Posts Tagged ‘real estate investment’

Why buy now?

The Spanish property crash has in part been caused by massive over development. However although most of the development which has caused the problem has taken place on the coastal areas of Spain, the fall in prices has been seen in inland areas too.

I spoke to real estate agent Zoe Rolland Males from Andalucia Olvera Properties last week. She told me that the market had picked up significantly during the course of this year, but crucially, all the property being sold had been reduced by the owner.

Now in London or New York a statement like that wouldn’t mean very much, as we’re used to dropping house prices during a recession. The Spanish are not. During the Franco years, house ownership was promoted and 68% of people owned their own property. Houses were seen as assets that had some permanence and so never fell in value. After Franco the Spanish economy was driven largely by tourism and construction boomed. For thirty years the Spanish made money building hotels and holiday homes and never experienced a recession. Now for the first time, the Spanish people are feeling the pinch. As a result property prices are tumbling as never before.

Where to buy.

When William Dillard uttered his famous quote “Location location location” he was talking about where to site his department stores, though generally the sentiment works for any real estate investment and is especially true in Spain. There is one simple legal issue that is often overlooked by buyers and ends up causing many problems. The Spanish authorities have a land classification system. When you buy a property or a piece of land it may be urban or rustico (country). There are others such as industrial but I’ll stick to these two for simplicity.

If you buy a property with urban classification your life will be much easier. The telephone company will give you a phone straight away, whereas if you buy with rustic classification you may wait years for a phone! Urban property will likely be on main drainage whereas with country property you will have to solve that one yourself – probably by having a septic tank.

Don’t get me wrong, I’m not saying “don’t buy a farm in the middle of nowhere”. Many people dream of that kind of lifestyle. But for practical purposes as an investor, the chances are you’ll get a better return buying an urban property.

So what types of ‘urban’ property are there? Well much of the over building that has taken place on coastal areas is classified urban. One can pick up some bargains on the coast, especially at auction. This kind of property has a big drawback from the investment point of view. Because there are a massive number of property of the same type it will be many years, if ever, that this type of property attains a sufficiently high price to make a decent return. In fact, there is a danger that now the funds have dried up to build the surrounding infrastructure, many of the developments will decay and the properties within them may become unsalable.

“Thar’s Gold in Them Thar Hills”

For me the answer is in the inland mountain towns around the Murcia and Andalucia regions. There exist a few dozen such villages with stocks of ‘old town’, urban classified property that is relatively cheap to buy (under 70,000 USD) The Spanish town halls are very keen to see these property renovated and often provide grants to replace roofs or spruce up the outsides.

The capital return on an investment like this depends on keeping down the cost of restoring the property and finding a buyer. Fortunately the cost of labour and materials in Spain is relatively low. The market for restored old town property looks bright as the young people in Spain have been priced out of the housing market for many years, and are looking at such houses as starter homes. (top tip: install some form of central heating as the young Spanish buyers expect it)

If you are looking for an ongoing return, the lure of mountain towns is increasingly replacing the traditional ‘sun sand and sangria’ holiday. Restored town houses make ideal holiday rentals for folk who are active. They are walkers, birdwatchers, cyclists, and culture vultures. Not being troubled so much by the weather they are likely to bring you bookings all year round, whereas the sun worshippers are not found in great numbers during the Spanish winter!

Do’s and don’ts – what to look out for.

If you’re looking to invest in a Spanish ‘old town’ property there are a few essential things to consider.

• Flying freehold. Many Spanish properties start off with one owner. When the owner dies the house may get split between siblings who divide the house up. This may result in the rooms on upper floors having a separate owner. These kind of property cause problems and are best avoided.
• Vehicular access. Most Spanish towns originated before the invention of the car. To offer protection from the sun, houses were often built very close together, often with hardly enough room to drive a donkey through. Look very carefully at this. It is easy to be wowed by the charm of an old street but if it is not reachable by car it may deter buyers or renters. Also it may increase the cost of restoration as it may make the removal of rubble and delivery of materials much more labour intensive.
• Noise. Noise pollution may seem a strange thing to consider, but again it has an impact for buyers and investors. It’s not uncommon to find a small business on a residential street, perhaps a carpenter or a metal worker. In Spain it is not at all uncommon for such businesses to work until 9pm in the evening. Another thing to look out for is if the street is a rat run for small noisy motorcycles and scooters, as the Spanish youth seem united in the need to remove the silencers from all of these, and only seem to ride them late in the evening!
• Legality. Do get an independent Spanish solicitor to check out the legality of the property before you buy, making sure the seller is the legal owner and that there is no debt on the property. By independent I mean not connected to or recommended by the agent selling you the house.

