After-Repair Value
The estimated market value of a property after all planned renovations and repairs are complete.
Appraisal
An independent professional estimate of a property's fair market value, required by lenders before approving a mortgage.
Real Estate Appreciation
The increase in a property's market value over time, generating capital gains for the owner.
Assumable Mortgage
A mortgage that allows a home buyer to take over the seller's existing loan terms, including the interest rate.
BRRRR Return
Measures what percentage of original cash invested is recovered through a cash-out refinance after the Buy, Rehab, Rent, Refinance, Repeat cycle.
Buyer's Agent
A licensed real estate professional who exclusively represents the home buyer's interests throughout the purchase process.
Cap Rate
The ratio of a property's net operating income to its market value, expressing the expected return on an all-cash real estate investment.
Cash Flow Property
A rental property where monthly income consistently exceeds all operating expenses, delivering positive net cash returns.
Cash-on-Cash Return
The ratio of annual pre-tax cash flow to total cash invested, measuring the leveraged yield on a real estate investment.
Closing Disclosure
A standardized five-page federal form lenders provide to borrowers three business days before mortgage closing, detailing all final loan terms and costs.
Comparative Market Analysis
An informal property valuation method used by real estate agents comparing a home to recently sold similar properties to estimate its market value.
Real Estate Contingency
A condition in a real estate purchase contract that must be satisfied for the transaction to proceed, protecting the buyer's right to exit without penalty.
Property Deed
A legal document that formally transfers ownership of real property from one party to another and is recorded in public land records.
DSCR
The ratio of a property's net operating income to its annual mortgage payments, used by lenders to determine whether a property qualifies for financing.
Earnest Money
A good-faith deposit a home buyer provides with a purchase offer to demonstrate serious intent, typically held in escrow until closing.
50% Rule
A rule of thumb estimating that approximately 50% of a rental property's gross rent is consumed by operating expenses — excluding mortgage payments.
Gross Rent Multiplier
The ratio of a property's purchase price to its annual gross rental income, used as a quick screening tool before deeper due diligence.
Hard Money Lending
Short-term, asset-backed real estate loans from private lenders that prioritize property value over borrower creditworthiness, enabling fast closings.
HOA
An organization that governs a residential community by enforcing rules, maintaining common areas, and collecting regular fees from property owners.
Home Inspection
A professional visual examination of a property's physical condition covering structure, systems, and safety, typically conducted before a real estate closing.
Investment Property
Real estate purchased to generate rental income or capital appreciation rather than to serve as the buyer's primary residence.
Landlord
A property owner who rents or leases real estate to tenants in exchange for periodic rent payments, assuming legal responsibilities for the property.
Lease Agreement
A legally binding contract between a landlord and tenant that defines the terms and conditions of a rental arrangement for a specified period.
Listing Agent
A licensed real estate professional who represents the home seller, marketing the property and negotiating on the seller's behalf throughout the sale process.
Multiple Listing Service
A database shared among real estate brokers listing properties for sale, enabling cooperation between buyer's and seller's agents across a local market.
NOI
Annual gross income from a property minus all operating expenses, excluding mortgage payments, taxes on income, depreciation, and capital expenditures.
1% Rule
A quick-filter rule that says monthly rent should be at least 1% of the purchase price for a rental property to generate positive cash flow.
Property Management
The professional oversight of rental real estate on behalf of property owners, encompassing tenant relations, maintenance, rent collection, and legal compliance.
Real Estate Agent
A licensed professional who helps buyers and sellers complete real estate transactions, earning a commission based on the sale price.
Real Estate Cycle
The recurring pattern of expansion, peak, contraction, and recovery that real estate markets move through, driven by credit availability, demand, and supply.
REIT
A company that owns income-producing real estate and trades like a stock.
REIT Types
The three main REIT structures—equity, mortgage, and hybrid—each investing differently in real estate assets and generating distinct risk-return profiles.
Title Search
An examination of public property records to verify a property's ownership history and identify liens or encumbrances that could affect a buyer's clear title.
Property Title
The legal concept of ownership rights to real estate, including the right to use, sell, and transfer the property, as evidenced by a deed and public records.
2% Rule
A strict real estate screening rule stating monthly rent should be at least 2% of the purchase price, targeting high cash-flow investment properties.
Vacancy Rate
The percentage of available rental time during which a property or unit is unoccupied and generating no rental income.
Zoning
A local government land-use classification system that divides territory into districts and specifies permitted uses, building types, and density for each zone.