Creative Real Estate Investing

2009 has been an odd year for anyone involved in property. At the start of the year there were some fantastic bargains to be had as the media told ‘doom and gloom’ stories on a daily basis. However, all this ‘end of the world’ news meant that most sellers who didn’t have to move took their properties off the market and have stayed put.

Meanwhile, the dramatic drop in interest rates and the government’s tightening of regulations on lenders repossessing property has meant that the amount of stock on the market has fallen almost, if not more than, demand fell last year!

So we are now in a situation whereby in the auction houses, according to www.eigroup.co.uk data there are less repossessions going through than there were before the credit crunch!

Investors are also hampered by the lack of finance available as well as tightening criteria, which means only cash rich buyers can really take part in what bargains can be found at the moment.

So is there any good news for current or wannabe investors? Of course there is, and here are our top 10 good news stories for investors:-

1. Property prices are 20% less than they were at their peak in 2007. Woohoo!

2. Property prices are expected to return to their 2007 levels from 2013 so, for the right property, in the right area, there is potentially 20% capital growth or more available in the next 4-5 years.

3. Although deposits have increased from 15 to 25%, if you can bag a bargain, this might mean you don’t need any more actual cash. For example, if a property was selling for £200,000 in 2007, you’d need 15% x £200k = £30k deposit. If you can get the same property for £120,000, then the deposit is the same.

4. There are less investors, buyers and developers around to compete with you on price.

5.  If you are into Buy to Let, rents are forecast to grow between 5-10% in 2010, now the accidental landlord stock has virtually disappeared.

6. If you want to self build or build to let, plot prices are down by 20%, you typically only need a 10% deposit AND if you get your sums right, you’ll earn a 30% uplift in value PLUS any market increase.

7. The new HMO legislation has given investors that get this property strategy right, a great barrier to entry, so less competition.

8. The economic hardship has lead to more people needing to rent than buy – some local authorities and charities will take properties off your hands for three years and sign a contract to maintain and return it in exactly the same condition at their cost.

9. The number of ‘accidental landlords’ has now decreased to such a level that rental income, in the main, is starting to increase which will result in less voids for 2010.

10. Some areas and property types will be in very short supply over the next five years (some won’t though!) so careful property investors will be able to make some exceptional returns!

Excited about property investment – don’t make a move until you’ve read our ‘bad news’ article for property investors!

Thinking about Buy to Let or already a Buy to Let investor?

Don’t do anything without purchasing one of our Buying and Renting a Buy to Let Property Packs to ensure you avoid costly mistakes with your property investments.  The pack is full of comprehensive information covering all aspects of buying and running a buy to let property. Each pack also comes with a FREE Which? Book – Renting and Letting or Property Investor’s Handbook, plus full access to the Designs on Property website, and all the expert and independent help you require from the UK’s leading property experts.

Kate is one of the top property experts in the UK and regularly quoted in the press including the Telegraph, Independent, Times, Daily Mail and Express, and has appeared on BBC2, as well as featured on BBC Radio 4 and a number of local BBC Radio stations.

Kate has also been a consultant to the property sector for a number of years and is the author of a number of books, including four for Which? – Buy, Sell, Move House, Renting and Letting, Develop your Property and the Property Investment Handbook.

Contact Kate Faulkner at http://www.designsonproperty.co.uk/

Article Source:http://www.articlesbase.com/real-estate-articles/whats-the-good-news-for-property-investors-1397294.html

Knowing the good news for property investors is only half the story! Investing in property is a roller coaster ride and you need to avoid major and minor mistakes when investing in property or you could lose a lot of money rather than gain the riches property investment can bring!

Here are our top 10 ‘bad news’ stories for property investors to be aware of:-

1. The current property stock to purchase is low, so to find a great Below Market Value deal you need to search through 150 property deals, find 50 that work, and then find 10 that’ll take an offer. Of these you can usually bag one!

