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Abstract Of Title
Abstract of title is a document that summarizes everything that has happened with the title of the property. All information pertaining to a particular property is recorded and maintained by local municipalities in the form of an abstract of title. For instance, any time the deed and title changes hands or a lien is placed, there will be a written record of all these details.
An addendum is an attachment to a contract that modifies its original terms and conditions. In the context of a lease addendum, they are documents added to the original lease agreement to provide additional information that the lease does not cover.
Amenities are any features of a building or space that provide comfort and convenience to the residents of that property. Some amenities are offered inside the unit; others are offered as part of the community.
Amortization is the schedule of your periodic mortgage loan payments. An amortization schedule is a fixed table that shows how much of your monthly payment goes toward interest and principal each month for the full term of the loan.
An apartment is a single housing unit that is part of one (or several) residential buildings. These units are self-contained, meaning they have their own entrance, kitchen, bathroom and living space.
An appraisal is the estimation of a home’s current market value. The valuation of the property is estimated by an authorized person who has a designation from a regulatory body. Appraisals are required by mortgage lenders to be sure that the money they are lending to a buyer is a fair amount for the home.
A contingency is a condition that needs to be met before an offer can proceed. It is kind of like a safety net. An appraisal contingency is a clause that allows a buyer to back out if a home’s appraised value is less than the sale price.
An appraised value is an evaluation of a property's value by a professional real estate appraiser. Appraisals are ordered by mortgage lenders to assess the market value of the property and to ensure the borrower isn’t trying to borrow more money than the home is worth.
In real estate, the term appreciation refers to the increase in the value of a property over time. The increase can occur for a number of reasons, including increased demand, weakening supply, or changes in inflation or interest rates.
An adjustable-rate mortgage or ARM, is a home loan with a variable interest rate. The initial interest rate of the mortgage is fixed for a period of time. After that, the interest rate applied on the outstanding balance resets periodically, at yearly or even monthly intervals. They typically start with a lower interest rate than fixed-rate mortgages, so an ARM is a great option if your goal is to get the lowest possible mortgage rate starting out.
If you’re in the market for a house, you’ll probably come across a few listings that include the words as-is. A property marketed in “as is” condition indicates that the seller is unwilling to address any issues or problems with the property. Buyers can either take the home in its current state or look elsewhere.
An assessment occurs when an asset's value needs to be determined for tax purposes. Assessments are conducted by a tax assessor, who is usually appointed or is an elected official. Property tax assessments are based on comparable sale prices and the level of tax set by the local or state government.
An assumable mortgage provides a buyer the opportunity to purchase a home by taking over the seller's mortgage loan. Buyers often choose to buy a home with an assumable mortgage to take advantage of financing with a lower interest rate, if rates have risen since the seller originally purchased the home.
When a buyer is interested in purchasing a property that is already under contract with someone else, that buyer has an opportunity to submit a “backup offer” in case the first transaction falls apart. There can only be one backup offer legally, as you cannot have a backup to the backup.
A balloon mortgage is a home loan that has an initial period of low or no monthly payments, at the end of which the borrower is required to pay off the full balance. Since balloon mortgages offer lower monthly payments, they are advantageous to buyers planning to be in the home for a short term.
Bill Of Sale
A bill of sale is commonly used when selling or buying something of value. It is a legally recognized record of a transaction. It lays out the exact terms of a real estate deal: the sale price, names of the buyer and seller, their contact information, and other important details associated with a home sale. In short, it protects both parties of the transaction should either side argue there’s an issue with the transaction.
A biweekly mortgage payment is a mortgage option where, instead of 12 monthly payments every year, you make half a month’s payment every 2 weeks. This method adds an extra month’s payment every year that is applied to your mortgage’s principal, helping you shave years off your mortgage repayment.
A blind offer is an offer by a buyer to buy a property that they have not seen in person. Blind offers are a quick and easy way for buyers to bid on a house. It saves buyers and sellers massive amounts of time by skipping inspections or appraisals.
