Net lease glossary
LTV (Loan-to-Value)
The loan amount divided by the property's appraised value or purchase price.
Loan-to-value is the loan balance as a percentage of the property's value, usually the lower of appraised value or purchase price. A $1.2 million loan on a $2 million property is 60% LTV. Lenders set maximum LTVs by property type, tenant credit, and lease term. In net lease, LTV often works alongside DSCR and debt yield, and the most restrictive test determines the actual loan size.