Archive for June, 2009
Jun
08
Why real estate is a good investment?
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Of all possible investments that are within the reach of the average investor, none ofter the combination of outstanding benefits that are available to real estate investors. And, do you want to know something, banks and life insurance companies recognise this fact!
So they invest your money in real estate. While they pay you 1 to 3 percent for the use of your money, they are making 10 to 20 percent on it.
Why is real estate such a good investment? It offers the investor at least five different returns or ways of making money, on his investment.
Gross spendable income - cash flow
Investors also refer to this as “cash flow” or how much money that you can spend at the end of the month or year after all the operating expenses and mortgage payments have been made. We also call this as “gross” spendable because we have not taken income tax consequences into consideration at this point.
We always purchase properties that cash-flow. It takes time to find them, but it is well worth the effort. The simplest definition of positive cash flow is that you collect more revenue, usually in the form of rent, than it takes to pay for and operate the property.
A big advantage of real estate over other investments is that it can produce cash flow on a monthly basis. The cash generated by a real estate investment will always be a much larger percentage cash-on-cash return than any other investment.
The beauty of a cash-flowing real estate property is that it can help you become financially free. We discussed two real life examples of such real estate property in “How to know if a property investment is worth investing?”
Equity income
This is also referred to as equity buildup or principal reduction. Anyone who has had a mortgage on a home or car recognises that each time a payment is made, a certain portion of that payment is for the interest charged by the lender and the balance goes toward reducing the balance on the loan.
In a real estate investment, this equity income can be a sizeable amount. Although you cannot spend it each month, when the time comes to sell your property, you owe less on the mortgage, so you will receive more money at closing. It’s like putting money in the bank each month.
Making inflation work for you instead of against you - appreciation
Like inflation, you do not see it but it’s there. Only now, it’s working for you instead of against you. How does it work? Each year, because of inflation, your real estate is appreciating in value. Those of you who own a home, for example, would you sell it today at the same price you paid for it five or ten years ago?
We keep on having babies but God quit making land a long time ago. The supply is limited.
What does this mean in terms of existing land values? It means that existing land is becoming more and more valuable each year. It explains why investment real estate, whether in single family homes, apartment buildings, office buildings, shopping centres, ware houses and even vacant land, has become the most secure and profitable way to beat inflation. Existing land in most parts of the country, is appreciating at a rate greater than that of inflation.
How real estate stacks up against other investments - leverage
Leverage is an interesting thing about investing in real estate. It’s more than likely you have heard the term Other People’s Money, or OPM. The concept is simple and powerful.
The OPM concept is using money generated from someone or something other you in order to start a business or acquire an asset. While it is true that you can do this to an extent with stocks through buying on margin, the fact is that there is no investment where the application of this tool is more powerful than in real estate.
In real estate the leverage is based on the asset itself and you can get a bank to loan you the money up to 90 percent, and sometimes even 95 to 100 percent, of the total asset value. Why do banks do this?
Because they can repossess the physical asset itself should you default. Buying stocks on margin, however, allows you to borrow no more than 50 percent of the stock portfolio value. Just try to get bank to loan you the money for buying stocks - let alone your margin! Instead, you have to buy through a brokerage - at a high interest rate. In other words, when you buy stocks on margin, you are taking the risk. But when you take out a loan to buy real estate, the bank is assuming the risk. - Ken McElroy in “The Advance Guide to Real Estate Investing”
You can see the power of leveraging demonstrated by real life cases in our article “Why you want to take up a loan for your real estate investment?” No other form of investing allows an investor the opportunity to control so much with a small amount of his own cash.
We further discussed in “How to finance your real estate investment for maximum return?” the ways to structure a mortgage loan in order to get the maximum return from your cash investment in real estate.
An investment that allows you to control
A unique advantage to real estate is that you can control it. In other types of investments, you give your money to a financial advisor and they place it for you in a company’s stock, a bond, or a mutual fund. What happens after that is completely out of your control. You have no ability to make operating decision for the company you have invested in; you are at the mercy of its managers.