Bonus depreciation allows an investor to deduct the full cost of capital improvements with a useful life of 20 years or less in the year the cost is incurred. For example, if $5,000 is spent to upgrade kitchen appliances and flooring in a rental property, the cost can be expensed right away instead of being depreciated over a number of years.
Breach Of Contract
When the parties sign a real estate contract, they agree to all of the terms contained in the agreement. Violating one or more terms results in a breach of contract (e.g., When a buyer breaches by failing to obtain adequate financing before the closing date or failing to pay on time).
Built-ins are any items that do not leave the property and remain a part of the permanent structure of a home. This includes any type of permanent appliances, cabinets, furniture built into the home (like shelves or benches), and other attached items.
A buydown is a mortgage financing technique that allows homebuyers to obtain a lower interest rate when taking out a mortgage loan. These help homeowners save money on interest over the life of the loan. Choosing a buydown when buying a home largely depends on the interest rate for which you qualify and how long you plan to remain in the home.
The IRS defines a capital improvement as a change made to property you own that does at least one of the following - Add to the value of the property, prolong the property’s life and adapts the home to new uses. It is essentially a permanent structural alteration or repair to a property that will either enhance the property's overall value, prolong its useful life, or adapt it to new uses.
Cash Out Refinance
Whenever you refinance, you're starting over with a new mortgage and new terms. A cash out refinance is a mortgage refinancing option that takes advantage of the equity you’ve built over time and gives you cash in exchange for taking on a larger mortgage. It gives you a new loan that's larger than your current mortgage balance.
A clear title, also known as a “clean title,” is a property title that is free from liens or additional issues that could jeopardize ownership, such as boundary disputes. With a clear title, there’s no doubt who the legal owner of the property is.
Closing costs are an assortment of fees associated with acquiring a property, including fees charged by a lender, the title company, attorneys, insurance companies, taxing authorities, homeowner’s associations, real estate agents, and other closing settlement related companies. These closing costs are typically paid at the time of closing a real estate transaction.
A comparative market analysis, or CMA, is a tool that real estate agents use to estimate the value of a specific property by evaluating similar ones that have recently sold in the same area. The analysis considers the location, age, size, construction, style, condition, and other factors for the property and comparables.
Common Area Maintenance
Common area maintenance, also known as CAM, are the costs associated with overhead and operating expenses for common areas that landlords pass on to their tenants. Common areas for tenants include - hallways, elevators, parking lots, lobbies, public bathrooms, and building security, etc.
Common areas are elements of a property available for use by all tenants. Common areas include hallways, sidewalks, parking lots, community swimming pools, and laundry facilities, though the list doesn’t end there. If people in a residential building or development are free to use a space, it is likely a common area.
Comparables are used in real estate to find the fair value of a home. They assist in finding the correct asking price for the property. The value of the home depends on the location, the area it covers, amenities offered, and the value of a recent sale in that location.
A condominium, also known as a condo, residential complex in which there are separate units, and each unit is owned separately. A condo owner usually owns the interior of their unit and the structural components of exterior walls. However, all condo owners of a complex will typically share certain common areas and amenities with their neighbors.
A construction loan is usually a short-term loan that provides funds to cover the cost of building or rehabilitating a home. Because they are considered relatively risky, construction loans usually have higher interest rates than traditional mortgage loans. Construction loans typically are one year in duration.
A conventional sale is when the property is owned outright or the owner owes less on their mortgage than what the market indicates the owner could sell their property for. This kind of sale is typically the smoothest form of transaction in comparison to foreclosures or short sales.
Cost segregation is a tax strategy that allows real estate owners to utilize accelerated depreciation deductions to increase cash flow, and reduce the federal and state income taxes they pay on their rental income. Cost segregation can reduce taxes and greatly increase the cash flow of a property, especially in its early years of operation.
Covenants, conditions & restrictions (CC&Rs)
Covenants, conditions & restrictions or CC&Rs are the rules and regulations placed on real property by a homeowner’s association (HOA), a neighborhood association, a developer, or a builder that sets forth any requirements and limitations of what a homeowner is allowed to do with the property. It may also include monthly and/or annual fees or special assessments.
