Property Management
A gross lease, commonly used in residential rentals, means:
AThe tenant pays rent plus all operating expenses
BThe landlord pays all operating expenses from the fixed rent payment✓ Correct
CThe tenant pays a base rent plus a percentage of their income
DBoth landlord and tenant split all expenses equally
Explanation
In a gross lease, the tenant pays a fixed rent and the landlord pays the operating expenses (taxes, insurance, maintenance, utilities). This is the most common structure for residential rentals.
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Key Terms to Know
Debt-to-Income Ratio (DTI)
A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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