Similarly, you have no control over financial markets when you purchase bonds or futures. You make a calculated guess, and then you sit back and watch. With these types of investments, the only control you have is choosing whether to buy or to sell.
Real estate is different. You purchase a tangible asset and you manage it. While there are still external market conditions that affect your investment, the difference is that you have the ability to manipulate the operations of your investment to respond to those conditions. Instead of being reactive (buying or selling), you are being proactive.
For example, if you are a landlord, you have the ability to manipulate rents based on changing market conditions in order to maximise income. This doesn’t always mean raising rents. The goal is to maximise income. Since it is a dynamic process, that might mean lowering rent or offering an incentive. A property’s occupancy comes into place here.
If you have the highest rents in a market, chances are potential tenants will rent from a direct competitor. Then all your high rents become lost potential income. The dynamic of real estate require you to keep occupancy, as well as rents, high.
You have the power in real estate to control the operational performance of your asset more than any other investment.
Quick Property Sale
Jun
07
Chicago’s Magnificent Miracle Mile - The Hottest Commercial Real Estate in the MidWest
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Can you afford commercial real estate on the Chicago Magnificent Mile? If you can, your business will be in good company, and you can make a lot of money!
A festival of restaurant dining, theater and jazz experiences, shopping, hotels and entertainment, Chicago’s Magnificent Mile is abuzz with activity from Spring through Fall, and those merchants and commercial vendors who are lucky and wealthy enough to rent space in Chicago’s most productive real estate market, are the fortunate recipients of some pretty hefty income.
The Magnificent Mile stretches from Randolph Street to North Avenue and from Lake Michigan to the North Branch Canal, and it is Chicago’s most expensive commercial real estate.
The landscape is flush with fancy hotels including the Inter-Continental, the Ritz-Carlton, Hilton, Omni, Le Meridian, Hyatt, Wyndham, the Westin, the famous Whitehall and many other world-renowned hotels share this prestigious real estate, and the Greater North Michigan Avenue Association manages the business district.
Within this precious Chicago real estate, street festivals, garden shows, food festivals and other events are planned, all to bring local residents and tourists to spend their entertainment dollars.
Along this stretch of expensive real estate you can also find posh, formal restaurants like Les Nomades, and NoMi intriguing international restaurants where you can find Brazilian, East Indian, French, Italian and cuisines from many countries around the world.
The Chicago Shakespeare Company is also in residence in the Magnificent Mile of Chicago Real Estate, as are a number of jazz clubs and galleries like Kenneth Probst, Peter Bartlow and R.S. Johnson, selling fine art, antiquities and much more.
Water Tower Place, the Shops at North Bridge, Chicago Place and the North Michigan Shops also offer commercial real estate opportunities in well-advertised storefronts, malls and real estate centers.
If you are looking for commercial real estate in this area of Chicago, be sure you employ a reputable broker. Rents are high and real estate is precious. Options to extend commercial leases and expansion options to take on more space will come at a premium in this real estate market.
Upscale brokers like Gordon McAdam, Property Management companies like Zeller, and Executive Suite brokers like AMATA deal in finding and leasing commercial real estate and space to businesses in this area.
If you are looking for Chicago real estate on the Magnificent Mile, be sure you find a company that will work with you to assess your square footage requirements, and do an office or building search that will take into consideration the ideal location for your type of business.
These companies can also help you analyze the commercial lease you will be asked to sign and negotiate more favorable terms. Some have partners that offer architectural and build-out services for your real estate needs, and even move-in and utility hook-up services.
If you DO rent commercial real estate along the prestigious Magnificent Mile in Chicago, make the most of your network by joining the Greater North Michigan Avenue Association. Membership in this business and real estate district association provides you the opportunity to participate in business-to-business marketing activities and to have your logo and business identify advertised and promoted in the Magnificent Mile events and activities.
