Posts Tagged ‘Stock Market’
Common myths about Real estate investment
January 9th, 2010
Jeff Adams asked:
Investment industry is a vast one. Real estate in particular is huge and consists of transfer of huge sum of money. Many think it is impossible to flourish in real estate investing. Here a few myths are busted to make it clear that real estate investing is like any other industry and needs no panic.
You got to be wealthy to be a realtor:
This is the most common myth. It is a myth for sure. It is not a requirement that a realtor should be wealthy to make money in this industry. If you are capable to find a good deal then the money will knock your door. If you run out of deals then you are in a soup no matter how wealthy you are. There are buyers for a good priced house. There should not e issued to get deals anyways.
You ought to spend a lot of time:
It is not difficult to make time for a business that can take your family to Disney world within a couple of deals. Make it a family affair to lookout for houses that are out for sale. At an average we spend four hours per day for useless stuff. This will make enough time for you to make great deals.
There is great competition:
There are too many deals available too. You cannot earn anything by just sitting in one corner. Look with wide opened eyes and listen with wide open ears. And hunt, you will get hold of exotic deals that serve as an appreciation for the efforts you take. There are scores of properties that are open for sale in the market. None of the realtor can go empty if he takes some effort to reach to make a deal out of them.
Realtors don’t cooperate with investors:
A right agent will be a great source of business to you. They can provide you with great deals on a continual basis. This is possible when they get what you really want from the property and thus make you rich. There is mutual benefit between both the parties.
Real estate investing is a risky affair:
Land is the safest investment one can ever make. Stock market on the other hand is uncontrollable. Calculated risk is highly essential to make a couple of bucks. By gaining more knowledge about the industry and the way it works then you will realize that this it is not risky at all. But the education is a never ending process.
You ought to be educated before plunging into the industry:
There is never an end line for the learning curve in this industry. And learning is a process in itself. But it is not a rule that prior education is necessary. Although, the innate fire to acquire knowledge is a must, to flourish in real estate investing.
Investment industry is a vast one. Real estate in particular is huge and consists of transfer of huge sum of money. Many think it is impossible to flourish in real estate investing. Here a few myths are busted to make it clear that real estate investing is like any other industry and needs no panic.
You got to be wealthy to be a realtor:
This is the most common myth. It is a myth for sure. It is not a requirement that a realtor should be wealthy to make money in this industry. If you are capable to find a good deal then the money will knock your door. If you run out of deals then you are in a soup no matter how wealthy you are. There are buyers for a good priced house. There should not e issued to get deals anyways.
You ought to spend a lot of time:
It is not difficult to make time for a business that can take your family to Disney world within a couple of deals. Make it a family affair to lookout for houses that are out for sale. At an average we spend four hours per day for useless stuff. This will make enough time for you to make great deals.
There is great competition:
There are too many deals available too. You cannot earn anything by just sitting in one corner. Look with wide opened eyes and listen with wide open ears. And hunt, you will get hold of exotic deals that serve as an appreciation for the efforts you take. There are scores of properties that are open for sale in the market. None of the realtor can go empty if he takes some effort to reach to make a deal out of them.
Realtors don’t cooperate with investors:
A right agent will be a great source of business to you. They can provide you with great deals on a continual basis. This is possible when they get what you really want from the property and thus make you rich. There is mutual benefit between both the parties.
Real estate investing is a risky affair:
Land is the safest investment one can ever make. Stock market on the other hand is uncontrollable. Calculated risk is highly essential to make a couple of bucks. By gaining more knowledge about the industry and the way it works then you will realize that this it is not risky at all. But the education is a never ending process.
You ought to be educated before plunging into the industry:
There is never an end line for the learning curve in this industry. And learning is a process in itself. But it is not a rule that prior education is necessary. Although, the innate fire to acquire knowledge is a must, to flourish in real estate investing.
Posted in 
Tags: 
What’s the Good News for Property Investors?
August 29th, 2009
Kate Faulkner asked:
2009 has been an odd year for anyone involved in property. At the start of the year there were some fantastic bargains to be had as the media told ‘doom and gloom’ stories on a daily basis. However, all this ‘end of the world’ news meant that most sellers who didn’t have to move took their properties off the market and have stayed put.
Meanwhile, the dramatic drop in interest rates and the government’s tightening of regulations on lenders repossessing property has meant that the amount of stock on the market has fallen almost, if not more than, demand fell last year!
