Intermediate terms

Tourist Area MTR Key Terms

Explore essential terminology for mid-term rental (MTR) investments, particularly in tourist-heavy US markets. This carefully curated collection provides clear definitions for key concepts you'll encounter, supporting your learning journey. It's designed as a quick reference to help you navigate the unique aspects of this niche.

Learning Path

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

Operating Expenses

Operating expenses are the ongoing costs of running and maintaining a real estate investment property, excluding mortgage principal and interest payments, and capital expenditures.

Beginner13-14 min

Corporate Housing

Corporate housing refers to fully furnished, temporary rental properties, typically leased by companies for employees on business trips, relocations, or extended assignments, offering a cost-effective and comfortable alternative to hotels.

Intermediate5-6 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

Capitalization Rate

The Capitalization Rate (Cap Rate) is a real estate valuation metric used to estimate the potential rate of return on an investment property, calculated by dividing its Net Operating Income (NOI) by its current market value.

Intermediate14-15 min

Mid-Term Rental

A mid-term rental is a property leased for a period typically ranging from one to six months, bridging the gap between short-term (vacation) and long-term (annual) rentals. It caters to specific tenant needs like traveling professionals, students, or those relocating.

Beginner6 min

Zoning Regulations

Zoning regulations are local government laws that dictate how land within a municipality can be used, controlling property development, density, and the types of structures permitted.

Intermediate13-17 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

Tourist Destination Market

A tourist destination market refers to real estate investment opportunities in areas characterized by high visitor traffic, often driven by leisure, business, or cultural attractions, leading to demand for short-term rentals, hotels, and related services.

Intermediate5 min

Gross Potential Income

Gross Potential Income (GPI) is the maximum possible revenue a rental property could generate if all units were fully occupied at market rent, including all other income sources, before accounting for expenses.

Beginner13-14 min

Short-Term Rental Permitting

Short-term rental permitting involves obtaining necessary licenses and adhering to local regulations for operating properties as vacation rentals, ensuring legal compliance and avoiding penalties.

Intermediate5-6 min

Occupancy Rate

The occupancy rate is a key real estate metric representing the percentage of a property's available units or space that is currently leased or occupied by tenants, indicating demand and income stability.

Intermediate14-15 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

Rental Analysis

Rental analysis is the process of evaluating a property's potential rental income and expenses to determine its profitability and investment viability.

Intermediate5 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

Seasonality

Seasonality in real estate refers to predictable fluctuations in market activity, property values, and rental rates that occur at specific times of the year, driven by factors like weather, holidays, and school calendars.

Intermediate5 min

Lease Term

The lease term is the specific duration or length of time, defined in a lease agreement, for which a tenant agrees to rent a property from a landlord.

Beginner14-15 min

Market Research

Market research in real estate is the systematic process of gathering, analyzing, and interpreting data about a specific market to make informed investment decisions, identify opportunities, and mitigate risks.

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

Digital Nomad Housing

Digital nomad housing refers to real estate properties specifically designed or adapted to cater to the needs of remote workers who travel frequently, offering flexible lease terms, furnished spaces, and amenities conducive to productivity and community.

Intermediate5 min

Cash-on-Cash Return

Cash-on-Cash Return (CoC) is a real estate investment metric that calculates the annual pre-tax cash flow generated by a property as a percentage of the total cash an investor has invested.

Intermediate15-18 min

Property Management

Property management is the professional oversight and operation of real estate, typically rental properties, on behalf of an owner, handling tasks from tenant acquisition to maintenance and financial reporting.

Beginner11-12 min