The Board of Director’s for this Chicago real estate business district and association always includes prestigious hotel managers and business managers for large commercial vendors like Neiman-Marcus, as well as business district and service vendors who provide the local transportation. These are good people to know if you want to promote your business.
Get to know the individuals who share this small square of real estate with you and leverage their connections to help you make more money and pay that steep rent bill every month.
Per square mile, this patch of Chicago real estate will produce more income for your business, but it will cost you a pretty penny to house your business here.
If you want to consider Chicago real estate with a slightly less onerous price tag, you can consider real estate in the Riverfront area, which is very near the Magnificent Mile and attracts lots of tourists. There are lots of events there and the overflow of shoppers and tourists from the Magnificent Mile is a definite advantage to renting commercial real estate in the area.
Ask your Chicago real estate broker to make some recommendations and see what you can afford. Good luck and enjoy the ride!
Real Estate Proffessionals
Jun
07
Lease & Finance Consulting
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Lease And Finance Consulting is a source of funding in which we have many years of experience. If you want to know why lease finance is such a sought-after service, read on.
Why is lease and finance so important to growing businesses? Almost all growing businesses need new equipment of some kind. Lease finance allows them to acquire new or used equipment without a huge capital outlay. We offer expert lease and finance consulting for all kinds of business.
One of the major advantages of lease finance to businesses is the availability of the equipment at the time when it’s needed the most.
One of the other main factors why business people choose lease finance is for the tax benefits. It’s an extremely tax efficient way to acquire equipment or assets for all types and size of businesses from PLCs to sole traders. We offer you the best Lease & Finance Consulting Services to help you get the best deals.
Call our specialist brokers in these packages, Glin or Peter on 01242 226662.
We offer access to over 50 finance companies ensuring that you get the right finance package to meet your funding requirements. Our expert best Lease & Finance Consulting Services ensure that you get the perfect fit to meet your needs.
You also reduce the risks of ownership, like obsolescence and debt burdens, when you choose lease finance. You can quickly and easily upgrade your equipment too.
The packages we offer are usually far cheaper that taking a loan from a bank, an important factor when for opting for lease finance. Payment schedules are flexible and the relatively low payments make it easy on your budget. It helps you build a hedge against inflation, since you purchase new equipment today and repay tomorrow when the same amount of money is less valuable. Make the most of our lease and finance consulting services to get yourself ahead.
Our lease & finance consulting services help you not just with consulting but also to source the equipment you need to build a flourishing business quickly and easily. So go ahead and obtain the equipment you need now using lease finance and by calling us on 01242 226662.
Sell House Quick
Jun
04
How to Find the Best Commercial Real Estate
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For most people, jumping into the commercial real estate market is done with sights set on millionaire land owners who have made their fortune buying, renovating and selling properties over and over and over. One of the keys to this success is finding the right commercial real estate properties to turn over. Do you go with a high-priced property and just hang onto it for a few years, letting it gain in value and then sell it or do you take a more out of the way property, fix it up and make it valuable then sell it? These are all options available out there for a potential buyer, but which one is right for you?
The best deals out there will give the biggest return on your investment. It is not unrealistic to look for deals that could give you upwards of two to four times the profit of what you invested. The amount of paperwork and red tape you have to go through is essentially the same weather it is a big deal or a small one, so try to maximize each deal and make it as profitable as possible.
The methods you use to find the best deals are important. You can rely on your own two eyes and simply go scout possible real estate deals that could turn a huge profit or you could enlist the help of a professional. There are real estate brokers that specialize in commercial properties but since they are hired by the people looking to sell, you might not get a straight answer on a particular property since all they want to do is sell it. The best thing to do if you are going to seek the advice of a commercial broker is to make a firm list of qualities you are looking for and dont deviate from them. The broker may try to sell you something you are not interested in so be careful. One advantage in using a broker is getting listings that have not officially gone on the market yet. This can help you get a head start in placing a big for a unit since no one else will know about it yet. Another good tip is to utilize the Internet. There are many sites out there dealing with property values and commercial sites that are for sale and many sites have excellent search criteria that can help you find what you are looking for quickly and easily in a non-confrontational environment.
