Real estate loan is what a lot of people use to buy their home. Real estate loans have been instrumental in bringing joy to people by making that unaffordable house affordable. Some real estate investors too make use of real estate loans for buying properties. However, real estate loan is not free money and anyone who buys real estate or plans to buy real estate using real estate loan must understand the concept of real estate loan very clearly.
Real estate loan (also known as motgage ) is the money that you borrow from someone (a financial institution i.e. a motgage lender) for the purpose of buying a property. The real estate loan generally covers a part of your purchase price and the remaining portion has to be paid by you upfront i.e. as down payment. The amount (i.e. the percentage of total purchase price) that you have to pay as down payment is dependent on a number of factors and you can generally reduce it to even 5% by going for mortgage insurance.
FHAand VA loans (i.e. mortgage insurances through FHA and VA) reduce the down payment requirements on real estate loan even further. Whatever you borrow from the mortgage lender as real estate loan needs to be paid back to the mortgage lender over a period of time (and, of course, you will also need to pay appropriate interest on that real estate loan). The tenure of your real estate loan and the prevailing market rate will determine the amount of interest you pay for your real estate loan. Generally, you are required to pay back the real estate loan in the form of monthly instalments which are composed of both interest and principal portions of your real estate loan.
Also, there are various types of real estate loans e.g. fixed interest rate loans and adjustable interest rate loans. So depending on what type of real estate loan you have gone for, your monthly payments might either remain constant ( fixed rate ) for the full tenure of the loan or keep getting adjusted periodically (adjustable rate) on the basis of a financial index. Besides that, some other costs are also associated with real estate loans e.g. there are closing costs , inspection costs, attorney fee etc.
Also, in case the property needs some repairs, there will be costs associated with that too. Again, there is stamp duty and other taxes that you need to pay. So, really you need to understand the concept of real estate loans and the related costs clearly before you actually go for the real estate loan. And understanding these concepts is really not that tough.
Tenant improvement allowances, funds provided by the landlord to improve office space, are becoming increasingly prevalent during landlord-tenant negotiations, and all companies should consider their role in creating an ideal office space. However, companies seeking to lease at least 5,000 square feet of Class A & B office space with a lease term of at least five years can exercise much greater leverage on the landlord and will typically find it easier to achieve many of the suggestions below. If in doubt, you should consult with a real estate broker to determine the feasibility of any specific item.
1. In todays economic environment, many landlords are providing and funding 100 percent of the building standard installations required by tenants.
2. Tenants should try to negotiate above-standard items, such as millwork, extra HVAC, large glass walls, plush carpeting or special lighting, to get them included in the tenant improvement allowance provided by the landlord.
3. When landlords refuse to fund all or a portion of above-standard items, tenants can try to amortize their cost into the rent over the term of the lease instead of paying out of pocket.
4. Funding above-standard work can also be achieved via negotiating tactics, for example, offering to decrease the quantity of free rent and increase the tenant improvement allowance instead.
5. We recommend tenants hire an architect to represent their interests and suggest a layout and design of the space to ensure tenant improvement allowances are put to the best possible use.
6. Tenants can avoid the need for a large tenant improvement allowance by touring many suites and finding one with a suitable existing configuration. However, we advise tenants to avoid compromising the amount of their tenant improvement allowance just to decrease the rental rate.
7. Landlords are providing generous tenant improvement allowances for new tenants, and tenants can use this as leverage even if they are only renewing, especially if they have occupied the space for the past five-to-ten years.
8. If landlords offer a specific dollar amount for a tenant improvement allowance, we advise tenants to negotiate an open-bid format, based on an expert review by their own architect, project manager or construction firm.
9. Many companies are using tenant improvement allowances to create more light in the workplace by adding glass in offices and conference rooms. From narrow, vertical side-windows to full walls of glass, natural light illuminates interior areas and provides sight-lines for workers to improve communications and productivity.
