Real Estate Articles

Purchasing A Home And Tips To Guide You Through The Maze! added 5-9-2012

Homebuyers worry about whether, as time passes, their home will hold or increase in value, in fact that's one of the most serious concerns. Consider the location of your home, its square footage, comparable home prices in the area and upgrades when deciding on how much you want to offer.

Keep track of what you have done to get into a new home. Set a budget, log your tour dates, the prices and sizes of the homes that you have looked at and you will find that it is easier for you to find a home that is exactly what you are looking for.

You may be able to borrow an assessor's device for measuring a house. You should do this before deciding to buy. You want to make sure the square footage that the owner listed actually matches up with public records. If these numbers do not match up closely, you should not buy the property or go to the proper authority to have it fixed.

When you want to buy a home stop and think if you are a good handyman or know someone that is. A lot of times your dream home could be a bit run down or needs a little bit of work done to it. If you can do that stuff and have the money to do so you can end up getting a great deal on a home.

Get organized before you jump into the house-buying game. Commit a notebook to information that is gathered through a variety of sources. This way, all of your data can be found in one place when you need to reference it.

Check the yearly costs of maintaining property you are interested in buying. There can be some hidden costs of ownership you may not have noticed on your thorough inspections. Fees such as taxes, water, and the cost of winter heating, are all factors you should strongly consider when you are buying a new home.

Homes that butt up against busy streets are not generally the best ones to buy. These houses can appear to be attractive due to the fact that they cost less than houses that are further away from busy roads; however, there is a good reason why they cost less. Although you may not have a problem with the added noise, it will be harder to sell when you want to move on.

After you have a home inspected, whether as the buyer or the seller, ask the other party to compare inspection results with you. Chances are very good that there will be disparities between the results of both inspections. Comparing results in this way ensures that both parties are aware of all potential problems with the home.

Homeowner's insurance should be purchased prior to moving into your new home. Waiting risks the insurance not being applicable if, or when, something bad happens, and Mother Nature may be pretty unpredictable.

To make sure you get a good home, you should pay attention to details such as appliances. Most people will sell their kitchen and bathroom appliances with their home. Make sure everything functions properly and does not look too old. Check the furnace too. If anything looks too old, do not forget to include it in your budget.

Always take the time to review your options before buying anything. It takes a while to find the right property for your goals and strategy.

It is important that you know what you want in your home before searching for one. This is crucial because you want to make sure your real estate agent is looking for the right home. For instance, if you want a three bedroom home, tell your agent so she does not show you two bedroom homes instead.

It is a good idea to prioritize your expectations before you start haggling for a good deal on a property. Note all the issue that must be dealt with, and your preferred resolution for each issue. Knowing what you feel strongest about will help you to determine which issues are a personal priority. Knowing you won't win on everything, be sure to take a firm stand on the most important issues so you can be flexible on some lesser ones.

Know your financing options. If you are considering purchasing your first investment property, take some time to carefully investigate the financing options available to you. While in some cases using traditional mortgage programs may be a great option, there are programs specifically designed for investors. First time investors need to pay particular attention to the options available, because most lenders will offer a program specially designed to help first time investors and first time buyers in general.

It's imperative that you are pre-qualified for a home loan before searching for a house. You will have a better idea of your price range before you make up your mind about buying a home. Also, getting a loan can be a long process that you do not want to wait until last minute to begin.

If you happen to encounter the seller when viewing a home, be sure to find something to praise and try to avoid saying anything negative about their home. Try to remember that the sellers are proud of their home. This is a time to be polite because it may pay off for you in the purchase.

Many home buyers don't suspect that buying a home is that hard of a process. Use this advice when buying property.

Projects Ideas For The Home With Potential Return added 4-11-2012

When considering investing money into a home improvement project, you must also consider the potential return for the the investment. This is because when the time comes to sell your property, you will get the money you have invested into the home back. Here are some great examples of projects that you can do to your home that carry a great potential for return.

A broken down old wooden front entry door will not bring any appeal to your home. If you have an old door on the front of your home, consider replacing it with a shiny new steel door. These doors are great for security and will outlast any wooden door that you could put on your home. These doors can be painted to match the rest of your home, or you can choose one that is already finished by the factory to lessen the amount of work you have to do to install it. When going through the home improvement store looking for the door, be sure to check out new hardware for it. The hardware that is manufactured these days can add great detail to the look of the entrance of your home.