One final place that is a great source of commercial as well as residential properties is auction houses. You may have to register with these houses and pay a small fee, but it is a sound investment since the auction house will be offering properties as a significantly smaller cost to you than if you were to buy it normally. In addition, these auction houses tend to send out notifications of properties that are about to go on the trading block. This can give you the time you need to research the deal, see if it falls within your criteria and then you can decide if you are going to bid on it or not.
Overall, there are many different options out there available for those looking to find sound commercial properties to invest in. If you do the proper research, you can find the one that is right for you.
Sell House Quick
Jun
04
It’s Payback Time: Remortgage to Solve your Debt Problems
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People in the UK owe more money than ever before. As it becomes easier and easier to borrow, whether in the form of credit cards, loans or countless other personal finance options, we are lured deeper and deeper into the debt trap, often to the point where we face an overwhelming financial burden that we have no means of repaying. Figures from the Consumer Credit Counselling Service reveal the extent of this problem the number of service users in ‘extreme’ debt (owing more than £100,000) rose from 1.4% to 2.7% in just one year from 2004 to 2005.
Such debt problems are often compounded by a lack of understanding of financial matters, leading to poor decisions that send debt levels soaring even further out of control. Many individuals, for example, attempt to juggle their borrowing by taking on new loans or credit cards to repay others, thereby creating an even more tangled web of debt and often paying even more interest on top of that already owed.
Worse still, a great number of people find themselves spiralling more and more towards financial insolvency by failing to admit that they have a debt problem in the first place. Debt is very easy to get into but very difficult to get out of unless it is tackled quickly. Ignoring payment notices and credit card bills may sweep the issue under the carpet for a short while, but in the long term it serves only to exacerbate the situation as the interest mounts up and the payment notices become ever more demanding.
So if you’ve fallen behind in paying your bills it’s important to confront the problem before it escalates out of control. The first step is to analyse your finances. Work out your monthly income and expenditure to identify how much money you have left for debt repayment.
Then make a list of all your debtors, dividing them into priority and non-priority debts. Priority debts are debts that could lead to legal proceedings against you and could have serious consequences. For example, you could lose or be evicted from your home for mortgage or rent arrears, your gas or electricity supply could be cut off as a result of outstanding fuel bills, you could face bankruptcy or imprisonment for non-payment of income tax or VAT, or you may have goods repossessed by bailiffs for unpaid child support or council tax
bills. Non-priority debts are not secured against your home or belongings and will not result in repossession of essential items. Examples of such debts are credit card or store card bills, catalogue account or hire purchase arrears, bank overdrafts or unsecured personal loans.
The next step is to contact your creditors to explain your financial circumstances, outline your budget and negotiate a repayment plan. You
should be able to come to an arrangement that is realistic and manageable for you, although you may end up having to pay more interest over the long term to account for smaller repayment instalments. It’s best to make some kind of regular payment to each debtor, but if this is not possible, ensure that you make payments towards the priority debts first.
Above all, don’t panic and don’t feel ashamed. You’re not alone in being in debt it’s a problem that’s faced by more and more people in the UK and there are several charitable organisations who can help you. Both the Citizens Advice Bureau and the Consumer Credit Counselling Service publish practical information guides and provide free, confidential and independent advice in locations across the country to help people sort out their finances.
Furthermore, financial organisations now offer a wide variety of effective debt repayment solutions to suit individual needs. Good professional advice coupled with an appropriately tailored product can help eradicate debt for good.
One possibility is to combine all debts into a single ‘debt consolidation’ loan. This has the advantage of making personal finances easier to manage, with only one monthly repayment to worry about. However, some such loans have very high interest rates and longer repayment terms and you could end up paying back a great deal more than your original debts.
