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Archive for the ‘Investment Property’ Category

Commercial Property Versus Residential Property

March 17th, 2010

While most small investors tend to go straight to residential property when wanting to make some kind of real estate investment – probably because they are more familiar with the market – sometimes commercial property might be able to provide a better return. Consider these advantages and disadvantages of commercial and residential properties for investors:

Commercial properties tend to have much longer leases – perhaps even as long as ten or twenty years – whereas residential properties are likely to lease for just one year or less. This kind of stability can be a great asset.
Banks are less likely to lend you money easily for a commercial property because it’s more complicated – so if your credit is not too great, investing in residential property might prove easier.
Once you have tenants in a commercial property, you can be fairly sure they will take excellent care of the property because it is the front for their business – if it looks bad, it’s bad for business. Residential tenants are not always so careful.
It can be a lot more difficult to find tenants for a commercial property, because of course the market of people seeking it is considerably smaller.

Beware Cheap Investment Property Options

March 15th, 2010

If you are in the market for an investment property, then naturally your ears will prick up if you hear or see details of a potential investment property that seems particularly cheap or good value. However, don’t go jumping in to buy it without consider a few important points first. There might be a reason that it’s cheap, the kind of reason that will damage its potential as a good investment for you. Check these points:

Something unusual might be happening in the area where the property is located – for example, a new highway is about to be built right behind it, the zoning regulations are changing, or a power plant will be built across the street. Get detailed local information before you make a decision.
If you are thinking of buying in another country – where property is often cheaper – there may be pitfalls that will make your investment not as worthwhile as you hope. Check, for example, the tax laws, ownership laws, the procedure for selling the property later, and so on.
There might be some hidden damage or maintenance needed on the property. For this reason, it is always good to have a building inspection carried out; if this uncovers the fact that the roof needs to be replaced, then you know straight away why the property’s selling price seems like a bargain.

5 Ways to Increase Property Value

March 12th, 2010

Whether you’re a property manager and want to increase the property value to draw a higher class of tenants, or if you’re a homeowner and just want to increase your home’s value for a future resale, the following five tips can help you increase your property value.

Storage

Storage is a key issue for renters, home buyers and homeowners. Improve the storage options on your property by adding more, cleaning them up, or adding compartments that make storage easier.

Make Repairs

Too many homeowners and landlords ignore little repairs and let them slide as they’re not essential but this habit should be avoided and all repairs should be made as promptly as possible.

Curb Appeal

Curb appeal is always essential, make sure your home looks good from the road, whether it’s just a simply lawn cutting or something more complex like intricate landscaping, every home looks better when the lawn and exterior is well cared for.

Safety

Take additional safety steps by adding home security, improved locks, motion detectors and improved lighting.

Clean

Not the typical cleaning where you dust a little and run a vacuum once a week, but thorough regular cleaning will keep everything in the house looking its best and in optimal working order.

Find that Down Payment

February 23rd, 2010

No down payment loans were available a few years ago, but after the housing crash those loans have all but disappeared from the market. Today you’ll probably have to come up with a down payment to prove to the lender that you are serious and do have some finances on your side.

Begin Saving

One way to come up with a down payment is the good old fashioned way of saving. Tuck aside every spare dollar that you can. You’ll need some spare cash after the house is purchased too so this is a good habit to establish.

Borrow from Savings

If you have money tucked away in stocks, a 401K plan or another retirement plan you may want to zap those funds and use them as your down payment.

Public Programs

Look for public programs or governmental assistance that is set up to help homeowners come up with a down payment. There are a number of different programs and you might be surprised at what you qualify for.

Putting up a sizeable down payment means you can borrow less money for the home, you will get a lower interest rate, more mortgage lenders may want your business, you’ll pay less mortgage insurance, and you may be able to totally avoid PMI payments.

photo credit:?faungg

Raise the Rent or Keep A Tenant?

February 17th, 2010

If you’re self-managing your own rental property, or your managing agent has said you should consider raising the rent, there’s an important point you should think about before you just see the dollar signs of more rental income being paid into your account. Unless your tenant is leaving, think twice!

When you have a suitable tenant in your property, and there is no sign that they will be leaving any time soon, it is often not worth raising the rent they have to pay. Doing so can be a catalyst for them leaving, and then the amount of income you gained from your rent increase will be eaten up by the costs of changing a tenant. Even if you are managing the property yourself, there are always costs when you change a tenant, even if it is just the lost days or weeks of rent, and the cost of advertising. For example, if you raise the rent by $10 a week, but then your tenant leaves your place empty for even just one week, think about how many weeks it will take to recoup this lost rent.

Take the time to consider your options before you increase the rent. Sometimes getting more money one week means you might get less the next.

Avoid Real Estate Mistakes

February 15th, 2010

Investing in real estate can be an exciting venture, whether you’re looking to make a mint by flipping houses or if you’re more practical and just want to buy a home for you and your family. But there are also some pitfalls to home ownership, although some of them can be avoided by steering clear of the mistakes listed below.

