Are you finding it hard to sell your home or investment property? Sometimes it is hard to sell on a tough market and you need to think outside the square to get inspiration. It can often be easier to sell a difficult to sell property if you are prepared to take something off the buyer in part or whole exchange.

Maybe you have an interested buyer who is short of the necessary deposit. It could be that they would be interested in using their car as a deposit. You could agree on a value for the car and that gets passed to you as deposit and part payment. Even if you have allowed a value well above what may be attainable elsewhere this could still be a very useful way of getting that property sold. Just consider that a cash buyer would have been much more aggressive in making a lower bid for your property.

Looking at trading a cheaper property for a more expensive home can work well, especially if the cheaper property can be rented out at a good rental until you decide to sell. If you do not like the idea of renting you can put it straight back on the market at a hot but lower price to get a quick sale. This needs to be thought through before agreeing to the deal because you do need to make allowance for any later price discounting.

Taking things other than property in an exchange needs to be looked at with more circumspection, particularly if it is something that you have never dealt in before. Boats are a favorite to trade but they can often be very hard to on sell. Get specialist advice and an accurate valuation with anything that you are unsure of.

So beware of the pitfalls of trading but keep an open mind because it can so often be a means to an end. Just be careful not to end up with somebody else's white elephant that is impossible to sell. In most cases, however, things will always sell at the right price. Which comes back to doing proper investigations before doing any deal.

It is so important to be vigilant when trading and only use it when all else is failing to sell your property. It does work and many people are more than happy with the result. One final warning, be sure of the values it is not unknown for unscrupulous traders to artificially inflate the value of their property to get an advantage in a trade. If in doubt pay for a proper certified valuation.

Talk to an experienced Lake Realty Broker if you have any interest in accepting or offering a trade in your next real estate transaction.
 

Bargain Properties - What You Want and What You Don't

Home foreclosures and fixer-uppers have long been a focus of savvy real estate investors looking to quickly make big profits. Of course, if the target property doesn't meet certain criteria, an investor can lose their shirt almost as fast as a rock star on a tour bus.

A cautious and methodical approach is best for rewarding and risk-averse decision making. Keeping that mindset, here are some critical area's that must be considered when looking for real estate bargains for investing purposes.

They are not all equally important. But they must all be considered in their entirety. The property should firmly meet at least one of the criteria, and should have no unjustifiable issues in any one area.

Following these principles is essential for achieving a higher return on your investment and lessening your risk.

KNOW WHY IT IS PRICE AS IT IS

Most investors focus on price first and foremost.

They search for properties they think are selling for below apparent market value. It seems easy enough but there are several things to watch out for.

First off, never buy for less than market price until you know exactly why the seller was willing to cut the price. What was their motivation. Are they relocating or in financial duress?

If not, there may be problems with the property that require costly, time-consuming repairs. Structural problems such as a compromised foundation, or outdated plumbing and wiring could be deal killers.

HOLDING COSTS ARE REAL COST

A usually unforeseen profit drainer is underestimating the liquidation costs of holding and selling the property. This is not surprising when one considers all the cost components, including commission payments to real estate agents, closing costs, mortgage payments, taxes, plus repair and maintenance costs.

An faulty determination of true market value is another obstacle to the successful deal. Market value is essentially a subjective exercise where the true value is not known until someone buys the property.

It's essential to analyze similar properties in the area, keeping in mind that prices are set at the margins and may reflect the extremes of a particular housing market environment.

TERMS AND CONDITIONS IMPACT PRICE

Investors often focus obsessively on price and location and discount other profit leveraging tools like the terms of the financing. This is especially advantageous if the property is intended an income producing rental.

In fact, used wisely, an investor can pay full price and use this positioning to negotiate lower interest rates or a smaller down payment. Over time, the rental cash flow will be in the black because of the generous terms given, combined with gradual rent increases and price appreciation.

YOU OR BROKER HAVE TO KNOW THE LOCAL MARKET

Experienced real estate investors often rely on the fact they know more about the market than the seller does.

Rental market bargains come about because you know more about the market than the seller.

Consider the absentee owner of a rental property. They might be primarily concerned with vacancy rates, so they keep prices low instead of upgrading the property. In contrast, your research shows that particular upgrades like air-conditioning, second bathrooms, or enhanced security allow for both lower vacancies and higher rental rates.

LOCATION - GOOD OR BAD?

Other than price, location is usually seen as the most critical component of finding a good deal. In reality, this matters much more in terms of finding a long-term residence than it does for a quick sale. It's more critical to focus on the potential profit margins than the area it's located in. If the ugly home by the dump is more profitable than the fashionable condo downtown, then it's a better deal, aesthetics aside.

DISTRESSED PROPERTIES - FIXER UPPERS AND FORECLOSURES

A familiar area ripe for investment picking is distressed properties or fixer-uppers. Of course these are the houses that need repairs to some degree. And the investors job is to discount the costs of these repairs enough so that the profit is still suitable.

With small repairs such as painting, minor landscape, and basic flooring, profits may be available but not really worth the risk. More significant profits are found with extremely distressed properties. Those slipping down the hillside and selling for a quarter or less of normal area values. Or the plumbing is corroded, the roof needs replacing, and the interior needs to be gutted and remodeled, but the seller is asking 50% of the market value and you can repair it for much less.

