Here's an article on Steve Hoyt, a successful investor in commercial real estate. On the one hand they say you can make good money hitting singles (as opposed to homers) but on the other hand they call the guy an artist:
What I realized quickly was that Steve had the entire discipline related to real estate that I someday wanted to have," Lund said. "I do think the art of the deal is something unique. You can’t learn that in college. I think most of Steve’s peers would call him an artist when it comes to real estate.I don't think an individual investor needs to be an artist to do OK in real estate. As long as you can hit a few singles before your first strike out....
This article discusses some of the riskier real estate markets, arguing that Denver is in better shape than Detroit and Cleveland because Denver is adding jobs at a good rate. The idea is that in some markets people aren't buying because they can't while in other markets (like Denver) they are just waiting for a better price.
Here's an interesting article about lease-to-own plans, which are becoming more popular in the currently down US real estate market. The article is fairly well-rounded with both advantages and disadvantages listed.
This article talks about how vulture funds are ready to buy. Should individual investors follow suit?
While it doesn't mean prices are changing, existing home sales are down over 12% in 2007 from 2006. This article talks specifically about Philadelphia, with people giving the usual lines about how there's nothing wrong with their city - it's just a national thing...
This article has some interesting things to say about fixer-uppers (rarely worth it) and condos (as bad as coops?).
"Breathing new life into low-end neighborhoods through high-end apartments" is a line from this next article about a new apartment complex in Newark. Since it is 15 minutes by train from Manhattan, Newark already has the location to be a good real estate market...
Finally, this list of lucrative neighborhoods for real estate mentions New York again as well as other big US cities like Boston, Philadelphia, and Atlanta. Interestingly, it mentions specific areas in each city.
This interesting discussion of South Florida real estate has lots of information. You'll have to draw your own conclusions as there are conflicting quotes from several experts. There is some good numerical data to analyze as well.
Here's a short article with the numbers on Pittsburgh area real estate. Housing prices are going up in some places...
You'd have to call Ohio the big winner after looking through CNN Money's 25 most affordable places to live.
Of course, this has prompted some local articles. A short one on Boardman and a longer one on places near Pittsburgh.
Here's an interesting article on Philadelphia real estate, particularly Center City. Real estate is still going strong there, and this article shares some statistics in an effort to explain why.
Urban real estate in general has become so valuable that Chinese immigrants can often not afford to live in Chinatown anymore. This article looks mostly at Boston's Chinatwon where there simply aren't many options for low-income people.
Because urban real estate is so expensive, many families end uo in the susburbs and workers have to deal with a commute. This article talks a little bit about some areas around Philadelphia that are decent for commuting.
One of my dreams has always been to own an apartment in Manhattan (in addition to one in Seoul, one in Rome, one in a Canadian city like Ottawa or Toronto, and now I've considered adding Brazil) so I was recently checking out Stuyvesant Town where, at least on this official site, it seems like you can only rent but not buy. $3,000/month for a 1 bedroom (which is all I need so far) tells you why I haven't achieved my dream yet...
I've been considering a more attainable dream, like an apartment in Morris Park or one on Arthur Avenue. These are also fun areas and I have a good friend who lives in and highly recommends Morris Park.
While most of New York's best attractions are in Manhattan, the island is easily accessible from the Bronx (subway or bus) and the Bronx does have it's zoo...
Pittsburgh didn't make the list of most resilient real estate markets, but some investors call real estate in Pittsburgh undervalued.
Anyway, this much house in or near a city for $200,000 is new to me:
The carefully restored 1871 town house boasts 14-foot ceilings, three bedrooms, 31/2 baths, original pine floors and oversized molding, furniture and artwork. But the real surprise is the 28-foot-long in-ground swimming pool surrounded by mature trees and shrubs in the side yard. Next to the pool is a 20-by-20-foot deck shaded by wisteria, with a two-car garage beneath.The neighborhood is supposedly getting better but they still say not to go for walks at night or take your abby out for a ride in the stroller by day...
Here's an article about Pittsburgh working to improve a problem area.
I've blogged about Pittsburgh real estate before, including residences that seem too cheap, the city targeting niche markets, and that Forbes thinks Pittsburgh is not overpriced.
Today I've got a few more articles involving Pittsburgh sports and their effect on real estate. This one is about a Charlie Batch project (he's the Steelers QB) while this one is about the North Shore where Jerome Bettis (the Steelers retired running back) just opened a restaurant.
