Benefits of Real Estate Investment vs. Stocks and Bonds

As the economic recovery continues to build, Americans are again able to consume and invest; and with recent reports from the U.S. Census Bureau noting 34 percent of American households are rental units, investors are taking notice and rushing to reap benefits of placing investment funds in single- and multi-unit residential property.

“Investor demand for single family properties remains strong,” says Kirk McGary, CEO of Real Property Management, citing a recent study from Zelman & Associates that found investor demand for residential properties ranking at 60.9 on a scale of 0-100. “Trends like this in the housing market have created significant demand for property management companies like ours, as investors choose to put their money in real estate as opposed to the alternatives.”

Although there are many investment options available, real estate vehicles offer the ability to finance a portion of the purchase price to leverage the initial investment to control an asset valued much higher – unlike stocks, bonds and CDs. With lower interest rates available, a small increase in the value of a leveraged property investment can carry a greater return than an unleveraged investment — approximately 12 percent gross according to the same study by Zelman & Associates.

Investing in real estate also offers tax benefits where earnings from investments in CDs, bonds and stocks are taxed. By making deductions from the profit on mortgage interest, cost of property repairs and depreciation, property owners are writing off depreciation of an asset that is actually ascending providing yearly benefits to a long-term investment.

Most importantly, ownership of property improves cash flow. Subsidizing the investment with consistent rental income puts money in the investor’s pocket, covering the mortgage, repairs and additional homeownership costs.

Being able to minimize tenant turnover through timely and concise management reflects on the bottom line, maximizing the return on investment overtime.

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Reprinted with permission from RISMedia. ©2013. All rights reserved.

Using Your IRA to Buy Investment Properties | Zillow Blog

AUTHOR:PROFESSORBARON.COM

With taxes going up for most people, you might be paying more attention to your tax-deferred retirement investing options, such as your Individual Retirement Account (IRA). And with property prices going up, you might ponder whether you can invest those IRA funds in real estate to both defer (or eliminate) taxes and earn a fair rate of return.   Read more

 

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Smart Real Estate Investing for the New Rebound

Market InsiderMy Market Insider – Update for October 2012

Featured “Insider Tip”: Smart Real Estate Investing for the New Rebound

A new real estate boom appears to be taking root and spreading across the U.S., but is this really the investment opportunity of a lifetime or are we being set up for another exploding bubble?

What Would Warren Buffett Do?

Legendary investor Warren Buffett has been known to dominate the headlines and even made the cover of Time Magazine, so what’s he talking about? Buffett’s recent crusade has been focused on selling the benefits of real estate investing and pointing out an array of indicators which suggest a new, extended period of growth. This is a view being echoed around the country from veteran real estate agents who say, in certain markets, a seller’s market is definitely here again.

The New Gold Rush is On …

Those who can afford it are bidding on packages of 500 rental properties being offered by Fannie Mae, while others are racing to foreclosure auctions or bidding on as many short sales as they can.

Prices are as close to bottom as most can predict, and the fear is that soaring home prices (due to shrinking inventories), the potential evaporation of REO and short sale opportunities in the near future, and a potential rise in mortgage rates will cause the best opportunities to fade quickly.

In principal the strategy appears to be sound. After all, banks are now paying selected homeowners up to $35,000 to complete short sales and get out, making cutting deals a breeze for investors. But are we getting set up for another great fall?

Over-Confidence Breeds Dangerous Speculation: Are You Being Fooled?

It truly is a great time to invest in real estate for those who buy wisely, buy low and have the finances to do so. Unfortunately, the contagion of overconfidence already seems to be infecting the masses, luring novices into acquiring properties they believe they can flip like the investors on a reality TV show.

Stories are emerging of buyers overpaying for homes and multifamily apartment buildings and even a surge in investing in the junk subprime securities which were supposedly to blame for the whole housing crash six years ago. It seems some people will never learn or just enjoy gambling.

How to Invest Wisely in the New Rebound

When utilized wisely as part of a diverse portfolio, real estate investment can be the best move for most Americans to build wealth and subsidize their incomes in retirement. Between passive cash flow, appreciation as a hedge against inflation, and depreciation to offset taxes, it is incredibly attractive. However, there are a few rules which must be followed:

1. Define Your Goals

Before acquiring any property, ensure that you have defined your financial and personal goals and that your investment decisions are aligned with them.

