Fine Homes

Introduction
Interest rates for savers generally follow inflation trends and statistics show that these gains are always positive unless you are very unlucky. The reason why so many people invest in Banks is because they are usually a safe bet. Indeed, often your savings will be guaranteed.
Money in a savings account is usually a safe investment but the return can sometimes be limited for the investor when compared to other options.
There are many opportunities for investment depending on the level of risk an individual is prepared to take. These forms of investment might include stocks and shares, endowment insurance policies, pensions etc. We are focusing our attention on the property market where our expertise is. Stability of Property Values
In real terms although property markets do suffer from peaks and troughs, property does increase in value in the long term. Recently in some areas, property prices have actually gone down, this is due to the economy which has an effect on supply and demand. An over supply of property can easily reduce property prices when the property market is struggling.
Property prices do go down but history has shown that they always recover and they are stable in the long term. Steady or significant increases in property prices are usually the norm.
Whilst there can be no guarantee that property prices will increase over say, a one year period it is generally accepted that a well maintained property in a reasonable area will appreciate in value.Interesting Statistics
The following statistics make interesting reading:

 

During a recent visit to the once thriving southwestern town of Tucumcari, New Mexico, located in Quay County on “Historic Route 66,” I wondered how businesses were surviving there during this floundering economy, especially since the town had been sputtering towards failure for more than a decade. The universe answered my mindful inquiry by presenting this example of how one businesswoman was making it, while an elder businessman was not.Once named “Six Shooter Siding,” Tucumcari was founded in 1901 as a railroad construction camp. The 2000 census was 11 people short of reporting a population of 6000, but the count has since declined. The town occupies 7.5 square miles. Businesses in Tucumcari that exude a level of success are rare; they are few whose windows aren’t barred or boarded up. The prominent ones are banks like Wells Fargo and Everyone’s Federal Credit Union. (Yes, that is the credit union’s actual name). Set apart, with its clean, almost modern architecture, Mesalands Community College seems as though extraterrestrials had plopped it down one late evening unbeknownst to the local inhabitants. [But I could only logically equate such an event with Roswell, New Mexico, far to the south.]On Main Street of Tucumcari’s “downtown,” the only business front that said, “successful” was Pajarito Interiors, owned and operated by Ruth Nelson, an interior decorator who (according to local news articles) earned her degree from the University of Hawaii and moved to New Mexico from Oregon several years ago. Pajarito Interiors’ Santa Fe adobe-style facade was clean, its paint fresh and stucco walls free of cracks. It had obviously been recently redesigned and updated compared to the buildings, up, down and across the street that sat in sad shape, windows boarded from vandal attacks, and having been long abandoned. An emaciated, feathery carcass of some now unidentifiable medium-sized bird-of-prey lay, splayed out in a display window where the raptor had accidentally flown in and failed in its escape. There it remained, in memoriam to its long suffering; for how long was anyone’s guess. The building adjacent to Pajarito Interiors, connected by a shared wall was Sands-Dosey Drugstore. It had burned a year ago. Its partially scorched-black walls remained half standing, reminiscent of a bombed-out structure from a recent war no one had heard about. Its long history destroyed in what must have been a matter of hours.Ruth Nelson’s store is stocked with high-end home furnishing and decorator items. The interior walls hold a neutral hue that complements every other color found on unique, seemingly one-of-a-kind tables, sofas, chairs, and objects de arte . The ceiling lights softly light partitions that showcase special furnishings like a fashionably high table with a pair of plush-upholstered, matching chairs. In Tucumcari, with an estimated 80% of its population living on public assistance, it was an immediate mystery as to who among the locals could afford such exquisite items.In an interview, Ruth Nelson said she moved to Tucumcari when she found a man with whom she thought she could spend the rest of her life; that being Donald Schutte, an attorney and now former state district judge. (Having been originally appointed by the governor, Schutte had lost last November’s election with his opponent winning nearly 2 votes to 1.) In local news articles, Nelson and Schutte have expressed plans to greatly improve downtown Tucumcari as they have filled key roles in the “Main Street” initiative with its mission to “bring back Tucumcari.” Nelson said her business was doing okay, but there was a time when she was realizing $7,000 to $10,000 in sales per week. That number sounded suspiciously exaggerated so I investigated further to find out the secret of how a businesswoman could be so successful in what appears to be a dying town. The answer came as a surprise.In July, 2006, Ruth bought a home furnishings business from businessman Stanley Jennings. Stanley was 81 years old and thought it a good time to consider retiring. A veteran, and retired serviceman, Stanley was born in 1925 in his family’s ranch house home in Quay, New Mexico, about 17 miles south of Tucumcari. He grew up there. Stan (as his friends call him) remembers as a child having just one shirt which his mother would quickly wash every night when he got home from school. She would iron it in the morning right before he left to attend a one room school house that was located on an adjacent ranch a couple of miles away. He would walk or ride a horse to get there. As a teenager, Stan was a “soda jerk” at Sands-Dorsey Drugstore whose abandoned business location was the bombed out building, previously noted. He served in the Army Air Corp as a P-51 fighter pilot in Alaska, and was once state President of New Mexico Young Democrats, a time he was being groomed to run for a higher, future office. He attended pharmacy school in Albuquerque but quit when he got a C in one class believing that it disqualified him to graduate. He didn’t understand that is was a Grade Point Average (GPA) of a C or less that would have disqualified him. Unexpectedly, Stan’s father died far too young, and left Stan’s mother to cope with running a cattle ranch that was on the small side, as cattle ranches go. The ranch was encumbered with a large tax debt, as well. Stan accepted the responsibility, supporting his mother, wife and child.Stan gave up pursuing ambitions outside of Tucumcari: the new, flourishing airline industry needed pilots, pharmacies were short-handed, and state level politics continued to beckon, but he kept busy on the home front. He was elected to the office of Quay County Assessor for several terms, continued on as a 4th generation rancher and founded a business in Tucumcari that he maintained for over 30 years. Tucumcari became home. He had married there; his only child had been born there. Janie, his wife, a school teacher who had taught for 26 years in Tucumcari, died there just short of their 50th wedding anniversary. Although now remarried, Stan has a burial place reserved beside Janie’s “place of rest.” He was an active member and held offices in the Kiwanis Club and currently holds the position of Chaplain in the local Masonic Lodge. Bottomline: Stan is a long-standing member of Tucumcari’s history. A dedicated community leader, he did everything expected of, above and beyond, many of his friends and peers who have passed away over the years. Since selling his business at the age of 81, what has happened to Stan in his golden years, within this small community he’s loved and served all his life ?Now a jolly-round man with a quirky little smile, and friendly disposition, Stan owns and operates Fort Bascom Trading Post, where he is a seller of used odds and ends. At a glance, one would describe it as a southwest curio and junk store with a few interesting “pieces” scattered here and there. A private 45 rpm record “juke box” rumored to have belonged to movie star Grear Garson, a Bally’s nickel slot machine, and a coin-operated orchestrian that plays a tune for a quarter. There are the numerous Model As in various states of disrepair (rebuild); a couple look pretty complete. The business is housed in an old building whose interior is lighted by parallel rows of garish florescent lights that burn (a couple flicker) all day since the building’s large picture windows were permanently boarded up after being broken out by vandals.Who’s