Real Estate

You could read a newspaper or a magazine and wind up with claims that commercial real estate is a better investment than residential real estate.

This is true in some situations but not for most property owners. In most real estate investing situations, residential real estate is often the better investment vehicle and equity investment when the alternative is to expect a return on investment in the bank. Banks are more conservative in lending on residential real estate and are often conservative in the amount of leverage they will accept; as a result, residential income-producing properties usually will not go as far as they might on a commercial real estate investment.

Sometimes A Residential Real Estate Investment Is Better Than A Commercial Real Estate Investment

Fortunately, since 1980, residential real estate has soared at an amazing rate while commercial real estate has stalled and in some places has actually begun to decline in value because of the poor management of the property. Much of this increase in value can be attributed to people who had the foresight twenty years ago to purchase homes in areas that would become their most desired locations.

Using an example from a small suburban city, I would like to claim that both the better investment in property in the past and the better return on investment in the present makes the purchase of either residential real estate or investment property in either a form of residential real estate a much better long term strategy than the purchase of commercial property or income-producing properties.

While residential housing has appreciated at a rate of 10% to 20% over the past three decades, commercial real estate, on the other hand, has declined and in some locations is completely gone.

The appreciation on the sale of commercial property is commonly much better than residential real estate when you consider the depreciation factor. You will generally break even on the sale of commercial real estate after 10 years on a moderate to strong appreciation.

When you consider the minimal amount of mortgage you will need to buy residential real estate and the long-term liability on a commercial property is virtually always greater, I would hesitate to commit to the purchase of a commercial real estate in most locations.

In the past when you had a sufficient amount of equity in your primary residence, real estate values could rise at a much greater rate than the increase in housing values. I am not referring to an increase in appreciation provided by the fact that some areas of the country continue to experience a stable or even decline in values.

I am referring to a situation in which you had the equity in your home increasing, thereby dividing the cost in housing by the increase in value of your home, without taxation of the increment in value as income in your pocket.

This situation is to be found in many areas where property values have appreciated at a steady 3 to 5% rate per year. At this rate, it is not uncommon to have investment properties have appraised values equal to or greater than the rental income resulting from those properties.

This 10% to 25% increase in value almost always occurs over a number of years and the heavier-handed influences that leading to this increase are mostly outside of your control.

Let’s look at an example. You own a duplex that is worth $200,000. At the time of this writing, you owe about $150,000 against the property. Then the property goes up 10% in value (5% of the original value) on its own within a few years.

At this same meeting, the boards of pages of your local newspaper are running an article about how the local median price for a home has increased by 20%. You, self-employed, make a living, have excellent credit and plenty of equity on your family home, so why isn’t this a good thing?

Let’s take the increase in the value of your home and divide it by the amount of equity you have in your home. You can’t divide the increase in value by 1.5 since that results in a negative number, so instead, leave it off the aforementioned equation altogether.

$150,000/$200,000 = $4,500

Divide by $200,000Key: It’s $4,500, and if you were to sell this piece of property at current market value you would be paying taxes on that $4,500!

That makes a significant difference in what it costs you annually.

There are some situations in which you might want to sell this piece of property if you want to meet certain specific goals, such as:

• College or higher education. An example would be: A student from your old country would be attending a local university. If you took care in doing your taxes correctly, you should be able to claim a tax deduction for the expense of living and related expenses that are connected with riding the bus to and from the university.
• Transracially relocated.

You have a family and you want to be part of a positive living situation. Usually, you start to nurture your career and all the other qualities that will impact your other life. If you have decided that your current world does not accommodate a safe and sound environment for your children, then perhaps now is a good time to scout neighborhoods for a new home. Choosing to own a house gets you emotionally attached to the space you might live in, but there is much more to consider before you make your decision.

One of the most important factors to consider when scouting for your dream house is its neighborhood. The neighborhood is very important to the safety of your families. Even if you love the house if the neighborhood is unsafe no amount of love can make up for it.

The quality of the neighborhood Or the crime rate in the neighborhood are two very important factors that you need to consider when scouting for one. Of course, you can speed up your hunt if you know where to find them. What you need is information. You can ask your real estate agent to provide you with data on both crime rates and neighborhoods. This way, you do not have to spend a lot of time and effort.

One of the ways where you can get a clear picture when scouting for the neighborhood is to ask for recommendations from your friends and relatives. You can ask your close friends if they live in a neighborhood that you are interested in living in and then try to find them a house that is close to the places you have visited. It is easier to select a neighborhood if you have few contacts with people living there. In fact, it is ideal if you can personally talk to them in order to ask them their opinion on the place.

In finding a house, it is also important to consider the status of the neighborhood. Is it developing or is it on the decline? You can check this by going home at certain hours to neighbors to know if they see anything good in the place. Whether they would like it to go back. Or, is it a truly Sending neighborhood where they can enjoy themselves and live happily ever after.

Buying a house just to find it a lot easier, or you want a place faster, you can hire a private home inspector to do the task for you. However, most of the time the strategy of getting a house in the quickest time possible is not the right one.

Inspecting the house for long will take too much of your time. In fact, it is better to be there in person to decide on things than to let your real estate agent do it for you. Assess the items on your list one at a time. Look for the things that will give you the impression of the neighborhood.