And of course we also have the Penguins staying in Pittsburgh (for at least 40 years) and the new arena being built. All this seems to bode well for Pittsburgh.
Brazil is one of the better real estate markets for foreign investment right now, competing with Germany, Japan, and China according to this article.
This article says that buying real estate in Brazil is not too tough. You'll need a CPF (taxpayer number) and should hire a real estate attorney to do a title search.
Brazilian real estate has a lot of things going for it. It's drawing more attention from international investors which should drive prices up. It can be rented out to vacationers since Brazil has a good climate and great culture and scenery. Brazil's economy in general is looking good.
It would be great to have a vacation home on the beach in Brazil, wouldn't it? Maybe you could rent it out when you're not using it and maybe you'll see real estate prices go up. But you would definitely enjoy that beach...
Here's an article on overpriced real estate markets. The authors calculated a P/E ratio for each market involving home prices and rental income. Low affordability, low income growth and a high cost of living are also issues here.
Starting with the most overpriced:
1. San Diego
2. Miami
3. Sacramento
4. San Francisco
5. Washington
6. Honolulu
7. New York
8. Los Angeles
9. Boston
10. San Jose
We also have the least overpriced real estate markets:
1. Charlotte, N.C.
2. Austin
3. Raleigh, N.C.
4. Detroit
5. St. Louis
6. Pittsburgh
7. Orlando
8. Philadelphia
9. Indianapolis
10. El Paso
Keep in mind that these listing don't necessarily talk about which cities are good real estate investments. The article warns agains investing in Detroit, and I've blogged about the same thing here. Philadelphia has economic concerns that are hurting areas outside of Center City. Pittsburgh does look good to many investors, however.
The better real estate prices in Philadlphia (compared to declining markets like Vegas and Boston) haven't reached a lot of neighborhoods outside of Center City. So many philadelphians in these areas live in poverty that a lack of jobs (plus easy access to guns) is being blamed for a quickly increasing murder rate and an unfortunate new nickname, Killadelphia.
Here's an interesting article with advice for new reat estate developers. This was the most interesting part to me:
One way to begin is with four-unit rental properties. These properties can be financed with 20 percent down payments and single-family mortgages. If your credit history is good, you should be able to obtain financing at attractive terms.Some actual numbers would be helpful here, but it's good to know which markets show better rental income relative to your investment.You should be aware, however, that such property in the D.C. area is currently rather expensive to buy relative to the rental income it generates. Prices are much lower in Baltimore, Philadelphia and Richmond, but managing properties from a distance can be difficult.
If you are moving to Colorado then some Colorado real estate resources could be very helpful, like a Colorado home finder or various other tools and articles on real estate in the area, whether you're interested in Denver real estate or some other areas.
First, take this HousingPredictor.com stuff for what its worth - when I did a News search for "housing predictor" I didn't get many results. I published links to the two useful ones below. Most results were press releases and that's often a bad sign as the company may be trying to create hype when there really isn't much interest.
But what did I find? Philadelphia is just happy not to be listed in the bottom 25. You have to wonder if they need to fix their pension problem before we see real growth there.
San Diego was in the bottom 25 (2nd worst) - HousingPredictor.com expects about a 13% decrease.
Luckily for San Diego, Miami was seen as the worst housing market (although single family homes under 250,000 are expected to perform comparatively well).
And of course, there's always India.
Here's an article that says Philadelphia could end up in trouble like Detroit has gotten itself into because they spend so much money paying pensions there's not enough left to run the city properly:
Scared yet? The article mentions other problems such as a lack of affordable housing, and a relatively uneducated population. The author paints a very bleak picture of Philadelphia's future.
This reality prompted one veteran city executive who is familiar with the impending budget crisis to liken Philadelphia to a "Bos-troit": a rapidly regenerating downtown, like Boston's, ideal for affluent tourists and new-comers, but surrounded by square mile upon square mile of dying neighborhoods, impoverished residents and relentless urban ruin, just like Detroit. And that situation is probably not sustainable, either - at least, not for long. No matter how good it looks, Center City cannot survive if it's totally cut off from the rest of a desolate, crime-ridden Philadelphia. That's no better than living under a state of siege, even if you are enjoying the view from the balcony of a million-dollar condo.
Not too long ago, I wrote about investing in Pittsburgh real estate. An $1,000 investment generated $300/month positive cash flow (liabilities = $18,000 mortgage, tax, and insurance which toaled $300 monthly payments while income = $600/month rent).
Most real estate investors are also looking for appreciation of the property. Pittsburgh is trying to make that happen and by targeting niches, I think the city has a good chance.
