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Category Archives: Real Estate

Mortgage Guidelines

The following list is a brief review of acceptable sources for the down payment on a mortgage.

• Cash and Unsecured Debt – Any deposits that cannot be documented, originated from cash, or borrowed on unsecured debt, such as: credit cards or personal loans cannot be used towards the purchase of a house.

• Checking and Savings Accounts – Your lender will require and review your last two months checking and savings account statements. If there are any large deposits made on these statements, you will be required to document the source of these funds. Acceptable large deposits include, but are not limited to: paychecks, reimbursements, tax refunds, sale or liquidation of asset accounts, and transfer of funds from one account to another. These large deposits will require a thorough paper trail to document the source of the funds. Unacceptable sources of large deposits include: cash, unsecured loans, and credit card withdrawals.

• Retirement Accounts – If you are using funds from a 401(k) or retirement account as part of your down payment, you will be required to document the withdrawal from the account(s) as well as the deposit into your checking or savings account(s).

• Gifts – Gift funds are allowed on some loan types depending on your credit score. Typically, gifts are only acceptable if they are from a family member. They require a fully completed gift letter that shows the relationship of the donor. The gift letter should also include their contact information and the amount of the gift. The person gifting the monies will have to show their most recent bank statement documenting the withdrawal of the gift funds. In addition, the lender will require a copy of the gift check and a printout of your bank statement showing the deposit and new balance.

• Down Payment Assistance – There are many sources for down payment assistance. Prior to entering into a purchase agreement, it is important to discuss your options with your lender to make sure that you qualify for down payment assistance based on your income and your credit scores.

SMSF Property Investment

Strict rules, restrictions and limitations apply to self-managed super funds and buying property using your superannuation.

Make sure to become familiar with the rules as imposed on trustees by the ATO. As an SMSF trustee some of your obligations include: developing, implementing and reviewing the fund’s investment strategy, considering the insurance needs of all fund members, as well as several ongoing compliance and administrative obligations which involves; appointing an SMSF auditor, lodging the SMSF’s annual returns, valuing the fund’s assets, recording and keeping accurate tax and super records and more.

Setting up and managing your SMSF will incur costs both in time and money. Because individual needs, goals and requirements vary the costs involved will differ.

Make sure you’re able to make sufficient contributions to fund your SMSF.

This is where seeking advice from a licensed financial adviser, before diving into the world of property investment, will pay off. Your financial adviser should provide you with the hard data to show whether you can afford to invest in property inside super and potential outcomes.

Choose the right property.

The goal of buying property using your superannuation is to invest in a property that will pay off handsomely to financially benefit your retirement. Make the right choices. Find properties that have the potential to increase in value; get properties that will be sold or leased fast.

Get financial advice and guidance.

Finally, seek out SMSF professionals who can help you make informed decisions and guide you through the whole process. Your property investments through self-managed super funds will deliver more favourable results when you have help every step of the way.

In order to ascertain whether this super fund is right for your specific needs, you have to consider a few things.

First, you need to consider whether having direct control and an understanding of where your superannuation is invested is right for you. An SMSF requires your active interest and participation in setting up and maintaining your super fund.

Effectively Selling Home

1. Strategy: The finest representation, requires a clear – cut, focused, meaningful, relevant strategy, based on a number of relevant factors, etc. The process must begin, with a discussion between agent and client, and agreeing to proceeding, on the same page, focused on the best way, to market a specific property, in order to achieve one’s needs, and objectives.

2. Pricing: Creating the best, initial listing price, means doing so, not based on emotion, and/ or pie – in – the – sky, wishing, hoping, greed, or unrealistic expectations. Quality agents will discuss pricing strategies, and which, might make the most sense, in the specific market, local area, and time. A meaningful rule – of – thumb, should be, to price a house, right, from the start!

3. Marketing; same page: Successfully marketing and selling a specific home, requires agent and client, to be on the same page, and commit to their agreed – upon, strategy. Homeowners must do all they can, to make their houses, readily available, so the most, qualified, potential buyers, are able to view it. When you get many views, you optimize your marketing efforts and possibilities! Homeowners should interview potential agents, and have a thorough discussion on how, a particular agent, might market the house, and the reasons!

4. Competitive; comparables: Remember, houses are not sold in a vacuum! There are generally several houses, for sale, in your area, and, you will, get your best possible results, when you are competitive, and make your home, stand – out, from the pack, in a positive way! Don’t guess about listing price, but examine and consider comparable properties, so you position your specific home, where, you’ll get the best results!

