Benefits of Buying Land in a Commercial Area

It is common knowledge that acquiring real estate is one of the best investments you can make since it is one of the few assets that increase in value over time.

Few investments are as safe as buying land. In general, lots for residential purposes are better known. However, a piece of land in a commercial area provides additional benefits that we will talk about in this article prepared by Sky Marketing.

But before we begin, we must define what a commercial zone is and how it differs from a residential zone.

What is a Commercial Area?

We can define a commercial area as the extension of land that is located in urbanized areas and whose purpose is to establish commercial businesses and promote the local economy. An example of this is the small shopping malls that group a certain number of businesses such as laundries, restaurants, convenience stores, and stationery stores, among others.
It can also be a shopping center where there is a greater number of businesses, in addition to activities for recreational purposes.

Commercial zones are not something recent since this concept arrived in Latin America during the 20th century. Its origin goes back a few centuries in the rural communities of Ireland, spreading during the following years to the rest of the world. The creation of commercial zones had its origin in need to generate jobs and boost trade. In this way, they evolved to what we know today.

Benefits of Land in Commercial Areas

Currently , large investors opt for the purchase of commercial land, as they generate higher profits than residential land. In recent years, Pakistan has been in the sights of foreign businessmen looking for investment land that will bring them safe profits in the medium and long term. This is due to the fact that as of 2018, an increase in investments in the real estate sector was observed, generating excellent opportunities to acquire land at a good price, in addition to the fact that the advantages of investing in the land even in times of crisis are still valid.

Based on this, we mention the main benefits of buying land in a commercial area:

1. Accessible Investment

Acquiring land is more accessible than buying a residence, and in most cases, it is not necessary to resort to a mortgage loan. You can acquire commercial lots at a very good price and in comfortable monthly installments, ranging from 12 to 36 months, even more, if the case arises.

If you have capital, allocating it to commercial land is the best option. In this way, instead of spending your money, you will be saving while acquiring assets that will make your initial investment grow with little effort.

2. Return on Investment

When you acquire land for commercial purposes, the return on investment rises considerably. Not only because it is cheaper to buy land, but being in a commercial area increases its value, unlike residential ones. The return on investment is calculated based on the purchase conditions, the flow of money and the capital gain obtained. This information is what gives you the certainty that your purchase was a good investment.

In summary, it ensures the profitability of your investment in the medium or long term, both in terms of ROI (Return on Investment) and ROE (Return on Equity), since the average growth rate of the investment rate in a piece of land is between one 12% and 20% annually.

In order for the value of your land to increase, it must meet certain conditions. For example:

  • Location in an urbanized area
  • Commercial and pedestrian flow
  • The surrounding population and its purchasing power
  • Price of nearby properties
  • Maintenance and use provided
  • Time and quality of materials (in case of construction)

The price and value of the property are different concepts; the value that the land can reach is the one that will allow you to obtain the return on investment.

3. Stability and Security

As we mentioned, buying real estate is one of the safest investments you can make. In addition to protecting your finances and your future, it will guarantee you a constant source of income if you want to rent it.

Having an estate on land not only gives you the peace of mind that your money is safe, but it grows with each passing year. Investing in real estate will give you the opportunity to build a network of properties, which can serve as collateral for other businesses or for retirement.

4. Price and Additional Costs

As we mentioned, it is clear that it is much more affordable to buy land than properties with construction. And not only that, the additional expenses are lower and most of them can be purchased in monthly installments.

There are good opportunities to buy at competitive prices and it is even better when it comes to a pre-sale of land since the savings are greater, which is reflected in the increase in profits in the future.

If you decide not to build, the expenses are almost nil. For example, the property tax is much lower compared to that of a property with construction. As for maintenance costs, you will not have to worry since the wear and tear of the land is non-existent.

5. It is Ideal for Any Type of Investor

The real estate market is friendly, which allows all types of investors to acquire land for business even without being very steeped in real estate. Commercial lots are ideal for first-time investor who wants to start their own business, for a small business owner who wants to expand and even for large investors who want to expand their network of properties.


In addition to the above, acquiring a commercial lot prevents the emotional attachment from being generated, and it is important to point this out because the attachment that sometimes arises towards properties can cause accurate and convenient deals not to be closed in the future for you.

6. Varieties of Use

One thing that stops first-time investors is wondering what business to do on a vacant lot. To answer this, the main advantage of land in a commercial area is its variety of uses.

How is this? Depending on the type of commercial area, you can put a wide variety of businesses ranging from hairdressers to convenience stores and even for residential use, for example, a set of apartments for rent.

The advantages of this are many since you have a free hand to choose the type of business you want to start, or on the contrary, leave the land as it is to resell when necessary, which we will talk about later. Another advantage is that you can know the type of business that the other lands will have as they are acquired, and in this way, avoid repeating them.

7. Extra Rental Income

You can generate immediate profits with your land by leasing it, either through traditional means or even renting it to franchises.

Acquiring land in a commercial area gives you several business opportunities, for example:

  • Lease the Land: If you have no plans to sell it in the short term or build on it, this is an excellent option. A large number of companies and businesses are always looking for a well-located space to expand, which is beneficial for you since you will not have to invest in construction and the land will be generating constant income while increasing its value over time. Even if you decide to sell it at some point, the company that is leasing it might be interested in buying
  • Build on the Land: Another option is to build one or more premises, even make a small commercial plaza with which higher income would be generated with the rental costs. However, this implies a greater investment, extra effort and additional expenses such as taxes and maintenance.

In addition, if you take into account that land is a finite product —that is, it cannot be produced more than what already exists— the demand for land with a privileged location in urbanized areas will increase, and with it, the opportunity to close a good deal.

8. Possibility of Selling at a Good Price

If your land meets the requirements to generate capital gains, you can obtain an attractive profit in the medium or long term since the value of the land increases as the area develops and grows.