10. We always recommend tenants hire an architect to brainstorm about the best uses for tenant improvement allowances. Many companies are decreasing hard-walled offices in favor of flexible workstations and huddle rooms, small two-to-four person conference areas, to accommodate departments changing needs.
In the face of the difficulties faced by economies worldwide, we have to take cognizance of the urgency of looking for sound investment prospects for a real estate investor.
Most would obviously avoid real estate investment prospects like a bubonic plague. However, seasoned investors are actually excited about the latest leading economic indicators that points to a definite windfall in the real estate sector.
Emerging Trends in Real Estate Business
The reason that most of us are doubtful of any prospects emerging in the real estate sector is the fact that it has triggered this economic turmoil that we are suffering right now.
When the real estate bubble burst a couple of years ago, it led to a series of turbulent shockwaves that rocked the very foundations of the US economy. Most see the sector in total ruin with no apparent hopefuls in sight.
There is actually a silver lining to all the debacles that real estate has been experiencing. Amidst the sub-prime issues, real estate mortgage defaults and liquidity and bankruptcy issues, we see one emerging investment hopeful. This we have to take advantage of, as it will be a hot item very soon!
It is an accepted fact that during economic recessions and meltdowns, real estate assets are undervalued. However, it is the kind of asset that leads in appreciation every time the cycle recovers and makes a rebound. It is one of the safest forms of assets. Cashing in on real estate properties at this stage would surely pay dividends as you purchase prime properties way below their real values.
Further, amidst the dips in the stock market, we see the erosion of our wealth. The stock market would not be an attractive investment opportunity at this time. In order to preserve the value of wealth, the best option for real estate investor is to cash in on prime properties.
These two-tiered beneficial effects are the strong arguments for a real estate investor to continue to keep their faith on real estate investment properties.
There is more to it than these two acknowledged beneficial effects. A real estate investor stands to earn huge profits if he makes his move now and engages in a buying binge!
A real estate investor should closely watch the emerging trends in space rentals. There is a clear indication of good investment opportunities for a real estate investor. Due to the downtrend in home buying and coupled with the high incidence of mortgage home foreclosures, there is now a sudden increase in the demand for rented space.
A real estate investor with equity must take advantage of this opportunity as it would immediately lead to significant profits even in the short term. As the market forces increase rental rates, buying prime real estate properties at amazingly low prices would be an extremely attractive investment prospect for the real estate investors.
The good news does not end there. This investment opportunity gives the opportunity for the real estate investor to assume enviable and strong position to gain even greater profits once the economy makes a comeback.
The concurrent economic indicator of this event would be the increase in value of these prime real estate properties.
This is the main reason why a seasoned real estate investor is buying real estate property like there is no tomorrow.
Who can and who should take the real estate training or course?
Practically anyone who wants to make a career in the property industry can choose to go for the training. If one feels that they can carve their niche in the property sector and have what it takes to excel in the profession, a good real estate course will be of crucial importance.
Amid the current financial recession when all industries appear to be toppling, property industry is still somewhat stable. Although there is an evident slowdown in the industry, yet it is growing. So the requirement for real estate professionals has not eroded and every property company needs a property professional. Today, when career opportunities in other professions show a great deal of saturation, the potential of real estate industry is slowly dawning upon people who are now taking up real estate training courses to enter this vast field of opportunities.
What are the real estate training courses about?
Real estate of course! Every country of the world has its set real estate laws and ordinances. These laws may vary largely from country to country, and also from city to city within in a country. This is one reason why it is important for a real estate professional to not only become aware of, but also have a deep insight into his region’s property laws and regulations. The real estate training courses consist of a series of classes or lectures which cover anything and everything about real estate in your region. The courses are designed, handled and delivered by the area’s real estate experts with vast experience of the local property market. The most common things covered in the property training are the property laws governing your area’s real estate industry, your responsibilities as a real estate agent, and the types of real estate present in your zone of operation. The courses are also designed to hone your buying and selling skills as a property agent.