If you follow the advice given here, buying a property in Spain is relatively straightforward, and by choosing the right type of property in the right area should give you a secure and lucrative investment.

Stephen Gould is the marketing manager for CSV The Voice, a real estate agency based in the North West of Murcia.

For more information Call Steve – (+34) 647 167 303 or email steve@csvthevoice.com

Alternatively visit our website at http://www.murciaspainproperty.com/

Author: Stephen Gould
Article Source: EzineArticles.com
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Once you reach the point that you seriously want to start investing in real estate, it’s time for you start searching for the real estate investment that best fit your investment goals.

In this article, I want to discuss why it could benefit you to develop a working relationship with an investment Realtor to help locate investment property, the qualities you should look for, and how you can find that person.

Why Use a Professional?

Let’s start at the top. Why would you want to use a real estate professional when you can find your own rental properties?

Foremost, because the right Realtor can guide you from your initial goal setting phase through the selection, acquisition, and subsequent management of your investment. They can direct you into investments you may not have discovered on your own and then negotiate the purchase for you (generally more easily than when a buyer and seller meet face-to-face).  Moreover, they are equipped with the tools like real estate investment software and the expertise to help you crunch and interpret the numbers.

Who is a Right Realtor?

Most importantly, you are not looking for a licensed agent who sells houses for a living without ever having become active or knowledgeable about investment real estate. You do not want a house salesperson with no or minimal clue about rental property.

You want an agent who works full time in the business and not only understands and practices real estate investing, but also knows the market.

The Realtor you want understands investing and is familiar with such things as taxation, depreciation, financing and tax-deferred exchanges. You want a specialist who can create rental property cash flow, rates of return, and profitability analysis presentations and then help you to interpret that data against your investment goals. A real estate investment might be the largest sum of money you will ever spend, and you want a broker who not only cares how you spend your money but also handles it amply as if it was their own.

How to Find the Right Realtor

You can locate agents in your area qualified to work with investment property in any number of ways.

Contact the brokerages and ask if they have an investment specialist in their office with background education in real estate investing; contact the CCIM Institute; contact the MLS and see who regularly lists rental property, the local Board of Realtors, and maybe a local appraiser, property management firm, or perhaps a friend or colleague who has been investing. You should have little trouble building a short-list of potentially qualified candidates that specialize in commercial and investment real estate full-time that you can meet with and interview. How you make your selection afterward will probably boil down to chemistry; whom do you prefer to work with.

As an investor, especially if you are a first time investor, you will discover that having a good investment specialist on your side will truly benefit your investment goals and well worth your effort to locate one and utilize their services.

Here’s to your real estate investing success.

About the Author

James Kobzeff is the developer of ProAPOD – superior real estate investment software solutions since 2000. Fast, easy, and concise. Discover how to create cash flow, rates of return, and profitability analysis presentations for any-size rental property in minutes! Learn more at => http://www.proapod.com

Author: James Kobzeff
Article Source: EzineArticles.com
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It is important for you to first understand why you should invest in real estate. Because once you understand “why” real estate investment is the best vehicle of wealth creation then “how to” is the easy part. It is the “why” that will provide you with the motivation and energy to invest in properties. Without understanding the “WHY” you will never succeed.
 
You have to understand how real estate compares with other investment avenues such as savings account, shares/stocks, commodities & businesses.
 
Rate of Return
 
Shares and stocks are perceived to have higher returns than property and provide hedge against inflation but they pale in comparison to real estate when you take into account the leveraging power of real estate investing and tax advantages of property. It is possible to buy properties by using other people’s money (OPM) with returns that are 20 or 30  or 50 or 100 percent or more per year.
 
Investment Risk
 
If you wish to understand risk then just check what banks are willing to lend their money for.  Are they willing to loan money to buy paintings, antiques, diamonds, mutual funds, CDs, commodities, stocks & businesses? If so to what level of funding? For properties banks will easily lend to 70 or 80 or 90 percent and in some cases to even 100 percent of the value. Banks are the most risk averse institutions and if they are willing to invest in properties up to 100% of value then they consider the investment risk to be extremely low when compared to other investments. You should take your cue from the banks.
 
Buy Below Market Value
 
You must have heard the saying that ‘you make money when you buy’  and not at the time of selling. Is it possible to buy stocks or diamond or commodity or gold below value? When you buy $100,000 worth of stock you pay $100,000 in cash.
 