The benefit of this is that in terms of land, competition is low since most are focused on buying homes and are unaware of the advantages of land.

What should you Take into Account when Buying Commercial Land?

Now that you know the advantages of commercial lots, we can mention that an additional one is the ease with which you can close the sale. However, we will tell you about the main factors that you must take into account so that your investment is safe.

  1. Research the reputation of the real estate company that is making the sale. It seems logical, but sometimes it is easy to get carried away by promotions or prices, and although it is important, you must make sure that the seller is trustworthy and has experience in the field
  • Check the location of the land. Most don’t have pictures of land because there isn’t much to show. However, making sure the location is compliant is vitally important. Check that the flow of people is constant and its proximity to inhabited areas
  • Check the legal status of the land in the Public Registry of Property (RPP) to make sure that everything is in order
  • Confirm the commercial permits — for land use — and the type of business you can open in the area. For example, a business dedicated to the sale of liquor would not be appropriate if there is a school nearby
  • Keep up to date with the payment of taxes that corresponds to each party involved in the sale to have an accurate budget

Differences between Commercial Land and Residential Land

When it comes to buying land, such as NMC , you may wonder what is better, whether to buy a house or commercial land. Among the main differences that exist between them —and that will help you make a decision— are:

1. Infrastructure

A property for housing can hardly be used for business, especially in residential areas where it is not allowed. Commercial land can be residential or mixed-use, which gives you an advantage over what you can build and how you want to use it.

2. Business Opportunity

Homes have a higher level of competition and a higher level of effort is required to make a profit. In the case of commercial lots, as we mentioned, the competition is much less, which makes buying and selling more accessible.

3. Maintenance Expenses

A property generates constant expenses due to the wear and tear of the property, either by use or by the passage of time. On the other hand, wear and tear on land is non-existent, so maintenance costs are almost nil.

4. Acquisition Cost

A property intended for housing is definitely more expensive, and usually, the payment has to be made in a single installment unless the purchase is made through a mortgage loan. Commercial land is more accessible and does not require a bank loan since they have their own financing in much shorter periods of time. 

If you are thinking of investing in a commercial lot, consider doing it in Blue World City and approach the experts. We are Sky Marketing, and we will answer all your questions regarding real estate. Contact us.

Author: M. Rubayet

Pros and Cons of Having a Coach House in Ottawa

When it comes to properties and homes, there are so many options to choose from. In recent times, coach houses started garnering attention in Ottawa.

So, it isn’t surprising that you are equally considering it. Formerly called carriage house, this building type has been around for quite some time now. Historically, they were built above horse stables as a means to make sure that carriages and horses are secured during the night. You can visit here to read more about this.

Now we no longer have carriages and horses yet this building type has evolved to become better. A coach house is now any small home that is built on a property and isn’t connected to the main building. They serve several purposes from being leased out to people to being used as additional housing for extra guests, and so on.

Yet, if you are considering to move into one or get one in your home, it is only right that you consider both the benefits and drawbacks before you do. This way, whatever decision you come to would be an informed one.

Pros of Coach Houses

The following are some of the major benefits of having a coach house in Ottawa:

1. Cleaning Time is Significantly Reduced

Coach houses are otherwise called tiny homes which means they are a lot smaller than normal-sized buildings.

Because the house is small, the time required for cleaning is significantly lesser than the time you would have otherwise spent on cleaning a bigger place.

Not only will the work be done in record time, but it would also be less tasking since there won’t be much clutter to clean around.

2. Less Clutter

When you live in a smaller space, you will learn to be more deliberate with your “stuff”. Irrelevant things won’t take up space in your home, at least this is what we assume since you would need space to walk around.

You will typically keep only essentials in and let go of frivolities or pretty junks that will take up space.

3. Improved Life Quality

Most people practicing the small home movement will attest that their general happiness and life quality have significantly improved since they choose the lifestyle.

Several factors often contribute to this feeling, one of which is that they no longer feel tied down by the frivolous things they formerly had. Or by a large mortgage.

They also spend considerably lesser cash and time taking care of the home. Hence, they tend to spend the extra time and cash on leisure activities they enjoy.

4. Cost-Effective

The money spent on taking care of a smaller space is a lot lesser than what is required to care for a bigger space. Money spent on cooling, heating, general home maintenance, and property taxes will be significantly lesser.

Also, because you don’t have space for unnecessary things, your idle shopping spree will reduce as well.

5. Reduces Your Carbon Footprint

This can be your chance to give back to the environment. This is because small spaces are eco-friendly since less energy is required to run them. Also, they do not produce as much waste as larger homes.

Cons of Coach Houses

The following are some of the major drawbacks of having a coach house in Ottawa:

1. Entertaining May Be Difficult

Know that your options are limited when it comes to entertainment. Your home is small so your guest list has to be limited. If you are someone that likes inviting people over, then this drawback may be a big challenge for you.

But you can work your way around this and entertain your guests outside your home if the weather is warm enough. But then, winter will put a stop to all the fun once it comes.

2. Organization is Compulsory

If you want an Ottawa coach house then you have to up your organization skills. Every space must be properly utilized if you don’t want your house to look like an extremely cluttered closet.

If this should happen, trust us, you would hardly want to stay there.

3. You Have to Make Difficult Choices

Moving into a smaller space can be quite a challenge because you would need to let go of some of your belongings. For some people, this may be the hardest part.

Conclusion

In this article, we have discussed some of the advantages and disadvantages of coach houses. Knowing these pros and cons will help you decide if this is the right move for you or not.

Author: Antoinette Navarro

www.propertyunder100k.com thanks for the nice contribution.

Why Invest in a Drone for Real Estate Photography

The world of real estate marketing has made a giant leap – drone photography is the newest real estate marketing weapon, and probably the best one too.

Drones photography provides unique insights and dynamism to any property marketing plan. It thus ensures that your online real estate listing doesn’t go unnoticed and attracts the attention of your potential buyers, leading to a faster sale.

