Tips on Property Investment|The Best Investment Properties Advice
Nov
12
Filed Under (Property Investment Advice) by admin
Andrew Stratton asked:
Investing in real estate has generally been considered as a relatively safe and profitable venture. Over the past few years however, the housing market has proven it is not immune to volatile ups and downs nor it has been safe from speculators and scheming fraudsters. Fortunately, during the same time, commercial properties have largely escaped the chaos and ruin that the residential market has experienced.
In fact, a recent study by Deloitte Consulting LLP, a subsidiary of the financial accounting firm Deloitte & Touche USA LLP, found many reasons to believe that commercial values are fairly consistent, making them a great real estate investment choice.
“In prior boom cycles, commercial real estate has responded by overbuilding. The industry has clearly learned its lesson because this time commercial real estate is enduring a credit crunch – not a crisis – partially because it resisted this urge. No doubt, the industry is in a strong position to withstand a recession, should one occur, and commercial real estate remains a viable investment option for those seeking to diversify and insulate their portfolios from market volatility,” said Dennis Yeskey of Deloitte’s real estate capital markets practice, as quoted in a press release on the company’s website. “Capital flow will return in 2008, with the exception of highly leveraged deals, and new opportunities are being sought in distressed debt funds, niche opportunities, and global markets.”
The “Real Estate Capital Markets Top Ten Issues” 2008 – study found that although profits have been skimmed as the residential market has failed, commercial property investment values have held steady in many places, and have seen modest growth in others.
Plus, the surveys detailed, because of the shakeup in the housing market, mortgage underwriting rules that were also becoming too loose in the business world are now being examined and revised. The result is that investment loans will be safer, with less risk of fraud.
Another finding is that investment values have been strong in the office and industrial segment of this market, making them a much better investment at this time than retail properties or multi-family dwellings.
Additionally, funding for commercial property investment is much more readily available today than it is for residential real estate purchases. Of course, large down payments are still required as well as well-documented sources of income and assets, but the study found that lenders approve conservative commercial property investment loans quite often.
While some shifting of prices and expectations still need to take place, the study concluded that commercial market values have shown good stability and potential for pretty profits.
Going forward the study said, “Investors would do well to stop comparing CRE (commercial real estate) returns to the previous few years’ performance, and to take a closer look at how these returns fit into the bigger picture. Returns will probably be lower, but when compared to other investment categories (stocks, bonds, etc.), CRE remains an attractive investment vehicle due to its stability and opportunity for diversification.”
Yvonne
Investing in real estate has generally been considered as a relatively safe and profitable venture. Over the past few years however, the housing market has proven it is not immune to volatile ups and downs nor it has been safe from speculators and scheming fraudsters. Fortunately, during the same time, commercial properties have largely escaped the chaos and ruin that the residential market has experienced.
In fact, a recent study by Deloitte Consulting LLP, a subsidiary of the financial accounting firm Deloitte & Touche USA LLP, found many reasons to believe that commercial values are fairly consistent, making them a great real estate investment choice.
“In prior boom cycles, commercial real estate has responded by overbuilding. The industry has clearly learned its lesson because this time commercial real estate is enduring a credit crunch – not a crisis – partially because it resisted this urge. No doubt, the industry is in a strong position to withstand a recession, should one occur, and commercial real estate remains a viable investment option for those seeking to diversify and insulate their portfolios from market volatility,” said Dennis Yeskey of Deloitte’s real estate capital markets practice, as quoted in a press release on the company’s website. “Capital flow will return in 2008, with the exception of highly leveraged deals, and new opportunities are being sought in distressed debt funds, niche opportunities, and global markets.”
The “Real Estate Capital Markets Top Ten Issues” 2008 – study found that although profits have been skimmed as the residential market has failed, commercial property investment values have held steady in many places, and have seen modest growth in others.
Plus, the surveys detailed, because of the shakeup in the housing market, mortgage underwriting rules that were also becoming too loose in the business world are now being examined and revised. The result is that investment loans will be safer, with less risk of fraud.
Another finding is that investment values have been strong in the office and industrial segment of this market, making them a much better investment at this time than retail properties or multi-family dwellings.
