19.4 real estate investments Flashcards Preview

Intro to Business > 19.4 real estate investments > Flashcards

Flashcards in 19.4 real estate investments Deck (30)
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1
Q

What are 4 costs of home ownership?

A
  1. property taxes
  2. interest payments
  3. property insurance
  4. maintenance
2
Q

What factors are taken into consideration when doing an appraisal?

A
  • the quality of construction
  • the location
  • the price of similar houses in the area
3
Q

What are property taxes?

A
  • 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
4
Q

land and anything that is attached to it

A

real estate

5
Q

the difference between the price at which you could currently sell your house and the amount owed on the mortgage

A

equity

6
Q

a legal document giving the lender a claim against the property if the principal, interest, or both are not paid as agreed

A

mortgage

7
Q

What are pros and cons of owning a mobile home?

A

Pros:

  • having a place to call your own

Cons:

  • not much land
  • small in size
8
Q

interest payments ____ to the cost of the house

A

interest payments add to the cost of the house

9
Q

a common financial benefit of home ownership is:

  • low property insurance costs
  • tax deduction for your down payment
  • increased property value
  • low maintenance costs
A

increased property value

10
Q

person that is trained and licensed to help with the buying and selling of real estate

A

real estate agents

11
Q

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

A

condominiums

aka condos

12
Q

What are the advantages of home ownership?

A
  • tax benefits
  • increased equity (will make money when you sell house)
  • pride of ownership
13
Q

Real estate property taxes are ____ when computing your federal income taxes

A

real estate property taxes are deductible when computing your federal income taxes

14
Q

The cost of ___ - maintaining your property in good condition - is important in home ownership

A

the cost of upkeep - maintaining your property in good condition - is important in home ownership

15
Q

mortgage with an interest rate that is set for the term of the loan

A

fixed rate mortgage

16
Q

mortgage with an interest rate that is raised or lowered from time to time depending upon the current interest rate being charged by lenders

A

adjustable rate mortgage

17
Q

what does a real estate agent do?

A
  • 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
18
Q

Describe a mortgage.

A
  • 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
19
Q

a ____ assures that your property has no claims against it such as back taxes.

A

a lawyer assures that your property has no claims against it such as back taxes.

lawyer helps you avoid legal problems

20
Q

What are the main benefits of home ownership?

A
  • tax benefits
  • increased equity
  • pride of ownership
21
Q

What are pros and cons of renting an apartment or house?

A

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
22
Q

What real estate professionals will you need when purchasing real estate?

A
  • real estate agent
  • lawyer
  • appraiser
23
Q

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?

A

don’t need the $180,000 market value - extra info

$90,000/$1000 x $60 = $5400

24
Q

provides protection from fire, theft, accident or other losses of your home or property

A

property insurance

25
Q

someone trained to estimate the value of property and who can give an official report on the value

A

appraiser

26
Q

What are some factors that affect the value of a home?

A
  • location
  • quality of schools
  • maintenance of the property
  • home features - updated kitchen, remodeled bathrooms, master bedroom suite, finished basement, large garage, etc
27
Q

what is one investment that many people eventually acquire?

A

real estate

28
Q

the person who reports on the value of a home is an:

  • lawyer
  • real estate agent
  • appraiser
  • mortgage broker
A

appraiser

29
Q

the amount that your local government determines your property to be worth for tax purposes, normally lower than the market value

A

assessed value

30
Q

a general increase in the value of property that occurs over times, homes increase in value

A

appreciation