What are the benefits of using a drone for real estate photography?

Sells Property Faster

Real estate listings with aerial shots were sold 68% faster compared to those with standard photos. (RISMedia, 2016)

When buyers see the property’s aerial views, it attracts their attention, and they are more likely to see it in person. It thus increases the probability of the home selling faster for a higher price.

Captures Scenic, Compelling Property Images, and Videos

Drones can capture quality footage from a high vantage point, which isn’t possible with traditional photography.

Sometimes, the weather may not allow the drone to capture a perfect shot. In such cases, you can enhance real estate drone photos using image enhancement services.

Highlights Property Features

Drones with a camera can effectively show important features of the property, including pools, backyards, garages, walking paths, and more.  The drone-captured real estate photos create a sense of awe and interest that you simply can’t get from traditional real estate photography.

Creates Remarkable Virtual Walkthroughs of the Property

It’s a common misconception that drones can only be used to film exterior footage. Drones are equally capable of capturing indoors as well. The final videos created using drones are so beautiful and interesting that they can be used for virtual tours.

Gives a Competitive Edge

The use of drone in real estate industry was 20.7% in 2015 (Business Insider, 2016). It has increased to 26% in 2016 (Statista, 2017).

It’s clear that your competition is using drone technology. 

If you want to gain an advantage over your competitors, invest in the latest technology.  Real estate drone photography acts as a differentiator in terms of innovation, quality, and focus.

Drone photography not only makes your listing look better than the regular ones, but it also helps to show you as a realtor who cares about the sales process and doesn’t mind investing in the latest technology to give potential buyers a better experience.

Generates New Business

Investing in a drone is an excellent way to impress both your buyers and your clients. When you use the latest technologies, you show your stakeholders that your company uses every opportunity to stay ahead of the competition.

Provides Solid ROI

Not very long ago, aerial footage was costly, making it more of a luxury. Realtors used expensive helicopters to capture aerial photos of the property. Drone technology is much affordable and easier to plan.

The COVID-19 pandemic has been a challenging time for residential and commercial real estate market, making it necessary for realtors to rely on technology to sustain their business. If you want to make a profit in real estate, you have to embrace technology; otherwise, you’ll be left behind in this brutal race. By using drone technology for real estate photos, you can make your property listing look different and incredibly professional.

Author Bio

Rahul Agarwal is the Co-founder & Chief Business Officer at Styldod, where he has taught a computer to do interior design! Styldod provides the most hassle-free & inexpensive virtual staging solutions for real estate agents so they can sell their listings faster, and for higher prices. Rahul was also a co-founder of Mebelkart (which is acquired by Ask Me). He’s your everyday IIT Kanpur nerd who pushes the boundaries with his innovative entrepreneurial stints and is also a sound startup investor & advisor. Rahul attributes his success as a professional to the discipline he has learned from his district hockey days, being a swimmer and a gym enthusiast.

Things to Consider When You Renovate Your House

Making the choice of renovating your home is a normal decision to make after decades that can amount to much expenses and effort all at once. The real question that you must ask yourself is if you are planning to sell the place or are planning to make these changes for yourself because the answer can be quite different actually. That obviously doesn’t mean that all improvements towards your household would be different but there are many upgrades that you can use through your home that can help you sell your property easier and sometimes at a better price without having to involve yourself with any investment that can have a risky outcome. If you are planning to stay within the property then you must consider all the electrical systems throughout the long periods of time, your attitude towards remodeling might actually end up more than if you plan to consider selling but most people plan to work around a budget.

The first thing when you have to decide which part of the apartment you would like to renovate first, which room is mostly occupied or which one that is not used often that doesn’t need much touchups, questions like that will pop up but just put into consideration the cost of that needs to renovated and are these things that you will need in the long run or is it something basic that can be fixed without having to hire anyone during the process. For example, if the furniture that you have can be in the worst shape possible or if you would like an upgrade on the latest television system, it would be best to change the furniture because otherwise you would have the latest technology feeling uncomfortable in the procedure. There are certain things that it would be best to prioritize its restoration.

Where to renovate first

When homeowners would feel that most of their rooms are still in good condition and then the choice comes down to three options: the kitchen, bathroom or the living room. Not only because they are used often but these rooms will improve your chances of selling in the future by increasing the value through renovation.

The living room is usually where most people and their guests occupy their time during their time, which usually gives out the vibe firstly, so it is best to always keep tidy and clean and have everything there well organized and no cracks on the walls or rusty painted walls. The kitchen is a place that should always be organized, clean and properly set up because that’s the place where you would prepare food to serve your family or guests. On the other hand, the bathroom is the place that should always be a priority as well especially that there can be many risks and health hazards so it is best to always keep all the bathrooms a reflection of comfort and safety.

When planning to renovate, consider getting the right fixtures and appliances that are capable of providing the best service and value long term as well. Don’t be stressed about the process, there are fun stages throughout the procedure such as new paint colors, different types and designs for curtains and even different carpeting and finishing and certain places among the property. But that doesn’t mean that you should extend beyond your budget. Your budget is the most important aspect to all of this so try your best to stick to it because there are many things that you can lose focus and end up paying unexpected costs part of the whole planning process. Do the right research and plan the proper budget for yourself to renovate your place the best way possible without having to exceed your financial limits.

Try your best to ask around and ask about other people’s experiences with renovation and where and what can you get and what is the best offer for such matters. If you plan to hire a contractor to make your affairs easier, they wouldn’t have an issue providing the right references and copies of their liability insurance before they even plan to take the task at hand. At that time, it would be better to get a better picture of your contractor so you won’t have to overthink all the prices and projects being done, it would be best to ask for past projects and see the before and after pictures. You will be surprised about the amount of options that you can have once you have started your research about the products or options that you want to make through renovating your own place. Take advantage of shopping through local stores, cheaper places because you will be shocked of what you might like and where you might find it.

