Tag Archives for " Real Estate "

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

Why Leasing Makes Sense in Today’s Real Estate Market

Due to the severe downturn in the economy, many sellers are finding themselves ‘underwater’ in their homes. This means that they owe more money than the house is currently worth. This makes sellers desperate, and they will often make foolish mistakes in how they try to sell the house. That is where options that they haven’t thought of before come in. Most people don’t realize there is more than just the traditional one way to sell a house. A home can also be leased with an option to buy.

The lease with option is not new to the market, but it is has not been common in recent years. In the last decade, the housing market boomed and people who had previously been ineligible for a loan found themselves with multiple offers being thrown at them. Why lease when you could buy?

But now many of those new homeowners are underwater and need help, and that is where a lease option comes in. This is a traditional lease for a property (this could be residential or commercial) with an option to buy.

The other is a lease purchase, which is a traditional lease term that is also a purchase. Sound confusing? It really isn’t. A lease purchase is a lease that will become a purchase once any missing criteria are met. For example, a person may need to tidy up their credit before they can officially be given a bank loan for a purchase. They are given a lease while their agent helps them get the necessary credit rating to qualify for the loan. At that time, the lease then becomes a purchase.

The lease option or lease purchase works for both parties because it enables the desperate seller to recoup their monthly mortgage payments while still finding another home. It works for the buyer because there is no money down, and any appreciation in the property is to their advantage. If the market begins to recover as you lease, that value is added to the home should you want to sell it later, after purchase. It should go without saying that there is a lot to be gained by going this route, and almost all of the gain is for you, the investor.

Source: Ezinearticles

Tips From Realtors for First-Time Homebuyers

Being a first-time home buyer can be challenging to say the least, but realtors help demystify the process and help make sure you get the house that best fits your needs.

Determine Your Long-Term Goals

The first thing that most realtors would recommend you do is to determine your long-term goals and how owning a home will fit into those plans. You may be tired of spending your earnings on rent and would rather put your money toward something that could actually turn a profit down the road. Or, you may simply want to be your own landlord for a change. Whatever your goals may be, get a clear idea of them before you start shopping around.

Finding the Home You Want

Once you have committed yourself to becoming a homeowner, you can expect the process to be a bit chaotic. More than likely, you’ll make a lot of offers and get a great many counter-offers in return. But don’t be intimidated or allow yourself to get frustrated. A professional can walk you through each and every step so that you’re not overwhelmed.

Financing

You will more than likely have a wide range of financing options, even if you don’t have the best credit. You may be able to find a loan backed by the federal government or get financing that doesn’t require the standard 20 percent down payment. In addition, the state you live in may provide special incentives for first-time buyers. Realtors can provide you with easy-to-understand information on all your options so you can feel confident while shopping around.

Making the Offer

Once you have honed in on the house that meets your needs, your real estate agent can help you decide how much you should offer, as well as any conditions you should request before signing on the bottom line. For example, you could ask the seller to pay your closing costs. Your agent will then take your offer to the seller’s agent, who will then either accept your terms or reject them and make a counter-offer. This back-and-forth will continue until you reach a deal or decide to move on to another option.

When you reach an agreement with a seller, you may be asked to put down a good-faith deposit. The transaction will then move into escrow, which is a period of time (about 30 days, typically) that the seller takes the house off the market. He or she will do so with the expectation that you will buy the home – provided that an inspection does not uncover any serious problems.

Realtors can help you find homes in the neighborhoods you prefer at prices that fit your budget. Once you’ve made your decision, they can help you through the entire purchasing process, from making an offer to getting a loan and wading through the seemingly never-ending paperwork. Realtors can provide invaluable assistance through a trying time.

Source : Ezinearticles

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

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

5 Common Residential Finance Questions of Home Buyers

No matter where you live, a home is a basic requirement and a necessity for life. Sadly, no necessity is available free of cost. If you want to buy a home, you need a home loan. Don’t think applying for residential financing is difficult. It’s simple when you read this article. It includes answer to the most common questions asked by home buyers.

1 – What Type of Residential Finance is available to you?

Today there are several types of loans in the field of residential finance.