Adding a deck to your property adds additional living space to it. This adds great appeal to the home and can provide an awesome place for family gatherings. It can be somewhat expensive to add a deck to a home, but when the time comes to sell your home, that money will be returned to you. Many home buyers will look at that deck as an additional living area and it will appeal to many of them as a place to create memories with the family.

Many homes have an unused attic or basement space that is not used for anything but storage. You can transform these spaces into additional living spaces for the home. Be sure that you leave an area to be used as an organized storage room, so that potential buyers know exactly where they will store their holiday decorations and things.

If the siding on your house is looking drab or damaged, invest in having new siding installed. There are other types of siding for you to consider that will outlast the vinyl, so be sure to consider all of your options before making any decisions.

Drafty windows must be replaced with new energy-efficient ones. The money invested into this project will come back to you through decreased utility bills as well as increased home value. Shop around to find the best windows for your home with a company that will guarantee them for the life of the house. Potential home buyers will appreciate the fact that the windows in the home are backed up for life from the manufacturer that they came from.

Whether you are planning to sell your home or live in it for the next fifty years, these home improvement tips are truly worth looking into for your home. You and the family that may one day live in the home will appreciate the fact that you have taken the time to make these improvements.

 

Try These Great Tips To Make Home Improvement Easier added 3-14-2012

Working on projects to improve your home is an effective way to bring out the best aspects of your home. Not only do these projects improve the appearance of your home, but they also improve its comfort and value. Even if you do not have construction experience, do no be scared to take on difficult home improvement projects. Here are some suggestions on how you can do some very good home improvements.

On major home improvement jobs, homeowners should always take information from their contractors with a grain of salt. It is very common for all contractors, even respectable ones, to take advantage of homeowners. Before additional costs and labor are agreed upon, the homeowner should carefully review the contractor's proposal.

Check around your home's foundation, looking for any low or sinking areas. These areas should be filled with compacted soil to prevent water from pooling and eroding parts of your yard. Water surrounding the foundation of your home can cause wood to rot, as well as seep into parts of yor home.

To protect surfaces, always cover them when you're painting or when you are removing walls or cabinets. You can avoid more work and costs by keeping your surfaces protected from dripping paint and airborne debris. If you don't plan to paint your walls, you should cover them to protect them.

Considering a home improvement project? For inspiration, look at the artwork potential in items you have already, and save money as well. Use interesting frames to match your decor.

One way to save money on home improvement projects is to borrow tools from your neighbors. You could also borrow tools form your neighbors instead of buying new equipment for your projects. Sharing tools and knowledge can help both of you achieve more success in your projects.

Having a ready supply of fasteners, nails and screws on hand can save you money and time. Nuts, bolts, screws and nails are pesky to try and dig out of drawers and irritating to have to go and buy, so keeping a handy selection conveniently available can speed up all sorts of minor home improvement projects.

Lampshades that are plain add no personality and are boring. By decorating these shades with stencils and paint from a craft store, you can turn a dreary lamp into a focal point in any room. This will give your rooms some personality, taking away from the reality of how boring an ordinary lamp shade can be.

You can spruce up your bookcase easily with wallpaper. Pick an interesting and unique design. By attaching the wallpaper in back behind the shelf, you will get a nice looking design that is seen behind your books. Your new, distinctive bookcase will look better, and it can even dictate the decor of the rest of the room

If your current residence lacks the square footage for a washing machine and dryer, you might consider purchasing a space-saving combo unit. Combo units are stacked and take up half the room. The combo unit is really convenient, as it combines the wash and dry cycle into one.

Keep your tools separate according to the project you would use them for. For instance, you can have a box for plumbing tools that has pipe wrenches, pipe fittings, PVC glue, and more. Use another for electrical jobs that contains switches, voltmeters, zip ties, fuses, etc. This way, you can easily find your tools by project when you need them.

Use accent paint or attractive wallpaper to distinguish alcoves or niches that have been built in. If it's an especially small niche, you can just use a sample container of paint, so there's no need to buy a whole gallon.

Planning your projects carefully will avoid you a lot of stress and problems as well as save money. So grab that hammer and get to work on improving your home today!

