By: Dale Beaumont
Ever wondered why some investors achieve extraordinary success, while others struggle to make the grade? Why some investors attract an abundance of great opportunities, while others are still out there looking?
A new book titled: 'Secrets of Property Millionaires Exposed!' takes people up-close and personal with eleven of the country's most successful property investors, including John Fitzgerald, Hans Jakobi, Peter Comben, Ed Chan, Dymphna Boholt, Gordon Green, Craig Turnbull and others. In a surprisingly candid way each contributor shares their own unique wealth strategy and dozens of hints and tips from years of experience.
The following ten (10) points are the author's perspective of those personal qualities and attributes that all multi-millionaire property investors have in common.
1. A strong desire
Successful investors have a strong desire to achieve their goals. They are not willing to compromise on their dreams and tend to be people that won't settle for a mediocre life. They understand the importance of building wealth, not for the sake of having more money, but for the lifestyle, time and choices it brings. For example, one of the people in the book, Dymphna Boholt, was at a low point in her life where she'd just gone through a divorce and had two hungry mouths to feed. Her wish to spend time with her kids and provide them with a good upbringing fuelled her desire and drove her to achieve great heights.
2. Think abundance
Every person interviewed in the book had an abundance mindset. They are of the belief that opportunities are always there and if they remain positive and optimistic, life will attract to them what they need. In fact, a number of them commented on the belief that the deal of a lifetime comes around once a week. So if you miss an opportunity, keep your chin up, because another deal is waiting just around the corner.
3. Be committed to a strategy
Many of the millionaires commented that the biggest mistake they see new investors make is that they try to execute too many strategies at once. As a result of chopping and changing, they lose focus, have fewer results and at worse, withdraw from property investing entirely. So take the time to devise a well thought out plan and then stick with it long enough to see it bear fruit.
4. Great communication skills
Multi-millionaire property investors understand the fact that real estate is ultimately a people business! While the properties themselves may be inanimate objects, the people that own them, and the people around them are real people with feelings and emotions. That is why it's important to treat people with respect and listen to their needs. News travels fast in property and your reputation is the key.
5. Action orientated
This is where the rubber hits the road. High achievers understand there is time for setting goals and developing plans, but then there's time for action. They know that when all is said and done, most talk but few do. High achievers take deliberate action. They know that anything worthwhile in life does not happen by accident. You must go after it and make it happen.
6. Take responsibility
People who make a real success of property investing take responsibility for everything that happens to them. They resist the urge of blaming others for their circumstances. For example if one of their properties becomes vacant for two months they accept responsibility and become proactive about finding a tenant, rather than blaming the property manager.
7. Focus on the team
Highly successful investors have all come to the realisation that you can't do everything on your own. That's why they're committed to finding and keeping the best people to work with.
8. Have an ability to bounce back
Challenges and obstacles are part of any worthwhile journey. Successful investors understand this and have developed a special ability to express resilience when times are tough. There's a Japanese proverb which says, 'fall down seven times, get up eight'.
9. Committed to continual growth
The only certainty in property is that things will never stay the same. That's why each of the people interviewed for the book are committed to broadening their knowledge base. They advocate the importance of knowing what's happening in the market and being aware of new issues that might affect them now or in the future.
10. Celebrate your success
There is one more quality of successful property millionaires and that is they celebrate their successes and reward themselves for their achievements. There are a lot of people who are not happy because they haven't mastered this particular quality. So go on, get out there and enjoy the journey!!
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About the Author
Dale Beaumont is a young entrepreneur and the creator of the 'Secrets Exposed' series. Having now released over 15 best-selling business books (available in bookstores across Australia or from www.SecretsExposed.com.au). Dale has been featured in all forms of the media and has become a sought-after speaker. To discover more about Dale's books, read his blog or to download other free articles and resources, please visit: www.DaleBeaumont.com
Photo: Courtesy of www.smh.com.au
The Essential Qualities of Multi-Millionaire Property Investors
Turning Houses Into Dollars: Reasons To Invest In Property
By: Dale Beaumont
When is the perfect time to invest? What demographics should I look at? How much money do I need? Why should I invest in property? There will always be questions about property investing because it involves risk and uncertainties. And while these drawbacks are often pushed to the forepart of our mind, we often forget about the benefits that property investing can provide.
A new book titled: 'Secrets of Property Millionaires Exposed!' takes people up-close and personal with eleven of the country's most successful property investors, including John Fitzgerald, Hans Jakobi, Dymphna Boholt, Ed Chan, Craig Turnbull and others. In a surprisingly candid way each contributor shares their closely guarded success secrets that have lead to a combined portfolio worth over $183 million.
Property investing may not be for everyone, however, ruling yourself out of the property game without the proper knowledge can be disadvantageous. This book serves as an introduction to property investing and offers strategies for becoming a property investor.
The following four (4) points are the author's perspective on reasons people should consider property investing.
1. The 'Great Australian Dream'
Buying your own home features prominently in the 'Great Australian Dream'. It is something that sits comfortably with most people and is a low risk investment that is relatively stable.
For author and speaker, Craig Turnbull, his reason for property investing stemmed from the financial struggles he experienced growing up. Noticing that many rich people either created or held their wealth in property, he realised he needed to invest in property in order to live the 'Great Australian Dream' - his dream!
2. Buy back your time
Most people reach a point when they realise that there has to be more to life than working long hours and long weeks. To make money you have to work for it, which is essentially selling your time. Time is a commodity that can't be stretched or taken back, however, property investing offers an alternative.
This is Gary & Jenny Leather's approach to property investing and one that lead them to establishing Jenger Investments. The dissatisfaction of the nine-to-five grind and two undervalued incomes prompted Gary and Jenny to explore the possibilities of using positive cash flow properties, which would allow them to buy back their time and find the freedom they were looking for.
3. To be uncomfortable
People need to be challenged. We need to learn, to grow and develop in order to improve ourselves. Property investing gives people the choice of moving out of their comfort zone and opening their eyes to other alternatives beyond their normal scope of living. No matter what field of work you are involved in, property investing can be undertaken by anyone who has a passion and willingness to learn the industry. It is never too late to invest in property.
One of the reasons property developer, Peter Comben started in property was that he found himself in a comfort zone in which he had grown accustomed to the security that a salary provided. So he took leave without pay to try something different. He is still in the industry today.
4. Passive is good
Property is one of the best assets you can own and will literally earn you money while you sleep. It is a passive income, which allows you to have money coming in whether you work or not.
Dymphna Boholt had just come out of divorce, had a baby to care for and another on the way when she started Active Financial Answers. When she decided she would rather enjoy a retirement lifestyle sooner rather than later, she understood that property investing was the ideal solution.
In Summary
Many uncertainties are associated with property investing and a lot of this hesitation has to do with a lack of knowledge. However, while property investing should not be entered into light-heartedly, do not overlook the benefits. According to investor, Patrick Bright, property investing is the best and safest way to create and hold onto wealth.
There are many reasons to invest in property. Identify why you would invest in property and keep an open mind to the endless possibilities.