2. Some areas and property types with oversupply in 2010 will FALL in value, so beware what you buy!

3. Finance is tough to find, you need (and will continue to need) 25% deposit and if buying to let, rental income 130% of the mortgage costs.

4. Fees are on the rise. For example, mortgage costs are up to 4% of the property’s value and fees in the thousands of pounds. Some insurance prices are going up due to the increased number of tenant arrears.

5. Mortgage rates for new properties are likely to remain at 5-7% long term.  Some investors’ portfolios won’t stack up at these rates – will yours?

6. Rental income inflation usually lags behind actual inflation and if it doesn’t keep up with your rental cost inflation, the income you receive will be worth a lot less.

7. Average yields of 4-5% for buy to let is not enough to cover you for the ‘unexpected’ in the future eg interest rate rises, oversupply of rental properties. As a result, if income is your prime investment objective, then it’s essential to ensure your rental property delivers more than the average! Some investors look for 8%, others for 10% minimums.

8. Rent arrears are on the rise from tenants being made redundant, costing some landlords thousands of pounds!

9. Local Authority Housing allowance being paid directly to tenants is causing some poor landlords to lose out to tenants sending the money somewhere else, or just spending it on themselves!

10. Population changes in the next 15-20 years WILL change the demand for property stock in the future. An ageing population that lives outside of London are highly unlikely to be that interested in small one or two bed flats that are three or more floors up!

So property investors need to wade through troubled financial waters and also now not just buy something that looks like it stacks up now, but identify when and who you will sell onto, to make a profit in the future!

Thinking about Buy to Let or already a Buy to Let investor?

Don’t do anything without purchasing one of our Buying and Renting a Buy to Let Property Packs to ensure you avoid costly mistakes with your property investments.  The pack is full of comprehensive information covering all aspects of buying and running a buy to let property. Each pack also comes with a FREE Which? Book – Renting and Letting or Property Investor’s Handbook, plus full access to the Designs on Property website, and all the expert and independent help you require from the UK’s leading property experts.

Kate is one of the top property experts in the UK and regularly quoted in the press including the Telegraph, Independent, Times, Daily Mail and Express, and has appeared on BBC2, as well as featured on BBC Radio 4 and a number of local BBC Radio stations.

Kate has also been a consultant to the property sector for a number of years and is the author of a number of books, including four for Which? – Buy, Sell, Move House, Renting and Letting, Develop your Property and the Property Investment Handbook.

Contact Kate Faulkner at http://www.designsonproperty.co.uk/

Article Source:http://www.articlesbase.com/real-estate-articles/whats-the-bad-news-for-property-investors-1397337.html

Thousands of real estate investors get their start by investing in single family homes. It is usually the easiest way to get started. It is also usually the easiest type of property investment to get financing for. Beginning investors can also getting creative with the financing to buy a property. Purchasing single family homes is great because it gives the beginning real estate investor much needed, real world experience, and at one investment, it is not too much for the investor to handle.

It is also not out of the ordinary for new investors to consider buying investment property to live in the property for a few years to learn the in and outs of owning a property. This not only gives the investor valuable experience, but it also has tax benefits to the investor once they decide to move out of the property.

Multi Unit Homes
The next step for the beginning real estate investor is multi unit properties. These can be called duplexes, triplexes, and fourplexes. These type of real estate investments are appealing popular because of the lowered risk to the investor. The issue with single family houses is vacancies. If you lose your tenant in a single family property, you have no cash coming in. If you own multi unit homes and you have a vacancy, you will still have cash flow. So, it is common sense to see why this type of investment property is appealing to real estate investors.

The other benefit to these properties is that getting money for these investments are still considered residential. Residential loans are less difficult for the investor to obtain than commercial financing. They are less difficult because oftentimes the down payment is lower and the loans don?t take as long to obtain.

Buying Apartment Complexes
Apartment complexes can be a fantastic investment if the investor does their homework. These investments can either provide you with some cash flow, or they can drain your bank account dry. It all depends on the investor. If the investor has done his research he should be able to see if an apartment complex is a worthwhile investment. Investors must look at vacancy rates, among other things, to ensure that they will have continual positive cash flow.

