REIPRIME Logo
Intermediate terms

Essential Residential Property Types Terms

This curated collection includes key terms that might be helpful when exploring residential property types. It focuses on the fundamental categories of homes and multi-unit dwellings that form the backbone of many real estate investment portfolios. These terms were selected based on common questions and areas where investors often need clarity.

Learning Path

1

Duplex

A duplex is a residential building containing two separate living units, each with its own entrance, kitchen, and facilities, often used by investors for rental income or "house hacking."

Beginner11-12 min
2

Triplex

A triplex is a multi-family residential property containing three separate living units, offering investors diversified rental income and potential for owner-occupant house hacking.

Beginner11-12 min
3

Single-Family Home

A Single-Family Home (SFH) is a detached residential property designed for one household, typically on its own land, offering privacy and direct ownership of the structure and lot. It's a popular asset for real estate investors seeking rental income and appreciation.

Beginner12-13 min
4

Condominium

A condominium is a privately owned individual unit within a larger building or community, where the owner also shares ownership of common areas and facilities managed by a Homeowners Association (HOA).

Beginner14-15 min
5

Fourplex

A fourplex is a single residential building containing four separate living units, offering investors diversified rental income and accessible financing options, often used for 'house hacking' strategies.

Beginner10-15 min
6

Multi-Family Property

A multi-family property is a residential building containing two or more separate dwelling units, offering investors multiple income streams from different tenants.

Beginner11-12 min
7

Residential Real Estate

Residential real estate refers to properties used for housing, including single-family homes, multi-family units, condos, and townhouses. It's a popular investment for rental income and appreciation.

Beginner12-13 min
8

Capitalization Rate

The Capitalization Rate (Cap Rate) is a real estate valuation metric used to estimate the potential rate of return on an investment property, calculated by dividing its Net Operating Income (NOI) by its current market value.

Intermediate14-15 min
9

Net Operating Income

Net Operating Income (NOI) is a key real estate metric representing a property's annual income after deducting all operating expenses, but before accounting for debt service, income taxes, and capital expenditures.

Intermediate11-12 min
10

Gross Rent Multiplier

The Gross Rent Multiplier (GRM) is a real estate valuation metric that compares a property's purchase price to its gross annual rental income, used for quick initial screening of residential income properties.

Intermediate10-11 min
11

Homeowners Association

A Homeowners Association (HOA) is a private organization that establishes and enforces rules for a planned community, maintaining common areas and collecting fees from property owners.

Beginner11-12 min
12

Rental Property

A rental property is real estate purchased with the intent to generate income through tenant rent payments and potential property value appreciation.

Beginner13-14 min
13

Operating Expenses

Operating expenses are the ongoing costs of running and maintaining a real estate investment property, excluding mortgage principal and interest payments, and capital expenditures.

Beginner13-14 min
14

Property Tax

Property tax is a recurring tax levied by local governments on real estate, calculated based on the property's assessed value, and used to fund public services. It is a significant ongoing expense for property owners and investors.

Beginner15-18 min
15

Mortgage

A mortgage is a loan obtained from a lender to purchase real estate, where the property itself serves as collateral for the debt. Borrowers make regular payments, including principal and interest, over a set period until the loan is fully repaid.

Beginner15-18 min
16

Due Diligence

Due diligence is the critical process of investigating and verifying all material facts about a property and its financials before a real estate acquisition, aiming to identify risks and ensure an informed investment decision.

Intermediate14-15 min
17

Cash-on-Cash Return

Cash-on-Cash Return (CoC) is a real estate investment metric that calculates the annual pre-tax cash flow generated by a property as a percentage of the total cash an investor has invested.

Intermediate15-18 min
18

Owner-Occupied Property

An owner-occupied property is real estate where the owner lives as their primary residence, often qualifying for favorable financing, lower down payments, and significant tax benefits.

Beginner14-15 min