buying this stuff? Nobody. “Economy’s bad,” Stan explains, “And I could sure use some sales, right now.” Since he used to offer financing (credit) to his customers, a lot of people still owe him money from the former business, and most of them aren’t paying. Stan has to file a claim (to garnish wages) against them, but can only do that if he has the extra $40 it costs to do so. Why don’t they pay? “People are hurtin’ here. They’ve been hurtin’ for as long as I can remember, and can’t afford to pay much for anything.” Most of Stan’s customers can’t qualify for a credit card, don’t have checking accounts, and “most live from paycheck to paycheck, if they’re lucky enough to get a paycheck,” he adds.In 2006, Stan was approached by Ruth Nelson who wanted to buy his home furnishings business and transform it into her own decorator studio and interior design business. The deal was struck and Nelson’s live-in male companion (then district judge Donald Schutte) bought the building from Stan with no hitches. Schutte apparently gave the building to Nelson as she is singularly listed as the owner of record at the Quay County Tax Assessor’s Office. Nelson produced and presented a contract to Stan stating the terms under which she would purchase his business and inventory (valued at approximately $118,000 which Stan was discounting to her for approximately $63,000). Nelson was buying only the new merchandise from Stan and she understood that Stan would retain the used items to sell as used merchandise. Nelson was to pay for the inventory over time… or at least that’s what Stan believes one of the contracts stated. You see, Nelson presented a number of versions of the contract to Stan over several days. Trusting, and in good faith, Stan signed each version of the contract that Nelson presented to him, but Stan was never given a copy of the final contract. Stan repeatedly asked Nelson for a copy, but those requests were ignored.In 2007, Stan spent 30 full days in hospital battling and overcoming a case of pneumonia from which most people his age would have died. While Stan was still recovering at home, Nelson wrote a letter charging Stan with breach of contract, citing that she had seen a (free, courtesy) phone listing (not an advertisement) for his business in a telephone directory, and that Nelson had been told by a customer (hearsay) that Stan’s staff had offered to order new items for them. For Nelson, these two events justified charging Stan with breach of a non-compete clause that was allegedly part of their terms of sale. This alleged breach therefore justified why she had the right to (abruptly) discontinue making payments to Stan for the inventory. Stan wasn’t offered an opportunity to discuss the matter.Meanwhile, Stan was slowly recovering from his illness and gradually returning to work. Stan continued to struggle to make payments on the original business loan he had obtained to buy the inventory that Nelson had bought, but now refused to pay for. Nelson was selling that inventory for pure profit and was realizing huge success in a faltering economy. This may explain how there were times when Nelson was able to sell $7,000 to $10,000 worth of merchandise each week… for a while.Now comes the rub. Stan’s family attorney (and CPA) refused to involve himself with a lawsuit against Nelson, not unlike five other attorneys across the state of New Mexico who, likewise, cited “conflicts of interest.” Apparently, Nelson’s live-in male companion (Schutte), the former New Mexico district judge and attorney also holds a seat on the New Mexico Bar Association Review Board, a position that could be politically dangerous for an opposing attorney to twiddle with.Stan met with the sixth attorney in Albuquerque, a specialist in elder abuse law, who requested a $2000 retainer which he had borrowed from family members. To begin, the attorney requested a copy of the contract three times from Nelson who ignored the requests. The attorney wrote a letter of demand for payment to Ruth Nelson and Don Schutte. Schutte responded that he had nothing to do with the contract between Stanley Jennings and Ruth Nelson, and that Nelson would probably respond through her own legal counsel. (Keep in mind Nelson was living with Schutte, an attorney and former district judge capable of advising her in matters regarding business ethics, best practices, and taking appropriate legal actions.) Nelson did not respond to the letter.The attorney told Stan that she would initiate a lawsuit against Nelson (and Nelson’s attorney-judge-pro-bono-legal-counsel boyfriend for his role) if Stan provides a $10,000 retainer… which will only pay for “discovery” and filing initial paperwork. A subsequent trial or further legal action would be at an additional expense to Stan. With what Stan owes already on the business loan for the inventory, and borrowing the initial attorney fees, the old man would be looking at $100,000 of debt at age 83. This level of debt he’d never experienced in his life. The attorney voiced concern that Stan might not be able to physically weather the depositions, inquiries, interrogation, investigation, trial, or trials to come. [In the event that Stan died, he wouldn’t be alive to pay for services rendered by the attorney, which probably explained the reason for such a large, up-front retainer.]So now this elderly cornerstone of the community is caught in a no-win situation. Why? The attorney outlined Stan’s options and possible options of outcome:1). If Stan initiates a lawsuit against Nelson (along with her attorney-judge-pro-bono-legal-counsel boyfriend), and wins, it may be ruled that Nelson must pay Stan’s legal fees, court costs, intangible and tangible damages that could total in excess of $100,000. Could (or would) Nelson pay this? Not if she demonstrates the inability to pay, and that might be pretty easy for her to do. Game over. Stan loses… and he would still owe court and legal costs… and would have to continue to pay on the business loan for the inventory.2). If Stan initiates a lawsuit, odds are, Nelson (and her attorney-judge-pro-bono-legal-counsel boyfriend) would counter-sue Stan with the pointed strategy of elongating the legal process, thereby financially breaking and/or out-living the old man Stan. Game over. Stan loses with his debts being transferred to his estate, or to his elderly widow who also loses… along with his children and grandchildren (who may have had some sort of inheritance prior to such a lawsuit).3). If Nelson counter-sues Stan and wins, Stan would probably be required to pay Nelson’s court costs, tangible and intangible damages, as well as legal costs to her now exorbitantly expensive attorney-judge-NOT pro-bono-legal-counsel boyfriend who will have suddenly transformed into the most expensive legal counsel on earth. Stan loses absolutely everything because the attorney-judge-legal-counsel boyfriend would probably file a lien against every asset Stan has.New Mexico Attorney General, Gary King advocates a strong stance on the protection of elders against abuse, both physical and financial. Yet a representative from the New Mexico Adult Protective Services Division stated that Stan’s situation isn’t really a case of financial elder abuse and that his case should be handled by law, through the legal system. If you review the options that the legal system offers (stated above), it is fairly easy to see that it offers little, if any, hope or opportunity for Stan to prevail in this situation.Stan’s retirement “plan” was simple. He wanted to spend his last days restoring Model A Fords, the kind he admired as a young man, but could never afford. Stan owns more than one shirt now, but his eyes tear up when he reflects about the moment when he had saved up enough money to buy two new shirts to have at one time. He gets up every morning, showers and shaves, checks his blood sugar, takes his insulin and other prescribed medications. He eats a little breakfast and feeds a group of cats before “going to work” at Fort Bascom Trading Post as a seller of used odds and ends, in an effort to make ends meet. For him, the weight of the world seems far heavier than it had 30, 40, 50 or 60 years ago. And he realizes he lacks strength. It seemed that Stan was headed on the same doomed path as the burn-gutted drugstore where he had once worked as a young man, only his suffering is lasting quite a bit longer. Stan is fast becoming the sun-dried hawk that fought for its life in the store display window until it could fight no longer, when no one either noticed or cared or tried to help it survive.This is one of those little stories about the unknown underdog featured on television’s 60 Minutes, 20/20, 48 Hours or Nightline. How can an elderly, almost gone, and nearly forgotten man get noticed by those globally viewed and respected programs? Who can help him, and who cares for guys like this anyway? If you’re reading this article and have the answer, please let me know, before Stan claims his place beside his wife Janie who died almost 20 years ago.