Curb appeal is a subjective appreciation for a physical asset in its simplest form. It is a term used by realtors to describe the general attractiveness of a house or other piece of property from the sidewalk to a prospective buyer.
Days on market (DOM)
DOM is a common real estate abbreviation for ‘Days On Market’. The term days on the market refers to the number of days between the day a house is listed on the market and the day it is sold. The days on the market can be a factor in the price that the buyer is willing to pay.
Debt-to-income ratio or DTI a percentage that tells lenders how much money you spend on paying off debts versus how much money you have coming into your household. You can calculate your DTI by adding up your monthly minimum debt payments and dividing it by your monthly pre-tax income.
A deed is a legal document that once signed, transfers ownership of an asset to a new owner. In real estate terms, property deeds are legal documents that transfer ownership of real property from a seller to a buyer.
Depreciation is the decrease in the value of your property over time. It is a process used to deduct the costs of buying and improving a rental property. Instead of taking one large deduction in the year you buy or improve the property, depreciation distributes the deduction across the useful life of the property.
Depreciation recapture is a process that allows the IRS to collect taxes on the financial gain a taxpayer earns from the sale of an asset. Capital assets might include rental properties, equipment, furniture or other assets. Once an asset’s term has ended, the IRS requires taxpayers to report any gain from the disposal or sale of that asset as ordinary income.
A down payment is a sum of money paid upfront in a financial transaction, such as the purchase of a home. It represents a portion of the total purchase price, and the buyer will often take out a loan to finance the remainder.
Dual agency occurs when a single real estate agent works on behalf of both the home buyer and seller in a real estate transaction. In most real estate transactions, it is very common to have separate agents representing each party, as this helps avoid any conflict of interest that can arise when an agent negotiates for both sides.
A duplex is a type of multifamily property that allows for two separate residential units that have separate entrances on a single property. Most commonly, a duplex has units that can be situated side by side or stacked one on top of the other (with one apartment upstairs, and the other downstairs).
Earnest money is a deposit made to a seller before closing on a house to show you're serious about purchasing. It's also known as a good faith deposit. This money gives the buyer extra time to get financing and conduct the title search, property appraisal, and inspections before closing on the property.
Economic obsolescence is the loss of value of a real estate property that is caused by factors that are external to the property. Such a form of obsolescence is usually incurable, and the property owners cannot fix the specific cause of depreciation. Common causes of economic obsolescence include increased crime rates, construction of a busy highway, construction of a landfill nearby, etc.
Encroachment in real estate occurs when one property owner violates their neighbor’s rights by building or extending some feature and crossing into their neighbor’s property lines. This often happens when homeowners make do-it-yourself improvements without any legal building permits or hired professionals.
Equal Credit Opportunity Act (ECOA)
The Equal Credit Opportunity Act (ECOA) is federal civil rights law that prevents lenders from discriminating against credit applicants based on factors unrelated to their ability to repay. It is designed to stop credit discrimination on the basis of age, marital status, receipt of public assistance, sex, national origin, religion, color, or race.
Equity is the investment a homeowner has in their home. To calculate equity, take the market value of the home and subtract any mortgages or liens against the property. The amount left over is the amount of equity you have in the home. Bulding equity is important as homeowners can leverage this financial asset to obtain loans to help finance items such as home repairs or to pay off higher interest debt.
Escrow is the use of a third party to hold an asset or funds before they are transferred from one party to another. In real estate, placing funds in escrow allows the buyer to perform due diligence, such as conducting a property inspection, before purchasing the property from the seller.
An escrow account is important because specific instructions must be followed in order to ensure that funds, deeds or property are released at the appropriate time and to the rightful owners. The party overseeing the escrow account is called the escrow holder. As holder of the account, this person or entity is charged with safeguarding all documents and money and releasing them when required conditions are met.
Eviction is the process by which a landlord can legally remove a tenant from their rental property. Eviction usually occurs due to nonpayment of rent, a violation of the lease agreement, or other situations as permitted by law.
Fair Market Value
Fair market value (FMV) in real estate is the price that a property will sell for in an open market assuming that both buyer and seller are reasonably knowledgeable about the property, are behaving in their own best interests, are free of undue pressure, and are given a reasonable period of time to complete the transaction.
