France’s Favourable Conditions Give Alpine Homes The Edge After Brexit Vote

Ski homes in the French Alps remain attractive to British investors in 2016, thanks to ongoing investment in resorts, the availability of cheap euro mortgages and looser leaseback rules, which together are helping to counter any concerns about this year’s Brexit vote.

Despite uncertainty about what Brexit could mean for British buyers in France and wider Europe, property pundits predict little change for UK buyers after leaving the EU. Buying costs are expected to remain the same in France and, thanks to the introduction in January 2015 of a single rate for EU and Non-EU members, taxation of income made from property rentals, such as ski chalets, and capital gain tax should not change.

Meanwhile, historically low European Central Bank Euribor rates, means France can continue to offer very attractive mortgages, including to foreign buyers. “UK citizens can get up to 85 per cent LTV mortgages, sometimes more, with extremely good interest rates – as low as 1.4 per cent fixed for 20 years from some lenders,” said Julian Walker, director at Skiingproperty.co.uk.

One less welcome effect British buyers in the French Alps have felt since the Brexit vote is the fall in the value of Sterling, pushing up the cost in Pounds of all property in the Eurozone. However, as Mr Walker adds, exploiting France’s low rates is one way of hedging against exposure to weak Sterling.

“Increasingly, clever cash buyers are taking advantage of France’s cheap mortgage rates by opting for a small loan on their French ski home, which they can choose to pay off once the exchange rate swings back in their favour.”

Encouraging for investors is the ongoing development of quality residences and facilities in the Alps. Among the most eye-catching new projects are the €36 million mini-resort, Mille8, in Les Arcs, and Courchevel’s €63 million waterpark and spa, Aquamotion, which both opened last winter and have a large selection of desirable ski chalets for sale.

Elsewhere, less stringent rules governing how owners can use leaseback properties make this option more appealing for British owners. In the past, most typical leaseback schemes gave owners just three or four weeks’ annual use of their property. But now, schemes are loosening up to allow owners in some residences up to 26 weeks’ use. 

A final selling point of the French Alps now is the new wave of developments that give skiers the chance to buy ‘back-door entry’ to the world’s most famous ski areas – and make big savings in the process. For example, buying into Les Menuires will give you access to the whole of the Three Valleys ski area, or an apartment in Tignes-les-Brevières will unlock the slopes of Val d’Isère and Espace Killy area.

 

Article source: http://www.nuwireinvestor.com/articles/frances-favourable-conditions-give-alpine-homes-the--edge-after-64141.aspx

Why Mobile Home Parks Are Taking On Apartments – And Winning!

When most Americans think of multi-family investing, they think only of apartments. But there is another form of multi-family that has a much superior business model, and that’s mobile home parks. This little known sector of real estate is taking on apartments in a big way – and winning every time!

Higher rates of return

Mobile home parks trade at roughly 10% cap rates in many cases. Apartment complexes often sell for 5% cap rates. There is no question that mobile home parks always beat apartments as far as return on investment. This is true on both cap rates as well as cash-on-cash returns.

Higher revenue stability

It costs around $5,000 to move a mobile home from Point A to Point B. It costs an apartment resident virtually nothing to throw their stuff in their pickup truck and drive off. As a result, mobile home park tenants never leave, and apartment residents churn constantly.

Lower competition

New apartment complexes are constantly being built. Any time a market has high apartment occupancy, up go a couple new buildings. However, new mobile home park construction is banned in almost every major city in the U.S. There are less than ten mobile home parks built per year in the entire nation combined. The law of supply and demand would dictate that this means that mobile home parks hold their value much more than apartments.

Better product

Customers always prefer mobile home parks to Class B and Class C apartments. Mobile homes offer 1) no neighbors knocking on your walls or ceiling 2) a yard 3) the ability to park by your front door 4) a stable sense of community and 5) the ability to be a homeowner. Apartments can’t compete with this.

