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Why Young Adults Can’t Afford the Homes They Want

For all the speculation as to why millennials are not buying into the housing market, Freddie Mac says the answer is basic–prices for homes are rising faster than incomes. And they've been doing so since the beginning of the century. Freddie Mac’s report looked at economic and demographic trends from 2000 to 2016 to identify the causes behind the 8 percent decrease in homeownership rate among adults under age 35 since the rate’s peak in 2004. Homeownership rates dropped steeply after the crash in 2008, and overall, around 700,000 young adults did not buy a home between 2000 and 2016 because of increases in inflation-adjusted home prices and rents, according to the report. While half the reason, Freddie Mac found, was higher rents and home prices, the other half was a mix of socio-economic factors like lower marriage and fertility rates among younger adults, as well as student loan debt—which accounted for 13 percent of the reason behind low ownership rates among the young. “Historically low mortgage rates and increasingly favorable employment conditions should have generated a far greater number of home purchases by young adults, especially in the last five years,” said Sam Khater, Chief Economist at Freddie Mac. “Unfortunately, home-price and rent growth above incomes–driven primarily by a severe shortage of housing supply–have been too high of a hurdle for many would-be buyers to clear.” Khater said that while rising home values continue to build housing wealth for most homeowners, weaker affordability conditions have led to “a missed opportunity for the interested young buyers who are unfortunately priced out of the market.” The issue doesn’t look to be going anywhere anytime soon. By 2025, the report speculated, more adults between 25 and 34 will buy homes, but rates will still be below the 2004 average. “Demographics, housing preferences, and economic conditions will all play a role in the direction of homeownership in coming years,” Khater said. “If economic conditions improve, and incomes and entry-level housing supply increase in a meaningful way, homeownership rates for today and tomorrow’s young adults could exceed our current projections.” Those projections put rates between 56 and 60 percent by 2025.

Seven Steps To Protect Yourself From Private Real Estate Investing Mistakes

Successful investing in private real estate takes more than deep pockets. Behavioral economics, the study of financial decision-making psychology, bares the subconscious biases that trigger real estate investment mistakes. That is how we work as private equity real estate managers at Origin Investments. Seven steps, inspired by my knowledge of behavioral economics, can help a private investor avoid common real estate investment mistakes: 1. People are comfortable with things they know, a behavior that is known as familiarity bias. Investors should look for deals where the sponsor holds significant equity. Private investors often hold assets that are losing their value. In private equity real estate, the risk posed by such loss aversion is to hold out for at least a breakeven result, even if that's unlikely. An old Wall St. saying applies here: “Bulls make money, bears make money, pigs get slaughtered.” A winner may not be such a winner when compared to other opportunities, and a loser may make a recovery. To make sure your investment decisions involve more discipline than rationalization, it pays to work with experienced real estate management teams that employ a data-driven process.

7 Ways to Get a Loan for an Investment Property

Here are seven options to consider for funding your investment property purchase or upgrade. Home improvement loan For the most part, getting a home improvement loan makes sense if you’re upgrading something you’ll keep for the long term. Home improvement loans also can be useful for income-producing properties. As with a home improvement loan, it’s possible to get a line of credit based on your long-term investment property. “That can make getting a home improvement loan impractical for any real estate investor.” The downside to using a home equity line of credit from your primary residence or your rental property is that you are putting your investment at risk. Instead, he pointed out, many real estate investors turn to more creative home loan solutions such as hard money lending. “This is used a lot by investors who flip homes,” said Machado. You could lose that money if you can’t make payments and the seller repossesses the home. Personal loan Is your home improvement project relatively small? Whether you need a home improvement loan to upgrade a revenue-producing rental property or you hope to buy a home to flip it, research your options and decide which one works best for you.