Continuing your education in real estate investing is of the utmost importance for your success as a real estate investor in today’s market. Why? The old saying, “knowledge is power”, holds true in basically every aspect of your life, including real estate investing. Whether you are a beginner or seasoned real estate investor, there is always something new you can learn to further your career.
With our current market situation, the changes in the availability of money, what you learned a few years ago may not be effective for today’s real estate investor. Continuing education for Real estate investors is crucial to their success.
Many real estate investors are recognizing the importance of continuing their education and are benefiting immensely from what they are learning.
New ideas and techniques have been developed to help real estate investors enhance their knowledge, so they can apply what they learn to increase their real estate empire.
There are many different methods you can use to continue your education. It depends on how far you have already come in your real estate investing career. You may choose to take advantage of the free online webinars to find out about new and innovative real estate systems or simply “read up” on areas of investing where you may lack knowledge.
Different methods to consider for continuing your real estate investing education are:
. Free Online Webinars
. Join a real estate investment club
. Enroll in a coaching program
. Purchase a real estate investing course
. Read books
. Mentoring
. Training classes
. Seminars
Other areas to consider continuing education for success in real estate investing:
. Real Estate Investor Marketing – Real estate investor marketing is essential to your success. Even if you have already learned real estate investor marketing strategies, new techniques have been developed to increase awareness of the services you provide. There are many different online resources available to purchase or to learn about real estate investing marketing.
. Personal Growth – Not only can you advance your career through learning more about real estate investing, but you can also further your career by investing in yourself through personal growth. Determine what could be holding you back in your real estate investing career. If you are feeling lost or unmotivated, you might consider attending a free online webinar. Or maybe you have issues in organization; they now have real estate systems for the Investor that can be set up for you at a very reasonable cost. Getting organized will help keep you on track.
. Join Forums – Communicate with other investors to find out what they have learned. Find a forum where you can exchange information and interact with others who may be experiencing similar frustrations and fears, as well as successes. Forums can actually be a way to motivate you and give you different ideas to move forward in your real estate investing career.
Continuing your education in real estate investing is essential to your success. There are many different methods and depths to which you can increase your knowledge in advancing your real estate investing career. The important thing to remember is you should never stop learning. Changing procedures, laws and strategies make it critical that you keep updated on these changes. Your success will be based on your knowledge in how to implement these changes into your real estate investing business plans.

We have visited several Country House Hotels in the Cotswolds in England and trust that the following will help in your search for a luxury hotel in the Cotswolds which is a beautiful part of England with numerous old English market towns and villages.
Broadway is a small town in the Cotswolds whose high street has a number of antique and gift shops and homes built of Cotswold stone. The Lygon Arms can be found in the high street and is one of several character Country House Hotels in close proximity to Broadway in the Cotswolds in England. The restaurant has a Michelin star and there are spa facilities. You can be assured of a warm welcome with roaring log fires in the winter months. This is indeed a luxury hotel in the Cotswolds.
Chipping Camden is a small town in the Cotswolds again with a wonderful high street where you will find The Cotswold House Hotel is a fine luxury hotel in the Cotswolds in England offering service of the highest standard with exquisite food served in both the restaurant and brasserie. This Country House Hotel has been designed inside in a modern theme but full of character with no expense spared.
Lower Slaughter is a small Cotswold Village with the trout filled River Eye running through it. Lower Slaughter Manor is in the centre of the village next to the church. It is one of two Country House Hotels in this Cotswolds village in this tranquil part of England. Personal service of the highest standard is provided. Enjoy afternoon tea in front of a roaring log fire in the winter or on the front lawn in summer. Beautifully decorated and furnished Lower Slaughter Manor is a luxury hotel close to the Cotswolds town of Stow on the Wold here in England.
Please do not hesitate to telephone us on 01562 631682 for further advice about a luxury hotel in the Cotswolds.

 

Getting a commercial mortgage for a hotel property is very similar to getting a commercial mortgage for an owner occupied commercial property with a few subtle differences. The driving force for the majority of most hotel income is the RevPar or revenue per available room. RevPar is most commonly calculated by multiplying a hotels average daily room rate (ADR) by it occupancy rate and is a key indicator of performance. Rising RevPar is an indication that either occupancy is improving; the ADR is increasing, or a combination of the two.

 

Although RevPar only evaluates the strength of room revenue, it is typically the most relevant indicator of performance. While many full service hotels generate revenue through other means such as restaurants, casinos, conferences, spas, or other amenities the majority of hotel properties are either limited service flagged properties or limited service unflagged properties. A limited service hotel is simply a hotel with out a restaurant. Because the operating costs of the restaurant component generally run higher than that of the hotel operations, it is common for the net operating income (NOI) as a percentage of total sales to be lower for a full service than a limited service hotel. For this reason the majority of commercial lenders prefer to finance limited service hotels.

 

Flagged vs. Unflagged Properties:

 

A flagged hotel property is simply a hotel that belongs to a national franchise. An example of a flagged property would be a Holiday Inn or a Best Western. For the guest, a flagged property provides the benefits of a uniform standard that is upheld by the franchisor. A guest could stay in a flagged property on the east coast and could expect the same flag on the west coast to have the same standard of cleanliness and amenities. The owner of the property gets the benefit of a nationwide reservation system and marketing. For this benefit the operator is expected to pay a franchise fee which can typically range anywhere from 5% to 10% of room revenue. Because of the advantages that a flagged property has, most commercial lenders prefer to finance them over an unflagged property. Sometimes it can be extremely difficult to get a commercial loan for an unflagged property, especially if the property isnt in what is considered a destination resort area. A destination resort area would be an area like Miami, Myrtle Beach, or Orlando FL. An unflagged property in a destination resort is easier to obtain a commercial loan on than an unflagged property in other areas of the country.

