Real Estate Update

Damian Qualter asked:




Land is a tangible investment – you can see what you are getting – but in addition you have the chance to enjoy it for its own sake, with the potential for considerable returns. Land as real estate investment property has risen in value by nearly 30% in the last 12 months and is up by 130% since the early 1990s.

Land compares favourably as an investment when compared with high risk stock market picks, making it an excellent real estate investment property opportunity.

Land which can be bought affordably can be turned into a real money-spinner if you get the right permissions subsequently. As an example, a plot of land in the South East, bought for £15,000, could gain planning permission for a four bedroom detached house. A builder could buy this land for £200,000 to sell a £600,000 house. This represents an excellent real estate investment property investment.

Land has some great advantages:

1. There is a finite amount of land

2. Land can increase in value in two ways

* By increasing property values, as demand outstrips supply

* By gaining planning permissions

3. There are strong possibilities of exceptional short to medium term returns

4. Any nationality can buy UK land

Recent government activity with regard to housing has made this a good time to own land. The government wants more green belt land to be built upon to increase the house-building programme over the next ten years. As other investment markets are feeling the squeeze, it is inevitable that land prices will continue to rise in the coming years. Real estate investment property such as land will shoot up in value.

The price of land has gone up by a multiple of eight in the last 20 years, with the most expensive land to be found in London and the South East. Prices here have been forced up by a shortage of residential land and an increased need for more housing.

In the medium to long term land can be a good investment, but you can make really big money if you buy land without planning permission and subsequently get permissions for that land.

So far, since it came to power, this Labour Government has approved 162 different schemes of development of green belt land. Still the shortage of housing continues to increase, with the shortfall predicted to be one million homes by 2022, unless there is a dramatic pick up in development. There is also a shortage of land suitable for development. A recent report said that an additional 70,000 to 120,000 houses per year would have to be built to keep pace with demands. 

These facts make land an attractive investment, and prices for land are expected to keep rising as demand for new housing continues to increase.

The largest gains can be made when buying land without planning permission, as the land can be purchased at relatively low cost and if the land is later granted planning permission large profits can be made.

There are obviously some things to look out for when buying land and such things as access rights, road infrastructure and many other things need to be checked out.

Land as real estate investment property has the potential to make big money if you do you homework, and it is also recommended that you use a solicitor when investing in land, to ensure that everything is in order.

Interested in investing in buying property? Look for great opportunities at http://www.buyproperty4less.com/

 

Chris Anderson, PhD asked:




Today marks a major change in the lending landscape and the way loans are sold to Fannie Mae & Freddie Mac…. Specifically, how they are appraised.

If you have not heard of Home Valuation Code Of Conduct (HVCC),just ask your favorite mortgage broker about it and more than likely their response will be something like:

&$#@%^&%$#^%$#@#$%^

(sorry, but can print what they really will blast you with)

In short, this change is designed to fix the evils of the past.

As always, there are good and bad sides to every change. We will explore the good, bad and ugly of this new approach but first, let’s synopsize what it is about.

WHAT IS HVCC (Short Story)

So what does the code say? Basically, it’s that the people responsible for originating mortgages can have nothing to do with the appraisal process.

In addition, the code also:

* Prohibits lenders and third parties from influencing or attempting to influence appraisals.

* Requires lenders to ensure that borrowers get a free copy of appraisal reports at least three business days before closing.

* Allows lenders to have in-house appraisers, so long as they’re completely independent of sales staff and their compensation does not depend on their estimates or on loan closings.

* Requires lenders to test a randomly selected 10 percent (or other statistically significant percentage) of appraisals and report any problems to Fannie Mae or Freddie Mac, which may force lenders to buy loans back from them.

* Requires lenders to report appraisal misconduct to applicable state agencies.

You can download a copy of the HVCC at: https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/pdf/hvcc.pdf

WHY IS HVCC GOOD?

Let’s face it, the appraisal business has been a bit “rigged” over the last several years.

In short, only appraisers that could “get the deal done” were used on a repeated basis by mortgage brokers, realtors, and or builders. It only makes sense that this is the way the system worked. If you were a realtor, or even if you were a new home buyer, the last thing that you want is for your appraisal to come up short and the deal fall apart.

Since appraisals are somewhat subjective, the appraisers that always got called were those where the subjectivity worked out in favor of the deal.

However, many appraisers felt very pressured to make the deal work….. their future business counted on everybody walking away happy. Of course we are now seeing some of the consequences of that type of approach with our current housing and mortgage crisis.