ZONING - HIGHEST AND BEST USE

Zoning provides an opportunity to put the property to a higher or better use and is an area many investors ignore. Higher and better use means that the owner is getting the most out of the land. For example, if a lot is zoned for three units but contains a single lot, then it is not getting its highest and best use. Or if a lot is zoned commercial, yet there's a three unit residential building sitting on it, it is not getting its best and highest use, like a business or a store.

These are often bargains because the price is based on current utilization. So the single unit residential is priced low while the double unit duplex could be sold higher or rented out. Harder to find as developers stay more aware of zoning allowances these days.

Watch out for "midnight conversions" where owners, aware of the zoning ordinance, have made changes without the oversight of the local building authority. Garages being converted to second units on a duplex lot are common examples.

Zoning maps can be found at the local planning department. The biggest thing to watch out for with zoning bargains is properties with multiple zoning that is not reflected on the map.

Even if its not your core strategy, the zoning should be looked at just to avoid negative consequences. Something to beware of is a future zoning change from residential to commercial which might affect an income producing rental property.

MOVING THE OLD OCCUPANTS OUT

A common instance of buying bargain properties at foreclosure is handling a former owner who still resides on the property. Not facing reality or citing mortgage fraud, they refuse to move out.

You can begin action to get the individual evicted, but if they battle it in court the judge may not dismiss the case and now you have a potentially lengthy court battle on your hands. Costs totaling in the many thousands and time measured in multiple months could be the end result of the purchase.

In any other type of purchase, always stipulate the conditions of occupancy, such as the house must be empty, before closing the deal.

In closing, these are some important areas you should use as a framework when searching for bargain properties. It serves to remind us that there's a bit more more to it than simply price and location.   Back to Lake Realty Newsletter Index

Is Real Estate A Better Investment Now?

With the world financial crisis in full swing the world stock markets are see sawing up and down like we have never seen before. Downright scary for any serious investor. Not surprising then that large numbers of investors are fleeing these markets but where do they put their funds. Well there is the bank but they have displayed poor judgement in recent times and do not give you the same feeling of security as they once did. Aside from the security issues the investment rates offered are really not worth having.

You can look at any number of alternative investments and they either look shaky in the current economic climate or the returns are very poor. So where do you put your money? You could bury it in the garden or hide it under the bed. That is very risky and anyway you will not earn any return doing that.

So, for most people there remains the old stand by of property. That, of course, has had its own bad press lately but it still remains one of the safest investments around. The trick is to buy at the right price. There are a lot of forced sales going on currently so there should be plenty of opportunity to buy cheaply. Do the sums and work out your purchase price that will give you a good return on your investment This should not be hard to do given the present market conditions.

Real estate has always been a good solid investment. The current woes are the fault of greedy finance companies lending money without any care or responsibility under terms that were unheard of only a few years ago. The fact that thousands of borrowers are now unable to keep up with their repayments is proof of that lending policy failing.

That loan money fueled the huge unjustified rise in real estate prices and that same loan money is fueling the drop in property prices as people are forced to sell their properties cheaply.

Real estate is still a great investment if the purchase price is well considered. Do not rush in and purchase right away but watch local prices and wait for your opportunity to buy. It will be a long time before we get another real estate boom but it will come, maybe not on the same scale as the last one but it will come.   Back to Lake Realty Newsletter Index

Superior Curb Appeal Attracts Home Buyers Like A Magnet

First impressions matter the most to potential home buyers. This is one concept that many homeowners trying to sell their homes often fail to understand. A house will sell many times faster if the property is well landscaped and maintained. First impressions make all the difference when a potential buyer looks at your property.

Curb appeal is the buyer's first impression when it comes to evaluating a house to purchase. You as a seller want those driving by to immediately think of your house as an attractive home to own. For this reason you should spend time and effort making the outside of your home inviting and appealing to potential buyers.

One of the first things that people will notice is crumbling paint, or tired and faded colors on the exterior. Vinyl siding is often more inviting because it is easily cleaned and maintained. Be sure the exterior of your home stands out and adds value to your property. A clean and crisp paint job, or siding, makes a much better impression than an apparent state of disrepair.

Another thing you can do to add curb appeal is to plant low maintenance flowers and plants around the exterior of your home. You do not want to invest in plants that require constant care, or plants that are going to grow out of control and detract from the overall beauty of the home. Bushes and climbing vines do well along fences around the property, or as a dividing line between your property and your neighbors homes.

If you live in an area that is not conducive to green grass you may want to consider some sort of hybrid plants for your yard that can grow with less water. Choose some form of landscaping that does not rely on large open patches of grass in order to be beautiful.

Excellent curb appeal will make the biggest impression when it comes to selling your home. If you properly care for the exterior of your home and keep it nice, the buyer will more than likely be inclined to want to see the interior of the home as well. Then you or your real estate agent can proceed to sell your home on the rest of its merits.

The point is to make your home as attractive on the outside to buyers viewing it as they will find it on the inside. People buy according to the perceived value. An attractive home makes the buyer feel as though they are getting more for their money.

Taking the extra time to ensure that the outside of your home is attractive to buyers can translate into a higher sale price for your home. This tip can add thousands of dollars to the sale price of your home and help you sell it faster in the local housing market. For these reasons it is well worth your time to improve the curb appeal of your home before the sale.   Back to Lake Realty Newsletter Index