Use your instinct about the neighborhood to aid you in finding one. If you feel unsafe then drive around the neighborhood. Drive at different hours, different days. See how it is as you drive. Is it noisy or quiet? See if there are strange people whom you feel are out to get you or compliment your neighborhood. If you feel like it is close to your house then it is not. Keep in mind that most and all buyers and home buyers will be focusing on the house they will buy, not on the neighborhood or the environment.

Make sure that you will do a home inspection to make sure that there are no hidden defects in the house. You can hire another person to do this as your real estate agent, but you need to pay him its fee. You can do all the home inspections by yourself by hiring a home inspector. Inspecting the house can save you a lot of money, and you do not have to be troubled and involve yourself in a home-buying nightmare. It will cost you time, effort, and sure, money. But for sure it will be worth it. Think about the money you can save in the future, on maintenance and repairs, on having to hire a lawyer to answer some legal problems in the house if ever, and other expenses.

When people want the convenience of living without the hassles of regular homeownership, condo living is the way to go. Condo owners can enjoy a guaranteed sense of security and security in knowing that the building they have purchased is insured against such things as fire and natural disasters, but most importantly, condo owners are required to pay a monthly fee on top of their mortgage rates, thus meaning that they have no home owner’s taxes to pay on their home. No repairs are needed and all expenses are paid by the condo association.

Condo living is popular, especially in areas that are booming and have the promise of urban living within just a few minute’s drive. Many people find that instead of actually moving out of the house that they have lived in, they can actually move into a condo and enjoy city living. Since the summer of 2007, more condos have been sold in the United States than any other type of home, according to the National Association of Realtors.

With recent economic indicators pointing upwards in the future, no wonder out-of-state owners have been rushing to buy condos. With its lower home owner’s taxes, no mortgage fees, and all the other benefits of condo living, there is no wonder why a record number of people are turning to condo living. In less than two years, nearly sixty thousand new units have been sold in the state of Florida alone.

Condo living is more than just a trend that people are choosing; in fact, condos are in a unique position to increase in value and increase in appreciation. After all, not everyone who buys a condo does so just for a place to live; many choose condo living solely as an investment.

Unlike other forms of real estate, condo owners are not required to give up any portion of their condo rights. In other words, if a condo owner wants to relocate, they are entitled to rent or sublet their unit as long as it is not for your use. And if they choose to keep the condo as a rental, they will still be able to claim their condo expenses.

One of the most popular reasons for condo owners to purchase is the lack of maintenance obligations that go with single-family houses. If a condo owner chooses to look after the exterior or yard of his or her condo, it is likely that obligations for maintaining other parts of the house will not occur.

If a single-family property owner is repairing a roof or taking care of plumbing issues, they will often need to hire professional help. A condo owner is not responsible for these maintenance issues.

Another plus for condo owners is that they are surrounded by neighbors who are very close by, if not right down the street. If a problem arises, all it takes is a little call to the condo association to resolve the issue. In case of a noise problem, many condo owners will be able to turn to the condo association, resolve the problem, and pass on the savings back to the condo owner.

Condo owners can also often find their condos are in established and up-and-coming areas, prices are often more reasonable than any home in a traditional neighborhood, and condo fees are typically cheaper. Apart from the financial advantages, many homeowners are also choosing condos because their home is protected by insurance from the same liability coverage that their condo acquired.

With its growing popularity, condo living is the best option for many families and retired couples. With its convenient location and established, up-and-coming neighborhoods, condo living is desirable and attractive right now. So if you’re thinking of adding a little piece of paradise to your life, there’s no reason to wait. Start investigating the possibility of condo living today and you may soon be packing up and moving into one of the many new condos for sale today.

Have you been interested in learning more about real estate investing? Perhaps you’ve seen cable shows centered on flipping homes and seen the numbers. If you want more money but have no interest in adding more hours to your work day, this is a good option. Below you will find useful tips to help you get started in real estate investing.

Do your own research and analyze the real estate market before you invest your money in a property. Investigate as many as 100 individual properties in that area; track your notes with a spreadsheet or database. Things to look at include repair budgets, expected rent, and current prices. This will help you to weed out the bad apples.

You need to become educated in real estate prior to investing. This is crucial since there are so many different strategies to learn when investing in this field. Read every source you can get your hands on; you can’t be too informed.

Go into the meetings that you have with potential investors with a positive mindset, but understand that a negative outcome is possible. Always have a jovial, but businesslike personality to get the people who want to invest to like you. This will go a long way and make your potential investors more comfortable.

Do not invest in any property before having it properly inspected. Certain sellers offer to provide inspections, but they may hire someone who is not impartial. It is best to get an independent person to come and inspect the property to protect your interests.

Think long-term when investing in real estate. While some investors seek to make quick turnovers by buying cheap and flipping within weeks or months, your better bet is a longer view. Look for safe properties where you can park a big sum of money and get investment return via monthly income like rent.

See if there are all of the stores and schools that you’ll need around the real estate that you’re thinking of getting for your family. You don’t want to move to an area where you’re not near anywhere that you need to go to. It would cost you a lot in traveling expenses, so keep that in mind when you move anywhere.

Factor in the ability to rent out the home that you buy when you are projecting what a home is worth. This can help you make thousands during the year from others who live in it. Later, you can resell the property for a larger profit.

Think about making use of a property management firm. Doing so does eat into your profit margin, but there are advantages to this expense. Property management companies can handle repairs and screen potential tenants. This will help save you quite a bit of time so that you can work on other avenues for investment.

Real estate investing can help you feel powerful when handling your money. You can choose the best properties and focus on what makes the best business sense. Use what you learned and start your investing.