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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 realestate land and anything attached to it, such as buildings or natural resources residentialproperty property in which an individual or family lives

7. Key Terms realestateagent 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 incomeproperty property used to generate income rentalproperty any type of dwelling unit or other property rented for a length of time

9. Key Terms underdevelopedproperty 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 • Usually on its own lot • Separate from other buildings • Range from two-bedroom homes to mansions Single-FamilyHomes Multi-UnitHousing ManufacturedHomes

15. Graphic Organizer • Single buildings divided into various units • Includes duplexes, townhouses, condominiums, and cooperatives Single-FamilyHomes Multi-UnitHousing ManufacturedHomes

16. Graphic Organizer • 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 Single-FamilyHomes Multi-UnitHousing ManufacturedHomes

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. Housing Costs Figure 32.1

19. 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. 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. Income Property With income property, the owner can product income in two ways: income property 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

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