Introduction to Property Management
Upgrade your investor lexicon with our real estate dictionary, specifically built for property owners and landlords.
Regardless of how long you’ve been a property manager, some key terms might still escape you. Like any good niche, real estate has given birth to hundreds of specialized terms that may confound the average joe.
Below is a list of essential terms and definitions for independent landlords, investors, and real estate professionals courtesy of TurboTenant
Accessory Dwelling Unit (ADU): A self-contained living space that extends an existing property. Sometimes referred to as Granny Unit.
Affordable Housing: Housing on which the occupant pays no more than 30% of their gross income for housing costs, including utilities.
Amenities: Desirable or useful features that add to the appeal of a home in the eyes of its tenants or buyers.
Amortization: The systematic repayment of a debt or other financial obligation, often paid in installments.
Appraisal: A professional opinion on the monetary value of the real estate, normally conducted by a licensed appraiser independent of both the lender and borrower.
Appraised Value: The amount a real estate appraiser estimates your home is worth when it comes time to sell it.
Asset Management: The process of identifying, acquiring, and maintaining assets to maximize their value to an organization.
Background Check: A method to confirm an individual’s identity using financial, criminal, and commercial data.
Balloon Mortgage: A mortgage in which a homebuyer makes low payments throughout the loan period but pays a lump sum at the end of the term. brick townhouse or row house with a brownstone facade
Brownstone: A mortgage in which a homebuyer makes low payments throughout the loan period but pays a lump sum at the end of the term.
BRRRR Method: A real estate investment strategy hinged on using cash or short-term financing to buy a distressed property or a property under foreclosure. It stands for buy, rehab, rent, refinance, and repeat.
Cash-on-Cash Return: A metric used to determine how profitable a real estate investment will be, calculated by taking the total amount of cash generated and subtracting all expenses, then dividing by the investor’s initial investment.
C Corporation: A legal structure for a business in which the owners, or shareholders, are taxed independently from the corporation.
Companion Animal: A domestic creature that provides companionship to a human but has no special protections under federal law.
Commercial Property Management: The business of finding tenants, arranging maintenance, and facilitating leases for non-residential buildings, such as malls and offices.
Co-Signer: Someone who takes full responsibility for the payment of a lease or loan along with the primary signer.
Covenant of Quiet Enjoyment: The legal right that tenants have to peacefully use their rented space without undue interference from the landlord.
Credit Check: A summary of a consumer’s existing and past credit, payment habits, and types of loans taken out that are used to assess their creditworthiness.
Credit Score: A three-digit number between 300 and 850 that communicates a consumer’s creditworthiness based on their credit history.
Duplex: A duplex house is a residential property consisting of two separate units in a single building.
Emotional Support Animal (ESA): An animal protected by the Fair Housing Act that acts as a companion to help treat depression, anxiety, and other mental health challenges.
Eviction: A legal process in which a landlord removes a renting tenant from their rental property.
Eviction Moratorium: A halting of evictions, often under specific conditions, as enacted by Congress on March 2020 in response to the COVID-19 pandemic.
Fair Housing: The right to choose housing free from discrimination based on protected attributes, including sexuality, national origin, and race.
Furnished Rental: A rental unit that comes pre-supplied with the furniture and appliances that its tenants will require.
Guarantor: Someone who agrees to be on a lease and guarantees to pay a tenant’s rent in the event that the tenant defaults on their rental obligation.
Home Equity Line of Credit (HELOC): A form of revolving funds that allows you to borrow money against your home’s value over time.
Homeowner Insurance: Homeowner insurance is an insurance policy designed to protect the borrower’s primary residence.
Holdover Tenant: A renter who doesn’t vacate the unit after the expiration of their lease without a renewed contract.
House Hacking: The process of renting out a portion of your primary residence, either as a long-term or short-term rental.
Investment Property: Real estate purchased to generate income through rental income or appreciation.
Landlord: The owner of a house, apartment, condominium, or other real estate which is rented or leased to a tenant.
Landlord Insurance: A type of insurance policy that protects property owners who rent out their property.
Lease Agreement: A legally-binding contract that outlines the terms and conditions of both the landlord and tenant.
Mortgage: A type of loan used to purchase or maintain property or land.
Noise Complaint: A written or verbal complaint made against a person or group that’s causing excessive noise.
Occupancy: A legal term that refers to how a person can use land or a building.
Personal Property: Any movable property that is not permanently attached to real estate. This includes furniture, appliances, and vehicles.
Pet Deposit: A one-time fee landlords can ask tenants to pay to mitigate the cost of property damage and losses caused by their pet(s).
Pet Rent: A monthly charge the tenant pays to keep their animal in the rental.
Prorated Rent: The amount a landlord will charge a tenant when they are only occupying a property for part of the agreed-upon term.
Reasonable Accommodations: A change, exception, or adjustment to a rule, policy, practice, or service intended to help a person with disabilities use and enjoy their dwelling and common use areas.
Rent Collection: The act of a landlord or property manager gathering the monthly rent payment from their tenant on a set date as outlined in their lease agreement.
Rent Payment: A monthly fee paid by the tenant to their landlord or property manager in accordance with their lease agreement.
Rent Roll: A document that lists due rent and rents that have been collected on an investment property.
Rental Arbitrage: The practice of renting out a long-term rental on a short-term rental platform such as Airbnb or VRBO.
Renters Insurance: A type of insurance policy that protects the tenant’s personal belongings, lawsuits related to their tenancy, and medical expenses for injuries incurred on the property.
Residential Rental Property: A property or portion of a property leased to a tenant in which the property owner spends no more than 14 days during the tax year.
Room Rental Agreement: An agreement between you and the person to whom you are renting a room within a rental unit. It outlines the rules and responsibilities of both you and your tenant.
Schedule E: Used for reporting supplemental income and loss as part of a personal tax return on IRS Form 1040.
Section 8 Housing: A government-funded program that assists low-income families in paying for housing.
Security Deposit: Money that a tenant gives to their landlord as proof of their intent to move in and care for the unit.
Single-Family Home: A freestanding residence that shares no common walls with any other structure.
Slumlord: Slang for an unscrupulous landlord who is more concerned about their profits than their tenants or neighborhood.
Squatter: Someone who starts living on a property they don’t own without permission.
Tenant: A person who occupies rental property owned by a landlord.
Tenant Estoppel Certificate: A written, signed stipulation that verifies the terms, conditions, and current status of a lease agreement, as well as proof of cash flow.
Therapy Animal: A creature who is registered by an animal-assisted intervention organization to benefit people in need.
Townhouse: A type of real estate that has multiple floors and shares at least two of its walls with other residences.
Triple Net Lease (NNN): A commercial real estate lease agreement in which the tenant pays the real estate taxes, insurance premiums, maintenance costs, and monthly rent and utilities.
Triplex: A property comprising three individual units in one building, and each unit typically shares at least one common wall.
Utilities: The essential daily services that a person needs in order to have a working, functional living space.
Vacation Rental: An investment property rented out for short periods of time, typically less than one month.
Virtual Assistant (VA): An independent contractor who handles the administrative tasks for a client or business, usually from a remote location.
Wear and Tear: Damage or deterioration resulting from everyday use over time.
Workforce Housing: affordable housing for households earning between 60-120% of their area’s median income.
Zoning: A set of regulations that control how land is used, including what types of buildings can be constructed, where they can be built, and what activities can take place there.
1031 Exchange: A real estate investment tool that allows taxpayers to defer capital gains taxes by swapping one investment for another, as defined under Section 1031 of the Internal Revenue Code (IRC).