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Archive for the ‘Property Investment’ Category

Finally, after a few long and hard years of living through the economic crisis, we are finally starting to see a more positive outlook on the economy. In particular, a lot of experts are pointing to signs such as job creation and rising consumer confidence as evidence that we are finally entering the recovery, and that things are starting to get better. As a result of a lot of this news, people are beginning to ask whether or not now is the right time to begin investing in the real estate market again.

So, is it? Well, the answer is somewhat complicated. The fact is that in spite of all this good economic news, there is still a lot of trouble out there – in particular, a lot of people are still facing the possibility of a bank foreclosure. In other words, people’s homes are still being seized. What happens to this repossession property? Well, most of the homes get placed back on the resale market through alternate avenues, such as foreclosed home auctions. These auctions have a tendency to drive real estate prices down. This was particularly true during the peak years of the recent financial crisis, when a lot of people were having their homes seized. The flood of foreclosed houses created a buyer’s market, because there were a lot more sellers than buyers, and this meant that buyers could dictate terms.

What does this mean for you, the potential real estate investor? Well, the fact that there are a lot of people who are still under the threat of foreclosure means that there is a risk that prices could still go down even further, due to the fact that these foreclosed homes are still being put on sale at prices that are lower than the market average. In spite of the positive economic news, there is still the danger that we could be entering a second (albeit somewhat milder) recession. In uncertain times like these, we suggest consulting a financial advisor before making any rash decisions.

Everyone wants to live in comfortable homes that offer peace and security from everyday living.  People that rent usually looks for certain accommodations that would help them cope with their work and even basic living necessities.  Houses to Let should have proper standards to have a steady flow of tenants.  Tenants always look for the best and affordable homes to live in.  Houses for Let that offer repairs, maintenance, water and electricity as well as sanitary outlets are a favorite.  This is what you may call “ideal” homes that will make you feel safe and secure.  Everyone deserves to have a house that they could call their own, even leased houses.

There are different standards for houses to let, but their general requirements are:

1. Safety and Security (surveillance video cameras outside is a plus)
2. Proper Care and Maintenance
3. Water and Electricity
4. Heating / Warming conditions (heaters for cold weathers etc.)
5. Hazard Free Environment

Landlords should make sure that the houses to let are “hazard free” before they start to advertise them.  Houses to Let should be free from hazards that may lead to health and serious accidents to its tenants.  The design and structure of the house is the major factor that affects these conditions.  Their purpose should be making homes warm and safe for people that will live there.

Tenants have the right to ask their landlords to fix certain problems with the leased properties.  If they do not comply, you can ask your local council to take action.  They will help you in addressing your problems as “legally” as possible.  Having a good relationship between a landlord and his tenant is the best way to build trust and respect.

Houses for Let are great investments.  Homes in residential areas generate a steady flow of income for investors and entrepreneurs.  Some even have multiple lots for lease for better profit productivity.  The location of the property plays a major role on this kind of investment.  A good location will definitely have better rewards and a chance of gaining more profits.

There are a number of different types of mortgages available on the market, and if you are currently looking for one yourself, you may want to consider a buy to let mortgage. Buy to let mortgages are used for people who want to buy a property but not use it as their own personal home. The buyer will rent the property out to tenants, and as long as this happens, you will should be eligible to obtain and keep a buy to let mortgage. The advantage of this type of mortgage is that you will be profiting from the increasing value of the property, and the mortgage repayments will be taking care of themselves through the rent money paid by the tenants, with perhaps some extra cash on top of that.

On the market there is a huge amount of different offers for mortgages, such as commercial mortgages, buy to let mortgages, alongside normal mortgages, there is so much choice and it is very easy to get confused. It is safe to say however that the most important hurdle for people to overcome is to pass the assessment for the mortgage, as this is what decides if you are able to pay back the monthly repayments on the loan, at least through the eyes of the lender.

After passing the assessment, you are then free to go ahead with your buy to let mortgage. You can then buy the property, get some lodgers in, and then collect the rent money every week or month that will be used to pay the monthly repayment bills. Over time the value of the property will increase, and you can even make some improvements to the property, further increasing your profit made on the investment.

There are however a few negatives to obtaining buy to let mortgages. First of all, the initial deposits for the mortgage are usually considerably higher than a standard mortgage, so make sure you have enough money in the first place in order to take out the loan. Furthermore, there will be more of an interest in how you will be recouping the money required to pay back the mortgage from the actual property itself rather than you own personal circumstances, so be sure to have a solid plan on how you are going to rent the property out, how much you will charge, and what you will do if thing do not go to the script.

A good piece of advice when searching for a buy to let mortgage is to take as much time as is needed in order to get the right deal. This is a big financial step, so you want to make sure you get the best for yourself. If you obtain the correct advice for the right people, and keep it clear in your head what is important for you, then buy to let mortgages are a great path to a stable investment.

Property investing has become a very popular business platform for many people in the last two decade.  With the growing understanding that real estate generally appreciates over time with reasonably good risk and return quotients, many have entered the market with gusto.