Last but not least, if you are looking to purchase a home that has been recently renovated, you should always know what you are getting yourself into before you make the purchase. Take a look around the neighborhood and even try to read any reports regarding inspection to find out what problems may have occurred in the past such as repainted walls or anything that needed to be repaired.

Author Bio

Mohamed El Zaafarany is a digital marketing consultant with interests in the travel and real estate industries who loves to connect businesses with their target audiences.

zaafarany.com

Image: Image by stux from Pixabay

Looking for a project that you can renovate? Find Real Estate for Sale below 100k.

5 Ways to Begin Investing In Real Estate with Little or No Money

Lots of folks believe this to enter the world of property; you require plenty of money. But it doesn’t imply that a person with less or no cash can’t begin a real estate company. In This article we have covered the full topic of – how to do real estate business with no money?

The first thing required to initiate a real estate company (or any business, really) is the ideal mindset. You will need to work out creative and innovative ways of getting financing for your real estate deal, especially when you’ve got no funds to spend.

A business is successful once you earn profit by selling your goods or services. This is true for the real estate business, also. The best thing about the property sector is that everyone can start this business with the wish to sell the property and earn high returns.

So, how can you begin a real estate company with zero capital? How can you organize financing to back up your real-estate deal?

If these questions are running through your head, then we have got helpful answers for you.

How to Make Money in Real Estate Without a License

Real estate is an exciting business. I have met a few of the most driven and enthusiastic individuals, lots of whom are currently lifelong buddies. It keeps you on your feet! When most folks consider transitioning to a career in real estate, but the first thing that comes to mind is becoming a certified realtor. With all the licensing and education requirements, however, that may seem quite daunting. Many don’t understand that you may work in real estate without a license in most countries. In actuality, a quick scan of the internet job boards shows the assortment of opportunities.

How to Start a Real Estate Business with No Money

Here Are Five Powerful ways to start a property dealing Company (How to do real estate business with no money) with zero Cash in your pocket, Plans you can learn from and apply in other businesses as well:

1. Buy a House as a Main Home

You can buy a house to live in with a zero money down VA or USDA loan, remain there for at least one year, then move out and turn the house into a rental home. Do not forget that equity building through property investing also contains the houses where you live. Additionally, the down payment and credit rating requirements for a primary residence are always less strict compared to investment property. Living on your insignificant farms first is an excellent way to avoid the more rigorous lender rules for property investment properties.

2. Purchase a Duplex, and Reside in 1 Unit while You Rent Out another One

Did you know that you could fund a two-unit duplex using an FHA loan? You reside in one unit and rent out the other property for additional cash. Along with the reduced down payment requirement, the best thing about this property investing strategy is the lease you derive from the opposite side of this duplex will most likely play a significant part of your mortgage!

3. Create a HELOC (Home Equity Line of Credit) on Your Primary Residence or another Investment Property. 

For those who have a large quantity of equity on your primary residence or another property rental property. Many banks will provide you with a HELOC, which you can then use for property investing. A normal HELOC will make a line of money in hand for around 70-80% of the instant equity in your currently owned land.

However, the HELOC can also be utilized as a zero-down mortgage to fund a rental property.

The HELOC interest rate is generally the prime rate and 1 or 2%, which now puts them around 5 percent. But the principal benefit of the HELOC is that it usually does not have any closing costs, and you’ll be able to close quickly with only a Drive-By evaluation on your premises. Some banks won’t charge you for this particular examination.

By way of instance, if the interest is $300, you can simply pay that minimum amount, or pay extra money each month to repay the principal. This permits you to make your mortgage under your terms.

Assuming the prime rate stays stable, the total amount of interest will fall as you pay down the principal monthly.

4. Ask the Seller to Pay your Closing Costs.

On many property transactions, the property seller is willing to cover buyer closing costs to incentivize a sale. However, the trade-off will most likely have to supply the full asking price or close to it. This is reasonable, so long as your lease is enough to cover all your expenses and give you little monthly cash flow. However, at full asking price in the event, the lender quotes you an entire mortgage payment (including insurance and taxes ). Which is equal to or higher than the lease you can reasonably cost, search for another deal.

5. Utilize a Bank that Pays Closing Costs or Supplies a Rebate on your Down Payment.

In combination with Freddie Mac’s Home Possible Advantage program, Quicken Loans has just promoted a 1% down payment option on single-family houses for owner-occupied properties. The buyer puts up 1 percent, and Quicken Loans provides a grant for another 2% needed. A 680 credit rating and a debt-to-income ratio of 45 percent or less will be required.

Sometimes the interest rate is slightly higher to get this deal, but some lenders are currently advertising. They’ll pay closing costs without increasing interest rates. Check with a site such as bankrate.com or do a Google search for a listing of those companies.

Whichever of these methods you opt to use, the most crucial point to bear in mind is that investing in real estate with very little money is a superb way to build wealth. It is among the very few investment approaches where you can begin without large quantities of cash. One never knows when particular property programs will come and go. So make sure to benefit from these ideas while they’re still around.

Is real estate an excellent way to earn money in 2020?

Real estate is best regarded as a long-term investment – it pays off best when held through the years. You can purchase property in 2020, but you would want to hold onto it for 20–30 years for the best results. Suppose you can find sellers that will sell their property for you at a substantial discount below market value. In that case, you can create a whole lot of cash in a couple of weeks through wholesaling or flipping. But finding people who will sell the property to you for 10–20 percent or more below market value is a whole lot tougher than finding quality properties that will appreciate and supply decent cash flow over the longer term.

How to Start Investing in Real Estate with Little Money

For many people, the term “investing” conjures up images of men in suits, tracking the exchange of tens of thousands of dollars on a stock ticker.

I am here to tell you: You do not have to be the Wolf of Wall Street to begin investing. It’s okay if you are more of a mouse of Main Street. Even if you just have a few bucks to spare, your money will grow with compound interest.