Buying Rental Properties To Guard Against A Stock Market Crash

One that came up recently - should I buy rental property to guard against a stock market crash? We know if the markets correct that dramatically, people would theoretically move to bonds, so the value of the bonds would go up. With the real estate market just as hot as the stock market, she would buy that rental home at the same time everyone else was trying to get into real estate. Truism #1: Investing in direct real estate may be appropriate in two situations. Truism #2: Be careful about going into a real estate investment with friends or family. Truism #5: Counting on a large portfolio of real estate to sustain your retirement plan is not very smart. People who counted on real estate income in 2009 ended up very stressed and losing their shirt, especially if they leveraged their properties. I have this gory real estate discussion with clients too often and decided as long as a real estate investment isn’t going to torpedo a financial plan, I don’t fight it much. They fear the markets when the market is in the doldrums and love the market when everyone is making money. Real estate is no different.

Why blockchain will drive the real-estate revolution

Advances in blockchain innovation mean that the real estate sector no longer needs to rely on dusty documents and traditional sales processes, because property titles, insurance, ownership transfer and escrow processes are all moving onto the blockchain. While buying a property will not be as quick and easy as buying a book from Amazon, for now at least, the world of real estate from home buying to property investment is about to be transformed. Why change traditional house buying? With its many third parties, time delays and lack of transparency, the legalities involved in buying property will be drastically simplified with blockchain. For example, in the verification of property titles; a title record for a property could be used on the blockchain in the form of a smart contract. Smart contracts do not require a trusted third party and, when a property is bought and sold, the details are encrypted and added to the record. This is a radical new approach which is gaining momentum — being able to own units or tokens in residential real estate – and it opens up the market to people who would otherwise not be able to invest in this sector. But where does all this change leave the real-estate agents? Undoubtedly, their roles will change, but there is no sign of them disappearing any time soon. Blockchain not only will improve the current processes of buying and selling property, but it will also revolutionize our traditional attitudes towards real estate.

How Best To Invest In Real Estate: Mid-America

In the economic sweepstakes it's usually California or Texas or Florida that get all the attention. Other than that special situation, and with the exception of booms in smaller markets - like Fargo with fracking - investors can expect steady returns in these places, without having to worry that they bought in at the wrong time. Aside from the very big cities, these are medium-sized markets where healthcare, government and colleges provide an outsized percent of local jobs. These stats can help investors decide how best to invest in each one. Looking first at population growth over the past three years, we see that few of these markets have done better than the US average of 3 percent. Average job growth for the US in the past year was 1.6 percent. In such a low-growth environment, investors in rental property mainly have to worry that they won't easily find renters. If you haven't already made your investment you need to factor the risk into the price you pay for the investment to begin with. We call that the Target Rent Range. If we look now at home prices, note that the change in home prices in the past year is a measure of demand for ALL kinds of housing, including rentals.

Catch an Early Wave! Buy a Home in the One of the World’s Best...

To create our list, the realtor.com data team first ruled out countries that have extremely restrictive policies on foreigners buying property. There isn't a lot of real estate right on the beach, but there are a number of affordable nearby villages. InterNations named Mexico the third-best destination in the world for expats in 2017. In Port Dickson, a coastal town with a population of nearly 120,000, you can still get a beautiful beach home at a reasonable price. If you get a 10-year visa, common among foreigners working in the country, you can buy homes for around $127,000. Sunny Beach (Bulgaria) Bulgaria population: 7,084,571 Coastline length: 354 kilometers Sunny Beach is a formerly notorious resort located on the coast of the Black Sea. La Concha Beach (Spain) Spain population: 46,354,321 Coastline length: 4,964 kilometers Relocating to a foreign beach town often means living in a remote location. That may have helped it to be ranked the second-best destination in the world for expats by InterNations. Costa Rica is very friendly to Americans buying property. When it comes to foreigners buying property, they have the same opportunity as locals in most parts of the country.

