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Why You Should Invest In The Urban Real Estate Market

Although many investors are leery when it comes to investing in urban neighborhoods, these areas possess a very appealing demographic of potential tenants. Listed below are 5 reasons why, you may want to consider investing in the urban real estate market.

1. Pricing- Now we’ve all heard the old saying that “You get what you pay for” but there are many hidden gems in the urban markets around the U.S. One rule always rings true in real estate investing and that’s to do your homework. Great deals can be obtained in any neighborhood and in any market so keep your options open.

2. Section 8 tenants – Imagine tenants on a waiting list because the U.S government subsidizes 80% of their monthly rent and they want to move in your rental property! The truth is this happens everyday across America in many inner city neighborhoods. These tenants are called section 8 residents and the U.S government is your rental insurance policy.

3. Fix and flips- Many builders such as KB Homes have reported huge losses at the end of 2007 but the truth is investors that really study the real estate market are eager to find great deals in today’s market. As a real estate consultant, I can personally attest to hundreds of deals that have come across my desk. The key to fix and flips in today’s market is selling the rehabbed property with incentives and preferably a tenant if it’s an investment property.

4. Government redevelopment- Often times the government funds projects to redevelop neighborhoods in many inner city areas across the U.S. The local government receives funding and usually offers attractive incentives to developers and home owners investing in these neighborhoods. This is a great way to keep your money in your pocket due to grants that may be available and you may even receive great deals on interest rates. So take advantage of the government spending our tax dollars, to improve neighborhoods you wish to invest in.

5. Location- Growing up my favorite board game was monopoly and I always tried to purchase the cheap real estate first because I could build homes and hotels a lot faster. Think of urban real estate investing the same way, you buy it low and sell it high when the opportunity presents itself, but in the meantime you collect rents and make a profit. There are many objectives to real estate investing such as appreciation, cash flow investing, etc. As you build your real estate portfolio you’ll find out that cash flow investing has less to do with location and more to do with making a profit. I hope this information helps to guide you in the right direction on your road to success.

How a Sell and Rent Back Scheme Works

One of the top types of ways how people can cut back on home payments is through the use of a sell and rent back scheme. This is a popular type of plan in that many different investment companies will be interested in handling deals that work with this in mind. A variety of different laws are used with this scheme for helping to protect consumers that are interested in this plan.

What happens here is that a homeowner will sell one’s house to an investment company. The house that is being sold in a sell and rent back plan will be sold off at a value that is generally lower than that of the market value of the home. After this is done the investment organisation will rent the property back to the consumer.

The value of the cost of renting the property in this scheme will vary. It is generally going to be based on the current market rate of the home. In many cases sell and rent back payments can be less than that of what the payments were for handling one’s mortgage costs.

What makes this a notable scheme among many different investment organisations is that they will be able to gain new properties while being able to retain tenants in these properties. The fact that a property will be rented back by a tenant who sold off the property is a major plus here. Because the tenant will be able to do business then the investment group the group will be willing to go along with this type of plan.

In accordance with laws regarding this scheme a sell and rent back scheme can work in that a person who participates in this scheme can be guaranteed a residency in one’s house for a good period of time. Many companies can offer tenancies that can last for a year and people can stay in their properties for as long as they want if needed. This is done to give people who use this plan a great amount of time to live in one’s property. As a result of this a renting company that offers this option will not quickly evict people from their homes in order to make some kind of fast profit.

There are many other important laws that work with this type of scheme. All of these laws are used to help with protecting the consumer. For instance, a group that offers this scheme option cannot legally use high-pressure sales promotions like telling people that they can get cash quickly. Also, all risks and concerns that can be involved with this scheme must be explained and laid out by a group that is offering this scheme. This is a necessity so that consumers will be able to be properly informed while knowing where they are going with their homes.

All businesses that work with this scheme option will have to be registered with the Financial Services Authority. This group is one that works to allow for the transparency of financial service businesses and for the protection of the consumer. All groups that offer this plan will need to work under interim authorisations from the FSA.

Overall a sell and rent back scheme is a useful type of scheme to check out for one’s property needs. With this type of scheme a client will be able to stay in one’s property for a great period of time and be able to work with payments on one’s house that can be relatively low in value when compared to what one has to deal with. It is also a type of plan that is covered through many laws that work with protecting people who are interested in this plan.

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