Real estate is an evolving industry, and it comes with its own dictionary of terms to know, understand, and follow in order to be successful. If you’re considering becoming an investor, be sure to know the real estate terms below like the back of your hand.
- Single-family home – A residential building that houses one family and is not attached to any other structures, units, or homes.
- Multi-family home – A residential building that houses multiple families. These properties can include apartment buildings, condos, duplexes, townhomes, etc.
- Net operating income – Annual income generated from an investment property after expenses associated with the property are deducted. The expenses include items like property taxes, property management fees, utilities, amenity fees, etc.
- Appreciation – The increase in the value of your investment property over time. Factors that could lead to appreciation include increased demand, decreased supply, and inflation.
- Buyer’s market – There’s a larger supply of homes than there is a demand for properties. It makes it a great time for buyers to enter the market and find a great deal on an investment property.
- Seller’s market – This is the opposite of a buyer’s market. There’s a larger demand for homes than there is a supply of properties. It means that sellers may be able to increase the price they list their properties for and may receive multiple offers.
- Cash flow – The amount an investor is left with after paying the monthly expenses for their investment property. If your expenses are more than what you made from the rent, you will have a negative cash flow, but if your expenses are less than what you received for rent, you will have positive cash flow.
- Rental property – A property that the owner receives a monthly payment from a tenant for the use of the space. Rental properties can be residential or commercial, but they can also be short-term or long-term.
- Short-term rentals (STR) – A furnished home, room, apartment, or condo that is rented out for short periods of time. Think of this as apartments that offer three-month leases or homes listed on Airbnb.
- Long-term rentals – A property investor rents to tenants for long periods of time.
There can be a lot to learn before investing in real estate, so if you have questions about the Austin market, contact the Sage Wilson Property Group. We’re happy to show you how we can help enrich your portfolio. Schedule a real estate investor consultation with us, and let’s begin the investment property search together!