Real Estate Glossary

69 terms — every word you'll encounter as a real estate investor, defined in plain English.

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1031 Exchange: A tax-deferral strategy that lets you sell an investment property and reinvest the proceeds into a "like-kind" replacement property without paying capital gains taxes at the time of sale. The name comes from Section 1031 of the IRS tax code. You have 45 days to identify a replacement property and 180 days to close. The tax isn't eliminated — it's deferred until you eventually sell without doing another exchange.

A

Accredited Investor: An individual (or entity) that meets the SEC's financial thresholds to invest in certain unregistered securities. As of 2024, an individual qualifies by having a net worth over $1 million (excluding primary residence) or earned income over $200,000 ($300,000 joint) for the past two years. Many real estate syndications are open only to accredited investors.
After-Repair Value (ARV): The estimated market value of a property after all planned renovations are complete. ARV is the key number in fix-and-flip and BRRRR deals. Lenders and investors use it to determine how much to lend and whether a deal makes sense. A common rule of thumb: your all-in cost (purchase + repairs) should be no more than 70–75% of ARV to leave room for profit and margin of error.
Amortization: The process of paying off a loan through regular, scheduled payments over time. With a fully amortizing mortgage, each payment covers both interest and a portion of principal, so the balance reaches zero at the end of the loan term. Early in the loan, most of each payment goes toward interest; as the balance shrinks, a larger share goes to principal. An amortization schedule shows exactly how each payment is split.
Appreciation: The increase in a property's value over time. Natural (or market) appreciation happens passively as local demand, inflation, and economic growth push prices up. Forced appreciation is value you create intentionally — by renovating, adding a bedroom, improving management, or increasing rents. Forced appreciation is what BRRRR and value-add investors rely on, because it's controllable.
Assignment Contract: A contract that transfers (assigns) your rights as a buyer in a purchase agreement to a third party, who then closes on the property instead of you. This is the core mechanic of wholesaling. You get a property under contract, then assign that contract to an end buyer for an assignment fee — usually $5,000–$20,000 — without ever taking title to the property.

B

Bridge Loan: A short-term loan (typically 6–24 months) used to "bridge" the gap between buying a new property and arranging permanent financing. Common in fix-and-flip and BRRRR deals where you need fast funding to acquire and renovate, then refinance into a long-term mortgage once the property is stabilized. Bridge loans carry higher interest rates (often 8–12%) and origination fees.
BRRRR Method: Buy, Rehab, Rent, Refinance, Repeat — a strategy for building a rental portfolio by recycling the same capital. You buy a distressed property below market value, renovate it, place a tenant, then do a cash-out refinance based on the new (higher) appraised value. If the numbers work, the refinance pulls out most or all of your original investment, which you then use to buy the next deal.
Buy and Hold: A long-term real estate strategy where you acquire rental property and hold it for years or decades to collect rental income and build equity through appreciation and mortgage paydown. Buy-and-hold is the most common wealth-building strategy in real estate — it generates cash flow today and builds net worth over time through three simultaneous return streams: cash flow, appreciation, and principal paydown.