It's hard to believe that homes are cheaper than cars in Detroit these days but that's how it is. Clearly you need to be careful when investing in real estate.
This article about investing in Pittsburgh real estate shows a situation that seems too good to be true:
One example of how this works is a single-family, three-bedroom, one-bath house in North Braddock that sold for $12,000. The buyer put $7,000 into it and had a $1,000 down payment. The mortgage was $18,000 at 12 percent interest, Wagner said.The mortgage at 12% interest seems strange to me - you could find a credit card with a better rate than that. Otherwise these numbers make sense to me but can they be real?"There is a positive cash flow of $300 monthly, based on a $180 monthly mortgage payment, plus insurance and taxes, and a rent of $600 monthly under the federal Section 8 rental subsidy program," Wagner said.
Peter Lynch says to buy a house before investing in stocks because the home is the better investment (plus it's useful to have a home). Robert Kiyosaki says your house is a liability, not an asset.
David Crook must be on Kiyosaki's side judging from this article on the financial pitfalls of home ownership. He even argues that in many cases renting makes better financial sense than buying (since a mortgage is basically paying rent).
Peter Lynch might have common sense on his side but Kiyosaki and Crook make convincing arguments.
Here's an interesting article on Nova Scotia real estate. It almost begins to sound like an ad for White Point Estates but Nova Scotia seems to be a real estate investing opportunity that's not too exclusive (prices aren't too high) and that offers good potential returns:
Since the media—including the likes of Consumer Reports, International Living and CNN—have begun to rate Nova Scotia among the world's best places to vacation, live and retire, property costs have risen as much as 50% annually in some areas of the province. Yet despite the price increases, property here remains a fraction of what one would pay for similar real estate back home. And with enticements like some of the world's most spectacular scenery, a relatively temperate climate (winters are milder than the northern U.S.), and a low profile, stress-free lifestyle far from the rat race, wars and terrorism, it's easy to see why life looks so good under the Maple Leaf.
Here's an article on this month's Philadelphia Magazine. They are trying to predict good areas for investment over the next 5-10 years: "On the up-and-coming list, Society Hill from 8th Street to the Delaware River and Pine Street to Callowhill."
It's interesting to me how the cheaper real estate in an area is typically in high demand compared to more expensive real estste. For example at the Jersey shore by Long Beach Island, a small home on a lagoon in Beach haven West was worth about $90,000-$100,000 in 2000. Today it's more like $350,000. During the same time, a house on the bay, bigger house and better location, went from being worth around $400,000 - $450,000 up to about $800,000.
In this case the lesser home was the much better investment. The location wasn't as nice and the house was much smaller but there's always pressure at the entry level it seems. Take this article for example. It says that people are giving up on amenities or increasing their budgets in the $200,000 to $400,000 range in Philadelphia.
However, the multu-million dollar homes (often highly personalized) of professional athletes are not selling. When they say that there are more homes on the market, you wonder if that means there are more pricey homes on the market. Entry level homes in the New York / New Jersey area don't seem to suffer from flagging demand at all.
And it makes you wonder what will happen to these homes in Philadelphia. Is the view worth millions in this market?
A recent question:
My father has owned a commercial building in NJ for years. He is trying to retire now and plans on selling it. The building holds two separate offices. He has always worked out of one for himself and has always rented the other, earning (and paying taxes on) rental income. Upon the sale, is their a formula that Uncle Sam uses to figure out how the sale should be seen (sale as a rental property vs. sale as a place of business)? He is also thinking about using the rental sale proceeds for a 1031 Exchange and buying a retirement home near the Jersey shore that they would eventually retire to. In theory, he would rent it out for a few years and then move into it as their primary residence, when they sell the house they live in now. Is such a scenario a viable way to avoid capital gains taxes? If so, is if there is a minimum amount of years that the shore house must be held as a rental property before making it their primary residence, to avoid paying capital gains tax on it? Thanks in advance.And some answers that came from an internet message board - don't make any decisions until you verify this information:
I'll answer the first question: use the same formula you used to allocated the basis for depreciation purposes between the business and the rental.And some more questions from someone who is trying to answer:To answer your second question: I believe he should avoid capital gains tax. One may exchange a business property for rental property (in your case) and meet the requirements of IRC section 1031.
These rules generally provide that no gain or loss is recognized when business or investment property is exchanged solely for other business or investment property of like kind.
What is like-kind? Without going into it too much, real property exchanged for real property shall be considered like-kind provided that both properties are either business or investment properties. There are also some timing requirements that you must be met.
