What does the term "capital recapture" refer to?

The term "capital recapture" refers to the return of principal at the end of ownership. This concept is essential in understanding investment properties and how returns are structured. When an investor sells a property or ends their investment period, they aim to recover the initial amount they invested, which is the principal. This is particularly relevant in real estate, where the capital recapture allows an investor to regain their initial outlay, in addition to any returns or profits generated during the ownership period.

In the context of the other choices, while the annual return on an investment, gain from selling property, and increase in property value are all related to financial performance, they do not directly align with the specific meaning of capital recapture, which focuses solely on the return of the investment principal.