Posts tagged: assets

Tempted To Invest In Property? Read These Tips First

invesment plans in propertyWhen you think about your monthly budget, some non-negotiables take priority: mortgage, food, utility bills, insurances and your kids education. However, once you have accounted for these necessities, you may find yourself in the fortunate position of having some spare cash. If you are financially astute, you may park this money in a savings account to accrue over time. This is the safest option and requires minimal risk on your part. However, as your cash begins to stack up, you may find yourself wondering whether your increasing stacks of cash are working in the most effective way for you.

One major alternative to a regular savings account with a bank is to test your resolve on the property market. Investing in bricks and mortar has paid dividends for many over the past few decades. Lucrative returns can be had in the short term if you are quickly flipping a house, and also in the long term, if you are building up a rental portfolio. Take a look at these tips to help you decide the sort of property investment that you may be tempted to make.

Research Like You Have Never Researched Before

Although you may be impatient to see some of your hard earned money invested in the realm of property, it’s vital that you understand the styles of property that are in demand. If you are thinking of purchasing an inner city dwelling, the chances are that apartments and penthouses will cater for the needs of young professionals, with their lack of gardens and low maintenance requirements. If you are opting for the land of suburbia, you may want to consider larger townhouses and condos that will accommodate wealthy families, that are spacious and located within highly regarded zip codes.

If you are tempted to try your hand at purchasing a property to renovate and sell on quickly, ensure that you purchase the worst house on the best street and not the other way around. You can always alter a property by bringing in a team of tradespeople and renovating it, but you can never upgrade where it is.

The Rental Option

If you are going to dabble in the property market for the long haul, you may wish to let your investment. You’ll need to do your homework and make sure that the rent you receive each month covers the mtal-ortgage that you have taken out to purchase the property. Try and buy somewhere close to other rental properties. You may want to look at a location close to a university to attract students or a hospital that may appeal to doctors or nurses working nearby. If your property is close to good transport links and is easily accessible, it will appeal to more potential tenants.

You may be worried that you could end up leasing your freshly painted and coiffed property to nightmare tenants who refuse to pay their rent resulting in you getting into financial difficulties. Don’t worry. Use a credit referencing agency if vetting your tenants yourself or pass this responsibility over to a specialist letting agent who’ll take care of it all. For a small percentage of the rent each month they will manage your property, take care of maintenance issues and deal with any problems as and when they arise.

Investing In Property For Your Family

You may disregard the idea of flipping or letting a property altogether. Instead, you may be keen to upgrade your current home and take a few extra leaps up the property ladder. You might even be keen to build your very own dream home totally bespoke to your family. You could opt for an eco-home, a waterfront property or one of the many mansions designed by Playoust Churcher. The architect you choose will create your dream home designed and built specifically for you. By investing in property this way, you are enjoying the fruits of your money, as well as ensuring that you have a humble abode that will increase in value if you come to sell it at any point in the future.

If you have extra money each month, you can, of course, build up your savings for a rainy day. However, if you want to see greater returns on your investment, it pays to consider either purchasing a second property to rent or to flip and sell on quickly. You could also think about building your own dream dwelling. You never know, if you clue yourself up on potential locations, housing types and property market forecasts, you could be at the embryonic stages of forming your very own property empire.

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4 Things You Should Consider When Growing Your Property Portfolio

money property ventureEveryone wants to make money in the real estate business but for every billionaire property magnate there are a dozen bankrupt chancers sitting in motel rooms wondering what they Hell happened. Investing in a property as an absentee landlord is one thing, but going from renting out of flipping one property to growing a portfolio of properties is a huge and expensive transition that carried with it a certain amount of risk. Buy hey, if it was easy, everybody would be doing it!

Buying property for investment is very different from buying a home and it requires a different set of skills and priorities. While neither a seasoned investor or someone looking for a new home wants to buy a turkey, the more you invest, the smarter you need to be. Here are some important things to consider when building your property portfolio…

Focus and strategize

When you’re just starting out, your investment strategy will be something along the lines of ‘buy property’ but buying indiscriminately is the surest way to a loss. When your portfolio grows, however, you need to think a little harder about when and where you buy. Do you want to buy properties, renovate them and let them out while you live off the passive income or would you prefer to buy and flip them, maximizing the profits and reinvesting your capital in your next project? These will determine the types of property you buy and their location.

