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Real Estate Jargons on your Fingertips – Effective Rent / Equity Linked Mortgage / Escalation Clause

When you are looking for an ideal home to live and you go to a real estate agent or a broker or even a builder, they might use jargons which you might not know.

But we give you a solution!!

Read this space every Tuesday & Wednesday for Real Estate Jargons.

Effective Rent

Effective Rent is defined as the remaining cash the landlord receives after paying all expenses for operating the property, and any costs for tenant work to get the space ready for occupancy. Effective rent is also often referred to as Net Effective Rent (NER).

Equity Linked Mortgage

A mortgage, whereby the interest on the principal, in part or in whole, is calculated usually yearly, by reference on the security, eg. It may reflect annual increase or possible decreases, in the annual return on, or the value of, the property in which the mortgage is secured.

Escalation Clause

Specified in lease agreements wherein renewals of lease period are built in. It involves an increment in the base rent at every renewal of a lease agreement and is generally a percentage rate that is either pre agreed or negotiated before the renewal of the lease agreement.



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