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Real Estate Investment

19-4. Real Estate Investment . Selecting a house. Real estate- Land and anything attached to it. Mobile home Cheaper than buying a house Usually in a park with other mobile homes Buying a house Mortgage- is the loan to purchase the house Usually 15, 20, or 30 years.

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Real Estate Investment

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  1. 19-4 Real Estate Investment

  2. Selecting a house • Real estate- Land and anything attached to it. • Mobile home • Cheaper than buying a house • Usually in a park with other mobile homes • Buying a house • Mortgage- is the loan to purchase the house • Usually 15, 20, or 30 years. • Will have to pay back principal and interest • Will have to pay insurance and property taxes.

  3. Types of mortgages • Fixed rate mortgage- Interest rate is set for the life of the loan. • Adjustable-rate Mortgage (ARM)- Interest rates change depending on the market rate.

  4. Real Estate agents • Not simple to buy home on your own • Relator are trained and licensed. • Relators help you make a decision. • If selling your house realtors help set the selling price and have open houses to show the house. • Realtors receive a percentage of the sales price.

  5. Other Real Estate Professionals • Lawyers • Assure their or no clams against the property • Appraiser • Gives an estimate of the property value • Location • Construction material

  6. Condos • Individual owned housing unit in an apartment like complex • Malignance and yard work taken care of for you • Usually have to pay an association fee.

  7. Benefits of home owner ship • Tax benefits • You recive tax deductions on your loan interest and property taxex • Equity • The difference between what you can sell your house for and how much you owe on it. • Pride • You can decorate your house how you like.

  8. Cost of Home Ownership • Property taxes • Usually 2-4% of the assessed value. • Assessed values are normally lower than the market value, often about half the value. • Interest • Rates are at an all time low now • On a $100,000 house at 8% you will pay about $64,000 in interest.

  9. Cost of Home Ownership • Property Insurance • Need to cover at least the value of the house • Usually cost about 1% of the homes market value. • Maintenance • Usually cost about 2% of the homes market value to upkeep the house.

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