New York Real Estate Ownership Guide

This article is designed to be a roadmap for the first time homebuyer or seller. Throughout, I'll guide you through the many steps of purchasing or selling your property and explain to you in the process how to avoid the most common mistakes. You will also learn both the legal and psychological problems often encountered.

For most people, buying (or selling) a home is one of the biggest part of living the "American dream". It's also probably the biggest investments they will ever make. Not surprising then, that many find this experience to be very exciting but also worrisome at the same time. Achieving the final transaction and transfer of funds for the property (referred to as the "closing") can leave many home owners feeling exhausted, even depressed. The same can be said for buyers. However, if the process is done correctly, it can also be both interesting and exciting for everybody involved. The ultimate outcome depends on many factors: time, energy needed to devote to the transaction, thoughtfulness and patience. All these traits are included in the process, and all can have an impact on your bottom line.

That's why preparation is key in any successful transaction. The process, complicated by multiple transactions and waiting periods, can be quite confusing. Real estate transactions require expertise. Those wanting total control of the transaction with a do-it-yourself attitude can make many costly mistakes. So unless buyers and sellers have a solid background in Real Estate, they stand to lose thousands of dollars in any given transaction.

Saving on New York Real Estate Attorney Fees

Trying to save a few extra dollars on legal fees may sound like a nice idea, especially for those with large down payments. But this strategy may backfire. You may end up being penny-wise, but broke in the long run. There are many detailed procedures involved in the purchase process that the vast majority of consumers may overlook.

In one of the biggest purchases of your life, it's simply not the time to "bargain shop". Remember the key criteria: if you can't afford to see the big picture in the transaction you probably aren't ready to close the deal. The amount of legal fees charged should not be the deciding factor in hiring a particular New York Real Estate Lawyer. You retain a New York Real Estate Lawyer because you trust that they will represent your best interest in the transaction. The bottom line is that you want a New York Real Estate Lawyer you can trust, if trust becomes an issue you are well advised to seek another New York Real Estate Lawyer, no matter how low the fees are. For the most part, a New York Real Estate Lawyers aim to satisfy their clients and keep that satisfaction within the legal bounds of the law --all at the same time. The happier their clients, the busier the New York Real Estate Attorney will be with future clients. So it makes common sense as much as it makes dollars sense to retain a New York Real Estate Lawyer who aim is to achieve the client's goal in the real estate transaction.
Real Estate transactions involve use of standard legal language. It is quite understandable then, if a buyer or seller do not understand the terms used in the transaction. First-time homebuyers have the worst experience. That is the reason why it makes sense to hire a New York Real Estate Lawyer who can represent your interest and can help you avoid pitfalls and unnecessary problems.
If not detected prior to closing, once a problem occurs, it can take time and money to correct the situation. An attorney with experience in New York real estate law can help steer a buyer or seller away from costly mistakes.

What kind of home fits my needs?

When buying a home, you have to determine what property will fit your needs. Picking the right kind of property to purchase requires careful planning, organization, and sacrifice. Since most people don't have the time, real estate brokers can be extremely helpful in letting you understand the many issues you might encounter. The questions involved can be overwhelming. What matters need further inquiry? Which homes come with bad neighbors? There are many matters which you need to inquire about when you look at different properties that interests you. However, some issues are common to most real estate purchases. A simple tip is to determine what borough you like to live. If you plan on living in Queens, Brooklyn, Bronx, Staten Island, Manhattan or Long Island, you may want to deal with a broker in that borough.

Coop or Condos?

Cooperatives are the most popular property purchased in New York City. One reason for this is a trend away from expense-ridden properties where foreclosures are common. Another reason for coop popularity is convenience. Deals can be less expensive (about half the price of a condo) and may involve less paperwork in the closing. Less financial stress and fewer headaches might sound good, right? But what most buyers don't know is that when you buy a co-op, you're NOT buying the physical apartment. Actually, you're buying "shares" of a corporation that owns the building which contains the co-op on its land. Also keep in mind that, just like any other company, a co-op has officers such as a president, a vice-president and a treasurer. And just like any other company they're responsible for the well being of the coop. If the coop suffers a financial meltdown, you could lose your apartment investment altogether.

What happens if I do decide to buy a coop?

You receive a stock certificate and a proprietary lease.

The co-op requires that each coop owner pay a "maintenance fee". If you own a condo, you'll be paying a "common charge." Usually, the monthly fee paid by a shareholder is almost double the fee paid by condo owners.

Sometimes a co-op only "owns" the improvements, and some other company or organization owns the land. This form of co-op is not the normal situation, but it does exist. Your New York Real Estate Attorney should be able to assist you in determining if you are purchasing such a property.

Where does the maintenance fee go? How is the money spent?