• Owner Occupied Residential Purchase

• Residential Investment Purchase

• First-Time Home Buyer

• Renovations, Extensions and Construction Purposes

• Refinance of your Existing Loan

• Debt Consolidation of your Existing Home Loan Debts

• Home-Equity/Cash Out purpose

• Restructure your Home Loans with Current Lenders/Credit Providers

2 – What are Features of Residential Finance?

Each lender/credit provider offers different interest rates and finance/loan conditions. Residential loan packages often incorporate many of the following options and features for you to consider:

• Variable or Fixed Rate Loans

• Interest Only or Principal & Interest Loans

• Combination (Split Loans)

• Line of Credit

• Offset Account

• Impaired Credit History

• Redraw Option and Access Availability

• Non-Conforming Loans

3 – What is Home Equity/Cash Out? How can it benefit you?

A Home Equity/Cash Out can unlock relatively large amounts of money for borrowers who want to borrow against the value of their home or property. More and more consumers are finding this type of finance arrangement to be very attractive. Such loan programs are very easy to qualify.

The concept of how Home Equity/Cash Out works for you is best explained by the following illustration. The illustration also assumes that you have an existing residential finance loan on your home or property:

The value of your home or property is valued at: RM800,000

Less Your current home loan balance owing: RM350,000

Your home equity amount is: RM450,000

From the example illustrated above you can clearly see that you have RM450,000 equity in your home or property, which you can use to:

• Buy your second or third investment property

• Invest in shares or managed funds

• Renovate, remodel, or otherwise improve your existing home and property

• Purchase vacant land and construct a new home on the vacant land

4 – Why Pre-Approval is better in Residential Finance?

With a pre-approval, you will have the peace of mind knowing that:

• You have a clear picture of what your borrowing limits are

• Your finance request has already been pre-approved and you will know the conditions of your pre-approval

• You have the upper hand when negotiating the sale price with the vendor, real estate agents, etc.

5 – How to get Lower Rates on Residential Finance?

Getting lower rates on home loans is very simple. Take help of the internet. There are many online companies that provide residential finance opportunities. Because of heightened competition in the financing market, lower interest rates are offered. Also, web companies offer faster approval because of their online nature of business.

So, these are the questions that often trouble other home buyers. But, now that you have answers to them, finding an affordable residential loan will be easy for you.

Source : Ezinearticles

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

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

A Guide To Successfully Buying Property

Buying a property, whether it is your first or fiftieth time, is a stressful process. For most people, buying real estate represents the biggest financial decision of their lives. Because there can be so much riding on this one purchase, it is imperative that you do the correct research and follow the correct procedures – a failure to do this can mean financial disaster.

Below is a brief guide to buying residential property. Consider this guide a starting point for your own research into buying property – information is your best friend in the real estate game!

Research

Research forms a solid base for any major purchase and the good news is, that you are doing some right now by reading this article! There is a variety of information you need to gather about your desired property and the local area before you commit to buying.

The first thing you need to do is look at the historical sales results for the suburb you wish to buy in. It is very likely that in the last few years a house very similar to the one you wish to purchase has been bought, or sold, in the local area. By comparing the historical prices paid to the current asking price, you can start to build a picture of the local market and decide if you are getting a good deal.

The next thing you need to seriously research, is the properties boundaries and any limitations on the use of the land it sits on. As people rebuild fences and conduct home improvements, the official boundaries can often be compromised. It is important that you are aware of the exact boundaries of the property you are purchasing – you can’t just rely on what your eyes tell you! In addition to this, local councils often place provisions on the use of residential land, such as specifying drainage areas and wildlife corridors. You can contact the council responsible for the suburb you wish to buy in to find out more about any land use limitations.

Inspections

Once you have done your research on the local real estate market and selected a property that you feel is a good deal, you need to start scheduling more in depth inspections. For this, you should hire a qualified building inspector. They will go over the property with a fine tooth comb, finding any major or minor faults, which may compromise the structural integrity of the house now, or in the future. If a house has faults, this doesn’t necessarily mean you shouldn’t buy it. However, you need to consider how much repairs will cost when deciding how much you will offer for the property.