But if you plan to seriously enter into this transaction, please consult a professional.
For the shore house to be considered a primary residence you have to live there for two years.
How was the property reported for tax return purposes - i.e., you mention that is is ONE building but TWO different offices (one rental real estate and one for your father's business)? Was the rental real estate reported on one Schedule C of your father's Form 1040 and was the office used for your father's regular business reported on a separate Schedule C ? Or was your father's business separately incorporated as C or an S corporation, or setup as an LLC ? Just curious because the way the two separate businesses have been reported may affect the way you want to handle the proceeds from a potential like kind exchange. I assume that when your father sells the building he will sell the whole building, thereby creating proceeds allocable to both the rental real estate business and his "regular" business. In other words, the building is not anything like a duplex where title can legally be sold to one unit (rental real estate part) and the other unit doesn't have to be sold (father's regular business).
Here's a follow up to yesterday's Philadelphia real estate blog entry. This article says that in Center City Philadelphia, more homes went on the market and prices dropped.
This article explains why some people are very optimistic. We have an expanding Pennsylvania Convention Center, expansion plans by the University of Pennsylvania and Drexel Universities, and the construction of "the skyline-altering Comcast Tower".
According to this National Geographic Traveler article, and one I can't link to because I read it on an airplane, Philadelphia is rebounding. If they are right, real estate prices will increase. There are many reasons, but this is probably the most compelling:
The renaissance of Philadelphia restaurants goes hand in hand with the revitalization of its neighborhoods, John Mariani tells me later. "Restaurants throw light on streets," says the Esquire food critic and co-author of the Italian-American Cookbook. "Sometimes a single restaurant can revitalize a whole section." Enterprising restaurateurs like Susanna Foo and her Walnut Street eatery, Georges Perrier and his Le Bec-Fin and, of course, Stephen Starr, are bringing the City Center—and Philly cuisine—back to eminence. "It's back, big time," Mariani says.People walking on the sidewalk make neighborhoods safe. And fun. That means people want to live there, driving up real estate prices.
In the Peter Lynch book I'm reading, Lynch writes that houses are normally more rewarding than stocks. Especially primary residences with all the associated tax breaks. However we also routinely recommend that people put money in stock-based IRAs and things as early as possible - well before the person can afford a home. Personally I disagree with Lynch here. You might as well invest in stocks as you build up capital to buy a house. Sure it carries more risk than putting money in the bank each month, but there's a good chance you'll be in a better position to buy a home thanks to investing early and often in life.
Question: I own a couple of homes, but they're both two family and not really complicated from an operational or investment perspective. I was considering getting into the multi-dwelling game (probably 6 family), and wanted to know a good place to start as far as understanding the expenses and risks.
I want to invest soon because I'm too liquid (I'm the diarrhea of investing), and I'm concerned that I'll get killed by inflation. Right now, it's wrapped up in a CD because I was expecting to pull the trigger on something this year, but the prices hadn't dropped as much as I'd hoped so I'm stuck in the waiting phase. I guess it is better to wait and get screwed a little than rush and face the potential of getting royally screwed. Anyway, I'd appreciate some advice.
Answer: The only people who need to be worried are the ones who are illiquid when the sh%t hits the fan. It sounds like you know the game in your other investments, and if you have the liquidity for a multi-family, it means you're probably in good shape. Every bad decision I've made as an investor has come when I've been in a hurry to put capital to work.
I'd rather give up a little to inflation than force a bad investment. When an investment is right, it's scary but you know that you've got the right call. If you are overly concerned about inflation, add a little gold or oil to your portfolio as a hedge.
Now for some advice. Good value is good value -- you have to analyze the building cost soley on its expenses vs it's income -- and not it's intrinsic value -- that's a separate calculation -- and if you're paying more than 8x the annual rent roll you have to look at the bottom lines even more carefully
Of course, here in NYC right now, getting anywhere near 8x (interesting rule of thumb there) seems to be impossible. Especially if you're considering that 8x after expenses, most of the places I've seen haven't come close.
Most sellers ask for 10x plus in my experience -- most banks won't give a valuation larger than 8x -- there is your profit margin in a nutshell -- if there is no high upside and the price is 10x you gotta walk -- if you are just going to be staying even -- going higher than 8.5x is suicide in this market unless the rent roll is exceptional against the expenses.
Also, make sure you get realistic numbers on expenses. When I bought apartments I got lied to more than the guys who rent hotel rooms out by the hour.
