Omni Storage: A rental side hustle that earns easy passive income

Omni rentals out for delivery

Looking for the easiest side hustle ever? Looking for how to make money without working? Try renting out new or unused items through Omni storage and Omni rentals.

My 27 day side hustle challenge

I set out to create a passive income stream / side hustle, a la Chris Guillebeau (Side Hustle School), that involved minimal work on my part.  You know the type, something very hands off. A quick note about me, I am very interested in the idea of rental property as a side hustle.  The problem with the typical rental property is that it is infinitely more complicated and definitively not hands off.

Normally, when one thinks of rental property, they think of residential real estate.  Real estate, unless you are old money, part of the current tech oligarchy (or robber barons), or freshly minted crypto-rich, isn’t acquired with the push of a Staples easy button.  No, managing a rental property is anything but hands off – tenants, repair requests, bookkeeping, and a whole host of other issues.

What about other types of property?  The barrier to entry for boat rentals is too extreme.  The market on car rentals has been cornered. Even something as innocuous as a snowblower rental company would prove too difficult.

For starters, I don’t exactly possess the faculty to repair and/or rebuild them, especially not when a renter drives the machine too hard, trying to throw wet snow and snapping the belt – something a renter would totally do!

Also, The South!  Half your market is toast on day one.

So I turned to Omni.

[skip to the rental process]

What is Omni?

Omni is an on-demand access and storage company based in San Francisco.  Omni was founded on the idea of that access to useful items in many cases is more desirable than ownership.  The question of access really highlights the idea of renting vs buying – I mean, where do you hide the fog machine and disco ball during a wine tasting party?  Similarly, unless you have a cool, brick loft with high ceilings, you will find that hanging your bike on hooks is a bit prohibitive in a 450 sq ft apartment.

Moving beyond minimalist living, they are encouraging everyone to “live lighter”.

What is Omni building and trying to solve?

Omni is building a concierge service to share and rent your stuff, all through the convenience of your iPhone (or a webapp).  You can borrow a ladder from a friend, rent a bike from the Omni community, or use a drone to try before you buy – it’s really simple and user friendly.

It’s clear that storage containers for rent is a booming industry, especially in a city like San Francisco.  By enabling users to share or rent stored belongings with one another, Omni can decrease the dependence on individually rented storage containers and revolutionize the concept of ownership in our lives.  At the very least, it claims that as a primary goal.

Why is this important?

Transit authority, Jarrett Walker, who famously got into a public tête-à-tête with Elon Musk, shared his thoughts on an article that Curbed wrote about the $38 Billion Dollar Industry of Self-Storage.

With larger trends pointing toward less space, less ownership, and more urban living, self-storage seems primed to find more room for, and profit from, your possessions. – Curbed

This quote is taken directly from the article that Jarrett Walker and Alissa Walker are referencing.  It makes a strong case for access over ownership, illustrating Omni’s value prop in no uncertain terms.

It’s clear that trends in real estate and the shifting demographic of urban residency is leaving many people with limited space to store their material goods.

The benefits of Omni storage

The primary benefits of using Omni can be found within their logistics and inventory management process.  For storage, Omni offers a convenient way to offload a lot of unused items from your small apartment and recall those items same day.

For Omni Rentals, users can access other people’s belongings for a (sometimes?) reasonable fee.  Once again, acquiring those items same day.

Their user experience is really strong, here are more benefits:

  • Search – you can find whatever you need within the Omni community with relative ease.  They do a good job of displaying relevant items via keyword search, trending category, or general browsing.
  • Convenience – Omni will deliver to you and pick up, wherever you are, within their service area, 7 days a week, 7:30am to 8:30pm.
  • Marketplace – they have a diverse marketplace, full of all sorts of useful items, ranging from kitchenware to camping gear.
  • Omni shield – Real brief, a protection policy to insure the quality of your belongings.
  • Photography – Omni’s photography is unparalleled in the rental space.  Users get a vivid picture of the actual item they receive.

Why is Omni storage a good fit for San Francisco?

It is well known that apartment rents in SF are outrageous, and with exorbitant rent comes increasingly less and less space.  Getting back to the 450 sq ft apartment idea, you don’t get a bedroom with a walk-in closet, you get a walk-in closet where you can put your bed.

So, rental storage in the Bay Area and downtown San Francisco comes at a premium.  Beyond the obvious connection to Silicon Valley and the tech industry as a whole, the current real estate and self-storage market has created a perfect climate for Omni to launch an on-demand access platform.

Omni plans on expanding to a new city (or cities) if COO, Ryan Delk is to be believed.

* Update – Omni is expanding to Portland, OR. This feels like a natural fit for Omni, a place where they can acquire a different set of data based on a different pervading culture. If Portlandia is to be believed, I should start renting out things from the 90s through the rental app.

Why is Omni storage a good fit as a side hustle and smart passive income stream?

It’s hands off.  You can operationalize income producing assets in just a few clicks.  I will cover just how easy it was to set up an account, do some quick research, and then purchase and ship items to Omni.

Being on a budget – launching for under $500

I didn’t want to break the bank trying to launch a side hustle.  That being said, when you are renting income generating assets, you need to start with money to make money.  Unless you are dumpster diving (not my thing).

So, I had to purchase physical stock.  Here is what the rental app looks like (my stuff!)

Omni storage and rentals

Hey, it’s my items for rent!


The entire Omni Rentals process (for me)

  1. Sign up for Omni account
  2. Research items to buy
  3. Buy on Amazon
  4. Ship to Omni
  5. They onboard the item (verification), taking photos, unboxing it, etc.
  6. I fill in the name, make, model, size, description, etc.
  7. I set the rental price and availability (including blocked off dates and price for friends)
  8. Make it available for rent!
  9. Collect $$ (hopefully)

Omni’s rental instructions

To note, it is important to write a strong description.  A mix of keywords, attention grabbing copy, and accurate product data will get you more visibility.  Omni likes to group rentals by events and trending categories.

Events: Valentine’s Day, Super Bowl, etc.

Categories: Try before you buy, Outdoor gear, Electronics, etc.

As a side hustle, and potential revenue stream, I only want to send brand new items.  I don’t want to deal with bad reviews from my own wear and tear, prior to Omni onboarding the item.  Also, there is a hidden benefit to using Amazon.

The primary benefit of using Amazon with Omni storage

Free shipping.  As a prime member, I can send items directly to Amazon for free, usually within two days.

  • Upside: No shipping costs (unlike that bike in your basement)
  • Downside: California sales tax

Additionally, If you sign up for an Amazon Prime credit card, you get 5% back on Amazon.com purchases.  This should mostly negate the impact of the CA sales tax (which may not apply in the future if Omni expands into other markets).

Also, you might qualify for a promotion.  I received $70 dollars as a first time sign-up bonus.

Another benefit:  Limited work on my end which is ideal for a side hustle.  Remember, the goal is to be hands off as much as possible.  I’ve turned what could be a tedious task, sorting through my closet, boxing up items, getting over to Fedex/UPS, and simplified it to the push of a few buttons.

How much does storage cost through Omni?

The pricing structure is $0.50 per month for a standard item and $3.00 per month for a large item.  They offer closed storage containers for rent at $7.50 per month, but that isn’t going to help our rental business make money.

Omni has made the deliberate choice to bill by item, not by the square footage the item takes up.  Certainly a decision that they believe provides them with a competitive advantage.

What do they charge for rental fees?

A flat rate of 50% of your rental.

Is the rental fee tax deductible?

I have no idea.  You should probably consult your accountant.  In fact, I hadn’t even considered that until writing this sentence.

Where did I get the idea to rent items on Omni rentals?

Late last fall, I found myself thumbing through Chris Guillebeau’s Side Hustle: From Idea to Income in 27 Days and wondering what I could do for my next side hustle.  I won’t lie, I didn’t settle on using Omni storage until early January, a couple of months after the launch of Omni Rentals.

I had known about the company for some time.  However, not living in San Francisco or the Bay Area really kept Omni off my radar as a potential side hustle, even with the October launch of Omni Rentals.

I’d like to say that I followed Chris Guillebeau’s book exactly, but the book arrived at my house 37 days before the above Ryan Delk tweet, a tweet that prompted me to consider this as a viable, smart passive income stream.  From there, it took another 20 days to move forward with the idea and get my items into Omni storage.

Here are the items (physical stock) that I am renting out:

Links are active, so if you live in San Francisco or the Bay Area and are throwing a birthday party for your kid, give the gift of Bouncy House!

Why did I choose those items to rent out?

The baby-related items were based on a post from Omni’s blog, Earn Money with Omni – The 10 Most Popular Rental Items.

Omni storage and rentals top 10 popular rental items

Omni Top 10 rental items

After some quick research, it seemed like Baby Items would be an easy category to walk into.  As a parent, I know that traveling with baby gear (strollers, cribs, pack’n’play) can get a bit cumbersome.  Wouldn’t it be better to just rent an item that ships to my destination?

The entire Omni rental product page

Updated photos upon return? Strong work, Omni!

The wheelchair was based on Ryan’s tweet [above] boasting $79/mo. in rental income.  It has since dipped to $37.50/mo., no doubt due to the influx of inventory (mine included) coming into the rental app.

Why the bouncy house?  Bouncy houses are baller.

So, are they income producing assets?

Yes and no.  One is. Three of them might become incoming producing assets in time.

Let’s start with the positive:

The Wheelchair

Omni Rental Item Display Card

5 stars! Sweet!

The wheelchair has outperformed my expectations.  This could be due to demand, it could be due to competitive pricing, it could be due to listing a more robust set of details and information than the competition.

Overall, I am not sure.  Based on Ryan Delk’s tweet [above], I’d put my money on demand.  When I signed up for Omni storage and reviewed other wheelchair details, they were nearly blank.  It seems that my efforts have sparked the competition to be more complete in their product descriptions.

I make sure to be as accurate and complete as possible when listing an item for rent.  You never know, the added copy might help.

Here is the current performance of the wheelchair, shown below.  You will see that I did not get the Amazon card’s 5% back rebate, I hadn’t received the card yet.  It was unfortunate, but not a deal breaker.

Wheelchair profit and loss, Omni Rentals

Wheelchair doing quadruple duty …

I have some current payments pending which will show March in a much better light, and, I have a support issue* being worked on for a rental that isn’t shown in February.  I plan to write a follow-up article at the end of month 6 to see how things are progressing. I truly believe that the wheelchair will have paid for itself and then some at that point.

Part of the (hopeful) profit here was getting a great price with an open box deal item.  I could afford to keep my price competitive with the wheelchair as I acquired it for only $112.79.

* Omni customer service is fantastic.  They are a pleasure to speak with, prompt, courteous, everything you’d want in a support team.

The Stroller, Pack’n’Play, and the Bouncy House

And now the negative.  Ouch. Hit hard here. All brand new items.  Zero rentals.

Serves me right for buying outdoor items out of season.

Do I have faith that things will turn around?  For sure. In fact, Omni advocates for even better pricing than I am offering, which was already competitive and lower than my competition.  Omni rentals says that you should price your rental items at 6% MSRP.

Let’s dig in and see if pricing was affecting me.

Omni Stroller Rental Price

Under the target 6%, for the win!

The Stroller

Ok, I am in the Omni rentals specified target % here.  There are currently 6 strollers and I am the cheapest by $3.  Unless Omni itself shares the data, I am going to chalk the lack of stroller rentals up to overall demand.

Omni Pack'n'Play Rental Price

Still a few % points off of the 6% target

The Pack’n’Play

Ok, seems I started a bit too greedy high.  I am still above the suggested 6% and that might hurt me.  There are two other pack’n’plays and two cribs, one a fancy travel crib.  The pricing is as follows, $15 fancy travel crib, $10 pack’n’play, $6 pack’n’play, $4 (me), and $3 crib.

The Pack'n'Play I am keeping in Omni storage

A Pack’n’Play Portable Playard

It feels as though it’s a demand issue.  I have the lowest price for my item, and, I offer the additional benefit of more portability than the crib ($1 lower).  The one thing that isn’t in my favor (maybe?) is that Omni storage never unpacked the box. The boxed up item might be affecting rentals, who knows?

Omni Bouncy House Rental Price

Getting closer to the suggested 6% MSRP

The Bouncy House

My pièce de ré·sis·tance.  I am getting scared that Bay Area children are being denied awesome birthday parties.  Come on, Omni, promote this inflatable delight machine!

Bouncy House profit and loss, Omni Rentals

Ouch! The Bouncy House needs some kids to jump on it!

I very nearly could have purchased two more open box Wheelchairs for $206.99.  Sure, it might have watered down the average monthly rental price, but it would have been a safer bet for a positive ROI.

On the flipside, it too suffers from not being unboxed.  Perhaps the spring weather will drive some rental growth.  Otherwise, I am just shelling out loot to Omni storage uselessly.

Am I satisfied with the results?

The total purchases came to $434.16.  At the current rate, I am not projected to break even until after 2 years have passed.  On the surface, that is a poor investment. The likelihood that these items become worn and used is quite high, almost to the point of losing their income producing status.

Omni Storage Business Annual Rental Projection

In the red, so far …

However, the almighty Wheelchair has some pending rental fees that need to be credited to my account, plus the support issue that needs to be resolved.  When taking those factors into account, I feel safe on breaking even in year one. As I said, I expect to update these numbers after month 6.

Other items I’d consider renting

I’d start by going back to the top 10 list that Omni posted.  Additionally, I’d consider renting out a Vitamix. Not only are they resilient, but they would make a great try before you buy rental due to their higher price point than a standard blender.  Then again, I’d have to buy a new one because I’d never consider renting my own out, it’s just too good.

Plus, I’m too busy hyperdecanting two buck chucks with my Vitamix.

Have I had any issues with Omni rentals?

Only one, a rental extension on the wheelchair.  Apparently it is a bug in the system or an incomplete feature.  Either way, they are working to fix it. Once again, fantastic customer service.

Total Time Spent on this side hustle

Excluding what I’ve written, probably about 6-8 hours.  That includes researching the company, setting up the account, dealing with the customer service issue, chatting with the support staff on Omni chat about trending rentals, and a few minutes just checking out the rentals app.

