Carefully Consider the Real Cost of that Fixer Upper

If you watch television, you have seen the shows that turn dumps into pristine dream homes. Fixer uppers can return good profits, but be careful when calculating repair costs.

Carefully Consider the Real Cost of that Fixer Upper

Flip it! Ah, the American Dream to the road to riches. The goal is to find a decent to nice neighborhood with one home that can charitably be considered to have a lot of “character.” Translating this infamous real estate term, the place is a dump and needs lots of work. Homebuyers can be suckers for these homes. They tend to see a low price when compared to the rest of the neighborhood and think they can make a killing when they fix the home up. This can, in fact, happen, but you must be very calculating.

Can you make a ton of money flipping fixer uppers? Yes and no. If you can do the work yourself, the profit potential is much better. If you must hire contractors to do it, you really need to take a moment and break out the calculator. Many people fail to do so and regret getting into a fixer upper.

One of the place people make mistakes with fixer uppers is failing to consider code requirements. The “code” refers to regulations requiring the use of certain materials and products in a home. Many older homes are not in compliance with code requirements, but often do not have to be as long as nothing is changed. If changes are made, however, the code can become a problem.

For instance, assume you make some change to heating or air conditioning in the home. In an older home, you may be forced to also update all of the electrical wiring. The same goes for plumbing where older pipes may need to be replaced with new ones to meet code. Obviously, these can be expensive fixes and run your cost in upgrading the home through the roof. What was one a tremendous real estate deal quickly becomes a money pit.

Flipping a home that needs some cosmetic repairs can be very profitable. If you do not understand the full costs associated with the upgrade, however, it can become an emotional and financial nightmare.

Capital gains

When you buy a  <a href=http://www.marylandrealestatesecrets.com >real estate in Maryland </a>and sell it for a higher price, the difference between the selling price and the purchase price is known as capital gain. In other words, profit from selling a property for a higher price is the capital gain on the property. Capital gains may be short-term or long-term.

Short-term gain: If you sell your  <a href=http://www.marylandrealestatesecrets.com >property </a> within 3 years after purchasing it, the gain is called short-term capital gain.
Long-term gain: When a gain occurs from selling a property after 3 years of its purchase, it is a long-term capital gain.

Calculation of capital gain: Capital gain is the difference between the selling price or the transfer price and the total cost of acquisition of the property.

The cost of acquisition includes purchase price of the property, cost incurred in registration of the real estate property in Maryland, its repairs, storage expenses, etc. In short, all the expenses of capital nature are part of the cost of acquisition.

The transfer price includes commission or brokerage paid by the seller, registration fees, cost of stamp papers, traveling and litigation expenses incurred while transferring the  <a href=http://www.marylandrealestatesecrets.com >real estate property in Maryland. </a>

Capital gains tax:
Capital gains tax is charged on the gain that you make on selling a real estate for profit in Maryland. It is calculated by subtracting the cost of acquisition of real estate from the transfer price of the property. The difference is added to your taxable income and charged according to the tax bracket you fall into.

The tax rates for short-term and long-term capital gains are often different. You must be alert of the tax structure of Maryland to know what tax bracket you fall under and what tax rates are applicable for your capital gains. 

Criticism: It is often argued that capital gains tax results in double payment of taxes. The property’s value that is sold might have been included in the value of assets sold by you while calculating wealth tax. Thus, including capital gain in the income tax statement in the same year may result in double-payment of taxes.

For more read at http://www.marylandrealestatesecrets.com

Canadian Realty Holding Its Own

The annual winter lull in the real estate market means that the time is good for prospective buyers who like to take their time. With Canadian unemployment at a 33 year low, the realty market looks like holding strong.

It is difficult for many of us Canadians to accept that while the US realty market may be floundering, the Canadian market is steady. In fact, due to the strength of our dollar and the weakness of the US dollar against International currencies, many Americans are actually buying into Canada to preserve their funds.

While coastal and lake areas would seem an obvious choice for American speculation, many are buying properties simply as an investment project. Renting a condo is one of the easiest way to make money and have the property 'buy itself', and condo sales everywhere have jumped as people are realizing the enjoyment of life without maintenance!

Condominium prices in Ottawa have been climbing upwards all year, with an increase of 7% over this time last year. The strong job market was partly the cause of this. The increase in national employment has marked the 15th. straight year of national employment growth.

In Calgary, condos are also a good investment and offer a reasonable price range if you are trying to get started on the property ladder. The increased inventory of all properties has slowed the market at the moment, so now is a good time to look for a condo. Some builders have even dropped their prices, so brand new ones can be snapped up by the shrewd buyer.

