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Real Estate Beginners Can Profit From Lease Options Strategies

For beginners with little or no cash, this could be a very good strategy indeed. The Lease Option Strategy has two components. Under the law, an option is a way for a real estate investor or buyer to enjoy the right — but not necessarily the obligation — to buy a specific parcel of real estate in a given market. The option component allows you as an investor to control investment real estate and to position yourself for later profit without necessarily having an obligation to buy. You might then lease the property (retaining the option to buy it later for yourself if you choose to do so), and turn the property into a cash-flow cow. In negotiating the original transaction with the owner, you would agree to a specific purchase price. That way, your price is locked in even if the market value goes up significantly.

CREATE A PROFIT GOING IN

With the property now under your control, if you ‘do the math’ and the numbers make sense, you can go ahead with the purchase from the previous owner if there’s an opportunity to make a profit when you later sell. Let’s say you acquire a certain property on a Lease Option basis. Assume for discussion you agreed on a RM500 per month rent and a RM100,000 purchase price with the owner. You might then sub-lease the property out to a tenant for RM650 per month and by monitoring the local market you might decide to buy the property at $100,000 as agreed. You then offer your tenant a Lease Option at an even higher purchase price of RM125,000, perhaps with lease payments (or a portion of them) being applied to the down payment. Under that arrangement, your tenant will be better motivated to take care of the property (since they might one day be the owner). At the same time, you would be in a better negotiating position on the selling price. Your tenant could have the lease payments (or a portion of them) applied to the down payment. Under such an arrangement, you might negotiate a better selling price than otherwise, and enjoy a win-win transaction.

FISHING THE WATERS

The Lease Option Strategy is one of many real estate investment techniques. It works well in soft markets, where there are more properties for sale than there are buyers. Where you find a property owner with a low equity-to-debt ratio, and they need to rid themselves of the property, you might find the owner willing to do a Lease Option. It also works well where the local market is experiencing a high number of foreclosures. The ‘teaser rates’ that many lenders offered a few years ago are creating thousands of foreclosures around the country as the adjustable rates get increased. You might profit by using the Lease Options strategy in your favor in those real estate markets. Look for Lease Option opportunities in single-family homes as well as duplex and apartment buildings. With a property tied up in a Lease Option, this gives you time to arrange suitable financing or to find your own arrangement in which you buy the property whenever your tenant is ready to buy.

Source: Ezinearticles

Lease Option – The New Road to Home Ownership

For many a beautiful family, a large yard in a good neighborhood and home ownership are still part of the American Dream. It’s time for this to stop being a dream and become reality. With lending institutions tightening their lending requirements it all but seems impossible for the dream of many to become reality. But there are choices, options and other avenues for a person to pursue. That option being Lease Optioning a home.

What is Lease Option? A lease option provides a way for many people to become home owners in today’s market. A lease option allows a person to obtain their piece of the American Dream without having to qualify for traditional lending up front.

Here’s how it works. You find a real estate investor with a home to sell that fits your needs and criteria. Once you have viewed the property and agreed to terms on the home you would then pay an option fee. This option fee is paid because you are asking the seller to take his/her home off the market to sell so that you may lease the property until you can get enough money for a down payment or work out whatever credit issues you may have prior to purchasing. Your lease term is agreed upon by you and the seller. The other terms should be established at this time such as monthly lease payments, purchase price, extensions, penalties and any other issues you or the seller may have.

There are some Pros and Cons to purchasing a home on lease option terms, let’s review them. Pros:

1. You can enjoy the pride of home ownership right away

2. You lock in your purchase price today even if the home is worth more when your lease term is up and you must purchase.

3. You gain property appreciation which equals equity

4. It’s easier than dealing with banks

5. If you have credit issues that prevent you from getting traditional financing this gives you time to work out those issues (a good seller should be able to assist in this area)

6. Your option fee and any rent credit can go towards your down payment reducing the out of pocket expenses you will have when getting traditional financing

Cons:

1. If for any reason you decide not to or you can’t purchase the home when the lease term is up then you would forfeit your option fee payment.

2. You discover that the property has major defects that were hidden

When looking to purchase a home in this manner we suggest knowing who you are doing business with, getting a home inspection, and understanding all the terms of the transaction.

Source : Ezinearticles

Things You Must Know Before Buying an Investment Property

Investing in real estate can help you get great returns; it is known for returning both capital appreciation and cash flow. Some examples of real estate investment properties include apartment buildings, bungalows, flats, single homes commercial or industrial properties etc. Often, these properties are categorized as illiquid, which means you can sell them hastily. As an investor, you must be aware of certain facts before putting your hard-earned money into real estate property. This article will be educating you about such facts.

