Buying Real Estate Investment Property For Retirement

Tuesday, August 28, 2012
What is the difference between rich and wealthy? The difference could be described as either working for a living or your money working for your living. In other words, when you are wealthy, your money works for you such as real estate property providing a cash flow so you do not have to work an 8 to 5 job. That is being wealthy.

It stands to reason that the purchase of a rental property today can make your retirement comfortable because the added income is a positive cash flow. Achieving financial wealth through real estate investments is long term, and can be risky if you don’t do your homework.

There are so many get rich quick scams out there, and some of them are get rich quick using real estate investments. Some of those infomercials are really so much hot air. They have the right idea but the wrong way to achieve it. That is why it is crucial to work with your tax advisor and a knowledgeable real estate professional rather than taking advice from an infomercial at one o’clock in the morning.

The problem most people face at retirement is that the cost of living has gone up faster than the increase in their 401K. Investment property can make a huge difference at not only what you can do when retired but also when you can retire. Working an 8 to 5 job generally does not allow you to save enough out of each pay check to acquire real wealth. Even those high paid executives can fall into a security trap thinking their income is assured, so therefore their retirement is assured. We don’t have to look any further than Enron or Worldcom to know that nothing is totally assured in this life; which is why you need to take control of your life and your retirement.

If you were to take $50,000 and use it as a 10% down payment on a $500,000 investment property, assuming: a breakeven cash flow and not including any tax credits or tax breaks, the value of the property appreciating over 20 years, the value of the property would be three times as much as when first purchased. That means that your initial investment of $50,000 has equity of over $1,400,000.

Take that same investment of $50,000 to a market fund or other bond-type, non-risk investment, and you can expect an 8% to 10% increase on average. After 20 years, you would realize $266,000 to $366,000.

When you put it into perspective in a real life type of comparison like this, you can see that real estate investment can provide a very lucrative retirement with little or no risk to you. The added benefit is that you are able to leave a nice legacy to your loved ones which is priceless.

By: → Alex Anderson

Real Estate Investment Loan – Two Critical Things To Consider

Saturday, August 25, 2012
Have you ever wondered why some real estate investors fail to meet their monthly bank instalments for their real estate investment loans or why their once stellar real estate investment has gone sour? This article will cover two critical external factors attributable to Real Estate Investment Loans that can affect the viability of your Real Estate Investment.

1.Interest Rates

One of the key advantages of Real Estate Investment over other types of investing is the ready access of information available through the traditional print media and the internet. If you do not know much about macro-economics, the first basic bit of economics that you can learn relating to your Real Estate Investment Loan, is the effect of an interest rate rise and whether there is going to be a rise and why and when. A rising interest rate may eat into your monthly cashflow and erode your earnings so it would be wise to spend some time thinking about the effect of a change in the interest rate on your current investment situation.

When choosing a Real Estate Investment Loan, you want to have an eye on current interest rates, future interest rates and the penalty that you might have to pay should you want to refinance your loan later to take advantage of a subsequently lower interest rate. So an obvious thing to do is to get a fixed interest rate, if you think that the interest rates are going to be higher in the next few months. The way to analyze this is to spend some time reading the business part of the newspapers to consider how monetary policy in the Federal Reserve is going to be in the next few months. This explains why some financial institutions and large property developers hire former Federal Reserve executives to tap on their expertise in understanding Federal Reserve Policy.

Another related interest rate investment strategy pertaining to Real Estate Investment Loans is to buy the property “subject to the existing mortgage” if the mortgage was locked in at a lower interest rate than the prevailing market rate. This particular strategy works well in a rising interest rate situation. Remember that a slight percentage increase may translate into a large jump in the amount of interest that you are paying so it would be wise to do your maths and get a friend to double check it before you leap into a deal.

2.Rental Yields

The most common indicator and thing that people would know about rental yield if you ask them is the Return on Investment (ROI). This is the annual rental as a percentage of the total cost of the property. So for example if I had paid $100,000 for the property and I recoup $10,000 per annum, my ROI would be 10%. Note that as a quick rule of thumb this also means that (excluding interest), you would fully pay up your property in ten years if you apply the full rental proceeds to servicing your real estate investment loan.

However, ROI is not the end all and be all of the analysis, another consideration when analyzing Rental Yield is not only the current or past rental yields but the future rental yields. Thus in order to do future projections, we need to study the property cycle of the target country and examine economic factors which may affect supply and demand of rental property in the area.