Despite the changes emanating from the famous revisions to the oil royalty revenue, Calgary has a strong economy and has seen a large population increase. According to one national forecast, it is poised to experience moderate growth and a sustainable real estate market though 2008.

Average house prices in Calgary are set to increase by 4% and in a slower moving market, first time buyers may be encouraged to put their toe in the water.

One of the mandatory requirements for a mortgage for first time (or any other) buyers is a good credit rating. If there is no credit rating recorded against you then apply to a bank for a credit card. They may require you to deposit $500.00 or $300.00 and then you will be required to leave that untouched in the bank as security.

By using your card every month, and paying it every month - on time, you will begin to build up a good credit history. Of course, other data is required by a lender. You will need tax forms showing your income and a letter on headed notepaper from your company stating your earnings.

It is always advisable to get "pre-approved" before looking for a house. This means you sort out the finance before checking out the realty. If you proceed in this order, you will know if you have to save more money for the down-payment, or which price range you can look in when choosing.

Things often 'heat up' in the housing market in the spring, so now may be a good time to invest in some Canadian realty.

Can You Spot The $596,000 Difference In Identical Homes?

Can you spot the difference? Let me give you a hint; it’s not the landscaping. It’s not the location. It’s not the gold plated fixtures in the master bathroom. In fact, it’s not anything you’d ever notice with the naked eye. The $596,000 differences are in how much the buyers unwittingly may pay for this home if they aren’t careful.

 I recently met with a gentleman who was referred to me by his financial advisor to receive some consulting on how to best structure his mortgage in preparation for retirement. He wanted to retire in 13 years and he had refinanced his mortgage last year to a 15-year fixed rate loan, taking advantage of the low rates, and wants to own his home free and clear right about the time he retires.

 Most home owners have the misconception that the wisest method to accelerate the pay-off of their home is to simply pay extra principal payments to their mortgage by utilizing a 15-year mortgage, bi-weekly payments or even by adding an extra $100 each monthly. In actuality, none of these methods usually proved to be the wisest method to accomplish a “free and clear” home.

 You can accumulate sufficient cash in a conservative tax-deferred mortgage acceleration plan to pay off a home just as soon or sooner than utilizing the methods described above. In addition you can accomplish the goal of paying off your home just as soon (typically in less than half the time) plus you will have the following advantages: 1) Maintain flexibility, liquidity and safety of principal by allowing the equity to grow in a separate side fund where it is accessible in case of emergency, temporary disability, or unemployment. 2) Maximize the only real tax-deductible interest allowed by tax reform by keeping the loan balance as high as possible until you have the cash accumulated to pay off your home in a lump sum.

 Let’s look at our example above…by strategically refinancing and taking advantage of the tax deductibility of mortgage interest we were able to accumulate enough money (at only 6% rate of return) to pay off the home in 8-1/2 years instead of 14 years. If he continued to invest his monthly saving he would have $596,000 more than the balance his mortgage at the time he was ready to retire. Don’t be fooled into giving up the liquidity, safety and potential rate of return on your money by giving it to your mortgage company. Get the facts and structure your mortgage to give you the greatest advantage from the start.

Please visit more articles at www.eloanlibrary.com
Thank you!

Can You Make Milions in Real Estate?

There are several shows on television that feature people buying properties and then flipping them after minor repairs. Many people make a profit doing this, but if you really pay attention, you will often only see what the house could make the owners. The shows often leave out when and for how much the home sold for.

Many of the richest people in the world started out in real estate. That's why real estate investment is so popular. But what are some essential things you should know before jumping into real estate?

1. Know how market timing works.

This means that you need to not only research how market cycles work, but that you need to sit back and watch them for yourself. The fact is that markets go up and markets go down. A lot of successful investors aren't looking for a three-month buy and flip. They buy when the market is low and sell when it is high.

2. Know how to analyze real estate numbers.

You have to be able to identify all of the factors that are affecting your profit.

There are four major parts of real estate investing: cash flow, appreciation, loan reduction and tax benefits. You need to understand how the four factors work together to produce a rate of return.

Real estate isn't simply making you a profit when it appreciates. And it isn't necessarily loosing money when it depreciates.

3. Know the economics in your area.

You have to look beyond the simple growth of the neighborhood you are investing in to the overall health of the city, state and country. For example, if interest rates are rising, you need to understand that borrowers are being cut out of the market.

The six aspects of economics you must understand are: mortgage interest rates, affordability indices, supply and demand, demographic information, commercial real estate and the job market.

