Monthly Archives: July 2016

Tips For Buying a Commercial Property

If you are considering investing in brick and mortar and are thinking of buying commercial real estate, there are many points of consideration. Unlike any other investment, putting your money here, can be a tough decision to make.

Investment Tips

Commercial real estate investment is all about creating a cash flow generating asset and all your efforts need to be directed towards ascertaining its potential value. It’s no secret that these are times of economic recession and the real estate market has taken a beating. However, if you think optimistically, this is a time of opportunity, as a piece of real estate, which was beyond your reach in boom time, can be bought at a substantially lower price today. Here are the major points of consideration, while purchasing a commercial property. These are certain pertinent questions, which need to be asked, that help you assess the profit potential of a real estate investment and make your choice simpler.

What Kind of Property are You Looking For?
Even before you can start thinking about this investment, you need to have a plan about the revenue generating mechanism or business plan, that is going to reap cash for you, through this investment. Are you planning to buy a rental property, business premises for your company, or a shop? If you make up your mind regarding this, you’ll know what type of property to look for. That will simplify your search.

What’s Your Budget?
The next thing to ponder upon is to come up with a maximum purchase limit. If you are planning to make the purchase using a mortgage loan, then you need to decide on the maximum down payment, that you could make. A knowledge of your purchase limit will see to it that you don’t go overboard, when negotiating on price and land up in a soup. Start looking for banks that offer commercial real estate mortgage loans, once you decide the property, which you plan to buy. There are many financing options to choose from.

How to Search For Them?
There are various channels through which you can search for such properties. Online and print classifieds are a place to start your search from. Approaching a real estate agent is one of the best ways of searching, as they have extensive databases of properties for sale. They can find you a property, that fits within your price range and requirement. Be on the lookout for properties being auctioned.

How to Evaluate the Revenue Potential?
When it comes to evaluating the value of real estate, with respect to commercial gain, location matters. Consider what is the scale of profits, that you can hope to make, from those premises. If it’s a rental establishment, calculate what is the cash inflow. If you plan to open a shop or your company office there, location is the most important factor.

Ensure that title of the property is clear and get an architect to evaluate the structural solidity of the building, if it’s an old one. See if there are any pending tax payment issues associated with it. Get a real estate consultant to provide you with a valuation of the property, according to current market prices. This is known as an appraisal. When all of your homework is done and you choose a property, make an offer to the seller yourself, or via his real estate agent.

Negotiate for a fair price and arrange for a mortgage if the deal goes through. See to it that all the legal formalities are handled properly. A real estate attorney can handle it for you. Once you buy the property, you could either opt to manage it on your own or let a management firm handle it for you.

To sum up, leave no stone unturned in evaluating the earning potential of a property before you buy it. If the potential is substantial, the risk you take while opting for a mortgage loan, is lessened.

Adverse Possession

There are many rules and regulations regarding acquisition of land by adverse possession. Till today, this method has helped many people own properties around the world without buying them with their own money or making any kinds of investment. In the next section, we shall know more about this method of real estate possession.

When is Adverse Possession Possible?

In order to become an owner of a piece of land by this method, a person needs to actually possess it by physically using it. The claimant must have something to show in court which will prove that he has actually utilized the land. For instance, if as a user of the property that belongs to someone else, the person has paid taxes on it regularly, it might be considered by some courts. There is a statutory period which is the number of years for which the person needs to hold the land in order to claim ownership for it.

Hostile possession of land which means the person claims its ownership and occupies it in opposition to the owner’s true rights is one approach that can be taken. The application of the person for permanent ownership of land can be rejected if he does not have exclusive possession of the concerned land. The claimant needs to hold the land personally even though there is opposition from other people.

Understanding the meaning of exclusive possession of land is important for all those who wish to benefit from the laws related to adverse possession. One can prove exclusive possession of land easily if he has made any significant changes to the property such as building a fence, leveling the plot of land or any other construction work on the plot.

The claimant needs to establish his intention to possess the land during the time he was controlling the land. Most states allow possession of land to a person who has lived there for 10 to 12 years at a stretch. Many places require people to be in possession of the land for 15 years. However, one must note that this requirement (number of years of possession) can change from one place to another. So, confirming about the same from local authorities and knowledgeable people would be a good idea.

Getting the property back is possible for the real owners from the person occupying it by approaching the local court with proof supporting their statements. At some places, adverse possession may not be considered hundred percent legal as it involves getting the property without making payment for it. There have been instances when cases have been filed against people for making false or illegal claims over properties of other people.

Another thing to note here is that claims of possession cannot be made against council owned land. This is really a very complex process and may require much more time than expected. So, do not be in a hurry to get the desired results and be patient so that the entire process is completed smoothly. The claimant or the owner must take help from real estate attorneys and realtors for clearing doubts. The Federal laws, rules and regulations related to it are subject to change anytime and hence one should keep an eye on the latest real estate news.

Land Investment Advice

It must be noted that land investment does not mean investment in property. Land investment means investment in land without any construction over it. The piece of land or real estate that has certain construction or structure on it has been classified as property.

Mark Twain jokingly once said that, one should buy land, because its production has been stopped. In a literary sense the statement is hilarious, and from the point of view of economics it is a fact. Land which is one of the most important resources, is needed for the simplest purpose – human existence.

Demand and Supply Analysis of Land

Land has an inelastic and non-growing supply, and at the same time it has an infinite and ever-growing demand. In simple words, the total area of land in the world is limited. In short, higher demand and limited supply of land has escalated the land prices throughout the world. There are several reasons such as vicinity to amenities, utilization resources, cultivable characteristics of land, or other such features tend to escalate the cost of land even more.

