Archive for the ‘Building’ Category

I invite you to take the next few minutes to learn the truth about the real estate market, how it compares to other methods of building assets and why it is such a lucrative form of investing. Many potential investors will say, ‘I need to get into the Florida Investment Property market’, especially taking into account current stock market fluctuations and the HOT market for investment properties, but simply don’t know the facts about Orlando property investing and how to use sale and leaseback method of property management.

When is the last time your financial advisor or stockbroker tried to convince you that moving a portion of your assets into the Florida Investment Property market might be a good idea? Never Right? The ‘why’ is simple. They don’t earn commissions when you buy Florida Investment Property. It is also likely that you have probably never had an ‘apples to apples’ comparison of stocks versus Florida Investment Property quite like the one you will see here.

Reason 1:

Leverage: Banks will not typically loan money to buy stocks. Banks will however, compete fiercely to loan money to buy Florida Investment Property. Your first question should be, ‘why is that’? It has to do with risk management, which we will discuss later. The fact that banks want to loan you money to buy Florida Investment Property creates a situation which we will call LEVERAGE.

Let’s assume that you have $10,000 to put into some type of investment. If you choose to buy $10,000 worth of stocks, you will own exactly $10,000 worth of stocks. Pretty straight-forward. However, suppose you choose to invest that $10,000 into Florida Investment Property using a 90% mortgage (which in many cases can go up to 95-100% mortgages in today’s market), you will own $100,000 worth of Florida Investment Property. If both of your investments were to appreciate by 10%, your actual gain with your stocks would be $1000 where your actual gain with Florida Investment Property would be $10,000. That equates to an actual 10% return on investment vs. a 100% return on investment. That’s what we call leverage.

Leverage: Florida Real Estate vs. Stocks

The traditional argument against Florida Investment Property Investing (mainly from Stock Brokers) has always been ‘I can get an average of 10% from stocks with little effort so why would I invest in Orlando Investment Property that only appreciates 6-7% per year’? This point-of-view is not taking leverage into account.

If you take the above statement to be true and compare the REAL numbers, the stock investment gained 10% of the initial $10,000 value (or $1000) and the Orlando Investment Property investment gained 6% of the initial $100,000 value (or $6000). That is still an actual return of 10% versus 60%. It is not hard to see which investment provides a greater immediate return on investment. Additionally. these numbers do not take into account any income from your property during the course of the year, or the substantial tax advantages to owning property, which we will discuss later.

Reason 2:

Value: As we mentioned previously, if you invest $10,000 into purchasing stocks, you own $10,000 worth of stocks (a fairly obvious point). If you invest $10,000 into purchasing Orlando Investment Property using the leverage of a 90% mortgage, you own $100,000 worth of Orlando Investment Property right? Well, only if you paid retail for your property. Any savvy investor will tell you that there are excellent deals to be had in Orlando Investment Property, you just have to find them.

What if you purchased a $100,000 property that happened to be worth $110,000 the day you bought it? Does it happen? The answer is yes, all the time. If you have your eyes open and are willing to ‘go through the numbers’ to find good deals, they are all around you. You may be asking yourself, why would anybody sell a $110,000 property for $100,000?

Value: Making money when you buy.

The reasons are endless as to why a quick sale is desired, but just to name a few: job relocation, divorce, an estate is being settled or maybe a current appraisal on the property simply wasn’t done prior to selling. By ‘finding this deal’ you have accomplished two things.

You have added $10,000 to your asset column in the form of equity.

You have created additional LEVERAGE for yourself as the value of your property increases (a 6-10% gain on $110,000 is better than a 6-10% gain on $100,000!) Remember, you make money in Orlando Investment Property when you buy, not when you sell.

Reason 3:

Control: Let’s take our assumption one step further. When you buy your $10,000 worth of stocks, what can you do to increase its value? If we follow the previous assumption, you have invested $10,000 using a 90% mortgage to purchase a $100,000 property that has an actual value of $110,000 because you ‘found a good deal’. So what can you do to further increase the value of your new $110,000 property?