When an "entity" (i.e. some organization or other company) holds a mortgage of the co-op, the coop corporation must pay a monthly mortgage payment to the bank. The "maintenance fee" charged to coop owners helps the corporation offset this cost. By charging each shareholder a charge per share the "maintenance fee" helps pay the city taxes on the property as a whole and pay for the expenses in maintaining the property (such as the superintendent or doorman) The "common charge" for a condo helps offset the expenses associated with the maintenance of the building. Elevators, painting, cleanliness and any landscaping all require funding not to mention the common areas of the residential unit.

It is important to note that the monthly fee is not fixed. Just like rent, it can be increased. In buying a condo, however, you are buying a portion of the physical building in which the apartment is located. You then own part of the building and will receive a deed to the property that shows that you are the legal owner. The common charges for condos usually tend to be stable. Most co-ops require that a seller receive approval by the board before attempting to sell. Likewise, the buyer must also be approved by the board to make sure that the buyer will be a "responsible" co-op owner. One exception to this situation is when the coop has a special status as being a "sponsor unit". That means that when the building was converted into a co-op, the co-op conversion plans allowed the sponsor of the building to reserve the right to sell unsold shares without board approval. If you are purchasing the co-op from the original sponsor, then most likely you will not need to get board approval. The same applies to subletting the unit. In most cases you'll need permission. In some cases, purchasing the unit from the original sponsor, may entitle you to the same rights and privileges as the sponsor.

Recently after the cost of fuel skyrocketed, many co-ops and condos monthly fees increased. So when buying a coop or condo make sure that you understand the financial future implications. Ask for the financial information before signing on the bottom line.

Should I buy a single or multi-family residence?

One of the most common dilemmas encountered when purchasing a home is whether to buy a "single-family home" or "muti-family home". Common sense dictates that a single-family home will cost you significantly less than a multi-family home, and will appreciate accordingly. What are the advantages? The peace that comes with it is enticing for some. Not having to deal with renting to strangers, and the headaches of hiring (or being) a landlord. However, on the other side of that argument, a multi-family home can be a financial plus: the rental income helps with the monthly mortgage payments and makes ownership less financially stressful.

How can a real estate agents help me?

Normally the first person you may have direct contact with in the purchase or sale of land or residence, is a real estate agent. Most people use them rather than do it themselves. The agent works for his or her supervisor, and they are called "brokers". The kind of relationship you have with the agent can have a major impact on how well you as a buyer or seller, understand the initial process, and transaction. Two important points: Agents can normally provide good advice and suggestions regarding your purchase or sale. Since they're well-educated in both the property markets and their field, they are can give you past performance for a particular property. However, although the agent may seem to work for you, unless expressly contracted for, they normally work for the seller!

What is a Binder? Why is it important?

A binder (otherwise known as an "offer to purchase") is the first document secured by a minimal money deposit. You will normally sign a binder at the moment that you decide to make the seller an offer to purchase. This tells the seller that you are serious about making the purchase. Once the Binder Agreement is executed, the real estate broker or agent will present it to the seller. If accepted, the property will no longer be shown to potential buyers. It is important to note that the binder, unlike a contract of sale, is subject to a time limit. Unless the binder details the money to be refunded, it will be forfeited under most circumstances.

What should I know about the "Contract of Sale"?

The contract of sale is the first formal stage of the buying and selling process. When you have retained a New York Real Estate Lawyer and have made an acceptable offer, at this point in time, you and the seller will sign a contract of sale. The seller's New York Real Estate Attorney will normally draft the contract and then the buyer's New York Real Estate Attorney will review the contract to make sure that you are protected from any future problems (both legal and residential issues).

It's also important to note that when the buyer signs the contract, a "Down Payment" is given to the seller for the seller's New York Real Estate Attorney to hold in a special account called an "Escrow". The seller's New York Real Estate Attorney is required by ethical rules to do so. However, not to worry: the entire amount will of course, be credited to the buyer and applied to the final outstanding balance at "closing."

The biggest mistake a buyer or seller can make is signing a contract of sale before getting adequate legal representation. A contract of sale is an agreement to purchase and sell the property. Once it's signed, it becomes a legal document. If you change your mind and want to change the terms of the agreement or if you want out of the transaction altogether, then you will find yourself in an extremely frustrating legal bind. That's why an experienced New York Real Estate Lawyer is necessary throughout the process, especially at the beginning stages. The contract of sale dictates exactly how the transaction will proceed. It says how payments will be made and collected, and contains all the important details. Tell your New York Real Estate Lawyer every detail which you think is important and essential to you intensions. For example, maybe you are selling another property while simultaneously buying a home. Since the sale of your property is a condition, that condition is a major detail that you should tell your New York Real Estate Lawyer since, the other "party" may have not accepted your offer had they known such a condition.