As an individual looking to invest in real estate, you must have clear idea about the amount of money, energy and time you are ready to expend for the same. In other words, you must know how much you want to commit or have the ability to commit when making this kind of investment. You must be aware of the fact that for making profit, you will have to put in a lot of time and effort; you will need research several properties and markets thoroughly before taking any investment decision. If you are not confident about your ability to research, you should always seek assistance from a professional; an experienced real estate agent can help you in completing the research effectively and quickly. Remember conducting research is extremely important as not doing it can make you lose all your money.

As mentioned above, for achieving success as an investor, you must perform thorough research both on individual properties and market characteristics. To do that, you must have some questions ready; once you find answers to all these questions, your research is complete. Find out whether the costs of the type of property you are looking to invest in are falling or rising. Find out whether there are plenty of options available for you to choose from when making an investment. Find out whether the rent of your preferred properties are falling or rising. Gather information about the economic status of the area, in which you are thinking of buying a property. Finally, find out whether the land, home or building you are looking to buy will allow you to achieve your goals of cash flow and capital appreciation.

It has been found that the majority of the successful investors rely a lot on their instincts. However, intuition is definitely not the only thing they believe in when taking a decision in these matters. These people also run numbers for making sure that the money they are looking to invest will bring them good returns. You should decide based on the combination of both, instincts and numbers.

Source : Ezinearticles

Any information please click into http://bit.ly/propertymillionaireintensive

5 Habits of a Successful Property Investor

Many people want to be financially free. I hear people say this all the time. But I always ask them these queries. So what are you doing about it? Have you ever got a plan on how you’re going to get there? When is your target date? How much are you aiming to build and what do you need to do reach that goal? they need simply no idea. So, it’ll just be a dream.

Similarly, the road to a successful journey in property investment is never easy. Whoever said that creating your millions in property is easy? If yes, then everybody you meet may be a property have. You’ll meet negative colleagues, relatives, friends, spouse or kids who can discourage you. But believe your dreams and goals that you have set up for yourself and you’ll be able to make that dream a reality. Cultivate these habits below if you want to be a successful property investor:-

1.Have Goals And Set Datelines

Setting realistic goals and datelines is crucial for any type of business as it guides your focus and action towards attaining the targets that you’ve set. Review the goals periodically to see wherever you’re towards attaining them and revise them wherever necessary.

2.Invest In Yourself

-Read lots of Property Books, Magazines And Articles
-Listen To Audios On Property Investments
-Attend Property Seminars And Exhibitions

Invest in educating yourself with the right knowledge to minimize the mistakes in property investments. I usually hear people say, the seminar courses are too costly, but yet they’ll afford to buy a replacement car, a new theatre set, choose a holiday or buy some lifestyle product that will be a liability rather than investment in educating themselves to achieve their dreams.

3.Take Immediate Action

Successful property investors are Action Takers! They make things happen. once they have gained the proper information about property investments from attending property seminars, reading property investment books and planning to know other successful property investors, they take immediate action to analysis for the properties they will invest in.

4.Willing to make Sacrifices to view Properties

Go and view as many properties as possible in the areas that you want to target. Jot down your observations in your notebook and compare them before you zoom all the way down to some of potential ones. Take a drive to look at the properties throughout different times of the day to note any important observations in the vicinity or surrounding areas close to your targeted property. For example, I noticed that the road resulting in a specific condominium within the evenings is full with automotive pose on the proper and left of the road due to shortage of car parks making the route tough to drive through that was fine once I went during the afternoon.

5.Invest With A Calculator, Not with your Heart

Don’t let your emotions affect your call once buying a property. Instead, use a calculator to work out the potential returns and gains based on the property costs offered by the vendor or developer. Calculate the price per square foot/meter of your targeted property and compare it with other properties of similar varieties within the same location (ideally). verify the numbers to see if you’re getting a decent deal from the property before investing.

Source: ezinearticles

For more information, please click the link below:

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Rent or Buy? Which Option Makes Sense for You?

If you are the individual who is weighing the option of buying or renting a house, you need to consider a few factors. Your financial situation has to be assessed for your long-term planning and that it is not that simple as well.

Understanding your house budget and expenses

It is wise to review your household budget in comparison to the expenses before you begin looking for a new house. You have to find out how much can you afford to pay for accommodation without putting a burden on the budget.

You simply cannot go for rent or mortgage payments if you are unable to pay them on time. Several factors are involved both for renting or buying that should be considered prior to making a decision.

What are the requirements while renting or buying a house?

Your credit history and credit score are crucial and that they will be looked upon by the rental agency or the landlords for the mortgage or rent. You will be checked whether you are can pay the bills on time and are not overdue with the loans or the credit card balances. You have to check your score and credit history before applying for the apartment or the mortgage.

