Property Keyword Glossary

The property world can seem like a foreign place if you are just starting out.

Being an apprentice myself, it took me quite some time to understand my HMO from my BMV. But do not panic! I have put together a Property keyword glossary to try and combat this confusion together.

 

A

  • Annualised Return- The amount of money your property makes over each given year.
  • Asset Class- a group of investments which share similar traits or characteristics

 

B

  • Below Market Value- lower than market average
  • Buy To Let (BTL) – Property which has been turned into rental property
  • Build To Rent- Purpose built rental property

 

C

  • Capital gains tax- tax on the profit you make when you sell an asset
  • Capital growth- Increase in value of property over time
  • Collective Investment Scheme- where income is shared between owners
  • Comparative Market Analysis- estimated value of a property based on similar properties sold in the same area

 

D

  • Diversification- adding different types of asset to an investment portfolio

 

E

  • Equity- estimated value of investment against owners outstanding debt

 

F

  • Financial Asset- non physical liquid assets where value comes from contractual claim
  • Financial Conduct Authority- regulatory body for financial services industry that protects customers
  • Fully Managed Investment- a developer manages everything from tenancy to maintenance for owners

 

G

  • Gross Development Value- value of an investment if it was sold on the open market
  • Gross Rate of Return- returns on your investment without deducting fees
  • Gross Yield- rate of return the property generates each year

 

H

  • Hedge- offset your investment exposure to wider economic functions
  • High Net Worth Investor- someone who earns more than £100,000 annually or has net assets of £250,000 or more
  • Houses in Multiple Occupation (HMO)- 2 or more individuals who are not family that live in the same building

 

I

  • Individual Investor- an organisation that invests money on behalf of its members
  • Income Tax- A tax charged on any income you make, including income from rent

 

K

  • Know your client- the legal process made by companies to verify identity/ funds

 

N

  • Net Profit- Actual profit after the deduction of any working expenses not included in the gross profit have been payed
  • Net Yield- annual rate of return following the deduction of fees

 

O

  • Occupancy Level- Proportion of properties that are occupied by a tenant
  • Off Plan- Property which is yet to be built which is bought based on plans
  • Open Market value- a prediction of what your property may sell for

 

P

  • Purpose built student accommodation- modern apartments designed for Uni students
  • Portfolio- a selection of investments that belong to one individual

 

R

  • Residential Property Investments- property that will be used as a place of residence

 

S

  • Stamp Duty Land Tax- tax payable upon completion of property purchase
  • Student Property Investments- investments in property which will house university students

 

V

  • Void period- a period of time where a rental property doesn’t have a tenant in and therefore isn’t making any money

 

Y

  • Yield- earnings a property has made over a period of time

 

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