Another issue that sometimes comes up is the issue of occupancy. Generally a house is sold vacant. However, if you would like to keep the existing tenants, it is a good idea to tell your New York Real Estate Lawyer (assuming it's not a new construction), and that by itself can save you time and hassle in the process of renting the property later on.

As a seller, should I have my home inspected?

Home inspections can sometimes make or break the deal. A New York Real Estate Lawyer can secure a condition in the contract of sale which allows the buyer to refuse to purchase the property if the home inspector determines that the structure is not physically sound. Termite problems or signs of other wood-destroying insects are great reasons for a buyer to opt out of the contract. In such cases the seller usually return the buyer's down payment and everybody walks away from the table. Home inspections are relatively convenient, inexpensive and will save you a lot of time and money.

Finding a New York Real Estate Lawyer?

When looking for legal representation, most importantly, you want a New York Real Estate Attorney whom you feel comfortable with. If you don't feel comfortable with a particular New York Real Estate Attorney, chances are that you will not have a good working relationship.

An experienced New York Real Estate Lawyer, who you feel comfortable with, can be greatly beneficial in explaining and reducing the mystery out of buying or selling real estate in New York. Your New York Real Estate Lawyer can review and prepare the contract of sale, order title insurance, and conduct key parts of the transaction. Making sure the property you are purchasing has no undisclosed liens. If they do exist, your New York Real Estate Lawyer can take care that they will be satisfied prior to the closing.

The last thing you need is to have doubts and questions about your transaction. You want to make sure that after all the documents are signed and notarized, that you understand what just happened and that you are confident that everything was done correctly.

When should I close the deal?

The closing is the climax of the transaction. The buyer's New York Real Estate Attorney is normally the ringmaster who coordinates the time and place of the closing. The closing is where the parties meet to finalize the deal. Normally the parties you will see at the meeting are the seller and their New York Real Estate Attorney, the bank's New York Real Estate Attorney, and the title representative. What occurs at the closing table can be broken down to three major steps:

The bank makes the loan to the buyer and in return the buyer gives the bank an interest in the property (Mortgage)

The buyer turns that loan over to the seller and in turn receives a deed from the seller

The title company makes certain that the seller does indeed own the property they are transferring

Unless there are any serious outstanding issues, the closing can take about 2-3 hours. At this stage, the buyer should have obtained homeowners Insurance prior to the closing. Since not all insurance companies charge the same prices for the replacement value of a house you might want to shop around before the closing.

Lastly, a day or two prior to the closing, it's always a good idea to do a walk though of the property to make sure that it is in the same condition as when you decided to buy it.

3 Things You Must Do to Succeed at Real Estate Investing

Here are three simple guidelines that must be followed if you plan to succeed at real estate investing. It's not everything, of course, but at the very least, you must be willing to commit to these things if you want to become a successful real estate investor.

Shall we get stared?

Acknowledge the Basics

Real estate investing involves acquisition, holding, and sale of rights in real property with the expectation of using cash inflows for potential future cash outflows and thereby generating a favorable rate of return on that investment.

More advantageous then stock investments (which usually require more investor equity) real estate investments offer the advantage to leverage a real estate property heavily. In other words, with an investment in real estate, you can use other people's money to magnify your rate of return and control a much larger investment than would be possible otherwise. Moreover, with rental property, you can virtually use other people's money to pay off your loan.

But aside from leverage, real estate investing provides other benefits to investors such as yields from annual after-tax cash flows, equity buildup through appreciation of the asset, and cash flow after tax upon sale. Plus, non-monetary returns such as pride of ownership, the security that you control ownership, and portfolio diversification.

Of course, capital is required, there are risks associated with investing in real estate, and real estate investment property can be management-intensive. Nonetheless, real estate investing is a source of wealth, and that should be enough motivation for us to want to get better at it.

Understand the Elements of Return

Real estate is not purchased, held, or sold on emotion. Real estate investing is not a love affair; it's about a return on investment. As such, prudent real estate investors always consider these four basic elements of return to determine the potential benefits of purchasing, holding on to, or selling an income property investment.

1. Cash Flow - The amount of money that comes in from rents and other income less what goes out for operating expenses and debt service (loan payment) determines a property's cash flow. Furthermore, real estate investing is all about the investment property's cash flow. You're purchasing a rental property's income stream, so be sure that the numbers you rely on later to calculate cash flow are truthful and correct.

2. Appreciation - This is the growth in value of a property over time, or future selling price minus original purchase price. The fundamental truth to understand about appreciation, however, is that real estate investors buy the income stream of investment property. It stands to reason, therefore, that the more income you can sell, the more you can expect your property to be worth. In other words, make a determination about the likelihood of an increase in income and throw it into your decision-making.

3. Loan Amortization - This means a periodic reduction of the loan over time leading to increased equity. Because lenders evaluate rental property based on income stream, when buying multifamily property, present lenders with clear and concise cash flow reports. Properties with income and expenses represented accurately to the lender increase the chances the investor will obtain a favorable financing.