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About the Author
Dale Beaumont is a young entrepreneur and the creator of the 'Secrets Exposed' series. Having now released over 15 best-selling business books (available in bookstores across Australia or from www.SecretsExposed.com.au). Dale has been featured in all forms of the media and has become a sought-after speaker. To discover more about Dale's books, read his blog or to download other free articles and resources, please visit: www.DaleBeaumont.com
Photo: Courtesy of www.investaustralia.gov.au
Investing In Real Estate - Six Specific Tips
by: Steve Gillman
Investing in real estate should be a pleasurable and profitable activity. Listen carefully to investors, though, and you hear not just success stories, but sad tales of stress and losing money. Here are some tips for keeping your real estate stories happy ones.
- Have a top price. Properties have a market value, and then they have their value to you. Many investors pay too much just because everyone else is doing so, and then they have negative cash flow month after month. Just because others are paying too much for duplexes, doesn't mean you have to. Once you decide on a top price that works for your plan (which hopefully involves cash flow), start below that and don't go a penny higher. The time to set your limit is before the negotiations start, not during them.
- Choose partners carefully. Investing in real estate can be an uncertain process. Too many decision-makers just make it more so. If you must have a partner, clearly define your roles before you start a project. Group decisions tend not to work well, and will cause you much stress. It is often best if one partner puts up the bulk of the money, and the other runs the show. Agree to a plan, then step back if you are investing the capital, and let your partner do his thing. Of course, step up and take control if you are managing the project.
- Listen to what the market is saying. When the cabinet guy asked me for a decision I realized that I knew nothing at all about which cabinets people like. I asked him which ones home owners were most often choosing, and he pointed to one that three quarters of his last forty customers had chosen. Then that's the one I want, I told him. Why would I argue with the market I am trying to sell to? I have seen sellers paint a home a certain color because they like it. That's a quick way to reduce the market value of a home. What colors do the potential buyers like? That's what is important.
- Understand the numbers. Investing in real estate is all about the numbers. If it is an income property investment, it's about one number in particular: cash flow. Be aware of whatever the local formulas are, whether gross rent multipliers or capitalization rates or whatever. Ultimately, though just be sure that after every last expense you'll have cash flow from the very first month. If it is a residential fixer-upper, know what it will sell for and what it will cost to fix it up - before you even make an offer.
- Don't confuse investing with gambling. Investing in real estate isn't gambling, or at least it shouldn't be. There is risk, but unlike true gambling, the odds are in your favor. At least they should be, and you should be able to clearly see the outcome. This why you shouldn't invest based on the assumption of continued fast appreciation. Over time, real estate values do trend upwards, but there is no guarantee that prices will continue up at any particular rate during a given time. Do deals in such a way that they'll be profitable even if prices go nowhere. If values go up, you're that much better off.
- Do the research. Understand the statistics and information you are looking at. It is possible that the real estate agent will show you only the comparable sales that make the property look more valuable. With a bit of your own research, and an understanding of how the various numbers are arrived at, you can avoid overpaying. Many counties have made researching prices easy, with sales prices online. Other web sites, such as the U.S. Census site, have information on population and jobs. Understanding these figures can mean not investing in real estate just before the town declines.
These tips, like all others, are just guidelines of course. You can "gamble" on rising values, for example, if you really did your homework and know the demand for housing in a town is about to explode. You might pass up a great opportunity too, because you refuse to go $500 over the top price you set. While having a few rules and guidelines is a good place to start, don't let them take the place of thinking when investing in real estate.
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About The Author
Copyright Steve Gillman. For a Free Real Estate Investing Course, visit: http://www.HousesUnderFiftyThousand.com.
Real Estate Investors Beware!
by: Robb Beltran
Can you really make money in real estate? You bet you can, but you better beware of what you’re getting yourself into. I have been investing in real estate for years now and I can’t tell you how many properties I have bought from burnt out landlords or young couples that really started too soon.
Like anything the key to being successful in real estate investing is education and practice. I have had some really good deals and others I thought were going to drag me down to the deepest of money pits. So for what it’s worth here’s a few observations I think will be helpful to investors just starting out.
Beware of the late night infomercial real estate gurus when they say you can build wealth in real estate with only five or ten hours a week. To be successful you need to be on all the time. It’s all about marketing and following through and networking and did I mention marketing. I am astounded every time I meet a so-called investor and ask them for a card and they don’t have one. How is anyone supposed to know you buy houses or invest in real estate if you don’t tell them every chance you get?
Beware of rentals. Land lording is a pain. I don’t care if you have a management company in place or not you are always going to get calls about something being broken or some inspection the city wants to run you through. New investors should especially be aware that almost all of the tenant/landlord laws favor the tenants. If you want a taste of what can happen rent the movie “Pacific Heights” with Michael Keaton sometime. You may never buy another rental again. Remember peace of mind could cost you more than great cash flow.
Beware of contractors who want to be paid by the hour and not the job. Unless you are constantly there with them, they will take you for a ride every time. Make them sign a must be completed by clause and if they don’t complete the job by the said date, your cost should be discounted.
Beware of homes sold at sheriff sales or on the courthouse steps. Yes you can find some great deals there, but make sure you do your due diligence and always try to inspect the house first. Judgments and out of this world repair costs could chomp away at your potential profit quickly. I like buying the foreclosure properties after the bank gets them back. They are still “As Is,” but you can always inspect them and have an out if you use a realtor. Better safe than sorry right.
Beware of taking advice from someone who doesn’t own any investment property, rents or swears he knows of the next big market if only he had the money.
I have learned and still believe you can never learn too much about something so when it comes to building wealth though real estate education really is the key. Whether you are a beginner or a seasoned investor the Real Estate Info Network may be just the tool to take you to your next level of investing.
The Real Estate Info Network promotes real estate education through real estate seminars, e-books and real estate investing. Learn how to make no money down deals, profit in foreclosures and short sales and how to rehab your way into real estate riches.
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About The Author
Robb Beltran is an active real estate investor and publisher of the Real Estate Info Network. The Real Estate Info Network promotes real estate education through real estate seminars, e-books and real estate investing courses.http://www.realestateinfonetwork.com
http://www.belstarproperties.com
Photo: Courtesy of www.archibaldjx.com
Four Steps To Real Estate Investing Success
by: Regine Hehn
The following article is the result of years working in the real estate business. It was written to answer some of the most frequently asked questions, as well as address common issues that people have with this topic. I hope that you will find the information in this article helpful.
Real estate investing is always good and sometimes it's red hot. When it's hot dozens of real estate seminars begin rolling across the country and thousands of people spend thousands of dollars for investing education.
It's startling to learn that of all those thousands of eager folks who attend these seminars only about 5% buy even one investment house. Why? The real estate gurus sell the "sizzle" and make profiting from real estate sound easy. The truth is that it's simple, but not easy.
Here's a quick plan that will enable anyone to begin building financial independence.
There are basically four steps to investing in single family homes:
1. Buy homes below full market value. Yes, people really do sell homes for less than the home's full value. The key is to understand that most home owners will only consider a purchase offer that is all cash and within 5% to 10% of their asking price.