I am looking forward to see if this becomes a failed experiment or a success.  I do take heart in the fact that serial entrepreneur, all-around business advice dispenser, Patio11 is interested in the Omni rental game (or rather his wife).  If someone much more accomplished than I has skin in the game, then it can’t all be bad.

What are my major takeaways from using Omni storage?

The rental process was easy to set up and get started.  The first “Cha-Ching” email is an absolute delight. I listed the Wheelchair on January 18th and four days later, it’s on it’s way out the door.

Omni notification email saying Cha-ching, Your Wheelchair has been rented

Cha-ching! Wheelchair rented!

In no particular order, here are my top 4 takeaways

  1. Per COO Ryan Delk, the wheelchair was a great investment. I plan to buy another when Omni storage expands into the next market(s). The $112 price tag, if I can get the open box deal again, and the 5% back from the Amazon card should deliver excellent returns.
  2. Don’t buy outdoor items in January, no matter what.  Being first to market with a bouncy house pays you zero when kids have coats on.  Reminder to self, break this rule when Omni launches in Saskatchewan!
  3. Omni rentals will share a little bit of the special rental sauce if you ask nicely.  Part of their success depends on people investing in rental items.
  4. Finding open box deals on Amazon are a key to maximizing profits. Definitely something to pay attention when using Amazon and Omni together.
  5. Bonus Takeaway: Their customer service really is fantastic.  I’ve said it a lot and I really really mean it.  To be fair, they use Intercom which is pretty fantastic for customer success management.

Things I’d like to see

I would really like to know what city or cities Omni storage will be expanding to.  COO Ryan Delk has polled users on Twitter, using Portland, Los Angeles, Boston, and Austin as potential targets.  They all represent interesting opportunities across culture, size, demographic, tech evangelism, etc.

One feature that might be interesting would be a long-term rental discount.  I don’t have the data to support it, and I could be wrong in my assumption, but promotional pricing could make the difference in a rental decision down the line.

Would I invest and buy more items to rent out?

Absolutely, if the numbers support it.  I really think it’s an interesting space, regardless of how the financials play out.

How do you start renting out stuff with Omni rentals?

First, download the app.  Or, you can sign-up at BeOmni.com.

If you do, feel free to use my referral code below.  You get $25 in Omni credit and I get $10 when you store your first item.  Good deal for both of us, right?

Referral Code: TFEELEY

Thanks for your patience while reading about my new side hustle.  I hope it inspires you to pursue your own passive income streams.

If you have any questions, feel free to reach out – tom @ tomfeeley.com

Main photo by

Maarten van den Heuvel

497 Real Estate Terms: The Ultimate Real Estate Glossary

If you’re getting into real estate, than these real estate terms are for you. Here are 497 terms and definitions to use as a study guide for the real estate agent exam. If you’re already a salesperson or broker, than this real estate glossary will help you brush up on phrases that you may not come in contact with on a day to day basis.

Skip to the flashcards & terms

What can I do with these real estate terms?

Use it as a study guide for taking the real estate exam.  You could read the entire list word for word, make flashcards (scroll down for the flashcards I made), create your own quiz, or even copy the entire list yourself. I found that copying and recopying the terms and definitions was the best way to create my own real estate exam study guide.

Do I need to know all 497 real estate terms to pass the real estate salesperson exam?

No.  For starters, a perfect score on the exam is not required to obtain a real estate license. So, you do not need to know them all to pass.  However, studying these terms will improve your changes for both the state and national real estate exams.

Will I need to know them in the field?

Yes.  These terms will come up everywhere, from MLS property descriptions to interacting with real estate attorneys and developers.  Top real estate agents know these terms and definitions, so start building your vocabulary.

How much of this real estate exam study guide is just jargon?

A fair share.  Don’t be intimidated.  Separate yourself from less detail oriented salespersons and brokers by studying these realty terms.  Once you are familiar with the lingo, it will become much easier to traverse.

Are there terms or definitions that I can skip right over?

Probably just commission.  We all know that means getting paid, right?

I am a landlord/property manager, does any of this apply to me?

Maybe?  As a person responsible for the management of an income property, familiarizing yourself with some of the terms and definitions in the list below can only benefit the daily operation and profitability of the business.  Create good customer service with a repair request form.

I am already a Real Estate Agent, Salesperson, Broker, Realtor, etc., and I know the terms and definitions, why should I continue on?

Congratulations. Feel free to review them below.

Real Estate Flashcards


– – –

The 497 Real Estate Terms & Definitions

1031 Exchange (1031 tax deferred exchange)

Under Section 1031 of the IRS Code, some or all of the realized gain from the exchange of one property for a like kind property may be deferred. It is not a tax-free event; however, in order to accumulate wealth, the payment is deferred.

Real estate terms that begin with A

Abandonment

The voluntary and permanent cessation of use or enjoyment with no intention to resume or reclaim one’s possession or interest. May pertain to an easement of a property.

Abstract of title

A condensed version of the history of a title to a particular parcel of real estate as recorded in the county clerk’s records; consists of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property.

Abutting

The joining, reaching, or touching of adjoining land. Abutting parcels of land have a common boundary.

Accelerated depreciation

A method of calculating for tax purposes the depreciation of income property at a faster rate than would be achieved using the straight-line method. Any depreciation taken in excess of what would be claimed using the straight-line rate is subject to recapture as ordinary income to the extent of the gain resulting from the sale.

Acceleration clause

A provision in a written mortgage, note, bond, or conditional sales contract that in the event of default, the whole amount of the principal and the interest may be declared due and payable at once.

Accession

Title to improvements or additions to real property is acquired as a result of the accretion of alluvial deposits along the banks of streams or as a result of the annexation of fixtures.

Accretion

An increase or addition to land by the deposit of sand or soil washed up naturally from a river, lake, or sea.

Accrued depreciation

The actual depreciation that has occurred to a property at any given date; the difference between the cost of replacement new (as of the date of the appraisal) and the present appraised value.

Acknowledgment

A declaration made by a person to a notary public or other public official authorized to take acknowledgments that an instrument was executed by him or her as a free and voluntary act.

Actual eviction

The result of legal action originated by a lessor, by which a defaulted tenant is physically ousted from the rental property pursuant to a court order.

Actual notice

Express information or fact; that which is known; actual knowledge.

Administrator

The party appointed by the county court to settle the estate of a deceased person who died without leaving a will.

Ad Valorem tax

A tax levied according to value; generally used to refer to real estate tax.

Adverse Possession

The actual, visible, hostile, notorious, exclusive, and continuous possession of another’s land under a claim to title. Possession for a statutory period may be a means of acquiring title.

Affidavit

A written statement signed and sworn to before a person authorized to administer an oath.

Agent

One who represents or has the power to act for another person (called the principal). The authorization may be express, implied, or apparent. A fiduciary relationship is created under the law of agency when a property owner, as the principal, executes a listing agreement or management contract authorizing a licensed real estate broker to be her or his agent.

Agreement of sale

A written agreement by which the purchaser agrees to buy certain real estate and the seller agrees to sell, on the terms and conditions set forth in the agreement.

Air lot

A designated airspace over a piece of land. Air lots, like surface property, may be transferred.

Air rights

The right to use the open space above one’s property. It can be sold to build a skywalk or for a utility company to erect power lines.

Alienation

The act of transferring property to another. Alienation may be voluntary, such as by sale, or involuntary, such as through eminent domain.

Alienation clause

Clause in a mortgage instrument that does not all the borrower to sell (without lender approval) on assumption or contract-for-deed. If an attempt is made to do so without prior approval, all of the mortgaged balance becomes due on the sale of the property.

Alluvion

The actual soil increase resulting from accretion.

Amendments

Changes to previously approved and adopted written agreements are amendments.

Amenities

Neighborhood facilities and services that enhance a property’s value. They are always outside of the property. Swimming pools, three-car garages, decks, etc., that are on the property are called features.

Americans with Disabilities Act (ADA)

A federal law, effective in 1992, designed to eliminate discrimination against individuals with disabilities.

Amortization

The liquidation of a financial burden by installment payments, which include principal and interest.

Amortized loan

A loan in which the principal and interest are payable in monthly or other periodic installments over the term of the loan.

Anticipation

An appraising principle created by the expectation of certain future events causing values to either increase or decrease.

Antitrust laws

The laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. Violation of antitrust laws in the real estate business generally involves either price fixing (brokers conspiring to set fixed compensation rates) or allocation of customers or markets (brokers agreeing to limit their trades or dealings to certain areas or properties).

Appraisal

An estimate of the quantity, quality, or value of something. The process through which conclusions about property value are obtained; also refers to the report that sets forth the process of estimation and conclusion of value.

Appraised value

An estimate of a property’s present worth.

Appreciation

An increase in the worth or value of a property, due to economic or related causes, which may prove to be either temporary or permanent.

Appurtenant

Belonging to; incident to; annexed to.

Arbitrage

The simultaneous purchase and sale of a security with the purpose of obtaining a higher yield from the differential between its acquisition and selling price.

Arbitration

A means of settling a controversy between two parties through the medium of an impartial third party whose decision on the controversy (if agreed upon) will be final and binding.

Assessment

The imposition of a tax, charge, or levy, usually according to established rates.

Assignment

The transfer in writing of rights or interest in a bond, mortgage, lease, or other instrument.

Assumed name statute

The law, in effect in most states, that stipulates that no person shall conduct a business under any name other than his or her own individual name, unless such person files the desired name with the county clerk in each county where the business is conducted. In the case of brokers and salespeople, statement of such filing should be submitted to the state’s real estate commission.

Assumption of mortgage

The transfer of title to property to a grantee, by which the grantee assumes liability for payment of an existing note secured by a mortgage against the property. Should the mortgage be foreclosed and the property sold for a lesser amount than that due, the grantee/purchaser who has assumed and agreed to pay the debt secured by the mortgage is personally liable for the deficiency. Before a seller may be relieved of liability under the existing mortgage, the lender must accept the transfer of liability for payment of the note.

Attorney-in-fact

The holder of a power of attorney.

Attorney’s opinion of title

An instrument written and signed by the attorney who examines the title, stating her or his opinion as to whether a seller may convey good title.

Avulsion

A sudden tearing away of land by the action of natural forces.

Real estate terms that begin with B

Balloon payment

The final payment of a mortgage loan that is considerably larger than the required periodic payments, because the loan amount was not fully amortized.

Bargain and sale deed

A deed that carries with it no warranties against liens or other encumbrances but that does imply the grantor has the right to convey title. The grantor may add warranties to the deed at his or her discretion.

Base fee

A determinable fee estate that may be inherited.

Base line

One of a set of imaginary lines running east and west and crossing a principal meridian at a definite point. Base lines are used by surveyors for reference in locating and describing land under the rectangular survey system (or government survey method) of property description.

Benchmark

A permanent reference mark or point established for use by surveyors when measuring differences in elevation.

Beneficiary

1. The person for whom a trust operates or in whose behalf the income from a trust estate is drawn. 2. A lender who lends money of real estate and takes back a note and deed of trust from the borrower.

Bequest

A provision in a will providing for the distribution of personal property.

Bilateral contract

A contract in which each party promises to perform an act in exchange for the other party’s promise to perform.

Bill of sale

A written instrument given to pass title to personal property.

Binder

An agreement that may accompany an earnest money deposit for the purchase of real property as evidence of the purchaser’s good faith and intent to complete the transaction.

Blanket mortgage

A mortgage that covers more than one parcel of real estate and provides for each parcel’s partial release from the mortgage lien on repayment of a definite portion of the debt.

Blockbusting

The illegal practice of inducing homeowners to sell their properties by making representations regarding the entry, or prospective entry, of minority persons into the neighborhood.

Blue-sky laws

The common name for state and federal laws that regulate the registration and sale of investment securities.

Boycotting

Two or more businesses conspire against other businesses to reduce competition.

Branch office

A secondary place of business apart from the principal or main office from which real estate business is conducted. A branch office generally must be run by a licensed real estate broker, broker salesperson, or associate broker working on behalf of the broker operating the principal office.

Breach of contract

The failure, without legal excuse, of one of the parties to a contract to perform according to the contract.

Bridge loan

A loan that bridges the sale of property.

Broker

One who buys and sells for another for a commission.

Brokerage

The business of buying and selling for another for a commission.

Broker/Salesperson

A person who has passed the broker’s licensing examination but it is licensed to work only on behalf of a licensed broker and who may be allowed to manage an office. In many states, known as (and licensed as) associate broker or broker/associate.

Brownfields

Deserted, defunct, and derelict toxic industrial sites in need of renewal. Federal legislation has diminished the innocent landowner’s liability exposure and provided the landowner the opportunity to expense cleanup costs rather than capitalize them.

Budget loan

A loan in which the monthly payments made by the borrower cover not only interest and a payment on the principal, but also 1/12 of such expenses as taxes, insurance assessments, private mortgage insurance premiums, and similar charges.

Buffer zone

A strip of land that separates one land use from another.

Building code

An ordinance specifying minimum standards of construction of buildings for the protection of public safety and health.

Building line

A line fixed at a certain distance from the front and/or sides of a lot beyond which no structure can project; a setback line used to ensure a degree of uniformity in the appearance of buildings and unobstructed light, air, and view.

Building restrictions

The limitations on the size or type of property improvements established by zoning acts or by deed or lease restrictions. Building restrictions are considered encumbrances and violations render the title unmarketable.

Bundle of legal rights

The theory that land ownership involves ownership of all legal rights to the land, such as possession, control within the law, and enjoyment, rather than ownership of the land itself.

Business plan

A three to five year blueprint for an organization or individual real estate practitioner.

Buydown

A payment made, often by the seller, to help the buyer qualify for the loan.

Real estate terms that begin with C

Canvassing

The practice of making telephone calls or visiting from door to door to seek prospective buyers or sellers; in the real estate business, generally associated with acquired listings in a given area.

Capacity of parties

The legal ability of persons to enter into a valid contract. Most persons have fully capacity to contract and are said to be competent parties.

Capital gain

Profit earned from the sale of an asset.

Capital investment

The initial capital and the long-term expenditures made to establish and maintain a business or investment property.

Capitalization

The process of converting into present value (or obtaining the present worth of) a series of anticipated future periodic installments of net income. In real estate appraisal, it usually takes the form of discounting. The formula is Income/Rate = Value

Capitalization rate

The rate of return a property will produce on the owner’s investment.