Additionally, funding for commercial property investment is much more readily available today than it is for residential real estate purchases. Of course, large down payments are still required as well as well-documented sources of income and assets, but the study found that lenders approve conservative commercial property investment loans quite often.
While some shifting of prices and expectations still need to take place, the study concluded that commercial market values have shown good stability and potential for pretty profits.
Going forward the study said, “Investors would do well to stop comparing CRE (commercial real estate) returns to the previous few years’ performance, and to take a closer look at how these returns fit into the bigger picture. Returns will probably be lower, but when compared to other investment categories (stocks, bonds, etc.), CRE remains an attractive investment vehicle due to its stability and opportunity for diversification.”
Yvonne
Nov
12
Dan N asked:
Hi. I received a 1098 substitute form in the amount of $2000 for interest on an investment property loan. Funny thing is, I sold that property on Dec 30, 2005. So for my 2005 tax return, I submitted a form 4797 for the sale of the property. So maybe the loan wasn’t paid off right away and interest accumulated in 2006. The 2006 interest must have been paid from the closing costs… after the closing on Dec 30, I did not personally pay for any additional expenses on the property. So how do I report what would normally be a business expense of $2000 for a property that I never owned in 2006? Or maybe I should not include the 1098 in my 2006 return since I did not pay anything on that loan in 2006???
Hi. I received a 1098 substitute form in the amount of $2000 for interest on an investment property loan. Funny thing is, I sold that property on Dec 30, 2005. So for my 2005 tax return, I submitted a form 4797 for the sale of the property. So maybe the loan wasn’t paid off right away and interest accumulated in 2006. The 2006 interest must have been paid from the closing costs… after the closing on Dec 30, I did not personally pay for any additional expenses on the property. So how do I report what would normally be a business expense of $2000 for a property that I never owned in 2006? Or maybe I should not include the 1098 in my 2006 return since I did not pay anything on that loan in 2006???
Thanks for any good advice.
Leonard
Nov
11
Filed Under (Property Investment Advice) by admin
gabriele m asked:
I believe property investment in specific locations is good because investment is not a short term task.
Just look at how much property investment has been done by Russians by the Black See, lately. The amounts they spent are unbelievable.
I am against not investing at all because, more recession will follow.
Best tourist destinations like Tenerife or the Caribbean will not lose their attractions. People who rather spend on prime holidays will always be around. If less now than more later again….
How do you feel about all this?
Jim
I believe property investment in specific locations is good because investment is not a short term task.
Just look at how much property investment has been done by Russians by the Black See, lately. The amounts they spent are unbelievable.
I am against not investing at all because, more recession will follow.
Best tourist destinations like Tenerife or the Caribbean will not lose their attractions. People who rather spend on prime holidays will always be around. If less now than more later again….
How do you feel about all this?
Jim
Nov
11
Filed Under (Property Investment Advice) by admin
Surinder Ahitan asked:
Real estate is a gamble. Yes, there’s plenty of money to be made in it, even with the current downward financial trends, but a property investment opportunity isn’t an automatic way to get a good return on your money.
There are plenty of websites that will show you “how easy it is” and offer you a number of “get rich quick” opportunities into which to sink your capital, but think about it, if it were that easy, wouldn’t there be more people doing it? Wouldn’t there be less middle people trying to hook up investors with deals? Of course there would, and that’s why I’m here to get you to stop making an irrational decision to jump on the first property investment opportunity that comes your way!
Before you even start thinking about putting your capital into a real estate project, you must have a well thought out strategy about what you hope to get out of the deal. For example do you want to buy to flip, resell as fast as you can for a higher price? Or are you more inclined to put your money into property you can let for an additional income? Speak to experienced property investors and learn from what their experience. Read everything you can about the current property market, and keep your knowledge base up-to-date.
Hire professionals who know what you don’t. Even learning all there is to know about the current state of the property market around the world, you will find that paying for a professional property legal expert will ensure that you don’t lose out in terms of property tax issues. They will also ensure that you have all the relevant paperwork completed for both buying and selling when you are involved with a property investment opportunity.
Your regular solicitor may well know something on property law, but I advise you to get someone who specializes in property law to handle your investment transactions as they will be much more familiar with the industry and any scams that are making the rounds. Try to find someone who is recommended by at least two other real estate investors, or ask for letters of recommendation from anyone you think might be suitable.
