Where is the Sophisticated Property Investor Putting his Money?
June 30, 2008
The Traditional Favourites
Over the last five to ten years, UK investors buying property abroad have generally stuck to the traditional favourites Spain, France and Italy. With prices a fraction of those in the UK and a guarantee of more sunshine, these markets offered plenty of scope for capital appreciation, rental return and holiday home use. However as prices have steadily risen in these countries, yields have hardened in response and an eventual over-supply particularly in parts of Spain has occurred. In today’s environment property investors are looking further East for yield and capital appreciation opportunities.
Emerging Markets
A year ago ten more countries joined the EU, expanding not only the Union, but the hunting ground of the international property investor. Most investors have come to the conclusion that the market cycle here in the UK is at it’s peak, and the more sophisticated investor has already started moving his money into the new EU countries. Many astute investors started buying there a year or two before EU accession, particularly in more developed cities like Prague and Budapest where the real estate markets were relatively more mature. So prices in these cities had already increased by up to 25% in the year up to May 2004, however there is still a long way to go especially in the other capitals of this region.
Realities of Real Estate Investing
June 29, 2008
If you are anything like me, you are always looking for a good way to work for yourself and make tons of money. Is this not the dream of millions of Americans? Of course it is, and I am willing to bet that you have considered getting into the real estate market at some point. You probably figure, you will buy a little and sell a little, and renting? How easy is that? Am I close? Have you ever thought along these lines?
Real estate may seem like a nice straightforward investment opportunity, but it is a tough business. To succeed in this market you will need to invest a lot more than money, you will need to put in a whole lot of time and patience not to mention commitment.
It is true that you could make scads of cash but first you need to know all of the ins and out of the real estate investing business. Knowledge is the key, make sure you have it in spades before you sink any money into an investment.
5 Hot Tips for Successful Real Estate Investment
June 28, 2008
The last downturn of the global stock market saw millions of ‘every day’ investors having their fingers badly burned. Overnight life savings were eaten away, retirement funds went into decline and the economic forecast for all of us who had any money invested in stocks and shares was gloomy to say the very least.
As a direct result investors in their thousands turned their backs on the rollercoaster stock markets and sought alternative asset classes in which to invest their hard earned money. This has led to a global boom in real estate markets and property prices, and it has spawned a generation of budding real estate investors.
For those of you wondering whether it’s too late to venture into real estate investing or considering how best to make the most significant returns from property investment, here are 5 hot tips for successful real estate investment to set you on the path to potential profits!
1) Consider Investment Property Abroad
There are many relatively untapped property markets in countries around the world that offer the real estate investor greater return on investment in the form of rental yields or short to medium term capital growth.
Residential Income Property Financing: Part 2 of 3
June 28, 2008
Welcome to the second segment of a three-part series about income property. In this second segment we will be discussing financing options for residential income properties as well as the upside (and downside) of owning this type of property.
Financial Concerns
Financing options for residential income property vary widely from commercial or industrial properties. For one thing, most private lenders place size requirements on the apartment complexes they are willing to finance, usually five units or more. Smaller complexes just don’t have the revenue generation potential required to make your loan officer feel comfortable.
The good news is that residential income property loans usually carry a higher LTV ratio than other property types. If you recall from the first segment of this series, LTV (loan-to-value) ratio indicates the percentage of money your lender will lend you to the property’s market value. An 80% LTV is the maximum most lenders will provide for residential income property.
Loan terms usually range from 25 to 30 years with a maximum loan amount of up to $3 million. Current competitive interest rates can range from 4.70% up to 6.625% depending on several factors including your credit rating and the size of your down payment.
How to Eliminate Risk in Real Estate Investment
June 27, 2008
Avoid 12 Common Mistakes Made by Novice Investors and Ensure High Rates of Return!
Real estate investment has provided many investors with positive cash flow, tax benefits and satisfaction of making an impact in others lives. Like any investment however, real estate has intricate nuances and market trends that when ignored can cause an investor tremendous heart ache.
Unbelievably many first time investors are willing to part with their hard earned cash without taking the time to study their investment. They rely on traditional trends and gut feelings. Before you risk your investment take the time to learn all you can about your market. By aligning yourself with the right professional you can avoid these 12 common mistakes and you’ll ensure an excellent return on your investment.
1. Failure to Determine Your Time Need - Cash flow, capital appreciation, tax benefits, loss of management, equity paydown and pride of ownership are just some of the things that need to be addressed before you make that investment. A service minded real estate professional can be a tremendous asset by taking the time to evaluate your needs and making sure you’ve got all your bases covered.