Cash flow

The net spendable income from an investment, determined by deducting all operating and fixed expenses from the gross income. If expenses exceed income, a negative cash flow is the result.

Casualty insurance

A type of insurance policy that protects a property owner or other person from loss or injury sustained as a result of theft, vandalism, or similar occurrences.

Caveat emptor

A Latin phrase meaning, “let the buyer beware.”

Certificate of sale

The document generally given to a purchaser at a tax foreclosure sale. A certificate of sale does not convey title; generally, it is an instrument certifying that the holder may receive title to the property after the redemption period has passed and that the holder paid the property taxes for that interim period.

Certificate of title

The statement of opinion on the status of the title to a parcel of real property, based on an examination of specified public records.

Chain of title

The succession of conveyances from some accepted starting point by which the present holder of real property dervies his or her title.

Charrettes

Community planning tool that welcomes and improves public participation in discussions about a community’s future growth and development.

Chattels

Personal property.

Check

Tracts of land located repetitively every 24 miles from a principal meridian and 24 miles from a defined base line. Guide meridians and correction lines define a check;s boundaries, consisting of 16 townships. A correction line “corrects” for the curvature of the earth, and guide meridians slant to compensate for North Pole directional movement.

City planning commission

A local government organization designed to direct and control the development of land within a municipality.

Claim of right

Used as a factor in determining adverse possession claims. Adversely occupying another’s real estate for a statutory period of time may create a claim of right.

Cloud on title

A claim or encumbrance that may affect the title to land.

CLUE

An insurance company repository for reported claim activity and previous property damage. CLUE is an acronym for Comprehensive Loss Underwriting Exchange. Insurers use the report to ascertain patterns of possible future claims and adjust their insurance premiums according to risk.

Codicil

A testamentary disposition subsequent to a will that alters, explains, adds to, or confirms the will, but does not revoke it.

Coinsurance clause

A clause in insurance policies covering real property that requires the policyholder to maintain fire insurance coverage that is generally equal to at least 80% of the property’s actual replacement cost.

Collateral

Something of value given or pledged to a lender as a security for a debt or obligation.

Color of title

Used as factor in an adverse possession claim when the occupying party actually received title but by a defective or incorrect deed (color of title).

Commercial property

A classification of real estate that includes income-producing property, such as office buildings, restaurants, shopping centers, hotels, and stores.

Commingled property

Property of a married couple that is so mixed or commingled that it is difficult to determine whether it is separate of community property. Commingled property becomes community property.

Commingling

The illegal act of a real estate broker who mixes the money of other people with that of his or her own; brokers are required by law to maintain a separate trust account for other parties’ funds held temporarily by the broker.

Commission

The payment made to a broker for services rendered, such as in the sale or purchase of real property; this is usually a percentage of the selling price of the property.

Common elements

The parts of a property that are necessary or convenient to the existence, maintenance, and safety of a condominium, or that are normally in common use by all of the condominium residents. All condominium owners have an undivided ownership interest in the common elements.

Common law

A body of law based on custom, usage, and court decisions.

Community property

A system of property ownership based on the theory that each spouse has an equal interest in the property acquired by the efforts of either spouse during marriage.

Comparables

The sold properties, listed in an appraisal report, which are substantially equivalent to the subect property.

Competent parties

Persons who are recognized by law as being able to contract with others; usually those of legal age and sound mind.

Composite depreciation

A method of determining the depreciation of a multi-building property using the average rate at which all the buildings are depreciating.

Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)

Federal legislation passed in 1980 requiring owners of contaminated properties to bear the cleanup costs.

Condemnation

A judicial or administrative proceeding or process to exercise the power of eminent domain.

Condominium

The absolute ownership of an apartment or a unit, generally in a multi-unit building, based on a legal description of the airspace the unit actually occupies, plus an undivided interest in the ownership of the common elements, which are owned together with the other condominium unit owners. The entire tract of real estate included in a condominium development is called a parcel or development parcel. One apartment or space in a condominium or part of a property intended for independent use and having lawful access to the public way is called a unit. Ownership of one unit also includes a definite undivided interest in the common elements.

Conforming mortgages

Securitized mortgages sold on the secondary market that meet certain requirements established by Fannie Mae and Freddie Mac.

Consideration

Something of value that induces one to enter into a contract. Consideration may be “valuable” (money or commodity) or “good” (love and affection”). Also, an act of forbearance, or the promise thereof, given by one party in exchange for something from the other. Forbearance is a promise not to do something.

Constructive eviction

1. Acts by the landlord that so materially disturb or impair the tenant’s enjoyment of the leased premises that the tenant is effectively forced to move out and terminate the lease without liability for any further rent. 2. A purchaser’s inability to obtain clear title.

Constructive notice

Notice given to the world by recorded documents. All persons are charged with knowledge of such documents and their contents, whether or not they have actually examined them. Possession of property also is considered constructive notice that the person in possession has an interest in the property.

Contingencies

A provision or condition in the purchase of real estate requiring a certain act to be done or an event to happen before the contract becomes binding.

Contract

An agreement entered into by two or more legally competent by the terms of which one or more of the parties, for a consideration, undertakes to do or to refrain from doing some legal act or acts. A contract may be either unilateral (where only one party is bound to act) or bilateral (where all parties to the instrument are legally bound to act as prescribed).

Contract for deed

A contract for the sale of real estate under which the sale price is paid in periodic installments by the purchaser, who is in possession and holds equitable title, although actual title is retained by the seller until final payment.

Contract for exchange of real estate

A contract for sale of real estate in which the consideration is paid wholly or partly in property.

Contributory value

An appraising principle where the value of a property’s component parts are measured by their effect on the selling price of the whole. Appraisers use sold properties as “paired sales” to isolate component parts and to identify their monetary contribution to the whole.

Conventional loan

A loan that is not insured or guaranteed by a government agency.

Conveyance

A written instrument that evidences transfer of some interest to real property from one person to another.

Cooperative

A residential multi-unit building whose title is held by a trust or corporation that is owned by, and operated for, the benefit of persons living within the building. These persons are the beneficial owners of the trust or the shareholders of the corporation, each having a proprietary lease.

Corporation

An entity or organization created by operation of law whose rights of doing business are essentially the same as those of an individual. The entity has continuous existence until dissolved according to legal procedures.

Correction lines

The horizontal provisions in the rectangular survey system made to compensate for the curvature of the earth’s surface. Every fourth township line is used as a correction line on which the intervals between the north and south range lines are remeasured and corrected to a full six miles.

Cost approach

The process of estimating the value of a property by adding the appraiser’s estimate of the reproduction or replacement cost of the building, less depreciation, to the estimated land value.

Counseling

The business of providing people with expert advice on a subject, based on the counselor’s extensive, expert knowledge of the subject.

Counteroffer

A new offer made as a reply to an offer received, having the effect of rejecting the original offer. The original offer cannot be accepted thereafter unless revived by the offeror repeating it.

Covenants, Conditions, and Restrictions (CC&Rs)

Condominium documents that serve as the operational procedures describing the rights and prohibitions of the co-owners in a condominium association.

Credit scoring

A three-digit score that assesses a borrower’s credit risk and the probability of default based on his or her past pay performances, outstanding credit balances, credit mix, time on file, and number of search inquiries.

Cul-de-sac

A dead-end street that widens sufficiently at the end to permit an automobile to make a U-turn.

Curtesy

A life estate, usually a fractional interest, given by some states to the surviving husband in real estate owned by his deceased wife. Most states have abolished curtesy.

Cycle

A recurring sequence of events that regularly follow one another, generally within a fixed interval of time.

Real estate terms that begin with D

Datum

A horizontal plane from which heights and depths are measured.

Defeasible fee estate

A qualified estate in which the grantee could lose his or her interest upon the occurrence or non-occurrence of a specified event. There are two types of defeasible fee estates: (1) Those known as a condition subsequent where the possibility of re-entry takes place, and (2) A qualified limitation, where the grantee’s ownership automatically ends with the possibility of reverter (otherwise known as a fee simple determinable). The words as long as, while, or during are key to creating a qualified limitation defeasible fee estate.

DBA

Doing business as

Debenture

A note or bond given as evidence of debt and issued without security

Debt

Something owed to another; an obligation to pay or return something.

Declining balance method

An accounting method of calculating depreciation for tax purposes designed to provide large deductions in the early years of ownership.

Deed

A written instrument that when executed and delivered conveys title to, or an interest in, real estate.

Deed in lieu of foreclosure

A process by which the mortgagor can avoid foreclosure. Mortgagor gives a deed to mortgagee when mortgagor is in default according to terms of mortgage.

Deed of reconveyance

The instrument used to reconvey title to a trustor under a deed of trust once the debt has been satisfied.

Deed of trust

An instrument used to create a lien by which the mortgagor conveys her or his title to a trustee, who holds it as security for the benefit of the noteholder.

Deed restrictions

The clauses in a deed limiting the future users of the property. Deed restrictions may impose a variety of limitations and conditions, such as limiting the density of buildings, dictating the types of structures that can be erected, and preventing buildings from being used for specific purposes or from used at all.

Default

The nonperformance of a duty, whether arising under a contract or otherwise; failure to meet an obligation when due.

Defeasance clause

A clause used in leases or mortgages that cancels a specified right on the occurrence of a certain condition, such as cancellation of a mortgage on repayment of the mortgage loan.

Deficiency judgment

A personal judgment levied against the mortgagor when a foreclosure sale does not produce sufficient funds to to pay the mortgage debt in full.

Delinquent taxes

Unpaid taxes that are past due.

Delivery

The legal act of transferring ownership. Documents such as deeds and purchase agreements must be delivered and accepted to be valid.

Delivery in escrow

Delivery of a deed to a third person until the performance of some act or condition by one of the parties.

Demand

The willingness of persons to buy available goods at a given price; often coupled with supply.

Density zoning

The zoning ordinances that restrict the average maximum number of houses per acre that may be built within a particular area, generally a subdivision.

Depreciation

1. In appraisal, a loss of value in property due to all causes, including physical deterioration, functional obsolescence, and economic obsolescence. 2. In real estate investment, an expense deduction for tax purposes taken over the period of ownership of the income property.

Descent

The hereditary succession of an heir to the property of a relative who dies intestate.

Designed agency

An agency relationship where a client designates a broker to appoint an office agent to singularly represent his or her interest to the exclusion of all of the other agents in the broker’s office.

Determinable fee estate

A fee-simple estate in which the property automatically reverts to the grantor on the occurrence of a specified event or condition.

Devise

A transfer of real estate by will or last testament. The donor is the devisor and the recipient is the devisee.

Diminishing returns

The principle that applies when a given parcel of land reaches its maximum percentage return on investment, and further expenditures for improving the property yield a decreasing return.

Discount points

An added loan free charged by a lender to make the yield on a lower-than-market-value loan competitive with higher-interest loans.

Discount rate

The rate of interest a commercial bank must pay when it borrows from its federal reserve bank. Consequently, the discount rate is the rate of interest the banking system carries within its own framework. Member banks may take certain promissory notes that they have received from customers and sell them to their district federal reserve bank for less than face value. With the funds received, the banks can make further loans. Changes in the discount rate may cause banks and other lenders to reexamine credit policies and conditions.

Dispossess

To oust from land by legal process.

Dominant tenement

A property that includes in its ownership the appurtenant right to use an easement over another’s property for a specific purpose.

Dower

The legal right or interest recognized in some states that a wife acquires in the property her husband held or acquired during their marriage. During the lifetime of the husband, the right is only a possibility of an interest; on his death it can become an interest in land.

Duress

The use of unlawful constraint that forces action or inaction against a person’s will.

DVA loan

A mortgage loan on approved property made to a qualified veteran by an authorized lender and guaranteed by the Department of Veterans Affairs to limit possible loss by the lender.

Real estate terms that begin with E

Earnest money deposit

An amount of money deposited by a buyer under the terms of a contract. In the event that the buyer, for no valid or legal reason, backs out of the transaction, earnest money is sometimes used as liquidated damages.

Easement

A right to use the land of another for a specific purpose, such as for a right-of-way or utilities; an incorporeal interest in land. An easement appurtenant passes with the land when conveyed.

Easement by necessity

An easement allowed by law as necessary for the full enjoyment of a parcel of real estate.

Easement by prescription

An easement acquired by continuous, open, uninterrupted, exclusive, and adverse of the property for the period of time prescribed by state law.

Easement in gross

An easement that is not created for the benefit of any land owned by the owner of the easement but that attaches personally to the easement owner.

Economic life

The period of time over which an improved property will earn an income adequate to justify its continued existence.

Economic obsolescence

The impairment of desirability or useful life arising from factors external to the property, such as economic forces or environmental changes, that affect supply-demand relationships in the market. Loss in the use and value of a property arising from the factors of economic obsolescence is to be distinguished from loss in value from physical deterioration and functional obsolescence, both of which are inherent in the property.

Emblements

Growing crops that are produced annually through the tenant’s own care and labor and that she or he is entitled to take away after the tenancy is ended. Emblements are regarded as personally property even prior to harvest, so if the landlord terminates the lease, the tenant may still reenter the land and remove such crops. If the tenant terminates the tenancy voluntarily, however, she or he generally is not entitled to the emblements.

Eminent domain

The right of a government or municipal quasi-public body to acquire property for public use through a court action called condemnation, in which the court determines that the use is a public use and determines the price or compensation to be paid to the owner.

Employee status

The status of one who works as a direct employee of an employer. An employer is obligated to withhold income taxes and Social Security taxes from the compensation of his or her employees.

Employment contract

A document evidencing formal employment between the employer and the employee or between the principal and the agent. In the real estate business, this generally takes the form of a listing or management agreement.

Encroachment

A fixture or structure, such as a wall or fence, that invades a portion of a property belonging to another.

Encumbrance

Any lien that may diminish the value of the property, such as a mortgage, tax, or judgment lien; easement; restriction on the use of the land; or an outstanding dower right.

Endorsement

The act of writing one’s name, either with or without additional words, on a negotiable instrument or on a paper attached to such instrument.

Equal Credit Opportunity Act (ECOA)

Federal legislation requiring lenders to make credit equally available without discrimination based on race, sex, color, religion, marital status, age, national origin, or receipt of income from public assistance.

