19.4 real estate investments Flashcards
What are 4 costs of home ownership?
- property taxes
- interest payments
- property insurance
- maintenance
What factors are taken into consideration when doing an appraisal?
- the quality of construction
- the location
- the price of similar houses in the area
What are property taxes?
- taxes paid on assessed value of property
- vary greatly from state to state
- normally range from 2-4% of the market value of the property
land and anything that is attached to it
real estate
the difference between the price at which you could currently sell your house and the amount owed on the mortgage
equity
a legal document giving the lender a claim against the property if the principal, interest, or both are not paid as agreed
mortgage
What are pros and cons of owning a mobile home?
Pros:
- having a place to call your own
Cons:
- not much land
- small in size
interest payments ____ to the cost of the house
interest payments add to the cost of the house
a common financial benefit of home ownership is:
- low property insurance costs
- tax deduction for your down payment
- increased property value
- low maintenance costs
increased property value
person that is trained and licensed to help with the buying and selling of real estate
real estate agents
an individually owned houseing unit in an apartment like complex, the maintenance and yard work are normally taken care of with a service fee paid by owners
condominiums
aka condos
What are the advantages of home ownership?
- tax benefits
- increased equity (will make money when you sell house)
- pride of ownership
Real estate property taxes are ____ when computing your federal income taxes
real estate property taxes are deductible when computing your federal income taxes
The cost of ___ - maintaining your property in good condition - is important in home ownership
the cost of upkeep - maintaining your property in good condition - is important in home ownership
mortgage with an interest rate that is set for the term of the loan
fixed rate mortgage
mortgage with an interest rate that is raised or lowered from time to time depending upon the current interest rate being charged by lenders
adjustable rate mortgage
what does a real estate agent do?
- helps a person decide what they want in a house
- arranges for the prospective buyer to view homes that are for sale
- sellers of real estate also use real estate agents to help set the selling price and to promote that the house is for sale
Describe a mortgage.
- long term loans - 15, 20 or 30 years term
- require monthly payments
- payments usually higher than rent
- payment includes a portion of the principal and interest charges, also includes money to be used to pay property taxes and insurance
a ____ assures that your property has no claims against it such as back taxes.
a lawyer assures that your property has no claims against it such as back taxes.
lawyer helps you avoid legal problems
What are the main benefits of home ownership?
- tax benefits
- increased equity
- pride of ownership
What are pros and cons of renting an apartment or house?
Pros:
- you are free from most of the work and expense of property maintenence
- easy to move whenever you want or need
Cons:
- can’t call the place your own
- you need to take good care of the place but can’t fix it up the way you want it
What real estate professionals will you need when purchasing real estate?
- real estate agent
- lawyer
- appraiser
If you have a home with a market value of $180,000 and an assessed value of $90,000. If the tax rate is $60 per $1000 of assessed value, what are the annual taxes?
don’t need the $180,000 market value - extra info
$90,000/$1000 x $60 = $5400
provides protection from fire, theft, accident or other losses of your home or property
property insurance
someone trained to estimate the value of property and who can give an official report on the value
appraiser
What are some factors that affect the value of a home?
- location
- quality of schools
- maintenance of the property
- home features - updated kitchen, remodeled bathrooms, master bedroom suite, finished basement, large garage, etc
what is one investment that many people eventually acquire?
real estate
the person who reports on the value of a home is an:
- lawyer
- real estate agent
- appraiser
- mortgage broker
appraiser
the amount that your local government determines your property to be worth for tax purposes, normally lower than the market value
assessed value
a general increase in the value of property that occurs over times, homes increase in value
appreciation