C

Cap Rate (Capitalization Rate): A measure of a property's annual return as if you paid all cash — no mortgage. Formula: Cap Rate = Net Operating Income ÷ Purchase Price. A property generating $18,000 NOI purchased for $200,000 has a 9% cap rate. Cap rate lets you compare properties of different prices and locations on equal footing. Higher cap rates generally mean more return but more risk (less desirable market or property). Lower cap rates reflect safer, in-demand assets.
CapEx (Capital Expenditure): Large, infrequent expenses that extend the useful life of a property — roof replacement, HVAC systems, water heaters, foundation repairs, and similar big-ticket items. CapEx is different from routine maintenance. Smart landlords budget for CapEx monthly (often 5–10% of gross rent) into a reserve account so a $12,000 roof replacement doesn't wipe out a year of cash flow. Ignoring CapEx is one of the most common mistakes new investors make.
Cash Flow: The money left over each month after all property expenses are paid. Formula: Gross Rent − Vacancy − Operating Expenses − Mortgage Payment = Cash Flow. Positive cash flow means the property puts money in your pocket. Negative cash flow means you're subsidizing the property from your own income. A property can have positive cash flow but low ROI, or negative cash flow but strong appreciation — understanding the tradeoff is essential before buying.
Cash-on-Cash Return: The annual pre-tax cash flow you receive divided by the total cash you invested. Formula: Annual Cash Flow ÷ Total Cash Invested. If you put $50,000 into a deal and net $4,000/year in cash flow, your cash-on-cash return is 8%. Unlike cap rate, cash-on-cash accounts for your actual financing — it reflects the leveraged return on the real dollars you put in. Most investors target 8–12%+ cash-on-cash.
Cash-Out Refinance: Replacing an existing mortgage with a new, larger loan and pocketing the difference as cash. If your property is worth $300,000 and you owe $150,000, a 75% LTV cash-out refi gives you a $225,000 loan — $75,000 in cash back (minus closing costs). The cash is not taxed as income. BRRRR investors use cash-out refis to recycle their capital into the next deal.
Closing Costs: Fees and expenses paid at the close of a real estate transaction, above and beyond the purchase price. These typically include lender origination fees, title insurance, escrow fees, recording fees, prepaid interest, and property taxes. On a purchase, buyers typically pay 2–5% of the loan amount in closing costs. Sellers typically pay 6–10% (largely real estate agent commissions). Closing costs significantly impact deal profitability and should always be factored into your numbers.
Comps (Comparable Sales): Recently sold properties that are similar in size, condition, location, and features to the property you're analyzing. Appraisers use comps to determine market value; investors use them to estimate ARV and verify that a purchase price makes sense. Good comps are close in proximity (same neighborhood), similar in square footage (within 10–20%), and sold recently (within 6–12 months). The quality of your comps determines the reliability of your ARV estimate.
Creative Financing: Acquisition strategies that don't rely on traditional bank mortgages. The term is an umbrella covering seller financing, subject-to, lease options, wraparound mortgages, private money, HELOCs, and other non-conventional approaches. Creative financing is especially useful when you have limited capital, can't qualify for a traditional mortgage, or want to structure a deal that works better for both buyer and seller.

D

Debt Service Coverage Ratio (DSCR): A measure of whether a property's income covers its debt payments. Formula: DSCR = Net Operating Income ÷ Annual Debt Service. A DSCR of 1.0 means the property barely breaks even on its mortgage. Most lenders require 1.20–1.25, meaning income exceeds debt payments by at least 20–25%. DSCR loans — which qualify borrowers based on property income rather than personal income — are popular with investors who have complex tax returns.
Debt-to-Income Ratio (DTI): The percentage of your gross monthly income that goes toward debt payments. Lenders use DTI to decide whether you qualify for a mortgage. Most conventional lenders cap DTI at 43–50%. Formula: Total Monthly Debt Payments ÷ Gross Monthly Income. As you add more rental properties, their mortgages increase your DTI, which can eventually prevent you from qualifying for more loans — a reason many investors switch to DSCR or portfolio loans.
Down Payment: The upfront cash portion of a purchase price that you pay out of pocket; the remainder is financed. For a primary residence with an FHA loan, you can put down as little as 3.5%. For investment properties, most lenders require 20–25%. A larger down payment means lower monthly payments and easier loan approval, but ties up more capital. House hacking with an FHA loan is one way to buy investment property with a small down payment.
DSCR Loan: A type of investment property mortgage where the lender qualifies you based on the property's rental income rather than your personal income and tax returns. DSCR stands for Debt Service Coverage Ratio. These loans are popular with self-employed investors, landlords with complex returns, or anyone with multiple properties that make their DTI look high. The lender simply verifies the property will cash flow enough to cover the mortgage.
Due Diligence: The investigation period after a contract is signed but before closing, during which you verify everything you've been told about a property. Due diligence typically includes a home inspection, title search, review of leases and rent rolls, checking for liens or code violations, verifying utility costs, and confirming the numbers used to underwrite the deal. Most contracts include a due diligence period (7–30 days) during which you can back out and recover your earnest money.