Of course the last few years have weeded out many who couldn’t weather the recent financial storm.  But for those who had the cash flow and capital to keep their investment properties, this business is still making people good money.  Although with the renter turnover rates skyrocketing due to the recession, many who were able to float their mortgage continues to build equity in their properties and many continue to see positive cash flow.

The investment property business, however, is a business indeed.  Those who have survived have had the working capital to keep going under bad times.  This is just like in any business.  Any business needs plenty of working capital to survive downturns or even short term decline in sales.  It’s one of the top reasons businesses go bankrupt.

Overall, if you look at property investing as a business you will fair well over time.  Even with the real estate market crash, it is still a very viable and potentially lucrative investment strategy for those with the time to do property management.  Especially now when the market is still down, you can find a lot of great deals.

Real estate prices are lower than it has been for decades.  Now is the time to buy and invest in properties.  You can find them at unbelievable prices at foreclosure auctions. Due to the mortgage re-modification plan, foreclosures will continue to trickle in over the next several months.  This will give investors more time to come up with the cash and financing to buy up houses.  In addition, it will also give mortgage rates a chance to recalibrate and lenders to ease the lending requirements.

Investment property is real estate which the owner has bought so he or she makes a profit over a period of time, in the form of rent or through sale.

Investment property loan interest rates are the same as the ones for normal loans and often have the same rules, such as the option of choosing between a fixed or variable interest rate. However, those taking a loan for an investment property are considered low risk borrowers and could even get discounts.

Now you may ask, is it possible to get discounted investment property rates? Yes, it is. Providers have certain offers that help borrowers enjoy a much lower interest rate, and thus, save money. Here are some offers:

• Honeymoon rates. As the name suggests, these are introductory or ‘honeymoon period’ interest rate discounts that many providers offer during the first year of the loan. The discounts may apply only to the first year, but borrowers can start out with great savings.

• Discounted interest rates for low risk. Those taking loans for investment properties usually already have an income stream, and are set to get additional income from their investment property. Plus, they will already own a home that can be used as collateral. All this encourages providers to offer them discounted interest rates on Cincinnati OH homes for sale.

• Discounted interest rates for larger loans. By borrowing a larger sum of money from a provider, borrowers may enjoy discounted interest rates or other benefits. Many providers have different interest slabs for different borrowing ranges.

Here are two tips to help you get a lowest interest on your loan for Mason OH investment property:

• Use of Loan Calculators. Home loan calculators will generally ask for details about the loan you are planning to take, and will list out the loan options that would be best for you, keeping your specific needs in mind. This helps borrowers secure the lowest interest rates. However, always discuss things with a real life loan consultant. He will help you complete your calculations.

• Comparing providers. Compare the offers made by various loan providers to get one that works best for you. This, usually tedious process, is made easy over the phone with the help of Home Loan Finder.

When looking for an investment loan, be clear about your needs, look around and compare. It can help you land a low interest rate.

If you own a rental property, then there will come a time when a tenant does not pay you on time.  You may hope it never happens, but it is inevitable.  I find real estate investors are too soft on rent collection.  Most people don’t like confrontation and rent collection is about getting your way (ie:  having the tenant pay the rent they owe).

Some of the most important tricks to collecting rent is being both consistent and immediate about your actions.  Here are some more quick tips:

1. Call the tenant immediately the day after the rent was due.  The tenants will see that you are serious about the rent and they may even be expecting your call.  Many newer Saint Paul Real Estate investors fail this step.
2. If you call and are unable to get the on the phone after several attempts (this should be within the first 24 hours after the rent was due), drive over to the property.  If you have your game face on, it is difficult for the tenant to ignore you when the landlord is standing at the door at 7pm at night.
3. Never waive the late fee, ever.  This simply rewards bad behavior.  Impose it immediately when the rent is late.
4. Mail statements to all tenants that owe anything over $5.  Get them in the mail or hand deliver them the day after the rent was due.
5. If the tenant sends you only part of the rent, call immediately to find out when the rest of the rent is going to be paid.  Explain to them that they still incur the late fee and send a statement with their updated balance.
6. When there is ever a discussion about when the rent will be paid or a balance due, push the tenant (while remaining respectful) to pay a little more or a little sooner.  Many times the tenant is just trying to stall.
7. When the tenant makes a commitment to pay you the balance by a certain day, call them a day or two in advance to remind them about the payment.  Make sure to tell them how much you are expecting and when.
8. If the tenant does not pay or does not live up to the commitments they have made to you, start the eviction immediately.  Most landlords make the mistake or taking excuse after excuse and only file the eviction notice after 30+ days of the rent being late.  Now you have lost 2 months!

Rent collection is the key to being a successful landlord.  You need this rent/income to keep your business solvent.

Repossessed property is an asset that has been seized for nonpayment of a mortgage or taxes and is now being sold. The lender or the government takes charge of the property and places it for sale to recover the money owed. These properties are frequently sold for well below the market value. Repossession property can provide low cost investment opportunities for the speculator or make home ownership possible for a savvy buyer.