Where are the real estate training courses available?
Probably not far from you. These courses are gaining popularity around the world and many established property companies and agencies have taken this initiative. Not only established real estate companies, but also experienced property professionals have started educationg people about the property business and its ethics with a special focus on the latest real estate trends of their own region’s property industry. So it’s very probable that after a brief search, you’ll be able to find a property company, agency or individual offering this course near your house or somewhere else in your city. And if you don’t, there are numerous real estate training courses available online in which anyone can enroll with ease. All it takes is a little online search and you’ll come across innumerable options. Most people consider online course more convenient than the classroom study as you can study at your convenience without having to rush for taking classes. It saves you the time and hassle of the traditional classroom study. Many online universities and institutions have even started bachelor and master degree programs in real estate development and management.
When can you enroll for the course? How long does it take to complete?
It depends on various factors. Your choice between online and classroom study, the mode of training, and the trainer’s discretion, all these factors come into play. The best way to find an answer to this question is to visit the trainer in person if it’s an offline (classroom) course, or to visit the website of the trainer if it’s an online course. The websites of educational institutions bear all the details of the courses they offer including the course objective, outline, duration, and choice. One trainer may offer more than one property training course at a time designed for different individuals as per their requirements, suitability and market exposure.
Why should you take this course?
Well, we’ve already discussed it in the 1st answer. One definite answer to this question is that the property market is still booming when the other industries appear to be falling down in the current financial recession. As the industry is expanding, there’s more and more room for real estate professionals in it. Taking a real estate training course can help you make a career in this booming sector and excel professionally.
Daniel Marshel is a senior real estate consultant associated with Better Homes, a leading real estate firm in Dubai, UAE. He has more than 25 years of hands on experience of working in Dubai property market. He has helped thousands of his clients to buy property in Dubai. He is a trusted name in getting real estate for rent among property finders. Daniel is well aware of the latest trends in property for sale in Dubai, UAE. His firm Better Homes offers online Dubai property listings, property management and property investment services
In the real estate scene, there are a lot of viable options available for every individual who wishes to invest in an excellent asset. With today’s unbalanced economy, now is the best time to become a real estate investor. However, you know that there are a lot of choices out there and this can confuse you. The key to becoming a successful investor is to know your options and be open-minded before narrowing down on a certain target.
The real estate world is very big and it comes in two ways – it can either generate you a lot of money or it can pull you down big time because of its risks. The key rule to do well is to know which investments can do you good whether it is in a good or bad condition. In other words, it must stand the test of time.
The following are the top five real estate investments options that every individual can choose to invest on:
1.) Residential Rental Properties
A rental property serves as the playground for first time investors since this is basically the starting point for most investors. What makes rental properties a great investment is because people need not shell out too much money in order to obtain this asset. Plus, it is totally not hard to buy it and then gear it to become for rent homes or for rent apartments.
The payments that one can generate from it can cover up the residences mortgages and other rental property expenses that come along with it.
As a landlord or a landlady, you get to reap the most rewards from having tenants. You not only generate a monthly income based on your tenants monthly payments but as well as get hefty pay-offs.
However, rental housings also display a risk especially when renters default in making their payments since you can end up paying all the expenses instead. Thus, you need to be ready on coming up with various solutions to counteract such instances.
2.) Single and Multi-Family Residences
For single family homes, these are great ventures when the economy is favorable and it displays lower risks. The advantage it has over multi-family properties is that the cost of purchasing and maintaining it is lower. It requires lesser paperwork and lower taxes. Plus, its home value appreciates more over time.
Multi-family homes on the other hand can produce more returns, less upkeep expenses and buying costs less since it is for a number of families.
Or more known as real estate turn around, flipping is when an individual purchases a house and then sells it to generate profit. This type of asset are best for people who have excellent knowledge and background for residential real estate investing as this includes knowing how to smartly market homes, recognize when the best time for selling houses is and identify what methods can best sell houses fast.