Equalization

The raising or lowering of assessed values for tax purposes in a particular county or taxing district to make them equal to assessments in other counties or districts.

Equitable title

The interest held by a vehicle under a contract for deed or an installment contract; the equitable right to obtain absolute ownership to property when legal title is held in another’s name.

Equity

The interest or value that an owner has in a property over and above any mortgage indebtedness.

Erosion

The gradual wearing away of land by water, wind, and general weather conditions; the diminishing of property caused by the elements.

Errors and omissions insurance

Insurance coverage for real estate agents against claims for innocent and negligent misrepresentations.

Escheat

The reversion of property to the state in the event that its owner dies without leaving a will and has no heirs to whom the property may pass by lawful descent.

Escrow

The closing of a transaction through a third party called an escrow agent, or escrowee, who receives certain funds and documents to be delivered on the performance of certain conditions in the escrow agreement.

Estate for years

An interest for a certain, exact period of time in property leased for a specified consideration.

Estate in land

The degree, quantity, nature, and extent of interest that a persona has in real property.

Estate in severalty

An estate owned by one person.

Estoppel certificate

A legal instrument executed by a mortgagor showing the amount of the unpaid balance due on a mortgage and stating that the mortgagor has no defenses or offsets against the mortgagee at the time of execution of the certificate.

Estovers

Legally allowed necessities, such as the right of a tenant to use timber on leased property to support a minimum need for fuel or repairs.

Ethical

Conduct conforming to professional standards.

Et al

Latin, meaning “and others”.

Et ux / Et uxor

Latin, meaning “and wife”.

Et vir

Latin, meaning “and husband”.

Eviction

A legal process to oust a person from possession of real estate.

Evidence of title

A proof of ownership of property, which is commonly a certificate of title, a title insurance policy, an abstract of title with lawyer’s opinion, or a Torrens registration certificate.

Exchange

A transaction in which all of part of the consideration for the purchase of real property is the transfer of like-kind property. Ex. real estate for real estate.

Exclusive-agency listing

A listing contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time to sell the property on the owner’s stated terms for a commission. The owner, however, reserves the right to sell without paying anyone a commission by selling to a prospect who has not been introduced or claimed by the broker.

Exclusive-right-to-sell listing

A listing contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time to sell the property on the owner’s stated terms and agrees to pay the broker a commission when the property is sold, whether by the broker, the owner, or another broker.

Executed contract

A contract in which all parties have fulfilled their promises and thus performed the contract.

Execution

The signing and delivery of an instrument. Also, a legal order directing an official to enforce a judgment against the property of a debtor.

Executor

The person designated in a will to handle the state of the deceased. The probate court must approve any sale of property by the executor.

Executory contract

A contract under which something remains to be done by one of more of the parties.

Expenses

The short-term costs that are deducted from an investment property’s income, such as minor repairs, regular maintenance, and renting costs.

Expressed contract

An oral or written contract in which the parties state their terms and express their intentions in words.

Real estate terms that begin with F

Fair Housing Act of 1968

The term for Title VIII of the Civil Rights Act of 1968 as amended, which prohibits discrimination based on race, color, sex, religion, national origin, handicaps, and familial status in the sale and rental of residential property.

Federal Home Loan Mortgage Corporation (FHLMC)

A federally chartered corporation created to provide a secondary mortgage market for conventional loans (Freddie Mac).

Federal Housing Administration (FHA)

A federal administrative body created by the National Housing Act in 1934 to encourage improvement in housing standards and conditions, to provide an adequate home-financing system through the insurance of housing mortgages and credit, and to exert a stabilizing influence on the mortgage market.

Federal income tax

An annual tax based on income, including monies derived from the lease, use, or operation of real estate.

Federal National Mortgage Association (FNMA)

Fannie Mae” is the popular name for this federally chartered corporation, which creates a secondary market for existing mortgages. FNMA does not loan money directly, but rather buys DVA, FHA, and conventional loans.

Fee-simple estate

The maximum possible estate or right of ownership of real property continuing forever.

FHA appraisal

An FHA evaluation of a property as a security for a loan. Includes the study of the physical characteristics of the property and the surroundings, and the location of the property.

FHA loan

A loan insured by the FHA and made by an approved lender in accordance with FHA regulations.

Fiduciary relationship

A relationship of trust and confidence, as between trustee and beneficiary, attorney and client, principal and agent.

First mortgage

A mortgage that creates a superior voluntary lien on the property mortgaged relative to other charges or encumbrances against the property.

Fiscal policy

The government’s policy in regard to taxation and spending programs. The balance between these two areas determines the amount of money the government will withdraw or feed into the economy in an attempt to counter economic peaks and slumps.

Fixture

An article that was once personal property but has been so affixed to real estate that it has become real property.

Forcible entry and detainer

A summary proceeding for restoring to possession of land one who is wrongfully kept out or has been wrongfully deprived of the possession.

Foreclosure

A legal procedure by which property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the mortgage document. The foreclosure procedure brings the rights of all parties to a conclusion and passes the title in the mortgaged property either to the holder of the mortgage or to a third party who may purchase the realty at the foreclosure sale, free of all encumbrances affecting the property subsequent to the mortgage.

Foreign acknowledgment

An acknowledgment taken outside of the state in which the land lies.

Franchise

A private contractual agreement to run a business using a designated trade name and operating procedures.

Fraud

A misstatement of a material fact made with intent to deceive or made with reckless disregard of the truth and that actually does deceive.

Freehold estate

An estate in land in which ownership is for an indeterminate length of time, in contrast to a leasehold estate.

Functional obsolescence

The impairment of functional capacity or efficiency; the inability of a structure to perform adequately the function for which it currently is employed. Functional obsolescence reflects the loss in value brought about by factors that affect the property, such as overcapacity, inadequacy, or changes in the art.

Funding fee

A fee required by the Department of Veterans Affairs for making a VA guaranteed loan. The funding fee is added in with the loan and then forwarded to the VA to guarantee a veteran’s loan.

Future interest

A person’s present right to an interest in real property that will not result in possession or enjoyment until sometime in the future, such as a reversion or right of reentry.

Real estate terms that begin with G

Gap

A defect in the chain of title of a particular parcel of real estate; a missing document or conveyance that raises doubt as to the present ownership of the land.

General contractor

A construction specialist who enters into a formal construction contract with a landowner or master lessee to construct a real estate building or project. The general contractor often contracts with several subcontractors specializing in various aspects of the building process to perform individual jobs.

General lien

A lien on all real and personal property owned by a debtor.

General warranty deed

A deed that states that the title conveyed therein is good from the sovereignty of the soil to the grantee therein and that no one else can successfully claim the property. This type of deed contains several specific warranties sometimes referred to as the English Covenants of Title.

Government lots

Fractional sections in the rectangular survey system (government survey method) that are less than one full quarter-section in area.

Government National Mortgage Association (GNMA)

Ginnie Mae,” a federal agency and division of HUD that operates special assistance aspects of federally aided housing programs and participates in the secondary market through its mortgage-backed securities pools.

Graduated lease

Lease that provides for rent increases at set future dates.

Graduated payment mortgage

A mortgage loan for which the initial payments are low but increase over the life of the loan.

Grant

The act of conveying or transferring title to real property.

Grant deed

A type of deed that includes three basic warranties: (1) the owner warrants that she or he has the right to convey the property, (2) the owner warrants that the property is not encumbered other than with those encumbrances listed in the deed, and (3) the owner promises to convey any after-acquired title to the property. Grant deeds are popular in states that rely heavily on title insurance.

Grantee

A person to whom real estate is conveyed; the buyer.

Grantor

A person who conveys real estate by deed; the seller.

Gross lease

A lease or property under which a landlord pays all property charges regularly incurred through ownership, such as repairs, taxes, insurance, and operating expenses. Most residential leases are gross leases.

Gross national product (GNP)

The total value of all goods and services produced in the United States (or other country) in a year.

Gross rent multiplier (GRM)

A figure used as a multiplier of the gross monthly rental income of a property to produce an estimate of the property’s value.

Ground lease

A lease of land only, on which the tenant usually owns a building or is required to builder her or his own building as specified in the lease. Such leases are usually long-term net leases; a tenant’s rights and obligations continue until the lease expires or is terminated through default.

Guaranteed sale plan

An agreement between the broker and the seller that if the seller’s real property is not sold before a certain date, the broker will purchase it for a specified price.

Guardian

One who guards or cares for another person’s rights and properties. A guardian has legal custody of the affairs of a minor or a person incapable of taking care of his or her own interests, called a ward.

Real estate terms that begin with H

Habendum clause

The deed clause beginning “to have and to hold,” which defines or limits the extend of ownership in the state granted by the deed.

Heir

One who might inherit or succeed to an interest in land under the state law of descent when the owner dies without leaving a valid will.

Hereditaments

Every kind of inheritable property, including person, real corporeal, and incorporeal.

Highest and best use

The possible use of land that will produce the greatest net income and thus develop the highest land value.

Holdover tenancy

A tenancy by which a lessee retains possession of a leased property after her or his lease has expired and the landlord, by continuing to accept rent from the tenant, agrees to the tenant’s continued occupancy as defined by state law.

Holographic will

A will that is written, dated, and signed in the handwriting of the maker.

Homeowner’s insurance policy

A standardized package insurance policy that covers a residential real estate owner against financial loss from fire, theft, public liability, and other common risks.

Homeowner’s warranty program

An insurance program offered to buyers by some brokerages, warranting the property against certain defects for a specified period of time.

Homestead provision

The land and the improvements thereon designated by the owner as his or her homestead and, therefore, protected by state law, either in whole or in part, from forced sale by certain creditors of the owner.

HUD

The Department of Housing and Urban Development; regulates FHA and GNMA.

Hypothecation

The pledge of property as security of a loan in which the borrower maintains possession of the property while it is pledged as security.

Real estate terms that begin with I

Implied contract

A contract under which the agreement of the parties is demonstrated by their acts and conduct.

Implied grant

A method of creating an easement. One party may be using another’s property for the benefit of both parties.

Improvement

1. Improvements on land: any structure, usually privately owned, erected on a site to enhance the value of the property; 2. Improvements to land: usually a publicly owned structure.

Inchoate right

Incomplete right, such as a wife’s dower interest in her husband’s property during his life.

Income approach

The process of estimating the value of an income-producing property by capitalization of the annual net income expected to be produced by the property during its remaining useful life.

Incorporeal right

A nonpossessory right in real estate.

Increasing returns

The principle that applies when increased expenditures for improvements to a given parcel of land yield an increasing percentage return on investment.

Independent contractor

One who is retained to perform a certain act but who is subject to the control and direction of another only as to the end result, and not as to how he or she performs the act. Unlike an employee, an independent contractor pays all of his or her expenses, pays his or her income and Social Security taxes, and receives no employee benefits. Many real estate salespeople are independent contractors.

Index lease

Lease that allows the rent to be increased or decreased periodically, based on changes in the a selected economic index, such as the Consumer Price Index.

Industrial property

All land and buildings used or suited for use in the production, storage, or distribution of tangible goods.

Installment sale

A method of reporting gain received from the sale of real estate when the sale price is paid in two or more installments over two or more years. If the sale meets certain requirements, a taxpayer can spread recognition of the reportable gain over more than one year, which may result in tax savings.

Insurable title

A title to land that a title company will insure.

Insurance

The indemnification against loss from a specific hazard or peril through a contract (called a policy) and for a consideration (called a premium).

Interest

A charge made by a lender for the use of money.

Interim financing

A short-term loan usually made during the construction phase of a building project, often referred to as a construction loan.

Intestate

The condition of a property owner who dies without leaving a will. Title to such property passes to his or her heirs as provided in the state law of descent.

Invalid

Having no force or effect.

Invalidate

To render null and void.

Investment

Money directed toward the purchase, improvement, and development of an asset in expectation of income or profits. A good financial investment has the following characteristics: safety, regularity of yield, marketability, acceptable denominations, valuable collateral, acceptable duration, required attention, and potential appreciation.

Real estate terms that begin with J

Joint tenancy

The ownership of real estate by two or more parties who have been named in one conveyance as joint tenants. On the death of a joint tenant, her or his interest passes to the surviving joint tenant or tenants by the right of survivorship.

Joint venture

The joining of two or more people to conduct a specific business enterprise. A joint venture is similar to a partnership in that it must be created by agreement between the parties to share in the losses and profits of the venture. It is unlike a partnership in that the venture is for one specific project only, rather than for a continuing business relationship.

Judgment

The official and authentic decision of a court on the respective rights and claims of the parties to an action or suit. When a judgment is entered and recorded with the county recorder, it usually becomes a general lien on the property of the defendant for a ten-year period.

Judgment clause

A provision that may be included in notes, leases, and contracts by which the debtor, lessee, or obligor authorizes any attorney to go into court to confess a judgment against him or her for a default in payment. Also called a cognovit.

Real estate terms that begin with L

Laches

An equitable doctrine used by the courts to bar a legal claim or prevent the assertion of a right because of undue delay, negligence, or failure to assert the claim or right.

Land

The earth’s surface extending downward to the center of the earth and upward infinitely into space.

Lease

A contract between a landlord (the lessor) and a tenant (the lessee) transferring the right to exclusive possession and use of the landlord’s real property to the lessee for a specified period of time and for a stated consideration (rent). By state law, leases for longer than a certain period of time (generally one year) must be in writing to be enforceable.

Leasehold estate

A tenant’s right to occupy real estate during the term of a lease, generally considered to be a personal property interest.

Legacy

A disposition of money or personal property by will.

Legal description

A description of a specific parcel of real estate sufficient for an independent surveyor to locate and identify it. The most common forms of legal description are rectangular survey, metes and bounds, and subdivision lot and block (plat).

Legality of object

An element that must be present in a valid contract. If a contract has for its object an act that violates the laws of the United States or the laws of a state to which the parties are subject, it is illegal, invalid, and not recognized by the courts.

Lessee

The tenant who leases a property.

Lessor

One who leases property to a tenant

Leverage

The use of borrowed money to finance the bulk of an investment.

Levy

To assess, seize, or collect. To levy a tax is to assess a property and set the rate of taxation. To levy an execution is to seize officially the property of a person to satisfy an obligation.

