Learn More About Real Estate, Tips, works, play and how to search for homes that you really want http://www.realestatebright.com Sat, 31 Jul 2010 03:52:49 +0100 FeedCreator 1.7.2 http://www.realestatebright.com/general/how-successful-investors-prepare-their-real-estate-analysis.html A wise investor knows the importance of numbers in the real estate business. He is well aware that numbers are used not just for counting the money earned from his investments—they are also for measuring an income property’s financial performance. How is it done? Investors use various reports and financial measures. The Annual Property Operating Data (APOD) is the most commonly used report in real estate investing. APOD is popular because it can provide a real estate analyst with a quick assessment of a property’s financial performance in the first year of ownership. It also serves as the annual income and expense statement of a real estate investor. Many real estate analysts also rely on a Proforma Income Statement, which is a useful method to evaluate a property’s long-term cash flow and future performance. The proforma’s projection spans a period of 10 to 20 years. Because a property’s source of income is critical to good investment decisions, real estate analysts use the Rent Roll. This document contains a list of presently occupied and vacant units. Real estate investors also use rates of return to analyze a property’s performance. An example is the capitalization rate or cap rate that provides a quick look at a property’s value and net operating income. Another measure of a property’s performance is cash-on-cash return, which measures the ratio between a property’s projected first-year cash flow to the amount of investment needed to buy the property. Do not be overwhelmed by the many reports that have to be examined to be able to come up with a real estate analysis. Just take your time in doing a thorough analysis. And if you do it properly, you will determine if a property is a good investment. Thus, you’re able to guarantee success. articles - General Sun, 15 Mar 2009 14:43:34 +0100 http://www.realestatebright.com/general/what-you-should-know-about-real-estate.html Want to become successful in real estate investing? You need to keep in mind several things about the real estate business, especially if you are a beginner. Awareness of the basic rules of real estate can help you survive the business and make more money from it. You may experience several difficulties at the start, but not giving in to pressure ensures your survival in this competitive area. Investing in real estate is the first thing that a beginner should learn. Real estate investment entails purchase and sale of residential and commercial properties. It also involves property appraisals, real estate transactions, and lending and mortgages. Beginners need to be familiar with the many real estate jargons so that they won’t be lost in the process. They also need to understand the government laws concerning property, real estate transactions, and ownership transfer laws. Competitiveness is the key to success in the real estate enterprise. Being a great investor involves the ability to strike the right deal. If you are negotiating with rich customers, you need to ignore their whims. It is possible that they express desire to sell their property, but then decide to withdraw the sale in less than a week. Thus, your persuasion skills to make your customers agree with the sale are also important. Patience is another key to success in the real estate business. It is because an investor may need to wait for a long time until a property gets a good value. As you can see, real estate business is not a walk in the park. It demands a great deal of skills and hard work in order for an investor to survive. And for ensuring success, it requires patience and competitiveness. articles - General Sun, 15 Mar 2009 14:43:08 +0100 http://www.realestatebright.com/general/why-people-sell-real-estate.html For professionals in the real estate business, it is important to know the possible reasons for a property being up on the market. It helps investors purchase a real estate at a good rate. It also helps the seller to get the best possible offer. What makes people sell their real estate? One of the common reasons is divorce. Divorced couples have to let go of their conjugal properties such as real estate. They will no longer need their real estates because they have to move into different homes. A notice of default from a bank also forces one to sell his real estate. A notice of default is given to people who have borrowed a certain amount from the bank and failed to pay their mortgage. Selling real estate may be also due to a notice of condemn, which informs a homeowner that his property—or part of it—does not meet building or zoning code. If the homeowner fails to fix it over a certain period, then he has no other choice but to move out and sell the property. In some cases, homeowners have attempted to sell their property but to no avail. Rather than pursuing the sale, homeowners decide to rent the property. Or sometimes, homeowners want to sell their real estate because of purchase error. Some homeowners want to correct their mistake by selling their property so that they could buy a better one for them. Property owners have various reasons for selling real estate. Whatever the reason is, real estate investors and sellers need to understand