Landlord
What It Is:
A landlord is an individual who owns real estate that he or she leases to renters.
How It Works/Example:
Landlords may own either residential or commercial properties. They lease the properties to families or companies in return for monthly rent. As the owning party, a landlord's obligations include structural maintenance and repairs as well as property tax payments (typically built into the rent).
For example, suppose Bob owns a three-bedroom apartment that he chooses to lease for rent. A family enters into a lease contract with Bob, the landlord. The family agrees to pay him $1,000 each month for a specific length of time (usually one year) in return for the right to live in the apartment.
Why It Matters:
By leasing their properties, landlords can generate cash flow that accompanies the appreciation in their properties' market value.
Undervalued describes a security for which the market price is considered too low for its fundamentals. Some metrics used to evaluate whether a security is undervalued are P/E ratio, growth potential, balance sheet health, etc. It is the opposite of overvalued.
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Cached on May 23, 2013, 7:52 pm