The successful investor learns to find financially distressed home owners who have no choice but to sell for less than market value. They have lost their job or been suddenly transferred; they are divorcing; they been living beyond their income; the family has been overwhelmed with medical bills and, not uncommonly these days, their money has gone to support a drug habit.
Those are examples of motivated sellers. They have to sell and they will accept something other than a conventional, all cash offer.
2. How do you find motivated sellers? You work at it! Like any business it is important to develop a little marketing plan. One that is simple, yet very effective, is the one that was proven 75 years ago by the Fuller Brush company; door to door sales.
You are selling your skill as a home buyer to people who must sell. Your are there when they need you and you have the skill to help them solve at least part of their problem. With door to door prospecting you will learn more and buy more homes quicker than any other method. However, most people just won't walk door to door for three or four hours per week. OK, there are other ways.
You can watch public notices for the announcement of foreclosure sales. Meeting with a home owner right after they've received a notice that they are about to lose their home allows you to deal with a very motivated seller. Other public notices that provide buying opportunities include probate, divorce and bankruptcy. You can follow the Homes For Sale listings in your local newspaper or Internet site.
You can telephone the names found in these notices or, and this is the least time consuming, send a postcard expressing your interest in buying their property. It will produce buying opportunities, just not as many as personal contact.
3. After you've found a motivated seller you must understand how to frame offers that provide benefits for both you and for the home owner. A good real estate investor quickly learns that this is not a business of stealing property, but of solving problems in a way that benefits the seller.
The home owner is in a tight spot of some kind and you can save them from public embarrassment and, in most cases, give them at least a little cash to get a new start.
No investor can afford to leave cash in every deal. No one but Bill Gates has that much available money. You must use creative techniques like, leases, option and taking over mortgage payments. Little or no cash is needed for those deals. You can find plenty of reasonable priced educational material on those subjects in book stores or on EBay. The same education that seminars sell for thousands of dollars.
4. You make your profit when you buy! Never make a purchase until you've carefully determined exactly how you will get to your profit. If you hold it as a long term investment will the monthly rental income more than cover the monthly mortgage payment? Will you sell the deal to another investor for fast cash? Will you do some fix-up and sell the property for full value? Will you quickly trade it for a more desirable property? Have a plan before you buy.
There you have four steps that even a part-time investor can execute in three to four hours per week. What's the missing ingredient? Your determination and perseverance. If you will unfailingly follow the plan for a few months you will be well on your way to financial independence.
OK, now that you have finished reading this article I want you to find more resources on this subject. Within just a short period of time you will have all of the answers that you need!
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About The Author
Regine HehnIf you want to buy or to sell any kind of properties in any place on the world than visit our site: http://homesnatch.com
Photo: Courtesy of www.GetACoach.co.nz
How Can Inspections Save You Money in Real Estate Investment
by: Paulie Sabol
Think about this: any property you come across is likely to be a used good. Real estate investment is like a garage sale; only instead of exchanging old t-shirts and record players, you’re buying and selling the actual garage, the High Victorian, the Colonial.
You will never find the perfect house, but you may certainly find the perfect house for you. For these reasons, it is absolutely essential that your investments are inspected thoroughly by a licensed professional. The sale of property is always negotiable, and a proper third-party inspection is a tenant of the deal that you’ll want to remain always firm upon. Put it in writing, and get it signed. Leave nothing to chance.
Here are a few things to consider:
If there is wood in or on the property, you may need a separate termite and pest inspection of the premises. General home inspections focus primarily on structural and mechanical features; they don’t typically check for bugs. Here again is an opportunity to get to know your inspector. Termites, carpenter ants, mice and other bugs can severely weaken walls, floors, attics and shelving. They can chew through wiring and cause electrical problems.
Professional inspectors will likely begin at the foundation, searching for major cracks, level ground, and/or evidence of water damage (i.e. water stains, mold, mildew, and mineral deposits). Some inspectors will also check for the presence of radon gas concentrations.
The house is examined as a structural whole; angles and joints and frames must meet at proper locations to ensure a solid foundation. Plumbing and electrical systems are inspected for damage, wear, and to be certain they conform to industry specifications. Pipes are checked for leaks, rust, lead, and other chemicals. In addition, some inspectors measure flow-rate and water pressure.
It is important to have properly functioning electrical systems. Be weary of faulty wiring, uncovered switches or receptacles, incorrect grounds, inadequate or malfunctioning circuit breakers, or poor-quality GFCI trips (those tiny red buttons in the middle of your outlets, which act as miniature circuit breakers).
Air conditioning and heating systems will be checked for duct leaks, the condition of filters, and adequate capacity and flow. It is also important to ensure that the thermostat is in proper working order.
Attics are checked for proper framing and strength, noting any water leaks or obvious damage. The roof is inspected for tears or holes, loose tiles, weaknesses, and to be certain that vent pipes are sealed properly.
Appliances (i.e. stove and water heater) must comply with standards. If there is a propane or wood-burning stove, these must be checked for physical integrity and proper function.
Carpets should not show signs of inappropriate wear or water damage. All faucets must be tested for leaks.
In addition to these major aspects, your inspector may check a variety of other systems. You’ll receive a detailed report of his or her findings, and as the buyer you may use these defective items as bargaining chips during the negotiation phase. As a seller, this professional inspection may be done before listing, so that problem areas can be given attention before the property reaches the market.
Home inspection can be costly, but a few hundred dollars may well save thousands in the long-run, and there’s something to be said about peace-of-mind.
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About The Author
Paulie Sabol, often called the ‘legal bank robber’ for his real estate financing and bank owned foreclosure investing, is a nationally recognizedreal estate investor trainerand financial thinker. Sabol, has personally completed 100’s of real estate investments, and helps real estate investors learn to make more money with creative investing. Visit his site at http://www.reiunion.com/rei.htmlPhoto: Courtesy of www.HMRInspectionsllc.com
Real Estate Investments and How to Make Them
by: Milt Tanzer
Mistake # 1. Spending thousands of dollars buying books, tapes and attending seminars and then putting all of that information on a bookshelf and never looking at (or using) it.
I’m continually amazed at the number of “would be” investors who have spent a bundle of money attending seminars, getting an education and then never using it to start their investment program. Not only is it a waste of thousand of dollars but it could be the biggest financial mistake you can make.
Mistake # 2. Failure to learn the basics of real estate investing.
The other extreme to Number 1 above, are potential investors who realize real estate is the best way to accumulate wealth and venture into the purchase of properties without knowing the basics of real estate investing. Those investors are almost certain to get into financial trouble.
Mistake # 3. Fear of making a huge financial mistake
We all fear making mistakes, especially a large financial one. If you follow the advice in Number 2 above, you won’t have to worry about making a financial mistake.
Mistake # 4. Not looking at enough properties
Don’t fall in love with the first property you look at. Too many investors buy properties because they “look nice” or they are just to lazy to see what else is currently on the market that may be better. Part of sound real estate investing is in giving yourself a choice so you can select the best one, financially.
Mistake # 5. “A better deal may be just around the corner” syndrome
This is the opposite mistake of Number 4. This investor never starts his or her real estate investment program because they always hope a better deal may be out there somewhere if they just wait...and wait...and wait. 
