A Glossary (not in alphabetical order) for the Multifamily Industry

The purpose of this glossary is to help folks in the industry learn and understand common terms that are used. This list will be updated over time. If you have any questions or disagree feel free to reach out to me.

*Disclaimer - The?#mfglossary?is not intended to define terms to be used legally. It is only for educational purposes. Please consult a legal advisor.

Started: 11/16/22 Last Update: 1/13/23

1. Occupancy Percentage - The percentage of total rental homes that are leased & occupied.

If the community has 400 homes and 385 are leased and occupied the occupancy is 96.25%

2. Leased Percentage - The percentage of total rental homes that have a signed lease.

If the community has 400 homes and 395 have a signed lease the leased percentage is 98.75%

(I have no idea why some people use the term Leased Occupancy)

3. Net Operating Income (aka *NOI) - Total revenue minus operating expenses.

*Note to suppliers. Please stop saying your product or service will improve the NOI.

4. Market Rent - The asking rent of an apartment.

Each home has an asking rent even if the home is rented and unavailable. One can refer to the avg asking rent at a property. Financial reports will add the asking rent total amount for all homes.

When the media says Market Rents are up that is based solely on the asking rents at a given point in time compared to the asking rents at an earlier point in time.

5. Actual Rent or In-Place Rent - When the current rent that a resident is paying. This will differ from the Market Rent.

A resident signs a lease for $1500. Two months after moving in the Market Rent is raised to $1600. The Market Rent will be $1600 and the Actual/In-Place rent will still be $1500.

6. Loss/Gain to Lease - The delta between the Actual/In-Place rent and the Market rent. In the above example the Loss to Lease is -$100. If the Actual/In-Place Rent is higher than Market Rent the Loss/Gain to Lease will be $100.

When the Actual/In-Place Rents are lower than the Market Rent there will be a large Loss to Lease. That is what it means when someone says the rents are well below Market.

7. Rent - The monthly amount a resident pays for their home

Johnny rents a 1bedrom and his rent is $1500 a month.

8. Lease Charges - Other charges the resident is required to pay

Johnny has a dog and pays $45 a month for a pet fee. Johnny also rents a garage and pays $150 a month. Both of these are lease charges.

9. Rent Roll - A list of every rental at a community with the name of the resident, the market rent, the actual rent, the security deposit, move-in date, lease expiration and the residents balance.

This is a very important report

10. Rent Roll with Lease Charges - The same as a rent roll but it also includes lease charges.

11. Vacant Unrented - A rental home that is not occupied and is not rented.

12. Vacant Rented - A rental home that is leased but is not yet occupied.

13. Notice Unrented - A rental home that is occupied by a resident that has given notice to vacate and the home is available to rent.

14. Notice Rented - A rental home that is occupied by a resident that has given notice to vacate and the home has been leased to a future resident

15. Occupied No Notice - A rental home that is lease and occupied and the resident has not give no notice to vacate.

16. Availability - Total number or percentage of homes available to rent. This included vacant unrented and notice unrented.

Players in the Game

17. 3rd Party Management - A management company that manages a property as a service but doesn't own the property. Some 3rd party management companies are exclusively 3rd party. Some are a hybrid and part of their portfolio is 3rd party and part is owned and managed.

18. Owner - A company that owns property and hires a 3rd part management company to manage.

19. Owner Operator - A company than owns and manages their properties