Effectively Marketing A Home

1. Price it right, from the start: One of the major obstacles to selling a house, is generally, the listing (or asking) price. This effort should not be based on either ignorance or greed, or haphazard, but, rather, should be based on the guidance of the qualified agent, you hire. Using, what is generally referred to as the C.M.A. (Competitive Market Analysis), you enhance your ability, to price the house, most effectively. This makes sense, because, historically, the best offers, come within the first few weeks, after a house is listed on the market, and, therefore, attracting, as many qualified buyers, in the appropriate price range, as possible, will best realize the objective, of fetching the best available offer.

2. Coordination between agent and homeowner: The homeowner, and the agent, he hires, must be, on the same page, to achieve the best results. Before hiring an agent, homeowners should interview several agents, discuss philosophies, perspectives, and marketing system, and agree, to a well – coordinated, team – based, effort!

3. Determine and address curb appeal: It’s often challenging for a homeowner to objectively look at, and evaluate, his own home, for many reasons, but, perhaps, most essentially, the emotional factors! Discuss any and all factors which might have an impact on the curb appeal, and effectively address these, proactively!

4. Consider if staging is needed: Since there is a cost, to staging a house, have a complete discussion, to determine if it makes sense, in the marketing of your property. Factors should include: condition of existing furniture (including size, etc); unusual room size and/ or dimensions; esthetic considerations; etc.

5. Showings; open houses; easy to show: If you want to get the best offers, commit to making the house readily available, and easy to show! Potential home buyers may need to look, at times, which may not always be, the most convenient, to you, but if you really want to sell, you should make that commitment! Discuss showings – strategy, use of open houses, and a thorough discussion, on philosophies and strategies!

All about Investment Properties for Beginners

• Know the range of options for real estate investment-you can invest in buying commercial properties, residential houses, apartments, condos, or land so you need to study which would be a better investment for you. There are many options so you will need to do your research to see which one will align with your future plans and stay within your budget.

• Why investing-are you investing to buy to sell again for a profit or do you want to rent the investment property? If your investment properties are residential you can create a regular income by invent in rental properties. You can also be a “house flipper,” which is where you buy an older home, renovate them, and sell them for a profit. If you decide to invest in commercial property you can hold it until the prices go up and then sell it to make a good profit.

• Location-when buying an investment property remember it is all about the location. The price of the property is largely a function of where it is located. Where the property is helps to decide the price range. Make sure that you research the price trends according to different locations before you buy investment properties.

• Network with a real estate agent-they can make your job a lot easier finding the type of property you want to buy. When you network with real estate agents they can help point you toward investment properties that fit your plans. A real estate broker will handle the legal work that is involved with the sale and purchase of the property for you. They can also make an offer and negotiate for you.

Considering Waterfront Home Investment

Make Sure The Property Is Structurally Sound

You may find the most perfect property for you when you are on your search, but if it isn’t able to withstand the weather conditions then it is not going to be a suitable purchase. Always remember that being on the waterfront means the house is more exposed to the element and may have to stand up against some pretty torrid conditions at times.

Before you commit to anything, make sure that you have an expert come in to take a look at the property. Ensure that they pay particular attention to its structural integrity and consider any weak points they highlight before you decided what you want to do.

Talk to Neighbours

Speaking to the people who already live in the area can give you the inside scoop about what sort of issues you might end up facing if you choose to make the investment. Be polite and courteous and you should be able to get honest answers from people who have first-hand experience.

This can prove to be invaluable when making your decision about whether or not to invest in the area, plus it also acts as a way to gauge the neighbourhood and whether or not the people there are people you will be happy to be around.

Look Into Utilities

Utilities are often an issue with waterfront properties, especially those that are in more rural areas. It can often be difficult to get electricity and running water to homes that are a little out of the way, which is something that you are going to need to account for.

Talking to the neighbours will again help in this regard, but be sure to discuss any concerns with the local utilities companies. If you don’t like what they tell you, then it might be time to start considering other options instead.

Popularity of Serviced Apartment

In recent years, the serviced apartment – a subsector of the hospitality industry – has grown more than any other temporary accommodation class in Europe. This can in part be attributed to globalisation and the needs for workers to travel more frequently to offices located out of town, and companies looking for less expensive ways to accommodate them. Also, families may have a preference to stay together and require a different set up to what hotels offer, in terms of wanting to keep an elderly relative close, having an office space to catch up on work tasks, or to allow older children more privacy.

The evidence of their popularity lies in occupancy rates. Serviced apartments in the UK averaged an 81% occupancy rate in 2016, and outperformed hotel rooms which stood at 77.2%. Amongst businesses, their usage is also increasing. According to a recent survey carried out by the Business Travel Show in November 2016, four in ten corporate buyers have reported that they would have used serviced apartments more by the end of 2016 than they did in 2015.

As we have mentioned above, serviced apartments are outperforming hotel rooms in terms of occupancy rates. Due to their cost-effective nature, they are becoming popular with companies sending employees on business trips, and those travelling for leisure who require more flexibility in their accommodation than what a hotel can offer.

