Sensible Home Management

Top Real Estate Investment Terms And Definitions That All Landlords Should Know

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The usage of niche-specific language and abbreviations is well-known in the real estate sector. If you’re purchasing a property for the first time or just getting started in real estate investment, you’ll undoubtedly come across terms you’ve rarely heard before.

As a rental landlord, you should be familiar with the most important property management and rental investing phrases. These real estate words can assist you in becoming a successful investor or landlord.

You must first learn to talk the talk before you can walk the walk. We’ve defined the terminology you need to know about landlords, property owners, and investors below.


The growth in the property’s value through time is referred to as appreciation. Inflation, increased demand, or a decline in the availability of properties are all factors that might induce appreciation. Appreciation can also take into consideration the value that has been increased to a property as a consequence of upgrades. Over a year, appreciation is normally estimated as a percentage of the property’s worth.


Amenities are traits that increase the market value of a property. Both residential and commercial premises have amenities. The features located within a given property, such as a garden, parking lot, swimming pool, number of installed appliances, and more, are called property-specific amenities.

Adjustable-Rate Mortgage (ARM)

A mortgage with an adjustable rate does not have a set interest rate. An ARM typically has a fixed rate for the first few years of the loan and then varies regularly. Since mortgage payment amounts may change during the life of the loan owing to market conditions, this is a key real estate investing term to know. This instability makes estimating a budget and possible return on investment challenging for investors.

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A co-signer is a person who signs a document to ensure that the payment will be made. A co-signer can allow someone to improve their credit score if they wish to lease or rent a home but don’t have the necessary credit. Property owners might use a co-signer to reduce their risk. If the first signee is unable or unwilling to fulfill the contract, the second promises to do so. Any payments made by the co-signer are legally obligated to the co-signer.

Cash Flow Property

An investment property that makes a profit after all expenditures are paid each month. Cash flow properties are in great demand among investors.


A duplex is a single residence split into two units, each with its door. These homes are popular among new landlords since they allow them to quadruple their revenue while maintaining a minimal initial investment.

Equal Housing Opportunity

This legislation, also referred to as the Fair Housing Act, prohibits discrimination based on physical disability, religion, caste, national origin, race, gender, family status, and skin color when renting or buying property.

Escrow Account

A financial account is used to pay for landowners’ property taxes and insurance supported by a landlord’s mortgage payments.


An eviction occurs when a renter is removed from a rented property. Eviction laws differ by state, but they might include lease violations, failure in rental payment, and/or the commission of unlawful conduct, such as running a drug operation out of one’s house.


This agreement defines the terms of renting property and is a legally enforceable agreement between a lessee and a lessor. The landlord is the lessor, while the renter is the lessee.‍Adverse implications will occur if any side fails to adhere to the agreement’s provisions.

Lease contract

The frequency of rental payment, duration of the lease, charges of late payments, length of the terms, security deposit, and other terms and conditions are all spelled out in a lease.

Leasing Fee

When property management signs a contract with a new tenant, they are charged a leasing fee. There is a re-leasing charge if a renter renews their lease.

Maintenance Request

Typically, a renter notices a problem and asks or suggests that a landlord or property management service, repair, inspect, or replace essential things in a rental residence.

Maintenance may be divided into four categories:

Condition Based Maintenance – an approach created to evaluate an asset’s real condition to determine what upkeep must be done.

Preventative Based Maintenance – performed regularly and comprised of planned inspections to ensure that equipment and the property are in good condition.

Corrective Based Maintenance – emphasizes replacing or repairing any equipment that has broken or damaged.

Risk-Based Maintenance – directs all maintenance efforts toward assets with a higher risk of failure and consequences.

Vacancy Rate

If a rental property is unoccupied, it is not profitable. The vacancy rate refers to the number of vacant units that aren’t rented since they’re not fit for renters, or no one wants to rent them. Vacancy rates should be examined by homeowners to figure out what causes such a high rate.

Property Inspection

This is a non-intrusive visual examination of a rental property performed by a fully certified expert who is highly experienced in real estate evaluation.

A rental property inspection is intended to offer a landowner and/or a tenant the necessary information to relocate.

Inspection is necessary to examine any unlawful renovations to the property, destruction beyond regular wear and tear, or anything that was not mentioned in the lease agreement.

Security Deposit

A renter who wants to inhabit a rental unit pays a deposit to the property owner as confirmation of their willingness to relocate without damaging the property. Based on the conditions of the lease, a security deposit might be either recoverable or not. A security deposit is utilized in rental property agreements to safeguard the landowner if a tenant damages the property or breaks the terms of the lease.

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Are you a landlord looking to manage your property for rentals? Sensible Home Management delivers exceptional rental property management services in South King County to both investors and homeowners. We will help you with property inspection, tenant screening, and leasing services.

So, if you’re seeking residential property management, call a property management service at (253) 236-0337.

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