2. Is Your Home the Worst Investment You can Make?

For many, purchasing a home can create forced savings and eventually become the best investment they ever make. However, your own residence and home equity should never be something to gamble with. It’s where you live; your investments are for paying for that. Don’t confuse the two.

3. Don’t Invest in Real Estate Until You Are Financially Ready

Real estate is somewhere to put your money to work for you. No money down real estate investing is possible, and it can be a way to make money, but if you bite off more than you can chew and don’t have any savings or reserves, you are asking for bankruptcy.

Make sure you are prepared for the worst, have separate personal savings which are sufficient to carry you through for several months, and have an exit strategy before you get in as well as a plan B and C.

Don’t Believe the Hype!

There are many ways to invest in real estate and even more silver-tongued professional sales people to pitch them. Choose a solid strategy and be wary of distractions that can lead you into investing in all types of exotic locations and structures you don’t really understand.

Note investing, construction, commercial properties and starting property management companies can all be exciting and profitable, but just as with stocks, it may be safer to invest in what you know.

Protecting Yourself Against Market Fluctuations

The most important thing for anyone considering real estate investment is to get educated. Don’t worry, this doesn’t mean having to go back to school or picking between tacky late-night infomercial products. However, it does mean learning more about the potential risks, how to protect against them, real estate cycles and the signs of negative fluctuations to watch for.

Buy-and-hold investing and creating a portfolio of rental properties is hot right now and has the potential to create incredible wealth over the long term. Just realize how long you may have to hold your investment and what the penalties could be if you need to cash out early in less buoyant times.

 

Excerpt from Market Insider, October, 2012.  Explore a wealth of information that will help you better understand the factors that impact the real estate market – sign up for FREE access to valuable market data !

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

REO Properties: Is List Price Just the Starting Bid?

Winning with ForeclosuresWhen it comes to bidding on REO (bank owned or foreclosure) properties in Stuart, Florida, it seems the list price has now become the starting point, not an asking price.  Previously banks would establish the list price of a foreclosure with the expectation of negotiating an acceptable offer within 90% to 95% of asking price. With increasing demand, limited inventory, and competition amongst buyers, it is no longer realistic to expect to get a steal on REO properties. In fact, it seems the banks in some instances may set the list price low in anticipation of receiving multiple higher offers. While there are still good values to be had, I caution my clients that desirable REO properties typically do not sell for less than asking price. It is now common to find ourselves in multiple buyer situations where the listing agent requests a “highest and best” offer, often resulting in a sale thousands above asking price.

 

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

 

U.K. Buyers Must Act Quickly to Secure Fla. Property Bargains

ORLANDO, Fla. – Oct. 10, 2012- Property prices are currently low in Florida, making it the best time to buy in years, but could soon be on the rise.
“Now is the time to buy in Florida. We’re starting to see the beginning of the shift from a buyer’s to a seller’s market,” says Dr. John Tuccillo, chief economist for Florida Realtors®. “Sales numbers and home prices have both been rising, and we expect the trend to continue as more international buyers take note of the opportunities here, and the market’s recovery gains traction. There are some real residential bargains to be found for British buyers.”

For United Kingdom buyers, bargain prices look even better thanks to the best dollar-pound exchange rate in six months.

Florida appeals to international buyers for its subtropical weather, beaches and attractions, but many of these buyers also see investment potential, particularly within the rental market. Some would-be landlords enter the market even when they don’t plan to vacation in their house, seeking out Florida property that already has tenants.

Florida sales to international buyers accounted for over a quarter of all U.S. international property market sales last year, according to the National Association of Realtors®, and Florida’s popularity is still rising among international investors. Florida Realtors recent research revealed buyers from Canada, Brazil and Venezuela are now joining British buyers in taking advantage of Florida’s property bargains.

Florida Realtors research finds that the median price for a single-family Florida home is £91,000, with Orlando the most popular destination for Brits. In Orlando a four-bedroom home with private pool and garden can be snapped up for around £125,000 – 75 percent of a similar-sized home in the U.K.

