8 Terms That All Real Estate Investors Must Know

Real estate is one of the most lucrative investments available. People will always need homes to stay in, whether temporarily or for the long-term, and providing them with the accommodation they need will bring you extra income even while you’re sleeping. However, the industry is notorious for using jargon that can sometimes alienate those hoping to invest.

Luckily, we’ve compiled some of the most common terms you’ll encounter when browsing for more properties to buy. That way, when you meet with industry experts, you’re ready to wow them with your knowledge and easily carry a conversation with them. It will also help you understand what you’re getting into when looking to self-manage rental property. Here are eight terms to keep in mind:

  • Lease

This is the written contract that outlines the terms and conditions of renting a property. Once the tenant signs the lease, they are immediately bound to the agreement and must comply, such as paying the agreed rental price according to the payment schedule. A lease is legally binding and can be used in court, so either party will be found legally liable if they do not follow the conditions as stated.

  • Lease Option

A lease option allows the tenant to decide on buying the rented property. It can replace the renting period or occur once the tenancy ends, in which the tenant can then choose to purchase or forgo the option. They also have this exclusive opportunity before the property owner puts it out in the market.

  • Tenant

A tenant is a person who occupies a rental property, whether a house or an apartment, for a specified period. They pay the landlord an amount of money they agree upon to stay in the unit. They also agree to the terms and conditions of the property owner, which are set in the terms of the lease.

  • Terms of the Lease

These are the conditions set forth by the property owner as rules that the tenant must agree to and abide by while they are staying in the rental unit. The terms can include the rent amount, payment schedule, security deposit amount, rental period, and more. They can also have pet policies, maintenance, repair, and other aspects of living in the property.

  • Fixture

A fixture is an item in the property that cannot be classified as personal property since they are attached to the unit. An example of this is a shelf drilled into the wall as it has become a permanent part of the home.

  • Property Management Agreement

This is a written contract between the property owner and the property management company, which clarifies the duties and responsibilities the company must carry out on behalf of the property owner.

  • Rent Control

Rent control is the law to control rent prices and ensure landlords do not indiscriminately raise rental prices. Many real estate investors are cautioned from buying rental properties in neighborhoods with rent control since it puts a cap on their potential earnings. 

  • Escrow Account

Escrow is the process of using an agent beyond the buyer and seller of the property to hold an asset. It is usually known as escrow money, but the asset can be other types, which is then held until the buyer and seller complete the contract terms. Escrow essentially keeps the money for the transaction safe while both parties review details and other aspects of the purchase.


These are some of the most commonly used terms in the industry. By understanding what they mean, you’ll have an easier time finding great properties to invest in and the fine print included in the documents you’ll have to read.

Quest Real Estate is a property management company specializing in all types, such as single-family investment homes, commercial office buildings, boutiques, and many more. Whether you’re hoping to buy or sell a property, we can help you accelerate the process. Contact us today to learn more about what we can do for you!