Diversify

A portfolio that’s richly diverse in terms of property type and location has a great chance of longevity and profitability. Investing heavily in hip, upcoming area is a great strategy since rental demand will be consistently high and your yield will tend to grow but you run the risk of keeping all of your eggs in one basket. If something happens to compromise the value of property in any given area, though, this can create huge problems for you. Thus it’s a good idea to hedge your bets by investing in a variety of different locations, even if they are similar properties to those in areas where you’ve already invested.

Don’t be afraid to refinance

Making money in property involves considerable and ongoing investment. While you need capital to acquire new property, you also need to have sufficient liquidity to manage your properties in terms of maintenance fees, ground rent and other fees not paid directly by the tenant. It’s important to be able to move quickly in the property game and having all your cash tied up in your investments can cause you to miss golden opportunities when they present themselves. Strategic refinancing can allow you to expand your portfolio, thus generating more revenue from rental income which means more disposable income for you!

Be prepared to let go of a dud investment

Investors can very often be their own worst enemies by obstinately clinging to properties that just aren’t working for them. Every now and then you may need to bite the bullet and take an up front loss. While a bitter pill to swallow, it’s far better than missing out on more opportunities because you’re shovelling all your capital into a money pit.

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That’s Your Lot! Why Auctions Are Great Real Estate Investments

money in real estateWhen a person invests in real estate, he or she doesn’t go to an auction. Usually, they find a realtor, view a variety of properties, and make a few bids. There is nothing wrong with this method. In fact, it’s a tried and tested technique which has provided excellent results on many occasions. But, that doesn’t mean that an investor only has one path to walk. Regardless of how you feel, auctions provide a range of benefits which make them a no-brainer. For the non-believers, below are the reasons why they are great places to find cheap properties.

Seller’s Circumstances

No one likes to address this topic, but the conditions of the seller play a significant role in the price. Anyone who can afford to wait doesn’t have to go to auction. Instead, they can put their house up for sale and go through the normal channels. By definition, people at auction can’t do the same thing. They either have to make a quick sale for financial reasons or have gone bankrupt. Again, it isn’t nice to admit, but this is an opportunity. Because people need an immediate injection of cash, they will accept lower offers and you can pick up a bargain. Sometimes, the bank will set the price and that will reduce the value further.

Less Popular

There is no doubt that the majority of people use the method above to find an investment property. Therefore, auctions are less attractive and not as well frequented. The reason this is important is due to a lack of competition. If there are fewer people at an auction, the price is bound to stay steady. When that happens, you pay less for the building than normal. Yes, auctions are usually packed, but not every person bids on every lot. For the most part, you will have competition from one or two people and that will keep the price low.

Perceived Risks

Another reason an average investor stays away from traditional and online auctions is the risk factor. In their eyes, the negatives outweigh the positives. Yes, there are risks and you will have to take a gamble of sorts. Still, the dangers aren’t as big as people like to imagine. After all, everything is in document form, signed and accounted for. Plus, there is a description of the house flaws. By reading this, you can get an idea of what to expect. Ultimately, the stigma keeps investors away and increases the chances of a bargain.

Play The Game

Think of an auction like a game of poker. By bluffing the other people in the room, you can keep your cards close to your chest. If they don’t know which properties you find appealing, they won’t up bid and increase the price. For example, a great trick is to bid on lots which aren’t attractive. This will get the ball rolling and people thinking the property is a keeper. When it comes to the one you want to buy, the competition will be less as everyone will have made their bids.

As you can see, an auction is an excellent place to find an investment property.

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Practical And Financial Advice For Building Your Own Home

home building money adviceMany people consider self-building a home, rather than buying a property on the market. If they haven’t been able to find their dream home elsewhere, it makes sense to build something from scratch, with all the features they have been looking for. However, you need to consider the costs. On average, it costs around $300,000 to build a home, so weigh this against the cost of buying pre-existing property on the market before you make a decision.

