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 investments

Real 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 needso Single Family Homeso Multi-Unit Housingo 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:oSizeoConditionoQualityoLocation

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 RentoSell 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