Terms Starting with N
45 terms
NAV (Net Asset Value)
NAV, or Net Asset Value, is the per-share value of a fund or REIT calculated by subtracting total liabilities from total assets and dividing by the number of shares outstanding. It tells investors what each share would be worth if the portfolio were liquidated today.
NIMBY
NIMBY — short for "Not In My Backyard" — describes the opposition that existing residents mount against new development near their homes, particularly affordable housing, multifamily buildings, or anything that increases density.
NNN Lease (Triple-Net Lease)
An NNN (triple-net) lease is a commercial lease where the tenant pays property taxes, insurance, and maintenance — the three "nets" — in addition to base rent. You collect rent and pass those costs through.
NOI (Net Operating Income)
NOI (net operating income) is what a property earns from operations each year. Rental revenue minus vacancy loss and operating expenses. Before you subtract the mortgage, CapEx, or taxes.
Named Insured Strategy
A named insured strategy ensures that every LLC in a real estate investor's entity structure is properly listed as a named insured or additional insured on all relevant insurance policies—so that coverage actually protects the entities holding property, not just the individual investor.
Named Peril Policy
A named peril policy is a property insurance contract that only covers losses caused by perils explicitly listed in the policy — if the cause of damage isn't named, the claim is denied.
Natural Appreciation
Natural appreciation is the passive increase in a property's market value over time, driven by external forces — inflation, population growth, job market strength, and supply constraints — rather than anything the owner does to the property.
Negative Amortization
Negative amortization occurs when a loan's scheduled payment is less than the interest accruing that period, so the unpaid interest gets added to the principal balance.
Negative Cash Flow
Negative cash flow occurs when a rental property's total monthly expenses exceed its rental income, leaving the owner covering the shortfall out of pocket each month.
Negative Leverage
Negative leverage occurs when the cost of debt exceeds a property's unlevered return — meaning every dollar you borrow makes your overall yield worse, not better. It happens when the interest rate on your mortgage is higher than the property's cap rate.
Negotiation
Negotiation is the back-and-forth process of reaching agreement on price and terms—what you pay, when you close, what contingencies you keep, and what the seller contributes.
Negotiation Script
A Negotiation Script is a pre-prepared set of talking points, questions, and responses that real estate investors use during offer negotiations, inspection discussions, and seller conversations to achieve favorable deal terms while maintaining rapport.
Neighborhood Analysis
Neighborhood analysis is the evaluation of location-specific factors—schools, crime, employment, amenities, and demographics—that affect rental demand and property values.
Net Asset Value
Net Asset Value (NAV) is the per-share worth of a real estate fund or REIT, calculated by subtracting total liabilities from total assets and dividing by shares outstanding. It represents the liquidation value — what each share would be worth if the portfolio were sold and all debts paid off.
Net Cash Invested
Net cash invested is the total out-of-pocket capital you have tied up in a deal after accounting for every dollar you put in — down payment, closing costs, rehab costs, and holding costs — minus any cash recovered through insurance, seller credits, or rental income collected before sale.
Net Investment Income Tax (NIIT)
The Net Investment Income Tax (NIIT) is a 3.8% federal surtax on investment income — including net rental income, dividends, capital gains, and passive business income — imposed on high-income taxpayers under IRC §1411. It applies only to the portion of your income that crosses a fixed MAGI threshold.
Net Present Value (NPV)
Net present value (NPV) is the difference between the present value of all future cash flows a property will generate and the initial amount you invest — expressed in today's dollars, accounting for the fact that money received in the future is worth less than money in hand today.
Net Rental Income
Net rental income (also called effective gross income or EGI) is gross rental income minus vacancy loss and credit loss — the rent you actually collect before subtracting operating expenses. It's the true top line. NOI = Net Rental Income − Operating Expenses.
Net Worth
Net Worth is a financial analysis concept that describes a specific aspect of how real estate transactions, analysis, or operations work in the context of real estate investing deals.
Net Worth Statement
A net worth statement calculates your total assets minus total liabilities, providing the single most accurate measure of your wealth and the ultimate scorecard for real estate investing progress.
Net Yield
Net yield is NOI (net operating income) divided by purchase price or total investment—expressed as a percentage. It's NOI yield after operating-expenses but before financing.
Networking
Networking in real estate investing is the intentional process of building relationships with other investors, agents, lenders, contractors, and professionals to create deal flow, partnerships, and mentorship opportunities.
Neutral Leverage
Neutral leverage is the condition where a property's cap rate exactly equals the cost of debt, meaning borrowing money neither amplifies nor reduces the investor's returns compared to an all-cash purchase.
Neutral Palette (Neutral Color Scheme)
A neutral palette is a curated selection of whites, off-whites, warm grays, greiges (gray-beige blends), and light taupes used throughout an investment property to maximize broad appeal, reduce buyer and renter objection, and support higher resale or rental value — without the risk of polarizing color choices.