Mistake # 6. Thinking that real estate investing is strictly a complicated game that only the wealthy can play.
First of all real estate is NOT complicated if you learn how to do it first. Did you know that even professional investors use a simple nine step process to analyze the financial feasibility of an investment property? Here's a brief idea of the nine simple steps they use in analyzing any type or size investment property.
A Basic Financial Property Analysis
1. Scheduled Gross Income (Income if 100% leased) = $ 26,000
2. Less: Allowance for vacancies (5% of Gross Income) -1,300
3. Operating Income before expense & Mtg. Pmts. $ 24,700
4. Less Operating Expenses (Taxes, insurance, utilities,
repairs and maintenance etc.) 40% - 9,846
5. Equals: Operating Income (Income before Mtg. Pmts.) $ 14,854
6. Minus: Mortgage Payments: -12,863
7. Equals Cash Flow 1,991 = 6%
8. Plus: Mortgage Principle Payment +1,697
9. Total Return: $ 3,688 = 10%
There's a lot more to it than that, but you just read the basic nine step procedure most professional investors use when analyzing any income producing investment property.
Mistake # 7. Falling in love with a property
Once you get your feet wet and become a real estate investor, you’ll wonder why you waited so long to begin. Now you’ll face another problem. Many investors fall in love with their property. They have seen how well it is doing, cash flow has been going up each year, and they have fallen in love with their tenants (not literally). Two big mistakes are made here.
First, never fool yourself into thinking your property is doing too well to sell or trade up because your cash flow is considerably higher than when you purchased the property.
The second part of mistake number 7 is getting so friendly with your tenants that you fail to maintain rental standards based on what the market will bear. This greatly hinders your growth potential. .
Mistake # 8. Failure to plan your financial goals
Before you purchase that first property, which, of course, you financially analyzed, determine what you expect from your investments…your financial goals.
It's known as "The 'time vs. money’" concept. The more you have of one the less you need of the other in order to reach your financial goals.
Mistake # 9. Trying to purchase properties that the seller is not motivated to sell
I’ve seen potential buyers continually try to purchase investment properties that are not really on the market. This includes property owners with the attitude that “Sure, it’s for sale… for a price”. Unfortunately the ‘for a price’ part usually means it will make no financial sense for a buyer.
Mistake # 10. Believing you can get rich quick overnight with no money invested of your own.
Getting rich overnight will not happen . . . (regardless of what some of the so called "experts" tell you). It takes some time, effort and knowledge of real estate investing to do it with minimum financial risk.
The important thing to remember is that YOU can do it, too. You can join the millions of investors who create sizable incomes by investing in real estate.
Mistake # 11. No money down investing usually isn’t.
Somewhere, somehow there will be some money required to put a transaction together and make it profitable. It may be closing costs, repairs or upgrading, whatever. But somewhere, some money will be needed. There are ways around this problem without getting into a high risk situation. You may be able to finance every dollar you need, but it can come back to haunt you in the form of mortgage payments you cannot afford to make. Again, learn what you are doing first.
Mistake # 12. Not financially analyzing a potential investment property.
This is the most serious mistake an investor, or potential investor, can make. I've seen a few pros in the business rely on a "worthless and inaccurate" rule of thumb to make a huge financial decision to purchase, with total disregard for how well the property will perform.
Oh, yes, there is one more major mistake many investor make:
Mistake # 13. Thinking it's important to pay off your mortgage as soon as you can because mortgages are a 'necessary evil'.
First of all as a real estate investor, mortgages are good and not a necessary evil. You must learn why this is true. You must learn how, in the right situation, a second or third mortgage can be a good thing.
Second: mortgages are one of the keys to creating wealth in real estate. You must learn how to use financing as one of the keys to creating your own financial estate, without concern for it being "risky".
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About The Author
Milt Tanzer has been a Commercial/Investment real estate broker and investor for over 25 years. Author of 7 books on real estate investing. Gave seminars to both the general public plus Realtor Association meetings for several years. Published by Prentice Hall division of Penguin Putnam.Websites:
http://www.investmentre.com
http://www.realestate-supermarket.com
Photo: Courtesy of www.Squidoo.com
10 Tips for Successful Real Estate Property Investment
by: Rhiannon Williamson
Just because real estate prices seem to have hit a temporary ceiling in many countries around the world, that doesn’t mean that profits from property investments are hard to come by.
Even during a real estate market slowdown, stagnation or depression profits can be made locally and overseas. This article shows you the top ten tips that real estate investors apply to their property portfolio building strategy to ensure success from their investments.
1) Research the curve - the concept of a property market cycle existing is not myth it’s a fact and is generally accepted to be based on a price-income relationship. Check the recent historical price data for properties in the area of the country you’re considering purchasing in and try to determine the overall feel in the market for prices currently. Are prices rising, are prices falling or have they reached a peak. You need to know where the curve of the property market cycle is at in your preferred investment area.
2) Get ahead of the curve – as a basic rule of thumb, professional real estate property investors seek to buy ahead of the curve. If a market is rising they will try and target up and coming areas, areas that are close to locations that have peaked, areas close to locations experiencing redevelopment or investment. These areas will most likely become ‘the next big thing’ and those who by in before the trend will stand to make the most gains. As a market is stagnating or falling many successful investors target areas that enjoyed the best levels of growth, yields and profits very early on in the previous cycle because these areas will most likely be the first areas to become profitable as the cycle begins turning towards positive once more.
3) Know your market – who are you buying property for? Are you buying to let to young executives, purchasing for renovation to resell to a family market or purchasing jet to let real estate for short term rental to holiday makers? Think about your market before you make a purchase. Know what they look for in a property and ensure that is what you are going to be offering them
4) Think further afield – there are emerging real estate property markets around the world where countries’ economies are going from strength to strength, where a growing tourism sector is pushing up demand or where constitutional legislation has been or is about to be changed to allow for foreign freehold ownership of property for example. Look further afield than your own back yard for your next property investment and diversify that real estate portfolio for maximum success.
5) Purchase price – set yourself a budget that will realistically allow you to purchase what you’re looking for and profit from that purchase either through capital gains or rental yield.
6) Entry costs – research fees, charges and all expenses you will incur when you buy your property – they differ from country to country and sometimes even from state to state. In Turkey for example you should add on an additional 5% of the purchase price for all fees, in Spain you will need to factor in an average of 10% and in Germany fees and charges can be in excess of 20%. Know how much you will have to incur and factor this amount into your budget to avoid any nasty surprises and to ensure your investment can become profitable.
7) Capital growth potential – what factors point to the potential profitability of your real estate property investment? If you’re looking overseas at an emerging market, which economic or social indicators exist to suggest that property prices will increase? If you’re buying to let out are there any indications to suggest that demand for rental accommodation will remain strong, increase or even decline? Think about what you want to achieve from your investment and then research and find out whether your expectations are realistic.
8) Exit costs – if you will incur substantial capital gains taxation liability if you sell your property investment for profit, will that render the investment profitless? In Spain a foreign buyer can incur up to 35% capital gains tax, in Turkey on the other hand property sales are capital gains tax free if the underlying real estate has been owned for four or more years.