Other factors that are important include your strong employment history, W-2 forms and current bank statements that have to depict a good picture. A few rental agencies require professional or personal references as well as background check and contact information from the previous landlord respectively.

When is renting a viable option?

If you have uncertain employment: According to Evelyn Zohlen (financial planner), if you are unsure about your living paycheck and job situation, it is best to save money for the future living expenses. This will help you to build an emergency fund for you as well.

Limited funds: Renting is the better alternative when you do not have enough money for making the down payment or for managing the additional costs of owning the house.

Short time frame: If you have an assignment that lasts two years or you plan to move abroad in a couple of years, then renting a house is a better option.

When is purchasing a house a feasible option?

Buying a house only makes sense when you have the ability to cover the additional costs for owning a house. It is vital that you pay the closing costs and the down payment before you buy a house. It is seen that many banks receive a 20 percent down payment. This means for a house that costs RM250,000, at 20 percent the down payment will be RM50,000. So, the total amount includes percent in commission and another one percent in closing cost as well.

But if you have much debt, you should not put your savings for the down payment at all. It will be better to pay off the entire debt first until you get a better financial position for yourself. If there is no debt, then you need to work out the buying or renting options in detail.

Source: Ezinearticles

For more information please visit : http://bit.ly/propertymillionaireintensive

Useful Tips on Buying Investment Property

It is important that you are knowledgeable when you plan to buy investment properties. as much as possible, you have got to fully understand what you’re about to enter into. Through researching about the subject, you’ll be able to be wiser in making your final decision and the purchase method will be easier for you to undergo. Seeking for help from the professionals also can lead you to good results. People such as the legal counsel, accountant and property broker are those that you’ll be able to count on. However, it’s still best if you’re assured enough that you just grasp one thing regarding this stuff since you’ll protect yourself from being mislead. There are cases that folks sometimes can direct you to make wrong choices through their marketing strategies causing you to regret later on.

When you purchase investment properties, the very first thing you need to do is to know the kind of investment you want. There are big range of decisions. These are industrial properties, commercial properties, raw land, rental lodging, condos, mobile homes and plenty a lot of. you merely ought to make certain what you plan to do in the future.

In this type of endeavor, you’ll sure come across with risks and bonuses on the way. If you’re still novice on real estate investment, a good way to begin is buy rental apartment or apartment building. This could be less complicated compared to those realities that need deep understanding and thorough analysis thus you can end up thriving.

When you are about to shell out your hard-earned money, you have got to sure that such property that you just are supposed to invest on ought to give you the best chance for regular profit. One nice issue regarding investment properties is that they’ll stabilize the prices and help you manage your budget. this could be a good begin for beginners.

The location is very vital decide that property to buy. Find areas that are advantageous once it comes to employment. Your tenants can sure would like something which will provide them a good supply of income. Thus, once your property is simply right next to commercial establishments and offices, they’ll simply notice for employment.

Aside from the employment opportunities, common business centers like schools, shopping malls, transportation and others ought to even be right around the corner. This can be more convenient for your tenants. They are doing not ought to go out of their way whenever they have something. Will undoubtedly get plenty of inquiries if your place can offer them the ultimate comfort and convenience once they stay in your pad.

Of course, your safety ought to even be part of your priority. Regardless of how excellent the place is that if the rate is relatively high, then this can still affect the tenant’s decision. Since renters will lease a place that will be their home, this should be the safest place for them.

The tips discussed above are some of the many things you ought to consider when buying investment properties. It pays if you conduct extensive research before entering into this endeavor. Although there are options for beginners, however it helps if you fully understand what you’re about to engage into. Knowing all of these things can lead you to success.

Source: ezinearticles

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Lease Purchase – Secrets of Buying a Dream Home Through Lease Purchase

Buying a home gives happiness to any individual soul. Perhaps, there is nothing like the one that belongs to you. It is always a tendency that is built in the human beings that things that we own are really close to our heart and mean something entirely different. Many of them just dream about owning a home. Only some of them live it. Are you ready to live it?

There are some possible ways to make sure that even a middle class person has access to own his home. Lease purchase and lease options have made it so simple to buy homes that almost all of them are considering these options today. To top it all, the real estate market is not doing very well off late which has caused them all to opt for these different methods.

So how are you going to buy that dream home?

Knowing that Lease purchase is one good option, you can go by it. But before getting into it, you should question yourself if you can do this without facing any difficulties. It is important that you analyze your financial status completely and make a brief note on all that you are capable of doing.

Possible approach towards owning a home:

You have to sit down and calm yourselves first. Later, make a list of your monthly salary and try to learn how much of it you would need to maintain yourself throughout the month. Include all the possible expenses in it. Try to see how much you can save from your monthly salary. If it is well beyond the rental amount of money, then consider going for that home. Perhaps, this particular commitment might require you to cut down on some of the unnecessary expenses for some time. Of course, you are buying a home and this much of commitment is absolutely inevitable.