WHY IS HVCC BAD?

Because now your purchase or sale is a crap shoot.

Why?

Simply because appraisers will be pulled out of a “blind pool”. From my personal experience, only about 20% of appraisers are good at their profession (you know, the ole 80/20 rule).

So you now have an 80% chance of a mediocre appraiser being assigned to your appraisal. Are they really capable of determining the value? I am skeptical.

In addition, most the incentives for the appraisers are now set up to appraise low….. The safe play is to come in BELOW what you may be thinking is actual value.

CONSEQUENCES

HVCC will be implemented May 1, 2009. Many people believe, myself included, that this is going to severely disrupt the home seller market, and investor market, for a period.

Everybody’s major hope is that soon, tweaks will be made into something that is workable for all in the industry.

Vikram kuamr asked:




If you are someone who is looking to sell your house in a hurry without losing too much on the value of the house, as would happen in the case of most distress sales, then you need to carefully weigh up your various options. The usual thing most people do, is to advertise their house for sale with an estate agent. This would entail paying for the solicitors fees to draw up the sale agreements and to verify the deeds and title to the property. It would also require you to shell out money towards the fees for the estate agent and suffer cutbacks on profit as well in case of a successful sale.

 

The fees paid and the money spent would add up and before you know it you would have lost more money than you had planned on when you thought of selling your house in the first place. In most scenarios the real estate agents would reduce the value of the house to enable a quick sale which would not be good for you but will fetch the agent his usual fees and commission nevertheless. There is however other avenues for selling your house fast that you can explore which include using the services of online estate agents.

 

Most estate agents also run their show online on the internet by putting up their own websites or by having a space on a very vibrant property portals. Nevertheless, most of these agents do not concentrate on their online sales activities which give significantly less profits for them but are content with their real world sales activities that are more profitable. This leads to them neglecting on the active marketing of real estate through their websites or online addresses and thus makes most of these online estate agents non reliable. There are however other agents who have profited immensely from having an online presence either exclusively or in combo with a real world presence in the field.

 

Opting to sell your house online is a very simple process and the cost associated with such a course of action is usually much less than using a flesh and blood agent who would **** you dry of money. The only requirement in most cases would be to fill up an online form and in most cases you would not have to shell out any money. The online form would require minimal details such as the address at which the property is located, the name of the owner and contact numbers. The responses start coming in within 24 hours usually. This makes it one of the easiest and fastest ways to sell your house.

 

In addition to being a quick and easy way to put your house up for sale, selling your house through and online estate agent also means that you would be spending less money on fees and commission. The exposure that your house would gain is maximum. Even people from other areas could view your advertisement and if someone is planning to move to your place from another area, they could be a prospective buyer. Another advantage is that you would not suffer from loss of profits in a distress sale when you use an online estate agent.

 

Clifton Waldrep asked:




To start off, I don’t own a real estate property management company, nor am I trying to send business to any real estate property management company. The purpose of this article is to make sure that you think things out (Look before you Leap) when you purchase your first rental property!

If you currently own rental property, or are planning on purchasing rental property then read on! It takes an effort to find good tenants. Everyone hopes to find someone who will appreciate your property and maintain the standard of living that was offered to them when they became your tenants. A possible solution is to find a competent real estate property management company.

Ideally, a company that specializes in the type of property you currently own, or are looking to purchase? Be it, a home, condo, apartment building, commercial, etc.

Who will be responsible for property maintenance?

In every state the law mandates that landlords perform certain repairs to maintain the property and keep it habitable. When searching for a real estate property management company, ask for referrals from current clients who use their maintenance service? Find out if they have a good reputation?

If you have no experience and/or no desire to manage your rental property, then I would suggest you hire a professional real estate property management company to over see your investment. It can take you years learning everything you need to know about managing your properties.

If you really have your heart on managing your properties there is one simple thing to do right from the start! That is setting up a DBA (Doing Business As). Create a name for your real estate property management company, and then file with your Local County Clerk’s office. Rent a P.O. Box where your tenants can send their rent payments. You don’t want to let your tenants know where you live! This could become a disaster! Also, don’t for get to open a checking account with your bank.

You might even want to use a professional business name instead of your real name when dealing with your tenants, and/or repair vendors? This really comes in handy especially when your tenants are asking for the carpet to be replaced? When you just spent $4,500.00 replacing for the last tenants, just before your current tenants moved in? You could inspect the carpet, then tell your tenants that you would have to talk with the owner to see if he/she would approve replacement of their carpet?

