Property Management Definitions

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.

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A

Accessory Dwelling Unit (ADU):  A self-contained living space that is an extension of an existing property.

Affordable Housing:  Housing on which the occupant pays no more than 30% of their gross income for housing costs, including utilities.

Amenities:  Explore Amenities in Property Management: Learn how these desirable features enhance the appeal of homes, apartments, and communities.

Amortization:  The systematic repayment of a debt or other financial obligation, often paid in installments.

Apartment:  Discover Apartments: From Multifamily Properties to Ownership Pros and Cons - Learn all about what apartments mean.

Appraisal:  A professional opinion on the monetary value of 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.

B

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.

C

C Corporation (C Corp):  A legal structure for a business in which the owners, or shareholders, are taxed independently from the corporation.

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.

Certificate of Occupancy:  A certificate of occupancy (CO) is a green light from your local government that your building is safe to occupy. Essentially, it’s a document issued by a local building department or agency certifying that a building complies with applicable building codes and laws, which makes it safe for people to inhabit. 

Co-Signer:  Understanding the role of a cosigner in rental agreements enhances the security of your investment. Learn more about cosigners here!

Commercial Property Management:  Discover commercial property management: tenant acquisition, leases, maintenance, and unique challenges vs. residential.

Companion Animal:  A domestic creature that provides companionship to a human but has no special protections under federal law.

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.

D

Duplex:   A duplex house is a residential property consisting of two separate units in a single building.

E

Emotional Support Animal:   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.

F

Fair Housing:  The right to choose housing free from discrimination based on protected attributes, including sexuality, national origin, and race.

FICO Score:  A three-digit number that summarizes a borrower’s financial history to communicate their lendability.

Furnished Rental:  A rental unit that comes pre-supplied with the furniture and appliances that its tenants will require.

G

Gross Lease:  A gross lease, most common in commercial leases, is one in which the tenant pays a flat fee for rent, and the landlord is responsible for covering all operating expenses associated with the property.

Ground Lease:  A ground lease, also known as a land lease, is a lease agreement where the tenant leases the land from the landowner but retains ownership rights over any buildings or structures erected on the property.

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.

H

Habitability Standards:  Habitability standards represent the minimum requirements a dwelling must meet to be considered fit for human habitation.

Holdover Tenant:  A renter who doesn’t vacate the unit after the expiration of their lease without a renewed contract.

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.

Homeowners Association:  Explore the HOA definition! Learn how homeowners associations operate and impact property management and owner responsibilities.

House Hacking:  The process of renting out a portion of your primary residence, either as a long-term or short-term rental.

I

Investment Property:  Real estate purchased to generate income through rental income or appreciation.

L

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.

Lease Option:  Lease options are like standard lease agreements, except they allow tenants the option to buy a rented property after a specified period, typically at the lease's end.

Leasehold Estate:  A leasehold estate is a property interest that a tenant (lessee) holds thanks to a lease agreement with a property owner (lessor).

M

Modified Gross Lease:  A modified gross lease, the tenant pays a base rent and then takes on a proportional share of other costs associated with the property.

Mortgage:  A type of loan used to purchase or maintain property or land.

N

Net Operating Income (NOI):  Unravel financial aspects of property management with our Net Operating Income (NOI) definition. Learn more landlord terms here.

Noise Complaint:  A written or verbal complaint made against a person or group that’s causing excessive noise.

O

Occupancy:  A legal term that refers to how a person can use land or a building.

P

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.

R

Real Estate Agent:  Learn what a real estate agent does, their skills, and how they facilitate property deals for buyers and sellers

Real Estate Broker:  Explore the role and importance of a real estate broker in property transactions with our clear definition.

Real Estate Investment:  Master real estate with our definition guide, starting with an in-depth look at real estate investment from a landlord's perspective.

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 Control Law:  Rent control laws dictate the amount a landlord can charge for rent and lease renewals.

Rent Ledger:  Understand rent ledgers with our Landlord Glossary article. Get insights into tracking rental payments and maintaining financial records.

Rent Payments:  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.

S

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.

Sublease:  Subleasing is an option for handling the remainder of a lease that a current tenant is unable to complete.

Sublet:  Subletting is one of the most common options for covering a portion of a lease if a current tenant needs to move out temporarily or earlier than expected.

T

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.

Tenant Improvements:  Tenant improvements (TIs) are modifications to a rental space to suit a tenant's specific needs.

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, and maintenance costs in addition to monthly rent and utilities.

Triplex:  A property comprising three individual units in one building, and each unit typically shares at least one common wall.

Turnkey Property:  A Turnkey Property is a home (single-family residence, duplex, or apartment) that is ready for a tenant to move into from day one.

U

Utilities:  The essential daily services that a person needs in order to have a working, functional living space.

V

Vacancy Loss:  Vacancy loss refers to the financial impact experienced by landlords or property owners when rental units or properties remain unoccupied for a period of time.

Vacation Rental:   An investment property rented out for short periods of time, typically less than one month.

Virtual Assistant:  An independent contractor who handles the administrative tasks for a client or business, usually from a remote location.

W

Wear and Tear:  Damage or deterioration resulting from everyday use over time.

What is a Lessee?:  A lessee is an individual or entity that leases an asset from another party, known as the lessor. In real estate, the asset is typically a residential property, such as an apartment, house, or condo.

What is an Investment Property?:  An investment property is housing, land, or commercial real estate bought to earn income.

Workforce Housing:  Affordable housing for households earning between 60-120% of their area’s median income.

Z

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.

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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).

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