The Federal Housing Administration, or FHA, is a government agency that promotes affordable, easy-to-qualify-for home loans. FHA loans are only available through approved lenders. If you're a first-time homebuyer without a substantial credit history, an FHA loan could be an attractive option for you.
FHA 203k rehab loan
An FHA 203(k) loan is a type of government-insured mortgage that allows the borrower to take out one loan for two purposes: home purchase and home renovation. These loans are intended to support homeownership among lower-income households, allowing them to improve and update older properties as their primary residence, to bring them up to FHA standards.
"An FHA loan is a government-backed mortgage loan that requires a lower minimum down payment than many conventional loans. These applicants may have lower credit scores than is usually required. These loans are insured by the FHA, meaning that your mortgage is protected against loss if you default on your loan. "
A FICO score is a credit score created by the Fair Isaac Corporation (FICO). This credit score is a method of quantifying and evaluating an individual’s creditworthiness; a three-digit number ranging from 300 to 850. Lenders use the score to determine how risky it would be to loan you money. FICO scores are used in 90% of mortgage application decisions in the United States.
A fixed-rate mortgage is essentially a home loan with a fixed interest rate for the entire term of the loan. This means that the mortgage carries a constant interest rate from beginning to end. Once locked in, the interest rate does not fluctuate with market conditions.
Foreclosure is a legal process that begins when a borrower fails to make their mortgage payments to their lender. The lender attempts to recover the amount owed on a defaulted loan by repossessing the mortgaged property and selling it. Since the home is collateral, it can legally be seized by the lender.
For sale by owner (FSBO) homes are sold by the homeowner without the help of a listing agent or broker. People typically choose to sell their home FSBO to avoid having to pay the real estate agent the commission fee on the sale of the home. FSBO sales do, however, still require a commission for the buyer’s agent.
Functional obsolescence is when a home doesn’t meet market expectations on a functional level. Some features of the home might be outdated and might not be easily improved. This reduces the desirability of the property and, in turn, its value. For example, an old house with one bathroom in a neighborhood filled with new homes that have at least three bathrooms would have functional obsolescence.
Good Faith Estimate
A Good Faith Estimate, also known as a GFE, is a document that a lender must give you when you apply for a reverse mortgage. It lists basic information about the terms and outlines the estimated costs and terms of a reverse mortgage loan offer. It also enables borrowers to comparison shop among different lenders and choose the deal that best fits their needs.
A guarantor is a person who guarantees something for a borrower by promising to pay their debt in the event that the borrower defaults on their loan obligation. The guarantor guarantees a loan by pledging their assets as collateral. They are usually someone with a good credit history and have a source of reliable income.
Hard money loan
A hard money loan is a type of loan that is secured by real property. These loans are primarily used in real estate transactions, with the lender generally being individuals or companies and not banks.
HOA stands for Homeowners Association. It is a self-governing organization for a planned community or condominium building that makes and enforces rules for the properties and its residents. If you purchase a property within an HOA, you automatically become a member and are required to pay any HOA fees.
Home Equity Line of Credit (HELOC)
A home equity line of credit, or HELOC, is a second mortgage that gives you access to cash based on the value of your home. Here, you borrow against your equity, which is the home’s value minus the amount you owe on the primary mortgage. You can draw from a home equity line of credit and repay all or some of it monthly.
A home inspection is an examination of the condition of a real estate property, usually when it is on the market to be sold. They are generally conducted by a home inspector who has a certification to perform such inspections. The inspector creates a report and assesses any repairs, issues or concerns.
Home sale contingency
A home sale contingency is a clause frequently included in a real estate sales contracts or when there is an offer to purchase real estate. With a home sale contingency in place, the transaction is contingent on the sale of the buyer’s home. If the buyer’s house sells by the specified date, the contract moves forward. But if it doesn’t, the contract is terminated.
HUD is an acronym for the Department of Housing and Urban Development, a government agency that was established in 1965. President Lyndon B. Johnson established HUD as part of an effort to combat poverty. Through its federal policies and programs, the agency ensures that all individuals in urban areas have access to quality housing that is inclusive and affordable.