4. Tax Shelter - This signifies a legal way to use real estate investment property to reduce annual or ultimate income taxes. No one-size-fits-all, though, and the prudent real estate investor should check with a tax expert to be sure what the current tax laws are for the investor in any particular year.

Do Your Homework

1. Form the correct attitude. Dispel the thought that investing in rental properties is like buying a home and develop the attitude that real estate investing is business. Look beyond curb appeal, exciting amenities, and desirable floor plans unless they contribute to the income. Focus on the numbers. "Only women are beautiful," an investor once told me. "What are the numbers?"

2. Develop a real estate investment goal with meaningful objectives. Have a plan with stated goals that best frames your investment strategy; it's one of the most important elements of successful investing. What do you want to achieve? By when do you want to achieve it? How much cash are you willing to invest comfortably, and what rate of return are you hoping to generate?

3. Research your market. Understanding as much as possible about the conditions of the real estate market surrounding the rental property you want to purchase is a necessary and prudent approach to real estate investing. Learn about property values, rents, and occupancy rates in your local area. You can turn to a qualified real estate professional or speak with the county tax assessor.

4. Learn the terms and returns and how to compute them. Get familiar with the nuances of real estate investing and learn the terms, formulas, and calculations. There are sites online that provide free information.

5. Consider investing in real estate investment software. Having the ability to create your own rental property analysis gives you more control about how the cash flow numbers are presented and a better understanding about a property's profitability. There are software providers online.

6. Create a relationship with a real estate professional that knows the local real estate market and understands rental property. It won't advance your investment objectives to spend time with an agent unless that person knows about investment property and is adequately prepared to help you correctly procure it. Work with a real estate investment specialist.

There you have it. As concise an insight into real estate investing as I could provide without boring you to death. Just take them to heart with a dash of common sense and you'll do just fine. Here's to your investing success.

Online Real Estate Courses

Buying a home is a major decision because it involves choosing a place where you will live for a number of years. This decision also has major implications on your financial status because of the usually high cost of homes and the loan applications that accompany such purchases.

Due to the enormity of the decision of purchasing a piece of property, most buyers solicit the help of real estate agents. Real estate agents are persons licensed by the government of a certain jurisdiction to handle real estate sales. Usually, real estate agents are under the employ of real estate brokers who can be either individuals or companies that have overall responsibility for the actions of real estate agents. There are also instances when real estate agents use the services of real estate appraisers to help them determine the market value of a home that is put up for sale.

Getting a License

Given the delicate and complex nature of real estate transactions, it is important that buyers get the right information so that they are properly guided in their decisions. Real estate agents, brokers, and appraisers need to have an understanding of the market and the technical aspect of real estate. To be able to get a level of competence in real estate, these persons need to take courses on the different aspect of real estate and take a licensing exam so that they can be certified by the state as persons who can handle real estate transactions.

Traditionally, people who wish to become agents, brokers, and appraisers enroll in institutions that offer courses on real estate subjects and take the subsequent exams for licensing afterwards. However, it is now possible for people who to take these courses in the comfort of their own homes because online courses are available on the Internet.

Online Courses

A search on the Internet can lead to you to a large number of online schools that offer real estate courses. Under this set-up, students enroll online, receive their materials through e-mail and they take exams online. These online courses promise that taking these courses is the same as or even better than the traditional way because students do not have to deal with the problems of traveling and face to face communication with instructors. These courses also offer review lessons on how the students can improve their chances in the licensing exams given by the government. Apart from being more convenient, these online courses also offer potential agents more opportunities since real estate courses on the different states are also offered. Given this new development, people who wish to be agents can now also avail of the benefits that the Internet offers.

5 Rock-Solid Real Estate Investment Strategies

Investing in real estate is more complex than simply buying and selling homes. To help new real estate investors to decide which strategy might work for them I put together 5 rock-solid strategies. It is up to you which strategy you feel more comfortable with.

1. Buy and Hold

This real estate investment strategy is commonly known as rental properties. Becoming a landlord is easier than you think. You buy a property, you advertise it as "for rent" and you sign a contract with your new tenant. That's where the love story ends. You need to know a lot about your duties and your rights as a landlord or you will find yourself in trouble.

Screening your prospect tenants is your first line of defense. Protecting your property from damage is your first duty. I might paint a little bit dark picture of being a landlord. But dealing with tenants can be the most frustrating job you ever had. Do yourself a favor and visit a bookstore or library and get as many books on landlording as you can get. Armed with this knowledge you will be able to create a positive cash flow and a long term relationship with your tenants every time you put the "For Rent" sign in the yard.

With the buy and hold strategy you basically have 3 income streams going at once.

Amortization; while paying your mortgage you also lower the amount you owe.

Appreciation; while owning the property it increases in value.