Real Estate Tax Incentives
June 26, 2008
Lower Your Taxes
Tax incentives for real estate investors can often make the difference in your tax rates. Deductions for rental property can often be used to offset wage income. Tax breaks can often enable investors to turn a loss into a profit.
For which items can investors get tax breaks? You could claim deductions for actual costs you incur for financing, managing and operating the rental property. This includes mortgage interest payments, real estate taxes, insurance, maintenance, repairs, property management fees, travel, advertising, and utilities (assuming the tenant doesn’t pay them). These expenses can be subtracted from your adjusted gross income when determining your personal income taxes. Of course, these deductions cannot exceed the amount of real estate income you receive. In addition to deductions for operating costs, you can also receive breaks for depreciation. Buildings naturally deteriorate over time, and these “losses” can be deducted regardless of the actual market value of the property. Because depreciation is a non-cash expense — you are not actually spending any money — the tax code can get a bit tricky. For more information about depreciation and various tax alternatives, ask your tax advisor about Section 1031 of the U.S. Tax Code.
High Profit Real Estate Investing–Make a Good Deal Every Time!
June 25, 2008
Knowing what a Good Deal is ? Is the Key to Success in Real Estate.
Dear Investor,
Take this little survey: The most important key to Real Estate Success is:
1. Finding Motivated Sellers
2. Funding Your Deals
3. Negotiating
4. Knowing a Good Deal when you see one.
Yes all of them are important. And if you answered #4 ? you’re right on the money. Why, because if your deal is a not good one, all your other skills and marketing and power will not make you money, and may even lead to disaster.
On the other hand, if you can unfailingly target good deals, you will always be successful and all the other skills and your marketing methods will serve to increase your success.
What is a Good Deal?
It’s a lot easier to state the question than give the answer. Why? Because it depends on many factors like:
- Market value and purchase price
- Expenses, carrying costs, repairs
- Cashflow and profit
- Holding time
- Loan terms
- Risk factors
- And more . . .
Burn, Baby, Burn!
June 24, 2008
Luxury homes are lots of fun to inspect. Sure, the pay is better too, but mostly it’s just fun to see how the other half lives! I also get to meet those people who have reached such a level of financial success that they are buying a home that seems like it could have been a boarding school!
One of the fun aspects of inspecting large and expensive homes is seeing furnishing and interior design work at the highest level. Unfortunately, that high level does not always translate to attractive! Good-sized decorating budgets does not always mean good taste. One such mansion sticks always in my mind.
Among the oldest and most prestigious sections of Jacksonville, Florida is Ortega. Situated along a wide expanse of the St. Johns River with a fabulous view of the downtown skyline is Ortega Boulevard. In our fair town, that address spells success!
It is always a thrill to inspect on Ortega Boulevard. The homes were built during the 1920’s and 30’s by the business and political leaders of the time. In a state not known for architecture, homes on Ortega Boulevard can be compared proudly with any in America. But that does not mean that some folks don’t commit creative crimes in the decorating department!
The Cat in the Attic
June 23, 2008
Strange and unexpected things happen during home inspections. Seldom are they tragic. Often they are humorous. One such occasion recently came to mind.
Not long ago, one of our inspectors was performing a new home final walk-through inspection. Accompanying the inspector were the homebuyers and the builders superintendent. As the superintendent was explaining the many and varied features of the windows, our intrepid inspector went into the attic to have a look around.
While in the far reaches of the attic, with light shining bright, the unmistakable reflection of eyes were observed. As our inspector went closer in an attempt to identify the eyes, not by name or color, just critter classification, the critter made a dash out of the light. As our brave inspector followed the dashing fur ball, it became clear it was a cat. After some time spent trying to encourage the cat toward the attic pull down steps, the chivalrous inspector not being a cat herder, descended the steps to tell the superintendent of the problem.
An Estate Planning Primer
June 23, 2008
An estate plan can be designed by clients and their professional advisors to achieve the client’s personal and financial objectives. Or, it can be an arrangement imposed upon survivors by state intestate succession laws if someone dies withŽout a valid, up-to-date will. Even though a will is the most basic estate planŽning tool, two out of three Americans die without one.
A comprehensive estate plan can arrange the ownership, management and distriŽbution of your assets in ways that meet your needs and objectives while miniŽmizing estate shrinkage. Without such a plan, whatever you may think is going to happen to your estate after you’re gone probably won’t.
? Estate settlement and distribution — Estate transfer is a privilege that can be exercised only by following specific legal procedures designed to protect the rights of deceased’s heirs. Estate settlement, as this process is called, involves the assigned executor making an inventory of the person’s business and personal assets, paying all debts and claims against your estate, identifying the legal heirs of the remaining estate assets, and distributing those assets accordingly.
