Archive for the ‘Real Estate’ Category
The Advantages of Home Ownership
June 24th, 2009 | 
Author: The Advantages of Home Ownership
Buying a Home is at the heart of the ?American Dream?. It can bring happiness and provide a solid foundation for you and your family. It has also proven to be a wise investment in recent years. It has many benefits, but the following three in particular ?
Tax Breaks
When compared to other investments, few can generate the healthy and long lasting tax breaks that home ownership does. When you become a homeowner, there may be tax breaks that you can take advantage of that renters and non-homeowners cannot, the mortgage interest deduction being just one of them. In addition, the deduction of your real estate tax on your federal income tax return is a common practice. Some homeowners choose to use their homes equity to obtain Home Equity Lines of Credit (HELOC) or home equity loans. Interest on these loans may also be tax deductible. With investment real estate, additional tax advantages include the deduction of depreciation and other expenses. With proper planning you may receive tax advantages that last a lifetime. As always, consult with your own tax advisor as to the specific benefits of home ownership that apply to you.
Equity
A home is an investment that can, and usually does, increase in value over time. In some markets, home values have been rising dramatically in recent years (California, Florida, Nevada, Arizona, etc.). In other markets the rise has been more slow and steady.
In addition, you can use your own hard work to make improvements that will increase the value of your home. Each improvement that you make will add to the overall value of your home and your way of living.
As the value of your home increases, and the amount of your mortgage shrinks, you build equity. That is, the money that would be left over if you sold your home and paid off the mortgage. As mentioned above, you can borrow against this equity should the need arise. It?s almost like a savings account that you live in.
Community
Moving into a home gives you a chance to meet new people, get involved in your community, patronize local merchants, and shape your new neighborhood. It?s a way to put down roots and invest in your town. Home ownership provides a sense of permanence and a solid foundation for our lives, and the lives of our children.
Buying a home may be the single, largest investment you will make in your life. But there are so many benefits, some tangible and some emotional. If you are paying rent year after year you are missing out on the advantages mentioned above. Maybe now is the time for you to take the plunge and buy a home, condominium or townhouse and experience this part of the ?American Dream?. Choose a Realtor and get going today.
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Tenant Quality Affects Real Estate Value
Tenant Quality Affects Real Estate Value
I was looking through one of my Valuation Reports the other day, and found a nice quote which demonstrates how valuers evaluate commercial real estate.
“Well located suburban properties, securely leased to national tenants, with modern building improvements, represent prime property investments and sell on yields of between 6.5%PRCTG% and 8.0%PRCTG%…
Properties that do not possess all of these attributes but have reasonable lease covenants of say 5 years, are selling on returns of 8.5%PRCTG% to 9.5%PRCTG%, depending upon location and building quality.”
Now, your mileage will vary – the numbers themselves will change from region to region. But the key is this: a better quality tenant will give you a more valuable property.
You see, it’s all about risk.
With a big, national company, your tenant has a strong financial backing, which means you can have a lot of confidence in your income.
With a smaller tenant, no matter how well-intentioned or business-smart they are, there is inherently more risk. One big lawsuit, one marital split, one fraudulent employee, or some unexpected occurrence, and their business (consequently, your income) is under threat.
People are willing to pay more for a lower risk.
Back to my valuation report. The valuer went on to value my property using a capitalization rate of 8.75%PRCTG%. This reflected the fact that my property had a single, independent operator.
Now, I’ve got a chance to re-lease the building, and I’m going after a national tenant.
Let’s say my property brings in %50,000 per year in rent. Assuming the valuer chooses the mid-point of the respective ranges, here’s the math:
With a lower-quality tenant, my property gets valued with a capitalization rate of 9%PRCTG%, giving it a value of %556,000.
With a national tenant, my property gets valued with a capitalization rate of 7.25%PRCTG%, giving it a value of %690,000.
So, switching from a standard, independent tenant, to a strong national tenant will make me %134,000. Even if the rent doesn’t change at all. That’s a massive difference! Makes it worth acquiring a good tenant, doesn’t it?
Some people are surprised by this. It’s the same land. It’s the same building. Surely the value can’t just change like that? What you have to remember is that a potential buyer doesn’t just buy the land and building. They also acquire the tenant and the lease. That’s why the value can change so significantly overnight.