 

Tips To Help You Purchase The Right Insurance added 2-27-2012

There are a lot of different kind of insurance. There is medical, dental, life, vision, home owners and car, plus more. You will be able to find out what kind of insurance you need, and the ones you may be able to do without if you are having issues with money. Smokers are considered a bigger risk because of the number of accidental fires that are started yearly by lit cigarettes left unattended. Consult with your insurance agent to find out if your provider has a discount available for you.

If you want your insurance to respond quickly to your claim, explain as clearly as possible what happened. Be sure to take photographs of any damage. Inventing a false explanation or trying to make the damage more severe will not get you more money; instead, you will end up in real legal trouble. Stop smoking to take advantage of deals on health and life insurance. Smoking is a huge consideration for health care insurance providers when they're calculating premiums, and smokers pay much higher rates. Quitting now, you will see that you're rewarded with lower monthly payments. A good way to lower your insurance costs can be to bundle several policies with the same company. For a fixed rate, you can get a car insurance and a motorcycle insurance. You should also investigate whether you can get homeowner's or renter's insurance through the same company that you get your vehicle insurance through. Also, if you have both homeowner's insurance and flood or fire insurance, see if you can bundle these insurances. Before you buy anything, though, be sure that you actually need it. If you are looking for ways to save money, you should purchase insurance only when you need to. Without specific requirements from the state, or if you must insure your family, you can avoid buying insurance just because it is available. If you can make declarations to the insurance company stating you don't drink and don't smoke, you may get a discount. Put a car alarm in to cut down on your premium and minimize the likelihood of theft. Find out more about discounts and make sure you get the ones you qualify for. Now you'll know everything you need to be sure that the insurance you have is right for you. Although it can seem extremely overwhelming when first starting out, you have to keep in mind that insurance exists in case your house, your car, or you are injured so that you can make it financially. 

 

Learn How To Get Your Finances Under Control added 1-24-2012

You don't need to be Dave Ramsey to manage your money well. With a little planning and discipline, you can live on what you make while putting some aside to grow your net worth.

Over time, it's possible you will have issues with financial problems even if you have planned carefully. It's especially good to be aware of the grace period after the due date, and how much the late fees might be. Know your choices before you commit to a year long lease.

One way to improve one's personal finances is to cut back on expensive restaurant trips and, in fact, to avoid all sorts of ready-made meals. You will save a lot of money if you just stay in and eat at home.

Compounding interest is an excellent idea for younger individuals looking to gain an early financial advantage. Save a little from what you earn in a savings account.

With respect to getting your finances in better shape, it is better to start late than not at all. That still gives you time to get things in perfect order by 60, which is more than you'd have if you didn't start at all. It's always a good time to start working toward better finances.

Keeping track of your expenses and income is a key component of getting your personal finances in order. Whether on your computer or by hand, start by writing a list of all of your monthly expenses. Be sure to include all living expenses, including rent, cars, lights, phones, heat and food. It's also important to include any expenses that you are anticipating. Some expenses only happen every other month or twice a year, so it's important not to forget those. Write down how much you need to pay, and be sure that your expenses do not exceed your income.

If you're in a foreign country, eat where the locals eat. The restaurants in hotels and tourist areas tend to overprice their food, that is why it is good to research on places on where locals eat. You'll find the most delicious and best priced fare in the area.

As this article has shown, you have the capability of raising your net worth, living within your means, and achieving a healthy and enjoyable financial state. Common sense combined with this helpful advice can allow you to create a budget, lower your debt, put money aside and control your finances.

 

Learn What You Need To Know About Home Owner's Insurance With These Tips-added 12-12-11

Home owner's insurance is one of the most important policies you can purchase. Protecting your investment, as well as your domicile, is of utmost importance. Read this article for help on understanding homeowners insurance. Having this knowledge will help you make the best choice of the policy to buy.

Homeowners insurance is a very big necessity in life. Keep in mind that some mortgage companies will not even make the loan unless a person can provide proof of coverage for fair or full value of the home. It can be very expensive so be sure to research the different companies and compare their policies so that you can find the best rate and coverage.

When shopping around for homeowner's insurance rates, be sure to mention any safety-related improvements that you've made, especially if it's an older home. Simply installing a smoke alarm on each floor of your home will not only protect your life in case of a fire, it could save you up to ten percent annually on homeowner's insurance.

When purchasing home owner's insurance make sure to shop around and read plenty of reviews. A company may be cheap and appear to offer the exact same coverage parameters, but what they lack in cost they may lack in service. When tragedy strikes the last thing you want is a battle for the money and protection that you were paying for.