So we are now in a situation whereby in the auction houses, according to www.eigroup.co.uk data there are less repossessions going through than there were before the credit crunch!
Investors are also hampered by the lack of finance available as well as tightening criteria, which means only cash rich buyers can really take part in what bargains can be found at the moment.
So is there any good news for current or wannabe investors? Of course there is, and here are our top 10 good news stories for investors:-
1. Property prices are 20% less than they were at their peak in 2007. Woohoo!
2. Property prices are expected to return to their 2007 levels from 2013 so, for the right property, in the right area, there is potentially 20% capital growth or more available in the next 4-5 years.
3. Although deposits have increased from 15 to 25%, if you can bag a bargain, this might mean you don’t need any more actual cash. For example, if a property was selling for £200,000 in 2007, you’d need 15% x £200k = £30k deposit. If you can get the same property for £120,000, then the deposit is the same.
4. There are less investors, buyers and developers around to compete with you on price.
5. If you are into Buy to Let, rents are forecast to grow between 5-10% in 2010, now the accidental landlord stock has virtually disappeared.
6. If you want to self build or build to let, plot prices are down by 20%, you typically only need a 10% deposit AND if you get your sums right, you’ll earn a 30% uplift in value PLUS any market increase.
7. The new HMO legislation has given investors that get this property strategy right, a great barrier to entry, so less competition.
8. The economic hardship has lead to more people needing to rent than buy – some local authorities and charities will take properties off your hands for three years and sign a contract to maintain and return it in exactly the same condition at their cost.
9. The number of ‘accidental landlords’ has now decreased to such a level that rental income, in the main, is starting to increase which will result in less voids for 2010.
10. Some areas and property types will be in very short supply over the next five years (some won’t though!) so careful property investors will be able to make some exceptional returns!
Excited about property investment – don’t make a move until you’ve read our ‘bad news’ article for property investors!
Thinking about Buy to Let or already a Buy to Let investor?
Don’t do anything without purchasing one of our Buying and Renting a Buy to Let Property Packs to ensure you avoid costly mistakes with your property investments. The pack is full of comprehensive information covering all aspects of buying and running a buy to let property. Each pack also comes with a FREE Which? Book – Renting and Letting or Property Investor’s Handbook, plus full access to the Designs on Property website, and all the expert and independent help you require from the UK’s leading property experts.
2009 has been an odd year for anyone involved in property. At the start of the year there were some fantastic bargains to be had as the media told ‘doom and gloom’ stories on a daily basis. However, all this ‘end of the world’ news meant that most sellers who didn’t have to move took their properties off the market and have stayed put.
Meanwhile, the dramatic drop in interest rates and the government’s tightening of regulations on lenders repossessing property has meant that the amount of stock on the market has fallen almost, if not more than, demand fell last year!
So we are now in a situation whereby in the auction houses, according to www.eigroup.co.uk data there are less repossessions going through than there were before the credit crunch!
Investors are also hampered by the lack of finance available as well as tightening criteria, which means only cash rich buyers can really take part in what bargains can be found at the moment.
So is there any good news for current or wannabe investors? Of course there is, and here are our top 10 good news stories for investors:-
1. Property prices are 20% less than they were at their peak in 2007. Woohoo!
2. Property prices are expected to return to their 2007 levels from 2013 so, for the right property, in the right area, there is potentially 20% capital growth or more available in the next 4-5 years.
3. Although deposits have increased from 15 to 25%, if you can bag a bargain, this might mean you don’t need any more actual cash. For example, if a property was selling for £200,000 in 2007, you’d need 15% x £200k = £30k deposit. If you can get the same property for £120,000, then the deposit is the same.
4. There are less investors, buyers and developers around to compete with you on price.
5. If you are into Buy to Let, rents are forecast to grow between 5-10% in 2010, now the accidental landlord stock has virtually disappeared.
6. If you want to self build or build to let, plot prices are down by 20%, you typically only need a 10% deposit AND if you get your sums right, you’ll earn a 30% uplift in value PLUS any market increase.
7. The new HMO legislation has given investors that get this property strategy right, a great barrier to entry, so less competition.
8. The economic hardship has lead to more people needing to rent than buy – some local authorities and charities will take properties off your hands for three years and sign a contract to maintain and return it in exactly the same condition at their cost.
9. The number of ‘accidental landlords’ has now decreased to such a level that rental income, in the main, is starting to increase which will result in less voids for 2010.
