Showing posts with label homeownership. Show all posts
Showing posts with label homeownership. Show all posts

Monday, August 30, 2010

Why is it time to Buy a Home !!!!

3 Reasons Why Real Estate is Superior to Stocks



Foreclosures

Phoenix,Gilbert,Goodyear,Avondale 60K-150K

Real estate and stocks are two popular investment vehicles. It is always important to have a balanced portfolio, therefore it is worthwhile to invest in both. However, if you are trying to decide between the two, you might find that real estate provides the better returns more consistently.


Here are the top 3 reasons I believe real estate is a better investment than stocks:

1.) Real Estate is a Tangible Asset. It is a physical investment that you can see and touch. Shares in a company are nothing more than a piece of paper giving you an interest in the underlying company. Although a company’s shares can be valuable, because real estate is tangible it generally provides more value because people can use it in everyday life, and more importantly it is essential!

People must have homes to live in and businesses must have places to operate from. You can live in a house or an apartment, but you cannot live in a share of stock from Google. You can operate a business in a retail shopping center or an office building, but you cannot open and operate your business just because you own stock in Wal-Mart (unless of course you bought the stock way back when and your capital has increased 20X!).

2.) Real Estate allows for Leverage. Now leverage can be a double-edged sword, and over-leveraging a property can cause your asset to become a “money pit” faster than you can say “Bubble”. The over-leveraging of properties coupled with greed is the primary reason why we are experiencing the effects of the recent real estate market crash.

However, responsible leveraging can allow an investor to put up 20-30% of the purchase price of a property and borrow the remaining 70-80% of the purchase price. This leverage will generally allow the investor to realize gains much higher than that of the stock market. For example if you have $100,000 dollars to invest in real estate, you can generally leverage that into a $500,000 property. So your $100,000 will serve as a 20% down payment on a $500,000 property and you will get a mortgage for the remaining $400,000.

If the property appreciates at 5% ($25,000) over the course of a year, that is an unrealized gain of 25% on your invested capital of $100,000. In addition, if the property was generating a positive income, which is always advisable, then your returns would be greater.

Now just to be straight forward, this is the broad view of the investment. It doesn’t take into account closing costs, loan costs, illiquidity of the investment, etc. So there are more costs that would be associated with this investment that would take away from that 25% return and you would still have to sell or refinance the property to realize that 25% return, however, over the course of a few years with responsible leverage, real estate returns far outpace stock market returns. Feel free to contact me if you would like me to justify that claim in more detail. :-)

Stocks can generally only be leverage at a 50% – 100% ratio if you are trading on margin. So if you have $100,000 to invest, you can generally purchase $150,000 – $200,000 worth of stock. Assuming you purchased $200,000 worth of stock and it appreciated 5% ($10,000) over the course of a year, that is an unrealized gain of only 10% on your invested capital of $100,000. And similar with the real estate investment you still have additional fees that will take away from this gain, primarily brokerage fees and interest on the borrowed capital in your margin account.

3.) Real Estate allows for more Control. When you invest in real estate, you generally have control in how that investment is to perform. You can implement strategies to operate the investment more efficiently in order to maximize returns. Unfortunately, with stocks you really don’t have any control in how the company operates in order to maximize your returns on your investment. At best you can submit suggestions to the board of directors, and maybe they will implement some of your suggestions….MAYBE! Great article by Khary Reynolds



Saturday, July 11, 2009

Bringing the Dream of Homeownership Within Reach


For information on the $8,000 TAX CREDIT call Linda 602-391-8246

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.

Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.

Breaking news: Tax Credit Can Be Used on Closing Costs.

Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.


The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.

Thursday, October 23, 2008

Optimal time to buy in Phoenix

This is the optimal time to buy a home in Phoenix

Who should be buying residential real estate in Phoenix right now? YOU!!!
If this just might be your magic moment.
Interest rates are still deliciously low, but both current events and long term trends suggest they’re headed higher. If you are a 1st time home buyer, you will be buying your next home at a bargain-basement price.
I have sold 2 homes this month alone in Tempe, Mesa to college students, their parents are looking to snap up deals on condominiums and homes while prices are so low.

First-time home-buyers are taking advantage of this market, as well, with low-down-payment.
This is a great time to own a home in Phoenix.

The Investors, have already figured that out. It’s very easy to acquire a home in a commuter-friendly suburb that will be cash-flow positive from the first tenant. Investor loans can be hard to obtain, but prices are so low that many investors are simply paying cash.

Evaluate Your Physical and Financial Situation
I came across this today as I was having my coffee. I thought it was great info for the 1st time home buyer, so decided to put it on my blog... THX Frontdoor

About to buy your first place? My First Place buying guide will answer your questions, ease your anxiety and guide you through the process step-by-step. Great Info...
Questions call Linda 602-391-8246 or AZhomes4u@gmail.com

Before You Sign a Lease
Rent vs. Buy Calculator
Questions to Ask Yourself
What You Need and Don't Need to Buy a Home
Figure Out Your Financial Strategy
Recipe for a Mortgage
Tally Your Expenses
Owning a Home: The Monthly Tally
Save for a Down Payment
What to Know About Down Payments
Tax Breaks for Homeowners
Stop Procrastinating: Buy Now!

Assemble the Experts

Home buying Checklist
Find a Mortgage Broker
Shop for a Real Estate Agent
3 Things to Know About Agents
Find the Right Home Inspector
Consult a Real Estate Attorney
What a Title Company Does
Insurance for Condo Owners
Make the Most of Home Warranty Coverage
Inspections & Insurance
Real Estate Glossary

Saturday, October 18, 2008

How to Buy a house in a Real estate market Fueled by FEAR


Are you having a Hard Time pulling the trigger finger on the HOUSE of your dreams?



You’re not alone, Many home buyers are looking, waiting ,looking, drooling … looking, longing … looking and wanting to buy a house.

Why don’t more make a move, when it’s a fact that in many real estate markets throughout the country, Prices are LOW the lowest in 6 yrs. here in Phoenix.

Fear turns the dream of homeownership into the perceived nightmare of high risk. In most cases, fear is the number one culprit in letting go of your housing dreams:


Fear of Wall Street worries.


Fear of employment security.


Fear of buying at the wrong time


Fear of the current state of finances in the country.
A lot going on in your head.


There’s a little bit of fear (in the real estate market). It is always hardest to react when you’re afraid. All the money to be made is when you go against the trend.


This is when you want to buy, FACE the FEAR and Do It Anyway's

How do you buy a house in a real estate market fueled by fear?
It will take a little courage these days to buck up and buy your dream house.
It will take a little courage these days to move from the wish list to the shopping cart.

It will take a little courage these days to shut out the noise of worry and negativity and follow your own path.

The first key is to realize your intention..
1. Write it down.

2. Verbalize it.

3.Visualize it.
4. Next, gain knowledge.

5.Get at least three referrals for a mortgage broker from your local real estate agent and from trusted friends or co-workers who have made a recent move.

6.Visit a mortgage broker and get pre-approved. Then sit down with your pre-approval and work out what the numbers..you don’t end up overextending yourself.

7.Can you still buy groceries, pay your utility bills and maintain your desired lifestyle without a big drain on your finances?

8.You must speak to a real estate agent who has a pulse on local neighborhood values - for current and past markets.


Don’t settle for less than someone who does their due diligence and housing homework.

For a buyer right now, inventory is higher and in Phoenix Arizona, current real estate prices are at 2002. It is TIME to Buy your Dream HOME .... Send me an E-mail