BOMI RPA key terms

A property's effective rental and other income minus operating expenses, before debt service, income taxes, capital expenditures, and depreciation. It is the core measure used to value income-producing real estate.

An income rate found by dividing a property's net operating income by its purchase price or value. Buyers use it to compare investment returns and to estimate value from income.

Potential gross income plus other income, reduced by vacancy and collection losses. It shows the income a property is realistically expected to collect in a period.

The total rent a property would collect if every rentable space were fully occupied at scheduled rates, plus contract and other income, before any vacancy or credit loss.

Total operating expenses divided by effective gross income, expressed as a percentage. It signals how much income is consumed by day-to-day operations and supports comparison across properties.

A valuation method that converts a single year's stabilized net operating income into an indicated value by dividing it by a market-derived capitalization rate.

Annual pre-tax cash flow divided by the equity invested. It measures the current income return on an investor's own money rather than on total property cost.

Net operating income divided by annual debt service. Lenders use it to judge whether property income comfortably covers loan payments, often requiring a minimum threshold.

Money or documents held by a neutral third party until agreed conditions are met, such as a good-faith deposit held during a purchase contract or funds set aside for taxes and insurance.

A signed statement in which a tenant confirms the current lease terms, rent, and any claims or defaults. Buyers and lenders rely on it to verify lease obligations before closing.

A summary of the key business terms of a lease, including parties, premises, term, rent, escalation, options, and responsibilities. It supports portfolio tracking and due diligence.

A lease provision that raises rent on a set schedule or by an index, such as a fixed annual percentage or a consumer price measure, protecting the owner from inflation.

Additional rent paid by a retail tenant, calculated as a share of sales above a negotiated breakpoint. It lets the landlord share in a tenant's success.

Amounts a tenant reimburses the owner for shared operating costs such as cleaning, landscaping, security, and parking lot upkeep. The lease defines what is included and how it is allocated.

A lease arrangement requiring tenants to pay a share of building operating costs, often through a base year or expense stop. It shifts cost risk from owner to tenant.

A dollar level of operating expenses above which a tenant pays its proportionate share. Costs below the stop remain the owner's responsibility, capping the tenant's exposure.

A reference year in a lease against which later operating expenses are compared. The tenant typically pays only the increase over that year's costs.

The transfer of a tenant's entire lease interest to another party, or of part of the premises for part of the term. Leases usually require landlord consent and set conditions.

Money set aside regularly from operations to pay for future replacements, major repairs, or unplanned obligations. Adequate reserves protect the asset and reduce the need for special assessments.

Spending that adds value or extends the useful life of a property, such as a roof replacement or HVAC upgrade. It is treated differently from routine operating expense in budgets and accounting.

The period over which a building component or improvement is expected to provide service. It guides depreciation schedules, reserve planning, and replacement timing.

Scheduled, planned servicing of building systems and equipment to prevent failures and extend service life. It is tracked through work orders and equipment histories.

Necessary repairs or upkeep postponed beyond the appropriate time, often because of budget limits. Accumulated deferral raises future costs and can affect value and safety.

A written or electronic record authorizing and tracking a maintenance task, including location, description, assigned worker, parts, and completion. It supports cost control and accountability.

Software that records equipment, schedules maintenance, issues work orders, and tracks labor, parts, and history. It helps operations teams plan work and control costs.

A networked control system that monitors and adjusts heating, ventilation, air conditioning, lighting, and other equipment. It improves comfort, energy efficiency, and operating data.

Comparing a building's energy use against similar buildings or past performance, often using a normalized metric. Results guide efficiency projects and can support compliance reporting.

A federal law prohibiting discrimination based on disability and requiring accessible public accommodations and commercial facilities. Owners must address barriers and follow alteration standards.

A federal law barring discrimination in the sale, rental, and financing of housing based on protected characteristics. It shapes advertising, screening, and tenant relations practices.

A change in rules, policies, or practices, or a structural adjustment, needed so a person with a disability can use and enjoy housing. Requests are evaluated case by case.

Model requirements for building features and practices that protect occupants from fire and similar hazards, covering exits, alarms, sprinklers, and egress. Local codes typically adopt or adapt it.

A documented procedure telling occupants and staff what to do during fire, severe weather, or other emergencies, including evacuation routes, roles, and communication. It is practiced through drills.

Shifting the financial consequence of a loss to another party, most often through insurance or an indemnity clause in a contract. It reduces exposure but does not eliminate the underlying hazard.

A document showing that a party holds specified coverage, limits, and dates. Property managers collect them from vendors and tenants to confirm contractual insurance requirements are met.

A contract clause in which one party agrees not to hold another responsible for specified losses or liabilities. It allocates risk and often pairs with insurance requirements.

The income reduction from unoccupied space plus rent that is billed but not collected. It is subtracted from potential gross income and watched closely in budgeting.

Money a landlord agrees to contribute toward a tenant's build-out or renovation of leased space. It is negotiated in the lease and affects net effective rent and capital planning.

The share of rentable space that is leased and occupied, usually stated as a percentage of total rentable area. It is a primary indicator of leasing performance.

A schedule listing each unit or space with its tenant, lease dates, rent, deposits, and status. It is the operating baseline for collections, budgeting, and due diligence.