10. Some areas and property types will be in very short supply over the next five years (some won’t though!) so careful property investors will be able to make some exceptional returns!
Excited about property investment – don’t make a move until you’ve read our ‘bad news’ article for property investors!
Thinking about Buy to Let or already a Buy to Let investor?
Don’t do anything without purchasing one of our Buying and Renting a Buy to Let Property Packs to ensure you avoid costly mistakes with your property investments. The pack is full of comprehensive information covering all aspects of buying and running a buy to let property. Each pack also comes with a FREE Which? Book – Renting and Letting or Property Investor’s Handbook, plus full access to the Designs on Property website, and all the expert and independent help you require from the UK’s leading property experts.
A MIXED PICTURE IN THE HOUSING INDUSTRY. Oct. 23, 2009
August 9th, 2009
Sy Harding asked:
Being Street Smart
Sy Harding
A MIXED PICTURE IN THE HOUSING INDUSTRY. Oct. 23, 2009.
In early 2007, after the real estate bubble began bursting and the extent of the problems from sub-prime mortgages became more clear, I predicted the aftermath would have the economy in the worst recession since 1973-74 by the end of the year (2007).
At the time, I also said the problems for the economy began in the housing industry and the recovery would also eventually begin in the housing industry.
Continuing to emphasize the importance of the housing industry, in predicting in February of this year that the stock market would launch into a substantial rally off its very oversold condition, I said the catalyst for the rally would probably be a temporary improvement in economic reports, including housing and retail sales. And that did happen.
Unfortunately, the improvement was indeed temporary. In the last month or two economic reports have turned sour again, with home sales and retail sales declining again (job losses and mortgage defaults rising, and consumer confidence falling).
It became clear that the temporary improvement in home and auto sales in the summer was due to the $8,000 government bonus to 1st time home-buyers, and the $4,500 ‘cash for clunkers’ deal for auto buyers.
The return of negative economic reports raised concerns about the sustainability of the economic recovery. So recently I have been saying that while the market was excitedly anticipating 3rd quarter earnings, I was more interested in seeing the next reports from the housing industry, due out this week.
And we have now seen and can analyze those reports.
The first was the Housing Market Index, which measures the sentiment or confidence of home-builders. Their confidence had been picking up in the summer months, although very fractionally, as they experienced an improvement in ‘traffic’ and sales.
But Tuesday’s report showed the index has fallen again, from September’s already low 19, to 18 this month.
The following day’s report showed why builder confidence is falling again. It was reported Wednesday that new housing starts previously reported for August were revised downward, and starts in September were flat. Even more discouraging, building permits for future starts fell 1.2%.
Meanwhile, the Case-Shiller S&P Home Price Index report a couple of weeks ago was encouraging. It showed that home prices rose 1.6% in July, the 3rd straight month of price increases. Unfortunately, it was old data. We’re interested in what has happened to home prices since the temporarily improved conditions of the summer months.
What makes it compelling that we see later data on home prices is a startlingly gloomy forecast by famed banking analyst Meredith Whitney. Whitney says home prices, which have already declined 33% nationally from their peak in 2006, are set to begin falling again. And not by a small amount, but by another 25% from here.
Few real estate experts think the bottom is in for housing prices. But Whitney’s forecast is seen as too gloomy, even alarmist. Yet, credit-rating firm Moody’s expects a further decline of 10% from here. There are already more than enough people owing more on their mortgages than their homes are worth. So a resumption of price declines would certainly not be a positive for the economy.
The most encouraging of this week’s housing reports, was Friday’s report from the National Association of Realtors that ‘existing home’ sales shot up an unexpected 9.4% in September. That was especially good news since the NAR’s previous report was that existing home sales fell 2.7% in August, which ended four straight months of sales increases during the summer.
The stock market didn’t take any encouragement from the report however, possibly because it’s expected that when the NAR releases more information in a couple of weeks, it will show that roughly 40% of sales in September were to buyers scrambling to get in under the wire before the $8,000 bonus program for 1st time home-buyers expires. The concern is that sales will tumble again, as happened to auto sales once the ‘cash for clunkers’ program ended.
By the way, there are some disturbing reports regarding the 1st time buyer program.
