The Real Estate Bubble Fallacy
August 31, 2007
There has been a lot of talk lately about the “Real Estate Bubble”, and a lot of folks are asking the question: “When it is going to burst”?
They are saying that the market just can’t sustain this level of growth and appreciation much longer, and I heat them say that it is inevitable that it must come crashing down soon. People are worried. They don’t think it can last; That whatever goes up, must come down.
These folks have been conditioned to believe what they believe most likely from the experience of the stock market bubble of 2000, and maybe the 1990’s when the real estate market was hit hard in many large metropolitan areas across the country.
Its human nature to feel this way. We all know the saying (or the 80’s tune for you big hair folks), “Once Bitten, Twice Shy”. Or what about, “All good things must come to an end.”? Its how we react to almost everything that affects our well being and general safety. Its a subconscious reaction at the gut level.
A Real Estate Investing Primer
August 30, 2007
There are a great many books and web sites devoted to real estate investing out there, but most of them concentrate on one specific area of investing. It’s often hard to find a general description of real estate investing, one that lists the various real estate investing strategies and how to get started. That’s what this article will set out to do.
Before beginning, you must understand that real estate investing is not a get rich quick scheme. Real estate investing can, and will, make you wealthy, but it certainly won’t happen overnight and it will require work. As you perfect your technique and gain experience, the amount of work needed to gain a lot of money will reduce, but it will take effort and persistance to make it there.
If you’re completely new to real estate investing then the only sort of investing strategy you’re likely aware of is rental properties.
Landlording has been around since there have been houses and people to rent them to, and it will continue to be a wealth builder. In fact, most of the ‘no money down’ real estate strategies you hear about still include rentals as part of their plan. Still, there are other ways to make money from real estate investing out there.
At Home In Your Overseas Home
August 29, 2007
Homeownership, in any form, is a big step for most people. In fact, it’s often one of the biggest financial decisions of our lives. Despite that, sometimes a homeowner in one country will want to buy a second home in another country, whether for a vacation home or future retirement. Usually they make this decision after realizing they visit the same country every chance they get, but sometimes it’s because they have relatives or friends nearby too.
Anyone considering buying a second home overseas will of course want to make sure they’re comfortable with the cultural and language differences they’re bound to encounter. If you’re used to visiting the area regularly, you will no doubt already be familiar with some of these. To be sure, you may want to rent a home in that area first, maybe even for a few years in a row, before purchasing your own home.
When you’re certain you want to buy, be sure to enlist the help of real estate and legal professionals in your chosen country. This is a good idea of course even in your home country!
Dealing With Dual Real Estate Agents
August 28, 2007
Historically, real estate agents have represented the seller of a property. The seller, after all, is usually the one who pays their commission, and agents therefore have a fiduciary relationship with the seller. This in no way means that agents may operate outside the bounds of the law and ethical conduct of course. It just means that the real estate agent is just that, an authorized agent of the seller for a particular transaction.
More recent trends have introduced buyer’s agents, who usually work on a fee basis exclusively for the buyer, and dual agents. Dual agents represent both seller and buyer, particularly in cases where the agent’s company is the listing company. Dual agency is legal in most U.S. states; however, most consumer advocacy organizations recommend against using a dual agent.
This is because there is an inherit conflict of interest for the agent - they receive a commission based on the selling price of the property. The higher the price, the higher their commission, so their reasoning is that dual agents never really have the buyer’s best interests at heart.
Expenses of Home Ownership
August 28, 2007
Hopefully all goes smoothly when you purchase your home. In your anxiousness to become an owner it may not have crossed your mind and no one tells you, your’e not done spending money on this transaction. It may not be soon and it may not be much, but you will need to have a comfortable income above your expenses.
Why didn’t they tell you? Shouldn’t a good real estate agent prepare you for everything they can think of, neighborhood analysis, schools, crime, child molesters, stigmas…? All of us who have been out here in the business have seen it too many times. Too many buyers spend what they are qualified for and many times that is too much. They may not have thought about buying a car in a couple of years, or how much it costs to raise children, how much furniture is going to cost….
What is a Foreclosure?
August 27, 2007
A foreclosure is an action taken against a property owner by seizure of his/her real property. It can be for many reasons. The main cause is delinquent payments on a mortgage. The mortgage company or second and even third mortgage holders contact the owner, then the trustee (usually an attorney) to begin the process. If it is VA guaranteed or FHA insured, many times they offer assistance or alternatives. Then the appraisal is ordered to determine fair market value.
