Property management terms is a complex field that can be overwhelming for those who are not familiar with its specific jargon. Terms like cap rate, NOI, and CAM can seem like a foreign language. But fear not! In this article, we will help you unlock the secret language of property management with our ultimate glossary. Soon, you’ll be impressing your friends with your property know-how!
Property management lingo made easy
Let’s start with some basic definitions.
- Cap Rate: short for capitalization rate, cap rate is a metric used to evaluate the profitability of a property. It is calculated by dividing the net operating income (NOI) by the property’s value.
- NOI: net operating income is the income generated by a property after all operating expenses, such as taxes and insurance, have been deducted.
- CAM: common area maintenance fees are charges paid by tenants in a commercial property for the maintenance of shared spaces, such as lobbies or parking lots.
Now, let’s move on to some more advanced terms.
- Lease-up: the process of leasing out a property that has just been completed or recently acquired.
- Tenant improvement allowance: a sum of money provided by a landlord to a tenant to cover the costs of customizing or renovating a space for their use.
- Renewal rate: the percentage of tenants who choose to renew their lease at the end of its term.
Impress your friends with property know-how!
Now that you’ve learned some basic and advanced property management terms, you can impress your friends with your know-how.
Next time you’re discussing real estate or commercial property, throw out some of these terms and show off your expertise.
- “Wow, that cap rate seems really high for that property. I wonder what the NOI is.”
- “Did you know that tenant improvement allowances can vary depending on the length of the lease?”
- “The renewal rate for that building is really impressive. The property manager must be doing something right.”
Congratulations! You are now well-versed in the secret language of property management.
Property management can be a daunting field, but with our ultimate glossary, you now have the tools to understand its complex language. Whether you’re a seasoned investor or just starting out, knowing these terms will give you an edge in the industry. So go forth and impress your friends with your property know-how!
Call Steve Schappert 203-994-3950
