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There is a Better Future for Real Estate Investing

Investing in real estate is a good option for anyone who is not sure of their finances in the future. If you have saved a lot of money for the past decades, it is a good decision to put your money in buying real properties. The price of land whether agricultural or commercial continues to increase and with proper management of your money you can always assure of a good future. As the saying goes, “do not put your eggs in one basket”, investing in real estate is a great way to diversify your investment portfolio so that you can have a better chance at a good return on investment. But how much do you know about investing in real estate?

investing in real estate

Investing is a broad subject because it deals with the ownership, purchase, sale and rental of an estate. Whether these are commercial, residential, industrial, or agricultural; they are all covered under estate property. Owning a piece of jewelry or an electronic gadget is not covered by this type of investment. Real estate development is a sub-specialty of estate investment which covers developing land for commercial buildings, subdivisions, condominium buildings, hospitals, cemeteries, housing projects and industrial buildings. The assets that result from this type of investment are generally just called real estate.

Every year thousands of acres of land are developed across the globe as sites for commercial buildings and housing projects with large capital invested by the land owner and estate developer. Millions of dollars have been spent for this investment which is expected to give multiple incomes when the construction is completed or make the land ready for sale or rental. When the buyers and renters are attracted to the property, the estate developer/owner can start reaping the fruit of their labor. More cash inflow is expected to come in as the price of rental for a condominium unit continues to rise with demand, the same goes for apartments and commercial buildings and store areas.

Brokers and agents will benefit from the proceeds of the sale or rental because they are entitled to a commission that would be negotiated before the deal is made. Most the commissions are usually anywhere from 5 to 10 percent. But 10 percent is too high. In fact in some parts of Asia, usually the commission is anywhere from 3 to 5 percent, a heavy cost savings. Although it sounds small, this can add up on a property being sold in millions. 5 percent is certainly enough to cover a broker’s bills and other expenses.

If you know how to deal with clients, dealing with investment can be a lucrative job for you. It is beneficial if you can become a licensed broker so you are guaranteed commissions on deals as well as having the ability to complete real estate sales yourself. Investing in real estate is a good sideline for people who have day job. As such, they can earn great money on top of their existing salary. For as long as your have persuasive skills and the ability to entice your buyer, you are guaranteed to have a good return on your money with real estate investing.

Tips for a First Time Home Buyer

Purchasing your own home is a big life decision, and should never be taken lightly. This is an experience that can be nail-biting and stimulating all at the same time. With that being said, you should always look into a few things before actually deciding to make the plunge. Here are some tips for first time home buyers to create a learning curve and smooth the overall process of buying your first home:
buying a house
1. Examine Your Debt (And Pay It Off!) – Ask any homeowner and most of them will tell you that they spent time saving money to make a down payment on a home rather than paying off debts, which are now causing them to struggle to make their monthly mortgage payment. You don’t want this to be you. So, instead of saving money for the down payment, pay off your debts. At the very least, pay them down significantly, so they won’t be such a burden once you do purchase that new house of yours.

2. Determine What You Can Afford – You need to have a long, hard look at your finances before making any significant purchase, such as a home. You need to also see how much you can borrow from the bank for such a purchase. In addition, you need to determine how much you realistically save for a down payment. When figuring up your down payment, make sure that you’ll have enough left over to cover any closing costs that may be necessary on your part. Keep in mind that your home insurance, mortgage payment and home taxes should not exceed 30% of your home’s gross income.

3. Examine Your Credit Report – It is important that before you purchase a house that you fully examine your credit report to find any discrepancies and have them taken care of immediately. Discrepancies can hurt your credit a little or a lot and it is a chance you aren’t willing to take when you start searching for your dream home.

4. Bad Credit? – Not everyone has perfect credit, but that doesn’t mean you can’t buy a home. There are programs set into place to help those in such a predicament in their lives. These are government insured loans that are provided by the FHA, Federal Housing Administration. With an FHA loan, you may only have to put down around 3.5 percent, which is great for lower income families; however, more and more individuals are being required to put down 10 percent, especially with a credit score lower than 580.

5. Consider Foreclosures – As a general rule, there is nothing at all wrong with a foreclosure. It is simply a home that someone was unable to continue making payments on and the bank took it as their collateral. You can usually purchase these at a discounted rate, but you must act fast! Plus, you might want to make sure your real estate broker specializes in foreclosures, as it will make the process a lot easier.

6. Tax Credit – Be sure to claim that tax credit on next year’s tax return!

Now that you know a little bit about it, start planning and searching for your new home. Don’t expect to come across your dream home on the first day of home searching. It will likely take time, but after all, time is something you have, as you don’t want to rush into anything. Happy home searching!

The Best Home Imporvements for Your Home

The idea of home improvement is one of the first things that come to many homeowners’ minds at the beginning of a new year or even during the holidays. This is because we tend to like the idea of starting over, a new beginning, or freshening things up.
home improvement
However, certain home improvements are worthwhile and some are simply a waste of your hard earned money, or even that mortgage or bank loan you take out to execute them. But what makes a worthwhile home improvement?

Well, the answer is fairly straightforward: something that increases the value of your house. Not only should you be recouping your money when you carry out a home improvement, it should be viewed as an investment, something that repays you at least three times over (and above). And of course, it should improve the overall livability of the home environment. It is only after these two aspects have been examined that you can look at aesthetics.

Suggested Improvements

Protective/Preservation:

This involves improvements that help protect the quality of the house. These include painting, plumbing and drainage systems, shutters and roof work.

