Terms All Real Estate Investors Should Know


In every industry, certain jargon exists and this certainly applies to the real estate industry. Knowing the common technical terms offers many benefits. So, if you’re interested in delving into real estate investment, you should take the time to understand the specific language of the industry.

When you interact with real estate professionals, it will be easier to grasp and follow the conversations. You also won’t be interrupted to ask about the meaning of certain words, helping to save everyone’s time.

So why should we spend time knowing the meaning of real estate terms?

Getting familiar with Real Estate Terms

At Halcyon Real Estate, we believe being knowledgeable of real estate terminologies leads to better communication. You save time noting every unfamiliar word and checking them. So, your discussions run smoothly with other real estate practitioners:

Rental Property

This refers to the type of property and its amenities where owners earn a fixed income from the occupants of their unit. It can be categorized into two ways: residential and commercial rental property.

Short-Term Rental

This is a type of property that welcomes renters to stay for a short period. It’s typically furnished and fits the needs of tourists. Platforms like Airbnb are filled with short-term rental properties.

Long-Term Rental

This is known as a traditional type of property. It’s suitable for renters aiming to stay in one location for a long period. A lot of real estate investors prefer to offer a long-term rental for its reliable and consistent returns.


Homeowner’s Association

Planned communities and condominiums usually have homeowner’s associations that take charge of maintaining the residences within their neighborhood location. If your property is managed by an HOA, you are obligated to comply with the HOA rules set in the area.


This is the final step in buying a property. At this stage, all the contracts and documents are arranged and signed by the parties of the real estate sale. The payment has been handed to the seller.

Tenant Screening

Tenant screening refers to the process whereby you gain information and question a prospect to assess how suitable they are to rent your property.

Rental Income

This is the amount of money a landlord receives from the renter occupying the property for a certain rental period.

Multiple Listing Service

MLS is made up of a database of properties that show price listings for real estate for sale or for rent. Agents can place properties that are up for sale and rent and can also consult it to check the available properties for sale or for rent on the market, to help their clients find a property that’s suitable for their needs.

Cash Flow

Once all the payables are completed, the remaining money is called the cash flow. Payables can represent mortgage loans, repair costs, and marketing service fees. Cash flow can either be positive or negative.


If there’s cash left over at month’s end, then the cash flow is positive. If nothing is left with expenses higher than earnings, cash flow is negative.

Seller’s Market

A scenario that favors property sellers is termed a seller’s market. This is a case where fewer properties are available and market demand is high, leading to increased property prices, which is naturally an advantage for sellers.

Buyer’s Market

Opposite a seller’s market, this is a case where more properties are available leading to reduced real estate prices, making it an advantage for the property buyers.


Over the long term, real estate properties increase their value, this is known as appreciation. The spike in value can be caused by more demand, inflation, or lack of supply.

Credit Score

Credit score serves as a way to evaluate the creditworthiness of individuals by looking at their credit ratings. If one’s credit score is excellent, getting a loan is faster. It’s also easier to get approved to be a renter. Credit scores are often checked by lenders and landlords as a gauge if an individual can be trusted to pay a loan or pay the monthly rental fees.


A realtor is a representative of a buyer or seller in a real estate transaction. Realtors differ from property agents since they are members of the National Association of Realtors and are subject to its rules of conduct and ethics.


Real Estate Agent

Real estate agents are also professionals acting in the interest of the buyers or sellers they represent during a property negotiation. They often work under a real estate broker.

Real Estate Broker

Real estate brokers are licensed and represent buyers and sellers in a property transaction. They can operate independently and employ real estate agents. Brokers are trusted to have solid expertise in the real estate industry and are able to manage complex contracts.

Proof of Funds

Before you can make a property offer as a buyer, you must be able to show proof of funds. This provides reassurance to the sellers that you can finance the property purchase before starting the transaction. Should you have additional financing from a landed, you’re required to present proof that you’re able to complete the down payment and closing costs.

Proof of funds can be obtained by submitting bank statements that are printed with the bank’s letterhead and financial statements that are certified and contain an accountant’s signature.

Bottom line

As you become more involved in the real estate industry, you’ll get to be familiar with a lot of real estate investing terms. So, it’s best to understand them fully to make the most of your career.

If you have any questions about real estate terms, marketing, or any other aspect of property management. Contact us at Halcyon Real Estate Services today!