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Where The Next Real Estate Bubbles Are Inflating

In real estate, pricing is relative. It would surprise no one that the most expensive real estate markets in the world are the most densely populated. There are simply few, if any, places to build, so prices stay high and keep rising. Of course, that doesn't mean that prices in the most-expensive markets are fair. In a recent survey, the Swiss-based bank UBS compiled a list of the most expensive cities in their Real Estate Bubble Index. While Hong Kong, for example, may qualify as one of the most densely populated an exciting cities in the world, it would take you more than 20 years to be able to afford an average-priced apartment, according to UBS. How does Hong Kong compare to the last city on its list (Chicago)? It would take you about five years to buy a place in the Windy City. So it's easier to buy something in Chicago as opposed to Hong Kong or Toyko. "Prices continue to soar," UBS notes, "but in half of the cities in the study, housing markets are booming with inflation-adjusted prices rising at least 5% in the last four quarters.

3 Reasons Why Investing in Real Estate Is Easier Than Ever

Image credit: Martin Barraud | Getty Images Opinions expressed by Entrepreneur contributors are their own. According to a study conducted by Morgan Stanley, more millionaires today have invested in real estate than any other asset class. While real estate investing may seem intimidating or out of reach, new technology is changing the game by increasing access and decreasing investment minimums. To get a better understanding for how new and younger investors can begin building their real estate portfolios, I had a phone interview with Joy Schoffler, Chief Strategy Officer at Upside Avenue, a spin-off of traditional real estate investment companies that let’s the little guys in. Start conservatively. I recommend starting out by investing with a more conservative approach because I’ve done it the other way and lost.” “If you adopt the investment concept of compounding -- the process of increasing your return based on reinvested earnings -- you might be surprised what you could earn over time. Don't worry about diversification -- just start. If you are fairly conservative with your early investments, you can earn while you learn.” 3. Technology is changing the game and inviting new players. The additional annual filings requirements also allow investors to keep better track of their investments, which gives investors way more information about these non-traded REITs.” Information, technology and transparency are removing the intimidating shroud that has historically covered the real estate investment market -- making that leap from saver to investor that much easier for the future generations of millionaires.

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."

Five Steps to Smart Multifamily Investments

Here are five things to consider before you make a decision: A growing market. Investing in a new complex. In response to the growing number of people who prefer to rent rather than buy a home, new, shiny apartment communities are being built in cities across the nation. Such turnover results in high expenditures for marketing and unit make-ready in order to attract new tenants. Increased demand for class-B and -C apartments. With minimal investment in upgrades and amenities, the older class-B and -C complexes can attract a wide demographic, including working-class individuals and millennials. The importance of professional management. Simply upgrading the units is not enough to improve value; professional property management is essential to protecting your investment. These days, that means more than simply keeping the property clean and attractive, although those things are important; it also means working to make your tenants feel like part of a community. Coupling an institutional investment approach with active, hands-on property management is what makes for a successful multifamily investment.

Multifamily Investors Continue to Accept Low Cap Rates, But for How Long?

Cap rates on multifamily transactions have not moved much since 2017, according to Real Capital Analytics. At conferences, leading investors and industry analysts repeat the same question: “Are interest rates going to go up any more and will capitalization rates respond?” says Jim Costello, senior vice president with research firm Real Capital Analytics (RCA), who is currently making the rounds of the fall apartment conferences, most recently at the Association of Foreign Investors in Real Estate (AFIRE), held in September in Ellicott City, Md. New buyers continue to step forward, paying high prices that keep average cap rates fixed at record lows. Cap rates still low Since the fall 2016, investors have accepted cap rates that average in the mid-5 percent range for apartment properties in the United States. At the same time, the yield on benchmark rates like the yield on U.S. Treasury bonds have changed quite a bit—rising from their low point of less than 1.5 percent in the spring 2016 to a little under 2.5 for most of 2017. Rising Treasury yields are likely to push cap rates higher eventually, but not immediately. For now, lenders are absorbing some of the shock of rising yields on Treasury bonds. “We anticipate (assuming interest rates continue to rise) that cap rates will eventually rise with them… there is still time for cap rates to react,” says Andrew Rybczynski, senior consultant at research firm the CoStar Group. New buyers keep bidding for apartment properties The pool of potential buyers for apartment properties continues to be very large. If one investor is unwilling to pay a high price—and accept a low investment yield for a property acquisition—another potential buyer may be willing.