“Buyers who have been waiting on the sidelines should see this as a sign to jump in before the market escapes them again,” says Florida Realtors® President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “We understand this is a big step, so to help international buyers understand Florida’s potential, we’ve put together a few tips and tricks for Brits looking to buy.”

Tips and facts on buying Florida property

• Florida’s property purchase system is different than the U.K.’s and can be confusing. Appropriate professional guidance is essential.

• There are no restrictions on foreign purchases of U.S. real estate, and international buyers can apply for conventional mortgage financing.

• When calculating how to buy a Florida home, include escrow fees and closing costs – part of the purchase costs – in calculations.

• Do your homework and consult several currency exchange companies in the U.S. for the best exchange rate, which can save thousands.

• If you choose to rent the property, note that Florida is one of the few U.S. states with no state income tax.

• Understand the homeowner taxes and U.S. tax process, which can be complex and may involve payments to at least four different levels of government: local, regional, state and federal. A Realtor can help explain this.

• U.K./U.S. visa regulations allow international visitors to stay up to three months at one time without getting an alternative visa. Arrange passports, visa and residency status before travelling to the U.S.

Representatives from Florida Realtors, including Chief Economist Dr. John Tuccillo, will be speaking at the Property Investor Show in London on Oct. 11-12, 2012, at the ExCeL London Exhibition and Convention Centre.

© 2012 Florida Realtors®

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Demand Surges for Rental Housing

Freddie Mac: Demand surges for rental housing

Rentals

MCLEAN, Va. – Oct. 18, 2011 – Freddie Mac released its U.S. Economic and Housing Market Outlook for October. It shows rental demand rising and calls the multifamily sector “a strong positive signal for the U.S. housing industry.”

Outlook highlights:

• Over the year ending mid-2011, the Census Bureau reported a net increase of 1.4 million households that moved into rental housing – a 4 percent rise in the number of tenant households in just one year.

• The U.S. homeownership rate fell about 1.5 percent over the past year (from 66.9 percent to 65.9 percent); homeownership rates fell about 4.4 percent for those under 25 years of age, and by 7 percent for those aged 25 to 29 years.

• Apartment rents, which had been flat to falling in many projects during the 2008-2009 recession, have started to rise, albeit slowly.

• New construction starts of apartments in buildings with at least 20 dwellings has picked up this year; in the second quarter, it reached its highest point since the end of 2008.

• Low Treasury yields suggest that mortgage rates fell to new lows for multifamily lending in recent weeks.

© 2011 Florida Realtors®

Reprinted with permission. Florida Realtors®. All rights reserved.

 

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Five Tips for Buying a Foreclosure


ForeclosuresPurchasing foreclosed properties in Stuart, Florida can be a vexing process for many home buyers. Here are some helpful tips for buyers considering a foreclosure:


1. Ensure that you are working with an agent with access to accurate foreclosure information. Do not assume that all agents have foreclosure expertise or equal access to these listings.

2. It is typically easier to pursue bank-owned properties rather than short sales, which can take months to close (if ever). When it comes to short sales some banks will negotiate in a timely manner, but don’t even think about a short sale if you must close by a certain date. Bank-owned property transactions on the other hand are straightforward; the banks are tasked with selling these properties as quickly as possible.

3. Price is negotiable. Don’t assume that banks are firm on their price; you can offer less. For example, asset managers responsible for liquidating bank-owned Stuart, Florida condos are often willing to consider a lower offer. That said, low ball offers are often rejected outright. In most situations I would not offer less than 90% of list price as banks have been pricing these homes competitively. If the home is in good shape and in a desirable area you will most likely be competing with buyers offering full price or more.

4. Ask the bank to pay your closing costs. They may say no, but banks can be quite accommodating when motivated. At a minimum they usually will pay for title insurance.

5. Get pre-approved for a mortgage. When making an offer, whether a foreclosure or short sale, it is essential to be pre-approved. You may want to consider using the same bank as this may help during negotiations.


This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Renting Your Vacation or Second Home

RentalsRenting your property can be a great way to offset some of the ongoing expenses of owning a vacation or second home. If you are an out of town owner you will need to consider how you will manage the property long distance. Hiring a property management company or a real estate professional are two options that can ease the stress of going it alone.