E

Earnest Money: A deposit (typically 1–3% of the purchase price) paid by the buyer shortly after a contract is signed, demonstrating serious intent to close. Earnest money is held in escrow and applied toward the purchase at closing. If the buyer backs out without a valid contractual reason, the seller typically keeps the deposit. If the seller backs out, the buyer gets it back — sometimes double. Due diligence and financing contingencies protect buyers' earnest money.
Equity: The portion of a property's value that you actually own — free of debt. Formula: Equity = Market Value − Loan Balance. Equity builds in two ways: appreciation (the property increases in value) and principal paydown (your tenants' rent pays down your mortgage). Equity can be tapped via a cash-out refinance or HELOC to fund future investments, which is one of the core compounding mechanics of buy-and-hold real estate.
Escrow: A neutral third-party account that holds funds and documents during a real estate transaction until all conditions are met and closing can proceed. Your earnest money goes into escrow; so does the buyer's down payment and lender funds at closing. After closing, your mortgage servicer may hold property taxes and insurance in an escrow account and pay them on your behalf. Escrow protects all parties by ensuring no money changes hands until obligations are fulfilled.

F

FHA Loan: A government-backed mortgage insured by the Federal Housing Administration, designed for buyers with lower credit scores or down payments. FHA loans allow down payments as low as 3.5% and accept credit scores starting around 580. The catch: you must pay mortgage insurance premiums (MIP) for the life of the loan (or 11 years if you put 10%+ down). For real estate investors, FHA loans are popular for house hacking — buying a 2–4 unit property, living in one unit, and renting the others.
Fix and Flip: Buying a distressed property, renovating it, and selling it for a profit — typically within 6–18 months. Fix-and-flip is an active income strategy, not passive. Profits are taxed as ordinary income (not capital gains) if held less than a year. The formula: buy at 70–75% of ARV minus repair costs. Risks include renovation cost overruns, time delays, market downturns, and carrying costs (mortgage, taxes, insurance) while the property sits vacant.
Forced Appreciation: Increasing a property's value through deliberate improvements rather than waiting for the market to rise. Examples: adding a bathroom, finishing a basement, renovating a kitchen, converting a single-family home to a duplex, or improving management to reduce vacancy and increase NOI on a commercial property. Forced appreciation is controllable, unlike market appreciation, which makes it central to value-add and BRRRR strategies.

G

Gross Rent Multiplier (GRM): A quick screening tool that divides a property's purchase price by its annual gross rent. Formula: GRM = Price ÷ Annual Gross Rent. A property listed at $240,000 that rents for $2,000/month ($24,000/year) has a GRM of 10. Lower GRMs generally indicate better value. GRM is fast but superficial — it ignores expenses, vacancy, and financing. Use it for quick filtering, then run a full cash flow analysis on deals that pass.

H

Hard Money Loan: A short-term, asset-based loan from a private lender (not a bank) where the property serves as the primary collateral. Hard money lenders care more about the deal's after-repair value than your credit score. They're fast to close (sometimes in days), but expensive — rates of 10–15% plus 2–5 points upfront are common. Primarily used by fix-and-flip investors and BRRRR investors for the acquisition and rehab phase before refinancing into permanent financing.
HELOC (Home Equity Line of Credit): A revolving line of credit secured by the equity in a property, similar to a credit card but backed by real estate. You can draw from it, repay it, and draw again during the draw period (usually 10 years). HELOCs are a common way to fund down payments or renovations on investment properties using equity you've built in your primary residence or other rentals. Interest is typically variable and only charged on the amount drawn.
House Hacking: Living in one unit of a multi-unit property while renting out the others — using rental income to offset or eliminate your housing costs. Classic house hacking uses an FHA loan (3.5% down) to buy a 2–4 unit property. You live in one unit; tenants in the other units pay most or all of your mortgage. It's one of the most effective entry points into real estate investing because owner-occupant financing is cheaper and easier to qualify for than investor loans.

I

Interest Rate: The cost of borrowing money, expressed as a percentage of the loan balance per year. On a $200,000 mortgage at 7%, you'd pay $14,000/year in interest (declining as you pay down principal). Interest rate directly impacts your monthly payment and cash flow. A 1% rate increase on a $300,000 loan adds roughly $185/month to your payment. Real estate investors watch rates closely because even small changes can make or break a deal's cash flow.

J

Joint Venture (JV): A partnership between two or more parties to invest in a specific real estate deal, usually without forming a permanent company. Common JV structures: one partner brings capital, the other brings deal-finding and management skills (a "time-for-money" split). Profit splits vary widely — 50/50 is common, but terms depend on what each party contributes. JVs are typically documented with an operating agreement to spell out roles, returns, and exit strategies.