The key to building wealth is developing good habits–such as regularly putting money away each month. Replace the barista-made cappuccinos for coffee in your home, and you may already be saving more than $50 per month.

As soon as you have a little cash to play, you may begin to invest.

It’s just as straightforward. Having a robo-advisor or savings account, you can make your money work as you play. With a stock trading program, you can play a little money and learn valuable investing lessons simultaneously. Exactly like Halloween costumes, investing comes in several diverse forms. It should not be a scary word.

With so many diverse choices, investing for novices is more straightforward and more uncomplicated than ever before.

Conclusion

Property coping is a very profitable business. Use the ways mentioned above to enter this line of business even when you don’t have cash. But, do not forget that entry is simply the first step on the ladder of success. How your company grows and succeeds is mainly based on your hard work and your ability to recognize opportunities and take action accordingly.

Ready to begin taking advantage of the current opportunities in the housing market?

Whether you are new to investing or have closed a few bargains. Our new online property course will cover everything you will need to know to help you start real estate investing. Professional investor than Merrill explains the very best property plans to help get you on the path towards a better financial future.

About the author: My name is King kentus i blog at komback.com and i am the CEO of the said website.

Renting vs Buying: What to Consider

Buying a house is the pinnacle of success—or, at least it used to be. It seems as though more and more people are abandoning the popular dream of homeownership and setting their sights on financial accomplishments that are more realistically attainable, like luxury vehicles, designer watches, and worldly travels.

That’s not to say purchasing a property is entirely off the table, though. There are plenty of affordable properties under 20k that you could buy without sending yourself into debt for several decades. There are two sides to every coin, but ultimately, there’s no single “correct” answer—it all comes down to your personal priorities. If you’re debating renting vs buying, consider these points to help you decide which option suits you best.

What’s on your time horizon?

If you’re thinking about buying a house, make sure to consider your timeline in two to 10 years from now. Will you be in the same city? Have the same job? Are you ready to settle down?

The people who like to rent are usually those that value flexibility and mobility; they don’t want to be tied down to a 15- or 30-year mortgage that locks them into one location. Of course, life happens and plans can always change, but if you have to sell your home shortly after buying it in order to move to a new city or place your child in a better school district, for example, you could lose money on your initial investment.

Bottom line: Purchasing a home is an investment in your future, but it’s a long play that will require you to live in the same place for at least two years. Just like any investment, there’s risk involved should the real estate market crash and you owe more on the property than what it’s worth.

How is your credit looking?

You’ll need a positive credit history whether you’re applying to rent or buy a house, but it’s much more important in the case of the latter. Most of the time, homeowners rely on financing to purchase a property; it’s pretty rare for someone to have a few hundred thousand sitting around in cash that they can use to complete the sale in one fell swoop.

Lenders will look at several things when reviewing your mortgage loan application, including your age and income, but credit history is one of the most important qualifiers. Not only do you need a strong credit score to finance a house, but it’s in your best interest to take the time to increase your score as high as possible in order to receive low rates.

A good number demonstrates less perceived risk, so the lender will be likelier to charge less interest on top of the principal balance—saving you a significant amount of money in total borrowing costs in the long run.

Bottom line: If you’ve missed a few bill payments in the past and are sitting on mismanaged debt, you should clean up your credit history before trying to buy a home.

Do you have money saved up?

One of the biggest differentiators between renters and buyers is the money they have saved up in the bank. Even with approved financing, you’ll need to place a sizable down payment—or, the portion of the purchase price that you pay upfront in cash—to show the lender you’re invested in the property and likely to repay the loan.

Many people think they need a down payment of at least 20% of the total price in order to buy a home, but that conventional wisdom doesn’t apply much today. While it’s true that a 20% down payment can help you avoid private mortgage insurance and save you tens of thousands of dollars in the long run, this barrier to entry is pretty steep for first-time buyers.

You can buy a home with anywhere between 5-15% down upfront, and there are also down payment assistance programs that can help you come up with the cash. Renting will also require a down payment, security deposit, and money on-hand for application fees, but these costs are usually cheaper than a mortgage and its affiliated costs.

What many people fail to realize, though, is that every rent payment they make likely goes toward paying off the landlord’s mortgage, and the price comparison isn’t that far apart. For example, if rent costs a thousand per month, a mortgage payment might be only 15% more. Rather than throwing that money down the drain on rent, those funds could be better applied to building your own wealth in home equity and increasing your net worth. You could also look into rent-to-buy homes in your area that can help you achieve the best of both worlds.

Bottom line: You’ll need to budget and save up for a home, which often leads people to stick with rent that’s easier to afford while keeping up with the cost of living—but putting in the work can pay off tenfold if you apply the cost of rent toward a tangible asset that you eventually own over time.

Are you financially responsible?

When you buy a home, the hard work doesn’t end once you get the keys in your hand. There are a lot of ongoing costs that you’ll need to keep up with, such as property taxes and maintenance repairs. And, whereas a renter could simply call up the property manager to fix a leaking sink, that responsibility will fall on you to repair yourself—unless you prefer to pay someone to do it for you.

Bottom line: If you don’t want to deal with the hassle of property maintenance and the ongoing costs of homeownership, it might be better to rent so you know exactly how much money to budget every month.

Do you have competing goals?

Finally, check in with your financial goals to see if there are competing priorities. Let’s say you just graduated from college; would you rather pay off your student loans or invest in the real estate market? Do you need a down payment to purchase a new vehicle?

Bottom line: It can be challenging to pay off debt or save money when owning a home, so consider your financial goals and decide what to accomplish first.

By keeping these thoughts in mind as you compare renting vs buying, you’ll be more likely to make the right decision for your financial future.

Samantha Rupp

Samantha Rupp holds a Bachelor of Science in Business Administration and is the managing editor for 365businesstips.com. She lives in San Diego, California and enjoys spending time on the beach, reading up on current industry trends, and traveling.