Lower pricing

Mobile home parks offer much lower rents than apartments. At a time in which the U.S. economy is in perpetual decline, this is a very important trait. The average mobile home park lot rent in the U.S. is around $275 per month, while the average three-bedroom apartment rent is around $1,250 per month – nearly $1,000 per month more.

Huge upside

Related to the giant spread between apartment rents and mobile home lot rents, there is obviously huge potential to increase mobile home rents going forward, while apartments have little ability to increase their prices. Literally, mobile home park lot rents could double and they would still be more than 50% lower than apartment rents.

Seller financing

Mobile home parks are the only remaining sector of real estate where you can still buy directly from the original mom and pop builders and, therefore, they have the ability to seller finance the purchase. That’s a huge advantage over apartments. With seller financing, you get a lower interest rate, non-recourse, no credit check, and no legal fees and points.

Conclusion

Mobile home parks beat apartment investing on almost every level. If you have not considered mobile home parks in the past, you should do further research. Affordable housing is America’s greatest challenge – and opportunity.

Article source: http://www.nuwireinvestor.com/articles/why-mobile-home-parks-are-taking-on-apartments--and-64078.aspx

Are We In Another Housing Bubble?

The 2008 housing crash is something that virtually every investor today is still old enough to remember. For those who don’t, housing prices spiked during the second half of the decade, and after many mortgages started to foreclose due to subprime lending practices, housing prices tanked for the next two years. Millions of people lost their homes and millions more lost all the equity they had gained.

A lot of people are now starting to wonder if we are reaching a similar situation. Home values in prominent cities are averaging nearly a 10% increase yearly. Any real estate investor can tell you that number is not sustainable. Think about the numbers. If wage growth is only growing by 2-3% a year, but home prices are climbing at quadruple that rate, eventually things will start to slow down, at the least. People can no longer afford homes, and once they stop buying, prices come again.

On top of that, a lot of data shows that the average credit score for buyers with approved mortgages was 719 as of January, down a full 10-20 points from last year. Considering the housing bubble of 2008 caused by spiking prices and loosening standards, this is clearly a cause for worry.

However, there are some important differences between now and 2008 that need to be taken into account before selling everything you own and moving into the woods.

The first, and most important reason is with the issue of loosening credit standards. Back in 2008 banks were giving away mortgages. They wouldn’t require any kind of income verification. You could borrow with almost no collateral. Millions of mortgages required no down payment. These credit standards seem like such an obvious bad idea to us today, but few recognized what kind of problems they could bring back in 2008.

A lot of this is due to government regulation. The Dodd-Frank act was passed after the 2008 recession and has significantly cut down on the number of loans. Anyone that has tried to get a mortgage in the last few years would be happy to tell you about their downpayment, waiting periods, paperwork, income verifications, and other research their mortgage company put them through.

The second important number to look at is new homes. Forbes magazine has reported a significant decrease in new homes being built in the past few years. This means that people are having to rely on old homes, and that the supply is more limited. Real estate runs on supply and demand, so when there are less homes being added to the market, but demand continues to climb steadily, you will see an increase in price until everything matches out.

There are other great reasons to claim that we are not in a bubble as well. We are at an all-time low in interest rates. This means that people are spending significantly less of their monthly payments towards interest and can afford to get a little higher mortgages.

There is also the issue of housing supply. Lawrence Yun, chief economist for the National Association of REALTORS, recently discussed the housing supply and claimed that it would take 4-5 months to sell through all the existing homes on the market, which is similar to 2008. With total home sales being down nearly 30%, this looks more like a squeeze than anything.

In conclusion, it is important to note that high prices are not always a sign of a bubble. Yes, bubbles always have high prices, but the converse is not always true. Sometimes the laws of supply and demand simply push up prices for awhile. Will the drastic yearly increases continue forever? Probably not. But there is nothing to indicate that we are in for another crash. I use my local MLS to keep an eye on things like this. I live in Georgia, so I use Fizber’s Georgia MLS, but you can use whatever one is closest to you.