 

Exterior Corridor vs. Interior Corridor:

 

An exterior corridor property is a hotel property where you can actually see the door to the rooms from the exterior of the property. These are sometimes referred to as a motel instead of a hotel. The term motel is actually derived from the term motor hotel where most travelers would park their vehicle directly in front of their room. While there are disagreements between what defines a motel and what defines a hotel, there is typically very little difference between the two outside of a lenders perception.

 

Most exterior corridor properties are older and subsequently will not have the quality of furnishings and will have more deferred maintenance than an interior corridor property. An interior corridor property is going to be more energy efficient and would have a lower utility expense as a percentage of gross revenue.

 

Financing Your Hotel Property:

 

When trying to get a commercial loan for your hotel property there are a few distinct differences you can expect as opposed to financing other commercial properties. A hotel property is considered special purpose in nature which simply means that it is generally cost prohibitive to convert it to alternate use. An office building or retail space can accommodate numerous types of businesses whereas a hotel property can only accommodate a hotel. Because of this a commercial mortgage for a hotel is going to be considered riskier to the lender than a commercial mortgage for other general purpose property types. A lender will mediate this risk by taking a more conservative approach to underwriting a hotel property.

 

The loan to value (LTV) for a hotel property will be lower than other general purpose property types. For a limited service, flagged property 65% LTV is typical and that number can go down depending upon the age of the property and whether its interior or exterior corridor. The LTV is simply a ratio calculated by dividing the loan amount by the value of the property. The debt service coverage ratio (DSCR) for a hotel will also need to be higher than that of a general purpose property type. The DSCR is a ratio that determines the strength of the property or business income in relation to the proposed mortgage payment. A typical required DSCR for a hotel property by a commercial lender is 1.30 which simply means that for every $1.00 in proposed mortgage expense there should be $1.30 available to pay it. For other general purpose property types the DSCR is lower. A DSCR of 1.20 is common for general purpose property types and can go oven lower for a less risky property such as an apartment building.

 

Because the acquisition of a hotel property under a conventional program requires a large capital injection, many borrowers prefer to purchase a hotel property by utilizing the SBA 504 program. This program enables the borrower to put in as little as 15% and still obtain a better interest rate than a traditional commercial mortgage for a hotel.

Rent a house in Bangkok

When I first moved to Bangkok, I rented an apartment like most newcomers to Bangkok do, but as I became more familiar with my new home town, I decided to be a little more adventurous and rented a house. Having lived in houses over the past five years now, I’ve found that renting a house in Bangkok not only offers more space and privacy, often it is also much better value compared to apartment living. More often than not, it is also a cheaper option (per square metre) compared to renting an apartment or condo, which are getting smaller in size these days! If you enjoy wide open spaces, appreciate some green in your life – a garden perhaps, have pets, a large family or simply want to maximize your budget, consider renting a house instead.

Another advantage in renting a house is, apartments tend to put a high surcharge on your electricity and water bills. Many apartments have a minimum charge of 1000 bht for water alone. That is a significant amount considering my water bill never cost me over 500 bht living in a house with a family of 5, and we do A LOT of washing! Electricity can be anything between 5 – 7 baht per unit compared to the actual 3.75 baht charged by the MEA. Living in a house can save you up to half your utility bills compared to living in an apartment, and believe me it is A LOT of difference!

Thailand is cheap!

As you may already know, Thailand (more accurately, “Bangkok”) is not the cheap haven many foreigners once thought it to be, especially when it comes to housing. Property prices and rental have gone up considerably and that’s the way it goes everywhere around the world. The very same 2 bedroom unit I rented 5 years ago (in Silom) has gone up by 30% in rental and hardly any refurbishment has been done to it since! “That’s ridiculous” you say and believe it or not, I agree! But hey, I don’t make the prices and if you think agents benefit from that higher commission, that’s only true when clients actually think these houses are worth the price and that isn’t always the case.

Renting a house in Sukhumvit, Silom or Sathorn.

If you are looking to rent a house in the the Sukhumvit, Silom or Sathorn area, then the very minimum rental you are looking at is 30,000 bht for a BASIC 3 bedroom house. Even then, they are few and far between in that range, and more often than not are above 15 years old, with dark parquet flooring and lots of wooden built-ins which many people find dark and depressing.

Most people prefer something a little brighter and contemporary. That would mean newer houses between 1 – 5 years old and these start around 45,000 bht. Depending on the location, size, décor, facilities etc. these can go up to anything from 150,000 – 250,000 baht per month. For that price, please do not accept anything less than a spectacular, resort-like villa with a private pool!

No, but seriously, you do get what you pay for so be realistic when it comes to expectations and budget. If you want something new and modern but lack the budget, then move further away from the city centre. Which also means further away from the BTS line. Unfortunately, we cannot have it all and something’s gotta give.

Generally, if you go further towards the end of the BTS line and beyond i.e. Mo Chit, Phayathai, Phrakanong, On Nut, Bangna, Srinakarin, Rangsit etc. prices drop significantly and you get much better deals which are sometimes worth the extra time commuting.

Is it possible to find a house for 15,000 bht?

Not many agencies deal with houses below 25,000 bht. Just search the various property website in Thailand and you will see that the minimum range for houses are 25,000 – 30,000 bht, where the search usually returns 0 – 5 results. Several reasons for that:

1) There are a lot less decent and rentable houses at

2) If there is, it is usually way out of town, far from any BTS/MRT station.

3) Most people want to live in town, close to the city centre, CBD or near a BTS/MRT station.

4) Apart from location, houses below 25,000 bht are usually older (thus old fashioned) and not very well-maintained, which makes it very hard to rent.

5) If a house is nice and decent with an asking rent of 25,000 bht or less, some agents mark it up!

Thus, it’s hard to find nice, decent houses at 25,000 bht or less…

Regardless, there are plenty of cheap houses as low as 12,000 bht for rent, but remember, and I stress again – you get what you pay for! And most 12,000 bht houses I’ve seen are usually in serious need of repair and maintenance, and the really nice ones are located way out in whoop whoop district.

I don’t care as long as rent is cheap. Where do I look?

Again, you won’t find any agents to help you there and finding that perfect yet cheap and nice house is undoubtedly the hardest step. It usually takes months of driving around moo baan after moo baan, which would mean having your own transport and knowing your way around.

The word “Moo Baan” translates to “village” in Thai, but the term “housing estate” would be far more accurate. These usually have a guard posted at the entrance and are situated all over Bangkok. These houses usually offer much better value than stand alone houses, and are a good place for the house hunter to start his/her search. Try areas like On Nut between Sukhumvit 77 – 103, Bangna, Rangsit, Ramintra, Phayathai, Mo chit etc.

