-#- 1031 exchange: A transaction under United States law which specifies that if an asset (such as a real estate) is sold and the proceeds of the sale are then reinvested in a like kind asset, then no gain or loss is recognized, allowing the deferment of capital gains taxes that would otherwise have been due on the first sale.

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adjustable-rate mortgages: A mortgage where the interest rate on the note is periodically adjusted based on an index.

advance payment: Payment by the renter to the owner equaling a portion of the total rental amount. The advance payment is applied to the total rental cost.

amenity fee: A certain amount paid to an owner or property complex above and beyond the rental rate that allows the renter access to certain amenities (golf, tennis, beach chairs, etc.).

American Society of Home Inspectors (ASHI): The oldest, largest and most respected professional organization for the education and certification of home inspectors.

availability calendar: An online calendar which can be updated to allow renters see the dates open for a certain property.

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bank-to-bank wire transfers: Offer direct payment from one recognized bank account to another account. Payment is immediate and convenient and money is deposited directly into the seller's account

bartered services: Exchanging a stay at your vacation property for repairs, maintenance, or other work done.

break-even formula: If your monthly mortgage payments is less than or equal to one peak week rental and your property is rented for an average of 17 weeks a year, you will break even financially.

broom clean: A term used in the real estate industry to describe the cleanliness of a home.  To broom clean a home, take out trash, remove personal items, and sweep floors.  Broom cleaning generally does not involve sanitizing.

business plan: A written list of the goals, objectives, and expectations that you have for your vacation rental business.

buyer's agreement: A signed document between you and a selling agent that says that the agent cannot show anyone else a specific property until you say you're no longer interested in it.

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cleaning fee: A certain amount above and beyond the rental rate that is charged to renters to cover the cost of cleaning the property after their departure.

compromise: Choosing a property that meets most of your vacation rental goals, but may not be exactly what you wanted.

confirmation of booking form: Form that includes the rental contract and rules sent to prospective renters at the time that they book your vacation home.

conforming mortgage: The usual way of purchasing a loan that is governed by industry standards. Usually requires that your financial situation fit into governments standards known as Fannie Mae and Freddie Mac guidelines.

cosmetic upgrades: Improvements to a home such as installing a new fireplace that are relatively inexpensive and make a big difference to the look of the home.

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damage deposit (also called security deposit): A certain amount of money that the owner holds until after the renters have left the property. The damage deposit is usually an amount above and beyond the rental costs and fees. The typical security/damage deposit is $200 or 10% of the rental rate.

damage waiver fee: Fee that some owners collect in lieu of a damage deposit. A damage waiver is typically significantly less than a damage deposit—usually just $25-$100 depending on the property. Unlike a damage deposit, the damage waiver is nonrefundable.

deeded access: A written and filed right to have access to a certain property and gives you assurance that you have the right to use the land.

deposit refund letter form: Letter sent with the refund of the renter's security deposit after you have confirmation from you housekeeper that there was no damage or theft.

discrimination: Restricting renters on the basis of race, color, religion, sex, familial status, disability, or national origin as under the Fair Housing Act.

dual agency: When your buying agent is the same person who listed your home for sale.

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electronic keyless lock: A digital or push button mechanical lock that does not require a key or access card to operate.

equity: A homeowner's financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on its mortgage and other liens.

eviction: The lawful expulsion of an occupant from a property.

exit strategies: A predetermined plan that takes in account everyone's interest in a joint ownership arrangement.

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Fair Housing Act: Federal statute prohibiting discrimination against renters based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents of legal custodians, pregnant women, and people securing custody of children under the age of 18), and handicap (disability). For more on the Fair Housing Act read the article, The Fair Housing Act and Vacation Rentals.

fair market value: The highest price that a buyer would be willing to pay and the lowest price that a seller would be willing to accept.

fixed-rate, fixed-term mortgage: Your interest and payments don't change over the length of the loan.

fixer-uppers: Homes with many problems or “diamonds in the rough” that can be purchased at bargain basement prices.

flood insurance: Insurance that covers a property against physical damage caused by flooding; A requirement for homes in federally designated flood areas.

FSBO (for sale by owner): When a homeowner chooses to sells a home themselves rather than go through a listing agent.

