Quick glossary
Pencil Used as
a verb, this real estate term
describes a situation in which
the monthly rent received from a
rental property matches or
exceeds the owner's monthly
expenses associated with that
property. If the rent on a given
property is as much as the
mortgage payment, then the
property is said to "pencil".
Principal The
amount borrowed or remaining
unpaid. The part of the monthly
payment that reduces the
remaining balance of a mortgage.