Concerns and other issues

1) Security

Honestly, I know of many farangs, including myself who have lived in single houses and existed peacefully without any disturbances or trouble for years. I also do not know anyone who has been burgled personally because they were living in a house. Do you?

If you are considering renting a house and security is a main concern, rent a house in popular areas like Sukhumvit, Silom and Sathorn where there are many nearby apartments and condos with security. That way, you can benefit from the dense security in the neighbourhood.

Another option would be to opt for houses or townhouse within a “moo baan.” There are plenty around and majority of them have tight 24 hour security. Common sense would also tell me to explore the neighbourhood a little and have a chat with shopkeepers and a neighbour who might be willing to share some information with you. I’m sure you’ll have no problems getting a friendly neighbour to spill the beans on the house, its previous tenants and probably things you don’t need to know about your landlord. Welcome to Thailand!

2) Air conditioners

Check to see how many rooms have air-conditioning; and how old the air-conditioners are. If you are looking at an older house, chances are it will have those big, old blocks that rumble every time you turn them on. These old air-conditioners consume a lot more energy than a new one, and would greatly increase your electricity bills. It is also unlikely that the landlord will install new air-conditioners for you unless they are completely dead (even then they will always try to revive the monster before even considering replacing it), so make sure that they are serviced and cleaned before you move in or if you got a good deal on the rent, invest in some new airconditioners!

3) Water Pressure

Now this is important. Always check that there is a water pump. Then check the water pressure on the upper floors to make sure the pump has enough power to deliver a decent jet of shower. I’ve learnt from experience that size does not necessarily mean power when it comes to a water pump, and sometimes a 2nd pump needs to be installed to ensure constant deliverance of water into the house.

4) Telephone lines

Again, from experience it is in your best interest to check the phone lines to make sure that 1) you have one and 2) it is working, because some areas (and this includes many areas in the Sukhumvit, Silom and Sathorn) do not have anymore available numbers and you will have to join a looong waiting list to apply for a new one. Also, older houses above 10 years old tend to be on the old, analog system which when faulty, cannot be replaced unless the whole area is re-cabled. No telephone lines = no internet. You don’t ever want to be caught in that situation!

5) Maintenance

Houses within a secured compound will have what they call “moo baan fee” or “community fee” which goes into the maintenance of the estate i.e. security, pool and garden maintenance etc. This is usually included in the asking rent. However, if you try negotiating on the rent, then more often than not, the landlord will exclude this from the rent and make you pay for it, so check to see what your rent includes when you are signing the contract. This ranges between 20 – 45 bht per square metre. Thus, the larger your house the more you pay! I currently pay 3,500 baht per month for my “moo baan fee” (I got a 5000 bht reduction in rent, so it works out) and we have 24 hour security, a well-maintained common garden and a superb pool that is regularly cleaned, so I am happy.

At Bangkok Finder, we specialize in properties for rent. Home rental is our only business and that gives us all the time in the world to help find you that perfect house within your budget when you move to Bangkok. Our website http://www.bangkokfinder.com features hundreds of houses and apartments for rent, and is updated daily with quality rental homes. Our negotiators have long established relationships with landlords, which means you will always pay the best rate when we negotiate for you.

IRA real estate investments are booming in 2008 for soon to be retirees who are worried about their future retirement plans. With the economy looking wobbly, the stock market plunging and the big investment banks going under, with us bailing them out, some traditional forms of retirement investing are starting to look a little sick.For these reasons IRA real estate investments are increasing. Increasing? Surely not. Along with an economic meltdown, a stock market collapse and all sorts of economic turmoil, isn’t the real estate market headed for oblivion as well? Who in their right mind would consider investing their IRA in real estate?Surely in 2008 real estate is a one way trip to the poorhouse.No, not quite. Have you ever heard the expression that there is opportunity in adversity? There is plenty of opportunity in real estate right now, if you know where.But lets look at IRA real estate investing first. How can you invest your IRA in real estate? Is it allowed? Is it legal?Traditionally the majority of the population invest their IRAs in investments that are promoted to them by their custodian. In fact some custodians limit allowable investments to their own. So, it’s estimated, over 90%, in fact around 96% of IRA funds are invested this way. Mutual funds, CDs and stocks, and so on.No problem if the markets are pushing ever skyward, but quite a problem right now.But what about IRA real estate investments? Yes it’s entirely allowed to invest your IRA in real estate through a self directed IRA. Although this is not widely recognised, IRA real estate investing is one of the best forms of wealth accumulation for retirement. Real estate is a traditional long term wealth accumulation model, and as such is in fact ideal for IRA investing.If you’re not certain about the details of how to set yourself up for IRA real estate investing consult your CPA, that’s outside the scope of this article. However take my word for it, it’s quite legal, and many canny IRA investors are doing it right now, and have been for a long time. You may need to execute an IRA rollover into a self directed IRA, but the trouble is worth it.And there’s powerful reasons to consider investing your IRA in real estate. Did you know, for example, that it’s estimated that 85% of all wealth in the US was created through real estate?And that through your IRA you can secure up to 70% bank non-recourse financing to invest your IRA retirement funds in income producing real estate?Its food for thought isn’t it?Now back to the real estate market. After all there’s no point in IRA real estate investing if the value of your real estate investment is going down is there?Although we all hear that the real estate investment market is dreadful this isn’t the whole story. PARTS of the real estate market are dreadful, but not ALL of it. It’s perfectly possible to find excellent opportunities for investing in the lower priced end of the market. Simple comfortable homes for the working class who live in those faceless suburbs in cities right across America. There are some fantastic IRA real estate investments available in the right place RIGHT NOW.But if you’re looking to get out there and find them yourself then you may be in for a shock. It’s not something that is realistic for the individual IRA real estate investor. You need professional help. Buy in the wrong place and you’ll probably get burnt, big time. But right now there are some excellent opportunities available for securing a great real estate investment, no cash down, at under market value, with tenants supplied, rental guarantees and even a guarantee that you will double your current investment return.All through a major US public corporation with a reputation for solid real estate investment returns, for both IRA real estate investing and ordinary credit investing in real estate.Yes you can secure your retirement future through a good IRA real estate investment, or more than one. However it’s the time to leave it to those who really know what they’re doing in hard times, and you can relax and leave the hard work to someone else.But which corporation could possibly offer an opportunity like this?

Most of the western world, if not the entire first world, seems to be reporting that property market price inflation is decreasing or stalled. In the worst-hit areas we even hear tales of a lowering of house prices and negative equity for some unfortunate new homeowners who jumped on to the property bandwagon at the peak of the recent property boom. High Street inflation never lets up, so it’s natural for property investors large and small to feel that the end of the world is nigh.

