Monthly Archives: June 2016

How to Start Investing in Real Estate

Real estate has always been a good investment option. It is also a much safer option compared to other forms of investment such as the stock market. However, before you invest your hard-earned money, it is necessary that you are aware of the risks and expected returns from the investment. So, this article will give you some pointers on how you can go about beginning your foray into the real estate business.

Market Study
If you wish to invest in real estate, but have a limited budget, then conduct a thorough market research to know about attractive investment opportunities. By doing a careful study, you will understand which property deal suits you the best and will generate the maximum returns.

Fix Your Budget
First fix the budget for your realty investments. Decide what is your investment capacity first. Before you decide the amount to be invested, take into consideration factors such as your annual income, current liabilities, monthly expenses, etc.

Finalize the Type of Property
There are different kinds of properties you can choose from. Apartments, row houses, independent villas, bungalows, penthouses, offices, shops, residential plots or commercial land are some options which you can explore. Be aware that commercial establishments will cost much more than the residential ones.

Finalize the Location
Location plays a crucial role in all kinds of real state investments. Whether you get good returns for your property will depend on where your estate is located. So, study the areas in the city and find out the current property rates and scope for further price appreciation there. Ideally, you can try to invest in upcoming locations where you can get properties at cheap prices.

Check the Developer’s Reputation
Checking the reputation of the property developer/builder from whom you will be purchasing the property is extremely important. You should buy a property from a developer who has a good track record of delivering properties on time and having the best construction standards and quality in the real estate industry. Make sure that the developer has followed all the necessary laws while constructing the project and there are no controversies and legal hassles.

Check the Plan
The next step is to check the floor plans with the developer. Visit the developer and understand each and every minute detail and specification of the project. Take along a property agent/realtor whom you know so that he can guide you in your property selection.

Get Finance from Lenders
Real estate is one of the biggest investment options in the life of any person and a lot of money is required for that. So, you might feel the need for finance and hence you should approach top banks with your income and personal information details. Also take the project details to get your loan sanctioned easily.

One way to invest in real estate is by selling a property you own and buying a new one for higher returns. So use these tips and some advice from an expert before you dabble in the world of real estate.

Tips For Buying a Commercial Property

If you are considering investing in brick and mortar and are thinking of buying commercial real estate, there are many points of consideration. Unlike any other investment, putting your money here, can be a tough decision to make.

Investment Tips

Commercial real estate investment is all about creating a cash flow generating asset and all your efforts need to be directed towards ascertaining its potential value. It’s no secret that these are times of economic recession and the real estate market has taken a beating. However, if you think optimistically, this is a time of opportunity, as a piece of real estate, which was beyond your reach in boom time, can be bought at a substantially lower price today. Here are the major points of consideration, while purchasing a commercial property. These are certain pertinent questions, which need to be asked, that help you assess the profit potential of a real estate investment and make your choice simpler.

What Kind of Property are You Looking For?
Even before you can start thinking about this investment, you need to have a plan about the revenue generating mechanism or business plan, that is going to reap cash for you, through this investment. Are you planning to buy a rental property, business premises for your company, or a shop? If you make up your mind regarding this, you’ll know what type of property to look for. That will simplify your search.

What’s Your Budget?
The next thing to ponder upon is to come up with a maximum purchase limit. If you are planning to make the purchase using a mortgage loan, then you need to decide on the maximum down payment, that you could make. A knowledge of your purchase limit will see to it that you don’t go overboard, when negotiating on price and land up in a soup. Start looking for banks that offer commercial real estate mortgage loans, once you decide the property, which you plan to buy. There are many financing options to choose from.

How to Search For Them?
There are various channels through which you can search for such properties. Online and print classifieds are a place to start your search from. Approaching a real estate agent is one of the best ways of searching, as they have extensive databases of properties for sale. They can find you a property, that fits within your price range and requirement. Be on the lookout for properties being auctioned.

How to Evaluate the Revenue Potential?
When it comes to evaluating the value of real estate, with respect to commercial gain, location matters. Consider what is the scale of profits, that you can hope to make, from those premises. If it’s a rental establishment, calculate what is the cash inflow. If you plan to open a shop or your company office there, location is the most important factor.

Ensure that title of the property is clear and get an architect to evaluate the structural solidity of the building, if it’s an old one. See if there are any pending tax payment issues associated with it. Get a real estate consultant to provide you with a valuation of the property, according to current market prices. This is known as an appraisal. When all of your homework is done and you choose a property, make an offer to the seller yourself, or via his real estate agent.

Negotiate for a fair price and arrange for a mortgage if the deal goes through. See to it that all the legal formalities are handled properly. A real estate attorney can handle it for you. Once you buy the property, you could either opt to manage it on your own or let a management firm handle it for you.

To sum up, leave no stone unturned in evaluating the earning potential of a property before you buy it. If the potential is substantial, the risk you take while opting for a mortgage loan, is lessened.

Land Buying Tips

If you are thinking of making a land investment, for building a home or for business; it is very important that you study as much about it, as possible, before you buy it. Its value has a reputation of appreciating over the years. So, buying land is almost always profitable. However, the rate at which the value appreciates, is totally dependent on the rate of development around the area. So, make sure that you choose it smartly.

