Property Investment Glossary
Learn 65+ essential property investment terms. Master the language of buy-to-let, HMOs, yields, and more.
Investment Metrics
ROI (Return on Investment)
The percentage return on your property investment
Gross Yield
Annual rental income as a percentage of property price
Net Yield
Annual profit after expenses as a percentage of property price
Cash-on-Cash Return
Annual cash flow relative to cash invested
Capital Growth
Increase in property value over time
Void Allowance
Budget set aside for empty periods
Property Types
Buy-to-Let (BTL)
Property purchased specifically to rent out
HMO (House in Multiple Occupation)
Property rented to 3+ unrelated tenants sharing facilities
Single Let
Property rented to one household on one tenancy
BRRR (Buy, Refurbish, Refinance, Rent)
Strategy to recycle capital through forced appreciation
Serviced Accommodation (SA)
Short-term furnished rentals like Airbnb
Property Flipping
Buying, renovating, and quickly selling for profit
Costs & Taxes
Stamp Duty Land Tax (SDLT)
Tax paid when purchasing property over £250,000
LBTT (Land and Buildings Transaction Tax)
Scottish equivalent of Stamp Duty
LTT (Land Transaction Tax)
Welsh equivalent of Stamp Duty
Capital Gains Tax (CGT)
Tax on profit when selling investment property
Section 24 (Mortgage Interest Relief)
Restriction on mortgage interest tax deductions for landlords
Limited Company Buy-to-Let
Purchasing properties through a company structure
Ground Rent
Annual payment to freeholder for leasehold properties
Service Charge
Annual fee for maintenance of communal areas
Legal & Regulations
EPC (Energy Performance Certificate)
Rating of property's energy efficiency from A-G
MEES (Minimum Energy Efficiency Standards)
Minimum EPC rating required to legally rent property
Article 4 Direction
Planning restriction on converting properties to HMOs
HMO Licensing
Legal requirement for renting to multiple households
Selective Licensing
Licensing scheme for all private rentals in designated areas
AST (Assured Shorthold Tenancy)
Standard tenancy agreement for private rentals
Section 21 Notice
No-fault eviction notice for ending AST tenancy
Section 8 Notice
Grounds-based eviction notice for AST tenancy
Deposit Protection
Legal requirement to protect tenant deposits
Right to Rent
Landlord obligation to check tenant immigration status
Due Diligence
Thorough research before purchasing
Section 106 Agreement
Planning obligations attached to property
Right of First Refusal
Tenant's right to buy before external sale
Gas Safety Certificate
Annual certification of gas appliance safety
EICR (Electrical Installation Condition Report)
Five-yearly electrical safety certification
How to Rent Guide
Government checklist for private tenants
Financing
LTV (Loan to Value)
Mortgage amount as percentage of property value
ICR (Interest Coverage Ratio)
Rental income compared to mortgage interest payments
Bridging Loan
Short-term finance for quick purchases or refurbishment
Remortgage
Replacing existing mortgage with new one
Equity
Property value minus outstanding mortgage
Leverage
Using borrowed money to amplify returns
Portfolio Landlord
Landlord with 4+ mortgaged properties
SPV (Special Purpose Vehicle)
Limited company set up specifically for property
Property Condition
Leasehold
Ownership of property for fixed term from freeholder
Freehold
Outright ownership of property and land
Lease Extension
Adding years to a leasehold property's remaining term
Property Survey
Professional inspection of property condition
Refurbishment
Renovating property to improve condition and value
Forced Appreciation
Increasing property value through improvements
Management
Letting Agent
Company managing property lettings and tenants
Void Period
Time when property is empty between tenancies
Rent Arrears
Unpaid rent owed by tenant
Tenant Referencing
Background checks on prospective tenants
Guarantor
Person agreeing to cover tenant's rent if they default
Maintenance Reserve
Funds set aside for property repairs
Rent Guarantee Insurance
Insurance covering unpaid rent from tenants
Landlord Insurance
Insurance specifically for rental properties
Market Terms
Below Market Value (BMV)
Property priced lower than comparable sales
Comparable/Comps
Similar properties used to estimate market value
Auction Property
Property sold through public bidding process
Off-Market Property
Property for sale not publicly advertised
Property Sourcer
Person who finds investment properties for fees
Rent-to-Rent (R2R)
Renting property then subletting for profit
Rental Demand
Level of tenant interest in an area
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