If building a home is something you have set your heart on, these are the steps you should take, and how they affect your finances.

1: Set a budget

You need to set a realistic figure before you begin, factoring in the cost of the land, building costs, loan repayments, and a contingency to deal with those unexpected costs. Use a construction cost calculator to give you an idea of the costs involved, as you don’t want to run out of money midway through the project.

2: Find the right location

You don’t want to build in an area that is inadequate for your needs, so think ahead. It is often cheaper to buy land on the fringes of a town or city, rather than the middle, so factor that into your choice. Wherever you choose, pay for the services of environmental consultants to make sure the land is safe, and free from hazardous materials and pollutants.

3: Speak to your lender

You need funding in place before the project can begin, so once you have chosen a plot to build your property, speak to your bank or another lender about arranging a construction loan. Funds will be released in stages, so you will only be paying interest on the amounts you have already drawn.

4. Know what you want

You need to have a clear idea of what you want your home to look like before you call in the builders. Your budget will dictate some of this, so speak to the experts, including architects and home designers who will help turn your dream into a reality.

5. Get planning permission

Before you start to build, you need to know that you are legally allowed to do so. Speak to your local authority for advice, and they will let you know the regulations attached to building property on the land you have chosen.

6. Factor in the hidden costs

Have a look at this article that will give you an idea of what to expect. There are costs you will expect to pay for, but it is good to be prepared for hidden and extra costs before building work commences.

7. Begin building

Should you choose a building firm, be sure to find somebody reputable. Be wary of those offering lower prices, as you don’t want anybody cutting corners on your project. There is some helpful advice here on keeping costs down in the construction process, whether you hire contractors or take on the building work yourself.

8. Enjoy your home

Finally, you will be able to enjoy your home, and spend whatever you think is necessary on the finishing touches. You could create the perfect home for you, or add value to sell later on. Enjoy.

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Exploring Your Options For Buying Property

property buying optionsThere are many reasons to consider buying a property. You might want somewhere to live that you can call your own? Perhaps you see real estate or owning a property as a status symbol. Maybe you’re just trying to collect assets? Regardless of your priority needs, any purchase worth as much as a property must be considered a financial investment. That means you must assess the risks of loss, and research to determine the potential growth or increased worth.

There are many steps you need to take before you can finally pick up the keys and let yourself in. Each of those steps might be a factor in your final decision or your reason for buying the property you chose. They might also be a reason for changing your mind too!

Time

The first consideration is time. How long do you have before you need to complete the sale? If you’re not in a rush, then you might decide to save up as much cash as possible before property hunting. The more you have upfront, the less you have to borrow. This increases the profit you can make on your property investment because you are not being charged as much interest on a smaller loan.

If you don’t have much time, then you need to find the money to cover the cost of the property. There are many other costs involved with buying real estate too. The legal costs and survey costs are just some of the expenses you need to cover up front. There are likely to be taxes, and you might incur moving fees if you plan to live in your new property. If you can spare more time, you can save more to cover each of these costs.

Financing

Financing your purchase is easy if you have a great credit rating. In fact, there are many mortgage lenders that are desperate to lend to people that have a good rating. Buy-to-let mortgages are plentiful too. If you have a substantial deposit, you might be eligible for a mortgage product that is low interest. If you’re not quite so financially ‘viable’, then financing in this way can become expensive.

Many ‘millennials’ are finding it necessary to approach the bank of mom and dad to fund the deposit. As salaries for this age group are quite low, it is essential to find quite a significant deposit. The deposit is the sum that is outstanding after the mortgage has paid for the property. The lender will expect to see that you have that outstanding amount (usually a minimum of ten percent of the purchase price) before paying the loan out.

If you are planning to become a property investor or a landlord, you might be able to develop a relationship with a business investor in this sector. This will become a legally binding business relationship in many cases. There will be responsibilities and obligations that you will need to meet. This is not usually the right option if you’re trying to buy a home.

Other Options For Raising Cash

You might already have a home that you need to sell first. This puts you in a ‘chain’ and can be difficult to coordinate. However, selling your current property may release a lot of equity so that you can buy another home. You don’t need to limit yourself to selling property to raise money for a deposit or purchase. Anything you don’t need could be sold privately or through an agent to help you raise more cash.