L

Land Contract: A seller-financing arrangement where the buyer makes payments directly to the seller and takes possession of the property, but the seller retains legal title until the loan is paid off or refinanced. Also called a "contract for deed." From the buyer's perspective, it functions like a mortgage. Risk: if the buyer defaults, they may lose all equity and possession without a full foreclosure process. Useful for buyers who can't qualify for traditional bank financing.
Lease Option: A hybrid agreement where a tenant rents a property with the option (but not obligation) to purchase it at a predetermined price within a set time period. The tenant typically pays an upfront option fee (1–5% of purchase price) that's often credited toward the purchase. Lease options can benefit buyers with damaged credit who need time to qualify for a mortgage, and sellers who want cash flow while marketing a property.
Leverage: Using borrowed money to increase the potential return on an investment. With 20% down, you control a $300,000 asset with $60,000 of your own money. If the property appreciates 5% ($15,000), that's a 25% return on your $60,000 — not 5%. Leverage amplifies both gains and losses. It's what makes real estate one of the most powerful wealth-building vehicles, and also why overleveraged investors get wiped out when markets turn.
Lien: A legal claim against a property used as security for a debt or obligation. Mortgages are the most common lien. Others include tax liens (unpaid property taxes or IRS debts), mechanic's liens (unpaid contractors), and HOA liens. Liens attach to the property, not the owner — meaning they must be paid off or cleared before the property can be sold or refinanced. Always run a title search before buying to identify any liens.
LTV (Loan-to-Value Ratio): The ratio of your loan amount to the property's appraised value. Formula: LTV = Loan Amount ÷ Property Value. A $160,000 loan on a $200,000 property is 80% LTV. Lenders use LTV to assess risk. Lower LTV = more equity = less risk for the lender = better rates for the borrower. Most investment property lenders cap at 75–80% LTV. BRRRR investors aim to refinance at 70–75% LTV to stay conservative and leave equity in the deal.

M

Market Value: The price a property would sell for on the open market between a willing buyer and a willing seller, with neither under pressure to act. Market value is determined by comparable sales (comps), not by what the seller paid or what they need. Appraisers determine market value for lenders. Investors try to buy below market value to build in equity from day one.
MLS (Multiple Listing Service): A database where real estate agents list properties for sale and share them with other agents. Access is typically restricted to licensed agents, though buyers can see many MLS listings through sites like Zillow and Realtor.com. Most retail buyers compete for on-market MLS deals. Serious investors often find better deals off-market through direct mail, driving for dollars, wholesalers, and networking — because there's less competition.
Mortgage: A loan used to purchase real estate, secured by the property itself. If you stop making payments, the lender can foreclose and take the property. Mortgages have two key components: principal (the amount borrowed) and interest (the cost of borrowing). The most common type is a 30-year fixed-rate mortgage. Investment property mortgages typically require 20–25% down and carry slightly higher rates than owner-occupied loans.

N

NOI (Net Operating Income): The income a property generates after operating expenses but before mortgage payments. Formula: Gross Rent − Vacancy − Operating Expenses (taxes, insurance, maintenance, management, etc.) = NOI. NOI does not include mortgage payments — it's used to compare properties independent of how they're financed. Cap rate and DSCR are both calculated from NOI. It's the single most important number in commercial real estate valuation.

O

Owner Financing: When the seller of a property acts as the bank, lending the buyer some or all of the purchase price directly. The buyer makes monthly payments to the seller instead of a bank. Also called seller financing. Benefits: no bank qualifying, faster closing, flexible terms. The seller gets a steady income stream, often at a higher rate than they'd earn in savings. Risk: if the buyer defaults, the seller must go through foreclosure to reclaim the property.