License

1. A privilege or right granted to a person by a state to operate as a real estate broker or salesperson. 2. The revocable permission for a temporary use of land – a personal right that cannot be sold.

Lien

A right given by law to certain creditors to have their debt paid out of the property of a defaulting debtor, usually by means of a court sale.

Life estate

An interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person.

Life tenant

A person in possession of a life estate.

Liquidated damages

Liquidated damages occur when, by contractual agreement, defaulted earnest money becomes the personal property of the seller.

Liquidity

The ability to sell an asset and convert it into cash at a price close to its true value.

Lis pendens

A public notice that a lawsuit affecting title to or possession, use, and enjoyment of a parcel of real estate has been filed in either a state or federal court.

Listing agreement

A contract between a landowner (as principal) and a licensed real estate broker (as agent) by which the broker is employed as agent to list and sell real estate on the owner’s terms within a given time, for which service the landowner agrees to pay a commission.

Listing broker

The broker in a multiple-listing situation from whose office a listing agreement is initiated, as opposed to the selling broker, from whose office negotiations leading to a sale are initiated. The listing broker and the selling broker may, of course, by the same person.

Littoral rights

1. A landowner’s claim to use water in large lakes and oceans adjacent to her or his property. 2. The ownership rights to land bordering these bodies of water up to the high-water mark.

Lot and block description

A description of real property that identifies a parcel of land by reference to lot and block numbers within a subdivision, as identified on a subdivided plat duly recorded in the county recorder’s office.

Real estate terms that begin with M

Management agreement

A contract between the owner of income property and a management firm or individual property manager outlining the scope of the manager’s authority.

Marginal lease

A lease agreement that barely covers the costs of operation for the property.

Marginal real estate

Land that barely covers the costs of operation.

Marketable title

A good or clear salable title reasonably free from risk of litigation over possible defects.

Market/data approach

A method of appraising or evaluating real property based on the proposition that an informed purchaser would pay no more for a property than the cost to him or her of acquiring an existing property with the same utility. This approach is applicable when an active market provides sufficient quantities of reliable data that can be verified from authoritative sources. The approach is relatively unreliable in an inactive market or in estimating the value of properties for which no real comparable sales data are available. It also is questionable when sales data cannot be verified with principals to the transaction. Also referred to as the market comparison or direct sales comparison approach.

Market price

The actual selling price of a property.

Market value

The most profitable price a property will bring in a competitive and open market under all conditions requisite to a fair sale. The price at which a buyer would buy and a seller would sell, each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.

Mechanic’s lien

A statutory lien created in favor of contractors, laborers, and materialmen or material suppliers who have performed work or furnished materials in improving real property.

Metes-and-Bounds description

A legal description of a parcel of land that begins at a well-marked point and follows the boundaries, using direction and distances around the tract, back to the point of beginning.

Mill

A tax rate used by municipalities to compute property tax.

Millage rate

A property tax rate obtained by dividing the total assessed value of all the property in the tax district into the total amount of revenue needed by the taxing district. This millage rate then is applied to the taxable value of each property in the district to determine individual taxes.

Misrepresentation

To represent falsely; to give an untrue idea of a property. May be accomplished by omission or concealment of a material fact.

Monetary policy

The government regulation of the amount of money in circulation through such institutions as the Federal Reserve Board.

Money judgment

A court judgment ordering payment of money rather than specific performance of a certain action.

Money market

Those institutions, such as banks, savings-and-loan associations, and life insurance companies, who supply money and credit to borrowers.

Month-to-Month tenancy

A periodic tenancy – the tenant rents for one period at a time. In the absence of a rental agreement (oral or written), a tenancy generally is considered to be from month to month.

Monument

Fixed natural or artificial objects, used in metes-and-bounds description, to establish the boundaries; located at the corners.

Mortgage

A conditional transfer or pledge of real estate as security for a loan. Also, the document creating a mortgage lien.

Mortgage lien

A lien or charge on a mortgagor’s property that secures the underlying debt obligations.

Mortgagor

One who, having all or part of title to property, pledges that property as security for a debt; the borrower

Multiple listing

An exclusive listing (generally an exclusive right to sell) with the additional authority and obligation on the part of the listing broker to distribute the listing to other brokers in the multiple-listing organization.

Municipal ordinances

The laws, regulations, and codes enacted by the governing body of a municipality.

Mutual rescission

The act of putting an end to a contract by mutual agreement of the parties.

Real estate terms that begin with N

Negligence

Carelessness and inattentiveness resulting in violation of trust. Failure to do what is required.

Net operating income

The gross income of the property minus vacancy, collection losses, and operating expenses (not including debt service).

Net lease

A lease requiring the tenant to pay not only rent but also costs incurred in maintaining the property, including taxes, insurance, utilities, repairs. If the tenant pays for everything, it is referred to as a triple net lease.

Nonconforming use

A use of property that is permitted to continue after a zoning ordinance prohibiting it has been established for the area.

Nonhomogeneity

A lack of uniformity; dissimilarity. Because no two parcels of land are geographically alike, real estate is said to be nonhomogeneous, or heterogeneous.

Notarize

To certify or attest to a document, as by a notary public.

Notary public

A public official authorized to certify and attest to documents, take affidavits, take acknowledgments, administer oaths, and perform other such acts.

Note

An instrument of credit given to attest a debt.

Novation

Acceptance by parties to an agreement to replace an old debtor with a new one. A novation releases liability.

Real estate terms that begin with O

Offer and notification of acceptance

The two components of a valid contract; a “meeting of the minds.”

Officer’s deed

A deed by sheriffs, trustees, guardians, etc.

One hundred percent commission plan

A salesperson compensation plan by which the salesperson pays his or her broker a monthly service charge to cover the costs of office expenses and receives 100% of the commissions from the sales that he or she negotiates.

Open-end mortgage

A mortgage loan expandable by increments up to maximum dollar amount, all of which is secured by the same original mortgage.

Open listing

A listing contract under which the broker’s commission is contingent on the broker producing a “ready, willing, and able” buyer before the property is sold by the seller or another broker; the principal (owner) reserves the right to list the property with other brokers.

Option

The right to purchase property within a definite time at a specified price. No obligation to purchase exists, but the seller is obligated to sell if the option holder exercises the right to purchase.

Optionee

The party that receives and holds an option.

Optionor

The party that grants or gives an option.

Ownership

The exclusive right to hold, possess or control, and dispose of a tangible or intangible thing. Ownerships may be held by a person, corporation, or governmental entity.

Real estate terms that begin with P

Package mortgage

A method of financing in which the purchase of the land also finances the purchase of certain personal property items.

Parol evidence rule

A law that states that no prior or contemporary oral or extraneously written agreement can change the terms of a contract.

Partial eviction

A case in which the landlord’s negligence deprives the tenant of the use of all or part of the premises.

Participation financing

A mortgage in which the lender participates in the income of the mortgaged venture beyond a fixed return, or receives a yield on the loan in addition to the straight interest rate.

Partition

The division of cotenants’ interests in real property when the parties do not all voluntarily agree to terminate the co-ownership; takes place through court procedures.

Partnership

An association of two or more individuals who carry on a continuing business for profit as co-owners. Under the law, a partnership is regarded as a group of individuals rather than as a single entity. A general partnership is a typical form of joint venture in which each general partner shares in the administration, profits, and losses of the operation. A limited partnership is a business arrangement by which the operation is administered by one or more general partners and funded by limited or silent partners, who are by law responsible for losses only to the extent of their investment.

Party wall easement

A wall that is located on or at a boundary line between two adjoining parcels for the use of the owners of both properties.

Payee

The party that receives payment.

Payor

The party that makes payment to another.

Percentage lease

A lease commonly used for retail property in which the rental is based on the tenant’s gross sales at the premises; often stipulates a base monthly rental plus a percentage of any gross sales above a certain amount.

Performance bond

A binding agreement, often accompanied by surety and usually posted by one who is to perform work for another, that assures that project or undertaking will be completed as per the agreement or contract.

Periodic estate

An interest in leased property that continues from period to period – week to week, month to month, or year to year.

Permanent reference marker

Referred to as a PRM, it is a fixed object that leads the surveyor to the point of beginning (POB). In most surveys, two different PRMs are used to locate the POB.

Personal assistant

An individual working for a broker or salesperson who handles non-sales-related aspects of real estate transactions. However, if the personal assistant is licensed, then he or she can also handle the sales-related aspects of the transaction.

Personal property

Items, called chattels, that do not fit into the definition of real property; movable objects.

Physical deterioration

A reduction in utility resulting from an impairment of physical condition. For purposes of appraisal analysis, it is most common and convenient to divide physical deterioration into curable and incurable components.

Plat

A map of a town, section, or subdivision indicating the location and boundaries of individual property.

Plat book

A book containing recorded subdivisions of land.

Point

A unit of measurement used for various loan charges; one point equals one percent of the amount of the loan.

Point of beginning

The starting point of the survey situated in one corner of the parcel in a metes-and-bounds description. All metes-and-bounds descriptions must follow the boundaries of the parcel back to the point of beginning.

Police power

The government’s right to impose laws, statutes, and ordinances to protect the public health, safety, and welfare, including zoning ordinances and building codes.

Power of attorney

A written instrument authorizing a person (the attorney-in-fact) to act on behalf of the maker to the extent indicated in the instrument.

Premises

The specific section of a deed that states the names of the parties, recital of consideration, operative words of conveyance, legal property description, and appurtenance provisions.

Prepayment clause

In a mortgage, the statement of the terms on which the mortgagor may pay the entire or stated amount of the mortgage principal at some time prior to the due date.

Prepayment penalty

A charge imposed on a borrower by a lender for early payment of the loan principal to compensate the lender for interest and other charges that would otherwise be lost.

Principal

1. A sum lent or employed as a fund or investment, as distinguished from its income or profits. 2. The original amount (as in a loan) of the total due and payable at a certain date. 3. A main party to a transaction – the person for whom the agent works.

Principal meridian

One of 35 north and south survey lines established and defined as part of the rectangular survey system (government survey method)

Principle of conformity

The appraisal theory stating that buildings that are similar in design, construction, and age to other buildings in the area have a higher value than they would have in a neighborhood of dissimilar buildings.

Priority

The order of position or time. The priority of liens generally is determined by the chronological order in which the lien documents are recorded; tax liens (like special assessments), however, have priority, even over previously recorded liens.

Probate

The formal judicial proceeding to prove or confirm the validity of a will or proof of heirship and to settle the affairs of the deceased.

Procuring cause

The effort that brings about the desired result. Under an open listing, the broker who is the procuring cause of the sale receives the commission.

Property disclosure acts

State mandated seller’s property disclosure reports. These reports place the burden of defect disclosure on the seller. Agents are not required to discover property defects but are required to disclose them if they are known.

Property management

The operation of the property of another for compensation. Includes marketing space; advertising and rental activities; collecting, recording, and remitting rents; maintaining the property; tenant relations; hiring employees; keeping proper accounts; and rendering periodic reports to the owner.

Property tax

Taxes levied by the government against either real or personal property. The right to tax real property in the United States rests exclusively with the states, not with the federal government.

Proration

The proportional division or distribution of expenses of property ownership between two or more parties. Closing statement prorations generally include taxes, rents, insurance, interest charges, and assessments.

Prospectus

A printed advertisement usually in pamphlet form, presenting a new development, subdivision, business venture, or stock issue.

Public utility easement

A right granted by a property owner to a public utility company to erect and maintain poles, wires, and conduits on, across, or under her or his land for telephone, electric power, gas, water, or sewer installation.

Pur autre vie

Latin, meaning “for the life of another.” A life estate pur autre vie is a life estate measured by the life of a person other than the grantee.

Purchase-money mortgage

A note secured by a mortgage or deed of trust given by a buyer, as a mortgagor, to a seller, as a mortgagee, as part of the purchase price of the real estate.

Real estate terms that begin with Q

Qualifying

The act of determining a prospect’s motivation, then matching his or her needs with the available inventory.

Quitclaim deed

A conveyance by which the grantor transfers whatever interest he or she has in the real estate without warranties or obligations.

Real estate terms that begin with R

Range

A six-mile strip of land measured east and west from the meridian lines.

“Ready, willing, and able” buyer

One who is prepared to buy property on the seller’s terms and is ready to take positive steps to consummate the transaction.

Real estate

Land; a portion of the earth’s surface extending downward to the center of the earth and upward infinitely into space, including all things permanently attached thereto, whether by nature or by man.

Real estate broker

Any person, partnership, association, or corporation that sells (or offers to sell), buys (or offers to buy), or negotiates the purchase, sale, or exchange of real estate, or that leases (or offers to lease) or rents (or offers to rent) any real estate or the improvements thereon for others and for a compensation or valuable consideration. A real estate broker may not conduct business without a real estate broker’s license.

Real Estate Investment Trust (REIT)

Ownership of real estate by a group of individual investors who purchase certificates of ownership in a trust. The trust invests in real property and distributes the profits back to the investors free of corporate income tax.

Real Estate Settlement Procedures Act (RESPA)

The federal law ensuring that the buyer and seller in a real estate transaction have knowledge of all the settlement costs when the purchase of a one to four-family residential dwelling is financed by a federally related mortgage loan. Prohibits kickbacks.

Reality of consent

An element of all valid contracts. Offer and acceptance in a contract usually are taken to mean that reality of consent also is present. This is not the case, however, if any of the following are present: mistake, misrepresentation, fraud, undue influence, or duress.

Real property

Real property consists of land, anything affixed to it so as to be regarded as a permanent part of the land, that which is appurtenant to the land, and that which is immovable by law, including all rights and interests.

REALTOR®

A registered trademark term reserved for the sole use of active members of local REALTORS® boards affiliated with the National Association of REALTORS®.

Recapture

In the year of sale, all depreciation or cost recovery taken on depreciable property in excess of the amount allowed by the straight-line method is subject to recapture provisions as established by the IRS, which has the effect of taxing the excess at ordinary income rates. Recapture is designed to prevent a taxpayer from taking advantage of both accelerated depreciation and capital gain treatment.

Receiver

The court-appointed custodian of property involved in litigation, pending final disposition of the matter before the court.

