Intermediate terms

Lease-Up Plan Key Terms & Rental Prep Glossary

This curated collection offers key terms that might be helpful when exploring the lease-up process for rental properties. It provides clear definitions for concepts related to preparing, marketing, and screening tenants before you even close on a deal. Use it as a quick reference to build your understanding of this crucial pre-acquisition phase.

Learning Path

Rental Listing

A rental listing is an advertisement for a property available for rent, providing essential details to attract potential tenants. It typically includes the rent price, property features, and tenant requirements.

Beginner3 min

Lease-Up

Lease-up refers to the critical period following the completion of a new or renovated income-producing property, during which the property is actively marketed and leased to achieve stabilized occupancy and rental income.

Intermediate5 min

Rental Comparables

Rental comparables are recently rented properties similar to a subject investment property, used to determine optimal rental prices, forecast income, and assess market demand.

Intermediate5 min

Due Diligence

Due diligence is the critical process of investigating and verifying all material facts about a property and its financials before a real estate acquisition, aiming to identify risks and ensure an informed investment decision.

Intermediate14-15 min

Pro Forma Financial Statement

A pro forma financial statement is a projected financial report for a real estate investment, forecasting future income, expenses, and cash flow based on a set of assumptions. It is a critical tool for evaluating investment viability, securing financing, and strategic planning.

Intermediate15 min

Property Readiness

Property readiness refers to the process of preparing a real estate investment property to be suitable for its intended use, such as renting out to tenants or selling to a new owner, ensuring it meets all necessary standards for safety, functionality, and appeal.

Beginner3 min

Rental Advertising

Rental advertising is the process of promoting an available rental property to attract potential tenants, aiming to minimize vacancy and secure qualified renters efficiently.

Beginner2-3 min

Lease Agreement

A legally binding contract between a landlord and a tenant that outlines the terms and conditions of renting a property, including rent, duration, and responsibilities.

Beginner18-20 min

Net Operating Income

Net Operating Income (NOI) is a key real estate metric representing a property's annual income after deducting all operating expenses, but before accounting for debt service, income taxes, and capital expenditures.

Intermediate11-12 min

Cash Flow

Cash flow in real estate investing represents the net income generated by a property after all operating expenses and debt service payments have been made. Positive cash flow indicates profitability, while negative cash flow suggests a loss.

Intermediate2-3 min

Vacancy Rate

The vacancy rate is the percentage of all available rental units in a property or market that are currently unoccupied or not generating income, serving as a key indicator of a property's financial health and market demand.

Beginner13-14 min

Fair Housing Act

The Fair Housing Act is a federal law prohibiting discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, national origin, familial status, and disability.

Intermediate12-13 min

Fair Market Rent

Fair Market Rent (FMR) is an estimate of what a rental property would lease for on the open market, including utilities, as determined annually by the U.S. Department of Housing and Urban Development (HUD) for various housing programs.

Intermediate13-14 min

Tenant Screening Criteria

Tenant screening criteria are the specific standards and qualifications landlords use to evaluate prospective renters, ensuring they select reliable tenants who can meet their lease obligations and maintain the property.

Intermediate5 min

Tenant Screening

Tenant screening is the process landlords use to evaluate potential renters, assessing their reliability, financial stability, and past rental behavior to minimize risks and ensure a good fit for the property.

Beginner15-18 min