It seems that speculators are hard at work in the New Orleans real estate market. Homes in the suburbs (which didn't flood) are selling for a quite a bit more than they used to. However, "flooded houses in the city are being bought as well, often at deep discounts of as much as $50 a square foot less than they would have sold for before the hurricane."
Since the houses in the city itself often end up being the most desirable, I think this is a risk that might pay off for the speculators.
Here's an interesting article about how the Vegas housing market is cooling off - there's more supply now than there has been in a while. There are some investors losing money; those who joined the Vegas real estate party in 2005 may be losing money after considering fees.
Since the Vegas real estate market is losing it's appeal, you may be more interested in a Vegas vacation. My Las Vegas NV site has some good articles and information on hotels. We also have some good reader reviews of the different hotels.
I found this article on Yahoo Finance about condo hotel investing. Some of the advantages are said to be:
1. Initial capital outlays tend to be modest, since you can invest early in yet-to-be-built hotels. For example:
In 2003 he put down a $10,000 deposit to reserve a small condo hotel room overlooking Lake Michigan in Chicago's Trump International Hotel & Tower. Over the next year, he put down an additional $79,000, or 15 percent of the nominal purchase price of $517,000. When the hotel building is completed, scheduled for 2007, he'll take out a mortgage.Today, based on the value of comparable units, Kim's Chicago studio is worth about $1 million. "The beauty of condo hotels is there's no mortgage to pay until it's done," Kim explains. "You get in early and sit on it while it appreciates."
2. There's no upkeep for the finished room.
3. Owners can stay in their rooms whenever they want.
4. Owners can make money by leasing out the units to others.
The major risk comes from the following, for which buying properties run by highly acclaimed hoteliers is the best defense:
1. Four years or more may pass between the initial investment and the completion of a property.
However, Business Week shows us a less one-sided picture of condo hotels. Where the Elizabeth Esfahani article on Yahoo Finance says that owners get a healthy percentage when the room is rented out, Business Week tells us that it's more like 50%. And just like a regular condo, there will be maintenance fees. And you may have to pay when you do decide to stay; these are called housekeeping fees and might be 30.00/day or more.
"Most of these deals are not priced in a way that they'll provide an immediate return on investment," says James Butler, a real estate attorney in Los Angeles. "You're buying a lifestyle and a long-term capital gain."If owning a room in a condo hotel is supposed to be a cheaper way of owning a vacation home (since the unit might bring in some cash when you're not using it), the most important thing is to find a good location. It has to be somewhere you and other people want to vacation.
Some major hotel operators still harbor doubts about the concept, fearing that the money pouring in from individual investors is causing projects to be launched that would not be built otherwise. Hilton Hotels has a handful of condo-hotel projects, mostly under its Conrad luxury brand, but the company is treading with care.So here we have an "investment" that doesn't generate income. You actually have a better chance of generating income by investing in a commercial hotel property rather than a resort. Since resorts see seasonal demand, they are unlikely to keep your unit booked year-round. However, if you plan to spend a lot of time at the vacation spot, 30.00/day is better than 300.00/day (assuming your investment is gaining value, rather than losing value)."We're very selective," says Matthew Hart, Hilton's president. "You have to be very careful that the project is viable as a hotel."
Already, some condo-hotel projects in the red-hot Las Vegas market have been scuttled. "Make sure the developer has a track record in the business and is not just looking to make a quick buck," advises John Burnett, president of Kor Hotel Group, which is building a $175 million condo hotel in Anguilla.
Question: Well, being a first time home buyer and most nice Townhomes in my area start around 400,000, and I have a household income of about 90-95,000, both people w/ car payments. I have good credit, my girlfriend has excellent credit. Right now we piss away about $1300/month in rent. We have no problems paying that amount. I imagine we could probably afford up to 17-1800/month if we had to. Given those parameters, what type of money do I need up front, and do I have any chance whatsoever at being able to finance $400,000-450,000?
Answer: As a rough rule of thumb optimum mortgage rates are granted when the borrower has good credit and they are borrowing 80% or less of the appraised value of the house.
Right now rates are approaching 7% but a good trick to calculate (approximately) mortgage payments is to take the interest rate (ie. 7%), multiply by 100, and that's the payment per $100,000.00 -- so for example, 7% would be $700 per $100,000.00.
Using this system, 80% of $400,000.00 = $320,000.00 - therefore you are looking at financing $320,000.00. If interest rates are 7% then your payments would be around $2,240 plus property taxes and homeowner's insurance.
