All Posts by Kok Yu Lim

The Advantages and Disadvantages of Buying a Lease Option

A Lease Option is technically a lease (rental) with the option to purchase. You are renting the home but have the right to purchase the home at anytime during the rental period at a pre-determined price. A lease option also can be a very favorable way to purchase a home because it provides the advantages of home ownership without the disadvantages of ownership.

The main advantages include: (1) No mortgage fees (2) less for a down payment

When structured property, there really are no disadvantages to a lease option relative to purchasing the home with a mortgage. When compared with renting, the major disadvantages of a lease option include: (1) pay more money upfront than renting (2) you are responsible for repairs, not the landlord. Each advantage and disadvantage will be discuss in greater detail below.

 

1. Advantage : No mortgage fees. This is because a lease option is technically a rental, the agreement is between you and the seller. Then it is also because of the bank is not involved, there are no bank fees, meaning that you don’t need to come up with the $5000 to $9000 that it costs to get a mortgage. However, eventually you will have to get a mortgage if you decide to stay in the home long term.

2. Advantage: Less for a down payment. Like the mortgage fees, because of the agreement is between you and the seller, the money down is negotiable, and sometimes not required at all, though the amount down typically ranges between $5000 and $10000 dollars. This is still better than the bank will require.

3. Disadvantage: Pay more money upfront. Typically a lease option requires a greater amount of money upfront than renting. This is not always the case and depends on how desperate the seller is the lease the home. Generally you can expect to pay twice what you normally would put as a deposit on a comparable rental.

4. Disadvantage: Responsible for repairs. One nice thing about renting is that the landlord is responsible for repairs. In a typical lease option, you are entirely responsible for maintenance of a home.
Finally, there are both advantages and disadvantages to buying a lease option. When compared with the buying the home with a mortgage, there is really no disadvantage. But when compared with renting, a lease option is a relative low risk investment for little additional out of pocket expense. The key is in the terms of the agreement between you and the landlord. The terms are negotiable, so make sure that you will do so. To summarize, a lease option can be a win/win situation for both buyer and seller. If you are looking for a home but don’t have enough for a regular down payment or are not sure if the market is going to get worse before better, you can consider a lease option and rest easy.

Source : ezinearticles

Why Lease Options Work in a Bad Economy

In a bad economy, the real estate market usually is the one of the first to shows the signs of distress. There are certainly no real estate investing secrets about the fact that people are not able to get credit, they have lost their jobs and everyone is struggling. It really is not the best time to be entering into a huge financial obligation like buying a home. This means sellers start to get desperate and more homes flood the market as people need to sell or risk losing their homes to foreclosure. There are not enough of buyers. Banks make it even more difficult since they stop lending and start being very picky about whom they lend to. This leads many sellers to consider a lease option on the property. For an investor, this could be a great opportunity to make a nice profit with a lease option agreement.

Why a Lease Option Works

This is the one reason of the real estate investing secrets that works in a bad economy is that there is no lender involved. Instead of making a deal with a lender on a mortgage, it is just the seller and buyer making the deal. The seller agrees to sell the property to the buyer at the end of the lease term and the buyer agrees to pay the monthly lease payment each month until the agreed upon date when they have the option to buy. It is important to note that, if a buyer doesn’t decide to buy at the end of the lease then they do not have to. But if the buyer wants to buy, then the seller must sell for the buyer.

Why This Works For Investors

Investing is real estate when the market is rough is not always the best financial situation. Many investors suffer some great financial losses since it becomes difficult to sell the houses that they have bought. With a lease option, the investor can rent out the property during the lease, which means the renters will pay the monthly lease payment for the investor. At the end of the agreement, if the market has not rebounded and the investor sees no possible way to sell, they can walk away.

Some Things To Keep In Mind

If you choose to move forward, this is one of the real estate investing secrets there are some things you will want to keep in mind so that you come out on top of this deal. You need to make sure that the monthly lease payment is not more than what you can reasonably charge for the rent on the property. You also need to do some research on the area and to make sure that in a good market that you will be able to sell the property. After that, also be sure that you have the potential renters lined up so that you won’t be stuck with the house sitting vacant and having to pay the monthly lease payment.