How and Where to Invest in Real Estate: The 4 Best Ways to Profit

It’s not a secret that real estate can yield bigger profits than most businesses, but did you know that you can earn in this market even if you don’t sell a house?

If you have ever experienced having a landlord, there’s a good chance that you have observed how challenging it is for them to field calls from tenants all day about overflowing toilets or giant bugs. But while it may not seem like the most glamorous job, being a real estate investor can be quite lucrative.

Aside from renting out a place, there are plenty of ways that you can get a significant return on investment in real estate. The only problem is that not all investors understand how they can do so, or even know which investments can get them a significant ROI.

If you’re new to the trade, this article is for you. Read on to learn the four best ways to profit by investing in real estate.

1.   Buy a rental property

This is probably the most straightforward method of becoming a real estate investor. ‘Investment property’ refers to any commercial or residential property to be rented out to tenants without any additional fixing or flipping.

When you own a rental property, you don’t just get what you paid for, but you also build wealth-generating income. Add to that equity appreciation and the leverage you have with real estate, and you have yourself a solid investment.

Still, it is worth noting that owning a piece of rental property may not be for everyone. When looking for houses or apartments for sale, you have to make sure that you consider your interests, lifestyle, and the potential drawbacks, including:

●      Time commitment

Owning a property and renting it out to tenants requires time, even with the help of a property management agency. Make sure that you can accommodate this in your schedule. Otherwise, it would be best to try something else.

●      Cost barriers

Another major concern most investors have about a rental property is the cost of buying one. If you’re taking out a loan for it, many lenders require a minimum of 25 percent down payment for an investment property loan. Thus, it would be better to consider undertaking this type of real estate venture if you have reserves worth several months’ expenses.

●      Uncertainty of yield

Although many rental properties provide a continuous source of income for many (especially if you pick an apartment in a highly desirable location, like a Business Bay property in Dubai, for example), it isn’t a 100% done deal. Vacancies can happen, and things may break. Although there is great potential in this sort of investment overall, there are considerable short-term risks.

2.   Invest in real estate investment trusts (REITs)

Real estate investment trusts or REITs allow investors to put in their money and let it grow without actual, physical real estate.

Although usually compared to mutual funds, REITs are actual commercial real estate properties like retail spaces, office buildings, apartments, and hotels that yield income through leasing. The revenue gathered through these properties is divided amongst the REIT holders – also called ‘trustees’ – in the form of a dividend, which they can automatically reinvest to allow it to grow further.

But while REITs are an excellent way to invest in real estate for people without the time to handle rental properties, they can also be complex and varied. Some of these are traded on an exchange the same way stocks are, but others aren’t publicly traded. This means that the kind of REIT you invest in is a huge factor in how big a risk you’re taking when engaging in this form of real estate investment.

3.   Purchase a vacation rental

Vacation rentals are quite different from the rental property mentioned previously. While the latter involves having long-term tenants, vacation rentals are only occupied by tenants on occasion.

One of the perks of having this type of investment property is that you can use it as your second home when it is vacant. It would also be easier to finance vacation rentals compared to long-term rental properties, particularly if your lender considers it your second home as it means you don’t need to use the rental income to qualify for the loan.

Moreover, these properties usually bring in higher rental income per day compared to long-term rentals.

But, like other investment options, vacation rentals also have some disadvantages.

For one, marketing and managing this type of rental property requires more involvement on your part compared to those leased out long term. Because of this, the cost of property management is a bit higher, with many property managers expecting to get paid 25% of the total rent. This is more than twice the 10% standard for long-term rentals.

4.   Fix and flip real estate

If you’re a fan of real estate TV shows, then you’re probably familiar with the term ‘fix and flip’ or the act of ‘flipping houses’. Fixing and flipping a property means that you buy a home for the sole purpose of refurbishing it and selling it quickly for a profit.

This particular investment option can be quite a lucrative option in real estate, especially if everything proceeds as planned. After all, what better way to earn some cash than by buying an underpriced home, showing it little love through inexpensive renovation, and reselling it for a higher price?

However, this strategy is a little bit harder to accomplish in reality compared to how they present it on TV. First, it comes with a higher risk as the maths behind flipping properties means you have to be very accurate in your estimated cost of repairs. That alone is a challenge in itself.

Plus, flipping homes is a job that requires not only your attention but a lot of time as well. This means that if you’re a passive investor, you should consider another investment option.

Remember that fix-and-flip investments can be quite daunting, even for the most experienced professionals. In fact, even the people you see doing this on TV require a team of four people or more, with varying expertise in real estate marketing, civil engineering, interior design, and others.

There are also some rules you must know about before deciding to jump into the fix-and-flip bandwagon:

  • You make money when you buy, not when you sell. Stick to the 70 percent rule; the acquisition, repair, and holding costs shouldn’t exceed 70 percent of the amount you expect to sell it for.
  • Time is equivalent to money in this trade. Dragging your feet during repairs and selling can destroy your profit margins.

Invest wisely in property

Property investment has a high potential of helping you build your wealth. When done right, you can even make it your main source of income.

Still, it would be best not to put all your eggs in one basket. Invest wisely by choosing the right kind of real estate investment among those listed in this article.

Author: Damac Properties

5 Smart Tips to Renovate Your House and Make it More Expensive

If you are trying to sell a house and make the most of it, you better make sure to turn your property into a super-attractive home. Let us be straight about it and tell you that it’s not an easy job – at least not in most cases – but it definitely pays off to renovate your house and make it more expensive.

You’ve probably brainstormed hundreds of possibilities, but do you know the most productive house repair tricks? If you don’t know where to start, check out five smart tips to enhance your real estate and sell it for the maximum price possible.

1.     Take Care of Street Appeal

Humans are visual beings who judge other people and things almost instantly. According to reports, it takes a person only seven seconds to form the first impression. In other words, your house may have only a few seconds to impress potential buyers.