It is amazing what a cleanup, a little landscaping and a paint job can do to increase the value of a property. Only a few hundred dollars well spent can result in huge value gains in Orlando Investment Property. Your $110,000 property with a little effort could easily be worth $115,000, $120,000 or more virtually overnight! Do you have to do any of this work yourself? Absolutely not! If you like to do that sort of thing then have at it, but if not, simply hire it done and accept a little lower net gain.

Reason 4:

Superior Tax Position: The tax code in the United States is geared to reward Investors who make housing and other property available to the population. When you invest in stocks, you are taxed at some of the highest rates in the tax code. When you invest in Orlando Investment Property, you put yourself in one of the best tax positions in the business world. Remember the wealthy that hold substantial portions of their assets in Orlando Investment Property? Tax advantages are one of the main reasons this is true.

Continuing with the above example, let’s say that you have completed your ‘deal’ with the $10,000 invested with a 90% mortgage to purchase the $100,000 property that appraised for $110,000 (because you ‘found a good deal’), which you improved to say, $115,000 by spending another $1000 on cleanup etc. Assume that one year passes and the Orlando Investment Property market grew by 6%, your property would now be worth $122,000. So far, so good right? If you are like most people, you may want to spend some of your hard earned money.

Let’s do the numbers. You have a mortgage at current rates that started at $90,000 and after a year worth of payments (the majority of which are tax deductible) you still owe approximately $89,000. However, your property is now worth approximately $122,000. If you were to refinance at 90% once again, you would take out a new mortgage of approximately $110,000. This will leave you with approximately $21,000 in cash in your pocket. Now, the BIG question; do you have to pay tax on that money? Absolutely Not! You have not sold the property or realized a ‘capital gain’. You have simply borrowed money from yourself. You are able to do what you wish with that money, free from any tax whatsoever. Obviously, a good strategy might be to purchase two more properties just like your first deal!

Also, we have not taken into account the fact that ALL of your interest payments on this property are tax deductible. In addition, you are also able to depreciate the property itself and all of its contents for additional tax advantages if you choose to do so.

Let’s be fair and compare the Orlando Investment Property tax position with the stock scenario. Assume that the $10,000 initial stock investment grew by 10% in the first year, creating a gain of $1000 and you wish to access it. If you draw it out, you will pay from 20-28% (or higher) in capital gains tax in order to have access to this money. This reduces your net gain to $800 (actual 8%) or less, depending on your tax situation. Compare that to Orlando Investment Property and you are beginning to get the picture.

Reason 5:

Limit Your Exposure To Risk

Risk Management: Do you remember at the top when we said that banks would compete fiercely to loan you money on Orlando Investment Property? The answer to the ‘why’ is very simple. Low Risk. Banks incur little if any risk when loaning money on Orlando Investment Property due to the steady, solid growth rate of the property market, as well as the fact that if you default on your payments they will simply sell the property to somebody else. This is in direct contrast to the volatile stock market, which can vary daily with sharp increases and decreases in value. Furthermore, banks realize that a property isn’t going anywhere, whereas many investors know all too well about .com and other types of companies that were there yesterday and gone today.

This is all not to say that Orlando Investment Property markets don’t go down from time to time, however the dips are much less dramatic than that which can take place in the stock market, proven out by the banks’ willingness to loan money on property.

Reason 6:

Protecting your peace of mind.

Finally, Now that we understand the value of leverage and risk management we realize that a 6% Orlando Investment Property gain ‘beats the pants off’ a 10% stock gain in actual return on investment by a wide margin (approximately 50%, not taking into account several factors that can increase this number such as tax advantages, income on property etc.) Owning good, solid Orlando Investment Property allows you to sleep at night, or go on an extended vacation without worrying about your asset column. This is directly opposed to holding a substantial percentage of your assets in stocks.