Watch out for property auctions. These are a great way of getting a good bargain, and can give you a good return on your money, but only if you know what you’re doing. The problem with auctions is more likely to be you, than the property! The property ought to be as listed, but you first of all need to do your homework and assess how much the property is worth and how high a ROI you can expect from it.
However, in the electrified atmosphere of an auction room, it’s easy to increase any carefully calculated bid maximum that you’ve set yourself. If you’re going to find a property investment opportunity via the auction route, remove the possibility of lowering your return by getting someone else to attend the auction and bid on your behalf!
There are many other things you can to maximize your profit margins on any property investment opportunity, but following these 3 simple tips above will get you started on the road to what should be a good return on your capital.
Annie
Real estate is a gamble. Yes, there’s plenty of money to be made in it, even with the current downward financial trends, but a property investment opportunity isn’t an automatic way to get a good return on your money.
There are plenty of websites that will show you “how easy it is” and offer you a number of “get rich quick” opportunities into which to sink your capital, but think about it, if it were that easy, wouldn’t there be more people doing it? Wouldn’t there be less middle people trying to hook up investors with deals? Of course there would, and that’s why I’m here to get you to stop making an irrational decision to jump on the first property investment opportunity that comes your way!
Before you even start thinking about putting your capital into a real estate project, you must have a well thought out strategy about what you hope to get out of the deal. For example do you want to buy to flip, resell as fast as you can for a higher price? Or are you more inclined to put your money into property you can let for an additional income? Speak to experienced property investors and learn from what their experience. Read everything you can about the current property market, and keep your knowledge base up-to-date.
Hire professionals who know what you don’t. Even learning all there is to know about the current state of the property market around the world, you will find that paying for a professional property legal expert will ensure that you don’t lose out in terms of property tax issues. They will also ensure that you have all the relevant paperwork completed for both buying and selling when you are involved with a property investment opportunity.
Your regular solicitor may well know something on property law, but I advise you to get someone who specializes in property law to handle your investment transactions as they will be much more familiar with the industry and any scams that are making the rounds. Try to find someone who is recommended by at least two other real estate investors, or ask for letters of recommendation from anyone you think might be suitable.
Watch out for property auctions. These are a great way of getting a good bargain, and can give you a good return on your money, but only if you know what you’re doing. The problem with auctions is more likely to be you, than the property! The property ought to be as listed, but you first of all need to do your homework and assess how much the property is worth and how high a ROI you can expect from it.
However, in the electrified atmosphere of an auction room, it’s easy to increase any carefully calculated bid maximum that you’ve set yourself. If you’re going to find a property investment opportunity via the auction route, remove the possibility of lowering your return by getting someone else to attend the auction and bid on your behalf!
There are many other things you can to maximize your profit margins on any property investment opportunity, but following these 3 simple tips above will get you started on the road to what should be a good return on your capital.
Annie
Nov
07
Sacha Tarkovsky asked:
Overseas property investment can be the road to riches or the road to ruin depending on how you invest.
If you follow the 4 tips below you will be able to enjoy the minority of big winners in overseas property investment so here they are.
1. Buy the trend
This is perhaps the biggest error made by newcomers to overseas property investment.
They don’t want to buy an established market they want to buy the new property “hot spot”
Why?
Because it’s cheaper and they think the rewards are higher. The downside of course is the risk is high to and most new property “hot spots” never take off and the investor is left with losses and a property he can’t sell.
Buy a trend in motion i.e. where investors are already investing and making money.
The reason for this is:
You have missed the start of the move and maybe some profit, but that doesn’t mean there is more to come and more importantly the downside risk is less.
Property trends last decades or longer and once their in motion they suck more money in ensuring higher prices.
Consider a favourite of US investors Cost Rica:
A property purchased 15 years ago near the popular resort of Jaco for $30,000, is worth as much as $750,000 today!
Is this move over?
Consider this and decide:
Beach front property is still up to 70% less than in the USA AND with demand for ocean view strong growth will continue.
This type of market not only offers great rewards but l0w risk, also as it’s popular you can pick up extra rental income as a bonus.
So 30 -100% profit is available without the risk investing in emerging markets.