Article source: http://www.nuwireinvestor.com/articles/are-we-in-another-housing-bubble-64008.aspx

7 KPIs That Successful Property Managers Measure

Successful businesses know that measuring key performance indicators (KPIs) is critical for a high-performing organization, no matter what size it is. KPIs enable a firm to gauge the success of various marketing and retail tactics.

They show where improvements should be made and when initiatives probably should be abandoned. There’s currently no better online system for gauging a business’s success.

Real estate managers can benefit from KPIs as well, but they use them in a different way. Without careful monitoring of these metrics, property managers can fall victim to unnecessarily lost revenue and hurt their bottom line.

It’s easiest to investigate these numbers when they’re gathered using software and then displayed on a professional dashboard for easier visual communication. KPIs property managers may choose to cover many KPIs, but these are a few of the most common and worthwhile.

1. Revenue Growth

One of the most obvious KPIs involves watching your profits, but too many executives focus on details such as occupancy levels rather than the actual revenue they bring. At no point do you want your revenue growth to flat line or fall.

Watching the rate of growth will empower you to spot areas where you need to improve or tack on additional (but fair) fees to help your revenue continue to grow.

2. Vacancies vs. Occupancies

Rather than focus on how many properties you have or how big they are, concentrate on whether you can fill them with tenants. When you have a property with more vacancies than occupancies, you may be more likely to make money from selling the property than from continuing to try to rent it out.

This is one area where it’s wiser to spend in order to gain. Devote your resources to marketing your rental properties through advertisements, social media, and signage. You might also offer incentives to those who sign a contract.

In the end, if your occupancy in a high urban area hasn’t stayed at an average of 95 percent per month, selling it may be the most sensible option.

3. Lost and Won Properties

It’s normal for property managers to lose between 10 and 20 percent of their rent roll per year. The vital thing is to figure out why you lost the properties.

Also, look at why you win properties and what elements they feature. Quality will almost always outperform quantity in the rental property industry. Make sure you can keep up.

4. Tenant Satisfaction

Do you ever survey your tenants to see how will they appreciate the property? You should do so at least once every quarter.

Renters can offer valuable information regarding the positives and negatives of living under your roof and management. There will inevitably be some negative responses from people who never can be pleased, but others will contain useful constructive criticism about the way you manage your properties.

This information can drive improvements in the quality of your rental properties and expand your revenue as a result.

5. Average Rent

Property managers are often very busy, and tend to overlook the average rent metric. Reviewing rents is simple, but very important for growth.

Easy money can be made when you analyze the average rent you’re charging your tenants and compare it against the average rents in the area. If neighborhood rents are rising, you can reasonably raise your rents as well.

In addition, make sure the rent you’re charging covers the costs of the tenant living there. If the monthly rent payments are barely covering your costs, that can be a good signal that a higher rent charge is in order.

6. Social Media Engagement

More and more property managers are using social media in order to unite their rental communities and market vacancies. If properly monitored, social sites like Facebook, Twitter, Google Plus, Instagram, and LinkedIn can be useful for tracking engagement.

You can gain a first-hand view of leads/appraisals, listings, and the percentage of traffic on each social platform. Carefully track engagement by monitoring the volume of “likes,” re-tweets, shares, and other social signals from your followers.

It’s best to use a software package to track these numbers for accurate, real-time reporting.

7. Listing Performance

Most property managers leave standard listings on listing sites, even if they’re already at maximum capacity. This allows them to generate interest in a property in case a sudden vacancy occurs.

You’ll want to monitor engagement with your listings to make sure it’s worth the money you’re paying for them, of course. You’ll also want to consider listing presentations and how much revenue they bring you.

Compare this with your marketing and sales metrics to ensure your budget is balanced.

Article source: http://www.nuwireinvestor.com/articles/7-kpis-that-successful-property-managers-measure-64007.aspx

Overcoming the challenges with US real estate investing

After working in the real estate market for over a decade, I’ve seen my fair share of the good and the bad that can occur when developing or investing in US real estate. As the founder and CEO at Rycal Investment Group, I have worked on both residential and commercial land projects for foreign investors interested in US real estate. Rycal’s involvement with these project spans a spectrum of capacities from purchasing to renovating and selling to renting residential properties as well as developing new build real estate.

