Renter Sub-Glossary

Glossary | Broker | Investor | Legal | Mortgage | Owner | Renter

Assigning is the subletting of rights to another party, and is prohibited by the standard Manhattan residential lease.

 

Economic life is the span during which an investment property is financially beneficial.

 

Fixed expenses are deducted from gross rental income, including real-estate taxes, building fees, and insurance, to determine gross profit from an investment property.

 

An income property produces cash flow generated by the collecting of rent.

An interest in real property is the ownership of it.

An investment property’s value is based on both short-term rental income and long-term value appreciation; a condop and condominium’s recent rental and sales history are both considerations.

An investment-worthy property pays a short-term return from current rental income while appreciating in value, known as “upside potential.”

 

A landlord is the owner of a rental property.

 

A lease is the document outlining the rights and responsibilities between a landlord and a tenant.

 

A lessee is a tenant; a lessor is a landlord.

 

To leverage an investment property is to purchase it with borrowed funds.

 

Margin is the difference between income and expense for an investment property, or the stable, or constant, difference between an adjustable-rate-mortgage index and an interest rate.

 

Net income equals gross income less expenses.

 

Net worth equals assets less liabilities.

 

An option to renew is a clause within a lease that establishes terms for renewal.

 

Owner pays, abbreviated as OP, is an inducement from an owner, management company, or developer to a tenant, offering to pay a portion or all of the commission due a broker.

 

A rent-stabilized lease, abbreviated as R/S, is subject to a state-legislature-set guideline regarding any increase, reviewed annually; such leases are automatically renewable by a tenant; a rent-stable tenant is entitled to increase guidelines on a renewal, as long as the monthly rent remains less than $2,000; it applies only to tenants with declared income of less than $165,000 on at least two of their prior three annual income-tax returns.

 

A rental building has apartments available only for lease—not sale.

 

A rider is an addendum that covers supplemental terms.

 

The right to sublet, or assign, a residential apartment by the primary leaseholder, or tenant, is not permitted in a Manhattan lease.

 

A security deposit, traditionally one month’s rent, is held by a landlord and returned to a tenant upon vacating, following an inspection of the premises for damage.

 

A short-term rental is one that is furnished, with a definite term, or time period, ranging from three months to less than one year.

 

A sole proprietorship is one by a single owner/investor.

 

Subletting is the assigning of a lease to a third party.

 

A tenant, or lessee, is the occupant of an apartment.

 

Term is the duration of a lease or loan.

 

The useful life of an investment property is determined by its covering costs, and its market value’s remaining investment-worthy.

 

Vacancy rate is the empty rental units as a ratio to those let, or under lease.

 

Yield is an investment property’s short-term return.