Investing in real estate after gaining a bit of knowledge, you can buy properties that are 10 or 20 percent or even more below market value. There are many reasons why people sell their properties below value. You can amass great wealth by simply buying property below market value.
 
Increase Value of Investment
 
Can you increase the value of your stock or bank deposit by tinkering with it? There is simply no mechanism by which you can increase the value of your stock or any other investment because you do not control them. However you can greatly increase the market value of your investment property by spending a small amount of money on making cosmetic changes or applying for change of use of the property.
 
Financial Leverage
 
No one has ever become rich without applying the power of leverage. Archimedes rightly stated in 200 BC that ‘Give me a lever long enough and a place to stand and I will move the entire earth.’
 
The financial leverage in the investment world comes from the use of OPM or Other Peoples Money. In real estate investing we buy property  with 10% down and yet we control 100% of real estate.
 
It is extremely difficult to finance other types of investments such as stock and businesses because funding is always an issue. Banks love property because of the low risk and capital appreciation associated with real estate.
 
Leverage can be used for quick wealth creation. If you know how to use leverage you do not need large amount initial capital to start your property investment portfolio.

Praveen Kumar is a real estate investor and an educator whose aim is to help create one thousand property millionaires in next 10 years . He wishes to share his knowledge and strategies on how to create wealth through residential and commercial real estate investment. On his website http://www.real-estate-investment.net you will find hundreds of informative articles, videos, audios and ebooks that will provide you with the leverage of knowledge to accelerate your progress.

Author: Praveen Kumar Panghal
Article Source: EzineArticles.com
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Did you know you can use your IRA or Pension plan to invest in real estate property? The majority of investors are feeling the pinch of the global recession and they don’t feel their investments are performing as they should. What these investors don’t realize is that there is another option out there for them called “private money lending”.

Make your Investments Work for you

Most people have been working for awhile have quite a large nest egg saved in their IRA allowing them to consider other options for this money such as real estate. Private money lending using your investments in your IRA and other retirement plans is a widely acceptable practice and can offer a very large return when done properly. There are some things you need to know before you use private money lending as an option to earn money through high interest earning loans.

Self Directed IRA

In order to take advantage of private money lending using investments you must have what is called a self directed IRA or a roll over 401k through a custodian. This simply means that you are responsible for making investment decisions on behalf of the investment fund. This allows you to direct your funds anyway you choose fit including private money lending and investment options.

Choosing a Custodian

To get a self directed IRA you must first choose a custodian for your account and roll over your existing 401K account after a job loss, retirement, or change of jobs (transfer funds within 60 days to remain tax deferred). Your new custodian will help you fill out all necessary paperwork and information so the process can run smoothly.

Choosing a Good Private Money Lending Investment

After you have completed the rollover process and assigned a custodian, you get to participate in the fun part which is choosing your private investments such as real estate investment. Make sure you do your research and find a good real estate investment firm that has been in business for awhile. The majority of private money investing options will offer an annual fixed yield rate of 10% percent or more! That means that a 20K investment will yield a 2K annual return on investment or $167 dollars a month just for loaning out your money.

Security

Many private money investments are secured by personal guarantees adding another layer of protection to the lender. Not only that, but there are checks and balances along the way to ensure that you are getting the most out of your loan and protected in the event of a default.

In a lot of cases private money lending investments are outperforming the stock market. This investing method is 100 percent legal according to the IRS and you have complete control over what you invest in and how much.

James J. Bullock of JDB Financial is part of a small team of active real estate investors and mortgage professionals working together to network with both private money lenders and real estate investors nationwide. To learn more about how you can invest in private money lending options, please visit: http://www.asaferwaytoinvest.com or http://www.asaferwaytoinvest.com/blog.

Author: James J Bullock
Article Source: EzineArticles.com
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There are many ways to build your fortune in the world today. One of the most common, and often the easiest to begin, even for the common entrepreneur, is purchasing investment property . In fact, you will often hear many rags to riches stories about the unemployed worker down on his luck that became a millionaire by investing in the realty market in one form or another.

There are many different types of methods for investing in this risky yet profitable venue. Realty is a great line of attack for anyone who is willing to take the time to learn the risks, options, and possible rewards for this type of investment process. Some of the more common ways of obtaining investment property are following.