This state of mind is undoubtedly an over-reaction. The human psyche drives modern man to ensure he has a place he can call home in the shortest possible time after leaving his childhood days behind in the former family house. Fair enough – but does this man of our times actually have to own his home outright, in theory at best? And more tellingly, does this man have a god-given right to expect that with home ownership comes enough lifetime’s wealth to be able to retire from working for an income at his chosen time? The latter scenario is a common desire, and it is based upon the premise that property values will always rise faster than other commodities.

We are now finding in Ireland and elsewhere that we have come to the end of a period where property value inflation was outstripping general living cost rises. But we should not be surprised because we have had these ups and downs before. The general trend though is that property prices commonly rise again fairly rapidly after periods of stagnation. It’s all about supply and demand.

The demand for new homes or at least of people looking to move house will never cease. Why? Because many old homes become dilapidated for a start. Then we have the new young families who need their own space and cannot expand into the limited environs of parental homes. On top of that, the modern world economy relies upon many workers who must be mobile throughout most of their working lives, thereby prompting housing development and property transactions countrywide and often internationally. And don’t forget those that opt to upgrade or downsize by choice due to family or personal needs.

What about the supply side? The builders can’t build fast enough in boom times because handsome returns on their property investments are almost guaranteed. If landbanks are purchased just prior to a stalling of property sales prices, then naturally there is no rush to build and sell at reduced profit margins. So any oversupply rate reduces until it balances demand. This is the period being experienced in many parts of the US and Europe at present.

In Ireland currently, un-named property commentators repeatedly get column inches reporting that house prices have dropped by nearly 10% in just 12 months. This type of statement is more than likely associated with party politics prompted by the Irish government’s opposition rather than informed economic commentary.

Let’s take a quick look at what the “Irish House Prices in Freefall” sensational headlines really mean when based on the 10% drop in a year statistic. The house price index is based on sales closure prices, not size of property or land acreage; these latter factors generally tend to grow on average at a moderate rate over each decade because we all want bigger and better homes regardless of our individual domestic needs. So bear in mind that the average price of a house per country tends to grow because the asset is getting bigger as well as reflecting local general economy inflation.

In Ireland last year, the average price of a house had risen incredibly to over €300,000 from nearer to €200k a decade earlier. That statistic is part of the local Celtic Tiger boom folklore which lending institutions rammed down our throats when selling home loans and risk-laden mortgage deals up until just a few months ago. The 2007 €300k average home was a bit bigger and better than houses available in the year 2000, but it was obviously grossly over-valued in real terms. It didn’t cost that much more to build than the average house completed and sold in 2000, evidenced by the great numbers of new self-builders who wanted a share of the money-spinning action.

In mid-2008, the average price of a house in Ireland is €275,000. This seems to be getting closer to a sustainable valuation (if you seriously want to sell, that is) for the average property size available which is typically 3 bedrooms, multiple bathrooms and all the latest mod-cons. A bonus in rural Ireland is that you might even get a generous half-acre of land thrown in.

So the “sensational” loss of over €25,000 on average off every Irish homeowner’s wealth is not a true loss as such at all. It is just a realisation of long-term property asset value. Anyone who spent their invisible extra €25k in less than 12 months was a greedy fool, and we shouldn’t have any sympathy for them if they don’t display the caution and prudence of serious property investors.

Anyway, it will not be long before the local property market detects the first signs of increased demand again. Sellers will start hiking up prices and the whole cycle will slowly start to revolve again in our favourite upwards direction.

So the conclusion is “don’t panic” and take some time to reflect on why existing homeowners feel uneasy every time this cycle reaches its low point.

Property is a reasonably sound investment, and it gives the buyer the obvious immediate attraction of having somewhere to live (or work in the case of commercial premises). However there are other ways to exist comfortably which don’t involve organising your life around the demands of meeting hefty monthly mortgage repayments and fretting about why the value of your property doesn’t always rise at a consistent rate.

Many young people are opting to rent property. The so-called home-owning critics immediately shout that house rent is “dead money”. To a degree, yes, but if renting frees up income to invest in markets which don’t fluctuate in boom & bust cycles, then isn’t the oft-struggling mortgage payer something of a hypocrite? And who actually owns the majority of private domestic homes anyway? If a homeowner misses a mortgage payment you soon find out that the big financial institutions cold-heartedly treat lenders as no better than tenants of real estate upon which their businesses are founded. And furthermore, as tenants with much less rights than conventional renters of property who have fair and equitable rental agreements with their landlords to rely upon in times of hardship.

It’s interesting to note that in previous generations the majority of house dwellers were tenants, particularly in towns and cities. Most homeowners can probably quote that their parents or grandparents lived in rented accommodation, and that is a reason why they strive to ensure that they and their dependants have the security of home ownership. What security, if you worry about why your investment and lifestyle is not always as good as you dreamt? Our ancestors survived, without the disposable income levels of today, so perhaps the property rental option should not be dismissed so readily.

Maybe the biggest lesson to be learned by property investors when global economy growth recedes is that only a few property types are guaranteed to grow in value (in the longer term) at a rate generally in excess of other inflationary factors. These are the well-maintained properties in desirable locations whether they be urban or rural. Funnily enough, my experience tells me that these properties are likely to fall into the cheaper price category or the other extreme, the high-end luxury home. The middle range property, by its very nature, forms the bulk of property sale listings, so the seller struggles to promote his property above the multitudes of similar priced homes or sites.

I suppose it can be summed up as follows:

Property buyers, renters or vendors in all three of these categories can benefit greatly from registering with web-based property advertising portals such as my own site (www.Propertysteps.ie). The exclusive luxury homes and the lower-end smaller properties are instantly brought to the fore from hundreds of listings by easy-to-use search functions which detect price range and/or location. The more attractive middle range properties also benefit in that household features and property type listings enable the website browser to easily compare the best value for money of numerous properties in a chosen location.

In Ireland, where we are based, I can report that Property Agents say that websites such as ours have contributed greatly to stability in the mid-price range domestic property market. Sale closures in this category, for sensibly priced houses, are regular and commonplace, thereby propping up the market in general. This contradicts the doom & gloom reported in the media, no doubt created by “worried” homeowners who aren’t even active in the buying and selling of property. The lazy expectation that easy money can be made simply by buying and living in a home for life smacks of greed, not reality. These merchants of doom should be ignored.

We also read in the press about the owners of expensive houses for sale having to dramatically slash prices to arouse interest. Probably, not maybe, the asking price was unrealistic and based upon outdated market value. The eventual selling price of a luxury home will still have made the purchase a sound investment if it was bought at any time except the very peak of the recent boom. Again, I can report in Ireland that Agents say that there is still a waiting list for desirable upmarket properties. The best of these homes are sold via website mailing lists or by the uploading of the property brochure to Propertysteps.ie and similar internet property portals.