It helps potential investors to take classes in both macro and micro economics. Macro will help the investor understand the large forces that impact real estate, such as recessions, national interest rates, war and demographics. Micro will look at individual sectors and focus on the local real estate market, such as local disasters, local recessions, unemployment rates, supply and demand, new housing starts, housing for sale and types of vacancies.

There is a lot that you need to know before you jump into being a real estate investor. Yes, if you are just buying and fixing up and selling one house, you have the potential to make money. But if you plan to do this as an investment, you need to obtain the necessary education. Otherwise, you are gambling with your money.

Can A Lender Profit From A Short Sale?

With the escalating number of foreclosure happening all around the nation, homeowners from around the United States are looking for effective ways to avoid this whole fixating situation. Moreover, it is not just the homeowners who are affected by this trying situation of foreclosure, but also the lender organization has to bear a lot of trouble due to these unfortunate, yet in most cases inevitable, situation. Although the consciousness is still not so overtly acclaimed as yet, there are ways to combat situations like these, an assured one of which is short sale of the property under question.

Short sale in the real estate industry refers to a situation where the homeowner sells of one’s property at a reduced rate (that is, less than the loan balance) in order to make for the mortgage upon the agreement of the lender. Like this, the homeowner can avoid foreclosure in its entirety and subsequently save up some money if the deal is good enough. However, it is not only the homeowner who is profited by short sale of property but also the lender entity. The lender can directly make up for its losses or even when the short sale does not keep up to its due balance, save a lot of money and labor, which conducting a property foreclosure would have otherwise induced.

Real estate foreclosure sales and auctions are indeed trying and tiring! In most cases, the lender entity tries to make all sorts of arrangements for a successful closing of the property deal, but to its utter disappointment, suffers only irrecoverable loss due to insufficient bids in the auction. At certain occasions, the property might not sell at all and the lender has to suffer major losses with the property left to no use of its own. It is, therefore, why the lender entity easily gives in to a minimum loss in cash with approving the short sale of the property under consideration.

So how can a lender get profited by property short sale? In general terms, the lender is free from any risk due to the potential un-saleability of the concerned property, which can be made sure with short sale. The loss thereby incurred is minimal and can be recovered with ease by the lender, whereas a virtually unsalable property is of no use to the lender. The entire procedure of foreclosure is also very demanding both in terms of money, time and labor, and by approving to the short sale of the property under question, the lender can ensure that it saves all of that.

Along with the easily dealing of the otherwise expensive and lengthy foreclosure procedure, the lender saves excessive loss of money. Since foreclosure auctions induce far less property price in comparison to the industry standards, short sale is an easy option, which ensures a respectable and, of course, a predictable property evaluation. The lender even does not have to bother with the refurbishment and repair of the property before the auction. No marketing, no selling - short sale maximizes profit and efficiency in all possible ways! And with the best loss mitigation negotiating and short sale negotiating service like eshortsale.com, things are even easier.

Can a Foreigner Own Property in Thailand?

Retirement in Thailand is the dream of many foreigners and mine too.  I plan to settle down there in about two years and have been checking out the rules for acquiring property in the land of smiles.

The easiest solution for a foreigner (farang) is to buy a condominium.  There is a percentage requirement as to the total number of farang and Thais in the condo complex.

Foreign land ownership is forbidden in Thailand.  So, the best that a farang can do is to lease the land and own the house.  The lease is good for 30 years and beyond that is anyone’s guess.  Some web sites say you can get an additional 30 years and other sites say that there is no guarantee.

Another option is to incorporate yourself as some sort of company and lease the property back to yourself as an individual. This is in the gray area of Thai law and one that I wouldn’t use.  I have friends that have done this and so far it is Ok but I worry about the future.

Lastly is something called a usufruct.  Googling this will probably give you more information and a better explanation than I can provide.  All I know is that is the option that a lawyer recommended to me and I will pursue further on my next trip to Thailand.  He claims it is similar to a lease but has some better advantages.  He will have to convince me. 

Regardless, it will be the lease or the usufruct.  Either one should allow me to have a place in Thailand until the day I die or whatever happens to the property after that I really don’t care about.

There is one final solution that I highly DON’T recommend.  You can place the property in your Thai wife or girlfriend’s name.  She will then own the property outright.  There is a minor technicality that she has to prove that she provided all the funds for the real estate – but that is an easy lie to cover.  The problem with this solution is that since she is the owner, she can do whatever she wants with the property.  You could take a two week vacation and come back and find that your house has been sold and your honey is gone.  This is definitely not advised.

Check with your lawyer and find the way to purchase/lease property for your retirement.  While you have your lawyer’s ear, check on pre-nuptial agreements and an enforceable will.  Don’t conduct any transaction of this nature without the advice of a lawyer.