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Archive for June, 2009

On any given day, people can easily find articles and news stories describing an impending bust of the so-called real estate bubble. Despite this gloomy prediction, many experts believe that the recent slowdown in housing will be a gradual and modest readjustment rather than sharp bust or decline. These experts believe that factors that lead to a sharp decline in the real estate market are just not present in the current economic outlook. In fact, a recent study by the Joint Center for Housing Studies at Harvard University noted that “despite the current cool-down, the long-term outlook for housing is bright.”

The rise and fall of the real estate market is subject to the forces of supply and demand, and these factors point to stable and positive growth in the real estate segment.

SUPPLY FACTORS

Limited supply of real estate makes it scarce and usually pushes home prices up. In contrast, an oversupply of real estate tends to put downward pressure on home prices. Despite the current slow down in the real estate market, factors that impact limited supply favor continued growth in the real estate market. Some of these factors include:

1. Builders have readjusted growth plans in regions that have an oversupply of new housing. Over time, any excess inventory is likely to be depleted and equilibrium achieved between supply and demand.

2. The availability of land in certain regions, as well land use regulations and associated compliance costs will continue to restrict the supply of new homes.

DEMAND FACTORS:

Housing located in regions with high demand tend to be more expensive than homes in regions with low demand. Factors that impact the demand for housing suggests a favorable long-term housing outlook. Some of these factors include:

1. No current evidence of significant and across-the-board job losses; forecasts of relatively low unemployment rates.

2. Long-term increased demand for second homes, vacation homes and senior housing by baby boomers.

3. Long-term increased demand for entry-level homes by the children of baby boomers.

4. Long-term increased demand for entry-level homes by immigrants.

5. Long-term increased demand for entry-level homes by second-generation Americans.

6. Forecasts that the outflows and inflows of the U.S. population in and out different regions will not significantly impact the overall U.S. real estate housing market.

7. Relative stability in interest rates.

8. Continued stability in long-term home appreciation rates.

9. Overall, rising rate of wealth across all age groups.

SUMMARY

In summary, strong household growth, overall rising incomes and wealth, and a stable economy all bode well for continued long-term growth in the real estate market. While the overall housing outlook is favorable, affordability will continue to be a challenge, as wages, especially in the lower income levels, have not kept up with housing costs.

You have probably heard the buzz words “buy-to-let” recently. So many people are deciding to try their hand at renting property as an investment.

The problem is that most of them don’t know how to go about this the right way.

Times have changed and investors need to learn new strategies to experience success. The good news is that I’m going to let you in on an important secret. You can use this information to turn your rental properties into a lucrative investment.

Are you curious yet?

Well, read on

First, I’m going to discuss some of the current changes in the 2007 buy-to-let market.

I know you’re anxious to find out the secret, but I don’t want to make it too easy. Besides, it’s important to know about these changes; they play an important role in the world of buy-to-let investing.

The current high property demand has been influenced by the following factors:

High European Divorce Rates

Fragmentation Of Families

Property Shortage

Increasing UK Population

Less Council-owned Properties

Mobile Workforce Expansion

Huge Increase In Immigrants From EU Countries

Very Low Interest Rates

More Lenders Offering Buy-To-Let Mortgages

This has resulted in a huge increase in the price of UK property. In fact, prices actually doubled from 1998 to 2002!

Renting property as an investment also involves many costs such as maintenance, service charges, furniture, property tax, tenant deposit schemes, property management and buy-to-let house insurance. Every investor who chooses to play the buy-to-let game has to pay these costs.

So what is the main difference between successful investors and ones who fail?

Location! Location! Location!

I can’t emphasise this point enough. Many people purchase local property for convenience. Unfortunately, this isn’t usually the best choice.

Experienced investors are more interested in an area where the numbers stack up for the investment rather than owning a property near to where they live.

So what’s the big secret?

Consider investing in Northern England and Scotland!

The reason is simple: prices in these areas are currently below the national average with yields of approximately 7-8%.

In this part of the country property is still affordable for first-time buyers.

Also the enlargement of the European Union has fueled demand for rent. A large number of people from Central and Eastern Europe have recently moved to Scotland. As you can imagine, this is great news for the buy to let investor as demand for property exceeds supply, fueling the capital growth.

Did you know you can still buy a one bedroom flat for 45,000 pounds with a rent of 300 pounds per month giving you a healthy return of 8% yield.

I have personally moved all my property portfolio from the south of the country to the north because of the high capital growth anticipated for at least the next five years.

Green Happiness

“He who plants a garden, plants happiness” is an old saying. However, things have changed a lot nowadays. Today, the proverb could be thought of as “He who plants a garden, plants money!” When it comes to selling a house, landscaping is an important factor that determines the value of the property. Real estate gurus believe that gardens around a house can contribute more than 10% to the total value of the property. Moreover, the houses with attractive gardens, particularly mature trees, are easily saleable when compared to the other houses with limited or underdeveloped landscaping. Investing a little time in tending your garden can really pay dividends when it comes to selling your home.

Enjoying Green

Houses with gardens around them are excellent choices for those who wish to enjoy time outside, while not travelling far to do so. It is always refreshing to open the door and go out into the garden and smell the flowers, plants, and trees. Most of us spend less time enjoying the greenery in public parks and sanctuaries since they are becoming more scarce and because of urban sprawl are often far away. Since most of us will never have a chance to visit the tropical rain forests of Central America why not invest a few dollars and house and have your own piece of nature right outside your door?

Green can be healthy

Plants not only contribute value to the property, but gardens also have great health benefits. The health benefits of gardening are impressive. According to medical experts, gardening is a great exercise for legs, shoulders, arms and neck. Gardening also helps to strengthen the joints in our body. Recent researches indicate that gardening lowers blood pressure, reduces cholesterol levels and also prevents diabetes and heart diseases. Gardening is also an ideal physical exercise for people who want to reduce their weight. Gardening helps to burn fat and as an added bonus, creates some healthy, organic fruits and vegetables for your entire family to eat.

Green in real estate

Based on a recent survey or property owners, it was noted that 95% of residential homeowners and 86% of commercial property owners believe that good landscaping adds more value to their properties. Also real estate brokers around Austin think that merely having a garden is enough to attract the buyers. Moreover, gardening has lots of benefits like offering a healthy body, fresh air, a fresh mind, fresh food, bringing birds, attracting butterflies, sustaining beneficial insects and added value to your property. Finally, gardening and makes your property look its best. So plant gardens around your home and grab the sure ticket to quick and valuable resale!