Resources
The landlord glossary
Plain-English definitions of the rental, leasing, screening, and accounting terms every self-managing landlord runs into.
Educational only, not legal or tax advice. Rules vary by state.
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Numbers
- 1099
- A family of IRS information returns reporting payments outside normal wages. Landlords may receive a 1099-K for processed rent or issue a 1099-NEC to a contractor paid 600 dollars or more in a year. See accounting and reports.
A
A
- ACH
- Automated Clearing House, the electronic network that moves money bank to bank in the United States. Most online rent payments and payouts settle over ACH in one to three business days.
- Adverse Action
- A denial, or a less favorable term such as a higher deposit, based wholly or partly on a screening report. The FCRA requires a written notice telling the applicant which agency supplied the report and how to dispute it.
- Amortization
- The schedule that splits each loan payment between interest and principal over the life of a mortgage. Early payments are mostly interest, later ones mostly principal.
- Application Fee
- A fee an applicant pays to cover the cost of screening, such as a credit or background check. Several states cap the amount or require a refund of any unused portion.
- Assignment
- A transfer of the entire remaining lease from the current tenant to a new one, who then deals directly with the landlord. Unlike a sublease, the original tenant usually steps out of the agreement once it is approved.
B
B
- Background Check
- A review of an applicant's criminal and identity records, often run alongside credit and income checks. It must follow Fair Housing and FCRA rules. See tenant screening.
C
C
- Cap Rate
- Capitalization rate, a property's net operating income divided by its price or value, written as a percentage. A quick yardstick for comparing the return on different rental investments.
- Cash Flow
- The money left over each month after rent income covers the mortgage, taxes, insurance, and operating costs. Positive cash flow means the property pays for itself with room to spare.
- CCPA
- The California Consumer Privacy Act, which gives California residents rights to know, delete, and opt out of the sale of their personal information. It can apply to data a landlord collects from applicants and tenants.
- Co-signer
- A person who signs the lease and promises to cover rent or damages if the tenant cannot. A co-signer is fully bound by the lease, unlike a guarantor who only backs the financial obligation.
- Concession
- An incentive a landlord offers to attract or keep a tenant, such as a free month or reduced rent. It lowers the effective rent without changing the headline rate on the lease.
D
D
- Days on Market
- How long a vacant unit has been advertised before a lease is signed. A rising figure usually signals the asking rent is above market or the listing needs work.
- Debt Service
- The total of principal and interest payments owed on a loan over a period, usually a year. It is the mortgage cost that net operating income must cover for a property to break even.
- Disclosure
- Information a landlord is legally required to give a tenant, such as a lead paint notice, the owner's contact, or known hazards. Required disclosures vary widely by state and city.
E
E
- Earnest (Holding) Deposit
- Money an approved applicant pays to take a unit off the market before signing. If the lease goes through it usually applies to rent or the security deposit; if the applicant backs out, the landlord may keep part of it.
- Eviction
- The court-supervised legal process for removing a tenant who has breached the lease, most often for unpaid rent. A landlord must follow the statutory steps; self-help lockouts are illegal in every state. See the eviction guide.
F
F
- Fair Housing Act
- The federal law that bars discrimination in housing based on race, color, religion, sex, national origin, disability, or familial status. Many states and cities add protected classes such as source of income. See fair housing.
- FCRA
- The Fair Credit Reporting Act, the federal law governing how consumer and credit reports may be pulled and used. It requires applicant consent before screening and an adverse action notice when a report drives a denial.
- Force Majeure
- A lease clause that excuses a party from obligations when an extraordinary event beyond their control, such as a flood or government order, makes performance impossible. The covered events are listed in the clause itself.
G
G
- Gross Rent
- The total rent collected before any operating expenses, vacancy, or debt payments are subtracted. It is the top line of a rental's income, not what the owner keeps.
- Guarantor
- A person who guarantees the tenant's financial obligations under the lease but does not live in the unit or hold tenant rights. Lenders and landlords often require one for an applicant with thin credit or income.