Side Bar: The only time I replace carpet is when the unit is vacant, to prepare for the next tenants to move in. If the carpet has a tear, then I just send out a carpet repairperson to fix it! This is a lot less expensive then installing brand new carpet!

This way they can’t confront you, because you don’t own the property, you just work for the real estate property management company? This places an invisible wall between you and your tenants, so you won’t be nickel and dime to death! Because right after you replace their carpet, the next thing they will ask for is getting their apartment painted, but not before replacing their kitchen & bathroom cabinets!

I hope by now you are starting to see how some tenants will take advantage of your good nature? Now I’m not trying to scare you out of having your very own real estate property management company? What I’m trying to do is warn you… it’s a lot of work! You must have the time and patients to deal with all types of people?

In the long run you can save a ton of money being your own real estate property management company and performing most of the repairs yourself. Of course you will need some maintenance experience when it comes to replacing toilets, sinks, faucets, etc. Plumbing will be your biggest repair expense with rental properties.

So knowing something about plumbing can really save you some serious money! Stop by your nearest hardware store or home Depot and check out their books on home repairs. You can also go to the library and check out one or two books on plumbing repairs?

In conclusion, if you manage only one or two buildings, then I would say… give it a try? If you plan on buying more then two, you probably will want to hire a professional real estate property management company. So you can spend most of you’re time searching and buying more properties.

Well, I hope that this gives you a little insight on real estate property management?

One last thing, when buying your rental properties try to purchase them fairly close together so you won’t have to do too much driving getting from one property to the next? You’ll need all the time you have focusing on more important things!

Good luck to your success!

Donald Plunkett asked:




Many property owners are only vaguely familiar with a real estate lockbox. They may have remembered a buyer’s agent utilizing something to gain access to properties or they may equate lockbox with some sort of banking practice or the 2000 presidential campaign and the related satire stemming from the extensive use of the word “lockbox” when describing social security and other economic issues. For those who don’t understand, a lockbox is used in real estate to secure a key to the property (it might include multiple keys to gates, security screens, front door, etc.). Once the key is removed, it can be used to open the door and enter the property.

What people do not realize is that the lockbox is an extremely powerful tool in obtaining showings for a property. Exposure to the maximum number of buyers increases one’s chances of selling a home. Think about it, you have a property in Tucson. A buyer who is relocating from New York is on a short weekend trip to look at properties. She needs to see as many properties as possible in a short period of time. Sunday she will return to New York and does not plan on coming back for awhile. Her buyer’s agent wants to allow her to view 10 properties per day, but doesn’t know the exact times they will be at each property, only a range. The agent is also aware that his client may decide in the car that she does not want to view a particular property for whatever reason. It is a dynamic situation and while the agent is comfortable providing a range of times he might be at a particular property, he would like the flexibility to view properties and cancel or move up showings based on his client. As a property owner, having a lockbox can provide an advantage in cases such as these.

There are two types of lockboxes used in real estate: mechanical lockboxes and electronic lockboxes. Mechanical lockboxes can be accessed by anyone that knows the combination or code, whether they are a real estate agent or not. They are frequently used by property management companies and general contractors that have a lot of different types of people that need to obtain access to the property. Electronic lockboxes can be accessed by a member or affiliate (e.g. an appraiser) of the local Realtor association. They are sometimes called Realtor lockboxes or e-lockboxes. There are only 2-3 major manufacturers of the electronic boxes, so they are somewhat expensive, but most people agree that the benefits outweigh the costs.

Besides increasing showings, users of an electronic lockbox also benefit from the fact that the box functions as an advanced tracking device. You can typically find the name, brokerage name, and phone number of any Realtor that has entered the property as well as the time of the showing. You can see if a particular Realtor has returned to the property on multiple occasions. Additionally, if the lockbox is ever lost or stolen, it can be disabled. Finally, most electronic lockboxes come with a feature that allows them only to open between selected hours, such as 8am to 8pm. The main negative surrounding lockboxes are the potential that someone could enter your home in a malicious fashion, such as to steal property or commit a crime. While these incidents are very rare, you should still be mindful of them and decide what is best for you. You also need to weigh the pros and cons of whether you would be better off meeting someone at the property who had similar intentions.

Next time, you list a property for sale, you should strongly consider using a lockbox. They have greatly increased the ability to show properties and feature many other benefits.