Serviced apartment companies are relishing their success and are subsequently expanding at a fast pace. SACO are currently one of the largest operators of serviced apartments and over the past few years have made several acquisitions. Since the start of the year SACO have secured additional developments in London, Cambridge and Dublin, and a fourth is in the pipeline in Manchester. This demonstrates a confidence in the market, and indeed, a 2016/17 report by Savills predicted that 2017 would be “record growth” in terms of new developments in the UK.
The distinction between serviced apartments and Airbnb.

Governments have been cracking down on Airbnb rentals, which in part allows for success in the serviced apartment market. Berlin has banned tourists from renting entire flats from Airbnb to protect affordable housing, and Airbnb are banned from listing short term rentals in New York. Serviced apartments differ in that they are not flats owned by individuals looking to achieve a supplementary income, but rather they are owned by a company with the sole purpose of renting them out on either a short-term or long-term basis to individuals who need somewhere to stay. Unlike Airbnb, the apartments are not someone else’s permanent residence.

The crackdown of Airbnb rentals in some locations is allowing serviced apartments the opportunity to accommodate those who would have used Airbnb, further boosting demand for the units.
Serviced apartments as an investment

Shop For a Mortgage

Ask your friends and family for referrals when shopping for a mortgage. Create a list of lenders that your trusted colleagues recommend. When comparing mortgage loan offers, make sure you compare apples to apples. Compare similar rates, terms, and costs. Make sure you ask for a loan estimate, which should include all costs associated with obtaining the mortgage. If the lender just emails you the interest rate and estimated monthly payment, you will not have enough information to effectively compare mortgage options and costs from each lender. Interest rates will vary from lender to lender, make sure you ask what the costs would be if they all offered the same interest rate. Also, some lenders may offer no fee loans, where the lender covers the costs of obtaining the mortgage; keep in mind that this loan type is usually associated with a higher interest rate.

A home loan involves numerous fees from a variety of sources. Most lenders charge fees for similar services, but call them by different names. If you are unsure of the reason for the fee, talk to the lender so you can get a better understanding of why it is being charged and if the other lenders you are considering for your mortgage are charging a similar fee. Keep in mind that some lenders may also charge just a few larger fees and lump many services into it.

About Choosing Comps

In the offering memo prepared, in almost all cases, a detail of rental comps is provided. As it is a primary fiduciary duty of a real estate agent to maximize the sales price of any marketed asset, it makes sense that a smart broker will select comps that display their property in the most positive light. In some cases, the broker chosen comps are, in fact, the best true representatives. However, in most instances, I have found that they are not.

Obviously, location is a significant factor, with properties geographically proximate to the subject being important. However, simply choosing the five or six nearest properties can lead to a distorted assessment of the acquisition target.

The critical feature that all comps must have is that they must be a realistic consumer alternative to the subject property. In other words, you must view the comps through the eyes of a potential future renter.

Of course, location is going to be a paramount consideration. In most instances, potential renters identify their preferred location, and then go about winnowing down the alternatives to a handful of properties that they may actually research further and/or visit. It is this “handful” of properties that will be most useful to an investor for comparative purposes during the due diligence period.

Of the remaining factors a potential future renter will consider, price is arguably the most critical factor, even surpassing location. After all, if a potential renter identifies a preferred location, but cannot find any options that fit within their budget, they will likely begin investigating secondary location options. While verifying current asking rents for these comps, it is vital that any current concessions or discounts be considered. Further, the inclusion/exclusion of other items like utilities, in-unit laundry and parking must be factored in.

Other elements that should be considered when selecting the proper comps include; property age/condition, building type (garden style, mid-rise, high-rise, etc.), included amenities, parking (on-street, surface or enclosed), current tenant base (young professional, family oriented, senior housing, etc.) as well as those factors that may be unique to the specific municipality or neighborhood.

Turn Property to Regular Income Source

Property Funds

These are associations that sell, buy and manage property, in which you can invest. You don’t have to bother about the daily business proceedings, which is usually taken care according to pre-agreed terms. You can join a property fund through an independent financial adviser. Funds are regulated by the FSA.

Property Renovation for Profits

This is a practical path for people who are well versed about the market with the right skills and the perfect contacts to improve/develop a property quickly and sell it. This is the ideal option when you are sure that the property prices are not going to rise, Example: recession. These kinds of investors are proficient in renovating semi-ruined or derelict properties and bring them back into the market.

Property Trading

For people who know their job and are ready to invest their time & expertise to look for properties that are low-valued or semi- derelict, possibly they can make minor changes or alterations, such as getting a planning permission for an extension, once the value is added, it is possible to trade on at a profit.

Buying ‘off-plan’ property

The buyer purchases unbuilt property from a developer, hoping to sell it on at a profit after it is completed. The investment is highly risky in a static/falling property market.