On your homeowners insurance policy, you will be able to save money by choosing a higher deductible on your policy. You will generally start to get a discount at a $500 deductible and the discount increases as the deductible increases. Check with your lender first if you plan to go higher than a $1000 deductible as some lenders do not allow this.

Find out what kind of home replacement coverage is offered on your home owners insurance policy. Some will guarantee replacement while others will limit the amount of money you will get if your home is destroyed. Some insurance companies have a cap on the payments to a percentage of the face value of your policy.

As previously stated, homeowners insurance is very important, and it must be purchased carefully. Do the research necessary to protect yourself in case of any problems with your home. Use the tips in this article to understand homeowners insurance. This will help you make the best decision when you are choosing your own policy.

Preparing For Your Real Estate Closing added 11-22-11

You have secured the financing, gotten an offer accepted on the home of your choice, and done a home inspection. You are almost done. Just the walk through of the property and the real estate closing is left to do. Some of the tips below will help you with the last, final action related to your purchase.

1. Review your closing financial sheet for correctness.
2. Take a calculator to closing.
3. Be sure your prepaid items have been deducted.
4. What day of the month should you close on?
5. Verify that the payoff on your old mortgage is correct.
6. Verify you have utility transfer information and homeowners association points of contact, if applicable.

For professional help finding the perfect Vero Beach Homes for sale Contact Sergei Goukasov

The closing should be a brief meeting between all parties to do the final transfer of the ownership of the property. Just take your time and ensure that you know what you are signing, and that you walk away with copies of everything.

 

Vero Beach Recreation added 10-25-11

Nicknamed “Hibiscus City”. Vero Beach is located in Indian River County on the east coast of Florida. It is north of West Palm Beach, south of Cape Canaveral and Coca Beach. Situated between the Space Coast and Miami, Vero Beach is on the Atlantic Ocean.

Vero Beach is home to Piper Aircraft, citrus farms and boasts a strong appeal to tourists. All bring money into the location, making Vero Beach real estate some of the most sought-after in the state of Florida. Weather is like a piece of heaven, averaging 72 degrees in January. During the summer, the nights cool into the low 80s.

Retirees and families relocating or looking for a vacation home will find Vero Beach real estate offers some of the best outdoor activities.

Fishing:

If you like to fish for sport trophies or to catch a meal of a lifetime, Vero Beach has got you covered. All types of fish are indigenous to this area. You’ll find king mackerel, grouper, wahoo, tuna and marlin. Not to mention, you’ll likely see pods of dolphins swim by as you cast your pole.

Golfing:

Like to hit the links? There are plenty of courses welcoming beginners and challenging seasoned scratch-golfers. Vero Beach Country Club, Oak Harbor Country Club, Vista Plantation Golf Club, Hawks Nest Golf Club, Bent Pine Golf Club and Sandridge Golf Club are just a few of the many public, private and semi-private courses.

Tennis:

Tennis players will also find much to choose from in Vero Beach. Boulevard Village & Tennis Club, Riverside Park Tennis Courts, Moorings Club, Twin Oaks Tennis Club and the Vero Beach Tennis Club will keep you busy playing singles or doubles tennis.

Water Sports:

It doesn’t stop with tennis, golf and fishing in Vero Beach. Volleyballers can enjoy their game right on the sand. For those seeking thrills, parasailing and personal water craft are available. You can also cruise the water in a pleasure boat or go on a dive. For those that like to surf, some tasty waves can be found off the coast. Or, you can just walk along the surf.

Having your own piece of Vero Beach real estate is like having summer all year round. Sunrises and sunsets will captivate people of any age. A picnic in a park or on the beach makes Vero Beach a great place to unwind and enjoy the life of sub-tropical living.

For professional help finding the perfect Vero Beach Homes for sale Contact Sergei Goukasov

 

10 Staging Tip for Selling Your Florida Home added 9-28-11

Preparing to stage a home in Florida can be difficult. You want your home to sell quickly and you want top dollar for it. However, in order to make that happen, you have to plan carefully and know how to make your home look appealing to potential buyers. Basically, you have to get your home ready for potential first time as well as experienced buyers. Here are 10 tips to get you started on staging your home.