Finally, there are many ways you can lose money on real estate investing during a recession, but you may trying out lease options because it may actually help you come out on top. Then you may be able to make it through the recession without losing anything and actually making a profit with this creative investing idea. And there you have another of the real estate investing secrets.

Source : ezinearticles

Lease Option Real Estate Investment

Lease Option Investment

A lease option is basically a rent-to-own contract for a piece of real estate. The buyer signs an exclusive contract to have the buying rights to a property after a given amount of time. When the allotted time expires, the buyer can do one of two things, that are buy at the price agreed on when the contract was signed, or don’t buy the property and forfeit down payment.

To make this easier, let’s take a look at this from a buyer’s eyes.

Buyer

Why would anyone use a lease option for real estate investing? Try risk management. If you were shopping for a home a few years ago (before the market went bad) but were unclear if the area would be hit by recession, you could use a lease option to pay monthly rent and then wait for the contract to expire. The next step is you would be to get the property appraised. As a buyer, a lease option means that you do not have to buy the property. So when you look at the home appraisal after a few years, you compare the current market value to that of the agreed upon purchase price. If the home is worth more than what you agreed, you can purchase it and gain instant equity. But, if the property went down in value, then you can leave the deal with no ties and are only lose the down and monthly payments.

Now, let’s talk about the seller.

Seller

During these poor economic times, it’s very difficult to sell your property since there are many sellers polluting the market and increasing the number of unsold houses. The excessive inventory lowers overall prices. Now, for some reason, so you need to sell your property as fast as you can and fast or cover the payments. Lease options can do both and here is how. Thanks to the financial education available, many people want to buy a home but do not have the credit or the full down payment that needed to buy a home. These people are ready and willing to buy a property but they can’t get a bank to look in their direction. Hence why a lease option for a low down payment that accepts medium to poor credit has such a strong customer base.

Finally, lease option real estate investment is a rent-to-own strategy that works through signing a contract for exclusive buyer privileges at the end of the agreed upon time period for an agreed upon amount. This contract can be very easily work to the benefit of both the buyer and the seller, and allows for property sales at your asking price even in recessed markets. So i suggests that lease option real estate investing should definitely be considered by either the investor, the buyer, or both.

Source : ezinearticles

Ways To Find Lease-Option Properties

You’ve decided that you want to buy a home creatively and you are looking for a flexible seller that would allow you to buy on a lease-option. Maybe you don’t quite have the 20% down that many lenders are asking for these days. Maybe you had a recent financial challenge that bruised or destroyed your credit and you need time to improve it. Or, perhaps your financial challenge led to a bankruptcy, foreclosure or having to sell your last home on a short sale. Regardless of the reason, you realize that getting back to being a home owner is an important next step and that buying a home on a lease-option is a way for you to do it right away.

Now that you have decided to do it, how do you find a seller that is willing to do a lease with an option to buy? There are some ways to find lease-option properties.

1. Contact Landlords With Properties For Rent

Some landlords that are advertising their properties for rent would actually consider or would even prefer to sell the property. Some landlords are only renting because they couldn’t sell their property in a timely fashion and could not afford to make payments on the property while it sat vacant. You can contact landlords and ask them if they’d consider to selling the property too.

2. Have a Real Estate Agent Do The Work For You

Calling sellers and landlords is time consuming even if it is worth it. There are a few great real estate agents that are knowledgeable and willing to do this work for you while representing you as a buyer in the transaction. Some will charge you an up front fee for this type of work that you will often get back many times over by the negotiating and deal structuring experience they bring to your corner by representing you. Some will do it without an upfront fee and will be paid a commission on the sale in the same manner that most real estate agents are paid on more traditional transactions. From my experience, there are probably only about 1 or 2 real estate agents out of 100 that really have the knowledge to work on creative transactions with you, but finding one is an immensely valuable resource that you should rely heavily on.

3. Marketing To Have Sellers Contact You

Many real estate investors understand the amount of work that is involved with finding sellers that would sell creatively. Many of these investors are willing to put out marketing to have sellers that are more likely to do a transaction like a lease-option contact them directly instead of doing the manual labor of contacting many sellers and landlords. They are often willing to spend $1,000 on marketing to have the sellers come to them instead of expending $1,000 of their valuable time sifting and sorting through sellers and landlords that may or may not be interested. By putting out marketing they end up talking to a very small number of sellers that are already willing and eager to work with them on something more creative in a win-win transaction.