P

Passive Income: Income earned with minimal ongoing active involvement. Rental income from well-managed properties, syndication distributions, and REIT dividends are common examples. The IRS has a specific definition of passive activity that affects how losses are deducted. For most landlords, rental income is considered passive — losses can only offset other passive income unless you qualify as a real estate professional (750+ hours/year in real estate activities).
Points (Mortgage): Upfront fees paid to a lender at closing, expressed as a percentage of the loan amount. One point = 1% of the loan. Points come in two types: origination points (lender profit, unavoidable) and discount points (optional fee to buy down your interest rate). Paying 1–2 points upfront to reduce your rate makes sense on long-term holds; it's rarely worth it on short-term deals you'll refinance in 12–18 months.
Portfolio Loan: A mortgage that a lender keeps on its own books rather than selling to Fannie Mae or Freddie Mac. Because it doesn't need to conform to agency guidelines, the lender can set its own rules. Portfolio loans are popular with investors who own many properties and have hit conventional loan limits, have self-employment income that doesn't look great on a tax return, or want to finance properties that don't meet agency standards.
Pre-Foreclosure: The period after a homeowner has defaulted on their mortgage but before the lender has completed the foreclosure process and taken back the property. During pre-foreclosure, the owner may be willing to sell quickly (often below market value) to avoid foreclosure and protect their credit. Investors who buy pre-foreclosures can get good deals, but it requires careful title work and sensitivity — the seller is usually in financial distress.
Private Money Lender: An individual (not a bank or institution) who lends their own capital for real estate deals, usually in exchange for a promissory note secured by the property. Private money is typically cheaper than hard money (rates of 6–10%) and more flexible on terms. Sources include friends, family, retirement accounts (self-directed IRAs), or high-net-worth individuals who want real estate exposure without managing properties. Relationships and track record matter.
Property Management: The day-to-day operation of a rental property — screening tenants, collecting rent, handling maintenance requests, coordinating repairs, managing leases, and dealing with evictions. You can self-manage (more work, more profit) or hire a property manager (typically 8–12% of gross rent per month plus leasing fees). Property management is a real operating expense that must be budgeted even if you self-manage, since eventually you may not want to.

R

Refinance: Replacing an existing mortgage with a new one, typically to get a lower interest rate, change the loan term, or pull cash out of the property's equity. A rate-and-term refinance changes the rate or term without extracting cash. A cash-out refinance extracts equity as cash (taxable? No — loan proceeds are not income). Refinancing has closing costs (2–5% of loan amount), so run the break-even math: how many months until the savings exceed the costs?
REIT (Real Estate Investment Trust): A company that owns, operates, or finances income-producing real estate. REITs are publicly traded on stock exchanges (or privately held), allowing anyone to invest in real estate without buying a property. By law, REITs must distribute at least 90% of taxable income as dividends. They offer liquidity and low minimums, but you give up control, leverage benefits, and direct tax advantages like depreciation. Think of REITs as the mutual fund version of real estate.
ROI (Return on Investment): A broad measure of how much profit you earn relative to the total capital invested. Formula: ROI = (Total Profit ÷ Total Capital Invested) × 100. In real estate, total return includes cash flow, appreciation, principal paydown, and tax benefits. Cash-on-cash return is a simpler, cash-focused version of ROI. ROI calculations should always specify the time period and what's included — "20% ROI" means nothing without those details.

S

Section 8 / Housing Choice Voucher: A federal rental assistance program where the government pays a portion of a low-income tenant's rent directly to the landlord. Tenants pay 30% of their income toward rent; the housing authority pays the rest. Pros: reliable partial payment from the government, long-term tenants, steady demand. Cons: required inspections, paperwork, rent caps set by housing authorities, and some property condition requirements. Section 8 can work well in the right markets.
Security Deposit: Money collected from a tenant at move-in, held in trust, and returned at move-out (minus legitimate deductions for damages beyond normal wear and tear). Laws governing security deposits vary significantly by state — including caps on the amount, rules for holding and returning the deposit, and required documentation for any deductions. Mishandling security deposits is a common source of landlord-tenant disputes.
Self-Directed IRA: An individual retirement account that allows investments beyond traditional stocks and bonds — including real estate, notes, private businesses, and more. A self-directed IRA can buy rental properties, make hard money loans, or invest in syndications. All income and gains stay in the IRA (tax-deferred or tax-free if Roth). Key rules: you can't use the property personally, and transactions with family members are prohibited. A specialized custodian is required.
Seller Financing: A transaction where the seller provides the loan directly to the buyer — acting as the bank. The buyer makes payments to the seller instead of a mortgage lender. Terms are negotiable: interest rate, amortization period, balloon payment date, and down payment. Seller financing is useful when a buyer can't qualify for a bank loan, or when a seller wants installment sale treatment for tax purposes. Also called owner financing or a seller carryback.
Short-Term Rental (STR): Renting a property for stays of 30 days or less — typically through platforms like Airbnb or VRBO. STRs can generate 2–3× the income of long-term rentals in the right markets, but require more active management (or a professional STR manager), more frequent turnover and cleaning, and are subject to local regulations that range from permitting requirements to outright bans. STR income is also more volatile than long-term lease income.
Subject-To: Buying a property "subject to" the existing mortgage — meaning you take over the deed and payments without formally assuming the loan. The original owner's name stays on the mortgage; you own the property. It's not assumption (which requires lender approval); it's an informal transfer. Risk: the "due-on-sale" clause technically lets the lender call the loan due, though this is rarely triggered while payments are being made. Popular for acquiring low-rate loans that are no longer available.
Syndication: A group investment structure where multiple investors pool capital to buy a large real estate asset — an apartment complex, self-storage facility, mobile home park, etc. — that none could afford alone. A syndicator (general partner) finds, acquires, manages, and eventually sells the property. Passive investors (limited partners) contribute capital and receive a share of cash flow and profits. Most syndications are open only to accredited investors.

