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Posted on January 24, 2012 by admin

The Top 3 Real Estate Buying Mistakes
In real estate it is important to know what to do and the way to do it. Also, it’s important to understand how to do it correctly. But that is not enough by itself; it doesn’t stop there. You also need to understand what mistakes to avoid. The simplest way to do that is to find out what mistakes others have made and then make sure to avoid them.
That’s especially true for a first time home buyer. There are a number of people who succeed here. You prefer to be one of these instead of one of those who make mistakes and fail. This will be the top 3 largest mistakes that individuals make after they start with the decision to look for and purchase a home.
Number 1, not knowing how much house you can afford. This is important since you will be responsible for making these payments on time every month. To avoid this problem you would like to figure out what you can afford before hand and make out a budget then get a home that’s within that price range.
Second, you should never let your true feelings show. This is a crucial factor in that whoever is with you not to make any comments on the house while you are going through the house. What you ought to do to avoid this error is to just tell whomever is with you to wait until after when you get back in the car to talk it over.
And finally, remember that there are all kinds of costs involved in buying a home. This can be a very common condition when you have to consider the painting, carpeting, or buying furniture and appliances that you will need if you buying a new home. The way to avoid this is to not only budget for everything, but also plan for a six to twelve month time period before getting fully settled in and before you do anything major to your home.
Analyze these common first time home buyer mistakes and very carefully avoid them. Keep to the recommendations above in order to avoid these mistakes and do things properly. Identifying these mistakes is not difficult when you know how to watch out for them.

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Making Money With Real Estate Investments

Posted on January 14, 2012 by admin

Investing in real estateis very profitable though it is necessary to have enough knowledge of its business cycle and the legal aspects this type of investment entails. The following steps will help one understand the intricacies of investing in real estate and make a tidy profit:

Take advantage of downturn: As and when the property rates are low, one can start investing selectively ignoring the media reports.  In fact, become contrarian and pick up good and cheap property deals in prime locations as these are the ones which will start giving good and fast returns once the market picks up.

Do research: To profit from real estate investments, one needs to do some research regarding location of the property and current rent of commercial and residential properties in that particular location.  If you are new to real estate investment, then you need to know the risk factors of investing in real estateand also, the fluctuation short and long term investment entails.  You must know how long to hold a property and when to sell so as to maximize your profit. Also, find out where you can find best deals against stiff competition.

Understand the business cycle of real estate. Real estate investmentcan be famine or feast depending on when you get in and out of it.  One must remember that there is correction from time to time and it is prudent to take advantage of these cycles by buying when there is correction downwards and selling when there is rise. 

Check interest cost and tax.  If you are financing your real estate investment by availing loan, then cost of interest has to be factored in so as to arrive at net profit you are likely to earn.  Also, you need to keep tab on tax liability.  So, you need to seek loan from financial institutions which provide loan with low interest rates. Also, understand the legal provisions, tax provisions as well as other such aspects concerning real estate investments.

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What You Need To Know About Real Estate

Posted on January 7, 2012 by admin

It is probably the natural instinct of our kind to invest in a house of our own. Therefore, buying and selling of property has become so popular and the real estate business is flourishing.

 

Real estate refers to property that is attached to land. Generally, this term is used for things rather than for people. The term is used for land and the structure on that particular land.

 

In the States, real estate has become a flourishing business. Economists actually believe that the lowering of revenue in the States is related to this real estate business which generates lower revenue. When Americans once again start looking at land as a business investment, the revenue will automatically rise.

 

There can be residential, commercial and industrial real estate.

 

Residential real estate arises when a family wants to shift home. They may want to buy a house or a flat. Someone will need to sell it to them. People find it hard to do all this on their own, being new to the place they are moving into. For this, they need the help of a professional to guide them. This person will have to show them a map of the area so that they get a good idea about the place they are shifting into. They will have to decide, with his help, whether they want real estate on rent or they want to buy it. This person who helps them is the agent. He will help them to save time and money by even giving them a tour of the place, the houses and the flats. He will help them to get a good bargain as well.

