Introduction to Business and Marketing Chapter 32.1

 Identify the three types of residential property  Discuss aspects of home buying  Determine the difference between rental property and underdeveloped property

 Real estate is an investment option.  Residential property, such as single-family homes, is usually considered a good investment  Property can also generate income

 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 investments Real Estate land and anything attached to it, such as buildings or natural resources

 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

 The most popular type of property  Usually on its own lot  Separate from other buildings  Range from two-bedroom homes to mansions

 Single buildings divided into various units  Includes: Duplexes Townhouses Condominiums

 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

 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

 Home buyers often obtain a real estate agent to help them find a home  Agent makes a percentage of the sale of the home

 Factors affecting home values include: o Size o Condition o Quality o Location

 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

 With income property, the owner can product income in two ways: o Collect Rent o Sell for Profit

 Apartment buildings and commercial properties are two common types of rental property Rental Property any type of dwelling unit or other property rented for a length of time

 Underdeveloped property usually does not have utility services and cannot be farmed Underdeveloped Property unused land intended only for investment purposes