Carry Cost

Definition

The ongoing expenses required to maintain a property while it generates no income, including taxes, insurance, utilities, and maintenance. Money leaving your pocket while nothing comes in.

Example Usage

The empty commercial building's carry costs were running $8,000 per month while we searched for a tenant.

Origin

Business terminology; the cost of 'carrying' (maintaining) an asset.

Fun Fact

Real estate investors spend hours analyzing carry costs because they can quickly turn a 'great deal' into a financial disaster.

Source: Real Estate Investment and Analysis standards

Related Terms

Beginner

title search

A deep dive into public records to verify legal ownership and uncover liens, judgments, or claims. Property background check revealing whether you're buying real estate or a lawsuit.

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notice

The formal heads-up you're legally required to give before doing something that affects someone else, like ending a lease, quitting a job, or evicting a tenant. It's usually 30, 60, or 90 days, giving just enough time for panic and apartment hunting. Without proper notice, your plans become legally questionable at best.

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Beginner

appraiser

The person who professionally determines how much your property is worth, usually arriving at a number that somehow disappoints everyone involved. These valuation wizards combine market data, property inspection, and mathematical formulas to tell you what someone might actually pay for your house—as opposed to what you think it's worth. They're basically the reality check between your dreams and the bank's willingness to lend.

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Advanced

Stepped Lease

A lease with predetermined rent increases at specific intervals rather than negotiated annually. Your landlord's way of automating inflation-based rent hikes.

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Intermediate

gross scheduled income

The total potential rental income a property could generate if every unit were rented at market rates with zero vacancy, representing an optimistic fantasy land rarely visited in reality. It's the before-life-happens number that makes proformas look amazing.

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Intermediate

Cinquefoil

A herbaceous plant with five leaflets arranged like fingers, or an architectural ornament featuring five lobes. Cinquefoils are found in temperate regions and have been used symbolically in heraldry and medieval design.

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