Financial Management Rate Of Return - FMRR

AAA

DEFINITION of 'Financial Management Rate Of Return - FMRR'

A metric used to evaluate the performance of a real estate investment and pertains to a real estate investment trust (REIT). REITs are shares offered to the public by a real estate company or trust that holds a portfolio of income-producing properties and/or mortgages. The FMRR is similar to the internal rate of return and takes into account the length and risk of the investment. The FMRR specifies cash flows (inflows and outflows) at two distinct rates known as the safe rate and the reinvestment rate.

INVESTOPEDIA EXPLAINS 'Financial Management Rate Of Return - FMRR'

Because the calculation for financial management rate of return is so complex, many real estate professionals and investors choose to use other metrics for real estate analysis. The benefit in using FMRR is that it allows investors to compare investment opportunities on par with one another.

RELATED TERMS
  1. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding ...
  2. Funds From Operations - FFO

    A figure used by real estate investment trusts (REITs) to define ...
  3. Internal Rate Of Return - IRR

    The discount rate often used in capital budgeting that makes ...
  4. Hubris

    The characteristic of excessive confidence or arrogance, which ...
  5. Real Estate Investment Trust - ...

    A security that sells like a stock on the major exchanges and ...
  6. Adjusted Funds From Operations ...

    A financial performance measure primarily used in the analysis ...
RELATED FAQS
  1. Which REITs pay the highest dividends?

    A real estate investment trust (REIT) is a financial security that trades like a stock on major market exchanges. However, ... Read Full Answer >>
  2. What is the difference between an Equity REIT and a Mortgage REIT?

    There are several types of real estate investments trusts (REITS) that investors can purchase, including equity REITS and ... Read Full Answer >>
  3. Which oil and gas stocks pay the highest dividends?

    Among the oil and gas companies that pay the highest dividends as of 2015 are Sandridge Permian Trust (PER), Whiting USA ... Read Full Answer >>
  4. What price-to-earnings ratio is average in the real estate sector?

    The price-to-earnings (P/E) ratio is a commonly cited valuation metric that can help investors decide what stock price is ... Read Full Answer >>
  5. How have low interest rates affected the real estate sector?

    Low interest rates stimulate the real estate sector by encouraging home-buying activity and by making it less expensive for ... Read Full Answer >>
  6. What kinds of derivatives are types of forward commitments?

    A derivative is a type of security in which the price of the security is dependent on underlying assets. A derivative could ... Read Full Answer >>
Related Articles
  1. Home & Auto

    How To Analyze Real Estate Investment Trusts

    REITs are much like dividend-paying companies, but analyzing them requires consideration of the accounting treatment of property.
  2. Options & Futures

    The REIT Way

    Ever considered investing in real estate? Read about the REIT and see if it's the investment for you.
  3. Home & Auto

    How To Assess A Real Estate Investment Trust (REIT)

    Find out why funds from operations is a superior measure of REIT performance.
  4. Bonds & Fixed Income

    The Impact Of Interest Rates On Real Estate Investment Trusts

    REITs are high-yield investments, but do they have an inverse relationship with interest rates? Find out here.
  5. Professionals

    Alternatives Need More Education, Not Enforcement

    While disclosures and investor education need improvement, alternatives provide a valuable way to increase yield and hedge against declines.
  6. Home & Auto

    Buying a Home? The Best Places Share This Feature

    The most lucrative areas to invest in a home are cities where job growth is robust.
  7. Investing

    Commercial Real Estate: How to Invest Like a Pro

    Investing in commercial real estate can add stability to your portfolio. Here's how to do it.
  8. Chart Advisor

    These REITs Are Looking Good Right Now

    These REITs are in strong uptrends and looking to go higher.
  9. Mutual Funds & ETFs

    Why You May Want To Be (And Stay) In Bonds

    Bonds are complicated, and it’s easy to feel intimidated or confused. Fortunately, you don’t need to be a numbers geek to be an informed investor.
  10. Personal Finance

    Commercial Real Estate: How it Works

    The ins and outs of what commercial real estate companies do.

You May Also Like

Hot Definitions
  1. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  2. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  3. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  4. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  5. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  6. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
Trading Center