Lisa Carson
http://www.biminibayresortinvestment.com
lcarson@biminibayresortinvestment.com

Author: Lisa Carson
Article Source: EzineArticles.com
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Buying Off plan – Get rich quick no risk or Fools Gold?

It seems to be the hot topic – many agents in the area are pushing off plan as the investment vehicle for get rich quick. Is buying off plan the key to quick money or can it leave you with egg on your face and no dinero?.

The basics

Buying off plan means buying a property before construction starts. The developers need to finance the project and typically use bank mortgages to finance the project. Increasingly however they sell an amount of the properties off plan to investors who hope to increase their investment many fold.

They put down an initial deposit of say 30% and if the property increases in value by say 20% in the time it takes to build then because you are staking a smaller amount your money grows faster. The purchaser then sells on their contract before completion, and the new purchaser pays all IVA and taxes paid to date, so in effect the only taxes you pay are capital gains tax.

Sounds perfect – where do I get in?

Before we go rushing in to buy off plan lets look at it a little closely.

What has happened recently is that many amateur investors rush in without doing their homework and buy off plan, fuelled in part by the many agents out there who are pushing off plan developments as THE way to make money.

The developers are aware that investors are buying and therefore price accordingly. We often receive calls from developers offering new developments to off plan investors, buy 99% we refuse as they don’t offer any sort of real investment. An off plan development should be under priced by 10-20% compared to other constructions nearing completion, or indeed complete. It stands to reason that if you are effectively funding the project you should gain something out of it.

However very rarely these days to developers offer any sort of discount at all of buying off plan. There argument is that the market is moving so fast that in two years time it will be worth much more.

Add to this that if a development is being sold to off plan investors – what happens nearer the time of completion. Yes everyone wants to cash in their chips before going to the notary and having to pay purchase taxes. So guess what lots of property go on the market at the same time – over priced of course because they were told that it would be easy to sell at a much higher price. Lots of product in a flat market means prices drop and the price you expect isn’t going to be achieved.

The Risks

1. Prices may not rise as expected

2. You will need to finance the property if you cannot sell it – can you afford another mortgage payment?

3. Too many investors (more than 15%) means more people selling at the same time – less likelihood of selling at a good price

4. Too much construction in the same area

5. Poor location

Off plan investing is a serious business. There is money to be made at it but you have to follow guidelines. The art of selling a property is to buy the property less than market value, but many investors have lost money by buying without thought so how do you avoid becoming one of them
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Here are a few simple rules to lessen the risk

1. Make sure that the price you are buying at is genuinely below market value – at least 10% but better 20%. You will be told time and again that the value will increase. That may be the case but unless you are clairvoyant how can you possibly predict what will happen in 2 years time. Did you envisage Sept 11th or March 13th?

2. Do your homework. Will the property be easy to sell afterwards. Find out what people are buying in the area and why. Adosados/Terraced houses, and town houses are difficult to resell because they are in vogue or out of vogue – apartments and villas are easier. The Spanish love apartments so you have a ready market for good quality apartments. They just don’t like buying something that they cant see (or generally so)

3. Research who will be likely to buy the property afterwards

4. Is the location prime. If not forget about it – you will have difficulty selling later unless the price is very much below market value.

5. Are there many other investors buying here. If so be wary because they will all be selling at the same time.

6. Do not become emotionally attached. Do your figures. Will it stack up on paper. Will you make a profit when you come to sell. If not walk away. People who are emotionally attached to a property make incorrect decisions. Remember it doesn’t matter if you want the building sky blue pink – the potential buyers are the ones you should be worried about. What do they want.

7. Is it close to amenities? If not your market will be reduced

8. Are there many new buildings around or being planned. How many of them do you think will be selling at the same time as you.

9. Do not sign for anything on site (this is an emotional purchase see point 6). In a flat market as today there will always be units available – no matter what the agent tells you. Always think about it and do your sums. If it all stacks up buy it, if not – don’t.

So how do you make money from off plan?