An iBuyer is a company that uses technology to make an offer on your home instantly. iBuyers take on the burden of owning, marketing, and reselling your home. Depending on the service you choose, the benefit is the certainty of an all-cash offer and more control over when you move.
An inspection contingency, also called a ‘due diligence contingency,’ gives the buyer the right to have the home inspected in a specified time period. Depending on the findings of the home inspection, the potential home buyer can negotiate repairs, sale price, or even walk away with their earnest money altogether.
Traditionally, when you purchase a home, you own the home and the land the property is built on. There are some scenarios that involve a land lease, which means you would own the home while you lease the land from an owner, which could be an individual or company.
Landlord insurance is a policy that is purchased for rental properties. It provides financial protection to landlords if their property is damaged, after a catastrophic event such as a fire or a storm, or if someone is hurt on the property. This type of insurance provides three types of coverage- property damage, liability protection and loss of rental income.
A lease agreement is a legal, binding contract between a landlord and a tenant, that gives the tenant a right to live in a property, while guaranteeing the landlord regular payments for a fixed period of time, typically covering a 6- or 12-month rental period.
A lessor is essentially someone who is the owner of the property that grants a lease to someone else. In real estate, the lessor is referred to as the landlord and the person they rent the property out to is termed as a lessee.
A lien is a claim or legal right against a property that can be used as collateral to repay a debt. It is used as a guarantee for some sort of obligation such as loan repayment. In other words, a lien ensures that a creditor obtains the right to the property if a borrower fails to meet his legal and/or financial obligations.
A listing agent, also known as a seller’s agent, is a licensed real estate professional whose job is to help the seller sell their home by ascertaining the asking price of their home, staging their home, and marketing the property on platforms like the MLS.
A listing agreement is an employment contract between a property owner and a real estate broker. It allows the broker to act as a listing agent and find a buyer for the property on the seller’s terms. Basically, a listing agreement grants your real estate agent permission to find a buyer for your home.
Loan-to-value ratio is a measure that compares the amount of your mortgage to the market value of your property. It helps lenders determine how much risk they're taking on with a secured loan. The higher your down payment, the lower your LTV ratio.
A mortgage refers to a loan used to purchase or maintain a home, land, or other types of real estate. It is an agreement between you and a lender that gives the lender the right to take your property if you fail to repay the money you've borrowed plus interest.
Mortgage Commitment Letter
A mortgage commitment letter is a formal document from your lender stating that you’re approved for a loan. Lenders issue a mortgage commitment letter after an applicant successfully completes the preapproval process. The letter serves as proof that you’re preapproved and are on the path, to being able to close the deal.
Mortgage pre-approval letter
A mortgage pre-approval letter is a document from a lender indicating that you have the financial means to qualify for a certain mortgage amount - how much money you can borrow, how much you could pay per month, and what your interest rate will be. Getting pre-approved for a mortgage shows that you're serious about buying a home and that you can afford it.
Multiple listing service
A Multiple Listing Service, also called MLS, is a database that allows real estate agents and brokers to access and add information about properties for sale in an area. When a home is listed for sale, it gets logged into the local MLS by a listing agent.
Natural hazards disclosure (NHD) report
NHD Report stands for Natural Hazard Disclosure Report. The natural hazard disclosure report (NHD) is a report that home sellers must obtain for their buyers in order to sell a home in a natural hazard zone (an area prone to earthquakes, hurricanes or wildfires, etc.)
Net operating income (NOI)
Net Operating Income, or NOI for short, is a formula used to quickly calculate profitability of a particular investment. It tells real estate investors how much money they can make from a given investment property on a weekly, monthly, or yearly basis. TOTAL INCOME — TOTAL OPERATING EXPENSES = NET OPERATING INCOME (NOI)
Occupancy is defined as the act of taking possession. In real estate terms, it is the act of owning, renting, or taking possession of a unit. When a tenant moves into a new house, they are taking occupancy of that home.