Reconciliation

1. The final step in the appraisal process in which the appraiser reconciles the estimates of value received from the market/data, cost, and income approaches to arrive at a final estimate of market value for the subject property. 2. An accounting procedure that balances a trust account by comparing the general ledger with the combined total of the account’s individual ledger balances.

Recording

The act of entering or recording documents affecting or conveying interests in real estate in the recorder’s office established in each county. Until recorded, a deed or mortgage generally is not effective against subsequent purchases or mortgage liens.

Recovery fund

A fund established in some states from real estate license funds to cover claims of aggrieved parties who have suffered monetary damage through the actions of a real estate licensee. To protect the public, some states mandate errors and omissions insurance as a requirement for licensure.

Rectangular survey system

A system established in 1785 by the federal government that provides for surveying and describing land by reference to principal meridians and base lines.

Redemption period

A period of time established by state law during which a property owner has the right to redeem her or his real estate from a foreclosure or tax sale by paying the sales price, interest, and costs. Many states do not have mortgage redemption laws.

Redlining

The illegal practice of denying loans or restricting their number for certain areas of a community.

Regulation Z

A regulation of the Federal Reserve Board designed to ensure that borrowers and customers in need of consumer credit are given meaningful information with respect to the cost of credit.

Release

To relinquish an interest in or claim to a parcel of property.

Relocation service

An organization that aids a person in selling a property in one area and buying another property in another area.

Remainder

The remnant of an estate that has been conveyed to take effect and be enjoyed after the termination of a prior estate, such as when an owner conveys a life estate to one party and the remainder to another.

Renegotiable rate mortgage

A mortgage loan that is granted for a term of 3 to 5 years and secured by a long-term mortgage of up to 30 years with the interest rate being renegotiated or adjusted each period.

Rent

A fixed, periodic payment made by a tenant of a property to the owner for possession and use; usually by prior agreement of the parties.

Rent schedule

A statement of proposed rental rates, determined by the owner or the property manager or both, based on a building’s estimated expenses, market supply and demand, and the owner’s long-range goals for the property.

Replacement cost

The cost of construction at current prices of a building having utility equivalent to the building being appraised but built with modern materials and according to current standards, designs, and layout.

Reproduction cost

The cost of construction at current prices of an exact duplicate or replica using the same materials, construction standards, design, layout, and quality of workmanship and embodying all the deficiencies, superadequacies, and obsolescences of the subject building.

Recission

The termination of a contract by mutual agreement of the parties.

Reservation in a deed

The creation by a deed to property of a new right in favor of the grantor. Usually involves an easement, a life estate, or a mineral interest.

Restriction

A limitation on the use of real property, generally originated by the owner or subdivider in a deed.

Reverse annuity mortgage

A mortgage loan that allows the owner to receive periodic payments based on the equity in the home.

Reversion

The remnant of an estate that the grantor holds after he or she has granted a life estate to another person; the estate will return or revert to the grantor. Also called a reverter.

Reversionary right

An owner’s right to regain possession of leased property on termination of the lease agreement.

Rezoning

The process involved in changing the existing zoning of a property or area.

Right of first refusal

A person’s right to have the first opportunity to either lease or purchase real property.

Riparian rights

An owner’s rights in land that borders flowing water, such as a stream or river. These rights include access to and use of the water.

Rural development

A federal agency of the U.S. Department of Agriculture that channels credit to farmers and rural residents and communities; formerly known as the Farm Service Agency and Farmer’s Home Administration (FmHA).

Real estate terms that begin with S

Sale and leaseback

A transaction in which an owner sells her or his improved property and, as part of the same transaction, signs a long-term lease to remain in possession of the premises.

Sales contract

A contract containing the complete terms of the agreement between buyer and seller for the sale of a particular parcel or parcels of real estate.

Salesperson

A person who performs real estate activities while employed by or associated with a licensed real estate broker.

Satisfaction

A document acknowledging the payment of a debt. Once filed, the collateral pledged (mortgage) is returned to the mortgagor for a “mortgage burning party.”

Secondary mortgage market

A market for the purchase and sale of existing mortgages, designed to provide greater liquidity for mortgages; also called the secondary money market. Mortgages are originated in the primary mortgage market.

Section

A portion of a township under the rectangular survey system (government survey method). A township is divided into 36 sections numbered 1 to 36. A section is a square with mile-long sides and an area of one square mile, or 640 acres.

Self-proving will

A will in which the witnesses give their testimony at the time of signing. This testimony is preserved in a notarized affidavit to eliminate the problem of finding the witnesses at the maker’s death and to assist in the probating procedure.

Separate property

The real property owned by a husband and wife prior to their marriage.

Servient tenement

The land on which an easement exists in favor of an adjacent property; also called a servient estate.

Setback

The amount of space local zoning regulations require between a lot line and building line.

Severalty

The ownership of real property by one person only; also called sole ownership.

Short sale

A sale of secured property that produces less money than is owed to the lender, but in order to expedite the sale and avoid foreclosure expense, the lender releases its interest so the property can be sold.

Situs

The personal preference of people for one area of land over another, not necessarily based on objective facts and knowledge.

Sovereignty of the soil

The beginning of the record of ownership of land by conveyance from the sovereign or the state. Historically, this is known also as a patent.

Special assessment

A tax or levy customarily imposed against only those specific parcels of real estate that will benefit from a proposed public improvement, such as a street or sewer.

Special warranty deed

A deed in which the grantor warrants or guarantees the title only against defects arising during the period of his or her tenure and ownership of the property and not against defects existing before that time, generally using the language “by, through, or under the grantor but not otherwise.”

Specific lien

A lien affecting or attaching only to a certain, specific parcel of land or piece of property.

Specific performance suit

A legal action brought in a court of equity in special cases to compel a party to carry out the terms of a contract. The basis for an equity court’s jurisdiction in breach of a real estate contract is that land is unique, and mere legal damages would not adequately compensate the buyer from the seller’s breach.

Sponsoring broker

A duly licensed real estate broker who employs a salesperson. Under law, the broker is responsible for the acts of her or his salespeople.

Squatter’s rights

Those rights acquired through adverse possession. By “squatting” on land for a certain statutory period under prescribed conditions, one may acquire title by limitations. If an easement only is acquired, instead of the title to the land itself, one has title by prescription, or easement by prescription.

Statute of frauds

The part of a state law that requires certain instruments, such as deeds, real estate sales contracts, and certain leases to be in writing to be legally enforceable.

Statute of limitations

That law pertaining to the period of time within which certain actions must be brought to court.

Statutory lien

A lien imposed on property by statute, for example, a tax lien; in contrast to a voluntary lien, which an owner places on his or her own real estate, for example, a mortgage lien.

Steering

The illegal practice of channeling home seekers to particular areas or avoiding specific areas, either to maintain or to change the character of an area, or to create a speculative situation.

Stigmatized property

A property regarded by some as undesirable because of events that have occurred on the property, like murder or suicide, or present paranormal activities. Sometimes, proximity to undesirable property causes a property to become stigmatized, too.

Straight-line method

A method of calculating depreciation for tax purposes computed by dividing the adjusted basis of a property less its estimated salvage value by the estimated number of years of remaining useful life.

Subagency

An agent appoints a subagent to help the agent in a specified transaction and to act on the principal’s behalf.

Subdivision

A tract of land divided by the owner, known as the subdivider, into blocks, building lots, and streets according to recorded subdivision plat that must comply with local ordinances and regulations.

Subletting

The leasing of premises by a lessee to a third party for part of the lessee’s remaining term.

Subordination

A relegation to a lesser position usually in respect to a right or security.

Subordination agreement

An agreement that changes the order of priority of liens between two creditors.

Subrogation

The substitution of one creditor for another, with the substituted person succeeding to the legal rights and claims of the original claimant. Subrogation is used by title insurers to acquire the right the sue from the injured party to recover any claims they have paid.

Substitution

An appraisal principle stating that the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property, assuming that no costly delay is encountered in making the substitution.

Suit for possession

A court suit initiated by a landlord to evict a tenant from leased premises after the tenant has breached one of the terms of the lease or has held possession of the property after the expiration of the lease.

Suit for specific performance

A legal action brought by either a buyer or a seller to enforce performance of the terms of a contract.

Suit to quiet title

A legal action intended to establish or settle the title to a particular property, especially when there is cloud on the title.

Summation appraisal

An approach under which value equals estimated land value plus reproduction costs of any improvements after depreciation has been subtracted.

Supply

The amount of goods available in the market to be sold at given price. The term often is coupled with demand.

Surety bond

An agreement by an insurance or bonding company to be responsible for certain possible defaults, debts, or obligations contracted for by an insured party; in essence, a policy insuring one’s personal and/or financial integrity. In the real estate business, a surety bond generally is used to ensure that a particular project will be completed at a certain date or that a contract will be performed as stated.

Survey

The process by which boundaries are measured and land areas are determined; the on-site measurement of lot lines, dimensions, and positions of buildings on a lot, including the determination of any existing encroachments or easements.

Syndicate

A combination of two or more persons or firms to accomplish a joint venture of mutual interest. Syndicates dissolve when the specific purpose for which they were created has been accomplished.

Real estate terms that begin with T

Taxation

The process by which a government or municipal quasi-public body raises monies to fund its operation.

Tax lien

A charge against property created by the operation of law. Tax liens and assessments take priority over all other liens.

Tax rate

The rate at which real property is taxed in a tax district or county.

Tax sale

A court-ordered sale of real property to raise money to cover delinquent taxes.

Tenancy at sufferance

The tenancy of a lessee who lawfully comes into possession of a landlord’s real estate but who continues to occupy the premises improperly after her or his lease rights have expired.

Tenancy at will

An estate that gives the lessee the right to possession until the estate is terminated by either party; the term of this estate is indefinite.

Tenancy by the entirety

The joint ownership, recognized in some states, of property acquired by husband and wife during marriage. On the death of one spouse, the survivor becomes the owner of the property.

Tenancy in common

A form of co-ownership by which each owner holds an undivided interest in real property as if he or she were the sole owner. Each individual has the right to partition. Unlike a joint tenancy, there is no right of survivorship between tenants in common, and owners may have unequal interests.

Tenant

One who holds or possesses lands or tenements by any kind of right of title.

Tenement

Everything that may be occupied under a lease by a tenant.

Termination (lease)

The cancellation of a lease by the action of either party. A lease may be terminated by expiration of the term, surrender and acceptance, constructive eviction by lessor, or option, when provided in the lease for breach of covenants.

Termination (listing)

The cancellation of a broker-principal employment contract. A listing may be terminated by death or insanity of either party, expiration of listing period, mutual agreement, sufficient written notice, or the completion of performance under the agreement.

Testate

Having made and left a valid will.

Testator

A will maker

“Time is of the essence”

A phrase in a contract that requires the performance of a certain act within a stated period of time.

Title insurance

Insurance designed to indemnify the holder for loss sustained by reason of defects in a title, up to and including the policy limits.

Torrens system

A method of evidencing title by registration with the proper public authority, generally called the registrar.

Township

The principal unit of the rectangular survey system. A township is a square with six-mile sides and an area of 36 square miles.

Township lines

The horizontal lines running at six-mile intervals parallel to the base lines in the rectangular survey system.

Trade fixtures

The articles installed by a tenant under the terms of a lease and removable by the tenant before the lease expires.

Trust

A fiduciary arrangement by which property is conveyed to a person or institution, called a trustee, and held and administered on behalf of another person, called a beneficiary.

Trust deed

An instrument used to create a lien by which the trustor conveys his or her title to a trustee, who holds it as security for the benefit of the note holder (the lender).

Trustee

One who as agent for others handles money or holds title to their land

Trustee’s deed

A deed executed by a trustee conveying land held in a trust to the beneficiary.

Real estate terms that begin with U

Unearned increment

An increase in the value of a property caused by increased population, development, or demand for which the owner is not responsible.

Uniform Commercial Code

A codification of commercial law, adopted in most states, that attempts to make uniform laws relating to commercial transactions, including chattel mortgages and bulk transfers. Security interests in chattels are created by an instrument known as a security agreement. Article 6 of the code regulates bulk transfers, that is, the sale of a business as a whole, including all fixtures, chattels, and merchandise.

Uniform Residential Appraisal Report (URAR)

Standard Fannie Mae Form 1004 used by appraisers.

Uniform Residential Loan Application Report (URLA)

Standard Fannie Mae Form 1003 used by loan originators.

Unilateral contract

A one-sided contract by which one party makes a promise to induce a second party to do something. The second party is not legally bound to perform; if the second party does comply, however, the first party is obligated to keep the promise.

Unity of ownership

The four unities traditionally needed to create a joint tenancy – unity of title, time, interest, and possession.

Urban renewal

The acquisition of run-down city areas for purposes of redevelopment.

Useful life

In real estate investment, the number of years a property will be useful to the investors.

Usury

The practice of charging more than the rate of interest allowed by law.

Real estate terms that begin with V

Valid contract

A contract that complies with all the essential elements on a contract and is binding and enforceable on all parties to it.

Valid lease

An enforceable lease that has the following essential parts: lessor and lessee with contractual capacity, offer and acceptance, legality of object, description of the premises, consideration, signatures, and delivery. Leases for more than one year also must be in writing.

Value

The present worth of future benefits arising from the ownership of real property. To have value, a property must have utility, scarcity, effective demand, and transferability.

Variable rate mortgage

A mortgage loan that contains an interest rate provision related to a selected index. Under this provision, the interest rate may be adjusted annually either up or down.

Variance

An exception from the zoning ordinances; permission granted by zoning authorities to build a structure or conduct a use that is expressly prohibited by zoning ordinance.

Real estate terms that begin with W

Writ of attachment

The method by which a debtor’s property is placed in the custody of the law and held as security, pending the outcome of a creditor’s suit.

How to create a Repair Request Form for your residential rental property

This is the first installment in a multi-part series on how to improve residential rental property profitability while using free and inexpensive off-the-shelf tools.  Specifically, part 1 is about creating a repair request form that tenants can fill out to expedite the property maintenance notification process.

As a landlord, you have basic obligations that you must satisfy under the law.  Property maintenance is one of those obligations. Maintaining a habitable and safe environment is not only legally mandated, but it’s first and foremost when it comes to providing excellent customer service.  What better way to not only provide a great experience for your tenants, but to also stay on top of property maintenance than to provide them with a repair request form.

