Introduction to Business and Marketing Chapter 32.1.

REAL ESTATEIntroduction to Business and Marketing

Chapter 32.1

OBJECTIVES

Identify the three types of residential

property

Discuss aspects of home buying

Determine the difference between

rental property and underdeveloped

property

THE MAIN IDEA

Real estate is an investment

option.

Residential property, such as

single-family homes, is

usually considered a good

investment

Property can also generate

income

INVESTING IN REAL ESTATE

Unlike stocks and bonds, real

estate is something you can

use

A home is considered a good

investment because home

prices rise over the years

Homes fluctuate in value, just

like other investmentsReal Estateland and anything attached to it, such as buildings or natural resources

TYPES OF HOMES

The type of residential property that

people pick depends on their income and

needs

o Single Family Homes

o Multi-Unit Housing

o Manufactured Homes

SINGLE FAMILY HOMES

The most popular type

of property

Usually on its own lot

Separate from other

buildings

Range from two-

bedroom homes to

mansions

MULTI-UNIT HOUSING

Single buildings divided

into various units

Includes:

• Duplexes

• Townhouses

• Condominiums

MANUFACTURED HOMES

Prefabricated houses are

partly assembled at a

factory, and put together at

a building site

Mobile homes are fully

assembled at factories

Cost is lower than other

types of homes

BUYING A HOME

Most people have to

finance the purchase of a

home with a home

mortgage loan

Buying a house requires a

down payment, which is

usually 20 percent

HOUSING COSTS

BUYING A HOME

Home buyers often

obtain a real estate

agent to help them find

a home

Agent makes a

percentage of the sale of

the home

HOME VALUES

Factors affecting home

values include:

oSize

oCondition

oQuality

oLocation

HOME VALUES

The amount of equity

you have in a home is

very important.

Home Equity the value of a piece of property less the amount still owed on the money borrowed to purchase it

INCOME PROPERTY

With income property, the owner can

product income in two ways:

oCollect Rent

oSell for Profit

RENTAL PROPERTY

Apartment buildings

and commercial

properties are two

common types of rental

property

Rental Propertyany type of dwelling unit or other property rented for a length of time

UNDERDEVELOPED PROPERTY

Underdeveloped

property usually does

not have utility

services and cannot

be farmed

Underdeveloped Propertyunused land intended only for investment purposes