Operating expenses include all of the costs associated with operating the property. They are the recurring costs to maintain a rental property in good condition. Common rental property operating expenses include property management fees, marketing and advertising, insurance, utilities, property taxes, repairs, and maintenance.
Passive Loss Rules (PAL)
Passive Activity Loss Rules, or PAL, are a set of IRS rules stating that passive losses can be used only to offset passive income. These were enacted in 1986 to curb rampant abuses from people using real estate and businesses to generate huge losses to offset income taxes. Passive income is generated from two kinds of activities: (1) rentals of both real estate and equipment and (2) businesses where a person does not materially participate, such as when a person is a limited partner in a business venture. Passive activity loss rules prevent investors from using losses incurred from income-producing activities in which they are not materially involved.
Per diem is latin for per day. In real estate terms, a per diem penalty is usually charged to a buyer in the event escrow does not close by the date set forth in the contract. Buyers can also request A per diem from the seller, in the case they’re holding up the deal.
PITI is an acronym that stands for principal, interest, taxes, and insurance - the sum components of a mortgage payment. It’s best to calculate your PITI before you start looking for properties. PITI helps determine which homes fit in your price range so that you don’t sign a mortgage that you struggle to pay back.
A pre-approval is a preliminary evaluation by a lender to determine whether a borrower can be given a pre-qualification offer. It is a fast way to see how much a lender is willing to extend to you when you’re ready to start house hunting, and it is recommended that your pre-approval is complete before you make an offer on a house.
Private Mortgage Insurance
Private mortgage insurance, also called PMI, is a type of insurance that is often required for conventional mortgage loan borrowers. Most mortgage lenders require PMI when a homebuyer makes a down payment of less than 20% of the home's purchase price. Like other kinds of mortgage insurance, PMI protects the lender, not you, if you stop making payments on your loan.
A probate sale happens when a homeowner dies without writing a will or leaving a property to someone. In such situations, the probate court will authorize an estate attorney, or other representative, to hire a real estate agent to sell the home.
In real estate terms, proration is defined as the act of dividing real estate expenses between the buyer and seller (or landlord and tenant) proportionately to the time of use or date of closing. The most commonly prorated expenses include property tax, homeowners' insurance, mortgage interest, and rent.
A real estate purchase agreement is a legally binding document that governs the purchase and sale of a property. It contain critical information, including the purchase price, mortgage contingency provisions, down payment requirements, and many other terms that summarize the conditions of the transfer of title or sale.
A quitclaim deed releases a person's interest in a property publicly and legally that, if they do have any ownership of the property, they are passing it to another individual. They are typically used to transfer property in non-sale situations, such as transfers of property between family members.
In real estate terms, rate lock refers to a mortgage. It is an agreement between a borrower and a lender that allows the borrower to lock in the interest rate on a mortgage for a specified time period at the prevailing market interest rate.
The recovery period of an asset is the length of time over which the Internal Revenue Service requires you to depreciate it. These periods theoretically track the actual useful life of an asset so, for instance, an office building has a much longer life than a computer. The Internal Revenue Service has its own set of depreciation rules and you must use their recovery periods when figuring taxable income.
When you refinance, you’re essentially trading in your current mortgage for a newer one, often with a new principal and a different interest rate. The goal is to have a better interest rate and better terms than the current loan. Another reason for a refinance is to reduce the term of the loan.
Rent control is a government program that is intended to keep living costs affordable for lower-income residents. It places a limit on the amount that a landlord can demand for leasing a home or renewing a lease. The limit is set by a government program, and rent control laws are put into place by local municipalities.
ROI stands for Return On Investment. Return on investment (ROI) is a measurement of how much money you have earned on an investment as a percentage of its total cost. It is a metric that helps real estate investors evaluate whether they should buy an investment property, one investment to another.
When an owner sells a property, they are typically required to disclose information in a written document, This document is supposed to provide details about a property's overall condition and information about issues that might negatively affect its value. Sellers who willfully conceal information can be sued and potentially convicted of a crime.
A short sale occurs when a financially distressed homeowner sells their home for less than they owe on the mortgage. The lender of the original mortgage gets all of the proceeds of the sale, and either forgives the difference or gets a deficiency judgment, which requires the homeowner to pay what’s left over.