The first way is called the Pre-construction investment. This is a highly speculative and very risky sort of investment that booms or busts with the times. The risks involved in this type of investment should not cover up the fact that many millionaires have been fashioned through this type of investing. And many more will be created in the future. Pre-construction investing is a type of investment where the investor purchases options on the property before any ground is broken for building. This type is more popular in high demand areas that experience housing shortages. These shortages often cause prices to rise quickly and the units are quickly sold before they are completed or any actual money changes hands.

The second type of purchasing investment property is through rental property. Property normally gains value over time. One problem investors have is the ability to hold onto and afford to maintain multiple properties over an indefinite period of time while waiting for house values to rise. One way to overcome this is by renting the properties to tenants while the property values are increasing. The tenant covers the cost of the note on the property making the venture less risky. There will still be the risks of dealing with tenants, such as property damage, failure to pay the rent, and possible legal problems of poor tenants.

Another option is the lease options. There are few people who never experience financial rough spots. Often these people are denied traditional home loans because of their poor management of debts in the past. For this reason they may be willing to pay for the opportunity of rebuilding their credit while working towards home ownership. For these people, a lease option presents a workable and often valued solution. Those investors who are willing to take the risks often find the rewards are well worth those risks.

We have all heard the stories of the investors who make millions by flipping houses. This type of purchasing of investment property has grown tremendously in the last few years due to the popularity of home improvement and house flipping shows on television in the last several years. More and more people have decided to pursue this sort of investment hoping to create big profits in a short period of time and with a small investment. The problem, of course, is that it looks much easier on television than actually doing it. Add to that the fact many people have unrealistic expectations when it comes to costs and their abilities. There are plenty of risks involved with this type of investment too. Successful flippers however see potential for great profit in a relatively short amount of time.

The final type of investment property is the buy and hold. As mentioned above, realty normally gains value over time. Even buildings in total disrepair are worth something just for the land they sit on. Purchasing several houses or large lots of land and holding on to them for as long as necessary before selling can often lead to financial gains. The longer these properties are held the better, providing a greater opportunity for the value property to increase.

These are only some of the investment property opportunities that exist for those who are interested in investing in realty. Other options include commercial and development properties. Needless to say realty investing offers many opportunities to the confident investor.

Source : Property Management

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Author: Kamyar Shah
Article Source: EzineArticles.com
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Real estate investments are actually meant for the expert players of this field. That is true. Nevertheless, people who have already tried their hands in real estate investing know well that if the investments are made well, one can easily get profitable returns. As per the experts in the Real estate field, there are plenty of ways to earn significant profits in the real estate deals. If you feel that the place where you have invested is quite profitable, you can earn a handsome amount of profit.

For a novice in the field of real estate, there are many challenges and pitfalls to encounter. However, if s/he is able to take the chance and is mentally prepared to bear the risk, there is definitely a lot to earn and much to learn. However, in the long run, when he or she has gathered some experience, he can become a real estate investment master closing quite a number of lucrative real estate deals.

As you want to be a good player in the fields of real estate investment, you need to acquire few skills before hand, which can help you to be a real achiever in the field of real estate. There are a few skills that are needed for investing in a real estate deal, which are mandatory for a profitable real estate deal.

Learn how to find the right sellers-

You should be aware of how and when to find serious sellers, as these authentic sellers can help you to earn a profit in the field of real estate. Make sure the sellers are of high repute, as if you are investing for the first time; this may cause the investing at risk.

Learn to be a master negotiator while you are closing a real estate investment deal.

While you are a novice, you try to acquire the skills of how to deal with the real investment issues. However, all your effort goes in vein when you are not able to negotiate well and end up with high prices. For that, it is quite necessary to acquire proficiency i8n closing the real estate investment deals.

Capable to analyze real estate investment deal accurately-

If you are capable to analyze the real investment deal, you will be able to understand where and how to deal perfectly. This will help you to be a gainer in a long run, as you can calculate the risks to some extent.

Gain expertise in all the fields revolving around the real estate investment-

In order to gain expertise in the real estate investment field, you must acquire expertise in all the areas, which involves the real estate investment. You must be aware of the lingo and terms used in the real estate investment world.

Develop understanding on the Real estate and the financial risks involved-

If you are able to understand what the concept behind the real estate investment is and the risks and benefits involved, you can easily be a master of this field. This understanding can be developed easily by educating yourself in this field.

Alton Hargrave can offer more information about using specialized software to manage your real estate investment business. His website, Real-Estate-Trader.com is a great source for auto enthusiasts.

[http://Real-Estate-Trader.com]

Author: Alton Hargrave
Article Source: EzineArticles.com
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