circulated by http://www.myinvestmentadvice.info/
The chief goals of any property investment are appreciation, cash flow and tax savings. Rental property investment is the only property investment that provides you all these three benefits at the same time.
The main rental property categories consist of single family rental properties, multi-unit residential rental properties, commercial rental properties and holiday homes. The first category includes long term single family renting, the second category includes apartments, buildings for multiple families while the last category includes shopping centers, office buildings etc. for a long tem renting purpose. Here are other points to consider with real property investments:
1) Methods like repossessions, ugly homes, and probate homes are useful for buying property. Lease purchases can be extremely useful which help you to leverage investment money and reach a positive cash flow from renting. Buying fixer upper homes or repossessions can help to reduce investment money and improve cash flow and appreciation.
2) One cannot expect a considerable cash flow from property with one tenant. In this case, the main goal is to cover the mortgage and current expenses.
3) Research on a potential rental home should include significant financial planning for years ahead, like expenses of property management, repairing, vacancy, emergency etc.
4) The apartment and the 2-4 unit homes are the main classes of the multi-unit residential property investments.
5) With apartment investments the main profit comes from the rental cash flow. A lease to purchase option and leveraging investment money is quite useful in this case. The most significant factors in this case are the financial evaluation and property management. With a steady cash flow from a number of tenants, it is possible to hire a manager for the property management. It helps to increase the cash flow and the value of the apartment building. Underestimation may damage the investment and lead to loss.
6) Commercial properties investments include office buildings, retail shopping centres, industrial properties and the like. The market value of these properties is decided on the cash flow (net rental income). The main objective of rental in these cases is to generate enough cash to exceed the cost of mortgage, insurance, maintenance, future improvements. This is not an easy task to handle. It requires analysis of many things. But if done properly it could prove to be lucrative.
Changes in the economic conditions usually have a pronounced impact on these types of real estate investments than on residential property investments. And as office buildings and industrial properties are more susceptible to these changes, it is wise to keep extra capital to support those investments if something does not go as expected. In this case, a money-leveraging approach (lease to purchase option) is very useful.
7) A holiday home can be used in two ways. It can be a property home or an investment property. This category includes resort properties, mountain homes, or beach homes. With holiday rentals, the main profit comes from the appreciation. Cash flow generated from renting is usually used for current expenses like property management, mortgage and insurance. These are short-term rentals and require intensive maintenance.
About The Author: Parmdeep Vadesha is the founder of the largest online community of property entrepreneurs who buy below market value properties from distressed sellers facing repossession, divorce and bankruptcy. Join 70,000 property investors & subscribe to his FREE newsletter www.property-system.com/
Please use the HTML version of this article at: http://www.isnare.com/html.php?aid=223129
Disclaimer...The comments, products and services are owned by the poster. We are not responsible for their contents.
Showing posts with label REAL ESTATE. Show all posts
Showing posts with label REAL ESTATE. Show all posts
Monday, May 25, 2009
Thursday, March 5, 2009
Invest in Farmland
Mark Twain once said, “Buy land, they're not making it anymore”, and he was absolutely right. Farmland is a tangible asset that will hold its value no matter what happens. Farmland is an appealing investment because you can receive income from rents and get appreciation that tends to run ahead of inflation.
My family is in the orange farming business and we don’t make much money by selling the oranges after all the labor costs. But on paper, we have made a boatload of cash from land appreciation. That really doesn’t matter because we will never sell our land, as it’s a great long- term investment. Let me explain.
Many farmers are getting a lot more income due to higher crop prices, growing food demand and increasing demand for bio-fuels. So it’s not surprising that farmland prices are on the rise.
A government can always print more currency, but it can’t make new farmland.
Investing in farmland is a great idea because the world’s population will continue to grow and so will the demand for farmland. The farmland is necessary to grow the food for all these extra people. So land is essentially the most valuable thing that you can possibly own.
How to invest in farmland
If you have the time and money, then buy a farm in Iowa and farm it or rent it out for the income. Good farmland in Iowa goes for about $4,500 per acre and you can aim for a 12% per year return with rental income and land appreciation.
