Property Management Glossary

A major, non-recurring investment that improves property value or extends its useful life.

The ratio of net operating income to a property's current market value, used to estimate potential return on investment.

Annual pre-tax cash flow divided by total cash invested, measuring return on actual out-of-pocket investment.

Shared costs among tenants for upkeep of common spaces in a commercial property, such as lobbies, parking lots, and landscaping.

A thorough investigation of a property's physical, financial, and legal condition before purchase or investment.

The legal process of removing a tenant from a property for lease violations, non-payment, or other lawful reasons.

Federal legislation prohibiting discrimination in housing based on protected classes including race, color, religion, national origin, sex, familial status, and disability.

The legal and ethical obligation of a property manager to act in the best financial interest of the property owner.

A lease in which the landlord pays all or most operating expenses, and the tenant pays a single flat rental amount.

The legal standard requiring rental properties to be safe, sanitary, and fit for human occupancy, including functioning plumbing, heating, and structural integrity.

A legally binding contract between a landlord and tenant outlining the terms of a rental arrangement.

The process of extending a lease beyond its original term, often with updated rent and conditions.

Gross rental income minus operating expenses, excluding mortgage and capital expenditures. A core measure of property profitability.

Recurring costs of running a property, including taxes, insurance, maintenance, utilities, and management fees.

Scheduled inspections and servicing performed proactively to prevent breakdowns and extend the useful life of property systems.

A systematic review of a property's physical condition to document its state and identify maintenance needs.

A contract between the property owner and a management firm defining services, fees, authority, and responsibilities.

A lease clause providing for predetermined rent increases, often based on a fixed percentage, consumer price index, or market rate.

A report listing all tenants, their units, lease terms, rent amounts, and payment status for a property.

Money set aside from operating income for future major repairs, replacements, or emergencies.

A refundable sum collected from a tenant to cover potential unpaid rent or damage beyond normal wear and tear.

Strategies aimed at keeping current tenants satisfied and encouraging lease renewals to reduce turnover costs.

The process of evaluating rental applicants through credit, background, income, and reference checks.

A commercial lease where the tenant pays base rent plus property taxes, insurance, and maintenance costs.

The percentage of all available rental units that are unoccupied at a given time.