Tips on Buying Land

Land remains the most sought after asset in the world. All things can be manufactured, but land can’t. It is the most sound investment to make. It is a more secure investment than stocks or bonds. However, investing in terra firma can be quite a tricky business. There are many issues to deal with and many things to watch out for. It can be a complicated business and one needs to carry out the whole business very carefully. Here are some tips, for those who came in late, in search of their promised land.

Location, Location, Location
When it comes to buying land, there are three important things to think about, which are location, location, and location. Yes, location matters. First of all, if you are clear about what purpose you are buying it for, your search is simpler. It helps when you know exactly what you want. See that you have electrical connections around your land so that you can get one easily, when you go into the construction phase. Water supply is another thing to look out for.

If water ain’t there, not much is going to grow there and life will be difficult. Ensure that your land is easily accessible by road. This is very important, as otherwise, transporting building material during construction becomes difficult. Also, it’s good to choose land, that is close to your place of residence. Otherwise, commuting will consume a major part of your time. Be ready for a lot of travel, to choose your promised land. Start with real estate advertisements in papers or approach real estate agents.

Check Topography and Surface Features
Check the topography of the land carefully. Avoid marshes and lowlands, as they are difficult to build upon. Hill slopes are also tough terrains to build upon. If you intend to buy it for agricultural purposes or otherwise, it is a good practice to get the soil type and quality checked.

Check if the land has an underground base of bedrock, that can hold water. If the bedrock’s there, possibilities of finding water underground are greater and may solve your water needs, in times of scarcity. If you are buying it for residential purposes, you must think from a landscaping point of view and evaluate it accordingly.

Ensure Title Clearance
Ensure that the land title is clear and there are no legal problems associated with it. Get the legal papers checked for authenticity. Many adventurers who were careless, have been conned by false papers and duped out of their life’s earnings. Take legal advice and professional help in making your purchase agreement.

Market Research
Research market prices in the area before going into a deal and agreeing on a price. Get a real estate appraisal. This way, you can ensure that you are paying a reasonable price. It is better to pay for the land in cash directly, instead of going for real estate loans. Loans can be very costly and can put a lot of financial burden. Saving money and buying your land within that budget, is a better option.

Land dealings are never simple. Rounds of negotiations and bargaining go on for days, before a price is agreed upon. The process can be even more complicated, when estate agents are involved in the process. Be patient and persistent. Ensure that everything about the deal is carried out through proper legal channels and consult a real estate attorney.

Tips For Choosing a Realtor

A realtor is a real estate professional who is a member of the National Association of Realtors. This association follows very stringent code of ethics and the members work full-time as real estate professionals. They are licensed by the state to help people in buying and selling properties, and need to meet set standards of education, experience, and examinations. A real estate agent may not be a realtor. If you are interested in buying a property, it is better to choose a realtor over a real estate agent.

How to Choose a Realtor

  • The first step is identification. You can ask your friends and relatives for referrals, or look for advertisements in websites and local newspapers. Identify around three or four of them, call them up and fix appointments for interview.
  • Interviewing realtors will help you in understanding their approach and personalities. This will let you access whether any one of them would be the right person to help you search a home or not.
  • It is important to check whether the person you are interviewing is actually a realtor or not. You can ask him to
  • show his work permit so that you can rest assured that you have chosen a genuine agent.
  • During the interview ask questions like – how often will you provide new listings? When can I expect to hear from you? How fast will you call back if you miss my call? etc. The realtor’s answers to these questions will give you a clear picture about his capabilities and style of working.
  • An experienced realtor has more contacts and is generally more updated than newcomers. Therefore, ask for the agent’s work experience and try to figure a rough idea about the number of dealings he has conducted so far.
  • Ask the agent if he is Internet savvy because agents who are well-versed with the Internet are more likely to send an immediate email about new property listings, and respond to your queries quickly.
  • Look for strong negotiation skills. An agent who is an expert negotiator can be of great help in settling issues between the buyer and the seller, and can conduct the whole process in a clever and efficient manner.
  • Select an agent who has mostly handled dealings from the buyer’s side as he will be proficient in it.
  • A realtor who handles property dealings under your price range and understands your requirements will be able to help you better in your search.
  • Referrals and testimonial letters can help in identifying a good realtor who knows his business well. Therefore, do not hesitate to ask for these documents during the interview.
  • Even though the seller party is liable to pay commissions to property agents, do not simply assume it. Talk about the agent’s charges for the complete process so that there is no confusion about it.
  • After the interviews, take time to analyze which realtor will be the best for you, make up your mind and appoint him as your property agent.

Selecting a realtor over a regular real estate agent helps, because they can access Multiple Listing Services (MLS) which is specifically available for members. This service informs members about new property listings in a particular area and increases the chances of finding a suitable house for the buyer. You can also choose to buy a house without a realtor, but then, you need to be extremely cautious and take legal advice, if required. As said before, owning a property is a dream and buying a house involves a lot of money. So it is simply not viable to choose a person who is not competent enough to help you find the best deal. That’s why, do all that it takes to find a good and reliable realtor and once this job is done, he will help in cracking the best property deal for you.