1. One of the most important things you can do to get ready to sell your Florida home is to emotionally detach yourself from it. You’re hoping to sell it anyway, so pack up the belongings you don’t necessarily use right now. If you can live without it for the moment, pack it away. You want a neutral environment to attract both men and women. Allow them to visualize their own property and furnishings in the home instead of just seeing all your things.

2. Today, wallpaper is usually a turnoff to many homebuyers. Each person has their own sense of style when it comes to décor. If you leave the wallpaper on, your buying audience may be limited. They may look at it and see work they will have to do by removing it themselves.

3. Don’t use bright colors when painting. Creams and taupes are the way to go and make sure you always repaint before showing your home.

4. Make sure the countertops are cleared of small appliances. Perhaps put a plant or scented candles on the counter. This makes the countertop appear spacious.

5. It might be wise to buy a new doormat.

6. Now onto the outside of the home. Be sure to mow the grass, trim bushes and do any needed edging. Also, put fresh mulch around the trees and bushes.

7. Add bright colored flowers to the front porch. These are appealing and draw the eye right to the front door.

8. If needed, buy a new mailbox or clean up the old one.

9. Clean out the gutters.

10. Finally, sweep and power wash the sidewalks, driveway and your exterior siding.

Every home requires general tips when it comes to selling it. You may need to contact a Staging Professional if you need assistance. Small investments now can increase the value of your property.

 

Discovering The Ideal Family Property-added 7-22-11

Locating the house in which you actually desire your own family members to grow up in can certainly be an important concern. There is a lot for you to think about plus attempting to make sure you get it great the very first time around can certainly be extremely nerve-racking. You will certainly probably be worried about exactly how the completely new house may have an effect on the family life or the children's advancement, long term possibilities as well as overall health first and foremost, But there is additionally your own foreseeable future as well as existing economic circumstances for you to place right into the actual blend. At this time there are usually a few things a person may bring into the choice in order to relieve some of the pressure and help make your property quest a enjoyable as well as thrilling encounter it should end up being
.
1st issues 1st, think about exactly how long you actually are planning to be residing inside the brand-new property. Do you really want this to be the property your own kids expend their own formative yrs or possibly is it your beginner property? Do you or your main partners currently have employment options which may possibly require yet another transfer inside the up coming couple of yrs? Do you foresee your family members expanding any more? The majority of properties are not going to end up being that perfect, once and for all property. Howeve rif you actually would like this to be, you will want to think about all of these types of factors as well as bring all of them in to consideration whenever buying your own property.

Whenever shopping for properties don't get influenced by the models having all the fancy decorations or even the biggest bedrooms: the initial issue ought to usually end up being the actual location. A person ought to become mindful regarding the actual features within the actual location, such as educational facilities, stores, companies, general public transportation as well as medical care. Do the potential neighbors really take proper care regarding their own real estate? Exactly what might be the actual resale worth like? Discover exactly what the actual neighborhood is actually like, whether or not there is very much criminal activity or even facilities issues.. A person can easily alter the actual interior of ones home appears, however a person cannot modify your neighbors or even the local community, therefore consider very carefully whenever selecting exactly where for you to begin the research.

In the event that a person has younger kids a person may well need to think about the particular demographic of people residing all around you. Even though a person's children are generally certain to receive plenty of friends from classes they will additionally need some other children to enjoy time with following classes. They will certainly additionally require someplace safe and sound to enjoy, therefore consider the actual accessibility regarding recreational areas as well as play areas in to consideration. Slightly older kids are likely want someplace to be able to hang out and about, therefore it also makes sense for you to find out if there happen to be local community organizations as well as additional risk-free places for them to meet up with friends.

Consolidating Money Owed Advantages and disadvantages added 4-29-11

Online debt consolidation comes into play immediately after you know that you are in an immediate need need for income simply because you are deep in arrears and interest rates, plus the premiums you have to send for your mortgages aren't affordable. So just in case you feel that your present loans aren't workable and may easily bring about individual bankruptcy, it's about time that you consider applying for consolidating debts.

At best, unpaid debts could have a strong effect on your credit report and bring about a poor credit statement; and as a last resort, you may lose your property. However, it tends to make no distinction how appealing debt consolidation loan can be, you need to understand that this can be very little else but another debt and if you obtain it unconsciously, it can connect you with even more serious financial problems for instance bankruptcy.

