master lease

Definition

A lease that gives the tenant the right to sublease the property to others, essentially making them a middleman landlord. It's landlording with training wheels, or a profit opportunity, depending on your perspective and local laws.

Example Usage

I signed a master lease on the whole building, then sublet the units individually—the spread pays my own rent plus profit.

Origin

Commercial real estate terminology that became common in the mid-20th century, increasingly adopted in residential investing

Fun Fact

Master leases are popular with real estate investors who lack capital to purchase but want to control properties, though many landlords prohibit subletting in their leases specifically to prevent this.

Source: Real estate investment strategy terminology

Related Terms

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rights-of-way

The legal privilege to cross or use someone else's property for a specific purpose, typically for accessing your landlocked parcel or running utilities through their yard. These easements create permanent pathways that survive ownership changes, meaning future owners inherit both the right and the awkwardness of strangers traipsing across their land. It's neighborly cooperation enforced by legal documentation instead of friendliness.

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Earnest Money

A chunk of cash you hand over to prove you're serious about buying, because apparently signing seventeen documents wasn't convincing enough. It's a trust fall with your savings account.

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change order

A formal document modifying the original contract, usually adding more work, more time, or more money—often all three. It's how contractors politely inform you that your 'simple request' will cost an additional $5,000. Change orders are proof that nothing is ever as simple as the original estimate suggested.

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cash on cash return

A performance metric showing the annual pre-tax cash flow divided by the total cash invested, expressed as a percentage. It's how rental property investors measure whether they're getting a decent return or just being a charity for tenants.

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segregation

The practice of separating people or things, which can range from voluntary self-sorting to legally enforced discrimination that stains history books. In genetics, it's the boring-but-important Mendelian process where parent organisms pass only one allele to offspring. Real estate agents know it as that uncomfortable topic from the industry's shameful past that fair housing laws were created to combat.

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titles

The legal documentation proving ownership rights to a property, representing the bundle of rights you allegedly possess after signing approximately 847 pages at closing. A clear title means nobody else has claims, liens, or surprise ownership stakes in your new home. Title issues are the plot twist nobody wants in their real estate transaction—like discovering three ex-spouses also think they own your kitchen.

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