4.) Commercial Real Estate
Entirely distinct from residential real estate investing, commercial real estate investment is an expensive outlay to have but it is considered as tried and tested assets since these investments offer security whether the economy is experiencing highs and lows.
Commercial assets makes for a great outlay since you are offering your assets to large people, meaning, your tenants range from small to big time business people. Tenants rent your place for putting up business firms, shopping malls, grocery stores, gyms and other commercial establishments. If the business is booming, so will your investment’s value.
Stability is the biggest advantage commercial real estate offers to people since one establishment can lease it and the other can rent it immediately. It offers a long-term basis of partnership and profit.
5.) Real Estate Investment Trusts
Also known as REITs, these are units that allows individuals to purchase, develop, manage and sell varying types of real estate assets like mortgages obtained by residential housings (apartments, condominiums, etc.), hotels and office buildings.
REITs are the most popular investment option preferred by people and they are operated just like stocks and is the easiest way to get in and out of investing. These gives off high dividends which makes it a very attractive asset to have and can be liquidated and give every investor high returns and lower risks.
To make investments profitable and advantageous to you, weighing every possible option is the best answer. A lower risk means higher returns and a happy investor.
Just like residential real estate contracts, Dallas commercial real estate contracts have their share of contingencies. In short, contingencies are found in most real estate contracts and are essentially escape clauses for both the buyer and the seller.
Each party wants to make sure they are protected in the real estate contract, so real estate contingencies are a common occurrence. They often make the contract much easier to handle for both the buyer and the seller, as it provides them with an opportunity to back out of the contract for a number of reasons.
Although both residential and Dallas commercial real estate contracts both have contingencies, the contingencies themselves are quite a bit different. The following list details some of the common contingencies found in Dallas commercial real estate contracts:
When purchasing a parcel of land for Dallas commercial real estate, the contract may be subject to the approval of the buyers attorney. Because Dallas commercial real estate contracts may be decidedly more in depth than residential real estate contracts, waiting on the approval of your attorney when buying Dallas commercial real estate is quite common. It is also common to have a contingency that is based on a business professionals partner or investor, as it is important to get approval from everyone involved before the contract is finalized.
Many commercial real estate contracts include contingencies that are based on financing approval for the buyer. For tracts of land, this contingency may include approval of a legal survey, if one has not already been done. In addition, a buyer will likely want to include in the purchase agreement some language about obtaining necessary permits and zoning for the commercial property.
When speaking of commercial tracts of land, there may be a contingency with verbiage regarding liens on the property. In particular, the purchase of the land will be contingent on no environmental cleanup liens.
It is common to have a contingency based on: the buyer achieving a loan of at least 75 percent of the purchase price of the Dallas commercial real estate property; the buyer being satisfied with the inspectors report; and the buyer being satisfied that the property can be remodeled or renovated to his or her satisfaction. In other words, the buyer will likely include a series of contingencies based on the use of the commercial property and how it can and cannot be used.
The use of a realtor qualified in commercial real estate is crucial, as he or she will be able to guide you when making a commercial real estate transaction. Real estate companies, like VIP Realty, have a plethora of highly qualified and experienced realtors who have extensive experience in dealing with commercial real estate contracts. It is important to never enter into any type of real estate purchase agreement, whether residential or commercial, without advice from a trusted realtor and real estate attorney, as they will be able to best protect your interest in the real estate transaction.
You’ve probably noticed in the news that real-estate markets across the nation are starting to see a little increase in activity and sales prices. That’s fantastic news for the typical seller, but for sellers having distressed property sale prices and surely days-on-market figures may not be looking up much. The truth is it is tough to sell an underutilized or distressed property in any market as traditional purchasers view it as a high risk investment given its condition and the amount of capital that will be necessary to get it into good running condition. So what’s an owner of distressed commercial, industrial or retail property to do? Think about a real estate bargain sale!