How can you help prospects fall in love with your property? The answer lies in street appeal. You can improve it using many different tricks, with the most popular being:

  • Mowing the lawn to make clear yard lines
  • Cutting the trees to make them look neat and clean
  • Replacing lanterns and other outdoor lights
  • Repainting the front fence

2.     Free Up Some Room

Do you know what really impresses house buyers? It is a place with enough room to add personal stuff and make it feel like home. This is exactly why we recommend freeing up some space before the next prospect pays you a visit.

You can do it by removing personal things from the living room, kitchen, and bedrooms. Take out your family photos, souvenirs, and all other items that might interfere with the visitor’s experience. The bottom line is that you need to depersonalize the property and let your guests imagine what they would do with it.

Keep in mind that this trick applies to all properties, from small downtown houses to 30a home real estate.

3.     Consider Kitchen Upgrades

A kitchen is almost always the central point of every house. Everything revolves around this room, so you might as well consider completing a few kitchen upgrades.

A tip that proved to be useful is to introduce natural light to the kitchen. If you have nothing but a small window, think about replacing it with a much larger window. Of course, there are lots of minor solutions to think about here such as refurbishing the floor or replacing worktops.

Any idea that can make a new chef more comfortable is welcome.

4.     Beware of Details

You probably know that the devil is in the details, a proverb that perfectly suits the real estate business. If you want to get the highest price for your house, you need to pay attention to the smallest features that are easy to repair but make a huge impact on buyers’ decisions. This is what we are talking about:

  • Wall cracks that make your house look old
  • Dust and dirt in lower corners and spider web in the upper corners
  • Broken flooring elements
  • Faucet leakages
  • Malfunctioning door handles
  • Any other broken or dysfunctional elements

5.     Think about Energy Efficiency

House owners who make their property energy-efficient can impress potential buyers and convince them to complete the purchase. Details such as wall insulations and double-glazing windows can look great in the eyes of a typical client for two distinct reasons – financial and environmental. Of course, it will also make the price of your home skyrocket.

Up to You

House renovation goes a long way, especially if you need to repair a lot of interior elements. However, you can speed up the process if you focus on the essential improvements only. In this post, we showed you five smart tips to renovate your house and make it more expensive. Can you renovate your place like this?

AUTHOR BIO

Leon Collier is a content creator at several thesis writing services in Edinburgh. Apart from working at the essay writing service UK, Leon is a blogger who specializes in business, real estate, and finance. When not writing, you can find him behind a book or playing tabletop games with his friends. Follow him on Twitter @LeonCollier12 Follow him on Twitter @LeonCollier12

Image:

Photo by Roelf Bruinsma on Unsplash

Everything You Need to Know About Rent to Own Homes

Sometimes, mortgage is not the best option for you right now. This is when rent to own homes can be a perfect way to gain home ownership in a non-conventional way.

Kitchen,luxury home,construction,real estate,free pictures - free ...

Rent to own homes are a popular concept these days because it gives people an opportunity to come a step closer to their dream home.

In this article, we will tell you everything you need to know about rent to own properties to help you make an informed decision.

What are rent to own homes?

Rent to own homes are lease options that give you a choice between buying the property or a requirement to buy it at some point in the future. The rental payments paid towards these homes include rent and funds that partially contribute towards a down payment in the future. If your credit scores are not up to the mark or you do not have the finances to pay for the down payment right now, then you can use this opportunity to hold the property till you do.

How to find a rent to own home?

Rent to own home is not usually find on the listings because they only happen under very specific conditions, such as:

  • When the owner is unable to sell the property even though it has been on the market for a while. In this case, they may list the property as rental with a rent to own option.
  • If the tenant is happy in their home, but the landlord wants to put it on the market, then the tenant may request them to have a rent to own agreement.
  • If a certain property has been on the market for a while, then a home buyer may approach the seller with a rent to own offer.

If you are trying to Find Rent To Own In Edmonton, then you can either start looking at rental listings that come with this option or a sale listing that has been around for a while.

How does it work?

Here is how the rent to own homes work:

  1. You sign an agreement with either of the two options: There are two types of agreements for someone who wants rent to own homes – a) a lease agreement with an option to buy which gives you the right to buy the home at end of your lease but it is not an obligation. But be prepared to lose all the money you paid for the rent; b) lease with purchase agreement makes you legally obligated to buy the property at the end of your lease. However, before you sign up for this contract, make sure you have a home inspection done. You may also want to get pre-approved mortgage to ensure that you will qualify for a loan when the time comes. 
  2. The purchase price is decided by you and the landlord: The purchase price of the property is negotiable and set up front. Traditionally, this price is determined by the real estate agents who negotiate on your behalf. However, agents rarely every get involved with rent to own home transactions because they have no way of getting paid until the home sale concludes. Therefore, you must do all the research and legwork before discussing prices with the landlord.
  3. You have to pay an option fee: While this fee is negotiable, it is mandatory as well. The option fee can be anything between 1-5% of the purchase value that needs to be paid up front. It is one-time and non-refundable fee that gives you the option to buy at an agreed upon price in the future.
  4. You decide the duration of rental term: At the end of your rental, you should be in a sound financial position to buy the home. The rental agreement can be anything from one to three years, depending on how long you need to sort your finances and be ready to qualify for a mortgage. 
  5. Maintenance roles should be defined: Since rent to own homes are a unique situation, the tenant and the landlord are both obligated to maintain the property and keep in good shape until the ownership is transferred. So, be sure to iron out these details in advance.
  6. Your monthly payments cover down payment and rent: You can discuss with your landlord to define these monthly payments that are usually 25% to 30% above the market rent. This additional payment is applied towards your future down payment.

Whether you are in a rent to own home situation or a regular rental, keep an eye on your finances to make yourself eligible for a mortgage down the road.

