Glossary of Multifamily Marketing Technology

In multifamily rental properties, this metric measures the rate at which available units are rented (typically over 12 months), and is adjusted to reflect a property’s turnover rates during the specified period.

The rate that available units that are expected to rent.  It is calculated as the total number of units rented divided by the total number of units listed (e.g., 42 units rented ÷ 60 units for rent = 70% absorption).

Tangible benefits associated with increasing the value of a real estate property, which range from inclusive items (plumbing, air-conditioning, etc.) to curbside appeal and location among other factors considered important to tenants.

The comparable price of rent in a market area.  Also known as “fair market” rent, there are various factors that determine fair rental prices, with calculations based on scientific regression analysis of rental units in a given vicinity.

One or more residential buildings used for single-family ownership, condominiums and/or apartment rental units, with each household considered an “owner” of the community and have majority-rule voting in community oversight, and share in its equity. A cornerstone of government-subsidized housing with low buy-in costs and rents aimed at assisting low income households.

A type of multifamily housing unit that is comprised of two adjacent dwellings – either horizontally or vertically attached – and have separate entrances yet share a wall.  The term is also applied to a variety of multifamily properties with three and four units.

Type of apartment unit characterized by a cluster of low-rise structures accented with landscaping and/or a garden area. Typically, these types of units are built on or below ground level, with amenities such as pools, playgrounds and clubhouses.

The total amount of rent paid including the estimated cost of utilities. Also known as a “gross lease”, it is the basic cost a tenant is charged by a landlord (or other third party) to occupy the rental property.

Using regression analysis, rent is determined as comparable to an area’s commercial markets (e.g., the tech industry in San Diego, CA), in which unit rental costs are affected by the current state of a particular market (i.e., the stronger the market, the higher the rents).

Rental prices for unit types in a particular metropolitan area. Exactly half of the units have higher rents and half have lower rents.  Used to calculate fair-market rental prices.

Real estate marketing tool that incorporates high-quality video tours of multifamily properties, used to present a property to prospective buyers and/or secure investment funds.  Multifamily tours are used with apartments, condos, timeshares, luxury residences, senior living, and low-income housing projects.

The amount a tenant will pay to a lessor or landlord in addition to the rent, which also covers some or all property expenses, and is specified within the lease.  Typically used with commercial rental properties, and can be “pro-rated” based on the size of the leased property.  With multifamily rental units, a tenant’s rent is adjusted to reflect utilities and/or amenities paid for by the landlord.

The calculation used by real estate investors to determine cashflow and the viability of the property based on the number of tenants. High occupancy rates reveals a stable base of tenants and can prompt a rise in rent by the landlord.  Low occupancy rates can be improved through rebranding, strong marketing and advertising.

The geographical area whose value is determined by the proposed development of multifamily rental units within a particularly strong real estate market.

Metric used to measure a particular area surrounding a property site.  The proposed area of analysis is circular, extending anywhere from one to ten miles from the center of the location. The analysis does not consider factors such as mobility, geography or socioeconomic disparity as it may differ from areas outside the analytic parameters.

Metric used to survey the median rent in a given area based on the available types of rental units and a property’s comparability rating to allow property owners and landlords to forecast rent for a particular rental property.  Calculated as Y ≈ f(X, β); x=independent variables, y=dependent variables.

Metric used to calculate the number of tenants needed to sign leases in order to offset the losses associated with tenants that have either broken or not renewed their leases.

Type of lease that provides deceased rental rates for tenants on specific future dates.  Landlords can use this type of lease to avoid losing tenants who would otherwise need to move out due to rising rents.

Type of lease where rental rates for tenants increase to a predetermined amount on specific future dates.  The property owner risks losing his or her investment, betting against factors such as inflation, taxes, and other incurred costs.

Type of attached multifamily unit defined as a two- or three-story dwelling that shares a common wall and/or adjacent walls with the other units.

The classification for residential dwellings.  Includes single-family and multifamily housing, further classified by size (1,2, or 3+ bedrooms) and unit structure type (e.g., apartment, condominium, duplex, townhouse, etc.), and is used to calculate rent.

The upper-25% over the median rental prices in a given area over a specified period of time.  For example, a multi-unit rental property has a total of 40 apartments; 10 of these apartments will have higher-than-average rent in comparison to the other 30 units.

HUD guideline managed by local Public Housing Authorities that defines the “Total Resident Payment” for low-income tenants living in subsidized housing.  These allowances are for basic utilities such as propane, natural gas, electricity, water & sewer, and garbage collection.

The calculation used by real estate investors to determine the value of a rental property.  High vacancy rates indicate a property is undervalued or undesireable.  Low vacancy rates equate to more prosperous real estate properties with owners enjoying lower tenant-turnover rates and increased leverage in raising rental prices.