The principle notion of debt consolidation loans is to blend many of the debts within a manageable loan, one interest and APR (annual percentage rate) for one simple reason - paying off this very loan as soon as possible. Basically, such options as loan consolidation of loans is available to all borrowers irrespective of credit score and position but nonetheless you should never forget that poor credit leads to higher rates plus much more complications with applying and getting approved for this type of loans. All loans suitable for consolidating debts are broadly separated into two categories: guaranteed and unsecured loans.

Secured finance require putting any important assets up against the loan as collateral. Unsecured loans, in their turn, don't require any security but result in more expensive rates and less beneficial conditions. You choice should depend on the needs you have, your financial budget along with your expectations. Just in case you hesitate whether to choose a unsecured or secured loan, it's suggested to never tempt fate and so be sure meet with a qualified professional.

The Advantages of Buying Vero Beach Waterfront Real Estate Now! added 3-29-11
 
With prices where they are right now, there's never been a better time to buy waterfront property in the Vero Beach area .
Anyone who has ever been to the Vero Beach area has at one point in their lives considered a life of relaxation with only the sound of the sea and the ocean breeze to worry about. While this may sound like an unobtainable form of paradise, with the current pricing, it is actually much more realistic than it seems. Here are several reasons.

1. A second home that generates income. For those who already own a home and are happy living where they are, waterfront property in Florida's popular Vero Beach area area can be a lucrative investment. Each year, thousands of tourists flock to the Vero Beach area to soak up the sun. Because of this, waterfront rental properties generally take in good rental income. In fact waterfront properties are always the first to get rented.

So, by purchasing a piece of waterfront property and renting it out, you can have all or certainly part of your home payments made plus enjoy it as a vacation home. The goal being, that eventually, you'll be in a position to retire and live the relaxing life you've worked so hard to attain or the property will simply be a good investment for the future.

2. Waterfront properties have historically always had the best appreciation. If you’re on the fence regarding whether or not to purchase property, remember that.
I’m sure you’ve all heard the phrase, there is only so much waterfront property available-which is absolutely true.

3. Buying vacant land. Another consideration is purchasing a waterfront lot and then even if you don't build on it, the property can still grow in value over time or you can build your dream home later. Lots of investors have made their careers out of purchasing multiple vacant lots.

4. The current pricing. Waterfront property in the Vero Beach area has never been cheaper than it is now and likely never will be again. The result is that people of all walks of life and nationalities are currently taking advantage of the Vero Beach area housing market.

The only way to make sure you can even get your hands on a piece of waterfront property in the Vero Beach area (and for less money than ever before) is to start looking now, while there are still excellent property investments available.
In summary, if you're in the market for waterfront property in the Vero Beach area, there's no better time than now to buy. Wouldn’t it be nice to vacation here and not have to leave?

 

Evaluating Real Estate Investments Like a Pro: Present Value added 1-20-2011

When you consider that there are many real estate opportunities where you think you could make a killing, how can you really be sure that one investment is better than another? Many would-be investors jump into real estate without a good way of determining whether a particular piece of property, a single family home, resort condo or a multi family dwelling is really and truly a good investment. The end result is often disappointing. Maybe you should have bought investment B instead of investment A. And so it goes…What is the best way of evaluating real estate? The following approach is the way large companies utilize a very important, yet relatively simple evaluation tool for comparing competing investments.

A Couple Fundamentals, First
Obviously, if you are a real estate investor, you probably have decided on a minimum rate of return or minimum amount of money that you would expect yearly on a real estate investment. Of course, there are some investments that you can immediately jump into without doing very much evaluation. Suppose you can snap up a home that is selling for 60% less than its current value and you’re very sure that without upfront repair/refurbishment expenditures, you can immediately sell it, realizing an attractive profit. The answer is obvious upfront. Most times, these opportunities are hard to find and often the listing real estate agent is in the best position to takes advantage of these situations.

Also, we’ll need to assume that there are no legal barriers, potential zoning regulations or other problems that would immediately preclude one investment over the other. Moreover, you as an investor will need to assume that all of your information is imperfect and the future is almost always unclear about investment choices you make. Thus, the following approach to evaluating competing real estate investments is based purely on financial returns. Let the numbers do the talking!

Present Value Overview
The basic approach to present value boils down to an obvious fact: a dollar today is worth more than a dollar that will be received at some time in the future. For instance, what would you rather have: a $100 return now or $100 return in 2 years? Obviously now, but when you start making that future $100 grow, there will be some point at which you will decide in favor of the latter.