How the residential rental property series will shape up:

Part 1: How to create a repair request form for your residential rental property

Part 2: Integrating the data with a spreadsheet for easier record keeping

Part 3: Setting up a proxy phone number to mask your personal phone

Part 4: How to create a FAQ to answer repetitive questions tenants have

Part 5: Using chat as the foundation of the landlord-tenant relationship

Part 6: Why going digital today gets you a better tenant tomorrow

Part 7: Introducing automation

Ok, let’s get started

If at any point something doesn’t make sense, please reach out and let me know.  I appreciate feedback and would be happy to help you out.

Step 1: Create a new form

Upon opening Google Forms, you will see this screen.  Click on the red plus icon at the bottom right of the screen to create a new form.

If you are not new to Google Forms, you should see the current list of forms that you have in place of the “No Forms Yet” section.

Step 1 - Create a new repair request form

Step 2: Name the form

You will want to give this form a unique name.  I like to use the address of the property that this form will serve.  For example – 100 First Avenue.  If by some miracle you have properties in other towns/cities with the exact same address, then feel free to add the town/city to the name.

To be clear, the name is meant to make logical sense for you.  That way, if you own multiple properties and repeat this process, you will know exactly which property it pertains to.

Step 2 - Name the form

Step 3: Create a title

As you can see, what you named the form in Step 2 is automatically duplicated for the title of the form.  The title is what your tenant(s) will see.  We want that to be Repair Request Form.

Why?  Because we want it to be clear to the tenant that they are about to make a repair request.

Step 3 - Create a title for your form

Step 4: Adding a description

Now showing up is Repair Request Form.  That’s good.  Next, we want to add a brief description that lets the tenant know what to do.

I like to include instructions on how to handle a true emergency, along with a phone number to call.  You should probably spell this out in the rental agreement at the beginning of tenancy, but it’s always good to be redundant for such things.

And lastly, include a thank you.  I know it’s minor, but a little courtesy goes a long way.  Remember, this is a customer service business.

Step 4 - Add a description

Step 5: Ask for the tenant’s name

The very first question you should ask for is the tenant’s name.  This is true for a few reasons.

  • It’s a good soft opening
  • You will want to know who to contact to resolve the issue (if necessary)
  • And, it’s good for record keeping in case any disputes, legal or otherwise come up

Step 5 - Ask for your the name of your tenant

Step 6: Require the name input field

In the lower right hand corner of the input box, you will see a “Required” toggle.  Turn it on.  This will force the user to answer this question.

Also, I like to use the description feature because I like to add context to the questions that I am asking.  I leave it up to you on this one.

Note – We aren’t worried about “response validation” – Is it possible for them to give a false answer?  Sure.  Don’t sweat it, it doesn’t do anyone any good and you would most likely figure it out anyway.

Step 6 - How to require a user enter an input field

Step 7: Add a new question

Great, you made it through the first question.  That wasn’t too bad, right?

Anyway, on the right side of the form, you should see a set of options.  Select the gray plus icon to add a new question.  It’s similar to the red plus icon and serves a similar function.

Step 7 - How to add a new question

Step 8: Ask for contact information

Beyond asking for the tenant’s name, you will want to ask them for their contact information.  This is where using the description comes in handy.

I prefer to ask tenants to give me their preferred method of contact, either email or phone number.  Getting back to the customer focus mentality, I want to make it as easy possible for the tenant to enable me to do my job: maintaining the property.

I feel that the more wide open the lines of communication, the more likely I am to avoid an issue that is going to cut into my profit. Nothing feels worse than a, “I was going to tell you, but I was busy and I forgot to” scenario two to three months down the road.

Step 8 - Ask for tenant contact information

Step 9: What needs to be repaired?

Though you can’t always trust a tenant’s assessment of the issue, it’s still a good idea to take their statement.  It’s on you to triage the scenario and assign a priority for getting it resolved.

Prompting the tenant with examples is a great way to get their mind wrapped around a possible issue.  If it’s straightforward enough, you may be able to save yourself some time.

Step 9 - Describe the repair request

Step 10: Test your form

I know what you are thinking, “Three questions … that’s it?”

For now, yes.  The purpose of this is to teach you how to create the form.  Next, we will cover integrating it with a spreadsheet for record keeping.

Ok, you want to test the form.  At the top of the page, you should notice an eye icon.  Clicking it will open up the form.  Check it out to see if the questions are in the proper order, or if there are any errors with spelling or the copy itself.

Step 10 - Test your form

Step 11: Your form is ready

Review the form.  Things to watch for:

  • Correct question order
  • Spelling/Grammar mistakes
  • Proper phone numbers

Note – Even I made a mistake in the image below.  Can you spot it?  I didn’t require “How can we contact you?”  Proofreading is necessary.

Step 11 - Repair request form complete

Step 12: Delivering the repair request form

Hit send at the top of the screen to see your options.

Step 12 - Prepare to send it to tenants

Once the pop-up box opens up, you will see that you have three options to choose from:

  • Email the repair request form (envelope icon)
  • Send out a link to it (link icon)
  • Embed it in a website (code icon)

Step 13:  Email the repair request form

Do you have a primary tenant that you contact for all issues?  Do you want every tenant at the premises to have the ability to submit an issue?  These are questions that you need to have answers to at this point.  Let’s assume every tenant will receive the form.  Here are the steps.

  • Enter in each tenant’s email address in the “To” field.
  • Write a message that makes it clear as to who this email is coming from (property owner, manager, super, etc.)
  • Hit send when you are done and ready to send the email

Note – There is a checkbox for including the repair request form in the email.  Feel free to select it if you want the tenants to see the form immediately.

Step 13 - How to email the form

Step 14:  Using a link to the form

A few reasons why you would want to copy and paste the link include:

  • Listing the link on your property management website
  • Posting the link via Social messaging – Facebook, Twitter, LinkedIn, etc. – maybe you have created a Facebook group for your tenants.
  • Sending the link from an another email address, one that is not associated with your Gmail (Google) account.

As to the last point, say you own the domain 100FirstAvenue.com for your property and/or LLC.  You might have a propertymanager@100firstavenue.com email address that you want your tenant’s in communication with.

There are many reasons why you may want to the share the link to the form.  Do what is best for your business.

Note – There are many reasons to purchase a domain name that reflects the property/business entity that tenants write checks to every month, the primary of which is to build trust.  If I am one of your tenants at 100 First Avenue, and you email me from owner@100firstavenue.com, I can be pretty sure that the communication is authentic.  Just something to keep in mind.

Step 14 - How to link to the form

Step 14b:  Shortening the URL

If you are going to send a link, you might want to consider shortening the URL (the link).  It just makes things a bit cleaner.  Also included is a keyboard shortcut on a Mac for copying the link.

Step 14b - How to shorten the url

Step 15: Embedding the form in a website

Let’s revisit the idea of owning a domain for your property management business.  Instead of owning a specific domain per property, maybe you own a domain that represents multiple residential properties, something like www.AwesomeCondos.com.

Using the embed function, you could place the code into a landing page that corresponds specifically with the property you set the repair request form up for.  That landing page could look like this:

www.awesomecondos.com/100FirstAvenue

When tenants arrive at that address, they are prompted with the form that is specific to that property.  It’s all a matter of personal preference in how you set everything up.  Feel free to experiment.

You will want to copy and paste the code, just like in Step 14.

Step 15 - How to embed the form in your website

Step 16: Receiving repair requests

You’ve completed the form and you’ve either sent it to your tenants, or, you’ve embedded it on a website of your choosing.  What’s next?  The important part, receiving the actual repair requests.

Select the “Responses” tab that is available at the top of the form, next to “Questions”.  A list will build out as repair requests arrive.  Congratulations, you have accomplished what you set out to do, which was:

  • Make it easy for tenants to request a repair
  • Keep a list of the times that they did so

Step 16 - Acquiring tenant responses

Step 17:  Setting up email notifications when requests arrive

Opening Google Forms 6-12x per day is not a valuable use of your time as an investor, owner, or property manager.  Selecting the three dots icon on the right will open up a menu that gives you useful options.  Select “Get email notifications for new responses” from the list.

Selecting this option will send responses to your Gmail account that you are creating the Google Form with.  You may want to consider forwarding responses to your gmail address if it is not the primary email address that you use for your property management business.

Note – Feel free to download or print the responses at year end for auditing purposes.  Reviewing it may provide some useful data and insight.

Step 18:  Tracking data in a spreadsheet (Google Sheets)

We will be covering this in the next article, but I wanted to show you where the link was in case you want to skip ahead and try it out for yourself.

Step 18 - How to track data in spreadsheet

Words of wisdom

  1. If you’ve done your job correctly, no one should be using this repair request form for showstoppers – things like fire, gas, or even a lack of heat in the winter time.  Set up a protocol for how emergencies are to be handled early in a new tenancy
  2. Tailor the questions to suit your business needs.
  3. Always keep your copy concise and approachable.  Better customer service = better profits.

And lastly, thank you very much for your time.

Part 2: Integrating the data with a spreadsheet for easier record keeping, will be next up in the series.

If you have any questions or want feedback on your progress, please don’t hesitate to contact me.

– – –

Landlords, brush up on your real estate knowledge by reviewing these real estate terms and definitions.

Candied Bacon for Ballers

Freshly cooked chipotle candied bacon

Question: What do ballers eat? Candied Bacon!

Not even lying. A few years back, I was at the Boston Bacon and Beer Festival at the House of Blues. The options were limitless. They had all types of gourmet candied bacon appetizers, various jars of bacon jam, even some uncured duck bacon. Seriously, uncured duck bacon. What an event! Most notable to me was the Chipotle Candied Bacon.

Anyway, this was the candied bacon recipe that was passed down from one of the vendors. I’ve made an adjustment or two over time as a way to experiment with it, but it remains largely the same. The chipotle gives the bacon a nice, smoky heat. The sugar sweetly balances the spice.

By the time you are done, your kitchen will smell like Patton rolling through Tunisia … VICTORY!

As the good general said, “If a man cooks bacon, what else is there?”

He didn’t actually say that, but he should have.

Candied bacon recipe

Ingredients to make a chipotle candied bacon appetizer

Ingredients

  • 2 tsp. of chipotle powder. I use Los Chileros. You can use any chipotle powder.
  • 1 lb. bacon – preferably small batch, locally sourced. I get mine from Chestnut Farms at the local Farmer’s Market. If you have the time and the money, but not the local source, go with Primal Pastures out of Temecula, CA. Otherwise, your local Whole Foods Black Forest bacon is tasty enough.
  • 1/4-1/2 cup of light brown sugar, or at least enough to coat the bottom of the bowl. I don’t use fancy sugar. Maybe I should?

If I opt for a maple chipotle candied bacon, I use Fadden’s maple syrup. Fadden’s maple syrup is simply delicious and highly recommended.

Candied Bacon Quick Instructions

  • Mix chipotle powder with brown sugar
  • Rub it on the bacon
  • Place bacon on a foil-lined cookie sheet
  • Bake at 350 for 20 minutes
  • Let the bacon cool on a cooling rack
  • Serve

Detailed Instructions for making Chipotle Candied Bacon

First, pre-heat the oven to 350. Then line a cookie sheet with foil.

Next, there are two ways to candy the bacon. The first is to make a rub. This can be as simple as combining the chipotle powder you purchased with brown or white sugar. If you are using brown sugar, make sure you knead it or beat it to get it to a more granular state. I prefer to dip the bacon in the bowl to ensure maximum coverage.

Making the chipotle rub

Add the bacon to the chipotle rub

To get fancy, you can create your own chipotle rub. To get super fancy, you could cure your own bacon. You don’t need to, just saying you could. Instructions are below.

The second way is to make a glaze. You can do this with sugar, or you can do it with your choice of sweetener: maple syrup, honey, agave, etc. Combine your sweetener with your chipotle powder in a saucepan over low heat. You will want to warm it until it’s somewhat viscous and can be brushed or drizzled on to the bacon.

Put the bacon candy in the oven

We are ready to go!

In either scenario, make sure to cover both sides of the bacon. Otherwise, you will miss out on flavor, and no one wants that. Also, use up the remainder of your mix, either sprinkling on the rub, or pouring the remainder of the glaze onto the bacon after you have placed it onto the baking sheet.

How to cook candied bacon in the oven

Set a timer for twenty minutes and clean up any mess you have already made. Also, make sure you get a cooling rack set up on another foil-lined sheet to catch the drippings. The cooling rack will help you to get rid of any excess grease.

Freshly cooked bacon

Time to find the cooling rack

If at the end of twenty minutes the chipotle candied bacon is not crispy enough, consider adding a few more minutes. Remember though, the bacon will cook even after you remove it from the oven. You should see a caramelization on the bacon at this point.

Bacon cooling on a cooling rack

Give it a few minutes to shed the drippings and cool

When the Chipotle Candied Bacon is cooked to your liking, you’re done and it’s time to serve. Add it to a plated dish, or eat it straight up.

Enjoy, it’s delicious.

Chipotle Candied Bacon and Eggs for breakfast

A better bacon and eggs breakfast

What if I want to use the stovetop?

I am guessing that you probably don’t have a breakfast diner’s setup, or even a Guggenau cooktop.  That’s ok.  Just break out your favorite cast iron skillet or frying pan and repeat the cooking steps, substituting the instructions for baking in the oven with a medium to high heat on the stove top.

You may want to remove some of the bacon grease in real-time to help prevent the grease from overtaking the rub/glaze.

Can I use a grill?

That said, I do recommend bringing this delicacy to a college tailgate.  You, along with beer, will be the star of the pregame show.

Does cut thickness matter?

Completely preferential.  Thinly sliced bacon generally leads to crispy bacon, while thicker pieces lean toward chewy.  Obviously, your cooking length and temperatures affect the overall crunch, as well as your drying tactics.

What not to do

Do NOT dry the bacon on a paper towel.  That is a recipe for eating sticky paper towel, a lesson learned the hard way.

How long does the bacon candy last for?

Candied bacon lasts about a week, especially if stored properly. That is in theory.

In practice, candied bacon lasts the duration of the meal, maybe less. It’s just so tasty.