How to climb the investment ladder in real estate

"People think that to start investing in real estate, you need a lot of money, but you really don't," he said. "Once you can find the deal and understand the formula for making a profit," he said, "you bring a deal to someone like me now, and if it makes sense, I will partner with you." As a young real estate agent he worked with investors, finding them properties to flip. "They were making $50,000 or more in profit," he said, "and I would make my little $5,000 commission." "I took Lucky to the auction and showed him what people were buying and what they were making," said Fuentes. Plus, now there were too many investors. Using these kind of high-interest lenders, Fuentes is able to put less down and put more money toward buying properties and renovations. Now Fuentes funds and runs his own real estate investments, flipping about 15 homes a year, in addition to being a real estate agent and owner of three RE/MAX offices. "Perhaps your first deal is a 30% cut for you, maybe less," he said, "but you'll learn from the process and you'll make some money. If you have a 20% or 10% drop you're not making any money."

4 SEO Tactics That Realtors Need to Know

You’ve researched the competition, and you’re confident your website is much more functional (not to mention beautiful) than their website. Start Small: Use Modest Keywords Dominating SEO is kind of like baseball. Once you have a few wins under your belt, then it’s easier to have success with higher level keywords. Use tools like the Keyword Explorer by Ahrefs to determine how difficult it is to rank for keywords. Moz has more tips that will help you write efficacious URLs. A premier caching plug-in is the WP-Rocket. Fix Broken Links Broken links on your website can damage your SEO efforts. Basically, Google lowers websites in search engine ranking results that have broken links. If you already know how to fix them, then use the Broken Link Checker to discover what needs fixing. Have you had success marketing your real estate website?

Advantages of Buying Turnkey Rental Properties

Advantages of buying turnkey rental properties are many especially for new buyers. Turnkey properties are also great real estate investment vehicle for investors who want a long term sustainable passive income without any hassle. A turnkey rental property is a good source of income to own because it provides a quick return on investment and a stable income with no work to be done by the owner of the property. For that you need to find reputable turnkey providers, which are real estate companies that find a property in a proven rental market with high ROI, rehab the property, and also place it in the hands of a local turnkey property management company. Advantages of buying a turnkey rental property is that the turnkey property companies do all the repairs before putting the properties out for sale. Another advantage of buying turnkey rental properties is that the turnkey investment companies also take the responsibility of finding qualified tenants. As an investor you need to put money into the best and most sustainable real estate markets, the markets in which property prices are steadily rising. Buying turnkey rental properties gives you an opportunity to expand into different real estate markets. It is always advantageous to not have all your turnkey rental properties in one given market. What more do you need from an investment?

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How to Structure Your Private Loans: An Interview with 4 Real...

How do you use private money? In the case of a fund, it could be funded by one person, but more often than not, it is funded by multiple investors into a pool.” What kind of security do you offer your lenders? Hence, the Loans are not securities, and the investments into the funds are.” What kind of legal entity do you use? The lender is either an individual, trust, LLC, corp, or whatever the lender uses (that’s up to them, and it doesn’t matter to me).” “In the case of the Blind Pool, I typically use an LP, but that is only because I’m in California, and the LLC fees are high for entities that make a lot of income. In the case of a Blind Pool or One Off, the investor writes the check or wires the money to the LP or LLC, and the money goes in the account.” Related: 4 Risks and Drawbacks to Using Private Money “We have control of the funds and use it to make purchases (Blind Pool) or close on the transaction (One Off).” What kind of terms and rates do you offer? Dave currently raises millions of dollars from private investors in the rather unique niche of real estate note investing. “I started by raising money from one investor for one property. Then I started doing private placements for real estate deals, and then I started doing them for notes. “If we’re tying a lender to a property or an individual note, funding is wired at the time of closing, when it’s going to be recorded.” “For an interested investor of our note fund, the process usually starts with an interview with our Investor Relations Department to see if there’s a qualified fit. The minimum investment is $10K, $5K a share.” “When we borrow against an individual note or lend on a property, our rates and terms vary.” What kind of problems have you run into, and how have you overcome them?