A more and more popular solution is remortgaging, and there are now some very competitive and flexible products being offered in the UK market. Even with a poor credit rating, it’s still possible to obtain a remortgage product to suit your needs and help you get your finances back on track.
Remortgage to raise extra cash: a great number of homeowners in the UK have large amounts of capital in their homes that they could easily access to solve their money problems. If you have equity in your home (i.e. excess value above the amount of any loans secured on it), remortgaging is a simple way to tap into the value of your home and convert it into cash without having to sell or move house, and it can often be cheaper than a personal loan. Think of the possibilities as well as using it to completely clear all your debts, there are numerous other options: make
that big purchase that you’ve always wanted a new car or luxury holiday. Alternatively, use it to supplement your pension to make yourretirement more comfortable, or make some home improvements it’s cheaper than moving and will increase the value of your house.
Remortgage to consolidate debt: bring all of your debts together into one regular repayment as part of your mortgage to make it easy to manage. If you look around, you will be able to find a good deal offering lower interest rates and you could end up saving a great deal of money on both your mortgage and debt payments. You might even be able to reduce the term of your mortgage.
A few words of caution though: before you do anything about remortgaging, check the terms of your current mortgage to see whether there are any redemption penalties or administration fees. You should also weigh up the risks and benefits of transferring your borrowing to secured debt.
On the whole, remortgaging can be an effective solution for clearing debt problems, enabling you to make a fresh start towards a healthy financial future. If you’re a homeowner and you’re looking for a way to manage your finances more effectively, speak to a mortgage expert soon to find the best package for you.
Quick House Sale
Jun
01
Commercial Property UK Ads in the Frontline at Low Cost Through Search4premises
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Advertising commercial property in the UK can now be done in a few simple steps. Searching and posting commercial property classified ads are trouble-free too. At Search4premises, commercial property marketing can be done with ease. If you want to market or invest in commercial property but you don’t know where to start, give Search4premises a try. Search4premises is a secure online advertising site for UK commercial property and businesses for sale. The site services those looking for commercial property and those needing low cost advertising solutions as well. On the one site you can find properties, offices, spaces, businesses and warehouses for sale, rent or lease, whatever suit your needs.
Search4premises works as a catalyst for property buyers and sellers, a vast community where you would need to spend a fortune for advertising, or to find the right commercial property fast. Advertisers include private owners and property professionals like commercial agents, surveyors and private leaseholders. This means a large pool of prime properties to choose from and effective marketing for sellers. Interested buyers make contact direct with the advertiser.
Advertising on Search4premises is not only inexpensive but, what’s more, we don’t ask for commission or other charges except for the minimal one-off fee on the ad space. This is a site that also considers security during payment so we have teamed up with Paypal to ensure that payments are handled by secure servers capable of data encryption.
Posting an ad for commercial property UK is made easy and fast in Search4premises, because of an easy, well organized step-by-step process. There are two ways to advertise, display adverts and classifieds. There are categories for private owners and property professionals. In this way, suitable advertising packages are available for you depending on your type of registration. If you are a private owner and need to post only a single commercial property, register as private owner, but if you have more commercial property listings to post, select the property professional registration type. Of course we also give you choice in advertising. You can choose to post your ad in a standard manner where a photo of your commercial property for rent, lease, or sale is shown together with all vital information about the property. Or, for business services and trades etc. you can advertise in the classified pages listings where lists of available commercial properties and businesses for sale are segregated into distinct property types for quick and easy searching by potential buyers. In this section, registered members are also allowed to post want ads so that anyone in the commercial property UK market who has what you need can notify you right away, making finding the right premises for your business faster and easier.
Search4premises also provides an efficient search tool for convenient searching of commercial properties. This means you don’t have to go through hundreds of different commercial property sites to find that single property that you need. All you need to do is give a specification of the type of property you want and the location and in one click you will have the list to choose from. This search tool is actually one good way to keep you advertisements in the frontline as well.
Real Estate Proffessionals