Tenant Quality Affects Property Value!
The Art of Finding Motivated Sellers
The Art of Finding Motivated Sellers
Such is that of good real estate deals, the good deals are those which are not entirely based on the selling price of the home relative to it’s neighborhood, but of the emotions attached to the owners at the time.
For instance, a homeowner may be undergoing a sea of emotion and may be more eager to sell than others. Scenarios such as foreclosure, divorce, or a death in the family-
though quite unfortunate for the homeowners, in reality provides an opportunity for the investor or homebuyer to purchase a home for much less than it’s true value. Instead of thinking of these opportunities as predatory and exploitative of the homeowner, realize that these individuals are eager to sell their homes to resolve a problem-i.e. in a foreclosure or bankruptcy they will have many fees to pay off and as a result must liquidate their assets in order to stay afloat. In the event of a divorce, assets will also have to be redistributed which will incur large legal fees as well, etc. The reasons vary, and the truth is, investors are not only helping themselves with windfall profits but also helping the homeowners in the aforementioned scenarios get out of a financial rut. It’s a win-win, which is what real estate is all about.
So now that you are convinced that the good deals in real estate depend on identifying these motivated sellers, how do you go about and find them? Your local County Recorder’s office is an indispensable research source. Put on your CSI thinking caps, and start finding leads!
1. Notice Of Default: available publicly, is a notice that banks send out to borrowers notifying them that they are delinquent on their mortgage payments.
2. Notice To Condemn: notifies the homeowner that their property doesn’t meet zoning or building code requirements for that county.
3. Notice Of Divorce: this happens before the actual divorce, and provides a clue that a divorce will happen in the near future.
4. Delinquent Property Taxes: back taxes that the State will try to recoup one way or another.
5. Pending probate court cases where the beneficiaries live out of State: Out of state beneficiaries may be more eager to sell for a fair range since they do not have an interest in managing the property remotely.
6. Out of State owners can usually qualify as a possible lead to a good deal.
7: Rental houses – the idea behind rentals is that some rentals are on the market, because owners may have tried to sell in the past with no success, and are no stuck with a property that they really don’t want. Look for clues such as broken windows, graffiti, and other tell-tale signs that this property is not highly valued by the current owner.
8: For Sale By Owner – some of these homes may not have enough equity to pay a realtor. These are prime candidates for a subject to type deal.
In all cases, approach as a consultant trying to solve a problem they may have. Empathy and listening skills are highly important. Ultimately by demonstrating your sincerity you will be able to also reap benefits from this transaction in the forms of:
1: Lower price offering.
2: Subject to deals
3: Flexible price offering.
4: Low to no down payment required.
So after you find these deals, make sure you close in on it as quickly as possible because competitors are everywhere! But first hire a handyman to evaluate the property in question to see if and how much repairs would be necessary on the property and factor that into the overall costs.
Stop Foreclosure Fast With Help From webuyhousesforcash
Stop Foreclosure Fast With Help From webuyhousesforcash
When a person falls upon financial hard times without their fault at several times and they are behind on mortgage payments they may need some financial help to stop foreclosure on their property. You can stay apart from foreclosure through hard work and not by sitting back and giving up frequently. You have the potential to do some things for stopping the foreclosure because nobody wants the sheriff to deliver a foreclosure notice. In any circumstances do not ignore letters or phone calls concerning your aberrant mortgage payments. Get in touch with the lender and elucidate your situation, as they may be keen to work and know that you are annoying to make things in an exact way so offer you financial help to stop foreclosure. While discarding the property you may get debarred for aid. When you work with the lender and your financial problems are temporary, the lender might be able to help with financial help to stop foreclosure. Often this is a one time loan, bringing your mortgage payments up to date. The upside is that the monthly mortgage payments are smaller but the lender interest rates are higher.
Always be honest and upfront with the lender and they will work with you. After examining your financial position and the reason for your nonpayment, the lender could reduce the monthly payment or suspend payments temporarily. Be honest with your lender and by working with them and examining the options available as it is possible to get the financial help to stop foreclosure. Foreclosures cost lenders money, big money, so it is in their interests to reach a workout with the borrower, either to rescue the mortgage, if this is possible, or to reduce the loss as a result of foreclosure. Don’t be intimidated by the lender or his attorneys. Apprise yourself of your exact financial position. Know your rights as well as options and be honest in your statements. Maintain a written record of all communications.