Tax incentive; as a landlord you will be able to deduct your investment cost over several years. (See you tax advisor for professional advice).

Based on this information you can easily see that even if the rent doesn't cover 100 % of your mortgage payment you will still be able to create a positive cash flow.

2. Flipping

This is the art of "buying" and "selling" real estate investment without actually taking ownership. In a flip situation real estate contracts get assigned and the person who assigns the contract to someone else typically gets a commission for their services. That's how you can make money with real estate without credit checks or no money down. Because you never take possession of the property, you don't need to apply for a mortgage.

You only need 2 things to be able to flip a home. First, you need to find an attractive property that will sell very quickly. Second, you need to find a buyer within a very short period of time. Typically 2-3 weeks. Then you simply flip the contract to the new buyer and you will collect your commission at a so called "double closing".

This sounds complicated at first, but with a little bit practice you will be able to create a nice income from this. By the way, this is the preferred concept of most real estate "gurus" who appear in late night infomercials.

3. Rehabs

Rehabs are the most risky form of real estate investments. You hunt for a cheap, run-down property and you hope that your preliminary remodel cost estimates will leave enough room for a nice profit. Well that's the theory. Most real estate investors are failing with this type of strategy.

You either didn't get the property cheap enough to make a profit or the damages are more extensive than estimated which will offset the cheap purchase price. To make matters worst. If during the rehab phase of typically 3-4 months the market is going south all bets are off. Trust me, I made my share of experiences with this and I told myself, never again.

4. Commercial Real Estate Investment

What comes to your mind first when you think of commercial real estate investment? Big factory complexes, shopping malls or maybe huge office buildings. Well, my answer is much simpler. Anything bigger than a 4 unit apartment building, some call it fourplex, is considered commercial. The great thing with commercial real estate is that the value of the property is determined by the rent income it generates and not by how crazy people are going with bidding on residential real estate.

Theoretically there's no such thing as sellers or buyers market for commercial real estate. I wrote a complete article about the pros and cons of commercial real estate. So I keep this brief. Personally I love commercial real estate. Of course, commercial real estate is more or less off limits for beginners, because commercial real estate lenders want to see some form of prior experience in real estate investments. However, if you got some experience, go for it. As an added benefit; the competition is far less.

5. New Construction

This is the most affordable and easiest way of real estate investment. Getting into the earliest phase possible of a new development is a sure thing to make money. Keep an eye on the market and you will be able to sell your new home before construction is finished. The construction companies don't like this, so they limit the number of homes an individual can buy. Even so, keep one or two homes constantly under construction and you will make some nice profits. Of course this works only in a sellers market. Stay away from this strategy in a buyers market or when you see big changes in the local real estate market.

Sincerely,

Peter Dobler

(c) 2005

Colorado Real Estate

Many people not only love to spend their vacations in Colorado, they also buy real estate there in all its forms, whether it is a vacation home, rental real estate, or a permanent residence. There are many different reasons why people want to live in Colorado. From outdoor activities to world-class shopping and entertainment venues, Colorado has a lot to offer to everyone.

If you are a property owner in Colorado, it is not that difficult to sell your property; the Colorado real estate has a great market. Colorado is known as a state with a healthy economy, so it is not hard to start a new life there if you decide to relocate. The real estate also appreciates in a few years' time, which is why many people are enticed to buy property there. If you have Colorado real estate to sell, just post its details with a real estate listing agent so that more clients will know about it. You will have a bigger chance to sell it quickly.

Meanwhile, if you are looking for Colorado real estate, you can begin your search by going through the Colorado real estate listings. Here, you can find quite a few choices such as luxury real estates in Vail and prime pieces of land in Colorado's fastest-growing city, Denver. However, if you want to be away from the big city atmosphere, you can check out Colorado Springs real estate. If you want to be near the University of Colorado, you can look at Boulder real estate listings.

Whether you are selling or buying a real estate in Colorado, you can certainly rely on real estate listings. You can even go online since many real estate companies have now taken advantage of the Internet for easy access and convenience.

Why You Need a Los Angeles Real Estate Agent

A large number of Americans make the decision to sell their homes. Are you one of those individuals? If you are, then you may be in need of a real estate agent.

Real estate agents are individuals who are trained and experienced in the buying and selling of real estate. They typically have experience with arranging negotiations with potential buyers, arranging open houses, dealing with professional lawyers or accountants, and managing the final sale transaction. If you live in or around the Los Angeles area, you are encouraged to seek assistance from a Los Angeles real estate agent.

Los Angeles real estate agents work like all other real estate agents, expect for the fact that they are familiar with the Los Angeles real estate market. This is an advantage of working with a local real estate agent. If you are in need of a Los Angeles real estate agent, you will have to find an agent that fits your criteria.

