If you are just starting to invest in real estate you undoubtedly will hear (if not already) terms generally associated with real estate investing that you might not understand.I even speak with real estate professionals who are not beginners and have no idea what they mean either. So no need to apologize. Knowing these real estate terms, of course, will not guarantee investing success, but it never hurts any beginner new to investment property to learn as much as possible; whenever possible.This list is not exhaustive, but it does include terms real estate professionals frequently confront me with and ask to be explained.APODAn APOD is an acronym for annual property operating data and essentially gives a snapshot of a rental property’s income and expense performance for one year.If you already started looking for rental income property, or previously met with a real estate agent about income properties, you probably have already seen an APOD because it is a popular report that is good at giving a first-glance look at a property’s performance.Gross Scheduled IncomeGross scheduled income (or GSI) is the total annual rental income a property would generate if all the rentable space were occupied and all rent collected. Sometimes called potential gross income, gross scheduled income is an estimate intended to show the maximum potential income without regard to any vacancy or credit losses.Operating ExpensesOperating expenses include those costs associated with keeping a property in service. Among others, operating expenses include costs for routine maintenance and repair, utilities, property taxes, insurance, and management fees. They do not include the mortgage payment (or debt service), income taxes owed by the investor as a result of owning the subject investment, or allowances for depreciation.Net Operating IncomeNet operating income (or NOI) is a property’s income after being reduced by vacancy and credit loss and all operating expenses-think of it as a measure of the property’s productivity. NOI is a valuable measure of cash flow and the return expected from a property for any given annual period as if it was wholly owned (without debt) and before taxes and depreciation are considered.Cash Flow, Before Tax and After TaxCash flow before-tax (CFBT) and cash flow after-tax (CFAT) has nothing to do with real estate property tax. Rather, it signifies whether the cash flow available after the debt is before or after consideration of taxes and the effect of tax shelter.CFBT is simply NOI minus debt service. CFAT requires a separate tax calculation. It subtracts from NOI interest on the loan, an allocation for depreciation (cost recovery), and allocable amortization expense (amortized loan points) to arrive at taxable income which is then multiplied by the investor’s marginal tax bracket and in turn subtracted from CFBT.
No one can deny investment research and its importance in the financial markets. Companies spend millions of dollars in hiring the services of expert investment research analyst every year. It’s about time when companies discovered outsourcing as a cost saving solution, since they gone through a difficult period of recession in USA and European market.Many giant companies have already outsourced their research and analysis services to china and India. Normally following investment research services are outsourced:1. Ratio Analysis2. Market Surveys3. Portfolio Analysis4. Feasibility Analysis5. Comparative Analysis6. Industry Specific Research7. Technical and Fundamental ResearchThe biggest reason of outsourcing investment research is to cut the cost. Since under privileged economies offers a low wage structure as compared to developed countries. Following are other advantages:1. Effective use of your internal resources and capital.2. Cut more than 70% cost of your HR expense.3. Access to most qualified professionals of the market like MBAs, CAs, CFAs4. Knowledge, expertise, experience and focus on limited process with state of the art technologies results in unmatched quality of service.5. Advantage of time difference is almost 12 hours results in 24 x 7 services.6. Limited process in-house mean less stress on you and better ROI of capital. It provides an opportunity to use internal resources more effectively.Even in the BPO industry, trends are changing aggressively. India was considered to be a giant player of late, but its growth rate has come down in the last year due to the entry of more cost efficient firms in the market. Pakistan is one of those countries who are emerging aggressively in the sector of investment research and analysis. Major reason is availability of foreign qualified and expert professionals at low cost as compared to India. Since main reason to outsource is taking advantage of the labor arbitrage, and Pakistan is providing it much better then India and other countries of BPO market.