Here are some property investment lingo you should know as a landlord!
Appraisal: An appraisal is where a licensed real estate agent provides an estimate or opinion of a property's value based on their own understanding and research of the current market and taking in consideration the property's size, location, nearby amenities etc.
Appreciation: When the value of a property is being increased overtime. This will allow the owner to make a profit or 'capital gain' when it's time to sell. The reason properties appreciate can be caused by the property market, demand, and supply of the local area, and/or renovations and improvements made to the property that is favourable according to market trends.
Rental Bond: A security payment that is paid at the start of the tenancy in case of any damage, cleaning or replacement of locks and keys needing to be paid for upon vacating of the property.
Capital Growth: Capital growth is measured by the difference between the current market value of an investment and its initial purchase price.
Depreciation: Depreciation is the opposite of appreciation, meaning the value of a property and/or its assets has decreased overtime. This may be caused by the current housing market fluctuation, or the property is needing major repairs and maintenance. When an investment property depreciates, the owner can claim tax deductions.
Guarantor: A person who undertakes to fulfil a contract if the main party defaults.
Holding Deposit: A holding fee in which an approved tenant must pay (up to one week's rent) prior to signing the tenancy agreement.
Investment property: Property held by the owner to earn rentals or for capital appreciation or both.
Lease Agreement: A legally binding contract between the landlord and tenant that covers all rights and obligations of the tenant occupying the residential premises.
Lessee (tenant): A person / legal entity who receives the right to occupy and use a property under the terms of a lease.
Management Agreement: A written contract recording the agreement between the owner and property manager concerning the duties, responsibilities and liabilities of the owner and the manager in the management of the property.
Outgoings: The expenses incurred in generating income. In real estate, these expenses include property rates, insurance, repairs and maintenance and management fees.
Periodic Lease: Where a tenant continues to rent / occupy the property after the lease has formally expired and becomes a month-to-month agreement until the landlord or tenant gives notice to terminate the agreement for any reason.
Positive Cash Flow: Income from the property (including tax benefits) is greater than all the expenses (including interest, rates and taxes, repairs, etc.).
Rates: Periodic property taxes levied by Local and State Governments (e.g. water and council rates).
Rental Return: The annual rental income as a percentage of the value of the property (also called the rental yield or yield).
Vacate: To give up occupancy; to make vacant; move out of property.
Source: Propertyme
Have more questions about your investment property? Want to ensure you are maximising your returns? Why not see the difference a dedicated team of property managers makes? For a free copy of our Property Investors Guide or an obligation-free chat, email our Director, Casey Healey, on casey@c21newcastle.com.au or phone 02 4928 7400 today.