Most investors want big gains but also want low risk and that’s what an established market gives you.
2. Location
Whatever market you buy in you need to get a good location. For example in Costa Rica you would look for the expanding resorts rather than the established ones to maximize your risk reward.
3. Look at the law
Many people invest in countries and have no idea of the law and find out later that they don’t have the same rights as residents or that their property can be seized by the government etc
Don’t take the risk. Only do overseas property investment in countries that offer you protection and get a local attorney if you can’t speak the language, its money well spent.
4. Make up your own mind
Don’t fall for sales hype like huge profits in a new emerging market – If it looks to good to be true it probably is.
With overseas property investment stick with established trends that look likely to continue.
Make sure that you pick locations carefully near expanding areas to maximize risk reward and get a good attorney; it’s a small price to pay and stick to countries where the law gives you the same rights as residents.
It’s all about risk reward
Of course you can be a pioneer and go for a killing in a new emerging market, but keep in mind many pioneers got rich, but most got the arrows!
You don’t need to be clever to make 30 – 100% annual gains in overseas property investment, you can do it by following the above and more importantly with low risk,
Lonnie
Overseas property investment can be the road to riches or the road to ruin depending on how you invest.
If you follow the 4 tips below you will be able to enjoy the minority of big winners in overseas property investment so here they are.
1. Buy the trend
This is perhaps the biggest error made by newcomers to overseas property investment.
They don’t want to buy an established market they want to buy the new property “hot spot”
Why?
Because it’s cheaper and they think the rewards are higher. The downside of course is the risk is high to and most new property “hot spots” never take off and the investor is left with losses and a property he can’t sell.
Buy a trend in motion i.e. where investors are already investing and making money.
The reason for this is:
You have missed the start of the move and maybe some profit, but that doesn’t mean there is more to come and more importantly the downside risk is less.
Property trends last decades or longer and once their in motion they suck more money in ensuring higher prices.
Consider a favourite of US investors Cost Rica:
A property purchased 15 years ago near the popular resort of Jaco for $30,000, is worth as much as $750,000 today!
Is this move over?
Consider this and decide:
Beach front property is still up to 70% less than in the USA AND with demand for ocean view strong growth will continue.
This type of market not only offers great rewards but l0w risk, also as it’s popular you can pick up extra rental income as a bonus.
So 30 -100% profit is available without the risk investing in emerging markets.
Most investors want big gains but also want low risk and that’s what an established market gives you.
2. Location
Whatever market you buy in you need to get a good location. For example in Costa Rica you would look for the expanding resorts rather than the established ones to maximize your risk reward.
3. Look at the law
Many people invest in countries and have no idea of the law and find out later that they don’t have the same rights as residents or that their property can be seized by the government etc
Don’t take the risk. Only do overseas property investment in countries that offer you protection and get a local attorney if you can’t speak the language, its money well spent.
4. Make up your own mind
Don’t fall for sales hype like huge profits in a new emerging market – If it looks to good to be true it probably is.
With overseas property investment stick with established trends that look likely to continue.
Make sure that you pick locations carefully near expanding areas to maximize risk reward and get a good attorney; it’s a small price to pay and stick to countries where the law gives you the same rights as residents.
It’s all about risk reward
Of course you can be a pioneer and go for a killing in a new emerging market, but keep in mind many pioneers got rich, but most got the arrows!
You don’t need to be clever to make 30 – 100% annual gains in overseas property investment, you can do it by following the above and more importantly with low risk,
Lonnie
Nov
07
Filed Under (Property Investment Advice) by admin
Jamie P asked:
My husband and I just bought an investment property that we intend to rent. We purchased the property for a 10 year old minor with the intention of us making the monthly mortgage payments and the child receiving the monthly rental income (approx. 12K annually) to put in a savings account. Will our 10 year old have to file taxes on this income?
Judith
My husband and I just bought an investment property that we intend to rent. We purchased the property for a 10 year old minor with the intention of us making the monthly mortgage payments and the child receiving the monthly rental income (approx. 12K annually) to put in a savings account. Will our 10 year old have to file taxes on this income?