 

Canada and The United States of America have a multiple listing system [MLS]. This helps people to find property fast. It also gives them information about who is selling the property and the rates.

 

Most of the time, when someone wants to buy a house, they call a real estate broker to help them out. They then tell the broker what kind of real estate they are looking for and where exactly they would want it. They also tell him how much they would be willing to pay. The broker will then look through the MLS to find something that he thinks his client will be happy with. Right now, there are about 800 MLS in the US.

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Design a Successful Real Estate Website for a Realtor Broker or Real Estate Agency

Posted on December 25, 2011 by admin

One of the most important elements of design for a real estate website will be the content of the pages that are included in the website layout. Listings that have descriptions, excellent photographs and detailed information is important and essentially needed to be included in the content of a real estate related site. This can come from the customer themselves or it can be content that comes from adding a multiple listing system database connection to the website. Each database provider of each MLS will have a contract agreement that must be agreed upon and signed by the real estate company and also the website provider.

The other content of a real estate website that is designed well will include information and lots of it. This information may need to include community and area information, information about mortgages, insurance, finances, home inspections, home loans and other subjects. It will also need to feature a page dedicated entirely to the credentials, education and history of the real estate company, broker or realtor, whichever the case may be. Photos are important and need to be included on that page also.

School information relating to the local area is a great addition for content. Visitors looking to sell or buy a home are interested in learning more about the area. The information on taxes, utilities, and recreation and entertainment areas nearby will be appreciated by visitors also.

One more important addition of content needed for a real estate website is the realtor, broker or real estate company’s contact information. This should be placed where it can be found almost instantly and included on every page. Placement for that contact information should be at the top of each page, on the side and also at the bottom of every page on the website. Remember that getting contacts is the purpose for the website. This cannot be underestimated.

List the credentials of the associated realtors, their success and groups and clubs they belong to. Addition of a page dedicated to their information is a must. Adding their photo is a plus! Detail the information about any awards that they may have been awarded. Keep it business but do not create it where there is no personalization.

Including forms where mortgage payments can be calculated and other calculations can be made concerning the selling or buying of homes and properties is real helpful also. The real estate company, broker, realtor or agent that you are designing for can offer you much of this content, but if you have access to information on your own, you can offer it to them for use on the website and they will appreciate it because they are very busy professionals.

The layout and navigation ability of a website is also very important. Keep the links out there where they can be found without searching for them.  Do not use lots of moving flash items, or large photos that will slow your site down. Remember to resize down to smaller if needed. Visitors are usually in a hurry when visiting online and you need to have all of the information out there where they can go straight to it without too much confusion.

Using simple fonts with plain black ink is always best for the print. After your website has been approved and is online, do your customers a favor and promote it to the search engines for them. They will tell others and you will gain more business as a real estate web designer. Let your customers know that you can be reached promptly and answer as soon as possible to their emails so that they know you take their website seriously. Remember to make your customers happy and they will spread the word for your business.

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Blogs: The best source for real estate information

Posted on November 29, 2011 by admin

Though blogs started out as personal journals, there is no limit to what may be covered in a blog. It is customary for people to compose blogs to express their work, their hobbies, their social or political issues, and news or current events.

Real estate blogs have also become a trend in recent years, however, not as fast or abundant as one may expect.

Nonetheless, blogs can be a very valuable source of up-to-date information on real estate, especially in a time when real estate value is very volatile and current information is what may make the difference between a successful transaction and a losing deal.

Real estate blogs have the advantage of presenting the top stories and the latest news in a single place eliminating the need to surf the net and search for multiple sources.

An example is The Toronto Real Estate Blog www.TheTorontoRealEstateBlog.com which provides its readers with a variety of information ranging from changes in interest rates to statistics on building permits and from the latest changes in prices to predictions of the direction of the market.

Another advantage of using blogs is they have RSS feeds from other sources, such as newspaper articles published online, which are updated daily with the latest news. These feeds give the readers the ability to receive a variety of opinions based on which to construct a personal opinion.