Later, do the reverse procedure. From your salary, eliminate the amount of money required to pay the rent. Later, from the remaining amount, refigure your budget. Stick to it completely. This is important because you will get an idea on how to manage your funds without wasting even a cent from it. It may really appear to be a silly thing. But, these small things can have a great impact on your buying capacity.

Within no time, say about two years, you will be a person who owns a home now! Remember, some things in life require a lot of dedication and patience. In the end, you will end up being the sole benefiter. That is fabulous right?

Source : Ezinearticles

Types of Commercial Real Estate Leases

Types of Commercial Real Estate Leases

Commercial real estate leases can vary significantly depending on the type of space and location. A business that leases space in the downtown area of a major city will have a completely different lease structure than a business that leases space in a suburban shopping center.

The following examples highlight some of the more common commercial lease structures:

o Gross lease: In this type of lease a tenant will pay a fixed amount for rent while the landlord is responsible for paying taxes, insurance and other associated expenses.

o Net lease: The tenant covers the base rent and a percentage of maintenance, insurance, and other operating fees.

o Triple-net lease: Typically written for a freestanding facility, the tenant pays all fees and expenses associated with the space.

o Shopping center lease: The tenant pays a base rate in conjunction with the square footage of the retail facility. Typically, the tenant will also pay some common charges and frequently a certain percentage of the gross sales. The tenant may also be assessed part of the property taxes. A shopping mall lease will often include terms about signage, hours of operations, common areas and deliveries. The landlord may also have the right to relocate the tenant.

o Land or ground lease: The tenant leases the ground itself and usually builds on the property. In the majority of land/ground leases, all improvements to the property including development of infrastructure and facility construction will revert back to the landowner when the lease ends.

Keep in mind that there are a number of variations on these types of leases. One example is if a company wants to lease office and warehouse space within the same facility. They might sign a universal lease that stipulates separate rent and lease options for both spaces.

Source: Ezinearticles

Investing in Property

Property is almost always a good place to invest your extra money in. If done correctly  you can easily become a millionaire and retire just off the money you make from homes you bought years ago. The theory is, while the market starts to climb so does the value of your property you own. If you would ever like to achieve more of a profit from your investment portfolio than putting some spending some money of property is a great way. There are millions of properties you can buy, don’t always look at ones in your own country I am talking about the entire world here.

People invest in property and land all over the world for wealth. Even banks, financial institutions, and other large corporations follow this strategy when they see an opportunity. In many cases, when you don’t have enough money to buy a property banks will lend it to you. This creates a great opportunity for you, and your bank to make some long term money. If you bought a home about 4 to 5 years ago you may be seeing a large profit, so you know the potential of buying property. As long as the real estate market is healthy you usually will not lose in a stable economy. If you have already made profits imagine buying more homes, this would just increase your wealth, this is a technique that many people take. Real estate is thought of by many as the best investment strategy you can make.

There are more millionaires made by investing in real estate than anything else in the world. Make buying homes fun, and you will enjoy searching for real estate. It’s something you can do with the whole family. Take a day off and look at homes you could purchase. Doing this is probably one of the best ways to add wealth to your portfolio.

Source: ezinearticles

For more information, please click the link below:

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The benefits of a lease option

There are many benefits to a lease option:

1- You can charge more per month than you’d for a rental, because part of the monthly fee is the non-refundable option.

2- If the tenant decides not to purchase the home, the option money is yours.

3- You attract different clients-clients who are looking to possess a home, who take into account the home theirs while leasing it from you because they’re paying into the equity of their future purchase. Even if they decide to not buy at the end of the lease term, they’ve probably cared for the property better than typical renters.

4- You can help people own homes who might not otherwise be able to purchase, because they’ll be building up a down payment a small amount at a time.

Because you still own the property, you get the tax write-off during the lease period, and if the tenant defaults, you’re still on the deed and can re-sell the property after a simple eviction process (not a foreclosure).

The buyer benefits, as well. Not only do they get to slowly build up a down payment with the option cash, but they also have a predetermined price for the house. If the market suddenly swells, they realize the additional equity when they build the purchase.

You could make money with this method without even owning the property. It is true, and it is easier than you think. All you do is find motivated sellers who are willing to sell to you on a lease option so match those homes with buyers who want to buy on a lease option. It’s really that simple. Legal tip to remember,- in order to prevent problems ought to your potential buyer default, don’t ever let them pay the taxes and interest on the property and always refer to them as a tenant and not a buyer. This will secure your right to evict and not have to foreclose on defaults.

Source: ezinearticles