How to Avoid Owner Financing with BrickBlock Blockchain Real Estate Investing

Owner Financing is the acquiring of property whereby a buyer gets to finance the purchase through the person who is selling. This could be because the prospective buyer cannot afford financing normally or they are not willing to pay the current interest rates in the market. Owner financing homes has been possible over the years due to the rising property costs and more sore the transactions that are involved int he acquiring of property. This mode of financing is a loan to a purchaser that is provided by the owner of a piece of property. This one then follows the conventional payment methods whereby a down payment is paid out, then monthly installments over a specified time, and interest rates until the loan has been fully repaid in full. Owner financing homes is beneficial to a buyer in that they may not be able to obtain a loan from the bank, to acquire the property. Being an investment whose return will be guaranteed by the ability of the one who is buying the property to cater for the pending mortgage. The buyer may be diligent in making payments but the seller might not make payments to the financing body that may be in place which may lead to the property’s foreclosure. There is no protection against over valuation of the property since there will be no protection from home inspection, mortgage insurance or a valid appraisal to ensure that they are not paying too much for the property. How BrickBlock makes Real Estate Investing more fun.

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.

How Blockchains Can Transform the Real Estate Industry

Inefficiencies in the Current Real Estate System In the real estate industry as it currently exists, investors are often required to invest in entire properties. There are only so many investors with enough capital to invest in real estate, due to the fact that even the most affordable properties can be very costly, compared with other investment options. Real Estate Investment Trusts Many people point to Real Estate Investment Trusts (REITs) as solutions where individuals have greater ability to invest in real estate. Blockchain technology grants the ability to unlock the potential held within the current real estate market, introducing a whole new world of liquidity and opportunity for investors. Benefits of a Blockchain-Based System In simple terms, blockchain application could allow real estate ownership to be delegated, traded or decentralized in other ways via tokens that represent fractional ownership of the underlying property or asset. SwissRealCoin is another blockchain solution looking to eventually provide global application for the tokenized real estate market. HiP is yet another company looking to change the world through blockchain-based real estate. The token is merely a fee on all trades." Bluenote is one more company in the blockchain property space, but with slightly different goals. Providing blockchain based proof that energy efficiency is the source of that profitability, can unlock the potential of $6.5 trillion in global real estate value, and solve climate change too."

New York City Housing Market Healthy After Crisis, But There Are Safer Investments

New York City real estate has recovered well from the recession, but it still may not be the best investment for your money, experts say. Since the housing market collapse in November 2011, nearly 500,000 homes were bought and sold in the city, earning a median return of 33%, according to a new report from the real estate listings site StreetEasy. But the Big Apple is falling behind the national market, as home values across the country rose 45.1% since mid-2012, noted a recent study from StreetEasy’s sister company, Trulia. Additionally, StreetEasy found that those who bought New York City property in the two years before the crisis and sold during the recovery earned a median annual return of just 1.7%, or a $60,000 cumulative gain on a median-priced home. Comparatively, the S&P 500 more than doubled since the city’s housing market bottomed out, increasing 125% for an annual return of 13%, making stocks a safer investment for those seeking healthy returns in a 10-year period, Long added. The trouble with buying and selling homes are the added expenses, including closing costs and property maintenance, he said, whereas stock portfolios require little oversight. “It’s obviously a lot more liquid - if the stock market’s increasing rapidly, you can sell that day.” However, “the real estate market is not just simply an investment, for a lot of people it’s their home,” he said. It’s a pied-à-terre.” If you do want to treat housing as an investment opportunity, the best place to put your money is in a real estate investment trust, or REIT, advised Michael Tanney, founder and managing partner of Wanderlust Wealth, a fiduciary financial advisement firm in Manhattan. Another bonus is that a financial adviser can connect a REIT investment to a tax-deferred retirement account, so your returns are pure profit. REITs can also be part of a diversified investment portfolio that includes allocations to real estate, fixed income, emerging markets and other assets.

Four Ways Real Estate Can Boost Retirement Income

Buy shares in real estate investment trusts (REITs). Private mortgage funds lend money to real estate flippers who buy, improve and resell properties. Independent home lenders offer investment property home loans with as little as 15% down, so you could buy a $200,000 property with $30,000 cash down. Let’s say home prices rise 5% next year. Real estate also tends to move with inflation. Timing your rental property mortgages to pay off by the time you retire creates an inflation-hedged income stream. After the real estate crisis, median home sale prices hit a low point of $148,000 in 2012. If you buy with a 15- to 30-year mortgage and don’t sell your rental property, home price changes won’t influence you. Real Estate Investment Trusts (REITs) Pros And Cons Real estate investment trusts (REITS) take money from shareholders to invest in real estate, such as residential or commercial properties, or mortgage-backed securities. To cash out home equity, you have to either sell a home you’ve built equity in, refinance or take out a reverse mortgage.


The top blockchain applications in commercial real estate

Little digital transformation and innovation has happened in the real estate market in comparison to other industries. The blockchain now appears to enable a...