Assuming the worst is always a safer strategy. In present value, it is more reasonable for you to assume that any rents, receivables, rates of return, rate of appreciation and occupancy rates will typically be less than you want and expect. As you assemble the facts for your analysis or business plan, be very conservative and this is especially the case if you’re seeking funding from a bank, venture capital source or investment group.

Present Value Internal Rate of Return Methodology
As mentioned above, money has a time value. Albert Einstein was quoted as saying, “The most powerful force in the universe is compound interest”. The so called internal rate of return analysis is all about that. The Microsoft product, Excel allows a relative financial neophyte to analyze side-by-side alternative investment cash flows in terms of its compound interest time value

A Basic Example
Let us say that you have two properties that you’re might considering. The first is a home that you can purchase for $100,000 with $25,000 down. The second is a condominium that has a price of $75,000, but can be purchased directly from the builder with only $7,500 as the down payment. Let’s assume that both will appreciate at 5% per year and by the end of three years, you would be able to sell either for a 15% profit over your initial cost. Let is assume that you can rent these properties resulting in the following:

1. You receive a net $100 per month profit after your mortgage payment on the single-family home.
2. You can realize $50 per month net profit on the condo.

Which is the better investment?

*Year 3 includes the yearly net rent, the return of the principal ($25,000 and $7,500, respectively) and profit.
The image on left shows what the Excel format would look like.

In the basic financial terms, without even considering individual any federal or state income tax rates that apply, the best investment would obviously be the condo’s rate of return which is more than double the rate of the investment on the home.

Now extending the investment horizon to 6 years, with the same sales price and the same rents, the condo is still the best investment, but the rates of return falls drastically. The home has a rate of return of 12.2% and the condo has a return of 22.3%.

How to Use the Excel function
Using Excel to set the example up is simple:

The Excel formula is IRR(Cash Flow1, Cash Flow2. Cash Flow3,Guess at Rate). On the Excel spread sheet it will be expressed as follows: =IRR(-C2:C5,19) where C2 is the initial investment (down payment with a bracket surrounding it, designating that it’s a negative flow) and C3, C4, C5, etc. which are the yearly (or monthly cash flows).

The last number, 19 is a ‘guessimate’ of the what the rate might be. I could used 5, 10, etc. Excel uses this as a function, but it really doesn’t matter whether you’re accurate or not.
You can obtain additional information about IRR directly from Microsoft.

Obviously you can make this as complex as needed. For instance, you might want to use a factor for federal income taxes, a factor for expected repairs and even increases in rent and real estate taxes. You may also assume occupancy rates. It really doesn’t matter as long as the formula is set up in the correct Excel format. You can make it as precise as you need. But keep in mind that too much precision into the future is largely wasted effort. This approach to analysis only requires you to be reasonable in all your assumptions.

There are numerous ways of performing real estate investment analysis. While you can’t ever know the future, you can assume typical terms, conditions and the types of rates that most banks or investor groups will demand of the real estate investor.

 

What to be aware of in Buying a Condo added 12/23/2011

There are some important considerations to take into account before you make the final decision to purchase a condo. Too often, people overlook these critical issues and end up regretting their purchase down the line. Do your research carefully and you will make a sound investment. What should you be looking out for? Here are a few important questions to ask:

Is the condo complex professionally managed?
You should examine all HOA documents carefully. It is important to establish whether or not the complex is professionally managed. It is a good idea to speak with other owners to get their impressions of the complex management. Also, look at the turnover rate of elected HOA members. If there is a high turnover rate this may indicate that the HOA may be disorganized and ineffective. Analyze the minutes of previous HOA meetings to see what the issues are and if they have been dealt with effectively. This will also reveal any major projects that might be under way. What do the association dues cover? Are owners paying their association dues? If there is a significant amount of unpaid dues, it could be a sign that the HOA is ineffective as well as underfunded. Check the HOA’s accounting records. Is there sufficient money in the reserve account to cover any emergency repairs? If not, the HOA dues could be increased to cover these unforeseen circumstances. Lastly, check that the HOA is not currently involved in any litigation.