In some cases, valuable tools are offered to the users, directing them to further sources to collect valuable information required to make an informed decision, such as crime rates, air quality by neighborhood and school ratings.

Here are a few ideas on how to use blogs to stay informed on real estate issues and trends:

- Search for relevant blogs. Google the name of your city along with the words “real estate blog”.

- A valuable blog has frequent updates.

- A nice, clean look will make it easier to read the articles relevant to you

- Ensure that it has RSS feeds to multiple sources

- It should have an impartial tone and not try to sell the services of a realtor

 Bookmark a couple of the best blogs according to the guidelines above and visit them daily.  It will pay off in time saved from going to a single source and in money gained by making informed decisions.

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Avoid Capital Gains Tax When Selling Real Estate

Posted on November 12, 2011 by admin

You can cut the capital gains tax out of a real estate sale with the use of Exchange 1031.  Exchange 1031 provides that if you are going to use proceeds of the sale of a real estate property to purchase additional property, you can avoid paying the capital gains tax.

The idea is to bolster real estate sales by allowing taxpayers to waive this tax on your property sale if the main purpose of the sale is to purchase another property.  This provision gives an incentive for both the buying and selling of property.

Capital gains taxes assessed in the sale of real estate are estimated at around 20%-30%.  If a taxpayer is engaged in a “like kind” real estate purchase, the tax reduces his ability to purchase a similar property by effectively cutting the resale value of their property by 20%-30%.  This, in turn, will reduce the amount of money that they are likely to spend on a “like kind” purchase of another property.

There, of course, are conditions to deferment of capital gains tax under Exchange 1031.

The value of the property you are purchasing with the proceeds from the sale of your property must be equal to or more than the net profits from the selling of your property.

The full equity realized from the sale of your property must be used to purchase the “replacement” property.

If the replacement property you purchase under an Exchange 1031 provision turns out to be of lesser value than the property you sold, you will be liable to pay an accrued tax.  The amount of your tax liability will be determined by the amount the replacement property fell short of the full equity of the sold property.

In other words, the amount of tax liability you incur will depend upon your given situation and the amount of full equity you realized after the sale of your property.  Therefore, part of the tax is deferred in this instance, rather than deferring all of the capital gains tax.

The hope of this provision is that such a substantial tax savings will encourage real estate sellers to purchase “replacement” property rather than invest the income from such a sale of real estate into some other venture.  It is a good provision for people looking to “buy up” in the housing market.

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Is Now The Right Time to Buy a Real Estate Investment?

Posted on November 5, 2011 by admin

We all know what has happened to real estate values over the last five years. Many homeowners who bought at the top of the market have been devastated by depreciated property values. However, we should remember that the primary cause of this decline was a vastly overheated market. It actually spiraled totally out of control. In contrast, those who bought their properties prior to 2000 had realized enough equity to weather the storm and their real estate continues to be a route to financial security.

Every change in economic conditions affecting real estate creates a new opportunity for financial gain. If you currently own your home, this may be a great time to purchase a residential rental property. For those who are in a position to make the 20% down payment required by lenders for investment property, all of the other elements are in play for a successful purchase. Interest rates are low, property values are down and all of those homeowners who couldn’t survive the housing downturn have created a very strong rental market. There are bargains to be had. Foreclosures, short sales and otherwise desperate homeowners have produced an exceptionally fluid buying environment.

In years gone by, the axiom was “if you can rent it for within a few hundred dollars of the mortgage payment, appreciation will take care of the rest”. Well, that may or may not be true today, at least for the immediate future. If the purchased property can be rented for close to the monthly payment, short term appreciation is not the primary concern. After all, one should buy rental   property for long term gain. With today’s low interest rates and a substantial down payment, a rental property purchased at the right price and the right location, should produce a positive cash flow. Rental rates have remained stable and even increased during the downturn and that stability is likely to continue for the foreseeable future.