Conclusion

Finally, whether you decide to focus on the easy-to-find already advertised properties or you decide to do the extra work to get what will often be better deals by calling sellers or landlords yourself, i think you will find that a little bit of extra work up front is definitely worth the effort as you go down the road of home ownership. Of course, hiring a real estate agent to do the work for you is an easy decision and a smart decision. They do the work often for a nominal up front fee or sometimes a fee that comes from the transaction itself. Or, if you’re willing to invest a little money to save yourself time and you want to do it yourself, you can always put out some marketing to get sellers to come to you. So, no matter which method that you use, i recommend that you must taking the step to own your own home. Go for it.

Source : ezinearticles

The Common Problem of Least Option to Avoid

Nowadays, many investors very love lease options. This is because this type of real estate agreement can be a low risk investment that allows you to make a nice profit in the end. It is a wonderful option for a new investor who doesn’t have a lot of capital to work with or for an investor that wants to get started slowly. It just because of lease options are popular does not mean they are hassle free. No real estate deal will ever be completely without its problems. If you are interested in lease options then you should listen to the following warnings. The following are the ways to avoid common problems that investors have with lease options.

Check Out the Seller

For investors, you must always check out the seller and make sure that the current mortgage is in good standing. If the seller has missed any payments or if there is a threat of foreclosure, then you must not to continue with that sellet. You must also check on taxes to be sure there are no back taxes. You could end up being the one responsible for paying any money owed or in the worst case scenario the house could be pulled out from under you by a bank foreclosing on it and there will be nothing that you can do for it.

Hand Out Disclosures If You Sublease

Even if you do not own a property, but you are renting it or subleasing it, you have the responsibility to hand out federal and state disclosures. This includes informing tenants about lead-based paint, which is mandatory if the house was built before 1979. Before you sublease the property, you must make sure that you know about what your legal responsibilities are regarding disclosures.

Don’t Sign a Contract That You Don’t Completely Agree With

Too often investors think a lease option contract is set in stone. You have every right to negotiate. You can negotiate on all points. You must make sure the contract is exactly how you want it or don’t sign it. You probably don’t have to worry too much about the seller walking away because in the case of most lease option situations, the seller is at their last resort and need someone to buy this property. You are in the position of power in this deal, so take advantage of that and get a contract that will makes you happy.

Know Your Rights

Every now and then there is a seller in a lease option who ends up not going to sell. It is important to recognize that you have the upper hand here. The lease option contract states the seller must sell. It is not an option for them. You are the one that has the option to buy or not to buy. If a seller tries to back out when the time comes for you to buy the property then you have every right to sue them for ownership and in most cases you will win the fight with no problem.

Finally, so if you are prepared or ready before entering into a lease option, then you should have a good experience. Most of the investors who have sworn off lease options have done so because they were not prepared or they did not understand the lease option process. So, you must be smart and know what the process involves and you should come out good in the end.

 

Source : ezinearticles

Financial Mistakes Rich People Never Make

There are some financial mistakes that rich people never make. The journey in becoming rich will require you to make a few mental changes in your behaviors. Once you make these adjustments, you will begin to see the progress as your create more positive results in your life. Acquiring wealth is a great goal, but who you become in the process is even more worthwhile.

Here are the financial mistakes rich people never make:

1. Buying on Credit

Many people purchase the objects they can’t afford with money, they don’t have to impress people they don’t like. This tragedy decimates many people, leaving them with a hopeless feeling when they repay their high-interest loans. If a person hopes to become rich, they will use their credit cards for growing and promoting their business, not funding personal expenditures.

2. Mortgaging a Home

Some “rich” people mortgage their homes, but they aren’t really rich. Mortgaging your home leads to an endless battle of re-financing, bill-paying, and inflation. When you mortgage a home, you’re likely to pay twice as much asthe original price. Rich people will rent until they can buy their house with straight cash.