those reasons to get the best deals possible articles - General Sun, 15 Mar 2009 14:42:53 +0100 http://www.realestatebright.com/general/what-are-the-top-corporate-real-estate-concerns.html Corporate real estate is a profitable business. However, it is not devoid of any difficulties. According to surveys, various major concerns for corporate real estate executives range from securing space for business expansion to searching for flexible leases. One of the top corporate real estate concerns is finding adequate space for expansion. This is an issue when the markets are up. Businesses find it difficult to secure available and reasonably priced corporate real estate where they can hold offices. Usually, corporate spaces in key cities are very expensive while those outside the cities may not give a company sufficient client exposure. Another concern regarding corporate real estate is the costly utilities like water and electricity. These utilities are expensive because of limited resources, power demands of business, and monopoly of utilities ownership. Finding flexible leases is also a corporate real estate concern. Corporate real estate leases are unpredictable because of the volatility of economic conditions. When the markets are down, six-month leases seem long, and 12-month leases seem to take forever. More often than not, business executives look for flexible leasing options to be able to adjust to the rise and fall of the markets. During economic slowdowns, a big concern in corporate real estate is getting rid of excess properties. When there are a few businesses to occupy leased spaces, costs can rise excessively. If the excess properties are not disposed of in time, a corporate real estate is doomed to closure. And obviously, selling those extra properties is hard to do when the financial times are tough. While there are a number of concerns that corporate real estate executives should manage, the good side to it is that the corporate market is much more profitable than the residential market. articles - General Sun, 15 Mar 2009 14:42:36 +0100 http://www.realestatebright.com/general/how-tax-shelter-benefits-real-estate-investment-property-ownership.html Many people invest in real estate because of the income tax shelter benefits. Regardless of investment type such as apartments, commercial buildings, and rentals, all real estate investments offer large tax incentives for investors. Tax shelter, one of the returns connected with real estate investment, benefits income property ownership. Provided by the tax code, tax shelter refers to any system of decreasing taxable income that leads to a lower tax paid to state and federal governments. Tax shelter allows a real estate investor to protect some of his income from being taxed and sometimes shelter income from other sources. With tax shelter, an investor can usually reduce capital additions starting when they are put in service. A real estate investor can pay off closing costs related to the purchase of a property. In addition to that, an investor can pay off loan points over the duration of the loan term. All these benefits are possible, thanks to the tax shelter. For real estate investment properties that provide tax shelter, there are two permissible deductions. The first deduction is for mortgage interest. The Internal Revenue Service (IRS) allows an investor to subtract the interest he paid on the mortgage to purchase the income property. This benefits investors because the interest is in fact a cost connected with the purchase of the property rather than operating it. Tenants are the ones who actually pay the mortgage interest for the investor. The other tax shelter source is deduction in depreciation or cost recovery. The IRS allows investors to presume that the buildings are deteriorating over time and may lose value. Thus, cost recovery allows investors to take a deduction for the supposed decrease in the value of the asset. articles - General Sun, 15 Mar 2009 14:01:56 +0100 http://www.realestatebright.com/general/earn-money-fast-through-real-estate-home-inspections.html Do you know that you can make lots of money quickly by doing home inspections for real estate firms? But before learning the benefits you can get from doing home inspections, it is important to know first what the job involves. Real estate inspection refers to the organized checking of a real estate property to assess its condition. A real estate inspector primarily checks for any defect in the property. Real estate inspections are important for a number of reasons. For example, if a real estate firm is going to sell a property, home inspection is necessary. Since real estate agents are too busy to conduct the inspection themselves, they outsource the job to save more time. This gives others an opportunity to earn big bucks by doing home inspections. Once you are hired to do a home inspection, you will be asked to spot any flaws that cannot be fixed before the property is released for sale. Afterwards, the property has to be checked again after the sale and after it has been vacated. This ensures that anything that should stay with the property is retained. As a home inspector, you will also have to inspect the condition of the home. If there is an additional damage after an owner has moved, it should be repaired before the new homeowner occupies the property. You may also be asked to check any rentals that a real estate firm has. You