Real Estate Pipe Dreams

It’s the get rich quick real estate dream that will probably never come true. Real estate is typically a good long term investment. Most people shouldn’t think of real estate as anything but a long term venture.

Paying Too Much

Everyone is looking for a good price when buying a home but some people still pay too much. Learn about the neighborhood, the value of the home and its amenities. Break down the investment as you would a major purchase to make sure you’re getting what you’re paying for.

Falling in Love

Yes you want to love the home you live in but you don’t want your emotions to control your purchase decisions. Try to be as clinical as possible and treat the purchase portion of the deal as a business venture. After that you can let your emotions run wild.

By avoiding the common mistakes above you’re more likely to find a great deal and a home or investment that works for you.

Stay Away from Get Rich Quick Real Estate

February 12th, 2010

There is something about those late night commercials and get rich schemes that is appealing but be wary because they’re just as big of a scam now as they were in the past. Sure the real estate market has changed and it’s easier to find a great deal but the economy isn’t right for many and buying any real estate may be too financially taxing.

Before you buy the sales pitch and toss well earned money at these real estate gurus, remember that few of them (if any) can actually back up their claims. And even if the pitch isn’t entirely a scam, it’s definitely not a no effort, immediate way to roll in the dough.

Buying real estate is typically a good investment, but few people have the time, money and ability to purchase more than one or two homes. Then there is also the time involved with real estate investments. They don’t immediately appreciate over night, typically it takes a long time for real estate to jump in value and quite often you’ll need to make improvements to the property to keep with the times. At the very least there will be maintenance that will drain your finances.

If you’re interested in investing in real estate there are ways to make money, you can make substantial money in fact, but you’re going to have to be willing to invest time learning about the business and the area as well as the property itself and you’ll have to have a significant amount of money to invest in the initial purchase and maintenance.

Foreclosed Homes as Rental Property

February 5th, 2010

With so many foreclosed homes on the rental market it’s easy to imagine picking up a property or two at a deep discount and turn it into a money making rental unit. But it’s not that simple, there are some things to consider.

Location

Like all home purchases, location is key. If you’re looking to get quality renters you have to be in a location that they want to be in. It’s not a deal if you can’t get a renter.

Bank or Homeowner

Will you be buying the home from a bank or from the homeowner? If the home has already been foreclosed upon then you’ll probably have to deal with the bank. If it hasn’t quite been foreclosed yet you might be able to deal with the homeowner, and this can be an ideal situation.

Inspect the Home

Do as much due diligence as possible inspecting the home, even chat with neighbors to find out about the owner’s habits. People that have foreclosed homes often do not put the care and pride into them as other homeowners.

Tenants

Often landlords become overwhelmed by economic crises, if the current homeowner is a landlord then there’s a good chance there are already tenants. Learn everything you can about their lease and if you’ll still have to abide by it.

Buying a foreclosed home as an investment can be a lucrative idea as long as you do your homework and make sure it’s a sound investment.

5 Tips for First Time Homebuyers

February 2nd, 2010

Buying a home is a very exciting and equally stressful experience. Going into the process knowing as much as you can about the business and the game can help you get the best deal and the property you want. The following five tips will help you buy your first home.

Do Your Research

Learn the neighborhood and the value of surrounding homes. This information is available through several different online locations, from sites like Zillow.com with comparative home values and local police blotters and predator websites that tell you which areas are more desirable.

Put on Your Poker Face

This is where a little game play comes into the process, don’t let anyone know you’re head over heels in love with the property and will pay just about anything, because if you do then you’ll end up paying top dollar. Keep your emotions to yourself.

Waiting Game

Another aspect of real estate is knowing that values wax and wane and being wise enough to time those trends to get the most bang for your buck.

Understand the Paperwork

Most people rely on a realtor and/or a real estate attorney that will help you wade through the enormous piles of paperwork. Whichever way you go make sure you understand everything that comes your way, and more specifically, everything you sign.

Patience

So much of the home buying process involves waiting and the better you are at waiting the better deal you’ll get and oftentimes you’ll find a better home if you wait and shop carefully.

photo credit:?army.arch

Investment Properties should be Fun and Profitable

January 29th, 2010

The first thing most people think about when they hear the phrase ?investment properties? is money. In other words, they are buying this type of real estate so they can profit either now or in the future. While there is nothing wrong with this, keep in mind that getting involved with investment properties should also be a lot of fun. If you can combine fun and profitability it is safe to say that you will feel good about your investment.

What is fun about investing in real estate? For some, the fun part of investing is when they see how much money they are making. This is what drives them, day after day. While you don?t want to hang your hat on this, it is definitely something to consider.

Some investors find it fun to buy homes, fix them up, and see their hard work payoff in the end. Is this something that excites you? Even if you are just learning, it can be fun to get involved in this manner.

A business venture is always more satisfying when you are having fun. This does not mean that every last detail of investing in real estate will be exciting, but you will find that keeping a smile on your face will make the experience much more enjoyable.