$1,800.00/month would be enough to pay for a $257,000.00 mortgage - but don't forget that you still must pay real estate taxes and insurance.
You can get lower payments with variable rate or interest only loans but using those options depend on your circumstances. Also when you budget for closing you need to budget for closing costs which include lender fees, title insurance and attorney fees. Depending on where you are buying these costs shift
Also 100% financing is possible these days -- so is 125% financing but you really need to figure out what you can afford and how long you want to own the house.
One mortgage broker added some specifics: At 400k with 5% down you are looking at a P&I of around 2300 at a 6.375% 30 year fixed rate mortgage.
Here's a very interesting article on how cheaper neighborhoods in big cities can make better investments than posh neigborhoods. Some examples include LA:
One might think that the bulk of that appreciation came in wealthy and well-known enclaves like Beverly Hills or Bel-Air. But according to a Forbes.com ZIP code analysis, within the Watts ZIP of 90059, home prices rose 91.9%; more than any other ZIP in Los Angeles. Meanwhile, had you sunk your funds into the upscale neighborhood of Holmby Hills, you would have the least amount of appreciation in the city--under 9% from 2003 through 2005.Also, check out Miami, Philadelphia, and New York:
For investment performance, think Miami's Little Havana, where prices increased more than 150% over the last two years. Or the tough Northern Liberties section of Philadelphia, which went up 70%. Or Manhattan's Lower East Side, where tenements that once sheltered struggling immigrants are now occupied by high-priced lawyers, and the median home price is more than $650,000, according to real estate appraisal and consulting firm Miller Samuel.Dallas and Minneapolis-St. Paul buck the trend - these cities still see pricier neighborhoods appreciating more quickly.
At the end of the article I linked to, theres a link to a slideshow that mentions 20 neigborhoods that would be good places (according to Forbes) to buy a home.
Some analysts argue that with each passing week there seem to be mounting signs of a pending crash in real estate prices. Real estate brokers' inventory of unsold homes has been on the rise. Another troubling sign is the increase in negative amortization, interest only, and adjustable rate loans. With rising interest rates, the adjustable rate loans will tart to re-adjust over the next 1-2 years, forcing some to lose their homes. The economy looks fairly healthy right now, but should the economy go into a tailspin then a decline in home prices would be even more likely.
Which brings us to an investment idea. Now might be a good time to become pre-approved for a loan on an investment property should prices decline. A high percentage of new condo purchases have been bought as investments. Should a high percentage of these investors get cold feet and run for the exits, then prices could decline rapidly and present a buying opportunity. You can learn more about mortage loans at an informative and easy to navigate site, called The Mortgage Resource Center.
BusinessWeek Online has an interesting article about the difficulty of predicting US real estate prices (although they do think that 2005 is the peak). Some will argue that the decline is starting, considering recent data, US-wide sales for single-family home and condos were soft, down 1.9% and 0.8%, respectively.
However these predictions have been made erroneously for each of the past several years.
A guest article that encourages homeowners to add a sauna to increase the value of their homes and improve their health. Considering the importance of staying physically healthy in order to have healthy finances, I decided it was worth publishing. I hope you agree.
Any homeowner knows what a huge investment in time and money owning a home is. While most people buy a home with little thought to eventually selling it, a new homeowner should keep in mind that this investment can be more than just an expenditure of money, it can literally be an investment in your family’s future. Be sure to take advantage of the many ways in which you can increase the return on that investment. By viewing your home as something of value beyond a place to live and raise a family, you can insure that your family has a secure future by providing them with a home of increasing value should you decide to sell and move on to a new home. Some of the most common methods for increasing the value of your home include redecorating or renovating the house, making additions the home or giving added house value by installing high quality appliances.
One way to increase the value of your house without a huge expenditure of cash is to add a home sauna. While this concept might not leap to mind when thinking of home improvements, an infrared sauna or steam shower can be a very attractive draw to potential buyers and increase the value of your home without the trauma of major construction or the tremendous drain on the budget that large-scale construction can bring. Formerly restricted to posh venues like spas and luxury resorts, saunas are now within the reach of the average homeowner. A home sauna is easily and quickly installed and can enhance the beauty and attractiveness of you home at the same time it increases the value. There is very little construction involved in installing a sauna, and in fact, some saunas can be installed and ready to use in under an hour. The attractiveness and chic style of a well designed sauna can enhance the beauty of your home at the same time as it enhances its value.