What IS a Real Estate Bargain Sale?
A bargain sale real estate transaction is an alternate to traditional selling techniques that allows the seller to pocket cash at closing while getting a substantial tax deductible donation that usually saves them from paying more in taxes on their regular income than they’d receive cash at closing. These kinds of sales are cash, meaning no contingencies to meet and a fast, comparatively painless closing. In a real estate bargain sale transaction the seller is given a bit of cash at closing to cover their assessment and closing costs, additionally they get a non-profit donation deduction which could be used on a quarterly return if they’ve sufficient income, or it could be applied to their tax returns for around 6 years. Real estate bargain sales often bring a higher sales price for the property than traditional buyers would offer due the IRS Rules regarding assessing bargain sale real estate in Publication 561 . So between the fast cash, charitable donation and higher sales price these sales really are a fantastic option for sellers of distressed properties!
IRS Publication 561
As everyone knows in this day and age if it sounds too good to be true it generally is. Sellers pursuing real estate bargain sales do not need to panic about a scam. The Bargain Sale Exchange was created by the government in Section 170 of the IRS Code and predates the 1031 Exchange, making it a long running safe and proven technique of selling distressed or underutilized business, industrial and retail properties. How does the bargain sale offer a greater profit for sellers than a traditional sale in the real estate market? These sales are bound by the IRS Code Section 170 and are more explained in Publication 561 requirements for real estate appraisals. This kind of appraisal allows the appraiser to assess the value by a combination of three methods of valuation: the Replacement Cost Strategy, the Market or Sales Approach as well as the Income Approach. They then take a weighted average from those techniques and may also think about the highest and greatest utilisation of the property when determining its value even if that use differs from its current use. According to IRS Publication 561:
‘Fair market value (FMV) is the price which property would sell for on the open market. It is the price that might be agreed on between a willing purchaser and a willing seller, with neither having to act, and both having reasonable knowledge of the relevant facts.’
Valuing a property in this manner removes the factors of time constraints and carrying costs on the seller’s part. Therefore the property can be appraised for a higher value than it might be in more traditional sales which use only the Market or Sale Approach or the quick bank .
Bargain sales of real estate offer an excellent alternative to more traditional selling methods for owners of underutilized or distressed property. As real estate bargain sales are cash transactions, closing is fast and simple. Under the terms set by the government the seller is entitled to a charitable donation deduction due to the sale and also pays minimum capital gains taxes on the cash obtained at closing. Thus all that cash saved by not paying as much in income taxes from gifting real estate via a bargain sale to charity can be reinvested in your business!
For more details visit http://mercyrealestate.com and http://mercyfoundation.org
Flipping houses. It offers the allure and appeal that we see on popular TV shows. From HGTV’s Flip or Flop to Flipping Vegas, these so-called “reality” TV shows paint a glamorous picture of flippers buying and renovating a house only to sell it and make a handsome profit. But the hard truth is that flipping houses takes more time, involves a significant amount of stress and isn’t always so rosy. I.E. You may not always reap huge profits. But if you do your homework and find a sound investment, then “flip this house as a business” may be right for you.
Many real estate markets present some good opportunities for investors. However, in some markets, flipping presents its challenges as market inventory is low making good deals hard to come by. And, when they do become available, they require competitive bidding to snatch up.
Here Are The Top 6 Tips for Flipping:
Have A Solid Budget. Not only do you have to take into account the purchase price and the renovation, but also take into account carrying costs (interest, property taxes, insurance, etc.) and make sure that you have a contingency fund in place should the project go over on budget and/or time. 10% of the rehab budget is a good rule of thumb.
Understand The Neighborhood And Market. Is the area an up and coming neighborhood that appeals primarily to the career minded millennial generation? Or perhaps the area caters to younger families and is known for fantastic schools. Study recent sale data and average days on market (DOM) to get a handle on realistic pricing and marketing strategies.