3. Traditional Retirements

Our retirement system is a joke that must be avoid by those who want to become rich. If you’re depending on mutual funds, 401(k), and certain life-insurance policies, you’ll do better boarding the Titanic. Plus, if you’re saving money to enjoy it for your sixties, that’s like saving up sex for retirement. Instead, build your fortune when you are young.

4. Not Saving

Most people blow their money on miscellaneous goods. When they see ‘X’ amount in their bank account, they automatically think of what they need and purchase it immediately. However, this impulsive behavior must be eliminated. Rich people save at least 10 percent of what they earn and rarely take out personal loans for themselves, even if they think they need it.

5. Lack of Enjoyment

Consumerism is funny. During 50 weeks at work, people think about vacations and when they finally get their two weeks, they only think about work. The truth about becoming rich is that you must enjoy the money that you already have, whether it’s $10 or $100. Your money will only expand if you enjoy it and think about how you can enjoy it more. You’ll always get more of what you enjoy.

 

Source : entrepreneur

To get more information, you can go to the page by click the link below :

http://bit.ly/TipForEarningMoney

Advantages of Lease Option Real Estate Investing

This way of investing basically gives investors the right to have  be in control of  and profit from a property without owning it.

Wendy Patton

Wendy Patton

The advantages of Lease Option Real Estate Investing are :


1. Flexible

Lease option real estate investing is a flexible way of investing because the terms of the agreement, such as payment amounts, payment dates, installments, interest rate, interest only payment, balloon payments, purchase price and other terms that are all negotiated between seller and buyer. The responsibilities of both parties are also negotiable. For example, if the investor don’t want to act in the capacity of a landlord, he can specify in the lease option agreement that tenant or buyer will be responsible for all minor maintenance and repairs and the original seller will remain responsible for any major repairs.


2. Financially Low Risk

Lease option real estate investing is a low risk financially, because you have the purchased the right to change your mind and let the “option to buy” expire, if the property fails to rise up enough in value to make a profit. Even if your tenant or buyer decides that not to buy the property, you have profited by a positive monthly cash flow from the tenant or buyer’s rent payments, and upfront non-refundable option fee.


3. High Leverage

Lease option real estate investing is a highly leveraged because you are able to get control of a property and profit from it now, even though you don’t own it yet. The fact that you don’t own it, also limits your personal liability and personal responsibility. Only if you decide to purchase the property by exercising your option to buy, would you take title to the property.

 

Source : paulinhabrecho

Finally, the more thing that you understand from creative real estate investing strategies and apply them for now, the more profits you will get in today’s real estate market.

For more information about Property Tips, please visit 👉 Property Millionaire Intensive

Benefits of buying and selling on Lease Option

You might be asking yourself what all the fuss is about lease options. Well there are a few reasons why investors have been getting hot under the collar about them.

Now, i will list out the benefit of buying and selling on a Lease Option :

Better Homes


Benefits of buying on a lease option :

🚩 There is no need to get a mortgage. You can simply recycle the seller’s mortgage. This will speeds the whole process up and gets round the problem of lending being refused or delayed.

🚩 No deposit is required. It really is possible to buy a house for a RM!

🚩 Deals cannot be scuppered by a surveyor down-valuing a property.

🚩 You can give the seller a much better price for their property than with the traditional below market value purchase model and still make good money!

🚩 You can buy negative or little equity properties and still profit.


Benefits of selling on a lease option :

🚩 You will normally get an upfront option fee from your incoming buyer. This can range from a couple of thousand to tens of thousands of RM.

🚩 Your monthly cashflow is far higher than a traditional buy to let, typically about 20% higher. You can’t beat this for income investment property.

🚩 You can sell quicker and simply because you are making the property easier to buy.

🚩 You can sell to people who would not normally be able to get a mortgage such as self employed, people who are new to the country, people with bad credit records, and crucially, those who not yet have enough deposit.

🚩 Tenants and buyers will tend to do their own repairs and not call you in the middle of the night about a leaking tap.

🚩 Your buyer will generally be in there until they buy so you won’t have any voids.

🚩 Your tenant is going to own one day so is very unlikely to miss a rent payment.

🚩 When the tenants and buyer finally buys the property, then you will normally make a cash lump sum that known as the “back end profit“.