When it comes to choosing a Los Angeles real estate agent to do business with, there are a number of important factors that you should consider. These factors often include the experience of a particular agent and the services that they offer. Many individuals mistakenly believe that all real estate agents operate the same way, but many operate under different guidelines. These guidelines could not only determine whether or not your home sells, but also for how much it sells.

One of the first things that you should consider is whether or not the Los Angeles real estate agent of your choice operates as a duel agent. Duel agents are those who work with home buyers and sellers. In addition to placing your home on the market and overseeing its sale, a duel real estate agent would assist those looking to purchasing a home in the area. Working with a duel agent may increase the number of potential buyers for your home.

It is also important to determine whether or not the Los Angeles real estate agent of your choice participates in an MLS Marketing Service. MLS stands for a multiple listing service. There are a number of cities, town, and counties in the United States that run an MLS program. Instead of searching for homes offered by a particular real estate company, potential buyers can view a collection of homes all in one place. Having your home listed with an MSL program is likely to increase the chances of your home selling.

As previously mentioned, a professional real estate agent may also be able to have an impact on the amount of money that your home is sold for. When finding a Los Angeles real estate agent to work with, you are encouraged to determine how much they will list your home for and how they reached that number. Many real estate agents use an appraiser to determine the value of a home and others use competitive pricing.

By taking the time to examine a number of real estate agents, you should be able to find the Los Angeles real estate agent that best fits your needs. Real estate agents are important to the successful sale of a home. That is why it is important to understand all of your options when selecting a Los Angeles real estate agent.

Breaking The Real Estate Bubble Myth

Bubble? What bubble?

At the root of the Real Estate Bubble Myth is the fact that interest rates are on the rise and the inexplicable truth is that, all of a sudden, everybody is so worried and concerned about it. Interest rates have been steadily on the rise both in the United States and, by reflection, in Canada since mid-2004, so I will leave to psychiatrists and psychologists the arduous task of explaining the newest, interest-rates phobia. I will, however, delve into the reasons as to why interest rates have been on the rise for these past 18 months.

Interest rates are the most important mechanism of Monetary Policy used by Central Banks to expand or reduce the available pool of capital at any given time. Central Banks use this mechanism to control the level of aggregate demand for goods and services, a primary cause of economic fluctuations. By reducing the money stock the cost to the banks for using the available capital is raised and passed on to consumers with a mark-up factor. This, in turn, discourages consumer spending on goods and services and, conversely, stimulates consumer saving. The effects are widespread and reverberate throughout the economic basket including, of course, real estate. What, however, pays to bear in mind is that it is not so much the amount of the increase that is important but, rather, the time given for the economy to adjust. The effect of a one percent interest rate hike in one month is going to be very different - and much more dramatic - than the effect of a one percent rate hike in six months, and this is a fact very well known to both the Federal Reserve System and the Bank of Canada.

So much so, in fact, that David Dodge, the Governor of the Bank of Canada, as well as Alan Greenspan, the outgoing Chairman of the Federal Reserve Bank and Ben Bernanke, the nominee for the Chairman position are all proponents of gradual interest rates increases. Prof. Bernanke in particular, in fact, has gone even as far as postulating an inflation-targeting approach designed to keep inflation in check at 2 percent over two years. All number-crunchers out there, therefore, consider this: the posted annualized U.S. rate of inflation calculated monthly for November, 2005 using the Consumer Price Index published by the Bureau of Labor Statistics is 3.46 percent, so all the Feds are talking about is a -1.46 percent inflation-targeting reduction programme over two years. That amount should be easy enough for everyone to absorb and it certainly does not look nearly as ominous as the doomsayers are all too fond of depicting.

Contrary to the belief of many 'bubbleologists' and the uneducated guesses of ill-informed consumers, a rise in interest rates is actually a welcome variable for the economy and, moreover, it is specifically the tool needed to keep a bubble from bursting. An economic bubble as it is widely known - or perhaps it isn't - occurs when speculation causes prices to increase, thus producing more speculation and subsequent price increases. The bubble bursts when prices of goods are so absurdly high that consumers either refuse or cannot afford to purchase, thus sending demand tumbling down. As real estate markets in North America have seen more than a fair share of speculation in recent times, it follows that a cooling-off trend through higher interest rates will have the beneficial effect of consolidating market wealth achieved thus far. The bubble would be likely to burst if no pressure were applied on speculation, thus increasing prices even further and causing demand to lower and finally collapse. Allowing the economy to get an even footing through a slowdown of capital appreciation and, at the same time, allowing real wages to catch up is exactly the tonic needed for a healthy foundation. Higher interest rates, moreover, promote domestic saving and attract foreign capitals thus reinforcing both the Greenback and the Loonie, another beneficial factor in finance albeit not in trade.