Your employer might also help you out with a loan or an advance. Usually, loans must be declared on your mortgage application. This might not appear favorably to any lender. Why not take some overtime, or ask for a pay rise? Changing jobs or taking a second job can also help you to raise the cash you need.

Sharing ownership of the property can also help you out financially. Legally, you are both responsible for mortgage repayments. If one of you stops paying for any reason, the other must cover the entire bill in most cases. Speak to your lawyer about this kind of arrangement and the potential consequences of non-payment.

Searching For The Right Property

Once the money is agreed, you can start searching for a property within your budget. You might already have some idea of the type of property you want. However, if you’re willing to be flexible, you might be able to secure a place with the most important requirements. You might be looking for four bedrooms, but your first choice of neighborhood means that is not affordable. You would need to reduce the bedrooms or pick a different community.

If you’re investing in property, you don’t need to restrict yourself to your local neighborhood at all. You could purchase overseas in areas that are up-and-coming. A big property search service like the one at http://rumahdijual.com/properti-dijual could help you to find something affordable. Of course, after the exchange rate, you might find you can afford incredible properties. Maybe large houses or mansions are affordable for you when you look overseas.

Whether you buy here or further afield, the purpose of your purchase must be clear in your mind. Consider your lifestyle and how the property you choose might affect that. If you’re buying as an investment, then a great deal of research on the community is essential. Look at sales data and the demographic of the region. Determine the type of person that will be interested in your property so you can strategize your marketing efforts.

Houses

Buying houses might be a little easier than other types of property. Land boundaries and rights to that plot are usually much simpler too. It’s unlikely you’ll be sharing any part of the property with others. This can make it easier to sell on when you’re ready. Of course, houses can be subdivided. You can rent out individual rooms or convert the property into flats.

Often, houses appeal to families. If you purchase a property that needs a little care and attention, you might be able to do the work then sell it on to a family in need of a good quality property. Alternatively, why not rent it out? Properties of multiple occupancies tend to net more profit and a higher rent in total, though.

Apartments

Apartments in the city can be very attractive to career driven singles and couples. However, the location of the property can drive the prices up. Nobody likes commuting, so many apartments are purchased or rented for mid-week living close to work. This means that you could tap into this market with your next property investment.

There are several things to consider though. There will be fees or rent to pay for the communal areas when you buy a property in a block. Empty apartments are rarely exempt. Access will be required periodically by the building owner. This could be for maintenance and testing of the block safety facilities like fire alarms. Ultimately, you have no land that is your own. The value of the bricks, therefore, may not appreciate as much as you would like.

For You, Your Portfolio, Or Business?

Once you’ve considered all of the above, you’re probably ready to make the final decision about the purpose of your purchase. Are you buying a home for yourself? If so, how long do you intend to live there? If the property is a forever home, do you intend to leave it to the kids as an inheritance, or sell it to fund your later-life care?

Perhaps this property will be part of a big portfolio you intend to develop over time? Maybe it’s the first one! Are you going to rent it out, or do it up and sell it on? Perhaps you’ll sit on it for a few years and wait for the value to go up? How will you start to reap a return on your investment in the meantime?

If you’re buying for business, then you need to consider the purpose of the property or the land it sits upon. You might be keen to develop the area. This might include demolition and rebuilding. Or maybe you’re converting or renovating the buildings on the land? Check the legal and planning restrictions on the real estate before buying.

The Process Of Buying

Buying a property takes a long time. Once you’ve found the one you want, you put in an offer to the vendor. They might go away for a few days to consider your offer. Even if it is agreed, you then need to find legal representation and finalize your financing. Surveys and checks can take weeks. If anything is found that your lender doesn’t like, you might have to start a new application with another lender.

At any point, the sale can fall through. There may be delays with other purchases and sales in the chain. Until the keys are in your hand, nothing is certain. It can be a bit of a waiting game. Of course, once the property is yours, it may be a long wait to see any return on your investment. Are you ready to buy a property?

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