Cleaning up – what to do with the leftover bacon fat

You could store it in a mason jar for future use.  Or, if you went the stovetop route, you could make some home-fried potatoes. Just cut up some potatoes and toss them into the pan with some fresh garlic and rosemary.

If you aren’t interested in saving the bacon grease for the future or cooking something else with it, then let it cool down for a bit.  Before it hardens, soak it up with some paper towels, or find a container that is pre-destined for the trash, and pour it into that.

Do NOT pour it down the drain.

What about the nutritional value of this recipe?  Is it low carb?  Will it work for my paleo diet?

If that is a real concern, I suggest you find some information on bacon, and then you research the ingredients that are being added to the rubs, glazes, and cures contained here.  Creating homemade rubs, spices, and cured meats allows for far greater control over the quality of the ingredients versus store-bought goods.

I am not a doctor or dietician.  That said, I would wager most spices to be fine. However, when it comes to the sugars, bourbons, and honey, you better do your research, especially if you are banting or on the paleo diet.

How do I home cure bacon?

Ingredients for the cure

  • 1.5lb of pork belly
  • .5 tbsp. of black pepper
  • 1/2 cup of salt
  • 1/4 cup of brown sugar
  • 2 cloves of garlic
  • 3 oz. of bourbon (optional for a sweeter, wetter “brine”)

Quick instructions

  1. remove the rind (skin)
  2. mix dry ingredients
  3. rub the mixture on the slab of pork belly. be thorough, you won’t hurt the pork belly
  4. place in a bag and put in the fridge. leave it there for 4-5 days
  5. turn it over every so often
  6. when complete, wash the mixture off the pork belly, rinse with cold water
  7. let it dry overnight, preferably on a rack, turning it over again
  8. fire up the oven to the lowest baking setting
  9. place the slab into the oven (~200 degrees) for about 2 hours
  10. let it cool on a rack
  11. wrap it up like a butcher in some parchment

How do I make my own chipotle rub?

Ingredients for the rub

  • 3 tbsp ground dried chipotle pepper
  • 1/2 tbsp paprika
  • 1 tbsp mustard powder
  • 1 tbsp ground cumin
  • 1/2 tbsp salt
  • 1/2 tbsp of black pepper
  • 2 tbsp sugar (optional)

Quick Instructions

  1. simple, mix ingredients together in a bowl

Do I want my chipotle rub to be sweet or savory?

That is up to you.  You can add smoke to your flavor by replacing regular paprika with some pimentón de La Vera, or you can amplify the sweetness with some molasses or bourbon.  Mix and match each time you try it.

What does it pair well with?

  • Breakfast – Caramelized bacon goes really well with scrambled eggs and a lemon pepper spinach and watercress mix.  Breakfast is served!
  • Lunch – An easy way to spice up your BLT or turkey club
  • Dinner – Toss it on a chef salad, or, build a pizza around it
  • Dessert – Candied bacon cookies just sounds dope
  • Drinks – Bourbon and maple ale are natural pairings

Chipotle candied bacon pairs well with everyday life.  No joke.  Be a superhero and bring this candied bacon appetizer to the next Super Bowl party.  Bring it to a baby shower and spice things up a bit.  Careful though, people will talk more about the bacon than the baby.

Do you hike?  Bring it along.

Camp?  Even better.

Ski?  The best, it’s the ideal pocket bacon to snack on after your milk run.  So good, you will spend Apres-ski bragging about it.

Editor’s note – Remember, consuming raw or undercooked meats, poultry, seafood, shellfish, eggs or unpasteurized milk may increase your risk of foodborne illness.

Honey Infused Vodka (how to make it)

Be a star at the next college football tailgate with honey infused vodka. You will feel like far less of a degenerate if your 8:30am booze tastes like Honey Nut Cheerios … because that’s what honey infused vodka tastes like. Breakfast of champions!

Equipment you will need:

  • a mason jar, old milk jugs, some other sealable container
  • metal strainer (optional)
  • cheesecloth
  • glasses for serving
Honey Infused Vodka ingredients - vodka, oats, and honey

The ingredients – cheap vodka, organic rolled oats, and local honey

Ingredients you will need:

  • 750ml – 1L of vodka (don’t but expensive vodka)
  • oats – 1 package of organic rolled oats
  • honey or maple syrup
  • nutmeg, cinnamon, allspice, vanilla (optional garnish)

Quick Instructions

  • add vodka to container
  • add oats to container
  • seal the container
  • shake it up, and repeat 1-2x a day over 4-5 days
  • first strain out the oats with a metal strainer, it’s quicker and less messy
  • then strain it repeatedly through the cheesecloth (until the mixture is less cloudy)
  • add the honey / maple syrup
  • blend for a few minutes
  • serve, on ice preferred
  • nutmeg or cinnamon is optional

Detailed instructions for making your honey infused vodka

For starters, you only need two pieces of equipment to make your infused honey oat vodka: a sealable container and a something to strain the mixture with. I used a Crescent Ridge half gallon milk jug, but you could just as easily use an equal sized mason jar. As for straining, I prefer to use a metal strainer before employing some cheesecloth, it really helps reduce the amount of cheesecloth you will need.

Why not premium vodka? Because you are adding flavors to the vodka. You don’t need the smoothest vodka money can buy to get a great result with this recipe. Forget the Grey Goose, forgo the Ciroc.

Plus, you don’t need to further pad Diddy’s wallet. I’m sorry, “Brother Love”.

Inexpensive vodka, ready to be infused with honey and oats

Doesn’t vodka look great in a milk jug?

Now, to make the homemade honey infused vodka, start by pouring your liter of college grade spirits, I chose Smirnoff, into your mason jar, milk jug, red snowblower gas can, etc. and then add your (preferably) organic rolled oats. Seal the container and shake it up vigorously. You will want to repeat this process a couple of times a day over the next four to five days as you let the oats infuse, creating your flavored vodka.

The vodka infusing process

What it looks like halfway through

When the oats are done infusing their flavor into the vodka, it’s time to strain the mixture. This is where you the metal strainer will come in handy. Use it to separate out all of the solids from the liquid. One to two times should do the trick.

Straining the oats from the vodka

Metal strainers for the win

After that, give it a few minutes to settle. Then, it’s time to use the cheesecloth for further refinement. Strain more or less depending on how long you left the rolled oats infusing the vodka.

Cheesecloth for straining the oats from the vodka

Cut the cheesecloth into pieces wider than the mouth of the container you are pouring into

The longer you left the oats in, the more times you should strain, let’s call it three to five times.

After you have strained the mixture, it is time to add the sweetener. In my experiment, I used a half-bear (technical measurement) of local, Massachusetts honey. You can use maple syrup or pure agave if you like.

Infuse the vodka with honey or maple syrup

Honey or Syrup? I prefer syrup.

If you want to keep the drink vegan-friendly, opt for the latter. Since I lack patience, I skipped right to using my Vitamix instead of shaking the mixture by hand. The bubbles were a delight to watch.

Honey infused vodka

Respect the Vitamix

Congrats. It’s now time to enjoy your homemade honey infused vodka. If you want, you can serve the drink after the mix settles. Or, feel free to chill it first.

If it’s the holiday season, feel free to sprinkle in some nutmeg or cinnamon, or some allspice if you are really feeling it.

To note – you could buy a vodka infuser, but it seems like a waste of money. For one, there is a ridiculous amount of flavored vodka on the market. Two, it’s much more fun to do it yourself.

Also potentially wasting your money is selecting a more expensive vodka. But if you feel so compelled, try the Bully Boy or the Triple 8. And if you have the chance, take the Cisco Brewery tour, it is a delight.

If you get tired of the honey infused vodka, grab a bottle of cheap red wine that you have lying around hyperdecant it (put it in a blender). Let me know that works for you.

Hyperdecanting: How to Improve a Two Buck Chuck

Oenophiliacs beware, we are destroying wine here. Or are we? For your next wine tasting party, try Hyperdecanting. Better yet, try hyperdecanting a two buck chuck to improve its flavor.

How do I decant wine without a decanter?

By Hyperdecanting it. Hyperdecanting wine is a way to change your wine tasting experience. It is a way to (maybe?) change your cheap red wine into a good red wine. Well, maybe not good wine, but it will certainly help a two buck chuck earn some points.

In fact, after hyperdecanting, you won’t feel shamed for serving it at your next wine tasting.

First, a little background.

  • What is decanting?
  • Why decant?
  • What type of wine should I decant?
  • Can I hyperdecant white wine?
  • Does bottle age matter?
  • What is two buck chuck?
  • Why is two buck chuck so cheap?
  • Can I use an expensive vintage wine?
  • What is hyperdecanting?
  • The process of hyperdecanting
  • What won’t hyperdecanting do for a two buck chuck?
  • For an optimal wine tasting experience

What is decanting?

Decanting is just the process of pouring the wine out of it’s bottle into another container. That could be a decanter, a carafe, or even another wine bottle. Or a glass, which conveniently is the best place for wine. So I’m told.

Why decant?

The first reason is to separate out any sediment or dregs that have collected over time. Beyond the aesthetics and visual appeal of the wine in your favorite goblet, there are various arguments about the effect that sediment has on flavor. To be clear, though a bit gritty, sediment is not harmful.

The second reason is to aerate the wine. As the wine takes in oxygen, cleverly called the breathing process, it helps open up the flavor of the wine, unlocking and releasing aromas of fruits and spices: black cherry, peppercorn, etc.

What type of wine should I decant?

Preferably red wine. Cabernet, Syrah, Barolo, and some red blends lend themselves well to decantation. Essentially, bold red wines that are rich with tannins work best. The decanting process helps reduce the drying effects of the tannins.

Can I hyperdecant white wine?

Yes. Although, white wines are aged for shorter periods, and as such, decanting seems to be less necessary.

There is benefit to hyperdecanting a chilled white wine. Blending it will help warm it up, especially true if using a Vitamix. This is handy if you need to serve the wine immediately, as cold wine doesn’t allow for maximum aromatics.

Does bottle age matter?

There is some thought that more mature wines need less decanting as mature wines will lose their flavor as they are exposed to the breathing process. Your mileage may vary.

As for my experiment, I used a Vitamix, which is anything but delicate. So, typical bottle age rules did not apply.

Besides, we are livening up a two buck chuck, not a jeroboam of 1945 Chateau Mouton-Rothschild.

What is two buck chuck?

The term was made famous due to Trader Joe’s selling of Charles Shaw wine for two dollars. Two buck chuck was a revelatory sensation for wine drinkers, brown baggers, college kids, and everything in between over the last 15 years. Thus, the low cost of entry makes it perfect for an experiment in hyperdecanting.

Despite the exercise in marketing over how the two buck price tag came about, Fred Franzia, creator of old school boxed wine, purchased the Charles Shaw label and drove a bargain product built for the bourgeois.

Why is two buck chuck so cheap?

In general, it’s because vineyards and wineries need to sell off their surplus without diluting their main brands (see Pacific Peak). So, some good value can sometimes be derived in bargain-priced wine. This was exactly the case with the 2002 Charles Shaw Shiraz.

For the experiment, I went with another bargain-priced wine, the Pacific Peak Cabernet Sauvignon ($2.57/bottle). Who owns Pacific Peak? I couldn’t find the answer, even after diving into what I call Search Purgatory, or, page 4 of Google.

Can I use an expensive vintage wine?

Sure. However, the thought is that young wines blossom from aeration, where as premium, old vintage wines don’t need the same treatment. That being said, it’s probably best to start with a cheap red wine and work your way up.

As a reminder, the goal of the experiment is to make your two buck chuck pass muster during your wine tasting. If you can convince your friends that you are serving a 90-point wine due to hyperdecanting, then you can save yourself some serious coin. Even professionals can’t always agree with judging the quality of wine.

Why does red wine need to be aerated?

Aeration helps remove undesirable aromas, thus “improving” the taste perception of the wine.

Can you put wine in a blender?

Yes! That is exactly what hyperdecanting is!

What is hyperdecanting?

It’s simply just the process of using a blender to aerate the wine. The main purpose of hyperdecanting is save time. Sure, traditionalists will mock this approach, but if you’re reading, I’m guessing you aren’t one.

Proper decanting steps include keeping the bottle upright for a period of time before decanting or using a light to determine if any sediment is being transferred. We don’t care about those one bit. So set aside your red wine decanter set, pull out your Vitamix, and fire it up.

The process of hyperdecanting wine

1. Plug in the blender
2. Uncork the wine
3. Pour the wine in the blender
4. Pick a high setting
5. Blend for 1-2 minutes
6. Let the froth settle
7. Pour into glasses, goblets, or chalices (the gaudier the better)
8. Drink and enjoy

The two buck chuck is in the blender. Let the hyperdecanting begin.

The two buck chuck is good to go!

Frothy wine

Maximum froth

Less froth

Settling froth

Hyperdecanted Pacific Peak Cabernet Sauvignon vs. Pacific Peak Cabernet Sauvignon from the bottle

The hyperdecanted Pacific Peak Cabernet Sauvignon did in fact taste “better”. Best to try both to be sure.

What won’t hyperdecanting do for a two buck chuck?

First off, it’s not like freeze drying food. You should consume the wine immediately, or shortly thereafter.

It won’t turn a cheap red wine into a good red wine. Let’s face it, you couldn’t slide your hyperdecanted two buck chuck past an actual sommelier. But, there is still plenty of room to impress your friends at your next wine tasting party.

The best two buck chuck is a hyperdecanted two buck chuck – me

May I suggest a fine Pacific Peak Cabernet Sauvignon?

If you want to add a touch of class, you could opt for the Wente Vineyards Charles Wetmore Single Vineyard Cabernet Sauvignon 750 mL

For an optimal wine tasting experience

Try a good cheese pairing, say … a rich mahón with some jamón serrano.

As an aside, I’m told that mahón is the “cheddar” of Spain, and, not a bad gift for your cheese of the month club.

Also, if you actually spring for a jeroboam of 1945 Chateau Mouton-Rothschild, please please please opt for the Reserva Jamón Ibérico De Bellota. No need to thank me.

* Want to take it up a notch? Try infusing your own vodka

How big is a jeroboam?

A jeroboam is a wine bottle that contains between 4 bottles (3 liters) and 6 bottles (4.5 liters) as it depending on the type of wine.