If you’re a newcomer to the world of property investment, you may find some of the jargon a little confusing. The following glossary of terms that are commonly used in relation to property management and tenanting may be helpful as you navigate your way through the process.
Body Corporate
This is a term used in the Strata Titles Act to describe the body that represents the building owners. This statutory Body Corporate has control and administration of the common property and the registered proprietors of the units are the only members of the Body Corporate.
Bond
A security bond is a payment made in advance by a tenant to cover any costs for which the tenant may be liable at the end of the tenancy, such as damage to the property or chattels, outstanding water usage charges or unpaid rent. The bond is the tenant’s money and must be lodged with the Bond Administrator (Department of Commerce) until the end of the tenancy.
Chattels
This term refers to any fixed asset other than freehold land and includes items such as machinery, furnishings, fittings, implements etc which may be associated with land use but which are not fixed to the land or premises. If they are fixed, they may be removed without causing any structural damage to the building.
Eviction
A process which takes place through legal means to remove a tenant/s from the home as a result of the tenancy agreement being breached (e.g. unpaid rent, noise violation, wilful damage to property etc).
Fixtures
This term applies to those parts of a property that are affixed to structures or land in such a way that their removal will cause damage to themselves or the property, e.g. carpets.
Lease
A lease is a written contract between an owner and the tenant that provides the tenant with the right to exclusive possession of the property for an agreed period of time.
Tenant
The person or legal entity who receives the right to occupy and use a property under the terms of an agreed lease.
Owner
This is the owner of a property who transfers the right to occupy and use the property to another person or legal entity under a lease agreement.
Maintenance
The upkeep and care of a property.
Managing Agent
This is the real estate agent who is authorised to manage the affairs of someone else’s property (in accordance with an agreement).
Periodic Lease
This refers to the situation where a tenant continues to rent or occupy the property after the lease has formally expired and continued on a monthly basis.
Property Manager
This is the person who works for a Managing Agent and manager of the property.
Notice of Termination
This refers to the notice given by either the tenant or the owner that they want to end the rental agreement and vacate the property in accordance with the terms of the lease agreement.
Right of Entry
This refers to a situation where an owner may inspect the property, provided that the tenant is given reasonable notice.
Strata Title
This is also referred to as ‘unit title’ and it grants ownership of a section or ‘unit’ of a larger building (e.g. apartment).
Tenant Damages
This refers to damage to the property that is considered outside of normal wear and tear that takes place during the terms of the lease.
Vacancy Rates
Vacancy rates show the percentage of rental properties on the market that are available for rent over a specified time period. For example, if a suburb has a vacancy rate of 6%, it means that 6% of available rental housing is not occupied.
Yield
This is the return on an investment which is shown as a percentage of the amount invested or market value. Gross rental yield can be calculated by multiplying the weekly rental amount by 52 (weeks in the year), then dividing that figure by the investment amount (total value of the property) and multiplying by 100 to get the percentage.
If you’re considering investing in property and want to speak to one of the leaders in property management in Perth, then look no further than our team at Time Conti Sheffield. We have over 60 years’ experience in real estate and property management and our professional team are on hand to decode any jargon and help you maximise your investment. Our friendly and experienced team are waiting for your call on 08 9362 5333 or alternatively, you can send us an online enquiry on our website.