Obtaining financing for apartment complexes should also be considered. Loans for larger properties like apartment complexes are considered commercial loans. So generally, it will take a bit longer to get the loan, and you will need a bigger down payment for the lender to feel comfortable in financing the property.

Real estate investing is a great tool to increase your income. If done properly investing in real estate can create more wealth than any other type of investment. The key is to decide on what path you want to take to increase that wealth. Do you want to begin small with single family homes, or do you want to go big and buy multi unit properties or even apartment complexes? Do proper research before deciding. If you have done your research properly, you could reap huge rewards in the future.

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As any person with even passing awareness with national news headlines is aware, the number of foreclosure sales taking place on a day by day basis has devastated all previous records. While this is obviously a disaster for the homeowners losing their homes, it?s also a devastating circumstances for lenders who can?t afford to take so many REO properties back into their inventories. For real estate investors that know how to get the most out of on this opportunity it is an unprecedented break for gain ? and a option to help others at the same time. Here are three ways you can take advantage of the opportunities presented in today?s red-hot foreclosure market:

Foreclosure ? Once a owner has defaulted on their mortgage finance, they?ve begun the countdown to foreclosure. At this point, the proprietor has faced the reality that there?s a awfully strong possibility that they could lose their home. Some are holding out hope that a miraculous way out could turn up that will out of the blue cure their economic problems, but several others are simply looking for a way out that will allow them to save some of their self-respect ? and their credit rating. A very skillful technique of identifying these foreclosure opportunities is by scouring foreclosure filings and then contacting homeowners with a way out to their troubles. You can approach homeowners in person, but a superior way is to send a personalized letter explaining how you can help them and why you are the best person to help them out of their condition. You might give a to the point description in your letter of how you propose helping them, but the most essential thing your letter MUST do is make a delicate connection with the homeowner with a call to action. Request them to write to you TODAY so you can put in plain words all of the options existing to the owner. Increase your chances of success with this approach by following up with a telephone call. Be relaxed, upright, and keen to help. The owner will be pleased about your honesty and will be much more willing to incentive you with a go-ahead to help them.

Post-foreclosure ? Once the foreclosure is finalize, the homeowner is out of the picture. Now the lender has an REO that they very much need to get rid of ? quickly. As a real estate investor, you?re in the exclusive position of being a solution to the lender?s REO difficulty. Lenders are saddled with so many REO properties that countless of them are willing to reduce them for as little as 45 to 55 cents on the dollar. Offers that lenders would have rejected with contempt a year or two ago are being accepted with gratefulness today. So be expert ? and prepared to get a good deal.

Pre-foreclosure ? While I don?t explain pre-foreclosure methods, some real estate investors have had success by trying to outperform the competition to the punch and buying a distressed property before it shows up on foreclosure lists. There are several ways of doing this. One of the best is by promoting your eagerness to purchase the house of a proprietor who may be facing foreclosure. Homeowners know before anyone that they?re in serious trouble, so if they?re facing an impending break up, job loss, or payments they can?t pay for, they know before they?ve even missed a payment that something needs to be done. You can market for pre-foreclosures in the classified section of your paper, on bandit signs, or even Craig?s List. When these desperate homeowners get in touch with you for solutions you can buy subject-to the existing financing, by utilizing associates, or even by doing a short sale. Your options are wide open. Pay attention to the needs of the homeowner and create a way out that meets their needs ? and funnels money into your bank account!

Foreclosures are a awesome way to build a portfolio of properties extremely quickly in today?s market. The foreclosures opportunities are genuine ? and the profits can allow you to generate instantaneous equity and residual income that can help you create a generational lift in your family?s financial potential.

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Have you tried investing in Real Estate and failed? Or are you looking at taking the leap into this tricky but extremely profitable industry?

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Article Source:http://www.articlesbase.com/real-estate-articles/real-estate-investment-guide-1394177.html