can do a checklist of conditions to be inspected and do a video inspection once the rental is ready. With real estate inspection, you earn money without sweat. Now that’s a great way to make good money quickly. articles - General Sun, 15 Mar 2009 14:01:35 +0100 http://www.realestatebright.com/general/how-to-succeed-in-real-estate-sales.html People who are in the business of selling real estate have one common goal: financial freedom. To become successful in this business, you have to create a financial goal—a certain amount you need to accumulate to achieve the desired quality of life. Only then you can start your endeavor and plan to achieve your financial goal by a certain time. You can follow some basic ways to attain success in the real estate business. First, you need to work hard. Majority of real estate agents earn huge income and become successful because they invest so much time and effort in their venture. These people make themselves available at all times to clients and prospects and attend to business calls day and night. The second surefire way to real estate success is doing aggressive marketing campaigns. Success-driven agents “buy” clients by investing in promotions through channels such as billboards and direct mailing. People in the real estate business should also display the ideal real estate agent traits. They should be skillful in finding the motivated seller, knowing the value of real estate properties, and being able to properly negotiate with clients. Another approach is to build a professional services business like that of a lawyer, accountant, or doctor. Only a few do this, yet they earn big—some make more than a million dollars every year. In addition, real estate agents need to be aware of the federal laws like the tax law to ensure their success. Otherwise, they may lose a great deal of money. Worse, they could be jailed for violating the law. articles - General Sun, 15 Mar 2009 14:00:53 +0100 http://www.realestatebright.com/general/the-supply-curve-in-residential-real-estate-bubbles.html The opposite of the demand curve, the supply curve indicates the amount that sellers can supply given a specific price. In a supply curve, sellers supply very few units at low costs and supply many units at higher costs. Supply and demand are in balance and market transaction is possible when these two curves meet. The Great Housing Bubble in the United States saw a growth in demand for real estate, which was a result of a significant increase in lending and credit. Sellers refuse to sell assets as these are quickly appreciating—this means a greater opportunity for them to gain more profits. This results in a limited supply on the market. In a supply and demand graph, the supply curve moves to the left, pushing the equilibrium between demand and supply to a more elevated price point. This happens because of the seller refusal. On the other hand, the demand curve moves to the right due to the higher liquidity of the lending environment. The intersection of the supply and demand curves shifts prices to a higher point. But once the supply and demand become balanced, their intersection touches the point of low transaction volume. This means fewer buyers can afford the higher prices. When more buyers cannot afford the high prices, transaction volumes drop. Prices also stop increasing as a result. This was the scenario in 2005 and 2006 when housing affordability was at its lowest record on many markets in the United States. This indicated the start of the so-called deflation of the Great Housing Bubble. articles - General Sun, 15 Mar 2009 14:00:38 +0100 http://www.realestatebright.com/general/why-is-this-the-best-time-to-invest-in-commercial-real-estate.html The current global economic slump is anticipated as the longest and deepest since the Great Depression of the 1930s. The downturn has affected the finance system in the United States and other countries worldwide. The biggest impact of the economic crisis is on the purchase and sale of commercial properties. While the stock market is plunging at record lows, an increasing number of investors are considering investments in commercial real estate. The commercial real estate typically refers to shopping centers, office buildings, warehouses, and manufacturing plants. So what makes commercial real estate attractive to many investors during economic slowdown? Intense financial difficulties force many developers and owners of commercial real estate into going bankrupt. What the commercial real estate owner does is to put the real estate on the financial market at a discount, which certainly attracts buyers who can seal the deal. Therefore, prices of real estates go down when the economy is slow. And with the current economic crunch, now is the best time to invest in commercial real estate. Because commercial real estate is a long-term investment, it needs to be done with caution. You don’t get rich overnight by investing in commercial real estate. If you think about purchasing a commercial real estate investment property, you must be aware of your future management responsibilities regarding physicals effort and time. If you are purchasing a net-leased property, the tenant pays most of the expenses, making property management a lot easier. This is the ideal property for you if you do not have much time to spare for your commercial real estate investment. articles - General Sun, 15 Mar 2009 14:00:08 +0100