Today, the US real estate market continues to maintain its status as one of the most attractive investment options for foreign and domestic investors. However, despite the many advantages, it’s important to note that it does come with an array of new laws, processes and pitfalls that can significantly affect your bottom line.

Outgoings and rental agents in the US rental market

On an annual basis, the US real estate rental market has experienced above average global returns. However, due to a landlord’s outgoings such as property taxes, water and refuge – the return on investment (ROI) can significantly decrease by as much as 35%. In addition, ROI can decrease once vacancy rates and upfront rental agent fees are factored in.

Many rental agents are paid for both the maintenance of a property and a monthly rental fee. This is because most rental agents own their own separate maintenance company so they can charge high and unnecessary additional services fees. From my experience, it’s important to do your research and employ the right rental agent to ensure that your investment is protected as well as hire a separate maintenance firm that you trust.

Challenges associated with US commercial real estate lending

A challenge faced by developers and investors of higher valued commercial developments is financing. Many times developers and investors are forced to work with alternative lenders if they are unable to get a loan from a standard bank.

While these alternative lenders may loan you capital for your project, they charge a much higher loan interest and significant upfront fees on tasks such as: underwriting, appraisals, administrative fees, site visits, commitments, and the list goes on. These charges will put a significant strain on how profitable a project is and can lead to potential loan defaults.

As a developer or investor you should look out for the following scams:

Outright Unapologetic Upfront Fee Scam – This scam involves fake ‘lenders’ that align their names and locations with well-known companies. Typically, these ‘lenders’ will charge a fee and then avoid the borrower after collection.  

Lenders Who Never Lend What You Need – These ‘lenders’ provide less capital then what is agreed upon and charge double digit interest rates. These lenders know that a borrower’s projects can experience a significant strain from the high fees they charge them. They will still demand payment whether a project is completed or not. In most cases these ‘lenders’ prefer developers default so that they can claim the property.

Lenders known as Gate Keepers – These are the ‘lenders’ you should be most cautious of as an investor or developer. Typically, they have contributed to a small proportion of a loan in the past and thus use that instance to call themselves lenders. What they actually do is shop out your loan request to the market, after, of course, charging you an underwriting fee. Following this, you’re destined to be associated with a succession of lenders and charged fee on top of fee. Attempts to address this with your lender can typically lead to aggression and anger on both sides. Look out for red flags such as speaking with the owner or director of the company. Rather than address the issue, they typically divert the conversation to other projects such as multiple hundred million dollar deals they’re working on.

These schemes can be inevitable when dealing with US real estate. My suggestion is to walk away before paying any fees. You have to do your research and if a lender is necessary for your project, look to a local small commercial bank. Often times when they are unable to lend to your project, they can point you towards the direction of a trusted lending source so you can avoid lending scams.

Simon Calton is founder and CEO at Rycal Investment Group, a US and UK-based property advisory firm. 

Article source: http://www.nuwireinvestor.com/articles/overcoming-the-challenges-with-us-real-estate-investing-64006.aspx

The New Low-Yield Environment

The 10-yr treasury bond yield rates seem to predict a weak economy for years. Last month’s Fed meeting minutes clearly indicated that the economy wasn’t looking so hot even before the U.K. surprisingly voted to leave the European Union.  The new world of low yields presents plenty of challenges.

Low Global Interest Rates Have Steadily Declined

To most people’s surprise, interest rates that were already low at the beginning of this year have continued to fall.  Although the latest U.S. jobs report was more optimistic, labor markets had largely remained weak versus expectations during the first half of the year, and economic growth remained stubbornly slow.