Generally if you are buying off plan you are too late. Once the first few units have been sold the prices will rise. The best time to buy into a development is when the land is being bought. But this is more difficult because you need to be close to developers or land purchasers- how do you find when land is being bought. It comes down to homework and this is my little secret, but there are plots around being bought now that will make very attractive investments.

In fact one I know of will hopefully have apartments for sale at half the value of surrounding property. Now that’s what I call a sound investment because you can make a profit and sell it on at below market value – so you will win., the buyer will win and the developer will win.

So when it comes to investing off plan the main point is do your homework. There are very few real bargains about these days but a little digging will soon turn up a gem because most people don’t bother looking hard enough. If you want any advice of course you are welcome to drop me an email

Vince Barnes is the owner of http://www.SpanishProperty-Direct.co.uk – a website aimed at informing buyers about the process of buying in Spain and keeping up to date with news and regulations affecting the Spanish Property Market. He has also just published the book – “The Insiders Secret Guide To Buying A Property In Spain – The Book Estate Agents Don’t Want You To Read” – available at [http://www.spanishproperty-direct.co.uk/book.htm]rn

Author: Vince Barnes
Article Source: EzineArticles.com
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Can you guess how far it is between these two points? A: The starry-eyed dream of building your own home. B: The passionate and committed decision to build the home of your dreams!

Actually, only you can answer that question accurately … as it relates to you! Personally, I’ve noticed that for so many people, the distance is staggering. And the gap is often a deep chasm that results from the dread of the unknown.

You see, the dream of home building, or even remodeling, is often followed by that nasty little devil of fear. So what happens? RETREAT! Yes, we retreat back to our comfort zone, put that dream away for a while and breathe a sigh of relief that we won’t have to face THAT devil again for a while!

But, what happens when you dare to face your fears and make a decision? What happens when you actually take the dream and give it life by adding action and the “real time” details that bring building or remodeling your own home into focus? Details like who, what, when, where, why and how?

THE PERFECT HOUSE PLAN

It wasn’t long ago that I was displaying house plans and building materials at a Home Show and watched as some folks were eying the home designs on the table. They seemed intent on them and I sensed they wanted to talk to me. I asked them, “Are you planning to build a home?” Their answer was to laugh nervously.

“We have our building lot and as soon as we find the right home plan, we’ll build” they answered with another laugh. Now, as this didn’t seem that funny on the surface, I knew there was something behind the laughter. As it turned out, they’d been looking for that “perfect house plan” for six long years! Needless to say, they had not made a strong decision to build.

CLEAR DECISIONS BREAK DOWN BARRIERS

To make a long story short, I was able to help these folks decide upon a house plan. This didn’t happen because I knew just what would be good for them. It only happened as I helped them gain the clarity they needed through a series of questions and answers about what they really wanted and why they were stuck in neutral.

Could you gain some clarity? What’s holding you back? Are you looking to break those barriers that have kept you from moving forward with your home building dream? See if you can relate to one or more of the following limiting mindsets … maybe one of them will get you closer to that empowering decision so your path can be cleared.

• The home building dream is only a wish until you make it specific and measurable: What specifics are missing in your wish list?
• Wanting to build but having no idea what that new home will really look like does not make for a good aiming point: When will you create that one vision that turns your fuzzy homebuilding picture into a sharp vision?
• Simply thinking that you want to build a home, but having no idea what the cost of building is, means you’re happy enough with the warm, fuzzy feeling of “some day maybe:” Who will you contact to determine building costs of your area?
• Looking at house plan after house plan without narrowing down the features and benefits that really work for you: Why do you choose to remain so general and what are you fearful of?

THE POWER OF DECIDING TO BUILD YOUR OWN HOME

Nothing happens until you make a decision! The powerful action of deciding exactly what you want is the catalyst needed to make a whole series of decisions. Dozens of decisions come together once you gain focus.

So, what will you do today or tomorrow to bring you closer to a decision about what you want in a home?