Financing

Before you even start looking, you should have finance arranged. By knowing how much you have to spend, you will be able to focus your search on properties that you know are in your price range. Without positive confirmation of finance, you could just be wasting your own and everyone else’s time by looking at properties to buy.

Source : Ezinearticles

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

How to Make Money Using Lease Options in Real Estate

There are a lot of different ways to make money in the real estate world. you’ll get into the flipping part of it, the agency selling part, or even the leasing part. when people think about making money investment in real estate for the most part they’re looking for a way to make a large amount of money all at once. This need for the large sums is why flipping and becoming an agent are the common courses of real estate investing. making money using the leasing option can bring in a steady cash flow but you may get it in payments as opposed to one lump sum.

Leasing homes and apartments allow you to provide a living arrangement for families that need them. Since you own the homes or apartment building that you are leasing out you will be able to set the worth that you want your tenants to pay. ensure that you set the prices so that they’re reasonable or you can have problems finding occupants for your space.

Leasing commercial real estate is another great way to make money. find a building that’s easily accessible. you will want a building that’s around different successful commercial buildings. A building that has plenty of parking and space are more desirable than one that doesn’t. If the commercial property is in a very desirable space you will have no problems filling it. Once you have someone operating your commercial property you’re guaranteed to have a steady monthly income.

While most people assume that you have to either flip or become and agent to make money in real estate, the truth is that you will supplement your income quite nicely and permanently with the leasing option. Leasing real estate is a great way to play in the real estate game without having all of the loose ends to tie up in the flipping world, and all of the classes you have to take to become an agent.

Source: ezinearticles

Important Things To Know Before Buying Property

Property laws vary from state to state but there are general guidelines real estate buyers would do well to know before investing in property. It isn’t simply a matter of having enough money to purchase real estate: you want to make sure it doesn’t turn out to cost more in the long run.

The value of property appreciates if it’s structurally sound, has essential amenities such as electricity, plumbing and water supply and is located in a neighborhood with easy access to hospitals, schools, colleges, transportation hubs, offices etc. Location is so important that it’s often the single factor that influences resale value.

Can you build a house on land?

You may have found a nice plot of land to build a house on. But can you? Some states have zoning restrictions on building houses and finding out what the laws are will eliminate expensive problems.

Know that buying land and building a house will cost a small fortune. Construction isn’t cheap especially when building for a family. The cost of materials is high and you’ll have to find a trusted contractor to advise you along the way.

Visit a house/land several times a day

When house-hunting, it’s wise to visit properties several times in the day. Evening and night visits mask problems with the house, noise levels of the neighborhood and intensity of traffic. Some buyers may be looking for a quiet street but won’t be able to tell the difference at night.

If land is being purchased, find out how close it is to amenities and whether there are any upcoming plans for commercial real estate construction. Some buyers inadvertently find themselves stuck in the middle of a commercial hub they didn’t anticipate would be built. Noise, traffic and crowds can mar the peacefulness of any location.

Do a house inspection

This is a vital part of the house-hunting process and the services of an inspector are required. Obvious problems like chipped or broken stairs, faulty doors and windows and peeling paint are cheaper to repair than those you can’t see. Inspectors may use tools like thermal imaging and draw on their expertise to pinpoint problems with insulation, plumbing and unsound foundations. The cost of an inspection isn’t very cheap but is a lot less expensive than being saddled with big repair works later on.

Check taxes

Some areas reappraise housing tax so it’s important to find out what the recent taxes are on a house. If you purchase property at a good deal only to be bogged down by rising taxes every year, you’ll take longer to pay the mortgage and the cost of maintenance will rise.

Check past renovations

The seller you approach may have made renovations to the house in the past. If this is the case, find out what it cost and what improvements were made. The cost will tell you if quality materials were used. Find out the date of the renovations as well to give an idea of whether you’ll need to make further improvements in the near future.

Don’t buy for short-term stay

Buying a house cost much more than renting one, at least for short stays. Don’t make the mistake of purchasing property if you don’t intend to live in it for at least several years. Paying off a mortgage takes time and a year or two isn’t enough for most people.

Source : Ezinearticles

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