Source : property-investment-blueprint

Read these benefit properly and try to buying and selling on a lease option, then you will know that it really can bring many benefit for you.

For more information about Property Tips, please visit 👉 Property Millionaire Intensive

Young adults must Investing in Property

Investing in property is means that adding assets. When paid in full and managed well, the investment will remain an asset, while providing passive income monthly and capital appreciation. Kept for a longer time, this asset can also be passed on from one generation to the next generation.

Actually, trying to investing when you are still young is obviously not an easy decision for you to make, but it is not impossible as well. With the right mindset and plan, it’s the best age and best time to begin for the investments.

Star Property

Star Property

For a successful investment, young generation should:


1. Be in the know

Being tech-savvy is another advantage for young generation, as there are apps, online courses, financial and educational property websites, blogs and social media, which offer valuable guidance for you. What matters most is getting your research done and get the right knowledge base before venturing into property investment. You should read up on books by financial and investment gurus, and attend talks and forums to get invaluable insights from property experts and investors. You can learn from their mistakes and avoid the pitfalls of property investment.


2. Buy to generate income

There are some young generation who are considering to buy the property for their own use, but i suggest that the best investment is to rent out the property. The investor would get capital appreciation and monthly rental at the same time and it’s not necessary to fork out money each month. So it’s better to let tenants pay for your investment.


3. Choose the right property

For the young generation to have a successful investment, it is important to choose the right property which will grow in value and will attract the potential tenants. You must start with smaller-sized units such as studio units and SOHOs priced below RM500,000. So it is best for you to evaluate the surrounding areas, the growth indicators and upcoming infrastructure, existing and future amenities, and so on.


Source : starproperty

Finally, to be successful in investment, these are the way that will help young generation to become successful in future. So, young generation must read these points and know about how to use the way for investments carefully.

For more information about Investment Tips, please visit the following website

Property Millionaire Intensive

4 Important Point for Investors

Buying a property is not that simple or easy as ABC’s. In order for you to be successful in property investment, you must do a detailed research to get the information of the property investment as much as you can and also find a intelligent investment strategy to use.

So for the four points that all of the investors should know to understand the way around property investment is :


1. Why invest in Real Estate? 🏠

Compare with other type of investments, investing in real estate is the investments that can bring many beneficial for you because it is a way to hedge against inflation. Property investment is considered as one of the best ways to grow wealth and leverage to purchase more property.

For example, if you compare between buying, holding and selling your real estate, you make money when you hold the real estate. This can happen in two ways, through capital appreciation and rental income. Capital appreciation guarantee increase in property value over time, whereas monthly rental can help with the mortgage and side income.


2. Get updates on current issues 🏠

Some might not be aware of this, but some current issues that are happening in the country can affect a property’s market value. Depending on the issue, it can either increase or decrease the property’s value. So, for the current issues that property investors must know are political stability, real estate bubble, depreciation of the ringgit, bank rules on mortgage loan, government curbs and also the implementation of Goods and Services Tax.


3. Be aware of pitfalls as an investor 🏠

Witnessing a high return on property investment could make one eager to buy without careful planning, research and preparation. This will bring high risk for your money.

The five pitfalls or mistakes that many investors made are :

🔓you just follow which investment that your friends buy because you see friends and relative buying property.

🔓 not paying attention to the absolute price versus psf value

🔓 imposing own value on property

🔓 buying during bad times or without a good deal

🔓 buying even though the property is not within budget


4. Think like a savvy investor 🏠

Investing in property is not just about making money, it is also about having the right mentality to make savvy investment decisions. You must always remember that property investment is not a decision to be made on impulse. When it comes to making profit like savvy investors, make sure that you are familiar with the concept of Finder, Financer and Funder. Then you can increase the probability of you securing a good property deal with these 3 concepts.

The most important things in property investment is to know the necessary in order to build a solid investment strategy. It is important to learn and understand the game of investing in property, and to maintain objectivity. You should also have to make sure that the property that you buy is always below market value.


Source :starproperty

Finally, i hope that these 4 points will very helpful in your investments and i prefer to invest in high-rise developments because it usually cost lower than landed property, and also because it makes quite good rental income.

For more information about Investment Tips, please visit the following website

Property Millionaire Intensive