Although this slump is by far the worst one since the great depression, we have experienced downturns in the real estate market before. In fact, on average, we have had declines in property values every seven years. Assuming we can return to a sustained growing economy, history will almost certainly repeat itself and substantial appreciation will occur. There are many factors that determine property value. Inflation, location, and supply vs. demand are the primary factors. It is very improbable that we will ever see zero inflation. If inflation dictates that a home builder has to pay more for materials, he must sell the home for a higher price or stop building. The older population keeps increasing, but land, in highly desirable areas, is in short supply. When the demand is greater than supply, appreciation occurs. This is an over-simplification and does not factor other economic considerations, but over time it is probable that well-located real estate in growing communities will show substantial increase in value.

In conclusion, diversification in one’s investment portfolio and today’s real estate market provides a window of opportunity. Buyers should be careful and remember the old axiom, “The three criteria for buying real estate: location, location, location”.

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Characteristics of a good real estate salesperson

Posted on October 22, 2011 by admin

Dealing with real estate is a stressful business and hiring the right real estate professional can make a huge difference. Typically, professional realtors possess a huge experience of over 15 years and really know how to build a professional relationship with their clients. This is evident on their excellent communication skills and on the confidence they show during the time they are working for them. In particular:

Professional realtors are focused

Good real estate salesmen are focused on their job, and take seriously the job they are doing for you. For instance, if your real estate agent is too friendly or doesn’t have a proper appearance or doesn’t have a proper office to carry out the business, it probably means he/she is not professional and lacks experience. Someone who doesn’t take care of personal appearance won’t take care of your business as well. This means you cannot and you should not trust this person in your endeavors to find a house.

Professional realtors are always available

A good realtor loves to work with people. This means that, even on a bad day, he is available for you to listen to your concerns and give you advice. Professional realtors are always available for their clients and always put their clients’ interest above theirs. If you arrange a meeting with your realtor and you feel rushed, it probably means he cares more about the commission than your case.

Professional realtors are knowledgeable

Good real estate salesmen have a broad knowledge of the real estate market. They are familiar with the state and local real estate laws and they are specialized in particular areas so that they can direct their clients in the best way.

Professional realtors go the extra mile

You may find a lot of professional realtors in the market with similar characteristics, who do their job great and bring results. However, those realtors who take care of extra details are those who, eventually, make the great difference or you, the client. Dealing with a realtor who is keeping you posted for every little development in your case; and is always polite and available for you is a win-win situation.

Overall, if you have a realtor who is returning your phone calls promptly, is an effective communicator, a powerful negotiator, an honest and polite individual and grateful for doing business with you, you are really blessed to have a good professional who will definitely take care of your case and will bring results.

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5 Reasons to Invest in a Down Real Estate Market

Posted on October 16, 2011 by admin

We’ve been talking about investing in the down real estate market for a while now, but there are so many people out there who are afraid to plunk down the kind of money it takes to get going in a down real estate market. Here are five things you should keep in mind when investing in a down real estate market:

1)      First, do not ever pay full asking price. The majority of people will be asking for prices at or near the amount of their mortgage, as if they held all the cards. They don’t, especially now that we are all facing a down real estate market. Seriously appraise the property and decide if you want it. If you really do, and it seems like it has the potential to be a return on your investment, then you should make an offer. Some places can be had for as low as a 20 per cent discount on the asking price; that is the beauty of purchasing in a down real estate market. If they balk at your price, you can walk away knowing that they will eventually come down to earth and realize that in a down real estate market, there are very few buyers.

2)      Second, think location, location, location. As the real estate market boomed the last couple of years, the locations for some housing developments started to become really whacky; out in the middle of nowhere, down one lane roads, and with the barest of infrastructures, housing tracts sprung up like mushrooms after a rain storm. You need to think strategically; the desirable houses will be more centrally located when people finally realize that the credit crunch and real estate market is making a come back.

3)      Real estate in a down market is a long term investment. You will probably not be able to unload your investment any time soon, but you should keep in mind that eventually, people will want to purchase new homes again, and when the credit markets do open back up, you will be sitting pretty. Be patient and you will make a tidy bundle when you finally do sell.

4)      You aren’t going to be able to flip a house in a down real estate market, so why bother. Don’t put more into a house than to make it habitable; some people may be lucky to flip in some areas, but flipping is quickly becoming a thing of the past. Maximize your dollars and invest in multiple properties while rehabilitating them only if necessary.

