In my previous post, I gave you a list of some of the most common acronyms used in real estate. Not a complete list, of course, but a good start to decode the secret jargon of our industry.
And as I professed then, mastering this lingo and using these terms correctly not only facilitates communication but also demonstrates expertise and insider knowledge.
Now that we have a representative list, let’s look at the meaning of some of these terms.
The acronyms you encounter on your journey to building wealth in real estate may seem like a witch’s brew of random letters. But every business or profession has its secret handshakes, its unique vocabulary, and real estate is no different.
In my previous post, I discussed what I believe are some of the most important pros and cons of investing in self-storage real estate.
As with most real estate sectors, self-storage features some terms that are particular to this property type — specifically in how owners describe occupancy: Unit Occupancy, Physical Occupancy, and Economic Occupancy. Let’s review them:
Simply put, self-storage properties are built to contain many, often hundreds of individual storage spaces of varying sizes. It’s a booming market, forecast to be worth over $64 billion by 2026.
For those of us whose experience with rental property goes back a few decades (maybe even more than a few), the term “property management” conjures up images of ledger books for recording rent payments and expenses, receipt pads for tenants who paid by cash, and a plumber or two on our landline’s speed dial.
If you’ve gotten involved as a landlord or tenant with non-residential real estate, such as retail or office buildings, then you have probably encountered a phenomenon that may go by any of several names: expense recoveries, expense reimbursements, pass-throughs, or common area maintenance (CAM) charges. What exactly is this phenomenon and how does it work?
Expense recoveries (aka reimbursements or pass-throughs) serve as a customary ingredient in leases for non-residential property. In part 1 of this article, I discussed some of the typical ways such an arrangement might play out.
In Part 2 of our discussion of real estate expense recoveries, we looked at several different methods that property owners use to recover some of their operating costs from tenants:
Real estate has probably been the best vehicle for building wealth since, well, forever – and income-producing real estate (aka rental property) may be the type of real estate that offers the greatest opportunities to small and mid-size investors.
But nothing worthwhile comes without a few potential pitfalls. You can and certainly should prosper as an investor, but to do so means being mindful of some mistakes that could derail your success. Let’s consider a few of the most important:
I had a question recently about a metric called Yield on Cost, aka Return on Cost and also sometimes called Development Yield. So what is it and when and how might it be useful?