Read all communications from your lender. Time is your enemy, so the earlier the potential problem is recognized by both parties, the better the chances of a resolution. If you are suffering from financial loss due to the death or loss of a spouse, illness, or unexpected increase in your outgoings, contact the lender and request a loan modification, which effectively changes the terms of the loan to lower the payments. This is a very common process, but you will need to offer evidence about the change in your circumstances. If you feel that you are qualified for a loan modification, and your lender refuses, contact the HUD for advice. Get in touch with your lender and request forbearance if your loss of income is temporary. This means that you may get period which is granted during which your monthly payments are “suspended”, after which you must resume your monthly payments with a partial payment in addition towards the payments you missed.
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Taking Little Steps to Make Your Property Sell Faster
Taking Little Steps to Make Your Property Sell Faster
Ask most coaches in professional sports what sets the best teams from the also ran?s and they will say sweating the details. The same is true for getting a fast offer on your property.
Taking Little Steps to Make Your Property Sell Faster
In many areas of the country, neighborhoods are built in collective groups. Ostensibly, this means there are other properties in your area, maybe a lot, that are very similar to yours. While you may like or dislike this fact, it does raise the issue of how do you make yours standout when trying to sell?
My friend, the key is in the details. There are a wide variety of little steps that can make your property stick out in the mind of potential buyers. Remember the key is to make your property appear better than the others, even if it is just a bit.
Closing or settlement is the time when everything comes together on the transaction. This is when final papers are signed and there is no turning back. Frankly, it can be a bit stressful and nerve wracking. If you are flexible on closing dates and such, then let buyers know in your marketing material and open houses. First time buyers may not appreciate the offer, but experience buyers will.
Buyers often wait with nervous patience for home inspections to be done. While they may love your property, they are usually wise enough to know they need to rely on a professional inspection to make sure the fundamentals are in order. One way to make your property stand out from the crowd is to get your own inspection done by a certified home inspector. You should then include this fact in any marketing materials and hand out copies of the inspection when showing the property. Doing so is a major step in building credibility and making buyers comfortable with your property. It screams that your property is in good shape and has been taken care of.
Taking little steps is the key to moving your property while others in your neighborhood sit around. If you can handle the above, do so and make sure to include the information in both your marketing material and handouts during open houses or showings.
State Real Estate Auctions – Tips for Buyers
State Real Estate Auctions – Tips for Buyers
State real estate auctions sell off real property that has been seized, abandoned, or forfeited. The Department of Treasury has been designated as the state department to handle such auctions. Typically, they conduct 100 auctions a year.
The funds obtained at state real estate auctions help support local and state police and other areas of the city. The placement of a successful bid at a Department of the Treasury auction establishes a legally binding contract between the successful bidder and the Government.
Here are some basic rules and policies:
To be eligible to bid you must be 18 years of age and not an employee of the state.
You cannot be the contractor, subcontractor or vendor or their agent who has access to information about the property.
A bidder registration form must be submitted for approval. If bidding for someone else, the form must be notarized.
Buyer is to inspect property prior to placing a bid.
Changes may be made on the day of the sale.
The Government reserves the right to withdraw from sale any of the property listed.
The buyer understands the property is sold on the ?AS IS? basis.
A lot of rules and regulations govern state real estate auctions, and it is wise if you take the time to research them prior to attempting to attend. Each registered bidder will be issued a bidding number. This is your lifeline to what is important on that day. Don’t loose it.
Most importantly enjoy yourself at a state auction. The properties auctioned off are very valuable and should bring you a good return.
Please visit some of my other site at Real Estate Actions and Government Real Estate Auctions
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Take Credit for Heritage Restorations
Take Credit for Heritage Restorations
For a long time heritage properties suffered from a bum rap. Investors were reluctant to purchase a piece of the past because of the cost of dragging it into the present. Fortunately, in the last few decades, older properties have been rightfully recognized for their beauty and historical value and have become a hot commodity. Yes, there is often work to be done on heritage buildings, but there are also financial incentives for restoring these properties to their former glory. After all, restorations create employment and the finished product is culturally significant, making it a draw for tourism and improving the quality of a neighborhood over all.