10-yr Treasury Bond Yields – 2016 (through July)

10-yr treasury bond yields

Jobs News May Embolden the Fed – a Little

The U.S. is recently adding jobs at a healthy rate, and the unemployment rate is relatively low.  But economic growth remains stubbornly slow, largely because of the struggling energy sector and the resultant decline in business investment.  Gross domestic product (GDP), the broadest measure of goods and services produced across the U.S., grew at a seasonally and inflation-adjusted annual rate of just 1.2% in the second quarter, the Wall Street Journal recently reported.  While jobs-for-capital investment may not seem like such a bad trade, business investment usually acts to spur employee productivity – which has grown at an anemic pace in recent years.

As a result of this slow-go economy, the Fed recently lowered its projections for rate hikes over the next few years.  The July jobs report may strengthen the central bank’s resolve to resume increases in its benchmark rate before the year is out, but financial markets are predicting a weak economy for years – and so far they’ve been correct about interest rates.  The primary culprits are not only reduced business investment, but also a large paring back of inventories and declining government spending.

The Current Low-Yield Environment Seems Here to Stay

The long-term trend of lower growth has been in place since the beginning of this.  In the United States, per-person gross domestic product rose by an average of 2.2 percent a year from 1947 through 2000 — but starting in 2001 has averaged only 0.9 percent. The economies of Western Europe and Japan have done worse than that.  So far, very few are predicting that this trend is about to reverse course.

             
Avg per capita GDP

Some observers worry that there seem to be weakness in both supply and demand, and that the two are pushing each other in a vicious circle.  Weak productivity and fewer workers are hits to the “supply” side of the economy, while the efforts of central banks to stimulate demand have only been partially effective on the “demand” side.

Lawrence Summers, the Harvard economist and former top official in the Obama and Clinton administrations, argued a few years ago that the global economy might be settling into a state of “secular stagnation” in which there was insufficient demand, and resulting slow growth, low inflation and low interest rates.  His diagnosis is that “lack of demand creates lack of supply;” people may have dropped out of the labor force because their skills and connections have atrophied, and companies may be reluctant to invest because they’re not convinced that demand is really there for their products.

Mr. Summers proposes that government sharply expand investment in infrastructure, which might help both demand and supply – building workers may become re-attached to the work force, for example.  Interestingly, this year increased infrastructure spending is an economic policy advocated by both Hillary Clinton and Donald Trump.

Commercial Real Estate is Still Attractive

For investors seeking healthy yields, there are no easy answers.  Even among private equity firms focusing on leveraged buyouts, soaring stock markets and intense competition for deals have made it harder for those firms to reap big profits.  “Right now, it is tough to earn returns of 20% or more in the private equity business,” Carlyle Group co-founder William Conway recently said.  Others have concurred.  “They are afraid and they are pulling back,” said Laurence Fink, CEO of BlackRock, in discussing how investors no longer know what to do with their money.

As a result, some investors have been turning to commercial real estate because of its potential to generate higher returns.  Commercial real estate fundamentals — such as demand, occupancy and rents — remain strong, which has kept property values up in the private market, said Steven Marks, a managing director at Fitch Ratings.  Even with commercial real estate, though, because of the supply constraints currently found in some markets, acceptable investment return rates may well be increasingly driven by value-add strategies rather than merely well-timed property acquisitions (which are increasingly difficult anyway).  In more stabilized markets, the execution of business plans based on property upgrades or operational improvements becomes of heightened importance. 

Private investments in commercial real estate are subject to significant risks.  All of the investments listed by RealtyShares, for example, are private offerings (exempt from registration with the SEC), so the disclosures are generally less detailed than an investor would typically expect from a registered offering.  The offerings are also illiquid, and the value-add strategies often seen in RealtyShares listings require significant market expertise by the real estate companies sponsoring an investment opportunity.  Nevertheless, the famous (and successful) Yale Endowment model has long stressed the importance of alternative assets like real estate. Real estate companies that create value and execute strategically on their business plans can potentially achieve attractive risk-adjusted returns, especially when compared with many other investment options in the new low-yield environment.