9) Profit margins – what levels of capital growth can you realistically gain on your property investment or how much rental income can you generate? Work out these facts and then work backwards towards your initial budget to work out your potential profit margins. At all times you have to keep the bigger picture in mind to ensure that your real estate investment has good potential for profit.
10) Think long term – unless you’re buying property off plan and intending to flip it for resale and profit before completion you should view real estate investment as a long term investment. Real estate is a slow to liquidate asset, cash tied up in property is not simple to free up. Take a long term approach to your property portfolio and give your assets time to increase in value before cashing them in for profit.
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About The Author
Rhiannon Williamson is a freelance writer whose articles about property investing and emerging real estate markets have appeared in publications around the world. She is currently working on a brand new property investment resource http://www.amberlamb.com/
Photo: Courtesy of www.ValuePlusAppraisals.com
Rental Property Investment - Finding The Properties
by: Steve Gillman
Rental property investment starts with finding the best deals. To do this, you can increase your odds by finding more deals. Who's more likely to get a cheap apartment building, an investor that looks through the MLS listings and calls it a day, or the one that uses ten resources? Here are those ten:
1. Look in old papers to find "For Rent" ads. Call if they are a few weeks old. The landlord may be ready to sell, especially if he hasn't yet rented the units out.
2. Look up old FSBO ads. Call on two-month-old "For sale By Owner" ads, and if they haven't sold, they may be ready to deal. Owners often give up the effort, but still would love to sell. Help them out!
3. Drive around looking for "For Sale By Owner" signs. Owners often don't want to pay to keep the ad in the paper every week, so you won't see all properties there.
4. Find abandoned properties. That's a pretty clear sign that the owner doesn't want to deal with the property. He might sell cheap.
5. Talk. Let people know you are looking and sometimes the properties will come to you. There are a lot of owners out there who want to sell, but haven't yet listed their property.
6. Talk to bankers. You might get a foreclosed rental property cheaper if you buy it before they list it with a real estate agent.
7. Offer someone a finder's fee. There are people that always seem to hear about the good deals. Have such people coming to you.
8. Eviction notices. If your local papers publish eviction notices, or if you can get the information at the courthouse, it can be useful. A landlord who just went through the procees of evicting tenants is a likely seller.
9. Use the internet. Go to a search engine and enter the type of real estate you are looking for, along with the city you want to invest in. You never know what you might find.
10. Put an ad in the paper. "Looking for rental properties to buy," might be sufficient to generate a few calls.
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About The Author
Steve Gillman has invested in real estate for years. To get a free real estate investing course, and see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com.
Photo: Courtesy of www.Properties4Auction.com
More Return On Equity For Your Investment Property Dollar
by: Cary Losson
Few would deny that real estate is a solid investment. It provides an attractive combination of stability, reliable cash flow, preservation of principal and capital appreciation. However, many investment property owners nearing retirement find themselves in a quandary. They are equity rich, but cash poor, with increases in the value of their property far outpacing income growth. They also are often tied down by the day-to-day issues of property management and, particularly in cities like San Francisco, California, shackled to the constraints of rent (and eviction) control. In fact, San Francisco is home to some of the lowest cash return on equity in the state's real estate marketplace, which is somewhat counter-intuitive given California's ever-booming property market.
The obvious answer is to sell the property and unleash the dormant equity, but that can be problematic. These investors face the reality of prohibitive capital gains taxes and recaptured depreciation, as well as the task of identifying an alternate investment venue; or locating, acquiring and financing suitable replacement property in the time period allowed, taking advantage of tax deferral under IRS code section 1031.
An ideal solution for many investment property owners may be to reinvest the proceeds from the sale of their property and utilize a subsequent 1031 exchange into a tenancy-in-common (TIC) ownership type, also known as co-ownership of real estate (CORE) interest in a suitable replacement property.
1031 exchanges, also known as Starker exchanges or tax-deferred exchanges, permit owners to sell investment property and defer tax payments by reinvesting the proceeds into another investment property (or investment properties). In order to completely defer the payment of tax, among other things, the replacement property must be of equal or greater value and all the equity from the sold property must be reinvested in the new property. The marriage of 1031 exchange and TIC/CORE allows investors not only to defer their capital gains taxes but also to upgrade their investment real estate.
TIC/CORE is a way of sharing ownership of property among two or more persons whereby each tenant holds an undivided interest in the property. Tenants-in-common may own interests of differing sizes. TIC/CORE investors are on the title and considered separate owners of the real estate. They share pro rata in the income, tax benefits and appreciation of the property. Their TIC/CORE interest can be purchased, sold, gifted, bequeathed by will or inherited; and it is subject to property taxes, gift tax, and estate and inheritance taxes in the same manner as any property held in sole ownership. With a TIC/CORE property, each of up to thirty-five investors have the opportunity to own an undivided fractional ownership interest in an investment-grade property, such as an office building, shopping mall, apartment complex or industrial property, costing anywhere from $10 million to $150-plus million.
The benefits of investing in TIC/CORE properties are substantial. Such properties employ professional asset and property management, relieving the investor of day-to-day tenant headaches. More important, investors often receive greater cash flow and overall returns than they had in their previous sole ownership property. Typically, many people receive between 2-3 percent of their equity in their property in rental income. By selling this property and placing the equity into a larger investment-grade property, they can potentially experience annualized cash flow from 6-8 percent, paid monthly, and 12-16 percent overall return on their investment. Also compelling is that TIC/CORE exchange investors can diversify among several property types, and geographic locations through fractionalized ownership, while still enjoying 1031 exchange benefits on each amount. Thus, investors can potentially reduce risk in their overall real estate portfolio.
Investors seeking to exchange for a TIC/CORE property are best advised to work with a financial advisor experienced in 1031 exchanges. Such advisors work closely with top real estate providers, who give the investor access to the best properties available. In addition, many TIC/CORE opportunities have pre-arranged, non-recourse financing in place, which is perfect for investors working within the 1031 exchange time frame. Numerous hours of upfront investigation, evaluation, due diligence and life cycle planning transpires before a property is offered to an investor group. Investors faced with only a 45-day window to identify a suitable replacement property to complete a 1031 exchange can select a suitable project with confidence.
Given the tax deferral, institutional-grade quality of the property, professional property management and pre-arranged, non-recourse financing aspects, a 1031 exchange replacement property structured as tenancy-in-common ownership can be a very wise and profitable solution. It allows the investor to maintain everything they like about real estate (monthly income, preservation of principal, capital appreciation, etc.), while eliminating most of the hassles of property ownership.
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About The Author
Cary Losson is the Founder and President of 1031 Exchange Options. A luminary in the TIC/CORE 1031 exchange marketplace, Mr. Losson is frequently quoted in journals and periodicals concerned with investment property issues and advice. For more resources to assist in your learning: http://www.1031exchangeoptions.com/resources.html
(c) 2005, 1031 Exchange Options. Reprint rights granted so long as the article and by-line are reprinted intact and all links made live. This article is neither an offer to sell nor an offer to buy real estate or securities. There are material risks associated with the ownership of real estate. You must be an accredited investor. Securities offered through Sigma Financial Corporation, Member NASD/SIPC.
