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  • Writer's pictureShannan Small

5 Terms and Phrases Every Real Estate Investor Should Know

If you're a budding real estate investor in Charlotte, NC, you should familiarize yourself with the property market before making your first purchase. You can start by learning some of the most important terms, such as distressed real estate, buyer's market, and seller's market. Once you've familiarized yourself with the home-buying process, reach out to a company that sells properties at low prices and start building up your passive income stream.

5 Terms and Phrases Every Charlotte, NC, Real Estate Investor Should Know

1. Distressed Real Estate

When a homeowner is unable to keep up with their mortgage payments and the piece of real estate is about to be seized by their lender, it is considered distressed. These kinds of homes can't be found very easily, as they might not be listed: you'll have to contact a specialist like Better Path Homes to access them. They can be a good investment because the seller wants to close the deal ASAP, so the properties are usually cheaper than regular homes.

When you buy a distressed house or apartment, you'll have to do it up yourself because the seller is unable to pay for repairs and renovations. This is a great advantage because you can change the layout to suit your preferences. Since distressed real estate is available at bargain prices, investors can often make a lot of money by either buying them and renting them out or buying them, doing them up, and then selling them.

2. Rental Property

A rental property is a home you buy to rent out to other people. It's unlikely that you will live there yourself, although you might spend time there at some point. Renting out a home is a great way of making a passive income, since you won't have to work a set number of hours to make money off your property. Instead, you are investing some of your funds when buying the place, and you can benefit from the return on your investment for years to come.

There are various kinds of rental properties. A short-term rental is often furnished, and people only stay for a few days, weeks, or months. In contrast, a long-term rental is usually unfurnished, and your tenants stay for a year or more. Both types of renting can be profitable: you can usually charge more for the former, while the latter is usually more low-maintenance.

3. Seller's Market and Buyer's Market

When lots of properties are on the market and there are few people who want to buy them, it's a buyer's market. In this scenario, the buyer can choose from several homes, and they won't have to pay a very high price for them. In contrast, a seller's market occurs when there aren't enough homes to go around and many buyers are competing for the same property.

Currently, Charlotte is a very desirable city, and many people are moving to the area. Therefore, we are experiencing a seller's market. Property prices are rising, and it can be hard to find a good home. Under these conditions, buying distressed real estate is a great solution because it allows investors to benefit from lower-than-average prices, even though the real estate market is very hot.

4. Closing

Closing is the process of finalizing the home sale and signing all the paperwork. During a traditional transaction, this can take many weeks or even months because the home has to be inspected, the mortgage has to be approved, and various documents have to be put together. If you're buying from a company like Better Path Homes, the process can be much quicker.

We buy distressed properties from homeowners, improve the properties' condition, and then sell them to investors. Because we have the home inspected and appraised early on, we're several steps ahead of a traditional seller. By the time you contact us, the property is ready to be bought, and you won't have to jump through hoops to do so. There are also very minimal fees associated with closing, since fewer professionals are involved in this kind of sale.

5. Single Family Home and Multi-Family Home

If you're investing in a rental property, you should consider whether you would like to buy a single-family home to rent out to one party or a multi-family home. The latter will provide you with a higher income because you can rent the home out to several families at once, but the former is cheaper, so it could be a better fit for new investors. In some areas of North Carolina, you can also buy an apartment to rent out. This is usually the cheapest option.

Every budding real estate investor in Charlotte, NC, should familiarize themselves with the most important terms related to property. They should know about rental properties, distressed real estate, buyer's and seller's markets, the closing process, and the types of homes that are available.

Call us today at Better Path Homes to find out more about the competitively priced properties we sell.

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