Will you identify the one single scariest feeling you have now and resolve to find an answer?

Will you find one single decision that you can definitely make and follow through on? Progress is made by taking one step at a time.

Define your home dream first. It’s empowering!

You can learn so much more about home building and remodeling online. One great option is to take advantage of a very informative yet simple to follow *free* e-course that you can find by clicking here http://www.DreamHomeCreation.com You will also find other tips and tools, surveys, videos, and additional articles by Mel Inglima.

Author: Mel Inglima
Article Source: EzineArticles.com
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If you’re involved in building, or refurbishing a property, then you will need to be aware of Part E of the Building Regulations, which were introduced in July 2003.  This section covers sound insulation, and sets out to raise the standard of sound insulation, and so reduce the amount of complaints about noise transmission. Noise pollution is covered by Health and Safety, and so is taken very seriously.

Here are 10 things you need to know:

1. Part e of the UK Building Regulations covers new buildings, refurbishments and extensions. 

2. Part E contains section E1-4 which cover different issues. 

E1 is protection against sound from sound from other parts of the building, and adjoining buildings.

E2 is protection against sound within a dwelling

E3 is reverberation in common internal parts of the building, such as flats or rooms for residential purposes.

E4 is the acoustic conditions in schools.

3. Pre Completion Testing is carried out before the build is complete to ensure that the building project meets or exceeds the UK Building Regulations Part E.  One out of every 10 construction types is tested, and all tests are at the discretion of the Building Inspector.  If the building fails the test, then the sound insulation will need to be improved, and then tested again.

4. Robust Detail is an alternative to Pre Completion Testing.  If the acoustic flooring, and other sound reduction products used meet the Robust Detail standard, they have already exceeded the standards set by Pre Completion Testing, and so the building does not have to be tested.   Robust Detail only applies to new builds.

5. New schools are also subjected to the UK Building Regulations Part E, to ensure that the amount of noise that transfers between classrooms is minimised.

6. Acoustic insulation, and noise reduction needs to be considered at the design stage, and not as an afterthought once the building project has started.  Failure to implement proper sound insulation is likely to mean that the building will fail the Pre Completion Test.

7. Flanking noise is where the sound takes the easiest route.  If there is sufficient acoustic insulation and the sound can’t go through the wall, then it will go up and over, or around the side. There are various ways to reduce flanking transmission.

8. Airborne sound is the sound created by voices, or music, or traffic. 

9. Impact sound is sound created by something touching something else.  Footsteps, a door banging, a vibrating washing machine, somebody playing a drum kit, are all examples of impact sound.

10. If you’re not sure how these Building Regulations will affect you, then why not seek professional help?

Now you know more about the Building Regulations, if you’re involved in building or refurbishing property, you’ve got no excuse for poor sound insulation

Find out more about the UK Building Regulation, and Acoustic Flooring and Sound Reduction at Hush.uk.com, and find out exactly which products you need to soundproof your building project, to make sure you meet or exceed the Building Regulations.

Author: M James
Article Source: EzineArticles.com
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How much does it cost to build a home? Everyone wants to start with the cost of the building materials. And while that represents a huge portion of the overall costs (probably the biggest in most cases), it’s still a fraction of the total cost to build.
 
This article is designed to help you, as an owner builder, understand the factors involved in figuring the cost of a home building project. My goal is to present you with a birds-eye view of how the cost of materials, while representing a big chunk of the home-building budget, cannot be thought of as an indication of your cost to build a home.
 
A Home Building Budget is Complex
 
Let’s put the cost of home building materials in perspective. What have you got when you have a pile of materials? Sticks, windows, doors, cabinets, appliances, tubs, sinks, lights, floor coverings … yeah, lots of cool stuff, but pretty much useless in a pile. The magic comes in how it’s all put together.
 
It takes a lot of people, talent, time and energy to make a pile of materials a home. This is what we pay for, even when buying materials. But, we’re still only about 30% of the way home once we’ve priced out our materials package.
 