In fact, property owners in Maryland can benefit from potential federal, state and local tax credits for improvements and renovations. Maryland is serious about encouraging people to restore historic homes or income-producing buildings. If you don’t live in Maryland don’t worry ? the state credits have no residency requirements, making it an equal opportunity investment opportunity. If you have a heritage property outside of Maryland you may still be eligible for the federal program. With all of these incentives, be sure to check the program requirements before starting any work.
Whether you are a home owner or a long-term lease holder of an income producing certified heritage structure, you can apply for a Federal Rehabilitation Tax Credit of up to 20 per cent of a restoration. If your property has not been certified, you can apply to have it certified or take advantage of the 10 percent credit for non-historic, non-residential buildings put in service before 1936. These credits have been used to revitalize buildings that were seriously dilapidated. They can be applied to all kinds of work on the building including, “architectural and engineering fees, site survey fees, legal expenses, development fees, and other construction-related costs”.
In a further effort to encourage folks to restore heritage properties, the Maryland Historical Trust administers the state Heritage Preservation Tax Credit program, which offers Maryland income tax credits for 20 per cent of the qualified capital costs. These credits can be used towards interior and exterior rehabilitation, certain landscaping projects, plumbing and electrical upgrades, architectural fees and more.
In addition, the Maryland Historical Trust offers low-interest rehabilitation loans to people who use the Heritage Preservation Tax Credit Program. This loan can be used to acquire, restore or rehabilitate property making it easier for you to do more with less.
Within Maryland, many counties and municipalities also offer property tax credits and/or a freeze on tax assessments (for up to ten years) to encourage people to rehabilitate historic buildings. Again, these programs apply to homes and income-producing buildings designated as historic buildings.
Although some (but not all) of these incentives require you to maintain ownership of your property for a time in order to enjoy the full tax benefits, you are significantly increasing both the appeal and the value of your home. When it does come time to sell, you will see the fruits of your labor. In the meantime you can enjoy the beauty of your heritage property, knowing that you have helped preserve a piece of history for future generations to enjoy.
Success of Short Sale Investing
Success of Short Sale Investing
Unbelievable but true ? more than two million citizens of the United States are facing foreclosure due to a missed payment or delay in repayment of there mortgages secured giants their property every year! The phenomenon of property foreclosure is escalating in the United States and more and consequently more people are selling off their homes at lower prices than their actual market value to avoid this unfortunate predicament of real estate foreclosure and seizure of the property by the lender organization. This is providing the real estate investors with magnificent opportunities of buying off property at much reduced prices and selling them at normal industry rates, thereby being able to keep a massive profit margin on each transaction.
The phenomenon is given more impetus by the property short sale option that more and more homeowners are availing these days, which helps them avoid foreclosure and losing home. Since the homeowners can conveniently avoid and overcome foreclosure and the consequent forfeiture of their property by the lender entity, short sale is coming by as a very viable option. Short sale in most cases equips the homeowners with the authority of selling their homes at a rate less than what they owe the lender institution, that is, less than the loan balance, thereby clearing off the mortgage balance at a single go. The homeowner, instead of losing one?s entire property to the bank or the mortgage company, becomes entitled to receive whatever remains excess from the short sale proceedings after paying off to the mortgage company.
This, combined with the bank?s willingness to short sale a property, has contributed towards the excess of short sale properties in the market. The bank, by encouraging short sale, also saves a lot of its effort and money, which otherwise would have been spent on conducting a foreclosure auction, refurbishing the property, finding an investor, and so on and so forth. The two factors have flooded the market with valuable property options, which provides the ideal platform for the US realtors and foreign investors to invest here. As a real estate investor, you can find yourself some good short sale companies, who will assist you in every aspect involved in closing a successful short sale deal.
The short sale experts also offer you assistance in negotiating with the seller party and save you the otherwise involved hassles. You can simply relax and take count of the money the industry can fetch you. All you need to do here is simply contact the best short sale expert company and supply him with all the needed information that will help them negotiate each aspect of the deal. You can initiate with buying some of these properties and see what benefits and profits each of them reaps you in no time at all. The further impetus is provided by the increasing demand of real estate in the United States, which foresees no decline in the recent future.