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HOA (Home Owners Association): Association responsible for the maintenance, upkeep, and financial management of common areas in certain complexes and neighborhoods.

high-maintenance homes: Older homes that require frequent attention in both time and money due to unseen maintenance and therefore very difficult to manage from a distance.

homeowner's insurance: An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents.

hot tub cleaning fee: A certain amount above and beyond the rental rate charged to renters wishing to use your hot tub.

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interest-only loans: A loan often tied to a fixed index in which you only pay the monthly interest, but do not gain any equity unless you make additional payments.

Internet Service Provider (ISP): A commercial service that sells access to the Internet to individuals.

investment property loans: A loan for property owners who will use the property less than 14 days or less than 10% of the days it';s rented. Typically higher in interest rates and fees than primary home mortgages.

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LIBOR (London Interbank Offered Rate): A base index used for setting the rates of some adjustable-rate financial instruments.

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Nigerian scam: Widespread scam in which owners deposit the check and then the “renter (AKA Scammer)” asks for an immediate refund, or worse yet, they write a check for an amount greater than the balance owed and would like you to mail back the difference. Unfortunately, by the time bank discovers the counterfeit certified check, it's too late—you have already sent the refund amount and there is no recourse.

nonconforming mortgage: When your financial situation doesn't fit into the governed loan guidelines. Usually the interest rates are higher than conforming mortgages due to the increased risks for the lender.

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overimproving: Adding improvements or expensive furnishings to your property which may make it nicer, but won't necessarily help you increase the rental rate for the property.

owner's closet: A locked closet that you set aside in your vacation rental property for your personal things.

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PayPal: A fast and convenient online payment service. People like the convenience of this service since money is transferred automatically over the Internet, directly from their credit card or personal checking account.

pet deposit: A certain amount of money above and beyond the rental rates. The pet deposit is refunded after the guests' stay if no damage was incurred.

pet fee: Flat rate in lieu of a pet deposit. A pet fee is nonrefundable.

piggyback loans: A product offered by mortgage brokers that allows you to buy one mortgage for the first 80% loan-to-value and a simultaneous second mortgage for either an additional 10 to 15% of loan-to-value to avoid PMI (Private Mortgage Insurance).

piggyback marketing: Pooling marketing efforts with your vacation home neighbors to expand reach and save money.

pool heating fee: A certain amount above and beyond the rental rate charged to renters wishing to use the heater on your pool or hot tub.

portfolio financing: Using your current stock portfolio to finance a property by using a portion of your portfolio as collateral.

preconstruction homes: Properties (often condos) that are sold by a developer well before construction usually at a discounted purchase price.

pre-qualification: A verbal approximation with no guarantees from a loan officer that you will qualify for a loan.

pre-approved pending property: When you've been totally approved for a specific loan amount and basically have a blank check in your pocket waiting to be filled out.

pricing structures: A system of different rental rates for the different rental seasons.

private mortgage insurance (PMI): Insurance often required on loans exceeding the 80% loan-to-value range.

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referred booking: A booking that results from the referral of a friend, neighbor, or past renter.

Rentors.org: Website offering free online availability calendars and guestbook, as well as, merchant accounts for vacation rental owners.

reservation deposit: A certain amount of money collected upon booking that validates the rental contract. The reservation deposit can convert automatically into a damage deposit.

Resort Recreation Specialist (RRS): A real estate agent who has completed special training in vacation/second home sales.

reverse mortgages: A home loan that gives cash advances to the homeowner, requires no repayment until a future time, and is capped by the value of the home when the loan is repaid.

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screening guests: Taking steps to get to know potential renters before allowing them to rent your property.

self catering: A term sometimes used for vacation rentals in Europe, South Africa, Australia, and New Zealand. Also applies to furnished apartments without an onsite cook.

self-directed IRA: An individual retirement account in which you have the power to choose your own investments.

shared maintenance: Collaborating with your vacation rental neighbors by collectively hiring maintenance people or housekeepers.

sweat equity:Contributing to a property in the form of labor or services rather than cash.

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time-shares: Homes divided in ownership or use on the basis of time periods, most often one or two week each year.

title insurance: Insurance that eliminates the risk that the seller doesn't legally own the property and can't sell it to you and protects the buyer from past liens on the property.

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value-added items: Amenities like high chairs, porta-cribs, hot tubs, pool tables, and sofa beds that when added to your property could increase your occupancy.