Real Estate Update

Rhiannon Williamson asked:




After the technology bubble burst back in 2000 the stock markets suffered a bleak period of decline and investors chose to place their focus on bricks and mortar rather than falling share prices and they began investing heavily into real estate.

As a result the second home and the buy-to-let real estate markets in many countries around the world such as in the UK, US and Australia boomed. However, as the real estate affordability gap continues to widen in these nations and fewer first time buyers can even get onto the first rung of the real estate ladder, property price increases have begun to cool off and the ability to generate impressive rental yields and strong capital appreciation has slowed right down for at least the short term.

At the same time the stock markets around the world remain volatile and so now many more investors are looking overseas for alternatives to cooling domestic housing markets and bumpy rides on the stock market. Many are finding that there’s an abundance of real estate opportunity in emerging countries around the world which has created a strong demand for real estate finance overseas.

For those considering joining the jet-to-let real estate investment set here are the three main options available when it comes to raising real estate finance, loans or mortgages to buy property abroad.

1) In many of the nations that were the first to boom the property markets are now stagnant and because lenders have fewer customers to provide finance for they are actively targeting those who have yet to upsize, release equity or take out a second mortgage and offering them increasingly favourable terms, conditions and interest rates.

For anyone thinking about buying real estate overseas in a country where they believe it will be difficult for them to secure local finance or where interest rates are unattractive, the option may exist for them to re-mortgage their existing property or take out a loan secured against the equity in their primary residence.

The negative side of this option to raise real estate finance to buy overseas property is that the purchaser’s primary residence will be the security against the loan and naturally this introduces an element of risk.

2) The second option available to buyers looking for real estate finance overseas is getting a mortgage locally in the country in which they want to buy. Some countries such as Spain, Germany and France for example offer attractive interest rates and payment schedules to buyers from other European nations and many countries offer mortgages to international purchasers who can provide a decent sized deposit.

Anyone thinking about buying abroad would do well to also research which banks and lending institutions exist in that country, whether they are allowed to lend to foreign buyers and if so, are the criteria for getting a loan and the terms and conditions of the loan favourable?

3) The final option available to the majority of real estate investors looking to finance the purchase of a property abroad is an international mortgage provided by an international lender who usually has experience in the country from which the borrower heralds and also in the country in which they wish to invest which can make the whole finance process so much simpler…but the downside is that arranging such mortgages can be far more expensive than the first two options available to those contemplating their real estate finance options.

The availability or applicability of any type of mortgage or finance raising scheme discussed in this article is something that needs to be determined on an individual basis therefore this article does not constitute advice. Anyone hoping to raise finance to purchase real estate overseas should seek expert financial advice.

Elizabeth McLachlan asked:




Buying-to-rent refers to an investment strategy of buying a residential property to be let for profit. This type of investment can deliver extremely good returns but should be carefully considered. Here are some tips to guide you through the process of buying to let:

1. Do In-Depth Research

It is important to know what you are letting yourself in for. If this is the first time you are buying to let make sure to seek advice from an expert or other buy-to-let investors. In tough economic times it might be easier to find tenants but when the property market is booming you might struggle to avoid you property sitting empty. Make sure you enter the market at the right time.

2. Choose a Good Area

A good area does not necessarily mean the most expensive or upmarket suburb, but rather an area that shows potential. If you are buying-to-rent with student accommodation in mind, make sure the area is close to campus or within easy access of public transport.

3. Consider All Areas – Near of Far from Your Home

Buying-to-rent does not always mean you have to live close by the property. There might be better offers further away from your residence that could be a wiser investment. There are lots of ways to keep up with what’s going on at your rental property.

4. Shop Around

You don’t always have to use the same bank for all your mortgages. Seek advice from a specialist buy-to-rent broker and remember you are under no obligations to use a broker once you have asked for information. Considering all options might save you a lot of money.

5. Negotiate the Price

As with first time buyers, you are not reliant on selling a property to buy another and hence hold a smaller risk. Remember this when negotiating for a better price.

6. Consider the Negative Side to Buying-to-Let

As stated before, rental demand is often dependant on the economical times. You have to be prepared for a slower rental market and all the challenges that come with renting out property. Factor in that your property might sit empty for at least 2 months of the year – thus leaving yourself a buffer.

7. Don’t be Over Ambitious

Because there is no such thing as a 100% sound investment there will always be risk involved. It is important to consider everything before you jump in. Talk to financial advisors and seek advice from friends and family whom you trust.

8. Follow the 12% Rule

An easy way to work out an achievable rental price is to divide the purchase price by 100. This will give you a rental figure that needs to be obtained to achieve 12% gross income. This does not apply to all property but will give you a good estimate.

9. Don’t Spend Too Much on Renovation/Refurbishment

If you are a first time buy-to-rent investors you should take on a property that needs little or no renovation. This will only cause unnecessary stress. Rather decorate the interior with neutral colours that offer a blank canvas to potential tenants.

10. Find the Right Tenant

This is one of the most import steps when buying-to-rent. Make sure to advertise in the right places to attract the ideal candidate. Always screen potential tenants and try to find out as much as possible about them. Ensure a good relationship with tenants, as they will be living in your property. Make sure you have the funds to pay for a letting agent should you need one. Seek legal advice when drawing up a rental contract.

Jene Pedder asked:




Have you bought a property at auction in need of renovation or purchased a property for business purposes that needs renovation, if so you might need the assistance of professional property renovators.

Property Renovation covers a wide range of activities, from structural repairs and new building work to converting a property into a house or business premises or even a set of apartments to refurbishment of the property all with the intent of renovating the property to the very highest standard. Once the property renovation has been done properly by the professionals you are likely to add considerable value to the property, which is what property developers are after of course.

Many property developers nowadays are buying a large house or warehouse and converting it in apartments. Apartments are great for first time buyers they usually cost a little less than a house and gives first time buyers the opportunity to afford to buy or rent somewhere as well as without the stress of looking after a garden. Selling or renting apartments can make a property developer a lot of money if they put the property on the market at the right time and right price. Of course with apartments you get to sell or rent each one individually usually making more money than just selling or renting one whole property for one price.

You may have a property that needs gutting before any renovation work can start, this may seem like a simple job whacking walls down, stripping walls but it can take time and a lot of energy and if you don’t have the time yourself or want a quick turn around the best idea is to get some professional renovators who can come in and gut the property before any other works starts. It’s not only gutting of the property that may be necessary but the installation of new electricity, water or gas systems may be necessary.

After the property is gutted, the areas that may need renovating and the help of professionals are:

• Electrical services

• Installation of partition Walls

• Installation of heating storage, radiators and or air conditioning units

• Installation of cavity walls and insulation

• Plastering of all walls

• Painting and decorating

• Window installation (double glazing)

If you have a listed building property that needs renovation you need to get permission from the English Heritage. They will give you a set of guidelines that you must follow, and they will regularly come and check the progress of the renovation and that the renovation is in keeping with the age of the property and that any original features are restored carefully.

If you’re a property developer and have bought a property that’s in need of renovation before you rent or sell the property on and you require professional help with renovating any part of the building or the whole building, there are specialist renovation and building supply companies to help you. You may feel you can do parts of the renovation yourself and also save some money, but you may also want a quick turn around and know you can’t complete the properties renovation in the time you have. If so contact a property renovation company today.