Author: Eernesto T Felder

How to Save Money When You Own a Home

Owning a home is a smart investment that allows you to build wealth and equity for yourself. It gives you the freedom to live and decorate how you want on your own property, a far cry from the typical rental experience. That said, it can also be financially demanding in a variety of ways, some of which you may not find out about until after you close escrow. In order to maintain your financial stability, you may be searching for ways to reduce your homeownership costs. To figure out how you can reduce your expenses, we must first look at some of the most troublesome areas in your homeowner’s budget. 

Some of the largest expenses of homeownership include:

  • Mortgage payments (and mortgage insurance): Mortgage payments are based on the cost of the home, your credit score, income, type of home loan you have, and more. According to the latest U.S. Housing Survey, the median mortgage payment is $1,100. 
  • Property taxes: Property taxes are required for state and local taxes. Property tax is based on the value of your home and is determined by an assessor. These taxes are used to fund programs and services within the city or county you live in. Property taxes can range from several hundred dollars to several thousand.
  • Maintenance and Repairs: The need for maintenance and repairs is an inevitable aspect of homeownership. While some may be on the cheaper side (insulating the attic), others can throw a wrench in your monthly budget (pipes bursting). According to Discover, you should plan on setting aside 1% of your home’s value per year to go towards repairs.
  • Utilities: From keeping your house cool during summer to enjoying hot showers after a long day, not to mention having the family stream all day, utilities can add up. Combined, utilities can cost upwards of $300 per month.
  • Homeowners association fees: In some communities, HOA fees are required in order to help maintain the operations and aesthetics on behalf of residents. According to Investopedia, these can average around $200 a month, but can be as high as $700 per month. 

Whether you are a new homeowner or have had your family home long enough to have raised your children in it, saving money in any way you can, can lessen the burden of homeownership substantially. While it might seem difficult—let’s face it there are many costs of homeownership that aren’t so flexible (HOA fees and repairs)—there are a variety of ways to save money when you own a home, starting with these 3 tips. 

#1: Refinance or Pay Off Your Mortgage

Mortgage payments are likely one of the biggest expenses in your monthly budget. Depending on your mortgage terms, you may be able to save money by refinancing. If you are in a better financial position when you refinance (like having a significantly higher credit score), you can qualify for a lower interest rate. Lowering your interest rate can save your substantially over the lifetime of your mortgage.

However, if a lower mortgage payment isn’t sufficient to help with your financial situation, you may also want to consider a reverse mortgage. Reverse mortgages, like those offered by GoodLife, are loans available to senior homeowners who need to supplement their retirement income. If you fall into this category, this type of loan may allow you to pay off your current mortgage, so you can eliminate it from monthly expenses.

#2: Reduce Your Property Tax Bill

While property taxes can vary significantly by state, and even sometimes by county, they are still a notable cost that virtually every homeowner has to pay. According to WalletHub, the average property tax bill in the U.S. is $2,279. For some homeowners, like those who live in states like New Jersey or Connecticut, property taxes are more than double the average.

Whether you live in a state with high property tax rates or considerably lower property taxes, you can benefit by finding ways to save when tax season arrives. There are several ways you can save on your property tax bill: 

  1. Exemptions: Exemptions can apply to a certain group of individuals, such as senior citizens, or a percentage of the property. For example, some states exempt a portion of the home’s value from taxes. 
  2. Deductions: Deductions are a tax benefit that reduces your taxable income, and in turn, lowers your total tax bill. Some common tax deductions homeowners qualify for include mortgage interest and insurance, property taxes paid (on your home, land, or a rental property), and home equity loan interest.
  3. Credits: Credits are a tax benefit that directly reduces your tax bill. There are a variety of tax credits that may apply to property owners such as energy efficiency credits and local tax credits. 

If you’re unsure of whether you qualify for one of these tax savings methods, you may want to speak to a tax professional who can help you make that determination. 

To avoid large increases in your tax bill, make sure to do research before making additions or upgrades to your home. For example, adding a pool or expanding the size of your home may increase the value of your home, meaning higher property taxes.

#3: Make Your Home More Sustainable

According to Move.org, the average cost of utilities for U.S. homeowners is $398.24. This includes: 

  • $110.76 for electricity
  • $72.10 for natural gas 
  • $70.39 for water
  • $14 for trash and recycling
  • $85 for cable TV
  • $60 for internet

If you’re looking for long-term ways to save money as a homeowner, making your household more sustainable may be an effective way to cut down on your bills (now and in the future). From lighting and appliances, to more eco-friendly materials, you can use sustainable alternatives to save money and reduce  your household’s carbon footprint at the same time. 

While it might be hard to see how this would be an effective way to save money on your home when you’re making a substantial financial investment, the savings you’ll see over time is well worth the trade-off. And, with more and more of these solutions available, the more affordable options there are. If you don’t have the money to invest in making these changes on-hand, there are special types of loans that can be used to make updating your home possible. 

Some examples of ways to create an eco-friendly home include:

  • Installing solar panels
  • Switching to a low-flow toilet and faucets 
  • Using a smart thermostat
  • Upgrading your insulation 
  • Adding ceiling fans 
  • Updating lighting fixtures with energy-efficient bulbs

If you’re not sure where to start in your home, determine what utilities are costing you the most and start by taking steps to integrate more energy-efficient solutions in your home.

Start Saving

While it might seem like a lot of effort, even implementing one of these strategies can have a big impact on your budget. Finding ways to cut down on your expenses in these three areas can also help you start a fund for the inevitable repairs and maintenance over the years, college savings, or retirement planning. Whether you are simply trying to live a more frugal lifestyle or have specific savings goals, navigating the expenses that accompany homeownership can help you make the most of your investment.

Author Bio

Alexis Maness has a Bachelor of Science in Integrated Marketing Communications and is a contributing editor for 365businesstips.com. As a professional content writer, she has over five years of experience and is a contributing writer for several San Diego magazines. Alexis specializes in topics related to business, marketing, finance, and hospitality and tourism.