Mortgage Foreclosures

Locating these properties is the first step toward purchasing. Searching for this type of real estate can be frustrating since it isn’t generally apparent where to begin looking. There are sites on the Internet that charge a fee to provide listings of foreclosed property. It is possible to find the same information at no cost for someone willing to do a little research.
The lender keeps a record of homes that are entering foreclosure or have completed the process. The Foreclosure Department of the bank can provide the list . The best deal to be had is if the property is bought directly from the bank before it is turned over to a real estate agency. If the bank list doesn’t contain any suitable property, then a real estate agency would be the next place to contact. Real estate agents can check which of their listings are foreclosures.

Property Tax Foreclosure:

Property seized for back taxes is sold at auction by either the state or the county in which the property is located. The local tax collector can provide information on when the sale is scheduled and what procedure is followed at the sale. Upon request, some states will email the list of properties one month before the auction.
Income Tax Foreclosure

On a recent reading at the bank foreclosed homes guide it stated that the Department of Treasury maintains a list of property for sale that was seized by the IRS. This list is on the Internet and easy to search. It is possible to subscribe to Treasury Auction email updates. This is a free service and the best way to stay current on what property is coming up for auction.

photo credit: sarflondondunc

Non-traditional mortgages include “interest-only” mortgages where a borrower pays no loan principal for the first few years of the loan and “pay option” adjustable-rate mortgages where a borrower has flexible payment options with the potential for negative amortization. Negative amortization results in an increased loan balance over time if monthly mortgage payments do not cover the amount of interest due and the unpaid interest is then added to the outstanding loan balance. Non-traditional mortgages have become less likely to obtain with the recent real estate crisis. For example, numerous companies offered options like ARMs in the past and interest-only loans several years ago. Non-traditional mortgages are virtually non-existant with lenders today, especially if you own your own home and are trying to finance an investment property. For instance, in the past you could be looking to purchase a home, refinance a home, be a first time buyer, looking at a second mortgage, be interested in debt consolidation, a new home construction loan, a zero down loan, or FHA and VA loans and up until recently various lenders would beat down your door to offer you their services.

Interest-only loans may lower a homeowner’s monthly payments but will limit the amount of equity a homeowner can gain over time because the principal loan amount is not being reduced. Adjustable-rate mortgages (ARMs) may cause the homeowner’s monthly payments to increase over time, with the potential for those payments to be more than a household can handle. Interest must be paid on the additional cost of the property, and yields a treading water effect, in that homeowners or investors are building zero equity. These types of loans are all but declared illegal in the current market.

Traditional mortgages are more difficult to obtain and non-traditional mortgages have become virtually obsolete, take into account individuals looking to purchase Dallas investment property. As a result, we have seen a resurgence of mortgages insured by the Federal Housing Administration or FHA. Traditional mortgages are fixed rate mortgages, which have an interest rate and monthly payments that remain constant over the life of the loan. This sets a maximum on the total amount of principal and interest you pay during the loan.

Lenders need to assume that large and increasing outstanding balances will confront borrowers who choose minimum payments. We agree that the lending industry must underwrite these loans as if at some point in the near future there will be a large outstanding balance for loans with minimum payments. Lenders are claiming that they are restructuring their mortgages to offer lower or temporary fixed interest rates to reduce balances to help people save their homes for now. Lenders are going above 80% LTV (loan to value ratio) on first mortgages. Underwriting to higher DTI (debt to income) ratios indicates a lowering of underwriting standards.

Lenders will be required to maintain appropriate prudential management standards and provide customers information on their mortgage whether the loans are held in portfolio or sold into the secondary market. This requirement is in the proposed guidance because of the credit, legal and reputation risks associated with non-traditional mortgages. Lenders also look at past tax returns, even after the loan has been settled. It should also be noted that stated income or no-doc mortgages are not free of paperwork. Lenders calculate a ratio (debt ratio) using the total monthly debts and the total monthly income. For example if a borrower has a monthly income of $6,000 and a total monthly debt obligation (including housing expenses and other consumer debt) of $2,000, the debt ratio would be 33%.

When looking for investment property specialists that you’d feel comfortable working with and eventually investing with it’s important to look at a few specific things that can make the difference between making a lot of money and losing everything. People get taken advantage of everyday in real estate, I’ve seen it happen myself. If you follow up on the three things listed below, you have a very good chance of picking the right investment company.

1. Professionalism – This is the first thing you’ll notice and have as an evaluation of the company as a whole. Any company that you are entrusting with your money should act professional. If they can’t act professional to you when you interview them, they’ll never be able to act professional with your money and how they invest it.
2. Track Record – People can be good at acting, which is why judging just based on professionalism isn’t always the only way to tell if a company is worth working with. Any legitimate investment property specialist will have a great track record of properties where they consistently made a decent return on the investment. You don’t want to see a small track record with amazing returns, you’d prefer to see a long track record with consistent returns instead.
3. References – Like professionalism, tracer records can also be decieving. Reference are another great way to actually talk to clients who’ve worked with the company you are interviewing. Don’t always ask them about how big of a return they got, but how the interaction was with the company and how well they dealt with problem and if they handled it the right way.

Three simple tips that will make all the difference in picking the right investment property specialist. If you take the time to do your research you should have no problem finding the perfect company for you.