Article source: http://www.nuwireinvestor.com/articles/the-new-low-yield-environment-63968.aspx

UK Interest Rate Cut is Expected to Benefit Property Market

Though the UK’s interest rate has already been long-maintained at a historic low, the Bank of England have further slashed interest rates to an all-time low from 0.5% to 0.25% in order to stimulate the UKs economy and to try and save the UK from recession.

The interest rate cut hasn’t come as a surprise, given the amount of uncertainty that the UK’s economy is facing following the unexpected result of the EU referendum, with the majority of the UK voting to leave the European Union.

The decision to further slash the interest rates has resulted in both winners and losers; property investment  and mortgages are expected to benefit from the new 0.25% interest rate, however pensions and savers are expected to suffer. 

Low interest rates are expected to attract more investors into the buy-to-let property market, as long term savers have seen the value of their savings plummet over time and will be further affected by the interest rate cut.

Despite the turmoil of Brexit, prime buy-to-let markets in areas such as London and Manchester have shown positive signs of recovery already and the new 0.25% interest rate should boost these markets even further. Investments such as these are now even more attractive for savers who are looking for more generous returns from their savings.

Borrowers also stand to benefit as the key influence that the base rate normally has on the property market is through the cost of lending, with lower base rates equating to cheaper mortgage deals. With competition fierce among lenders, property buyers already have access to a selection of highly affordable deals offering attractive interest rates and these are expected to drop to new record lows, potentially saving borrowers thousands of pounds if they are looking to re-mortgage by switching to a new lender.

Enquiries from first-time buyers are also expected to increase as the interest rates on new mortgage deals available to first-time buyers will be at an all-time low.

For mortgage holders on a fixed-term mortgage, the interest rate cut is still good news, however it may take some time before they see any benefit if they are tied to a fixed interest rate which can vary from 18 months to 5 years.  

Furthermore, the weaker pound is also attracting more international investors who want to invest in the UK property market, which is good news for both property developers and independent sellers.

It’s too early to tell what the EU referendum will mean for the UKs property market and economy as a whole in the long term, however the Bank of England’s decision to cut interest rates is seen as a last ditch attempt to save the UK’s economy from recession and to inject confidence into mortgage lending and property investment. One thing is for sure, whatever the outcome,  property is still considered a fairly stable investment and a sound one for the longer-term; this is a storm it is weathering well.

Article source: http://www.nuwireinvestor.com/articles/uk-interest-rate-cut-is-expected-to-benefit-property-market-63963.aspx

Why Real Estate Remains The Top Investment Option

Real estate remains the leading long-term investment choice for the third year in a row according to a new Gallup survey.

“Both the housing market and the stock market have recovered from catastrophic losses suffered in the last decade,” said Gallup, “with average house prices and the Dow well above their pre-crash high marks. But Americans have been much more likely to regain confidence in real estate than in stocks as “the best” long-term place to invest their money. The split between the two investment options grew again in the last year as the stock market’s volatility increased investors’ concerns.”

The Gallup study showed that 35 percent of all Americans see real estate as the best long-term investment option. The real estate results compare with 22 percent for stocks and mutual funds, 17 percent for gold, 15 percent for savings accounts/CDs and 7 percent for bonds.

The huge importance given to real estate is surely understandable if it is considered as everything but an investment. A home represents a tangible accomplishment, it’s an index of not only our personal wealth but our individual taste. It has dimension, it’s tactile – you really can reach out and touch it – and most of all it reflects our ego and who we are. While shares of stock and gold bars may be identical the same is not true with real estate. It’s technically a nonhomogenic commodity, a fancy term which means that no two pieces of property are like.

But while real estate may have many social and psychological values the Gallup survey did not ask about such things. Instead the pollsters wanted to know about investment options and when it asked that question it was real estate that came out on top.

Why Real Estate Is A Favored Investment

There is no universal answer but surely there are three factors which impact the status of property ownership as an investment.

First, real estate is a controllable asset. You as the owner can buy, sell, rent, or paint the inside puce if you elect. Alternatively, if you own a thousand shares of Microsoft Bill Gates is not on the phone asking for your opinion about the latest version of Windows.