Not only can you increase the resale value of your home, but you can also improve your health in the process. A home sauna, especially an infrared sauna, can provide an immediate boost to the quality of your life and your health. Warm and soothing, a sauna has long been prescribed as a wonderful way to relieve and sooth tired muscles, melt away stress and enjoy quiet time in the comfort of your own home. Normally you would have to drive across town the gym or health spa and try and relax in the company of strangers in public saunas. With a home sauna, you can completely relax. No nosey neighbors, no chatting golf buddies, just you and the warm soothing rays of your very own sauna. Not only will you be relieving stress, but you will also be relieving your body of the day’s exposure to the outside world. Infrared saunas emit a pleasant and safe form of rays known as far infrared ray. It penetrates deep beneath your skin and helps release toxins from within your body. Sweat away the chemicals and toxins that you have accumulated during your long work day. A warm, cozy sauna is just what the doctor ordered after a long hard day and having one installed in your home is simple and relatively inexpensive.
In addition to being a great investment, a home sauna can also enhance your lifestyle. Imagine how impressed the guests in your home will be when you invite them to enjoy a warm, relaxing sauna. Some saunas even come equipped with speakers for relaxing to your favorite music. Think of it; a nice bottle of wine, good friends and some soft, soothing music. They’ll think you had hit the lottery! Only you will know that you have made such a smart and savvy decision when you had it installed, and even if the temptation is too great and you do spill the beans on your wonderful new addition, they will still be impressed, and probably jealous! They will certainly be impressed that you had the forethought to not only increase the value of your investment; your home, but they will also be impressed with your creativity and style.
Much more attractive and upscale than a hot tub, a home sauna implies wealth and success, more so than the nearly ubiquitous hot tub. It also has far less upkeep and hassle than a hot tub. No chlorine to purchase and apply, no guess-work as to how much chemical to use, no wet mess to clean up after, and no need for noisy pumps and jets to soothe your aching muscles. The quiet heat of the ceramic infrared heaters does all that with virtually no need for maintenance and upkeep. For a small investment, you can add glamour to your home and increase the value and therefore increase your investment.
This article from HeraldNet has some basic advice about what to expect when getting involved in realestate. It begins with the time investment required and moves on to the types of properties you should be looking at:
I believe in investing in real estate to make money. That means you should have a positive cash flow, or at least break even, before taxes. Don't count on tax write-offs to bail you out, and remember that tax laws can change.If you have the money, your next step is to find a deal that makes sense. That's often the toughest challenge. Don't walk into your local real estate office and pay the retail price for a nice clean home, because you will not be able to achieve a positive cash flow unless you make an enormous down payment.
Ideally, you want to search out a house that is in poor condition but is in a good location. However, this is extremely difficult in today's hot housing market.
With some estimating that a large percentage of the 200,000 homes in New Orleans will become tear down candidates, it will be years before housing supply is back to normal. This decreased supply may lead to increased prices and increased competition for available units.
It is also possible that clean up companies will do well short term (the next year or three), while homebuilders in the area do well once the rebuilding begins. Having been to New Orleans, I can say that we're talking about an amazing city - I wouldn't move away if it were my home and the people have a great spirit. It will take time, but I believe the city will be rebuilt.
A Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania was asked if home equity is safer in a conservative side fund than buried in the house earning a 0 percent return. He answered that it's more risky since assets that earn more than the mortgage interest rate are risky.
The major target of the new wisdom is the homeowner with significant equity, who is being persuaded to borrow against it in order to invest at a profit. The borrowing cost that the investment return must beat is the cost of a new mortgage, either a second mortgage or cash-out refinance. This is usually higher than the rate on the borrower's existing mortgage, making it that much more difficult to find an investment that will yield a margin over the cost.The recent boom in house prices has increased the size of the target market enormously. While few households have a business in which to invest, no problem, the loan officer/planner/financial advisor will advise them about investments.
The new wisdom is supported by an enormous amount of financial self-interest. There is money to be made on the new mortgage, and on the investment. The intermediaries in the process take theirs off the top. For the household to end up richer, however, the investment return must exceed the borrowing cost over a long period. Since investments that yield a return higher than the household's borrowing cost carry risk, the household can also end up poorer.
Sometimes I dream about investing in Italian rela estate and possibly vacationing/retiring there.
If you want to buy a condo in Rome, a beach front cottage in Naples, a country home or a farm property in Tuscany, you only have to go as far as your computer. One search online will reveal a list of thousands of real estate companies who specialize in European properties, listings by owners on community websites meant to reach out to the American buyer, and Italian focus websites that offer opportunities in all things Italian, real estate included.