Photo: Courtesy of www.EdmontonRealEstateBlog.com
Real Estate Investment – Three Ways To Success
by: Joel Teo
If you ever wondered about the most profitable investment avenue, real estate investment comes out tops. Did you know why? As population rises, demand for services and quality living space is bound to grow. Families would look for residences and business would want more offices. Naturally then, owning a piece of real estate would bring higher returns in the form of rental income and capital appreciation over time to beat inflation.
Before you jump at the friendly next-door real estate agent with dreams of cornering a property in the most glamorous district in the city, do your groundwork well. Here are three simple ways to success with real estate investment.
• Determine your time span and budgetary constraints.
• Do a thorough research on the investment.
• Stay motivated to make real estate investment an ongoing habit. 
The first step in your attempt to invest in property consists of making a realistic estimate about your finances. You need not save up for the entire value of the property. Even if you decide to purchase a mortgage, the lender would first ask for your financial position. So, calculate your present and potential future earnings, deduct living expenses, payment for other debts and outflows for savings. You can find out the sum you would be ready to pay monthly towards home purchase.
You should calculate the probable number of years for which you could invest in real estate. This puts a dollar value on your capacity to invest and removes ambiguity.
The second step is the most crucial and time-consuming. You must perform a detailed study of the trends in the real estate market. A few rules of thumb are:
• Concentrate your search closer to your area or at least within your state.
• Look for growth potential in upcoming areas.
• Personally inspect the property and the area a couple of times before making the decision.
• Consider areas with good infrastructure as these bring higher rentals.
Investing in real estate should not be a one-off affair. You must imagine property as a component of your investment portfolio. Hence, you must remain an active investor. Keep watching the trend and move out of unprofitable areas to more lucrative ones. Do not be disheartened by the occasional losses. With time and experience, you would make better choices.
Real estate investment calls for careful planning and methodical execution. It is the best way to make your hard-earned money multiply faster and easier. If you did your preparation well, it would be impossible to go wrong.
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About The Author
Joel Teo writes on various financial topics relating to arizona estate goodyear investment real. Signup for his free online Real Estate Investing newsletter today and gain access to the “Six Day Real Estate Investment Profits Course” now at http://www.realestateinvestment101.info/Arizona.htmlCopyright © 2006 Joel Teo. All rights reserved.
Photo: Courtesy of www.ConstructionDeal.com
The Racy World of Property Investment
by: Scott James
There has always been a degree of “racy glamour” to the world of property investment. Too often the image has always been portrayed as an industry being handled and managed by “be-suited city types” wheeling and dealing any huge multimillion dollar fortunes.
It doesn't really matter what your perception of property development he is, the fact is that if you can time it correctly, manage it properly it's a very useful tool in any investment portfolio.
Investing in residential property has become well and truly established in recent years. Volatile share and bond markets have simply underlined the inherent strengths in bricks and mortar for long-term investments.
Few can have failed to notice the growth in residential property investment over the past decade. There have been many contributing factors behind this, not least the advent of buy-to-let finance offered by banks, the increased volatility in equities markets that has seen supposed blue chip names fall from grace and of course the significant returns from residential property over the pasta for 30 years.
The great majority of people are now looking to own an investment property as part of a balanced and well diversified portfolio. Private bankers and IFA’s have tended to bypass the residential sector, leaving their clients to deal with this themselves.
If you were to ask most people what their concept of property investment was I wouldn’t be surprised to see the response's comeback in much the sort of vein as “well, buy a flat or a house, do it up and then sell it on, make a profit and reinvest”. This as an approach might be simplistic but it's not too far from the truth and if followed to a limited degree in theory should lead to success.
However their comes a time as in any business or industry that you move out of the shallows into slightly deeper waters on this point you really do need to know what you're doing or you need to get in the services of experts.
This is the point in the entire process way you start to consider issues like gearing and borrowing funds to help increase the asset base of your portfolio thereby actually giving you a greater return on your initial capital. It is this sort of concept that differentiates a part time player from the professional who read he does understand what they're doing.
Only when you start to look a property like this do you really stand a chance of making regular sizable returns on your hard earned money and giving your self a fighting chance to actually make a profit so that you can reinvest and earn more. If you are going to be remotely involved in property beyond buying renovating and selling then you need to consider issues like ongoing property management and tenancy agreements. Not only do you need to consider these issues you need to understand them properly as well.
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About The Author
Scott James writes regularly on Finance issues and more on the above can be found at http://lifeafterbankruptcy.us/afterbankruptcy/ and http://uptoyoureyesinit.com/debt/Photo: Courtesy of www.ArjaniHomes.com
Key Factors To Consider When Buying Investment Property
by: Joel Teo
Buying investment property with discretion is perhaps a foolproof way of accruing long-term wealth. With the stock markets being overly volatile the investor is anxious and often seeks haven in real estate, which unequivocally involves less uncertainty than other investment options. While real estate has drooped a bit from its zenith during the late 1980s, astute real estate investments can still deliver significant gains. In general, buying investment property gives you access to three benefits: yield, capital growth, and tax advantage through negative gearing.
Investment properties are also known as Non-Owner Occupied properties. Since every investor looks for high capital growth, buying investment property in a developing area does make sense. Experienced investors state that suburbs located within a 10 km radius of a city’s hub can be regarded as developing areas. It is recommended that you explore the area prior to buying investment property. Ensure that the basic amenities and emergency provisions are easily accessible to potential tenants. This would result in healthy rental returns and minimal vacancy periods, if any.
While buying investment property, you must consider that renting an apartment unit is much easier than renting a separate house. Moreover, the expense of rectifying problems, such as replacing the heating ducts, is shared among the several owners in the apartment.
The locale also plays a crucial role in determining which property to purchase. Properties with a panoramic view are often more desirable than others. Undoubtedly, the rental income from such a property would be huge. But there is no point going overboard and purchasing an expensive property, prior to ensuring that potential tenants can afford renting such a property.
If capital growth is what you look for in an investment property, then seek a property that can be sold quickly. Augmented properties, such as a unit with a balcony, garage or laundry, are rather alluring and can be sold with ease.
While buying investment property with the key intent of renting it, you must bear in mind that there might be periods when the property is unoccupied, either because of repairs or lack of tenants. Therefore, you must have a contingency plan for such vacancy periods.
Property investment might not seem all hunky-dory during the initial few years. But after a few years of holding a property, you might hopefully see yourself from being negatively geared to being either neutrally geared or positively geared. That is, your returns would be higher than your operating expenses. This is because the rental income would increase on a gradual basis, keeping pace with the market sentiments. Over time, you would also generate extra capital in your investment property.
On the whole, buying investment property can be a profitable venture if it’s done astutely.
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About The Author
Joel Teo writes on various financial topics relating to Ahwatukee Real Estate Investment. Signup for his free online Real Estate Investing newsletter today and gain access to the “Six Day Real Estate Investment Profits Course” now at http://www.realestateinvestment101.info/Ahwatukee.html.Copyright © 2006 Joel Teo. All rights reserved.