Judith
Independent_guy asked:
Hi,
A foofing Contractor I contacted suggested a new roof for just half the roof of an investment property. He said it will cost $3,800 just to do half the roof and that the other half is in a better condition. should I ask him to replace the entire roof or does it actually make sense what he suggests? also, it’s in Ontario Canada – is the price reasonable for half the roof of a single family 1600 sq. ft. house? THANKS.
Robin
Hi,
A foofing Contractor I contacted suggested a new roof for just half the roof of an investment property. He said it will cost $3,800 just to do half the roof and that the other half is in a better condition. should I ask him to replace the entire roof or does it actually make sense what he suggests? also, it’s in Ontario Canada – is the price reasonable for half the roof of a single family 1600 sq. ft. house? THANKS.
Robin
kpj asked:
If my spouse should be admitted to a nursing home, can I protect our rental property investment by removing his name from the deed? Or will the government force me to sell the property to pay for the nursing home?
Karl
If my spouse should be admitted to a nursing home, can I protect our rental property investment by removing his name from the deed? Or will the government force me to sell the property to pay for the nursing home?
Karl
Nov
03
Filed Under (Property Investment Advice) by admin
Gary Paul Taylor asked:
Overseas property investment has historically yielded great returns for investors, but with the global credit crunch taking its toll, investors are now seeking new emerging property markets to maximise their returns over the next five to ten years. One of the most exciting places for investors at the moment is Larnaca, Cyprus.
Cyprus is a diamond in the rough as far as mediterranean holiday destinations go. It has an established tourist and expatriate market that has been growing steadily for the last 40 years under the radar of EU investment.
When Cyprus joined the EU in May 2004 they were granted 6bn Euros to fund the development of the island’s infrastructure including improved roads and airport expansion, but also to grow its tourism industry from 3m visitors per year to 10m.
The bulk of this funding will be injected into the city of Larnaca on the south east coast of the island and will include a new airport, attracting new budget airlines such as Easyjet and Monarch. A PGA golf course just a few kilometres from the town and a luxury 750 berth marina which will replace the old oil refinery, all of which will transform Larnaca into a cosmopolitan holiday destination.
“Over the last three years demand for property has increased by an average of 15-20% per annum. This will continue with EU membership as people from the land locked central European countries, which are also destined to become member states, are expected to look for second homes on the island” (Source: FT World Report)
Bessie
Overseas property investment has historically yielded great returns for investors, but with the global credit crunch taking its toll, investors are now seeking new emerging property markets to maximise their returns over the next five to ten years. One of the most exciting places for investors at the moment is Larnaca, Cyprus.
Cyprus is a diamond in the rough as far as mediterranean holiday destinations go. It has an established tourist and expatriate market that has been growing steadily for the last 40 years under the radar of EU investment.
When Cyprus joined the EU in May 2004 they were granted 6bn Euros to fund the development of the island’s infrastructure including improved roads and airport expansion, but also to grow its tourism industry from 3m visitors per year to 10m.
The bulk of this funding will be injected into the city of Larnaca on the south east coast of the island and will include a new airport, attracting new budget airlines such as Easyjet and Monarch. A PGA golf course just a few kilometres from the town and a luxury 750 berth marina which will replace the old oil refinery, all of which will transform Larnaca into a cosmopolitan holiday destination.
“Over the last three years demand for property has increased by an average of 15-20% per annum. This will continue with EU membership as people from the land locked central European countries, which are also destined to become member states, are expected to look for second homes on the island” (Source: FT World Report)
Bessie
Nov
02
Dialo A asked:
Due to the neigboring unit’s overflooding, my unit flooded causing major mildew damage. The property is inhabitable and the area has rundown. I do not want to pay mortgage every month for a property I can not sell and can not rent.
I need to find the best option to cut this problem without losing anymore money or taking a big credit hit. I don’t know whether to let it foreclose or pursue a deed in lieu of foreclosure because I can’t keep paying for a dead investment.
Megan
Due to the neigboring unit’s overflooding, my unit flooded causing major mildew damage. The property is inhabitable and the area has rundown. I do not want to pay mortgage every month for a property I can not sell and can not rent.
I need to find the best option to cut this problem without losing anymore money or taking a big credit hit. I don’t know whether to let it foreclose or pursue a deed in lieu of foreclosure because I can’t keep paying for a dead investment.
Megan
