1. Click here to advance to the next slide.

3. Read to Learn
Describe the three types of residential property.
Discuss aspects of home buying that a potential home owner should know.
Determine the difference between rental property and underdeveloped property.

4. 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.

5. Key Concepts
Investing in Real Estate
Buying a Home
Income Property

6. Key Terms
real estate
land and anything attached to it, such as buildings or natural resources
residential property
property in which an individual or family lives

7. Key Terms
real estate agent
a person licensed to arrange the buying and selling of homes and other types of real estate
the value of a piece of property less the amount still owed on the money borrowed to purchase it
equity

8. Key Terms
income property
property used to generate income
rental property
any type of dwelling unit or other property rented for a length of time

9. Key Terms
underdeveloped property
unused land intended only for investment purposes

10. Investing in Real Estate
Unlike stocks and bonds, real estate is something you can use.
real estate
land and anything attached to it, such as buildings or natural resources

11. Tax Advantages
Home owners can deduct the mortgage interest they pay each year on their federal income tax. This allows home owners to lower their reported income, which decreases the amount of tax they owe. Property taxes are also deductible.

12. Investing in Real Estate
A home is considered a good investment because home prices have risen steadily over the years.
Homes fluctuate in value, just like other investments.

13. Types of Homes
The type of residential property that people pick depends on their income and needs.
residential property
property in which an individual or family lives

14. Graphic Organizer The most popular type of property
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
Manufactured Homes

15. Graphic Organizer Single buildings divided into various units
Single-Family Homes
Single buildings divided into various units
Includes duplexes, townhouses, condominiums, and cooperatives
Multi-Unit Housing
Manufactured Homes

16. Graphic Organizer
Single-Family 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
Multi-Unit Housing
Manufactured Homes

17. 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.

18. Figure 32.1
Housing Costs

19. Home buyers often obtain a real estate agent to help them find a home.
Buying a Home
Home buyers often obtain a real estate agent to help them find a home.
real estate agent
a person licensed to arrange the buying and selling of homes and other types of real estate

20. Home Values
Factors affecting home values include:
Size
Condition
Quality
Location

21. The amount of equity you have in a home is very important.
Home Values
The amount of equity you have in a home is very important.
equity
the value of a piece of property less the amount still owed on the money borrowed to purchase it

22. With income property, the owner can product income in two ways:
property used to generate income
Collecting rent
Selling the property for a profit

23. Income Property
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

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

25. Describe different types of residential property.
single-family homes, on their own lots; multi-unit housing, single buildings divided into units; manufactured homes, prefabricated or mobile homes

26. What are some factors to consider before buying a home.
home mortgage loan and down payment, a real estate agent, size, condition, quality, and location

27. Discuss the two forms of income property.
collecting rent from rental property or selling property for a profit

28. End of