Photo: Courtesy of www.RomaniaReport.com
Investment Property Portfolios - 6 Key Strategies for a Smart Loan
by: Brian Long
A booming market for buy-to-let and investment property portfolios has created the need for new types of mortgages and investment property loan facilities. Securing finance for buy to let and holiday rental properties classed as an “investment property loan”, has never been easier and many of the main lenders have transformed their lending criteria to support property entrepreneurs.
Historically lenders were reluctant to support property investors unless they had serious investment equity ranging from 25-40% of a given properties value. The latest range of financial offerings, are now more in-line with existing household mortgages where buy to let loans are available for up to 90% of the value of the property. The criteria for lending, depends very much on the anticipated yields for the property and to some degree on solid business plans and logic that reflect capital growth in the investment. With a myriad of product offerings available it maybe difficult for a prospective property investor to determine what constitutes a good offer from a financial institution.
The best investment property lenders will look and consider 6 key elements in their risk assessment. So it is very important that you as the proposer understand clearly and prepare in advance a plan that accurately presents your facts in order to pitch smartly to get the finance you need.
6 key Investment Property Loan points
Equity available – Know what you have in terms of tangible equity in your home, other investments in assets, and liquidity. Use this valuable information to form the basis of calculating your security to finance the investment plan. This ensures to the lender that you have a sound knowledge of your strategy in investing and you have a good consideration in managing your risk.
Interest Rate Percentages – It is generally anticipated that the higher the investment deposit the better the mortgage rate. Buy-to-let mortgages rarely attract the discounts that home mortgages attain. However interest rate benefits are gained if you are prepared to put up front 20 – 25% of the loan value. Try and avoid low deposits as the rates for larger deposits will be more attractive both in the short-term overhead reduction and long-term gain.
Current debts – Ideally all outstanding mortgage and loan liabilities or commitments should be understood and declared when requesting the finance. This will determine the maximum loan available to you for your investment project. Ideally this should be considered in advance of any property speculation or viewing of proposed properties. You may also find through this process that it presents an excellent opportunity to consolidate current finance and reduce overheads through the consolidation process.
Current Income or Salary – Lenders will often consider salary and income within the mix of calculating repayments. Multiples of salary are often considered along with the yields or estimated monthly rental incomes from the property portfolio. Important to the property investment will be the current state of the property and whether the property requires investment in refurbishment or modification to enable tenants or renters to occupy.
Tax liability Reduction – You can often save money by offsetting your mortgage payments, maintenance costs and agents fees against rental income. This will ultimately reduce tax liabilities against any profits made in rental and capital growth.
Insure properly – Accidental damage caused by renters or tenants does occur as does general wear and tear. So, make sure that you invest in adequate insurance and don’t let these costly overheads affect your profits. There are specialized landlord and investment property insurers who will cover your property for these eventualities and once again these fees should be tax-deductable.
Summary:
Investing in a property portfolio can be a lucrative venture provided that you are prepared and you understand and manage your risks. Lenders will look for good credible knowledge of the investment and will make assessments based on the six points raised earlier. An ill-conceived plan and approach will unlikely attract the finance desired from leading financial institutions. Alternative sources of finance may be available to you, although you should expect to pay significantly higher costs in terms of interest payments set-up fees and management costs. If the numbers don’t add up in the plan the leading lenders will not support your venture. If this is the case then veer towards prudence and carefully rethink the 6 key steps to a smart loan.
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About The Author
Brian Long is the the author of numerous article. He has an MBA and writes about various finance related topics. For more information or to find a investment loan property Holiday Home Loan Online, Investment Property Loan, Home Building Loan, Business Investment Loan, visit (Second Home Loans). http://www.2ndhomeloans.co.uk.Photo: Courtesy of www.smh.com.au "Invest in the Best" article by
Real Estate Investment - Still a Great Option for the Long Term Investor
by: Matthew Honsberger
Investing in Real Estate is a great Addition to any portfolio, but what is the best way to do it? There are a number of different options, and we will go through some of them here.
The first one, and the one that seems to get the most attention these days is the "Flip". With the emergence of shows like "The Big Flip", and "Flip This House", this Buy, Renovate and Resell strategy is the 'sexy' option for most real estate investors right now. However, there are a few things to consider before you go about this. The first thing to think about, of course, is where are you going to find the property that is priced well for the flip.
There are a few options for investors - the first of which is to contact a good Real Estate Agent and have them scan all listings for you for any that are undervalued, priced as is, owned by the bank or foreclosure company, or any other good opportunities that might be on the market. Your Real Estate Agent is your best friend in this respect, as they will be very motivated to find you the best property, and will be very vigilant, if for no other reason than they know you will be reselling the property at some point pretty soon!
When looking for Properties to Flip in your area, remember that the same rules apply as to your own home - the first three things you should look for is Location, Location, Location! Properties that are in Downtown Areas are often the easiest to resell, however, they are often more expensive than more suburban properties, so that will eat into profit margins. Look for houses on popular streets, in good neighbourhoods. If you are buying into a worse neighbourhood, make sure you are factoring that into your price of purchase, and projected resale.
The other Key factor to the Flip, is that you must ensure that you don't price yourself out of the neighbourhood. For Example, no matter how nice you make your small bungalow in an area of starter homes, Don't expect to resell it for 50% more than anything else in the area! Ensure that your renovations don't bring the price too high. Finally, Understand that the higher price bracket you try to flip, the longer it is going to take to resell, and the higher your materials costs will be. You need to consider all of this and much more before considering the flip.
The other main strategy that you can use to add to your investment portfolio in the real estate world is the rental property. Rental Properties offer two different qualities to your portfolio - income and capital gain.
Your rental property can offer you a monthly income over and above your monthly outlay of expenses (mortgage, utilities and taxes). Even if your rental property doesn't offer you a huge (or any) monthly income, remember, you are also earning a capital gain on the property, as it is very likely to increase in value... just like your personal home is.
All of this should be taken into consideration when deciding on a property. However, with Rental property, the most important consideration is always the Tenants that you have. A great looking, well maintained and located property can still be a nightmare if you get a bad set of tenants in their. It is important to do stringent interviews, check references and draft a strong lease agreement. You should also familiarize yourself with the Nova Scotia Tenancy Act. Finally, you need to decide what kind of rental property you are going to run. Do you want to rent to students? Young Professionals? High or Low Income? Students offer payment by room, which is often higher than you could command for entire flats, but you have to consider that they will likely not care for the building very well, and might not have the rent each month. Additionally, you have the concern of them bailing out on you once school ends for the year.
Young Professionals will often be very easy to deal with, will pay their rent on time, but will also be very astute about how much they will pay, and are likely to be there for only a short period of time. Your Rental portfolio must always account for at least a 5% vacancy rate (in the good times), and must still generate money for you with that in the equation.
Like I say, in both of these cases, your real estate agent can be your best friend, and you should seek out one that you feel can be an informative and trusted advisor. They will work in conjuction with your financial planner as well, to determine what the best course of action for you is. As always, you should feel comfortable with whatever investment you make!