If you have lots of time, you could pick up cheap land in a developing country for a few hundred bucks an acre and bring it into production or improve it to raise yields. My wife and I looked at some farmland the last time we were in Brazil in 2004 and we could have picked up some cheap land for only $100 an acre. The problem is the land was in an extremely remote area. We decided against it because it would have been difficult for us to develop since we live in the US and don’t speak Portuguese.
If you don’t have the time to become a farmer, then I suggest you buy stock in a timber producer. One of my favorites is Plum Creek Timber (PCL). PCL owns and manages millions of acres of timberland in the United States and its products include lumber products, plywood, medium density fiberboard, and related by-products, such as wood chips.
Best Wishes,
Ted Peroulakis
feedback@investorsdailyedge.com
Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell
My family is in the orange farming business and we don’t make much money by selling the oranges after all the labor costs. But on paper, we have made a boatload of cash from land appreciation. That really doesn’t matter because we will never sell our land, as it’s a great long- term investment. Let me explain.
Many farmers are getting a lot more income due to higher crop prices, growing food demand and increasing demand for bio-fuels. So it’s not surprising that farmland prices are on the rise.
A government can always print more currency, but it can’t make new farmland.
Investing in farmland is a great idea because the world’s population will continue to grow and so will the demand for farmland. The farmland is necessary to grow the food for all these extra people. So land is essentially the most valuable thing that you can possibly own.
How to invest in farmland
If you have the time and money, then buy a farm in Iowa and farm it or rent it out for the income. Good farmland in Iowa goes for about $4,500 per acre and you can aim for a 12% per year return with rental income and land appreciation.
If you have lots of time, you could pick up cheap land in a developing country for a few hundred bucks an acre and bring it into production or improve it to raise yields. My wife and I looked at some farmland the last time we were in Brazil in 2004 and we could have picked up some cheap land for only $100 an acre. The problem is the land was in an extremely remote area. We decided against it because it would have been difficult for us to develop since we live in the US and don’t speak Portuguese.
If you don’t have the time to become a farmer, then I suggest you buy stock in a timber producer. One of my favorites is Plum Creek Timber (PCL). PCL owns and manages millions of acres of timberland in the United States and its products include lumber products, plywood, medium density fiberboard, and related by-products, such as wood chips.
Best Wishes,
Ted Peroulakis
feedback@investorsdailyedge.com
Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell
Thursday, February 5, 2009
The index of pending home resales climbed
The number of Americans signing contracts to buy previously owned homes unexpectedly rose in December, signaling that foreclosure-driven declines in prices are boosting demand.
The index of pending home resales climbed 6.3 percent to 87.7, the first increase since August, from a revised 82.5 in November, the National Association of Realtors said in a report today in Washington. Other reports showed a record number of houses for sale stood vacant last quarter and property values sank by more than $3 trillion last year.
Builder shares jumped on the increase in contracts and on reports the Obama administration, in seeking to stem record foreclosures, is considering offering government guarantees to mortgage lenders that modify loan terms.
“The biggest gains were in areas with the biggest improvements in affordability,” Lawrence Yun, the group’s chief economist, said in a statement. The NAR’s affordability index reached a record high in December.
Pending resales are considered a leading indicator because they track contract signings. Closings, which typically occur a month or two later, are tallied in the Realtors’ monthly existing-home sales report. That report for January is scheduled to be released Feb. 25.
Purchases of previously owned homes, which account for about 90 percent of the market, climbed 6.5 percent in December from the prior month as foreclosures helped drive median prices down 15 percent from a year earlier.
-Bloomberg.com
more article in www.stockmarketwatch.info
Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell
The index of pending home resales climbed 6.3 percent to 87.7, the first increase since August, from a revised 82.5 in November, the National Association of Realtors said in a report today in Washington. Other reports showed a record number of houses for sale stood vacant last quarter and property values sank by more than $3 trillion last year.
Builder shares jumped on the increase in contracts and on reports the Obama administration, in seeking to stem record foreclosures, is considering offering government guarantees to mortgage lenders that modify loan terms.
“The biggest gains were in areas with the biggest improvements in affordability,” Lawrence Yun, the group’s chief economist, said in a statement. The NAR’s affordability index reached a record high in December.