What insurance policy is in place?
Ask for a copy of the certificate of insurance to get more information on the association’s insurance policy. You need to know exactly what the policy covers. Is there sufficient cover to rebuild the complex should something happen? Are the replacement costs outlined in the policy an accurate reflection of the cost of rebuilding? Does the policy have a building-ordinance clause?

What are the HOA bylaws?
This is where buying a condo differs significantly from buying a single-family home. The HOA’s bylaws can be a minefield of information. They can be difficult to understand and interpret. It is a good idea to have a real estate attorney look over the bylaws on your behalf. You should know exactly what you will own and what you won’t own.

How many units are owner occupied and how many are rented?
Generally, owner occupied condos are maintained better than rented condos. If there is a high number of rented condos make sure that the HOA has a clear rental policy. Find out exactly what these policies are and if they manage the renting out of condos or not? Do they stipulate that you use their lease agreement? If so, have your real estate attorney look over their lease agreement. Also be aware that the HOA may prohibit the renting out of condo units. You should be aware of all these fine details before you make a final decision to purchase.

How often are units bought and sold in the complex?
A high turnover rate of units bought and sold could be a clear indication that something is not right in the complex. This could affect the value of all units. Talk to other people living in the complex and ask them about the high turnover rate. Current owners will probably be quite willing to reveal any major problems to you.

Buying a condo is a complex process. Make sure that you do your homework thoroughly to avoid disappointment later. As with any financial investment, a sound analysis and investigation will significantly reduce the risk involved.

11/20/2010 Estate Investment: Vacation Home or Condo?

With the historic decline in real estate values, many are wondering, “Which is the best investment, a home or condo?” To be sure, in some parts of Florida, the real estate market for condos is not good. But should one still shy away from a condo investment? The answer, believe it or not is, “Absolutely not!”

The Real Advantages of Condo Ownership in Florida
There are several key advantages that one need consider. There is a key qualifier: the following pertains to properties that are located within coastal/vacation areas.

1. Cost/Return on Investment – Vacation condos in coastal areas that are both South of Tampa and Daytona Beach have an almost year round vacation market. Further north and the weather during the winter months is really too cool to attract tourists. Therefore, given the relatively low upfront cost in purchasing a vacation condo versus a single family home, weekly rental rates for condos are often a net positive cash flow, almost from the outset with a real positive return on investment.

2. Market Size – The market for short term condo rentals in the Florida vacation market is much greater than the market for single family vacation home rentals. The rental rates are much lower and the probability of keeping a condo rented on a continuing basis is much greater, because in the current market, fewer can afford the relatively high cost of renting a three or four bedroom home near the beach or waterfront areas.

3. Views – One of the other advantages of a vacation condo is that condominium complexes near the ocean, gulf or in the Florida Keys usually have better views than would a moderately priced single family home in the same area. In other words, it is significantly less expensive to purchase a condo with a “decent” view than a single family home with the same view.

4. Condo House Keeping Cost – Typically, in mid sized to large condominium complexes that are rented to vacationers, it’s relatively simple to find reputable and dependable individuals to perform cleanup services after a one or two week vacation stay. Also, the clean up cost of a typical condo is a fraction of what it might cost to perform the same services on a single family rental home.

5. Facilities – A key advantage of a condominium over a single family home is that because there are so many units sharing the cost of all the facilities (a pool, recreation room, and work out room, etc.) the number and quality of facilities usually far exceeds that which might be found in a typical single family home.

6. Ease of Management – If one buys a condo situated in one of the Florida vacation destinations and the owner is located in Texas or New York, maintenance problems are an absolute annoyance. Even if the owner is only 15 minutes away, it still is an annoyance. With a condo, often there is an on site manager who normally handles a vacationer’s problems, like a jammed toilet or sink. Also, local maintenance companies can be contracted to respond to a problem when summoned by a tenant resolving the problem without ever bothering the owner.

7. Ultimate Sale of a Condominium – As mentioned above the market for vacation condos to purchase is significantly larger than the market for single family vacation homes. When an owner of a condo elects to sell his property after having owned it, it is certainly easier to find buyers with the necessary down payment and financial resources to purchase a condominium as opposed to a much more pricey single family vacation home.

Like anything else, doing the background work in purchasing a condominium is of key importance. A potential investor must research the area, the rental history, the condition and the suitability of purchasing whatever condominium in which he might have an interest. Even in today’s market and perhaps, especially in today’s market, a Florida vacation condominium has so many obvious advantages as an investment.