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About The Author
Matt Honsberger is a Licensed Real Estate Agent in the heart of maritime Canada - Halifax, Nova Scotia, and the designer of http://www.homesinhrm.com.Photo: Courtesy of www.ProRealEstateHomes.com
Real Estate and Your Retirement
by: John Harris
Many people are looking for ways to increase their retirement income. For most of these individuals, their homes are the greatest asset. A large section of the aging population has failed to plan effectively in order to have sufficient savings at retirement. They now are looking to their real estate to supplement their retirement income.
Real estate values are very unpredictable, especially now with the decrease in the real estate bubble. Prices are falling in some cities and flattening in others. It will take some planning to get the most from selling your real estate to supplement your retirement.
Be Realistic. To plan effectively, you must be realistic about the price you may get for your home. Real estate is an up and down market, so you should assume a traditional real estate market for valuating your home, with gains in value equal to the inflation rate. At retirement, you will have the same purchasing power you currently have. If gains in real estate values are better than the inflation rate, then you will have more. Just don’t count on it.
Get the Most from Your Real Estate. People used
to work hard to pay off their mortgages for homes they planned to raise their children in and retire. Since 1989, the number of people 65 and older with mortgage debt has nearly tripled, adjusting for inflation. Making payments on real estate in retirement years will deplete your savings and retirement income faster than any other expenditure.
There are three reasons to pay off your real estate mortgage — (1) decrease expenditures in your retirement years, (2) use the mortgage interest rate that you will save to increase your retirement savings, and (3) build more equity, in case you need it as income on which to live later. Paying off your mortgage is a good thing to do, regardless of what the real estate market is doing.
Downsize Your Home. If you are living in a home that is larger than what you need, do not hold on to it for sentimental reasons. Selling the larger home for a smaller one can: (1) give you a smaller mortgage payment than you currently have, or (2) purchase a smaller home outright with no mortgage. It also means less physical upkeep by you, as well as less maintenance and repair costs in the future during retirement. Please keep in mind that there will be selling, moving and new home renovation costs that must be deducted from the sale proceeds.
Sell the Extra Real Estate. If you have a second home or vacation real estate that will not be your retirement residence, you may wish to sell this extra real estate now, putting the sale proceeds into your retirement savings. You can put the mortgage and annual upkeep payments for this property into your retirement savings, too.
Reverse Mortgages. Though these products have been around for some time, we are hearing a lot about them lately. Such mortgages give you 50 percent or more of your home’s value with no mortgage payments, which are collected by the lender at your death or if you sell the real estate.
Beware! Reverse mortgages should be used only as a last-ditch effort at survival. The interest and fees added to your mortgage debt can be very costly. If you must consider a reverse mortgage, here are a few smart tips:
• There are only a few reverse mortgage products now on the market, but others are coming soon. So, wait two or three years to garner more options and possibly better products.
• You must be 62 to qualify for a reverse mortgage loan, but wait as long as possible to take such a loan. The younger you are, the smaller the loan and higher the cost over time.
• Check out all of the products on the market and get independent financial counseling on the best one for you. They may look the same upfront, but the number of years and the loan value differ greatly between products, as well as the costs over time.
• Do not buy into the hype! Mortgage brokers receive a large commission on these products. If you feel you are being pushed in this direction, check out other lenders.
• Plan ahead. If you move and sell your real estate, the lender receives all that is due on the reverse mortgage from the sale proceeds. This could actually leave you in a worse financial state.
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About The Author
John Harris is an expert researcher and writer on real estate topics such as economics, credit improvement tips, home selling advice and home buying preparations. For more on San Diego Homes for Sale visit http://www.twtrealestate.com.Photo: Courtesy of www.EuropeanTop.com
Smart Real Estate Investing Tips
by: Ben Euporian
Real estate investing is a topic that many people wonder about. The earning potential of a smart investor is extremely high, because unlike nearly every other type of investment, real estate does not typically decrease in value. When you are looking for a way to ensure your security for the future, or to build a retirement portfolio, real estate is a good vehicle to use. Here are some things that you might want to know about real estate investing…
- Work with a mortgage broker. When you are considering financing options for the purchase of your investment property, contact a mortgage broker to see if he can help you to find financing that is the most advantageous for you. Shop around, and talk to several different brokers to get a feel for experience and access.
- Don’t pass over properties that you may be able to resell to other investors. Sometimes it is a good idea to purchase a property that is an excellent value simply because it is a property that is attractive to other investors. Keep in mind that when you purchase a property that is not what you are looking for or one that requires extensive work, it may end up being a long term investment. However, when someone who specializes in rehabbing comes along you are likely to make a substantial commission on the sale.
- Research potential properties before purchasing them. When buying a rental property, there are several key features that you should be looking for. The first is sustainability. Is the property in solid condition and is it going to stay that way with minimal upkeep? The second is the location. Yes, location is extremely important for most rental properties. You need to ensure that your tenants can get to where they need to go and that the property is near commonly used retailers and service providers. The third is the average income of the area. This is different from physical location, because you should keep in mind that a high rent area is definitely a better location than a low rent area. And, in high rent areas location is often less of a concern than in low rent areas.
- Start by purchasing a home of your own. If you are not already a homeowner, it is probably a good idea to purchase a home before you purchase an investment property. There are several reasons, but perhaps the most important is that you will learn the process of purchasing a property by actually buying one. It is not unusual for investors to turn their first home into their first investment property, because the property and the market become familiar entities.
- Let potential home sellers know you’re looking to buy. One way to find hidden investment properties is to distribute flyers around a neighborhood in which you would like to buy. Consider having someone drop them door to door. A thousand flyers will only cost you around fifty dollars, and you never know who might give you a call to discuss or point you in the direction of a property. And, much like business cards, you never know who is going to see your contact information. This is an excellent outreach technique when you would like to get your name out there and to find properties that meet your criteria.
- Consider living in your own rental property. A good strategy to consider when you are looking to purchase an investment property is purchasing a multi-unit property and becoming an occupant. The advantages include low cost living, because the other rents coming in should cover a good portion of the mortgage payments, higher deductions at the end of the year and the ability to stay current on maintenance.
- Find a great attorney. Before you become involved in the purchase of an investment property, you should form a relationship with a real estate attorney who is familiar with situations similar to yours. This is especially true if you are attempting to purchase a property with non-conventional financing, because an attorney will help you to ensure that you are making good decisions in terms of your investment.
- Know exactly what you’re getting in to. If you are considering purchasing a rental property with existing tenants, it is imperative that you have access to all tenant records prior to signing a purchase agreement. Otherwise, you may be inheriting another landlord’s problem. Keep in mind that you will most likely not be able to increase the rent amounts after purchasing an occupied property for at least the duration of the existing lease.
Hopefully, the information presented here has given you new insight into the world of real estate investing. Our intention is that you can now take this information and put it into play in your own investment plan. Careful planning is the first step to financial freedom, and real estate is an excellent vehicle for carrying out the plan.
Ben Euporian makes it easy to learn from today's real estate investors. For details, visit this site now: http://www.easyrealestateinvesting.info/
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About The Author
Ben Euporian provides information on a wide range of topics.Photo: Courtesy of www.CEOConsultant.com
