Need to know what a hotel investment term means? Look it up in the XOTELS Glossary.
With our expertise as a hotel management company, we explain definitions, terminology and industry lingo in the hospitality investment industry.
Equity to Value Ratio or Equity Ratio
Equity to Value Ratio or Equity Ratio Calculation: Equity to Value Ratio = Total Property Equity / Total Property Value Ideal ratio: ratios below 0.5 are an indication of a heavily leveraged business What is the Definition & Importance of ´Loan to…
Average Mortgage Rate
Average Mortgage Rate: Calculation: Average Mortgage Rate = Sum of Mortgage Rates / Number of Mortgages What is the Definition & Importance of ´Average Mortgage Rate´: This KPI helps investors to evaluate if properties require refinancing….
Loan to Value Ratio (LTV)
Loan to Value Ratio (LTV) Calculation: LTV Ratio = Mortgage Amount / Appraised Property Value Ideal ratio: typically, 80% or lower LTV ratios will help you to obtain the most favorable / lowest rates What is the Definition & Importance of ´Loan to…
Average Rent Price Per Property: Calculation: Average Rent Price Per Property = Total Monthly Revenue / Total number of Properties What is the Definition & Importance of ´Average Rent Price Per Property´: As the name suggests, the KPI ‘Average…
Tenant Turnover
Tenant Turnover Calculation: Turnover Rate = (Number of Tenants Moved Out / Total Number of Tenants) * 100% What is the Definition & Importance of ´Tenant Turnover´: This real estate KPI informs you at what rate your tenants are leaving, and…
Payback Period Calculation: Initial Capital Cost for Project / Earnings from Project or Annual Savings What is the Definition & Importance of ´Payback Period´: Determining the actual payback period, otherwise known as break-even, is essential…
Operating Expense Ratio
Operating Expense Ratio Calculation: Operating Expense Ratio = ((Total Operating Expenses – Depreciation) / Gross Revenue) * 100% Ideal ratio: below 80% What’s the Definition & Importance of ´Operating Expense Ratio´: Using this KPI can help…
Return on Investment (ROI)
Return on Investment (ROI) Calculation: ROI = (Investment Revenue – Investment Cost) / (Investment Cost) or ROI = (Net Profit / Total Investment) * 100% What is the Definition & Importance of ´Return on Investment (ROI)´: Any time you´re making an…
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