Your total investment to build will be spread over the following:
 

• Cost of land and utilities
• Coaching and project supervision
• Building permits and other required fees
• Home design and architectural work
• Financing and reserves
• Professional and casual labor
• Deliveries, insurance, contingencies

 
Simplifying the Process of Pricing With Kit Homes
 
Many owner builders use packaged homes to make pricing a materials package easier. But it still doesn’t remove the need to factor in all the other costs of building a home. Don’t make the mistake of asking for the price of a package and think you’ve got a good handle on the cost to build.
 
Home building packages do include more labor than a site built home, but they only slightly reduce the need for all the other building requirements I’ve listed here. As always, I advise the use of a home building coach to accurately assess your project. 

You can learn so much more about home building and remodeling online. One great option is to take advantage of a very informative yet simple to follow *free* e-course that you can find by clicking here http://www.DreamHomeCreation.com You will also find other tips and tools, surveys, videos, and additional articles by Mel Inglima.

Author: Mel Inglima
Article Source: EzineArticles.com
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A chunk of every home building budget goes to the inspector. Those sneaky people who come to poke around, slow you down, and make you redo what you’ve already done. Sometimes it seems like your local building authority is ready to dispatch one to analyze every move you make.
 
Are you planning to build or remodel? Well, you gotta pay the man. And sometimes those building department fees really add up.
 
Owner Builders and the Local Building Authority
 
Over the years, I’ve discovered that owner builders are mystified by the requirements of their local building authorities. They worry about the code requirements, the submission of plans, and the inspections. Often, owner builders are baffled by what seems like unjustifiable costs for permits.
 
Here’s an outline of some of the costs you should expect and the reasons you are being charged. My goal isn’t necessarily to justify them, but to reduce the mystery so that you can be empowered to move forward with your project.
 
The Dreaded “Permits & Fees”
 
Just another form of taxation? I hear that a lot and in a way, it could be true. Building Departments are government agencies and salaries and bureaucracies cost money. But, let’s take a look at this from a practical standpoint so you can figure your costs and budget accordingly.
 
These represent some of the most common and your agencies could require more or less:
 

• Compliance with universal and local building codes: You’re actually paying for them to hire structural engineers to review every single plan that comes across their desk each day. They scrutinize every aspect of the structure.
• Health and Safety departments: Fire safety and other departments have to put their stamps of approvals on things.
• Parks and common areas: Expansion and maintenance of local parks & recreation departments are often involved in cities and counties.
• Schools: This, as well as all of the fees, can vary. Is your area growing rapidly?
• Utilities and hook-ups: Gaining access to city sewer, electrical grid, water, etc. can be rather costly but the alternatives can be substantially more expensive.
• Mitigation and variances: It is becoming quite common in many areas to charge impact fees to help find ways to balance growth and building with the environment. If you’re in an area where this is prevalent, the fees can be exorbitant.
• Periodic inspections: Yes, these are the guys and gals that come and snoop around.

 
So what does all this add to the cost of building a home? Generally, you can figure on less than 5% of your overall budget. Your local building authority should be happy to provide you with a list of all the fees and I recommend that is one of the first things you should do when thinking about building.
 
Where to Get Help With Complying
 
Finally, you very likely need some help getting your plans through the building department’s approval processes. As always, I advise people to use experienced building professionals and recommend a home building coach. Your coach will point you towards other professionals as well.
 
Another suggestion would be to use a local architect, designer, or drafter in conjunction with a structural engineer. With this approach, most of your fears will vanish as they will not only design the home in accordance with all the codes, they will back up their work and make any changes the building authority requires.

You can learn so much more about home building and remodeling online. One great option is to take advantage of a very informative yet simple to follow *free* e-course that you can find by clicking here http://www.DreamHomeCreation.com You will also find other tips and tools, surveys, videos, and additional articles by Mel Inglima.

Author: Mel Inglima
Article Source: EzineArticles.com
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