Pending resales are considered a leading indicator because they track contract signings. Closings, which typically occur a month or two later, are tallied in the Realtors’ monthly existing-home sales report. That report for January is scheduled to be released Feb. 25.
Purchases of previously owned homes, which account for about 90 percent of the market, climbed 6.5 percent in December from the prior month as foreclosures helped drive median prices down 15 percent from a year earlier.
-Bloomberg.com
more article in www.stockmarketwatch.info
Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell
Thursday, January 29, 2009
There Is Still Money To Be Made In The Housing Market
A little over a week ago, in my Monday column, I correctly predicted that the December Housing Starts and Building Permits reports would miss the mark by a wide margin. I even correctly picked the actual number. This past Monday, my prediction was that the December Existing Home Sales report would also likely disappoint. I wasn’t such a good fortune teller the second time around.
The December Existing Home Sales report actually surprised to the upside, posting a gain of 6.5 percent versus November. This equates to roughly 290,000 units.
It turns out that I just underestimated how bad the housing market is. These sales aren’t from eager buyers who got priced out of the market during the run up over the last few years. The buyers are vultures, swooping in and cleaning the carcass. Over 45 percent of the sales were “distressed” according to the report.
That is bad news for the market. It is just the beginning of a viscous cycle.
Foreclosures continue to drive down prices in all markets. As a result, more and more homeowners see their equity vanishing. Many more find themselves underwater. This leads many to simply throw in the towel and let their own home go into foreclosure, feeding the cycle.
Another item to consider is whether or not all the bank-owned foreclosures are even back on the market yet. There is growing evidence that banks are holding back properties from being re-listed to avoid flooding the market, which would result in prices being driven down below what they hope to get for the repossessed homes. This means there could be an additional backlog of properties that we aren’t even aware of yet. This will delay any recovery.
Finally, a major question that needs to be answered is how many people actually qualify to buy a home? Fannie and Freddie are said to be toughening up on standards, and banks are just flat out not lending. That means short of a huge down payment or an all-cash purchase, buying any home, foreclosure or not is going to be difficult. And the housing market needs buyers to move the inventory.
With all this gloom in the market, it is going to take quite some time for a recovery. That leaves you plenty of time to profit from the slide in the housing market. One way is shorting the iShares Real Estate Index (IYR), another is shorting the Vanguard REIT ETF (VNQ). Both have already seen a significant down leg, but with the housing market the way it is, there is still plenty of room to the down side.
A more speculative play could be the UltraShort Real Estate ProShares (SRS). This ETF moves inverse to real estate, so it goes up as the market goes down. A quick look at the chart shows a huge spike in November and a drop since then. It is now trading at two-year lows, so you could view it as a more speculative play on the continuing decline of the housing market.
By Christian Hill
Posted 28Jan2009
more lastest stock articles in www.stockmarketwatch.info
Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell
The December Existing Home Sales report actually surprised to the upside, posting a gain of 6.5 percent versus November. This equates to roughly 290,000 units.
It turns out that I just underestimated how bad the housing market is. These sales aren’t from eager buyers who got priced out of the market during the run up over the last few years. The buyers are vultures, swooping in and cleaning the carcass. Over 45 percent of the sales were “distressed” according to the report.
That is bad news for the market. It is just the beginning of a viscous cycle.
Foreclosures continue to drive down prices in all markets. As a result, more and more homeowners see their equity vanishing. Many more find themselves underwater. This leads many to simply throw in the towel and let their own home go into foreclosure, feeding the cycle.
Another item to consider is whether or not all the bank-owned foreclosures are even back on the market yet. There is growing evidence that banks are holding back properties from being re-listed to avoid flooding the market, which would result in prices being driven down below what they hope to get for the repossessed homes. This means there could be an additional backlog of properties that we aren’t even aware of yet. This will delay any recovery.
Finally, a major question that needs to be answered is how many people actually qualify to buy a home? Fannie and Freddie are said to be toughening up on standards, and banks are just flat out not lending. That means short of a huge down payment or an all-cash purchase, buying any home, foreclosure or not is going to be difficult. And the housing market needs buyers to move the inventory.
