Everyone seems to be after real estate investments as that is regarded as one of the safest high return investments. There are various schools of thought on real estate investments. Let’s explore two of the most common real estate schools of thought.
One real estate school of thought talks about doing a lot of analysis. This real estate school of thought advocates studying a lot of factors which are generally linked to economic indicators. This real estate school of thought evaluates the economic indicators in many different ways. It takes its cues from a number of financial indices and how they are expected to perform in the near future. This real estate school of thought evaluates various socio-economic indicators at all levels – Global, national and local. This real estate school of thought evaluates inflation and things like value of money today and value of money next year etc. It uses all these evaluations in order to come up with predictions on how real estate industry is expected to fare in the next few years. So, this real estate school of thought tries to determine the buying power of people in order to determine the course of real estate prices. When it comes to evaluating the real estate trend with regards to a particular place (i.e. locally), this real estate school of thought takes into account various local factors like the unemployment rate, the industrial development in the region, the change in tax policies and any events that might affect the real estate prices in the area. It also takes into consideration the surrounding areas and the real estate trend in those areas. So, this real estate school of thought is really followed by arch real estate consultants/investors who know a lot about finance and put all that knowledge to use in determining the trends for real estate industry. However, that is just one real estate school of thought.
The other real estate school of thought doesn’t consider those factors at all. According to this real estate school of thought, real estate is always lucrative at all times and at all places. This real estate school of thought advocates looking for great deals. It’s this real estate school of thought that asks you to go to public auctions, look for distress sales and foreclosures, find motivated seller, rehab and sell, etc. So, this real estate school of thought focuses on getting the information about the best deals in town and taking advantage of them to make good profits.
So, those are the two real estate schools of thought and following either or both calls for time and effort (if you are to make any profits out of real estate investments).
Tuesday, December 2, 2008
Monday, June 9, 2008
Lease to Own Property Investment
If you've dreamed of real estate riches along with dreaming of being in the position to help out those who have hit a few bumps in the road along the way but are generally good people fallen on hard times then you may want to consider a type of real estate investing in which you purchase properties and then work out a lease to own agreement with people who, for one reason or another, cannot get the financing to purchase their own properties right now.
This type of real estate investing is a great way to make money while helping out your fellow man and there are many other benefits to this type of arrangement as well. First of all, renters have no stake in a property. For this reason you will often find that renters have little regard for damage done to the property beyond how it affects their security deposit. Those who have hopes of someday owning the property however are much more inclined to take great care of the interior and exterior of the home they are renting. This means that chances are good that the value of the property will actually improve during their tenure whether they ultimately decide to purchase or not.
This also benefits you because these properties are often in high demand and will fill up more quickly then the average rental property should the sale of the house fall through for whatever reason. Common reasons for sales falling through are work related transfers, divorces, and an inability to get financing even with the money escrowed to go towards a down payment. The good news is that even if the sale falls through you can try again and the house isn't likely to sit empty for very long.
The benefits to those leasing from you are many. First of all, you will be putting a predetermined and agreed upon sum of each months rent towards their down payment at the end of the (again) previously agreed upon amount of time. This allows them to save the money for the down payment without really consciously thinking about it each month. This agreement also allows them a little more leeway for making improvements, painting to taste, and decorating than your typical rental home.
Another big benefit to those leasing to own is that it gives them a certain amount of time, typically two years, to get their affairs in order and work on improving credit, saving money, and taking other positive steps towards their dreams of home ownership. They also get the opportunity to see how they like living in the home in question. Many homeowners would love to have had a two-year trial on their homes before making the final commitment. They have an opportunity to learn about many of their neighbors, the local schools, the local commute, shopping, and entertainment among other things. These things are all great knowledge for those leasing to see and enjoy first hand before making the absolute commitment to purchase the property. It also happens to keep money filling your pockets month after month with excess paid to go to the down payment reverting to you if after two years (or the agreed upon time frame) they decide not to make the purchase.
Some have a difficult time making the decision to go the lease to own route when it comes to real estate investing. They feel, for whatever reason that it is taking advantage of some people and that is something you'll have to wrestle with on your own. Truthfully speaking it is a service that many people wish was offered much more often than it is and can be a huge help to those who are experiencing a bit of a rough patch but otherwise have always been on time with payments and are, at the core, good people who deserve a break. You can quell the feelings of taking advantage by offering a fair price on an arrangement that has the potential to be mutually beneficial.
This type of real estate investing is a great way to make money while helping out your fellow man and there are many other benefits to this type of arrangement as well. First of all, renters have no stake in a property. For this reason you will often find that renters have little regard for damage done to the property beyond how it affects their security deposit. Those who have hopes of someday owning the property however are much more inclined to take great care of the interior and exterior of the home they are renting. This means that chances are good that the value of the property will actually improve during their tenure whether they ultimately decide to purchase or not.
This also benefits you because these properties are often in high demand and will fill up more quickly then the average rental property should the sale of the house fall through for whatever reason. Common reasons for sales falling through are work related transfers, divorces, and an inability to get financing even with the money escrowed to go towards a down payment. The good news is that even if the sale falls through you can try again and the house isn't likely to sit empty for very long.
The benefits to those leasing from you are many. First of all, you will be putting a predetermined and agreed upon sum of each months rent towards their down payment at the end of the (again) previously agreed upon amount of time. This allows them to save the money for the down payment without really consciously thinking about it each month. This agreement also allows them a little more leeway for making improvements, painting to taste, and decorating than your typical rental home.
Another big benefit to those leasing to own is that it gives them a certain amount of time, typically two years, to get their affairs in order and work on improving credit, saving money, and taking other positive steps towards their dreams of home ownership. They also get the opportunity to see how they like living in the home in question. Many homeowners would love to have had a two-year trial on their homes before making the final commitment. They have an opportunity to learn about many of their neighbors, the local schools, the local commute, shopping, and entertainment among other things. These things are all great knowledge for those leasing to see and enjoy first hand before making the absolute commitment to purchase the property. It also happens to keep money filling your pockets month after month with excess paid to go to the down payment reverting to you if after two years (or the agreed upon time frame) they decide not to make the purchase.
Some have a difficult time making the decision to go the lease to own route when it comes to real estate investing. They feel, for whatever reason that it is taking advantage of some people and that is something you'll have to wrestle with on your own. Truthfully speaking it is a service that many people wish was offered much more often than it is and can be a huge help to those who are experiencing a bit of a rough patch but otherwise have always been on time with payments and are, at the core, good people who deserve a break. You can quell the feelings of taking advantage by offering a fair price on an arrangement that has the potential to be mutually beneficial.
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