So, what is the prognostication for 2006? Real estate consumers need to look no further than at the prices large developers are asking - and collecting - today for new construction slated for completion by the end of 2006 and beyond. Prices for residential condos in the planning stage or just under construction sold 'on paper' today are about 10 percent higher than prices of equivalent existing resale units, which goes a long way to point out where big players think the real estate market is heading. The basis of this buoyance is that consumer confidence is stronger than ever. Just before the Holidays, in fact, the Feds reported that the Index of U.S. Consumer Confidence has risen to 103.8 from 98.3 in November, the second highest level since August, 2005 when the Index reached 105.5, a reflection of lower energy prices and an improved job market environment. Moreover, preliminary estimates already show an 8.7 percent rise in Holidays spending in the United States and a 7.6 percent rise in Canada over the same period last year. There is no valid reason to believe, under the circumstances, that consumer confidence applies to everything but real estate and that an economic bubble would affect only real estate markets and nothing else. Furthermore, Real Estate Boards across Canada and the United States report that inventory levels are 'seasonally normal' - an indication that the anticipated glut of housing due to the inability of homeowners to meet mortgage payments has failed to materialize thus far. In fact, those who worry that adjustable-rate mortgages are a potential financial time-bomb ready to explode should be informed that while there has been a surge of new adjustable-rate mortgages over the past twelve months, especially in the United States, they account overall for less than 10 percent of the total existing inventory of mortgages held by banks. Furthermore, many adjustable-rate mortgages have allowed consumers to fix rates up to 10 years, and it is only borrowers of sub-prime mortgages that face monthly-payment adjustments after three years - which therefore means that the problem, if there is a problem, will come due in 2008, not in 2006. Interest rates increases have absolutely no impact whatsoever on the vast majority of mortgagors who have locked in already.

In conclusion, therefore, it certainly appears that the Real Estate Bubble theory belongs more to Greek mythology than the reality of our times. There is in progress right now a reduction of real capital values, which will continue for some time as the direct consequence of the markets taking a breather. This trend is expected to settle real estate markets to new, more commensurate pricing levels before appreciation will surge upwards once again. Where the difference will be seen more likely than not is in the annualized rate of appreciation: gone are the times of twenty percent capital appreciation increases from year to year. As interest rates are steadily, gradually increasing, expectations in economic circles range from a conservative 5 percent to an optimistic 10 percent housing appreciation in value by this time next year. But there is no question that real estate markets still have a way to go to make up for years of decline. Those who theorize the collapse of the housing market by comparing it to the stock market are fundamentally incorrect. At its core the housing market, like the stock market, is all about supply and demand. However, the difference is that investors base their decisions to buy into stocks on future potential whereas investors base their decisions to buy into housing on inherent value. Moreover, externalities as varied as immigration, internal migration trends, marriage trends and cultural precepts as well as generation gaps affect real estate markets whereas they are totally missing in stock markets. As such, real estate markets just do not 'crash' like stock markets. There is not going to be in real estate the infamous Black Monday - October 19, 1987 - when the Dow Jones collapsed 22 percent in value in one day. When people buy into stocks there is no guarantee whatsoever that the companies they are buying into will be still in business five, ten, fifteen years down the road. Real estate markets, conversely, are far, far safer.

In the absence, therefore, of external negative influences the likes of wars, terrorist attacks or devastating virulent pandemics - which, on the other hand, would affect the entire economy - and until such time as consumers exhibit confidence and purchasing power the way they have been doing thus far, there is no reason to fear bubbles of any kind anywhere in real estate. Hence, do not expect to hear a popping sound any time soon.

Chicago Real Estate Appraisal

The first thing to do before selling your real estate property or buying one is to get an appraisal. This is essential in all situations. Whether you are a first time seller or a savvy real estate investor, you need to get your property appraised before you put it on the market.

Real estate appraisal means determining a piece of property's monetary equivalent based on its highest and best use value. A real property's value differs in many ways: market value, value-in-use, insurable value and investment value.

In order to optimize the sale of your property and get every cent you deserve, refer to a reliable appraiser. An accurate Chicago real estate appraisal is important for loan financing, real estate tax and financial planning.

The real value of property is not in its physical appearance but its use. For example, a certain area of land may be given its highest and best value as a commercial lot rather than as a residential property. So if you are looking for a place for your family, it would be best to opt for real estate labeled as residential. For one, dwelling in a commercial space may not be legal. And two, most commercial spaces are more expensive than residential areas.

So to be on the safe side, acquire a Chicago real estate appraisal before you take action. There are plenty of appraisal companies all over the Chicago area that will put you in touch with qualified appraisers. A quick visit to any appraisal company is all you need to get a Chicago real estate appraisal.

Protect your investment with a Chicago real estate appraisal. Whether your property is a 2-room apartment or a sprawling mansion, a log cabin in the mountains or a high-rise condo-you should get an appraisal before you put it on the market.