5)      Become a land lord. Land lords are holding all the cards right now. Just because someone loses their house doesn’t mean they are going to become homeless. In fact, in many rental markets, there is a shortage of landlords who can rent to all the people needing houses. Being a land lord can be seen as an interest return on your investment since a 200,000 dollar house rented for 1,000 dollars a month returns 12,000 dollars, or 6% on the investment per year!

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Financing Your Real Estate Investment Is Still Possible

Posted on October 14, 2011 by admin

The last five to six years have been incredible for the real estate lending market; incredibly good and incredibly bad. Skip back to 2005, the height of the residential and commercial real estate market. Home sales (both new and existing) were off the scale, and the building of commercial property was vast. Large, national home builders were constructing millions of new single family homes across the country. Tall condominium towers were popping up in major cities all over the US. Thousands of apartment units were being constructed, and new retail shopping centers were being built on every city block. All was great! People were happy. Consumer confidence was high, unemployment was low, and speculative real estate investors were making money “hand-over-foot.” Buying, borrowing, and selling real estate was a “piece of cake” at that time. Then one day, the wheels came off the wagon. Practically over night the real estate market went from terrific to terrible! Those who invested and borrowed weren’t able to sell their holdings and were devastated; the banks had stopped lending and would not extend further credit to investors.

So what was the impetus of this rapid change in the lending market? Well we’ll need to start back at the housing boom of 2004-2007. National home builders and large condominium developers flooded the residential market with millions of new units. Many of these new units were sold to speculation buyers who received bank financing to purchase these homes. Several of the speculation buyers purchased multiple units hoping to score large profits by selling to real home buyers (better known as “flipping”). However, builders poorly gauged the real demand for housing by true home buyers and allowed investor or speculative buyers to dictate, thereby inflating what the demand truly was. In a matter of a few months, banks and builders realized that the penned-up demand for housing wasn’t anywhere close to the level of the building that occurred within the span of a few years; thus the very basic law of supply and demand took precedence and banks realized that the new supply of housing had incredibly out-weighed the actual demand.

The quick spiral downward began in the last quarter of 2006 and hasn’t stopped. Overnight banks cut credit to borrowers, and investors stuck in the middle suffered horribly. To make matters even worse, Wall Street cut off the supply of commercial, CMBS paper (loans to real estate investors), and thus banks we’re left stuck with large loan portfolios and no hope of being paid off by Wall Street. The Commercial Mortgage Backed Securities (CMBS) market was always an outlet for banks and borrowers. Investors would obtain bank financing to build an office building, for example, and within a short period of time, pay the bank back with new loans from Wall Street. As soon as Wall Street stopped the flow of money in 2007, financial matters for banks became unbearable. Big banks had to borrow from the Federal government, and small banks just failed; new loans were nonexistent.

Fast-forward to today, the second quarter of 2011, and things haven’t changed. New home sales remain stagnant, condo towers remain empty, and commercial space is still vacant. Bank’s REO (real estate owned) portfolios remain at record holdings as foreclosures and bankruptcies continue at a rapid pace. 

SO, where does an investor go to borrow money to take advantage of vastly discounted real estate prices? Unless you’re a public company that raises money via the stock market (which none of us are), you must go to nontraditional sources commonly described as “hard money” lending. What is hard money lending? “Hard Money” typically refers to small loans, generally 0k to mm. It usually involves a quick approval process (48 hrs), a 65 to 70% loan against your total purchase, and funds within two to three weeks. Because hard money is usually used to buy distressed real estate, and the loan to value is conservative, personal guarantees are often not required. “Hard Money” lenders are typically private lenders that specialize in the “niche” lending market. They’ll do their own appraisals after their review of your financial proforma for the property you intend on purchasing. 

The key in finding good, hard money sources is to subscribe to a service or find a broker who ”runs in those circles.” In other words, you’re not going to find these sources in your local yellow pages. There are excellent buys out there so take advantage now!

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