Utilities Based Improvements:

Not only does maintaining your utilities keep up the value of the house, it is a great safety measure and also means with your utilities operating smoothly, you have more efficient billing. Look at your heating systems, electrical systems, especially wiring, water systems and of course again, plumbing.

Energy Saving Improvements:

This is an often ignored aspect of houses. They are huge consumers of energy, whether for heating, lighting, cooling or things of that nature. This would be a time to create more skylights, get in French windows, work on the heat conduction system in preparation for harsh winters; all these and others would make the house more energy efficient and save you a ton of money on bills.

Space Creation:

Sometimes a homeowner can find themselves in a house whose space distribution does not exactly agree with their plans or find they need space particularly for storage. One of the most practical steps to remedy this is to build an attic. An attic is convenient and helps free-up space within the livable part of the house, and is thus, a great home improvement idea.

Specialty Rooms:

No one feels like they own a house until they have their own area, especially in a family environment. Apart from this aesthetically pleasing aspect, this trait has its useful side. In an age when a lot of work is brought home from the office or a lot of people live and work in the same home, changing and redesigning some parts of your house into a study, office, studio or recreational area is an ideal, practical and even sometimes income generating way of improving the overall value of your home.

These changes, though not all-encompassing, will keep in line with the principles suggested above and help ensure that your home improvement is worthwhile.

The Smart Way to Get A Mortgage

The current economy and dire predictions of the real estate market to come may frighten prospective buyers from taking that big step into home ownership. But with careful preparation and research, there’s no reason to be afraid when setting out to obtain a home loan.

house mortgage

As with any large purchase, research is the first step to finding and applying for a mortgage. Examine your personal finances and assets, figure out what kind of monthly payment you can afford, not to mention whether you have enough on hand to cover fees, underwriting and closing costs. The majority of lenders require a significant down payment – between five and twenty percent – and you should know ahead of time how to secure that lump sum. Beyond your current financial situation, make sure to contact one or more credit report services to review your credit score and history, making sure to correct any errors right away. Once you’re satisfied that you have the assets and income necessary to maintain your mortgage payments, it’s time to research potential lenders.

Whether it’s through a credit union, broker or direct lender; rates, fees and closing costs determine which loan is best for you. Look into the approval percentages of the lenders you’re interested in, as well as their interest rates. If you go with an adjustable rate rather than fixed, ask how your monthly payments will vary with market fluctuations. Another often overlooked expense is Private Mortgage Insurance. If you apply for a loan that is more than 80% the cost of the property, most lenders will require a monthly insurance payment to protect them in the event you default on the loan. There are limitless online resources for loan shoppers, and www.fdic.gov even offers a shoppers worksheet to help you compare and contrast the details of up to four different loans. Remember, these institutions are fighting for your business. Don’t hesitate to let them know that you’re shopping around for the best rates.

When you’re ready to apply for the loan, ask for a “lock-in” that puts the rate, fees, points and closing costs in writing, protecting you from rate changes throughout the approval process. For the application you’ll need to provide proof of residency, check stubs, bank statements, tax returns and any income from investments you may have. Once you’ve provided the lender with the application they’ll review your credit history, evaluate your ability to pay and perhaps appraise the property. Given the research and due diligence necessary, it can take up to three or four weeks to receive a final decision. Remember, the Equal Credit Opportunity Act protects borrowers from discrimination by lenders due to sex, race, age, religion, national origin, marital status, or income from public assistance. If you suspect your failure to be approved is due to discrimination don’t hesitate to confront the creditor and your state’s Attorney General. However, with hard work and preparation, chances are good that you’re on the road to owning your own property.

 

Five Smart Financial Moves to Begin the New Year!

It’s a new year and with it of course, come some new resolutions on how to improve our way of life. A chief aspect that governs our lifestyles is our finances, and so outlined below are five suggested steps or areas which we need to either initiate, maintain or improve on in that particular regard.

Champagne

Savings

It would surprise many people to discover this but saving is not something that many people do. Like all good things that improve us, for saving to be effective, we need to adopt it as a habit, a mindset of sorts. Deciding that every income we get will be levied by a certain percentage which goes into untouched savings is a great first step. Follow this up with something methodical, for example, installing a standing order on your banking account so that every inflow of income that goes through it has a percentage deducted to a fixed deposit account. You will be impressed at how quickly you build your nest egg, and best of all, once the process is a habit, it simply gets stronger, securing your future.

Fiscal Planning

It is important to make sure you have filed all your tax returns, whether it is on income, property, or any other dues. This is vital because improperly filed taxes have a nasty habit of coming back to haunt you, and tend to gain interest as well. Make sure you do not owe the tax man anything.

Debt or Credit Management

Just like unpaid taxes, bad debt can be a terrible burden, particularly with rising interest rates. Calculate your total debt and start dealing with it promptly. Know to what extent you are in the red. It will give you perspective let you have a handle on what your next move should be, and it will also help you monitor interest and keep a decent credit rating, which is vital.

Investment

You will also need to look more carefully at how to invest whatever you are earning. Investment involves risk, of course, but calculated risk into assets and blue chip stocks are a safe way of managing your investment efforts. Look at solid and credible mutual fund managers as well, but do find a way to grow your hard-earned income that is significantly more effective than the comparatively low interest it will earn sitting in the bank.

Diversification of Income

Because of the current economic climate, never has the importance of income diversification been so high. Even when things improve with the global economy, having a diverse income base is always beneficial to ones lifestyle and welfare. It might not seem such a straight-forward option but you would be surprised at the areas that you can delve into and add to your own personal cash flow just by setting a few hours aside to develop a skill that is marketable or that fills a demand in the economy. Never has the proverbial statement “do not put all your eggs into one basket” been more relevant.