Possibilities are abundant in real estate in the US and greater are they if the property under consideration is a product of short sale. Massive interests and huge benefits ? this is what the industry believes and this is what you to can get.
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The All Important Real Esate Document
The All Important Real Esate Document
Selling or purchasing a piece of real estate, be it a house, condominium, or an apartment, is probably one of the most important financial transactions a person will conduct in his lifetime. This single purchase is bound to affect the lifestyles of several people for years to come.
Due to the long-term effect a single real estate transaction may have on the buyer and the seller, it is important that all the details pertaining to this transaction be formalized. It is not enough that the dimensions of the land, the purchase price and equipment included in the sale are listed down; the individual obligations of both the seller and the buyer should be itemized as well. All these details should be found in just one document, the Real Estate Sales Agreement.
Legally, a real estate sales agreement is a contract between both the buyer and the seller. This document stipulates all the conditions of the sale, from the technical details of the property, to the chattels that will be thrown in. The agreed upon purchase price should be stated (in words and numerical figures), as well the deposit (earnest money) given, down payment and final remittance. Exact details on how and when the monies will change hands should also be indicated in this document. The real estate sales agreement is considered valid once both parties affix their respective signatures and, should there be a need to include any changes, these should be attached to the main document, as an addendum.
Normally, real estate sales agreements are formulated by real estate agents and / or lawyers. However, a lot of home sellers and home buyers nowadays opt to compose the sales agreements on their own. There are various real estate related websites where one can view, download and even customize all kinds of forms, including the immensely important real estate sales agreement, needed to complete and legalize any real estate transaction.
Online real estate forms can be purchased and downloaded by piece (as needed) or by bulk, the option really depends on the user and payment is also done online, as these sites accept most major credit cards. Once the forms have been downloaded, the contents can be modified and edited to suit and conform to the specific requirements of the user.
In terms of content and format, all the forms found on these real estate websites, most especially the real estate sales agreement, are considered legal and are recognized by local, state and federal agencies. However, even though the developers took great pains to verify the accuracy of their forms, it is still recommended that before the final copy is signed, a rough draft be sent to a lawyer or a real estate agent for their review. Since, the real estate sales agreement is probably the most important of all real estate documents; it is of utmost importance that all the technical information stated is accurate, and that all the necessary conditions and clauses, particularly the terms of payment and possible penalties for non-payment are also clearly outlined.
Ten Tips For Selling Your House
Ten Tips For Selling Your House
One of the biggest mistakes people make when selling a house, is not understanding real estate value. It doesn’t matter at all what you think your home is worth. The value of your home, and any improvements you made, is determined by buyers. What you enjoyed about your house is irrelevant when it’s time to sell it. Think in terms of what other people want, and use some of the following tips.
House Selling Tips
1. Know your market. Find out what other similar houses have sold for, and have those examples ready to show potential buyers.
2. Decide on your minimum price – the price below which you will just not move. Don’t tell your agent what this minimum is, but work with any buyers who make an offer above it.
3. Clean the most visible things first. Buy a new mailbox, perhaps. If buyers fall in love with the house before they even enter it, they’ll forgive a lot of problems.
4. Clean up the neighborhood. If there’s a neighbor who’s yard is a mess, give their kids %10 to pick up the yard. Spend another %20 to put flowers in any common-areas, and buyers will have a better first impression of the neighborhood.
5. If you or your agent aren’t getting many calls, find out why. Is more advertising necessary, or is the price too high? Drop it fast, if price is the problem.
6. Listen to comments of prospects. They will be more objective than you. If you hear several times that the kitchen is dark, get out the white paint.
7. Find out what the average sales time is in your area. If your house is taking longer than average to sell, there is a problem. Usually it’s price.
8. Be sure to ask your real estate agent what they plan to do – before you sign a listing agreement. Write down what he says, and hold him to his promises.
9. If there are any known problems, such as an old roof, get an estimate for repairs. The sellers may want a %7,000 allowance for a new roof – until you show them your %4,000 estimate.
10. Do any improvements that can realisically get you at least a two-to-one return on investment. If %300 to seal the driveway is likely to add %600 to the sales price of the home, do it. Consider first those things that are most visible.
There are dozens of things you can do to sell your house faster, and get a better price. If you don’t have time to do them all, start with the ones that will get the most “bang for your buck.”