Credit gives the word to pay either by repaying it or returning those resources later. In other words, this credit is the method of making the reciprocity formal, legally enforceable, and of course, extensible to a vast group of people who are not related.
However, the resources provided may be financial or have goods or services, like consumer credit. The credit covers any form of deferred payment. Credit generally gets extended by the creditor, the debtor or lender, and sometimes the borrower.
The annual equivalent rate indicates any notional interest rate, which is otherwise equivalent to the contractual interest rate, in case it was paid and then compounded annually. Once you understand this concept, you can move onto the ELR (equivalent level rate) as a specific rate for a property and the factors that influence the same.
The ELR (equivalent level rate) of any real estate asset or property means the rate for every square foot of the same in any specific currency or dollars. Now, this is the rate which will be equivalent to the varying valuation of the possible cash flow of the property on an annual lease. The ELR is a flat rate which is influenced by a particular mechanism or formula. For working out the ELR on any rental real estate, you should deduct cash flows on the net valuation of the property. You have to then undertake amortization and break down the entire sum of the valuation throughout the net lease terms and conditions, on the basis of the property’s square footage or area. You should compare the valuation in square feet to the leasing cost in simple words. This ELR concept helps in the determination of a property’s valuation with regard to leasing or renting out the same. Landlords often use this term or system of calculation.
