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Glossary of Common Terms

This glossary will help you understand some of the most common terms and phrases associated with landlording and property investing. Simply click on a term to learn more.

Adjustable Rate Mortgage
When looking for financing, an ARM is one option to explore. This adjustable rate mortgage has its risks and benefits.

After Repair Value or ARV
The After Repair Value is the projected value of the property after repairs.

Appraisal
A property appraisal can help determine the fair market value of your home. Learn what this type of appraisal entails.

Appreciation
When a property appreciates it means it has increased in value. There are a variety of factors that can cause a property to appreciate.

Blockbusting
Real estate agents and property developers can engage in the illegal practice of blockbusting to try and buy properties at lower prices.

Contingency Fund
When renovating property, you should have a contingency fund. The amount to put in the fund depends on several factors.

Distressed Property
It is possible to get a good deal on a property that is considered distressed. Here are some factors that can lead to distress.

Eviction
An eviction is the legal removal of a tenant from a rental property.

Grace Period
Grace periods are common in mortgage loans and in rental agreements. If a payment is made during the grace period, no late charges will be incurred.

Fair Market Rent
Fair market rent is the estimated amount a property will rent for in a specific area. HUD calculates this number for over 2,500 counties in the United States.

FICO Score
The credit bureaus will determine your riskiness as a borrower by assigning you with a FICO score. Learn how this score is calculated and how it can impact your ability to get financing.

Fixed Rate Mortgage
An FRM offers borrowers stability. This fixed rate mortgage has a constant interest rate over the entirety of the loan.

Owner Occupant
When the person who owns a home also lives in the home, they are considered an owner occupant.

Partial Claim
If you are a homeowner who is delinquent on an FHA loan, you can file a partial claim. However, there are certain qualifications you must meet.

Pre-Qualified
Is there a difference between being pre-qualified or pre-approved for a loan? Find out here.

Primary Residence
A primary residence is a property where an individual spends most of his or her time.

Reasonable Accommodation
Fair Housing requires landlords to make reasonable accommodations for the disabled. Here is what landlords can and cannot do.

Rent Control
Many landlords have to deal with rent control laws. These laws put limits on how much a landlord can increase a tenant's rent by.

Renter's Market
Landlords are not happy when it is a renter's market. They cannot charge the highest price for their rentals in this situation.

Section 8
Section 8 is also called the Housing Choice Voucher Program. It allows individuals to rent out homes using vouchers that are subsidized by the government.

Security Deposit
A security deposit is a sum of money a tenant agrees to pay the landlord prior to move-in.

Sweat Equity
Sweat equity refers to the value a homeowner adds to their property by doing the renovations themselves.

Short Sale
A Short Sale is an agreement between a lender and a borrower to settle mortgage debt for less than the full amount owed.

Tenant
A tenant is a person who has the right to reside in a rental property according to an oral agreement, signed lease, or rental agreement.

Tenant Qualifying Standards
In order to rent your property, tenants should meet your qualifying standards. Here is what you can legally require.

Normal Wear and Tear
Normal wear and tear is the deterioration that happens to a property through a tenant's everyday use. Landlords can make deductions for damages in excess of normal wear and tear.

Public Housing Authority
HUD grants Public Housing Agencies the authority to administer housing programs such as Section 8. Learn what these agencies are responsible for.

Writ of Possession
A writ of possession involves taking back control of a tangible asset, usually property. It is issued through a court order and is common in evictions.

Occupancy Rate
Rental occupancy rate is the percentage of time a unit was rented during a set time period. Here is how to calculate it.

Utilities
Electricity, gas and even water are considered utilities. They are necessary for the basic function of people and property.

Landlord's Market
In a landlord's market, landlords can charge higher prices for their rentals. Learn why.

Prospective Tenant
Landlords show their vacancies to prospective tenants. They may have viewed the property, but do not live in the property.

Pre-Approved
Being pre-qualified for a loan is not the same thing as being pre-approved for one. Find out the difference.

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