Don’t Over-Renovate. Some flippers are guilty of over-renovating. The goal of a flip is to deliver a sound property within a specified period of time and on a budget that reflects the neighborhood. Use the money in the places that it will return the most. Don’t go overboard with marble tile if it will price the home out of the neighborhood. Instead, look to add what buyers demand. If the space feels closed in, then consider removing walls to create an open-concept layout.
Price Accordingly. While it may be tempting to over-price based upon the time and expense that went into the renovation, be fair in your pricing strategy. Tour comparables in the area and compare features and benefits of each. Obviously, you don’t want the flip to be priced too low, but overpricing may make it sit on the market and means that you may miss out on lost opportunities to snatch up good deals while your money is tied up in the previous flip.
Choose The Best Financing. Although there are some loan programs on the market that offer little to no down, beware of the limitations that may come with them. Note that paying interest on a loan does affect your bottom line when the deal is done.
Have An ‘A Team’ On Your Side. Everyone from a lender, realtor, contractor, accountant and the list goes on. All of these professionals can lend you their expertise to be successful at flipping.
Being a rehabber isn’t as glamorous as the reality TV shows make it out to be. Behind every flipper is a detailed budget, flip timeline, bills to pay, contracts, negotiations, overseeing contractors and subcontractors, obtaining permits and the list goes on and on. Real estate can be an expensive proposition and deciding to purchase and flip a house can be a large financial responsibility. It is also time-consuming. If you have a 9 to 5 job to, adding in a flipping a house business can put pressure on daily life. Just remember, that while there are potential profits to be made from flipping, if it were super easy then everybody would be doing it!
Commercial buying is entirely different from purchasing residential properties. It requires huge investment therefore several risks are involved in the process that can cause great loss even you made a single mistake. There are number of factors that can influence your decision of buying commercial possession. You can also take the help of professionals who can provide you with expert advice and help you in making a sound investment. Above all, they are well educated thus take each and every step carefully by understanding the rules and regulations so as to avoid any trouble later in the future. Some of the most important factors that are responsible for making or breaking up your decisions are given below:
Firstly, make a check on the sources of income. This is one of the essential rules that before investing because it gives you an idea about your budget limitations. You can calculate the right amount by deducting the total expenses from your monthly income. It is recommendable never try to purchase a property off your budget because it is difficult to maintain later in the future. This way, you can wait till you manage to save a bit more before buying a new space.
Secondly, you credit score can really affect your decision badly. Individuals with bad credit scores have to face problems in getting their loan approved and do not get any rebate on current availing rates where as it is not true in the case of good credit scorers because they have the opportunity approve their mortgage in short interval of time and at discounted rates.
Thirdly, be clear with goals of the property. Everyone has different goals when it comes to real estate. Some of them buy to setup a new business where as some buy to expand their industry. No matter what the reason is, investors invest in order to gain maximum number of profits thus make a purchase in order to achieve goals in short interval of time.
Fourthly, location is prior concern in real estate industry. When you are talking about commercial real estate then it should be located in the centre of the city so that the company has maximum exposure to its customers as well as employees. Moreover, such locations have low transportation costs as well. Buying a pre constructed office spaces is an attractive options because you are availed with number of resources along with different equipments installed with software that help you saving a good amount of money.
At the end, it is advisable to hire home inspectors so that they can analyze the place properly in order to determine the real worth of a property. He gives proper time to the building to asses it carefully and addresses even minute details to his customers. Apart from this, you must see the access of parking in commercial buildings well in advance because it becomes a major issue later in the future. On availing these services of professional individuals you dont have to worry about any legal issues as well.
So you are considering the purchase of a condominium. You want to know if this is a good idea for you. As with any type of home purchase there are good points and bad points. In this article we shall look at a few of each as they relate to owning a condo.
First of all you must decide if you really want to live in a condo for the rest of your life. If you have a large family and/or a lot of pets, a condo is NOT a good place for you. Remember a condominium is essentially an