Single Family Home
The legal definition of a single-family home is - a structure maintained and used as a single dwelling unit. A single-family home is a stand-alone, detached property. These homes are designed to be used as a single-dwelling unit, with one owner, no shared walls, and its own land.
Staging refers to preparing your property to sell so it appeals to the most potential buyers who will pay the highest possible price. It involves redecorating, rearranging furniture, cleaning, and other design or aesthetic strategies to present the property in the best possible light.
Start-up expenses are the costs you incur to get your rental business up and running. Any expense that would be deductible as an operating expense by an ongoing business is a start-up expense when it's incurred before a business begins.
Straight-line depreciation is the depreciation of real property in equal amounts over a dedicated lifespan of the property that's allowed for tax purposes. It is used to reduce the carrying amount of a fixed asset over its useful life. It is calculated by dividing the difference between an asset's cost and its expected salvage value by the number of years it is expected to be used.
Student housing is a form of off-campus accommodation for university or college students. These are not typically owned by the college or university but located in close proximity to them. Student housing is available to students enrolled in college or university classes and these rentals are usually priced on a per bed lease.
Subletting occurs when your lease-signing tenant rents out their spot in your property for a certain period of the lease term. A sublease is essentially a new contract that is signed between your tenant (the lessee) and the subleasee (the new tenant who is taking over during that period).
Tax Cuts and Jobs Act (TCJA)
On Dec. 22, 2017, former President Donald Trump signed a massive tax bill known as the Tax Cuts and Jobs Act (TCJA). As its name implies, it cut individual, corporate, and estate tax rates. If you live in an area with high property taxes, you will be affected by the new $10,000 limit on how much state and local tax (including property taxes) you can deduct from your federal income taxes.
A tax shelter is a place to legally store assets so that current or future tax liabilities are minimized. A tax shelter is a financial technique used by taxpayers to reduce taxable income. Tax shelters include both investments and investment accounts that provide favorable tax treatment, as well as deductions as laid out by the Internal Revenue Service (IRS).
Tenant screening is a process carried out by landlords to assess an applicant before renting to them. This includes looking into their credit, eviction, and criminal history so that the landlord can be confident in the tenant’s ability to fulfill all their lease obligations.
When you purchase a home, one of the documents that you will receive and be required to sign is for a title. A title is a legal position that represents ownership of a property, and is transferred from the seller to the buyer.
A townhouse, also called a townhome, is a multi-floor home that shares at least one of its walls with other residences. These buildings are often tall, thin and attached to other townhomes in a long row. Townhouses are usually designed for high-density, urban areas, with a tall and narrow silhouette.
Transfer of ownership
Transfer of ownership is the means by which the ownership of a property is transferred from one hand to another. These agreements can be used to sell a property, goods, a business, a vehicle, or even land.
A transfer tax is a charge on the transfer of ownership or title to property from one individual or entity to another. It is a one-time tax or fee imposed by a state or local jurisdiction upon the transfer of real property.
Triple Net Lease
Triple net lease (also commonly known as NNN) is normally a commercial lease where the tenant or lessee pays rent and utilities, and also promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance.
A triplex consists of three individual dwelling units combined into one building, with the individual units sharing one or two common walls. Each unit within the triplex will have its own kitchen, bathroom(s), living room, and its own address or unit number.
The U.S. Department of Agriculture (USDA) home loans program offers mortgages to low-income residents of rural areas who cannot otherwise obtain a conventional mortgage. The home loans program is designed primarily to help lower-income people living in unhealthy or unsafe rural conditions purchase safe and affordable homes in rural areas.
A VA loan is a mortgage loan that is available through a program established by the U.S. Department of Veterans Affairs. These are available to active and veteran service personnel and their surviving spouses. VA mortgages have benefits such as zero down payment and no private mortgage insurance.
The vacancy rate is the percentage of all available units in a rental property that are vacant or unoccupied at a particular time. It is expressed as a percentage and compares the amount of time a property could be rented to the amount of time a property was actually rented.