This is also the reason for the different price levels in the different parts of the country. The rule of thumb is the more convenient and resourceful the land, the more is demand for it and vice versa. More demand means that the price of the piece of land is going to steadily rise.

Hence, as an investment, you will need to hunt for a piece of land that has very good value projections. To do so, you will have to conduct some market research and analysis. While researching, there are a couple of channels such as realtors and estate planning experts, who you can approach if you are dealing in a mammoth investment.

Locations and Features of the Land

The best pointer to the value projection of a particular piece of land is its features. When you decide to invest in land, you will have to look up and research the different features of land. First, the geographical and geological characteristics have to be observed such as is it an industrial, barren, agricultural or mountainous piece of land.

Usually the barren and mountainous piece of land would not get much of a high price projection. The second aspect is the significance of the surroundings. For example, if the plot of land is situated on one of the main roads of the city, then the projection is magnificent, if it is situated near an industrial belt then you got a lot of returns, if it is barren and still next to or in the vicinity of an urban region, then again there is good chance that you have struck gold there.

The features of the land itself, and even the ones of the surroundings is a great pointer so as to learn how much will the value of land will increase. Your analysis should thus be precise and in detail. Hollywood Boulevard is one of greatest examples of how the features of land and its surroundings affect its price. Reading more and more real estate investment tips, land for sale columns, and land investment advice that appears in the newspapers, magazines and websites will certainly help you a great deal.

Mortgages and Loans

One of greatest worries of buying a plot of land is the financial consideration. There are three things that you can do to make the investment a really rewarding success. Point number one, get in touch with banks and public lenders and get pre-approval of the real estate loan. Calculate the installments, closing cost, add up potential interest rates and then, compare the same with your research. If you feel that the investment cost is much lesser than the sales costs that you are anticipating, then the purchase is worth it.

The best thing about land investment is that the demand and price are always going upwards, and there is going to be no dearth of potential customers once you decide to sell the land. There are many options that you can execute even before selling the land, for example you can develop the land, or construct an entire set of buildings or some houses, or some commercial place before selling. Developing a farm or any other commercial place before selling that one piece of land is also a great idea to have a side business, till you decide to sell the place.

Property Investment For Beginners

Traditionally, one of the best high return investment options has been investment of money in real estate. While the property prices may go up and down in the short term, over the long term, they have always appreciated substantially. The ownership of a piece of land is an investment you can eventually bank upon, as it acquires value through development of the areas in its vicinity. With the falling of property prices, many people will advise you to stay away from investing in real estate. However, if you look at it from a different perspective, you will see opportunity in this situation.

Properties which were once beyond your budget reach are suddenly within your range. For those of you who have been smart enough to save money throughout the past bearish decade, now is the time to invest and take advantage of the opportunity, which has presented itself. In this Buzzle article, I shall share some tips on real estate investment for those of you, who are smart enough to recognize the opportunity this recessionary background has presented.

Tips on Property Investment for Beginners

Any investment comes with its share of risks, which cannot be entirely eliminated but lessened through research and planning. Same goes with real estate investment. You have to do your homework and get your research right to end up on the winning side. Here are some tips for beginners.

Know about the Range of Real Estate Investment Options
Firstly, you need to begin with a study of the varied range of investment options in real estate, which you may consider. You may invest in buying residential houses, commercial properties, condos, apartments or purely specialize in land investment. There are a lot of options out there and you need to consider the entire range, to decide which would ideally suit your investment budget and align with your future plans.

Invest to Sell or Invest to Rent out Properties
There is the important decision of deciding whether you buy to rent or buy to sell again for a profit. The former option is open, if you buy residential properties. You can create a regular income source for yourself by investing in rental property.

Otherwise, you also have the option of entering the house flipping business, which is buying old houses, renovating them and selling them back again for profit. You may buy a piece of commercial property, hold it till the prices rise and sell it to make a substantial profit.

It’s All About Location
Remember when it comes to property investment, it’s all about location. The price of any real estate property is largely a function of location. The localities decide the price range and therefore you need to research the price trends according to location, before you make a purchase.

Research & Do the Math
Once you have decided on what kind of property you plan to buy, what purpose you intend to buy it for and are clear about the amount of money you are willing to spend, start researching real estate listings to find properties that fit the bill. Calculate the returns you plan to gain from the investment and the amount of mortgage loans you can afford to apply for.

Networking With Real Estate Agents
A real estate agent can make your job easier in finding properties that are exactly what you are looking for. Creating a good network of real estate agents who can point you towards good investment properties is essential. Real estate brokers can handle the legal affairs associated with purchase and sale of property for you. They can make an offer to owners on your behalf and negotiate on your behalf.

Making Financial Arrangements for the Investment
Once you have decided on the property and made an offer, you need to arrange for the money you plan to invest. A pooling up of your own savings and a mortgage loan if needed, can cover the total investment amount. Talk to financial institutions and mortgage brokers for financing options.

The key to making good investment decisions in real estate, lies in research. For a property, the location is the most important aspect of consideration and all other points come later. Good location, with access to resources in its vicinity, creates an opportunity for eventual growth of property value. With a pooling in of your own savings and a mortgage loan, you can buy strategically located properties and rent them to generate revenue, or sell them as the prices appreciate substantially. You can’t eliminate risk, but minimize it by putting your money into properties with high potential of price appreciation. Get a good real estate agent to advise you and a mortgage broker to assist you in the arrangement of finance.