The Real Estate Investing Glossary

Get familiar with key real estate terms used on the Realbricks platform and deepen your knowledge with general real estate terminology. This comprehensive glossary helps you navigate investments confidently and build your portfolio with ease.

Key Real Estate Investing Terms

Key Terms for Realbricks Investors

Real estate investing often comes with a steep learning curve. However, Realbricks simplifies the process, allowing investors to focus on key concepts and make informed decisions with confidence. By understanding a handful of essential terms, you can navigate the platform more efficiently and start building your investment portfolio.

Key Terms to Know on Realbricks:

  • Property Appreciation: The increase in a property’s value over time, driven by market demand, improvements, and other economic factors.
  • Rental Income: The income generated from leasing out properties, which serves as the primary source of dividends on Realbricks.
  • Dividends and Estimated Dividend Yield: Dividends are periodic payouts to investors, derived from rental income after deducting expenses. The “Estimated Dividend Yield” represents the projected annual return, making it easier to evaluate potential investments.
  • Annual Return: The total annual gain from an investment, often expressed as a percentage of the original investment.
  • Quarterly Return: The gain or income earned during one calendar quarter (Q1, Q2, Q3, Q4), typically used to provide a more frequent measure of an investment’s performance.

Investment Insight: If a property projects a 9% annualized return, that’s approximately 2.25% per quarter, though actual quarterly returns may vary.

  • Primary Marketplace: The primary marketplace, is where properties will first be listed as available to invest in. Minimum investment is $100.
  • Secondary Marketplace: The secondary marketplace allows users to place buy and sell orders freely in an open trading environment, akin to trading stocks.

Investment Insight: After a property is fully funded on the primary marketplace, it is transferred to the secondary market. Here, users can place buy and sell orders with no minimum purchase or sell quantity.

  • Buy Order: A request to purchase shares of a property.
    Sell Order: A request to sell existing shares of a property.
    Property Management Fee: A fee charged for overseeing the day-to-day operations of the property, such as maintenance and tenant relations.
  • AUM (Assets Under Management) Fee: A fee calculated as a percentage of the total value of properties managed by the platform.
  • Platform Fee: A fee associated with using the Realbricks platform to invest in real estate.

(For a detailed breakdown of fees, refer to this article on understanding fees on Realbricks.)

Interested in Learning More? If you’d like to deepen your understanding of real estate investing as a whole, explore our expanded glossary, where we break down additional terms that every investor should know. This comprehensive resource can help you grow your knowledge and feel more confident as you build your portfolio.

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Expanded Real Estate Investing Glossary: Additional Terms to Know

Capital Gains

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The profit earned when you sell a property for more than you paid for it. Capital gains can be short-term or long-term, depending on how long you held the property.

Debt-to-Income Ratio (DTI)

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A personal finance measure that compares your monthly debt payments to your monthly income. Lenders often use this metric to determine borrowing eligibility.

Escrow

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A neutral third party that holds funds or documents until all conditions of a real estate transaction are met, ensuring both buyer and seller fulfill their obligations.

Foreclosure

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The process through which a lender takes possession of a property due to the borrower’s failure to keep up with mortgage payments. Foreclosures are often sold at a discount, making them attractive to some investors.

Market Value

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The estimated price a property would sell for on the open market, influenced by factors such as location, condition, and comparable sales in the area.

Property Taxes

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Annual taxes levied by local governments based on the assessed value of the property. These are typically a significant ongoing cost for property owners.

Real Estate Agent/Broker

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A licensed professional who assists buyers, sellers, and investors in purchasing, selling, or renting properties. Brokers often oversee agents and handle more complex transactions.

Real Estate Investment Trust (REIT)

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A company that owns, operates, or finances income-producing real estate. Investors can buy shares in REITs, offering a way to invest in real estate without direct property ownership.

Title

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A legal document that proves ownership of a property. Title searches are conducted to ensure that the seller has the legal right to transfer ownership and that there are no liens or disputes.

Underwriting

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The process through which a lender evaluates a borrower’s financial situation, property value, and market conditions before approving a mortgage.

Vacancy Rate

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The percentage of unoccupied rental units in a property or market. A high vacancy rate can indicate an oversupply or less desirable property.

Zoning Laws

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Regulations that determine how properties in certain areas can be used, such as residential, commercial, or industrial purposes. Investors must be aware of zoning laws to ensure their intended use is permitted.

Disclaimer: Investing in real estate involves risks, including the potential loss of capital. This content is for informational purposes only and is not intended as investment advice. Investors should perform their own research and consult with financial professionals before making investment decisions.