Whether you are a first time buyer of property or an experienced investor, you will need an agent to help you sort through the details of buying abroad. Even if you are fluent in Italian or lived there for years, if you don’t live there now, you are going to need someone to help you through whose business it is to know all the ins and outs of the market.
If you can get over there to look at the properties in person, great. But before you go, narrow it down by going online and looking through as many property listings as possible to at least narrow it down to a particular region of interest with a few homes on your list. If you can’t go and must rely solely on listings, go for the sites that offer virtual tours, tons of detailed pictures and incredible histories.
Too much cannot be said for finding a broker with a strong reputation, testimonials you can check out, and a long time in the business. Do your research, not just on the properties and the region in Italy, but the broker. The last thing you want to do is give your money to some phantom company selling imaginary properties so that they can grab your money and run.
Once you find a broker that is registered with the Better Business Bureau and has thoroughly checked out intense scrutiny, be very clear about what you want from your property and be open to discovering things you didn’t know you wanted. Have a broker that speaks fluent English is a necessity if you don’t speak Italian. Communication is of the utmost importance.
Have fun. It’s exciting to buy a new home, especially one in Italy. Whether this is meant to become a family heirloom or your latest investment, make sure it’s the home that best fits your needs.
If you’re dead set on investing in NYC real estate but are frustrated by the shortage of unit availability (short of a few $15-20 million dollar town houses on the West Side), then just wait a little bit longer. Patience will reward you.
How? The most difficult place to buy in Manhattan due to lack of available properties, the famous West Side, will soon open up in a big way. The blocks to the west and the north of the new Time Warner Center are slated to be renovated very soon. According to Abby Gellert of Halstead Property’s director of sales for Manhattan’s Westside, the garages in that part of town will become condos virtually overnight. What used to be considered a slum has been revived thanks to young professionals unable to find residence in nearby Hell’s Kitchen, the great restaurants and Whole Foods market in the new Time Warner center, and upgraded public schools.
Adding to Donald Trump’s seven towers on Riverside Drive, there will soon be at least nine other condominium towers from 35 to 60 stories tall. Both the Empire and Mayflower hotels are expected to be converted partially into condominiums as well, according to The Real Deal, a New York based real estate publication.
Other plans for the area include the doubling in size of Fordham University’s Lincoln Center campus. If this happens, a seven building high rise to house 10,600 students would be created on the Columbus Avenue between 60th and 62nd streets as well as the construction of a 1.5 acre courtyard and two apartment towers.
Most other construction projects will happen around West End Avenue and West 59th street. It is expected that the bases of these new condominium towers will house retail and restaurant properties in an attempt to create the sidewalk traffic found in the rest of Manhattan.
In 2004, condos on the West Side averaged $1.29 million and co-ops averaged $877,000, up 27.2% and 11.7% respectively, from 2003. Pick your moment wisely (and your broker) and be ready to jump when the condos go on the market.
Predicting that the Real Estate market has to cool off at some point (perhaps when foreigners stop seeing such good echange rates), Money Magazine has some interesting tips on how to plan for future real estate investments and how to time the market.
One thing you should do is start networking with small local banks because:
If a slowdown develops and banks start foreclosing, the smaller ones are likely to end up holding title to homes directly. Believe me, landlording is not a business these guys want to be in. They'll sell their foreclosed properties as quickly as possible to a responsible owner.
There is also advice on how to track the real estate market by paying attnetion to how long it's taking homes to sell, home builders throwing in freebies in an effort to sell new homes, and tracking real estate in neighborhoods you like. When you finally get a deal through your friends at the bank on a foreclosed home, be patient:
It's highly unlikely that home prices will permanently fall off a cliff, Pets.com-style. But real estate markets that go down have been known to stay down for years. Ask anyone who owned a home in Texas in the late 1980s, or Southern California in the early 1990s.So don't bid on a property unless you are prepared to be the landlord for at least five years. Because you might have to be.
Here's an interesting article that describes why foreigners are investing in US real estate:
Most notably, real estate agents and home builders from many of the more popular destinations are reporting foreigners showing an increasing interest in U.S. property. And at the accelerated rate that home-price appreciation has been running, particularly in those coastal areas that tend to draw foreign tourists, you get the idea that the currency differential must be a major inducement indeed.
The key is to do it through a real estate mutual fund or other investment vehicle in which you can take advantage of professional managers who are capable of sorting out the maze that foreign real estate investing can be.