For a fraction of the cost of press advertising, our best value for money website gets quick results. Often you never even see a For Sale sign being erected for property in the more exclusive address category, yet new occupiers appear and everyone involved in the transaction is delighted. You don’t read about these everyday success stories in the media; it appears to me that only boom, doom or gloom stories sell newspapers when the local economy is discussed.

Christopher Clover is the founder, owner and Managing Director of Panorama, Marbella’s longest established real estate agency.

The buyer’s problem in finding the right property, negotiating its purchase and closing the sale is much more difficult than in one’s own country. As in most resort areas, everybody seems to be in the business, from the taxi driver to the hall porter in the Hotel. Property is everyone’s favorite subject of conversation. And almost everyone has an opinion, many of which can easily confuse a potential buyer.  Where to start?

Finding a property 

Some people spend years looking for a property. Others are lucky enough to find a property and have the confidence to purchase on their first visit to Marbella. Yet others need to take their time and view properties during three or four trips, until they feel really comfortable with their eventual decision. 

What type of property are you looking for, and in which area?

Many potential buyers think they are looking for one type of property and end up choosing something totally different. Unless you are very clear about what you want and are equally sure that it exists, look at various types of properties in different residential areas with an open mind. This exercise will also help you build up your knowledge of market values in the area, a major advantage in negotiating and ensuring that you are getting fair market value for your money when you buy. 

Choosing a reputable estate agent can save you time and there are many highly qualified agencies on the Costa del Sol, alongside more opportunistic and less qualified ones. In the past, qualified agents have either been APIs (Agentes de la Propiedad Inmobiliaria) or GIPEs (Gestores Inmobiliarios), but recent legislation allows anyone (!) to open a real estate agency. It is therefore extremely important to look for an established, experienced agency with an excellent track record and good recommendations from non-interested parties. A recommendation from your lawyer or a long-time resident should point you in the right direction. 

Good agents will really listen to you and interpret your requirements. They will share their market knowledge and  experience with you and, if they exhaust the properties suitable for you from their direct portfolio, they will work with properties from the portfolios of collaborating agencies to find the right properties to offer you. Key qualities to look for in a good agent are: experience, professionalism, product knowledge, sincerity, good communication, a friendly desire to help you in any way possible in your property search and, above all, not pushy! 

If you do not feel comfortable with your agent you shouldn’t hesitate to move on. But when you find one who is easy to work with and understands what you are looking for, stay with that agent until you find the right property, or until you are satisfied that you have been offered all the properties available through that agency and its collaborating agencies. Sticking with an agency motivates the agent you are working with to pull out all the stops and come up with the right property, as well as saving you from having to tell the same story to every new sales agent you approach.

A few points of advice

Compromise always pays dividends

It will be almost impossible to find exactly what you want, even if you build it yourself and if you do find it, don’t be sure your partner will agree with your choice. Find a property that you are both happy with (even if this means compromise!) 

Do you mind being a pioneer?

If you want to buy in a new or not fully built-up area, remember that empty land plots will be built on one day and that you may find yourself in the middle of an ongoing construction site for many years to come. 

Protect your investment

Make sure you have enough land around you to protect your privacy and views from a prospective building project. 

Ensure the protection afforded by the law is given to you

If you are buying property under construction, the developer is legally required to provide an insurance policy or bank guarantee to protect your payments in the event of incompletion. The developers must also provide proof of ownership, as well as planning permission and licenses, and since 2002, an insurance policy against building defects. A lawyer experienced in property transactions will anticipate these items.   

Buy for your own use first and foremost

Unless you are absolutely sure that your children or grandchildren will visit you, it is generally a mistake to buy with their use as the main consideration. Time and again, people end up selling their enormous homes when their family doesn’t visit as often as envisaged.  Purchase primarily for your own use, taste and objectives. 

Realistically analyze the potential costs of modernizing an older villa or apartment that has romantically taken your fancy

Reforms and unexpected repairs can be expensive surprises. That said, second hand properties will often have a better location and may be less expensive than newer properties.

Look at comparables

The best rule for determining the value of a property is to take real sales prices of comparable properties recently sold. To enable you to do this your agent must have very good market knowledge. It will also help to have seen enough properties yourself to get a basic knowledge of the market. 

Think ahead to the day you sell

A property bought today is an important part of one’s assets. It is therefore advisable to take into account not just personal preferences but also general investment criteria, such as location, design factors, quality of finishes and facilities.   

Negotiating the purchase 

Your agent may not be as skillful in negotiating the price of your offer as he or she was in helping you find the property in the first place. Don’t hesitate to seek out the Sales Director or Managing Director of the agency to help you negotiate your purchase. Experienced estate agents are generally better at handling the commercial elements of a sale (this is their job) than lawyers are, and will do their best to bring what are often opposing viewpoints (yours and the seller’s) together in harmony, as any good negotiator should do. Your lawyer can always be consulted during the negotiation to ensure that the offer meets his or her legal criteria, and become actively involved in more complicated negotiations. 

In making an offer it is important to feel out the bottom price of a seller but at the same time qualify yourself as a serious bidder. Too low an offer will not engage the interest of the seller, and might prove counter productive. 

Try to get all your negotiating points together at one time rather than negotiate piecemeal: this saves time and often, unpleasant surprises.

If your offer is too low, your strategy can boomerang and it may simply insult the seller, and you may not even get a response. It’s important to know how much property is really worth in the market, and to you. Find out if the seller has rejected other offers and what they were. What is the minimum offer that will engage his interest?

Make your offer in writing if possible (of course, subject to contract), and include not only the price, but also the deposit amount, when you are prepared to pay it, when you are prepared to complete, what you understand to be included in the price (for example furniture and fittings if applicable), and an often neglected point, that all machinery equipment and installations should be in good working order. 

Show the colour of your money to the seller. He will certainly take your offer more seriously if you have a healthy deposit ready for immediate action in a bank account in Spain. This is normally in the area of 10% of the purchase price. Many agents today also offer credit card facilities, wherein a small deposit from €5,000 to €50,000 can be taken to “seal a deal” with a seller, and the deposit remains in the agent’s client account during the week to ten days it can take the lawyers to prepare the private contract and a transfer of the 10% to arrive.

Municipal Added Value (Plus Valía) tax (the increase of the index value of the land since it was last purchased to its present sale). This tax corresponds, by its nature, to the vendor who is responsible for its payment, unless otherwise negotiated.

Measure the land you purchase. If you are looking to buy a plot of land and no topographical survey exists, it may be advisable to negotiate a “Euro per square metre” price subject to survey, to avoid any unpleasant surprises. 

Good psychology dictates that you should leave room to improve an initial offer. However, if you believe your offer is realistic and perhaps have a second choice in mind, it can be a wise strategy to let the seller know that if he doesn’t accept your offer, you will be offering on another property before considering any counter offer from him.

