And now, the latest installment of definitions to help you understand the myriad of real estate terminology.
• Home Equity Loans are a line of credit that is secured for the purpose of buying a home. This is a first registered mortgage over your residential property.
• Investment Property refers to a piece of property that has been purchased with the express purpose of netting a profitable return on the property. In Australia right now a good investment property would be any rental residence. Investment properties that meet the demand of renters can net a good profit especially along the Gold coast.
• Interest is the fee that is paid to the lender of a loan. There are two different types of interest. The first is called ‘simple interest’ or ‘flat rate interest. This type of interest has a fixed amount of interest that is paid each year on the amount of money that has been borrowed. The other kind of interest is called ‘compound interest’ Compound interest is calculated on the initial principle as well as the accumulated interest over previous periods.
• Land is whatever the deed holder owns up to the sky and down into the Earth. A few exceptions are mines and minerals which are owned by the State and the air space is limited to reasonable usage.
• Lease is a verbal or written document that allows a person to gain possession of a property for a specific amount of time without actually owning the property. The lease usually outlines terms and agreements in relation to the property in regards to rent and time of occupancy.
• Leverage happens when you borrow money to purchase an investment. In order to magnify the rate of your profits from capital growth or your income from the investments. Often times investors will leverage one property in order to purchase another.
• Lien is a form of security interest that is granted over an item of property to secure the payment of a debt or performance of some other obligation.
Sean Rasmussen
Property Options Australia
Property Options Blog © 2006 – 2008
Tags: investment property, investment terminology, Property Investment, Real Estate, real estate definitions, real estate terminology, real estate terms
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Hi Sean,
Again, great, easy to understand definitions. Investment terminology can be a little difficult but you’ve done a great job of explaining these terms.