For example, let’s say that we deem a particular Real Estate Investment viable this year for the purposes of cash flow and get a Real Estate Investment Loan. But what the you might have not considered is that you bought the property at a high in the property cycle and rental demand might go back to normal levels thereafter, rendering your so called Real Estate Investment in negative cash flow territory. So we can observe that you need to learn about the potential downside of your investment and do your sums carefully before you embark on getting your Real Estate Investment Loan.

In conclusion, having a good understanding of interest rates and rental yields will enable you to profit from Real Estate Investment and as such it would be imperative to learn all you can about these things in your target market so as to maximize your profits and yields. Investing in property when viewed in this light can be said to be a science and it sometimes is best to treat it as such so as to remain detached when deciding on whether to enter into a deal.

By: → Joel Teo

Basic Rules Of Preconstruction Investment Real Estate

Tuesday, August 21, 2012
Although the preconstruction real estate investing option has been around for many years and is nothing new, it just recently became well known to the masses and real estate investors all over the world are scouring the web for the best new construction and preconstruction real estate projects in areas where real estate prices are skyrocketing (Baja Mexico, Costa Rica, Bulgaria, Cabo San Lucas, Orlando). While the sudden increase in demand has influenced many legitimate developers to offer more projects and developments, it has also seen the emergence of many ill-prepared developers into the market. Here are just a few ways you can properly screen your preconstruction real estate developer / brokerage and make sure you are not signing with a less then reputable developer:

1. Read Small Print – Before investing in a development, be sure not to fall victim to the curse of the small print. Avoid ending up the subject of those horror stories about real estate investors who are suckered into scandalous contracts with real estate developers. Some real estate developers will not let you sell the property until years after it is finished and others will charge huge penalties if the property is sold early. Always, have an attorney look at every contract before you sign anything.

2. Find a Preconstruction Brokerage – Unless you are VERY well connected in the area's preconstruction market, it's a good idea to go through a real estate brokerage that specializes in preconstruction real estate developments. There are several reasons why using a quality brokerage can help you, but most importantly, they know the developers and can discern between which can ensure quality and which are "accident prone".

3. Research the Developer's Past Projects – If the developer has had huge delays in past preconstruction projects, it will probably happen in the next several projects. Remember that your time is money – even if you get your full deposit back 2 years later, because of constant delays you may lose hundreds of thousands of dollars worth of wasted time and resources.

***Note*** As real estate developers have learned that the word "preconstruction" alone can sell out a project, they have created a new trend in the industry by labeling every phase of the project a "preconstruction phase." Often these are low-quality condo conversions or condotels that are not worth half the asking price. BE SURE you are buying in the actual preconstruction phase before purchasing!!!

Just remember, the bigger the preconstruction real estate market gets, the more you have to watch out for fly-by-night developers and unethical brokerages that don't have your best interests in mind.

By: → Phil Laboon

Making Money With Las Vegas Real Estate Investment

Friday, August 17, 2012
Las Vegas in the state of Nevada remains today ever more than before one of the top real estate investment locations in the United States. Many real estate investors have been flocking into the state to invest in property in the area and there is a good chance that the growth of the gaming industry there will continue to spur economic growth.

This article will highlight three areas to consider when choosing your next property investment in Las Vegas.

Firstly, consider proximity of your property to the strip or even better purchase an apartment in the Casino itself. In real estate investment, the prime indicator of capital growth is rental yield. By purchasing a property near to the strip, your occupancy rate and rental yield of your property would be higher than say a little near the fringe of town. The latest developments by W Hotels & Resorts feature for instance apartments that they rent out on your behalf and you collect the rental proceeds.

Secondly, city rejuvenation projects may also provide an avenue for growth. The city realising that much of the human population in Nevada started to migrate away from the city centre and so has embarked on a redevelopment project so as to attract the crowd back to the city centre. One of the tenets of real estate investment is to invest in the path of progress and you might want to invest in properties that are in the newly redeveloped areas in that part of Nevada.

Thirdly, remember the impact of Nellis Air Force Base. This base remains one of the drivers of the need for services in Nevada and commercial property surrounding the area may provide somewhat good rental yields for companies and businesses that wish to provide services to the base employees.

In conclusion, Nevada today ever that before, remains an important investment area for real estate investment in the United States with the ever increasing tourist traffic and convention traffic flooding into the area. Spending some time considering real estate investing in Las Vegas is therefore going to be a profitable thing for you this weekend. Start taking some massive action today and your financial future awaits you.

By: → Joel Teo

Property & Real Estate Investment in Egypt

Monday, August 13, 2012
The main reasons Egypt is so popular with property investors are its stable economy and comfortable standard of living. At present the price of property in Egypt is still within the means of many buyers, however as prospective investors realize the countries potential these prices are anticipated to grow rapidly.