Oregon Commercial Real Estate

Real estate is broadly categorized into two types. This includes residential and commercial real estate. As the name suggests, the latter revolves around sale and lease of property that is intended for use in trade and business. This includes a wide range of business opportunities including shopping malls, gas stations, car parks and office buildings. The Oregon commercial real estate market is huge and encompasses innumerable viable plots and property.

Oregon commercial real estate could refer to an empty plot of land, a building, a store or multiple shops, or even a park. The instant any property is to be used for a business purpose, it is categorized as commercial real estate. Oregon commercial real estate includes land, as well as anything that is permanently built or fixed onto it. These fixtures include nursing homes, buildings and fences. They also refer to pipes, plumbing, heating devices and light fixtures that are inbuilt or fixed on the exterior of a building. Commercial real estate can be purchased, sold or rented as required. Such commitments prove to be profitable for real estate agents who deal in them. Since commercial real estate deals with profitability in the long run, entrepreneurs do no rush into such commitments. It is important to find an Oregon commercial real estate property that is feasible and can help increase trade.

Price points for Oregon commercial real estate depend upon their location. Areas that are established as "commercially profitable" are categorized within higher price brackets, as compared to others located in developing areas. Their rates are calculated differently from residential real estate. A number of Oregon real estate listing companies have dedicated commercial real estate databases that are easy to access and designed to help clients find a viable property in a short time. Before finalizing an Oregon commercial real estate deal, it is important to ensure the property is not blacklisted and all fixtures within it are in compliance with state regulations.

Real Estate Investment Success Series Tip #1- Making Money With Real Estate Investing

Are you losing money in all kind of speculative instruments like share, bonds and forex and am wondering what asset class to invest in? Why not consider real estate investment with its traditionally higher yields as compared to leaving your money in your bank account. This article will highlight four common strategies that real estate investors use to make money in property investment.

Money Making Method #1 - Purchase run down property and spruce it up
This method involves finding a run down property in a good area that you think has promise for resale and sprucing it up like some of the shows where people do an extreme makeover on the property. Bring along a good structural engineer or architect when you do look for such properties so as to ensure that the renovation works that you have to do will not be so extensive that it does not become worth your while to purchase the property. Since the property is may be rather run down, you need to redecorate and repair it and then you can resell this real estate for a much higher price. The key consideration when investing in this kind of real estate is to keep your renovation costs low but ensure that the basic utilities like the electricity , water and gas pipes are in good working condition. Thus this buy at undervalue and upgrade real investment strategy requires good investment property valuation skills and the ability to keep your costs low.

Money Making Method #2 - Find places with high rentals
Find areas with traditionally high rental returns that outperform the national average and then spend time looking for them and make money from the rentals. Here in this area of real estate investment, spending some time to find the real estate investment that is a bargain is a good idea so that you can get better return on investment.

Some people do not seem to get it that high rental yields are important to a real estate investor and think that most of their customers would pay anything to get a winter residence. I was at a property exhibition recently and spoke to a Spanish Real Estate Agent and when I asked her what the Return on Investment was on a piece of Bulgarian property that she was selling. Not only could she not even understand the concept of ROI but she even laughed off the question of rental yield when I asked her. I am sure she is not alone in his mistaken belief that people buy just because they like the real estate. Thus rental yields or return on investment is critical when you decide what type of real estate investment property to purchase.

Money Making Method #3- Purchase foreclosed property
Most people will know that foreclosed property usually fetches a lower price than the market value since banks are often eager to sell at a price that covers their mortgages or sometimes they just want to liquidate the property. Such properties tend to be auctioned off and you can then resell them for a higher value subsequently. However beware of hidden defects in auction properties and always arrange for a visit down to the property just to check it out.

Two people you should bring with you when deciding on a real estate investment is your professional engineer and your contractor. You want to check for hidden defects in your real estate investment to avoid buying a defective property that would cost loads of money just to repair. Thus purchasing foreclosed property may be profitable if you find a real bargain for your real estate investment portfolio.

Money Making Method #4- Cash Flow Investment
Robert T. Kiyosaki in his book explains this real estate investment strategy. He argues that the best investment you get is when you find a property at a bargain and then purchase it with as much debt as possible and then generate a cash flow from the difference between the monthly rent and the mortgage instalment. This method is highly interesting and requires you to really spend time looking for such a real estate investment that fits in that criteria.

Remember that real estate investment is dependent on rental and the higher the proposed rental the better your monthly cash flow is. You could also purchase the property at a lower price and this would mean that your monthly cash flow would improve. Note that once your property is partly paid up, you can refinance your loan and extract out some money and purchase a second property and so on. Soon you would have multiple streams of income from the purchase of one real estate investment property.

In conclusion, there are many ways to make money from real estate investment and what's missing is massive action on your part. Take massive action and start hunting for your ideal real estate investment property today and start generating substantial real estate investment property profits.