Second, if the value of your home rises you get a benefit in the form of more equity plus it’s still a place that you can live in or rent. If the value falls you still have somewhere to live as long you make your monthly payments plus you have the opportunity to rent the place if you like. This is important because unlike stocks or bonds, real estate has a utility value, you can live in it or rent it.

Third, real estate is the last opportunity for most people to make a substantially leveraged investment. A qualified buyer can readily purchase a home with 3.5 percent down through the FHA mortgage program. First-time purchasers can get financing with just 3 percent down from Freddie Mac (Home Possible) and Fannie Mae (HomeReady) while millions of buyers have financed with nothing down through the VA program.

What these programs tell us is that it’s possible to have enormous leverage with real estate – 33-to-1 in many cases. What other financial opportunity with equal risk offers such leverage and is so widely available?

Tax Benefits Fade

However, because of low mortgage rates one traditional real estate attraction has been diminished.

You can’t get a deduction for credit card spending or auto loans but mortgage interest, property taxes, and mortgage insurance are generally deductible from federal taxes.

“The effect of these deductions is to make real estate ownership more attractive and affordable,” said Rick Sharga, executive vice president at Ten-X.com, an online real estate marketplace. “If you combine the value of property deductions with the impact of inflation the net result can be financing with an effective cost that is pretty close to zero.”

Renters don’t have such deductions but with changes in interest rates and the tax code the traditional financial advantages of homeownership may be eroding. For example, in 2007 the standard deduction was $5,330 if single and $10,700 if married. By 2015 the same deductions were $6,300 and $12,600.

Meanwhile, while the standard deduction was going up, real estate write-offs were largely going down. Housing debt in the US totaled $8.74 trillion at the end of 2015, a substantial drop from the $9.75 trillion in mortgage debt that was owed in the fourth quarter of 2007, a trillion-dollar drop.

Not only is there less debt, the interest on that debt has fallen substantially. The typical mortgage rate in 2007 was 6.34 percent versus 3.85 percent in 2015. Not only that, but by refinancing many people are able to get rid of mortgage insurance costs. Combine less debt with far-lower housing expenses and the result is that a growing number of homeowners are using the standard deduction, just like renters.

Will real estate continue to be a favored investment in the future? For what it’s worth the view here is yes because, after all, what other investment provides so much shelter in a storm, whether the storm is physical or financial?

Article source: http://www.nuwireinvestor.com/articles/why-real-estate-remains-the-top-investment-option-63955.aspx

Real Estate Investment: The Best Financial Solution For Retirement?

 As we age, almost every American starts to worry about the same thing – their retirement. Have we saved enough or will we depend on Social Security payments to make ends meet? And due to recent economic instability, particularly the great recession that took hold in 2008, retirement savings concerns have only increased. Many employer-funded retirement plans have proven inadequate, and Congress doesn’t seem eager to help. The years spent relaxing after a long career are turning into an age of anxiety.

One way that more people can ensure a secure retirement, however, is by investing in real estate while they’re young. Real estate offers more than one way to boost income or savings during your later years and can help owners have the enjoyable retirement they hoped for, rather than one spent living hand to mouth.

Investment Considerations

When we recommend investing in real estate, we don’t mean that you should drop all of your savings into a pile of properties in the hopes that they will provide for you down the line. Rather, the key is to invest in moderation, keeping a reserve of money for your needs on hand. In many cases, buying a one bedroom condo is all you’ll need to assure adequate income down the line.

You also need to invest in a way that’s commensurate with your goals. If your hope is to fill your retirement with incredible experiences like traveling the world or driving a sports car, then investing in real estate that you can later rent out can help fund those things for those who would struggle to afford them otherwise. If your hopes for retirement are more modest, however, buying property may be too great of an investment.

Sell, Rent, Use

Part of what makes real estate such a wise retirement investment is that property can be used in multiple different ways. If you need a significant cash infusion, for example, you might opt to sell a property to get the money you need, while in other cases, it might make more sense to sell your personal home and downgrade to your smaller investment property as you age.