Seen as an emerging property market, Egypt has already demonstrated strong returns for those who invested early, some have reached 20-30% per year depending on the area. The government has stepped up its promotion of the country and is dedicated to modernizing Egypt’s communications and transportation networks in preparation for the arrival of visitors to the country.

The popular Red Sea coastal resorts and main cities of Cairo, Luxor and Alexandria have received the main attention from overseas property investors. Various development projects are underway or have already been completed in the coastal resort regions. Due to this there has been an increase in tourism leading to a significant boost in demand for property in Hurghada, Sharm El Sheikh, El Gouna and Marsa Alam.

What has caused Egypt to become more popular during the last few years? Generally, people are drawn here for its interesting and exotic culture and traditions, yet it also manages to be modern in its provision of amenities. Egypt has the advantage of being just a short flight away from most major European cities, it can offer the ideal climate, has a stunning coastline and a broad range of activities and sights. Currently the country has a healthy economy and the government is energetic in its promotion of the country to tourists and visitors, these are just some of the basic ingredients needed for investors looking for long term returns from property in Egypt.

As Egypt receives more visitors each year, the demand for high generating short term holiday rentals increases and with a year round warm climate the continual holiday rental is also positive. Budget airlines have already organized flights to the Mediterranean and Red Sea resorts, minimizing the time the journey takes and the cost. There are regular flights operated by British Airways and Egypt Air between Heathrow and Cairo International Airport where a connecting internal flight can then be taken to the coastal resorts of Sharm el Sheikh, Marsa Alam, Hurghada and Taba.

Over the long term, investment opportunities for Egypt real estate are positive, for anyone thinking of investing in property here this is the best time to do something about it as the economy is steady. The Egyptian government is busy marketing the country to overseas investors through tax breaks and a simplified purchasing procedure. The costs of labor in Egypt are low, the standard of living economical and tourism levels are on the increase.

Spain and Turkey have been the leading destinations for property investment for many years, however that is changing as Egypt emerges as a promising destination for investment purposes. As Egyptian resorts continue to provide first rate amenities and the number of visitor’s increases the potential for rental returns is high.

By: → Michiel Van Kets

Commercial Real Estate Investment Overview

Wednesday, August 8, 2012
Commercial real estate investing is an exciting and rewarding industry that yields results to which no other industry can quite compare. In fact, commercial real estate is one of the easiest ways to become extremely wealthy with limited knowledge, personal financial investment and time.

With commercial real estate you are able to return millions of dollars within a matter of a few years, and use other professionals to make it happen. If you can find the deals, get financing, and find the people to do the work, you are officially a commercial real estate investor. Below you will find 5 basic steps that involve commercial real estate investing. It may be simple- almost too simple. However, commercial real estate investors follow these basic guidelines often.

The first step in becoming a commercial real estate investor is to locate actual deals. This can be done through finding potential properties on the internet, the local newspaper, brokers and agents, and for sale by owner (FSBO) signs. There are so many places to locate properties. Be sure to set criteria for the properties that you are going to work with such as type of property, price as compared to actual value, size of lot or building, number of units, condition, etc. Keep in mind that the properties where you can create value that does not currently exist are the best properties with which to start. Once you become a seasoned investor, you can then purchase properties just for their income. Until then, you must perform the work to increase the value of a property.

The second step is to prescreen properties according to the guidelines you originally stated. It may take calling on several properties to find one that fits your specific criteria. Establish quick identifiers so you can quickly move through properties that do not fit your criteria, and uncover the ones in which you would be interested. The more properties you filter through, the more likely you are going to find the deals that will return the best results.

The third step to commercial real estate investing is, after you locate and prescreen a property that you feel is workable under your guidelines, you must create and submit an offer. There are many ways to purchase a property. Using seller financing, borrowing from banks, and using commercial lenders or private lenders are all viable options. The idea is to use other people's money (OPM) to purchase the property you want. This can be done quite easily by understanding the lender's criteria. Meeting seller's wants and needs can be as simple as asking. Remember that the asking price is not always what a seller is expecting to get, so be sure to perform solid research before constructing and submitting an offer. It is a must to identify the current market value of a property that you are considering to buy.

The fourth step is to follow-up with solid due diligence. This entails getting every bit of information you can on a property including actual highest and best use, after developed or future value, any issues or concerns there might be with the soil or environment, or the city or municipality. This is your time to verify all the information you either have been told, or have assumed prior to submitting the offer. This is also your time to locate financing, if you find that the deal is as you had thought originally. This is perhaps the most crucial step, as it will save you from making a terrible investment that could cost you wasted time, effort and money.

