Assessment Ratio: Equals the Assessed Value divided by Market Value.

Assessed Value: Equals Market Value multiplied by Assessment Ratio.

Cap Rate: Short for "capitalization rate" and equals the Net Operating Income (NOI) divided by Purchase Price.

Cap Ex: Short for "capital expenditures" and refers to major expenditures that provide long-term improvements to the physical quality of the property required to maintain or add value to the property.

Discounted Cash Flow (DCF) Analysis: A method used to find the present value of future cash flows or to measure the Internal Rate of Return (IRR).

Discount Rate: Equals the opportunity cost of capital or the return expectations for an investment.

Effective Tax Rate: Equals Actual Taxes divided by Market Value. It also equals Assessment Ratio multiplied by Tax Rate.

Going-In Cap Rate: Cap Rate at the time of purchase.

Going-Out Cap Rate: Cap Rate at the time of sale, also known as the reversion or terminal cap rate.

Gross Potential Rent: Computed by taking the average rent of all units multiplied by the total number of units at the property. The result equals the monthly gross potential rent, which should be multiplied by 12 to arrive at the annual gross potential rent. Gross Rent Multipliers are applied to annual gross potential rent.

Loaded Cap Rate: Equals Cap Rate plus Effective Tax Rate.

Market Value: The price at which a property can be sold on the open market.

Mill Rate: The the amount of tax payable per dollar of the assessed value of a property. The mill rate is equal to one-tenth of a cent or $0.001.

Net Operating Income (NOI): Equals all sources of revenue minus operating expenses.

Property Taxes: Equals Assessed Value multiplied by Tax Rate.

Tax Rate: Equals Mill Rate divided by 1,000.