Renting out the property, however, will give you the greatest and most consistent return in most cases, especially if you’re looking at many years of retirement. By renting the property, you ensure that there’s added income coming to you on a month-to-month basis. The only downside to renting the property is managing it. You may need legal assistance, maintenance support, or other external help depending on the terms of the contract.

Daring To Diversify

Finally, if you’re already saving for retirement in a variety of ways – some stocks, bonds, or a 401(k) – then investing in real estate can be a good way to diversify your portfolio. When you only invest in one way, you risk losing it all if a company goes bankrupt or another financial problem arises. But by breaking up your investments, you make it more likely that there will always be something there for you to fall back on.

Retirement should be a relaxing time, but it’s hard to enjoy yourself when you’re constantly worried about finances. By investing in real estate now, however, you can feel assured that you’ve left your options open and will have the resources you need to live comfortably in your senior years. 

Article source: http://www.nuwireinvestor.com/articles/real-estate-investment-the-best-financial-solution-for-retirement-63954.aspx

Brexit and Your Real Estate

The United Kingdom’s recent decision to leave the EU, popularly termed “Brexit”, sent shockwaves around the political world, and had extreme implications for global finances. In the immediate run up to the vote, UK citizens were widely expected to vote to remain within the EU, and political pundits were confounded by the decision to leave.

The impact of Brexit will not be isolated to UK shores. Instead, the effects of Brexit immediately hit global markets – wiping out a mind boggling 2 trillion dollars of wealth in one day. And, the results of the vote are far from over, global markets are expected to continue to experience the shockwaves of the leave vote for some time to come. Many commentators observe that a period of high volatility is likely to continue for some time, preventing an immediate bounce back of the markets. Nonetheless, global stock markets rallied surprisingly well in the days after Brexit, with the nasdaq recovering half of the losses it incurred the day of the vote.

One market that is certain to be influenced by Brexit is the real estate market. Anyone involved in real estate should pay close attention to the vote. In fact, many are expected to be drawn to US markets, since the US economy can offer a sense of stability where the UK cannot. Brexit, therefore, will have a relatively minimal impact on the stability of US real estate, especially as European and UK investors start to target these markets in order to gain some much needed solidity in the wake of Brexit. Furthermore, prices will be driven down in the short term, creating a buying opportunity that real estate professionals should pay attention to. We are still in the period of immediate reaction to Brexit, and as confidence levels rise, so to will associated confidence. It is therefore a good time to consider investing in a relatively deflated US real estate market, with an extremely strong chance of returning to full strength over the coming months.

There is another dimension to how Brexit will impact US real estate portfolios. Foreign demand for US real estate could drive prices up and keep values at inflated levels, despite any of the instability associated with Brexit. Firstly, high wealth individuals who are put off by European and UK risk, may consider buying properties in US cities instead. Similarly private enterprises and companies that no longer see as many financial benefits in remaining located in London, may consider investing in office space and other real estate in cities like New York, San Francisco, and Los Angeles. This is not limited to investors in European and UK cities either, foreign investors from China and India are clearly concerned about the effects of Brexit, and they too might be inclined to seek safe harbor in US markets. Overall, then, despite the immediate costs of the Brexit vote, and the undoubted insecurity which it creates in global markets, the outlook for US real estate remains promising. Because the US is widely considered a safe haven for capital while Europe goes through various upheavals, those holding US real estate portfolios look set to benefit. Indeed, they would be wise to consider the notion of expanding their holdings in order to take advantage of these structural conditions.

Real estate portals, such as MLS, provide a great way to get a national overview of property prices and real estate opportunities from around the country. They also allow individuals to remain in touch with ongoing news and changing dynamics in real estate markets. MLS is geared towards providing listings for professionals in real estate, and can help you understand the economy during the tumultuous post Brexit period.

Article source: http://www.nuwireinvestor.com/articles/brexit-and-your-real-estate---what-you-need-to-63914.aspx