With all this gloom in the market, it is going to take quite some time for a recovery. That leaves you plenty of time to profit from the slide in the housing market. One way is shorting the iShares Real Estate Index (IYR), another is shorting the Vanguard REIT ETF (VNQ). Both have already seen a significant down leg, but with the housing market the way it is, there is still plenty of room to the down side.
A more speculative play could be the UltraShort Real Estate ProShares (SRS). This ETF moves inverse to real estate, so it goes up as the market goes down. A quick look at the chart shows a huge spike in November and a drop since then. It is now trading at two-year lows, so you could view it as a more speculative play on the continuing decline of the housing market.
By Christian Hill
Posted 28Jan2009
more lastest stock articles in www.stockmarketwatch.info
Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell
Thursday, November 6, 2008
Focus Can Now Shift To The Collapsed Housing Market
With the election now over, focus will turn back to what ails the economy. And front and center will be the continuing housing crisis. Foreclosure rates keep going up and the $700 billion bailout has yet to spur lending.
So what is a bank with a collapsing loan portfolio to do? Take matters into their own hands. Bank of America previously announced it would work with delinquent borrowers to try and stave off foreclosures, and now JP Morgan Chase is doing the same.
JP Morgan Chase has announced it will delay foreclosure proceedings while it works with struggling homeowners. Over the next 90 days, the bank will look at loans and determine if the loan is eligible for a reduced interest rate or loan balance. The company has already helped over 250,000 families with over $40 billion in troubled loans, and over the next two years plan to help another 400,000 homeowners with over $70 billion in loans. Loans held by Washington Mutual and EMC Mortgage Corp, which were recently acquired by JP Morgan Chase, will also be eligible for revision.
What remains to be seen is the effect this will have on foreclosure rates. Reducing a borrower’s interest rate slightly doesn’t necessarily translate to a large reduction in a mortgage payment. A drop of $75 or $100 a month in the mortgage payment would be welcome for the homeowners, but the savings could quickly be eaten up by rising costs elsewhere.
Hopefully the plan relies more on reducing principal balances to more accurately reflect fair market values. This would help by stabilizing home values at fair-market levels, rather than letting foreclosures decimate neighborhoods.
For example, if a home bought a few years ago for $250,000 gets re-appraised for $180,000 and the borrower can now afford the payments and avoids foreclosure. This drops the value down to $180,000 for comparables, but avoids a potential drop to $125,000-140,000 if the home goes into foreclosure and gets sold at auction. Not a perfect solution, but anything is better than another foreclosure.
By Christian Hill
Posted 05 Nov 2008
for more recent articles visit this link www.stockmarketwatch.info
Disclaimer...The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.
So what is a bank with a collapsing loan portfolio to do? Take matters into their own hands. Bank of America previously announced it would work with delinquent borrowers to try and stave off foreclosures, and now JP Morgan Chase is doing the same.
JP Morgan Chase has announced it will delay foreclosure proceedings while it works with struggling homeowners. Over the next 90 days, the bank will look at loans and determine if the loan is eligible for a reduced interest rate or loan balance. The company has already helped over 250,000 families with over $40 billion in troubled loans, and over the next two years plan to help another 400,000 homeowners with over $70 billion in loans. Loans held by Washington Mutual and EMC Mortgage Corp, which were recently acquired by JP Morgan Chase, will also be eligible for revision.
What remains to be seen is the effect this will have on foreclosure rates. Reducing a borrower’s interest rate slightly doesn’t necessarily translate to a large reduction in a mortgage payment. A drop of $75 or $100 a month in the mortgage payment would be welcome for the homeowners, but the savings could quickly be eaten up by rising costs elsewhere.
Hopefully the plan relies more on reducing principal balances to more accurately reflect fair market values. This would help by stabilizing home values at fair-market levels, rather than letting foreclosures decimate neighborhoods.
For example, if a home bought a few years ago for $250,000 gets re-appraised for $180,000 and the borrower can now afford the payments and avoids foreclosure. This drops the value down to $180,000 for comparables, but avoids a potential drop to $125,000-140,000 if the home goes into foreclosure and gets sold at auction. Not a perfect solution, but anything is better than another foreclosure.
By Christian Hill
Posted 05 Nov 2008
for more recent articles visit this link www.stockmarketwatch.info
Disclaimer...The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.
Subscribe to:
Posts (Atom)