The final step is following through with your exit strategy. Depending on what type of investment strategy you are currently using, such as buying properties in poor condition and fixing them up, or perhaps you are looking to purchase properties only to have them generate income, an exit strategy is necessary. You could quick turn a property after increasing the value, sell at retail, or even refinance. It is always a good idea to have multiple exit strategies in mind so that, if one does not work out, you have others to fall back on.

As you can see, commercial real estate investing is really not that difficult of a process. In fact, when you follow these five easy steps you will gain more knowledge regarding various types of commercial properties and how to best obtain financing. You can become a successful investor. Don't ever think that this industry is unobtainable by those not yet educated in the world of commercial real estate. I urge you to continue your pursuit as a commercial real estate investor so you, too, can live the life of your dreams.

By: → Tony Seruga, Yolanda Seruga, And Yolanda Bishop

Real Estate Investment – Three Ways To Success

Saturday, August 4, 2012
If you ever wondered about the most profitable investment avenue, real estate investment comes out tops. Did you know why? As population rises, demand for services and quality living space is bound to grow. Families would look for residences and business would want more offices. Naturally then, owning a piece of real estate would bring higher returns in the form of rental income and capital appreciation over time to beat inflation.

Before you jump at the friendly next-door real estate agent with dreams of cornering a property in the most glamorous district in the city, do your groundwork well. Here are three simple ways to success with real estate investment.

• Determine your time span and budgetary constraints.

• Do a thorough research on the investment.

• Stay motivated to make real estate investment an ongoing habit.

The first step in your attempt to invest in property consists of making a realistic estimate about your finances. You need not save up for the entire value of the property. Even if you decide to purchase a mortgage, the lender would first ask for your financial position. So, calculate your present and potential future earnings, deduct living expenses, payment for other debts and outflows for savings. You can find out the sum you would be ready to pay monthly towards home purchase.

You should calculate the probable number of years for which you could invest in real estate. This puts a dollar value on your capacity to invest and removes ambiguity.

The second step is the most crucial and time-consuming. You must perform a detailed study of the trends in the real estate market. A few rules of thumb are:

• Concentrate your search closer to your area or at least within your state.

• Look for growth potential in upcoming areas.

• Personally inspect the property and the area a couple of times before making the decision.

• Consider areas with good infrastructure as these bring higher rentals.

Investing in real estate should not be a one-off affair. You must imagine property as a component of your investment portfolio. Hence, you must remain an active investor. Keep watching the trend and move out of unprofitable areas to more lucrative ones. Do not be disheartened by the occasional losses. With time and experience, you would make better choices.

Real estate investment calls for careful planning and methodical execution. It is the best way to make your hard-earned money multiply faster and easier. If you did your preparation well, it would be impossible to go wrong.

By: → Joel Teo

Real Estate Investment: A Way To Secure Your Future

Wednesday, August 1, 2012
It’s commonly seen that people take longer time before investing in certain expensive items. They make lots of investigations regarding their purchase. Only when all their queries are answered than they agree to invest in the particular purchase. Similarly, investment in land requires an equally careful investigation on part of the buyers. Besides, a lot depends on whom you purchase the land from.

Purchasing land is like purchasing gold. You ought to be aware of its fluctuating prices. Since land prices are always registering an upward rise in the graph, its best to invest in purchasing it without much hesitation. This should be done, of course, not at the cost of overlooking other relevant factors i.e. a buyer has a limited budget and further delay on his part can often result in his inability to purchase his desired land. Moreover, once a land is purchased, the owner always has the golden opportunity to sell it off at an enormous profit. Land prices are always soaring high and so the buyer can enjoy great profit whenever he sells it!

It is very necessary for the buyer to approach the right person from whom he wants to purchase his land. In the present day scenario, approaching a real estate firm would be suggestible. A number of firms offer lands at below market value and assist buyers to purchase lands with built-in equity. Besides, buyers are also offered consultation services with regard to the transaction. They are welcome to make the required investigation with regard to their purchase. The legal formalities, too, are taken care of by these firms. Hence, purchasing land has become an easier and hassle-free task.

Those interested in purchasing land should make no further delays. Always remember that land is an asset that everyone wants to covet as much as possible. Quite a number of established real estate firms like the Arizona Land Wholesalers offer quality real estate property in Arizona. Investing in real estate is always a safe bet compared to investing in the stock market. Judging by present market statistics, land prices are going to rise further in the near future. It’s now the best time for buyers to purchase lands with future profit in mind.

By: → Suzanne Macguire