I have heard from a number of 1st time buyers who closed on their homes a couple of months ago and expected to receive their $8,000 bonus immediately. But they have yet to receive it and are being told it will be another month or two before they do. And at a hearing on Thursday the Treasury Department reported that the legitimacy of about 100,000 claims for the bonus is being questioned. That can be kind of scary for those who were assured by real estate agents that they qualify and cannot afford the home without the bonus to pay off credit cards or whatever.
Sy Harding is president of Asset Management Research Corp, publishers of the financial website www.StreetSmartReport.com, and the free daily market blog, www.syhardingblog.com.
Being Street Smart
Sy Harding
A MIXED PICTURE IN THE HOUSING INDUSTRY. Oct. 23, 2009.
In early 2007, after the real estate bubble began bursting and the extent of the problems from sub-prime mortgages became more clear, I predicted the aftermath would have the economy in the worst recession since 1973-74 by the end of the year (2007).
At the time, I also said the problems for the economy began in the housing industry and the recovery would also eventually begin in the housing industry.
Continuing to emphasize the importance of the housing industry, in predicting in February of this year that the stock market would launch into a substantial rally off its very oversold condition, I said the catalyst for the rally would probably be a temporary improvement in economic reports, including housing and retail sales. And that did happen.
Unfortunately, the improvement was indeed temporary. In the last month or two economic reports have turned sour again, with home sales and retail sales declining again (job losses and mortgage defaults rising, and consumer confidence falling).
It became clear that the temporary improvement in home and auto sales in the summer was due to the $8,000 government bonus to 1st time home-buyers, and the $4,500 ‘cash for clunkers’ deal for auto buyers.
The return of negative economic reports raised concerns about the sustainability of the economic recovery. So recently I have been saying that while the market was excitedly anticipating 3rd quarter earnings, I was more interested in seeing the next reports from the housing industry, due out this week.
And we have now seen and can analyze those reports.
The first was the Housing Market Index, which measures the sentiment or confidence of home-builders. Their confidence had been picking up in the summer months, although very fractionally, as they experienced an improvement in ‘traffic’ and sales.
But Tuesday’s report showed the index has fallen again, from September’s already low 19, to 18 this month.
The following day’s report showed why builder confidence is falling again. It was reported Wednesday that new housing starts previously reported for August were revised downward, and starts in September were flat. Even more discouraging, building permits for future starts fell 1.2%.
Meanwhile, the Case-Shiller S&P Home Price Index report a couple of weeks ago was encouraging. It showed that home prices rose 1.6% in July, the 3rd straight month of price increases. Unfortunately, it was old data. We’re interested in what has happened to home prices since the temporarily improved conditions of the summer months.
What makes it compelling that we see later data on home prices is a startlingly gloomy forecast by famed banking analyst Meredith Whitney. Whitney says home prices, which have already declined 33% nationally from their peak in 2006, are set to begin falling again. And not by a small amount, but by another 25% from here.
Few real estate experts think the bottom is in for housing prices. But Whitney’s forecast is seen as too gloomy, even alarmist. Yet, credit-rating firm Moody’s expects a further decline of 10% from here. There are already more than enough people owing more on their mortgages than their homes are worth. So a resumption of price declines would certainly not be a positive for the economy.
The most encouraging of this week’s housing reports, was Friday’s report from the National Association of Realtors that ‘existing home’ sales shot up an unexpected 9.4% in September. That was especially good news since the NAR’s previous report was that existing home sales fell 2.7% in August, which ended four straight months of sales increases during the summer.
The stock market didn’t take any encouragement from the report however, possibly because it’s expected that when the NAR releases more information in a couple of weeks, it will show that roughly 40% of sales in September were to buyers scrambling to get in under the wire before the $8,000 bonus program for 1st time home-buyers expires. The concern is that sales will tumble again, as happened to auto sales once the ‘cash for clunkers’ program ended.
By the way, there are some disturbing reports regarding the 1st time buyer program.
I have heard from a number of 1st time buyers who closed on their homes a couple of months ago and expected to receive their $8,000 bonus immediately. But they have yet to receive it and are being told it will be another month or two before they do. And at a hearing on Thursday the Treasury Department reported that the legitimacy of about 100,000 claims for the bonus is being questioned. That can be kind of scary for those who were assured by real estate agents that they qualify and cannot afford the home without the bonus to pay off credit cards or whatever.
Sy Harding is president of Asset Management Research Corp, publishers of the financial website www.StreetSmartReport.com, and the free daily market blog, www.syhardingblog.com.