PROPERTY PURCHASE COSTS

TRANSFER TAX (I.T.P.) 7% - Payable by the buyer for the purchase of any Real Estate (villas, flats, land, commercial premises, garages), provided the vendor is not a developer or normally trading in the business of resale properties.

VAT and STAMP DUTY 7% + 1% – For any VILLA or APARTMENT, or GARAGE that is annexed to an apartment, where the vendor is a developer, promoter or habitual trader in these generally new properties.

VAT and STAMP DUTY 16% + 1% – For PARCELS OF LAND, COMMERCIAL PREMISES or COMMERCIAL GARAGE SPACES, where the vendor is a developer, promoter or habitual trader or a company. This covers virtually all NEWLY URBANIZED LAND PARCELS and NEWLY BUILT COMMERCIAL PREMISES. This only covers resale properties when the vendor falls into one of the above categories.

NOTARY and PROPERTY REGISTRY FEES - Approx 2.000€ for both. The cost increases according to the number of pages or complexity of the title deed, and value of the property.

MUNICIPAL ADDED VALUE TAX (PLUS VALÍA) - The Plus Valía tax (described earlier) can be as little as a few hundred Euros or as much as many thousands of Euros on a property with a lot of land that hasn’t changed hands in many years. This tax corresponds, by its nature, to the vendor who is responsible for its payment, unless otherwise negotiated.

LAWYER’S FEES 1% Appox. Lawyer’s fees are in the order of 1% of the selling price, more or less, depending on the lawyer and the price of the property.SummaryThe total official costs involved in purchasing a constructed residential property should be less than 8% for resale properties or less than 9% if VAT is paid on the purchase price, plus lawyer’s fees. 

When an offer is accepted, always get a lawyer to check the land registry (the last word on property ownership, where any liens and encumbrances will show up). He will prepare a private contract that will bind both parties to the deal, and eventually prepare the public deeds for signature in front of a Spanish Notary, when the balance of the purchase price is paid and vacant possession of the unencumbered property is granted, thereby completing the sale. There are excellent lawyers in Marbella, most speaking fluent English and other languages. The best way to find one is by personal recommendation, or by asking your agent. 

Of course, many of the above comments are more intended for the purchase of resale properties, as new developments have a fixed price list and payment schedule, often with very little room for negotiation, at least with respect to price. Sometimes some extras or modifications can be negotiated within the purchase price, depending on the policy of the developer.

In summary, finding and buying a property in Spain can be as simple, or as complicated a procedure as one wants to make of it. The old rule of Caveat Emptor, (Let the Buyer Beware!) always holds true. And a final tip: listen to your intuition! It is often one’s best guide!

By Christopher Clover

Copyright © 2007 Panorama Properties S.L.

All rights reserved

 

 

 

 

 

Real estate investing in Miami real estate is now becoming popular again as there are many properties in foreclosure, short sale, bank reo’s, and government foreclosures. With such an overwhelming inventory of homes available for sale a real estate investor must be able to determine which one to purchase. Investors must follow six steps in order to learn, understand and achieve Miami real estate investment success.
These are the six L steps to Miami real estate investing:
1. Location – Location, location, location is still the key of buying Miami real estate. Buying Miami real estate just because the price is low in a declining area is big mistake that should be avoided. Look for homes in an excellent location like, good schools, economic stable and growing neighborhoods, near shopping centers and malls, near bus stops and metro rails, near hospitals and restaurants. Sometimes it is better to pay a little more for a property in a good location than getting a bargain in a place where it is very hard to sell or rent the asset. Location is often overlooked in purchasing real estate as many investor think they can overcome a bad location if the price is low enough. Out of two homes that are exactly the same, the one in the best location will command a much higher sales price and rental income. Location is the number consideration when purchasing Miami South Florida real estate.
2. Long Term – Real estate investing is a long term proposition. Don’t think you are going to be a millionaire over night. It takes years of hard work and dedication in order to succeed. Hold any property at least one year before selling it. Capital gain taxes will be greatly reduced. Consider renting the property for at two or three years. The rental income generated will help you to properly repair and renovate the property. Many investors purchased properties in the middle of real estate boom with no money down and no equity. These investors were thinking of flipping the homes fast and make a killing in the process. Many homes now in foreclosure are due to investors that were caught in the middle and now realize that real estate investing is very hard to time. Long term Miami real estate investing is the secret to a successful real estate career.
3. Lease Option – Never rent a property with a lease option to buy. Either sell or rent it straight out. A lease option usually is a disaster for both buyers and sellers. The tenant will demand a large discount of the rent to go towards the down payment and closing costs. The problem is that tenant will not buy the property at the end of the lease and the landlord/seller will have wasted a lot of money in rebates given to the tenant/buyer. Demand a 20% or 30% deposit from the tenant/buyer and a clause in the contract that if they default on the purchase they will lose the deposit. This technique will force the tenant/buyer to purchase the property or lose the deposit. The risk of losing the deposit will eliminate the tenant from taking advantage of the landlord by walking out of the contract after receiving a monthly rental discount.
4. Local – Buy real estate close to where you live. Don’t buy real estate in another state or in another country. Keep real estate investing local. Buy in your own county and in your city. The more you know about the area where you are buying the better the decision will be. The investor should always be close to the investment property. The Miami real estate investor should inspect the property often to determine any repair, roof and other problems. The landlord must inspect the property every month when collecting the rent. Check for the number of tenants actually living in the property, check for damages and destruction of the property and overall condition of the place. The investor/landlord will not be able to inspect and determine the condition of the property if it is located far away. Keeping real estate local is an essential step in real estate investing.
5. Leverage – Most real estate books and seminars tell you to use other people’s money when purchasing real estate. This technique is not the best and buyers should try to buy the property in cash if at all possible. Buying a house in cash will help you get a better deal and allow you to negotiate from a position of strength. A cash buyer will always have the upper hand in negotiating with banks, property owners, and other sellers. Cash buyers will not suffer and go into foreclosure if the market turns and they are unable to sell or rent the house right away. Like Dave Ramsey always says “cash is king and debt is dumb”. Buying an investment property in cash is an excellent way to avoid Miami real estate investment mistakes.
6. Learn – Research the property and learn everything about it before you buy. A mistake in Miami real estate investing can be very costly. Usually you make your money when you buy not when you sell. Buying the property at the wrong price the wrong place and at the wrong time could be detrimental. One mistake could wipe you out and put you out of business before you start. Ask questions to the experts, real estate agents, appraisers, mortgage brokers, and other real estate investors. Learn, research, educate yourself in all aspects of real estate investing before you purchase the asset.
It is definitely a buyers market in Miami-Dade County. Miami real estate investors have more choices than ever before when it comes to real estate investing. Investors must follow the L steps, the 6 steps real estate investor guide to successful real estate investing in order to achieve their investment goals in the Miami real estate market.