H
H
- HOA
- A homeowners association that governs a community or condo building, sets rules through covenants, and charges dues. Its rules can limit rentals, so a landlord should confirm an HOA permits leasing before buying.
I
I
- Implied Warranty of Habitability
- A legal duty, recognized in most states, that a rental be safe and fit to live in (working heat, plumbing, and a sound structure). It applies even if the lease never mentions it.
J
J
- Joint and Several Liability
- A lease term making each tenant responsible for the full rent and all obligations, not just their share. If a roommate leaves, the others remain on the hook for the entire amount.
L
L
- Late Fee
- A charge added when rent arrives after the due date or grace period. Many states cap the amount or percentage and require that it be spelled out in the lease.
- Lease
- A binding contract setting the rent, term, and rules for occupying a property. A fixed-term lease runs for a set period, commonly a year. See leasing.
- Lessee / Lessor
- The two parties to a lease. The lessee is the tenant who rents and occupies the property; the lessor is the landlord or owner who grants the right to occupy it.
- Lien
- A legal claim against a property for an unpaid debt, such as a mortgage, unpaid taxes, or a contractor's bill. A lien generally must be cleared before the property can be sold with clean title.
M
M
- Market Rent
- The rent a unit would command today given comparable listings in the area, its condition, and demand. It is the benchmark for pricing a vacancy or planning a renewal increase.
- Month-to-Month
- A tenancy that renews each month until either party gives proper notice to end it. It offers flexibility but less stability than a fixed term. See leasing.
N
N
- Net Operating Income (NOI)
- Annual rental income minus annual operating expenses, before mortgage payments and income tax. The core measure of how much a property earns from operations.
- Notice to Quit
- A formal written notice telling a tenant to fix a lease violation or vacate the property by a deadline. It is usually the required first step before a landlord can file for eviction.
O
O
- Occupancy
- Whether and by whom a unit is lived in, and the limit on how many people may reside there. Occupancy standards must be reasonable and applied consistently to comply with fair housing rules.
P
P
- Prorated Rent
- A partial rent amount for a partial month, used when a tenant moves in or out mid-month. It is calculated from the daily rent times the days of occupancy.
Q
Q
- Quiet Enjoyment
- A tenant's right to use the rented home without unreasonable interference from the landlord, including improper entry. It is implied in nearly every lease even when not written down.
R
R
- Renters Insurance
- A policy that covers a tenant's belongings and personal liability inside a rental. Many landlords require it in the lease, since the building's policy does not cover a tenant's property.
- ROI
- Return on investment, the gain from a rental relative to the money put in, written as a percentage. It is a broad measure used to compare one property or improvement against another.
S
S
- Schedule E
- The IRS form on which individual landlords report rental income and expenses for the year. Income, repairs, depreciation, and other costs flow through it to the personal return. See accounting and reports.
- Security Deposit
- Money a tenant pays at move-in that the landlord holds to cover unpaid rent or damage beyond normal wear. State law sets caps, holding rules, and return deadlines. See forms.
- Sublease
- An arrangement where a tenant rents the unit, or part of it, to a third party while remaining responsible to the landlord under the original lease. It usually needs the landlord's written consent.
T
T
- Tenant Screening
- The process of evaluating an applicant through credit, background, income, and rental history before approving a lease. It must follow Fair Housing and FCRA rules. See tenant screening.
- Turnover
- The full cycle of one tenant moving out and another moving in, including cleaning, repairs, marketing, and lost rent during the vacancy. Lower turnover is one of the biggest drivers of rental profit.
U
U
- URLTA
- The Uniform Residential Landlord and Tenant Act, a model law that many states adapted to define landlord and tenant rights and duties. Whether and how it applies depends on each state's own statute.
V
V
- Vacancy Rate
- The share of rentable time or units sitting empty over a period, written as a percentage. A higher rate means more lost income and is a key input to any cash flow projection.
Y
Y
- Yield
- The annual income a property generates relative to its cost or value, written as a percentage. Gross yield uses rent before expenses; net yield subtracts operating costs first.
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