It can also be for medical bills, delinquent taxes and other liens, even credit cards. “The purpose of this foreclosure is for collection of a debt” is usually printed in the legal section of the newspaper as well as some other publications, such as local business papers and law papers.
Many people feel that they can purchase these properties for almost nothing and sometimes that is the case, especially tax sales. If the property is ” free and clear” of other liens then it is solely based on the taxes, penalties and interest due. I know of some that have sold for less than a few thousand dollars.
Seven Questions You Should Ask When Buying a Condo Hotel Unit
August 26, 2007
You may have heard all the buzz about the newest type of vacation home investment, condo hotels. These are condominiums located in four- and five-star hotels in cities like Miami, Orlando, Las Vegas and Chicago. Owners use their condos when they’d like. When not using their unit, they can place it in the hotel’s rental program and receive a percentage of the revenue it generates.
How do you choose a condo hotel unit that meets your desire for a vacation home and is also likely to produce a healthy revenue and appreciate down the road? Consider the following seven questions when evaluating a condo hotels:
1. Is a condo hotel right for you?
Condo hotels are not your typical second homes. They are fabulously-furnished condominium suites in some of the most famous hotels and resorts around the country. The properties are usually large, high-rise, luxury hotels and come with premium amenities like valet, concierge and maid service. Prices can range from $250,000 to over $1 million for prime properties.
2. Is the condo hotel well-located?
Consider whether the property is located in a popular vacation destination, one that is likely to do a healthy tourist or business trade regardless of economic factors.
Selling Your Home - A FSBOs Guide to Keeping It Safe
August 25, 2007
Sellers need to keep their safety in mind when prospecting potential buyers. The real estate industry has seen a problematic climb in assaults towards realtors, and so is the concern for those who are selling their own homes.
Here are just seven ways designed specifically to protect you, your family, and your home, from being victimized:
1. Fully screen callers before allowing them an appointment for seeing your home. Ask all the questions: name, existing address, and telephone number. Where are they employed? Why are they looking to buy? Do they have a family in the area? Any children? Ask as many questions until you feel comfortable with this person.
2. Do not let unannounced visitors into your home unless you have their information first. If you are alone in the house, have them come back later when there are others home. There is no reason why someone cannot be professional and make an appointment with you. Make sure there is more than one person in your home when showing your property. Remember, safety in numbers.
Investing In Land
August 24, 2007
Changing social trends point to a huge rise in demand for housing within the next twenty years.
With an ageing population and more single people requiring accommodation, it comes as no surprise that the government has ordered planning authorities to find more land to develop, including areas of greenbelt.
The value of land has risen dramatically over the last few years (nearly 24% last year) with the most valuable land being in the South East of England. To many land is becoming a real investment opportunity, but how do you go about investing in land?
How to invest
Until recently, land investment was the domain of large developers, public bodies, farmers and the landed gentry, who formed a trusted inner circle.
This has changed, with land agents using the internet to advertise plots of land to the general public.
Although buying land is similar to purchasing a house, there are a number of issues that are peculiar to this form of speculation and those without previous land buying experience are best to deal through a land agent.
As with any investment, there are risks involved and the aim is to invest with a long-term view.
Investing In Commercial Property
August 23, 2007
Why commercial property?
Compared to residential property investments, commercial property offers some key advantages:
Long-term secure cashflow — Commercial lets normally have long lease contracts, with periods of 10 years and more not being uncommon. In addition to this, commercial property tenants are less likely to default on payments and even if the tenant goes into liquidation, the liquidator may continue paying the rent in order to stop the lease being forfeited.
Maintenance — Commercial tenants are generally liable for the maintenance and upkeep of the property, contrasting with residential leasing, where the onus tends to be on the landlord.
Income yield — Commercial property tends to deliver a relatively high income yield throughout the rental period. In comparison residential property investors rely on the capital value of the house increasing to generate a good return. This is fine during periods of rising property prices, but less beneficial during property slumps.
Commercial property investments have also performed well in terms of growth and stability, compared to equities and gilts over recent years.
Commercial property for the personal investor
Few personal investors will have sufficient funds to invest directly in a commercial property, however there are opportunities for indirect investment.
