David Hochfelder lists some of the basic yet crucial terms commonly used in real estate investing to help everyone build the foundation that they need.

1. Basic Real
Estate Terms
Every Investor
Should Know

2. APR (Annual
Percentage
Rate)

3. The APR is the yearly
interest accrued on your
total loan that you're
responsible for paying
each year.

4. Amenities

5. Amenities are the
aspects of a property that
are in addition to the
bare bones structure.
They include walk-in
closets, storage space,
stone countertops and
more.

6. Appreciation

7. Appreciation is
whenever something
increases in worth,
whether due to
increased demand or
scarcity.

8. Closing

9. The final step in a real
estate transaction when
the title transfers from
the seller to the buyer
and the seller gets paid.

10. Closing Costs

11. These are all of the
costs associated with
closing that cover
various brokerage and
escrow fees that the
buyer is responsible for
paying.

12. Collateral

13. This is something
offered by the borrow in
exchange for a loan so
that, in the event that
the borrow forgoes
payment, the lender can
seize the collateral.

14. Direct Cost

15. This is the summation of
all of the expenses that
go into the construction
of a structure and include
things like the cost of
labor and the cost of the
materials.

16. Depreciation

17. The opposite of
appreciation, this is
when something
decreases in value. In
real estate, this can
happen due to
unfavorable location or
wear and tear on the
property.

18. Escrow

19. When something is in
escrow, it's being held by
a third party for a
particular means, usually
until the recipient
completes a certain
action.

20. Equity

21. Equity is the amount of
your property that you
actually own. If you
have a house worth
$100k and your
mortgage on it is for
$60k, then you have
$40k in equity in your
home.

22. Interest Rate

23. The interest rate
reflects the current
average rate of
borrowing money.

24. Underwriting

25. This involves doing
extensive research on
the investment and
uncovering any risks
involved with each
deal.