T

Tax Lien: A legal claim placed on a property by a government authority when the owner fails to pay property taxes. Tax liens take priority over most other liens — including mortgages. In many states, investors can buy tax lien certificates, essentially paying the delinquent taxes and earning interest (often 8–36%) until the owner redeems the lien. If the owner doesn't redeem, the investor may eventually be able to take ownership of the property.
Title Insurance: Insurance that protects a property buyer (and lender) against losses resulting from defects in the title — undisclosed liens, forged documents, errors in public records, or ownership disputes. Unlike most insurance, title insurance protects against past events, not future ones. There are two types: lender's title insurance (almost always required by lenders) and owner's title insurance (optional but strongly recommended). It's a one-time premium paid at closing.
Turnkey Property: A rental property that's fully renovated, occupied by a tenant, and managed by a property management company — ready for a passive investor to buy without doing any work. Turnkey providers sell these properties to out-of-state investors seeking passive rental income. Pros: no renovation hassle, immediate cash flow. Cons: you're paying for convenience — turnkey properties rarely have the upside of buying distressed. Vet the turnkey company and verify the numbers independently.

U

Underwriting: The process of analyzing a real estate deal to determine whether it meets your investment criteria. Includes verifying the financials (rent roll, expenses, NOI), evaluating the property condition, assessing the market, reviewing the title, and stress-testing the numbers (what if vacancy is higher, rents are lower, or repairs cost more?). Lenders also underwrite borrowers — verifying income, credit, and assets before approving a loan.

V

Vacancy Rate: The percentage of time a rental unit sits empty between tenants, or the percentage of units in a building that are unrented. Formula: Vacant Days ÷ Total Days. A property vacant 18 days per year has a 5% vacancy rate. Vacancy is an expense — even without a tenant, you still pay the mortgage, taxes, and insurance. Most underwriting models assume 5–10% vacancy. Using 0% vacancy in your projections is one of the most dangerous mistakes a new investor can make.
Value-Add: A property or investment strategy where the investor increases value through active improvements — renovations, better management, lease-up of vacant units, or operational improvements. Value-add sits between stabilized (already performing well) and opportunistic (high-risk development or turnaround) on the risk-return spectrum. The goal is to force appreciation and/or increase NOI, then refinance or sell at a higher valuation.

W

Wholesaling: Finding distressed properties, getting them under contract at a below-market price, then selling (assigning) that contract to a cash buyer for a fee — without ever owning or renovating the property. Wholesalers are deal finders, not investors in the traditional sense. Income is transactional (like sales commissions), not passive. Typical assignment fees range from $5,000–$25,000+. Requires strong marketing, negotiation, and a reliable buyer's list.
Wraparound Mortgage: A seller-financing arrangement where the seller keeps their existing mortgage in place and issues a new, larger mortgage to the buyer that "wraps around" the original. The buyer makes payments to the seller on the larger loan; the seller continues paying the original lender. The spread between the two interest rates is profit for the seller. Like subject-to, wraparound mortgages carry due-on-sale risk if the original lender discovers the transfer.

Z

Zoning: Local government regulations that dictate how land and buildings can be used in a given area. Common zone types: residential (R1 = single-family, R2/R3 = multi-family), commercial, industrial, and mixed-use. Zoning affects what you can build, how many units a property can have, and whether short-term rentals are permitted. Always verify zoning before buying. Rezoning petitions can unlock significant value — and denial can kill a deal.