New Construction
New construction is building a rental property from the ground up on raw land or a cleared lot, rather than buying or renovating an existing structure.
Niche Strategy
A niche strategy is the deliberate decision to specialize in a specific property type or market segment—such as self-storage, student housing, or mobile home parks—rather than competing in broad, crowded asset classes like conventional multifamily.
Nightly Rate
The nightly rate is the price a short-term rental host charges guests per night of stay. It is the primary revenue lever in the STR business model.
Noise Complaint
A noise complaint is a formal report filed by a tenant, neighbor, or local authority citing excessive or disruptive sound levels at a rental property. It triggers a landlord's obligation to investigate, document, and act — often under the terms of the lease and local noise ordinances.
Noise Monitoring
Noise monitoring is the use of dedicated sensors — placed inside a short-term rental — to measure ambient decibel levels and trigger automated alerts when sound exceeds a host-defined threshold. The devices detect volume only, not conversations, making them legally compliant in most jurisdictions. They integrate with guest communication workflows so hosts receive a text or app notification the moment a noise event occurs.
Nomad Strategy
The Nomad strategy is a portfolio-building method where an investor buys a primary residence using owner-occupied financing, lives there through the required occupancy period—typically one year—converts it to a rental, then repeats with a new primary residence purchase.
Nominal Interest Rate
The nominal interest rate is the stated annual percentage that a lender advertises on a loan — the number on the term sheet before compounding frequency or inflation adjustments are applied. It represents the base rate used to calculate interest charges, but not the true cost of borrowing.
Nominee Owner
A nominee owner is a person or entity that holds legal title to real property on behalf of another party—the beneficial owner—who retains all economic rights, decision-making authority, and financial responsibility for the property.
Non-Compete Clause
A non-compete clause is a provision in a commercial lease that prohibits the landlord from renting other spaces in the same property — or within a defined geographic radius — to a business that directly competes with the tenant.
Non-Conforming Loan
A mortgage that doesn't meet the purchase guidelines set by Fannie Mae or Freddie Mac, preventing it from being sold on the secondary market.
Non-Disclosure Agreement
A non-disclosure agreement (NDA) is a legally binding contract that prevents one or both parties from sharing confidential information disclosed during a transaction. In real estate, NDAs protect sensitive deal data — rent rolls, financial statements, cap rates, buyer lists — while parties evaluate whether to proceed.
Non-Performing Note
A non-performing note (NPN) is a mortgage loan where the borrower has stopped making payments, typically for 90 or more consecutive days. Investors purchase these defaulted notes from banks and loan servicers at steep discounts --- usually 40--70 cents on the dollar of the unpaid principal balance --- and then work to resolve the loan through modification, foreclosure, or other exit strategies.
Non-QM Loan
A Non-QM loan is a mortgage that falls outside the federal Qualified Mortgage rules, allowing lenders to use alternative income documentation instead of traditional W-2s.
Non-Recourse Loan
A non-recourse loan is financing where the lender's remedy in default is limited to the collateral—the property. The lender cannot pursue the borrower's personal assets (other real estate, bank accounts, wages) to satisfy a deficiency. Contrast with recourse loan, where the lender can go after everything.
Non-Traded REIT
A non-traded REIT is a real estate investment trust that is registered with the SEC but not listed on a public stock exchange, offering investors access to institutional-quality real estate portfolios while accepting illiquidity in exchange for potentially higher income distributions.
Nonconforming Use
A nonconforming use is a property use that was lawful when established but no longer complies with current zoning regulations — and is legally permitted to continue because it predates the zoning change.
Normal Wear and Tear
Normal wear and tear is the gradual, expected deterioration of a rental property that results from ordinary day-to-day use — faded paint, lightly worn carpet, minor scuffs on walls. It is the natural decline that happens even when a tenant is careful and respectful. Landlords cannot charge tenants for it, and it cannot be deducted from a security deposit.
Note Investing
Note investing is the practice of purchasing existing mortgage loans — the legal debt instrument — rather than buying the physical property that secures them. The investor steps into the lender's position, collecting payments or working out a resolution on loans that have stopped performing.
Note Investing Strategy
Note investing strategy involves purchasing existing mortgage notes (the borrower's promise to repay) from banks or other lenders at a discount, earning returns through monthly payments on performing notes or through workout strategies on non-performing notes.
Notice to Cure
A notice to cure is a formal written warning from a landlord to a tenant that identifies a specific lease violation and sets a deadline — typically 3 to 30 days — for the tenant to correct it or face further legal action.
Notice to Vacate
A notice to vacate is a written document that formally informs a tenant — or a landlord — that the rental occupancy will end by a specific date.