A Real Estate Dictionary for Beginners Key Investment Terms You Need to Know

A Real Estate Dictionary for Beginners Key Investment Terms You Need to Know Real estate investments can be a lucrative game, but there are basics you need to know first. This real estate dictionary will help you get started. In the United States, over 5 million homes were sold in 2017. If you want to get into the game and start investing in real estate, youll need to first know the appropriate lingo for the job. Knowing this terminology will help you start your venture and have you looking like an expert. Here is a real estate dictionary for beginners with all the key investment terms you need to know. NOI is Net Operating Income An NOI is the difference between your income and your expenses in relation to your rental income properties. Note that your income isnt always just the money you make on rent. Commercial rental income can also include other add ons such as parking permits and other services like laundry. The expenses are any costs from running the income property like property tax, utility bills, and management fees. Broker Price Opinions are Valuable to Your Sale Real estate brokers can take a walk through your commercial or residential property and give their opinion of the value of the home and at what price it can sell. Know that a BPO and an appraisal are two different things. An appraisal will be more thorough, but a broker price opinion will still offer a written opinion. The agent can then use this opinion as a way to justify the price of the listing. Always Know the Price Per Square Foot Knowing the price per square foot value of your property will help you evaluate and understand how much the home is worth. To calculate your price per square foot, youll need to divide the sales price by the total square footage of the home. You can also use this as a convenient tool that will allow you to compare two similar properties against each other that are in the same market. Short Sales Can Be Good Investments A short sall happens when mortgage lenders agree in a settlement letter to lower sales price than that the homeowners owe them. A short sale can often take longer than a normal sale. Youll find that these sales will go through a third party like an attorney in conjunction with other real estate agents. Even though they can take some time, short sales can also be some of the best real estate investments that you can make. ROI Should be In Your Real Estate Dictionary To figure out how well your investment is working, you can calculate your ROI or Return on Investment. To do this, youll need to see how much money youve spent on the investment and how much money youll make after you sell. The formula that you need for this is ROI = Net Profit of Investment/Total Investment Cost. Launch Your Career This real estate dictionary will help you start your journey in real estate investing. Read more into these basics so that you can use them to launch your career in real estate investing. Mike McRitchie helps advise achievers to reach their fullest career and business potentials. Continue reading through our articles for more career advice and tips.