A property management company will charge an ongoing fee, usually 10% of the monthly rent for their services (in addition to their fee for procuring a tenant) while a Realtor may offer some services as part of his listing agreement. The latter can save you an ongoing management fee but will require some “hands-on” participation from you.

As a Realtor who handles rentals as well as home sales, I provide many of the services offered by a property manager as a courtesy to my clients. This primarily consists of getting your home “rent ready” with the assistance of service professionals who provide various maintenance services directly to my clients for a fee while I help manage the process.

Some owners rely on a neighbor or nearby relative to perform these functions only to find the job does not get done or is done poorly. In the end you wind up with an unhappy tenant you need to deal with from miles away. Regardless of which approach you take, your home must be spotless and equipped to handle the demands of tenants seeking a stress free vacation rental and who may become repeat renters for years to come.


Preparing Your Unit to Rent

It may seem obvious but having a bright and clean rental will result in a quicker sale and a better tenant! For seasonal rentals I recommend a thorough cleaning before we begin showing the unit. You should also plan on another cleaning before your tenant arrives, especially if it has been vacant for a while. Bathrooms need to be spotless and free of mold and grime. Carpets may also need shampooing. You may want to consider a cleaning service for scheduled visits – local cleaning companies charge about $100.00 for a typical 2/2 condo or villa (basic service).

Clutter and personal items should be removed or stored in a secure area. You should also try to address any maintenance needs before showings begin.

If upholstered furniture or bedding is showing its age, consider having it cleaned or replaced. Likewise, threadbare linens, pillows and sheets should be replaced as needed.

Also, consider a fresh paint job if the walls are dingy or showing wear and tear. This is very important for vacation rentals to help move them quickly.

You should provide your tenants a list of contact numbers (including yours) for service emergencies. Include information about anything that pertains to your unit, complex or community.


This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.



10 Tips For Purchasing Rental Property in Stuart, Florida

RentalsWhen considering a rental property for investment or a vacation home you plan to rent out to offset expenses, it is important to make sure you perform due diligence and are prepared for the task at hand. As a “rental property virgin” buying your first property involves more than just buying a home and renting it out. Here are some tips to help get you started.


1.Find a seasoned Realtor who knows Stuart, Florida’s neighborhoods and communities as well as the surrounding Treasure Coast area. An experienced agent can recommend suitable properties to buy and will be able to provide up to date information about local market conditions, negotiate the best deal, and procure a tenant when the time comes.


2.Check your finances. When financing your rental property or vacation home it is important to ensure there are no errors on your credit report and resolve any problems quickly.


3.Schedule an appointment with your accountant or lawyer. They will point out how becoming a landlord affects you from a legal and tax standpoint.


4.Determine your budget. Your lender or mortgage broker should help calculate the maximum amount you can afford to pay, how much of a down payment will be needed, and get you pre-approved for a mortgage. Estimated closing costs and other incidentals must also be factored in.


5.Visit neighborhoods that interest you at various times of the day and night to get a feel for what the area is like.


6.Be selective http://microbestshop.com/microsoft-windows-7-professional-with-sp1-32-bit-64-bit/. It is important to treat your rental property search as if you were in the process of buying your primary residence.


7.Consider future resale. Features that are a concern to you will most likely affect future buyers as well.


8.Before making an offer ask your agent to provide information about comparable properties in the area. It is important to compare recent sales, price per square foot, area rents, and other relevant information to be sure you are getting a good deal.


9.Schedule a home inspection. Once your offer is accepted (with conditions) be sure to call in a professional home inspector. A home inspection will tell you if the home is safe to live in, identify any problems that need to be addressed, and help to avoid expensive repairs down the road. You may also need to get separate termite, well, septic or other inspections.


10.Establish a reserve fund to cover future repairs, vacancies, etc.


As in any real estate transaction, buying a rental property requires advance planning and that you stay on top of all the activities and details necessary for a successful purchase. Employing a Realtor with a high-quality professional support network will help to facilitate your transaction and avoid missteps along the way.



This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Buying Investment Homes in Stuart Florida


InvestorsEnhancing Your Acquisition Team


As an investor your needs are different than the typical home buyer. You need someone who can identify and show you multiple properties that meet your investment goals and make sure the paperwork happens right and on time. Eric Slifkin and his team serves our investor clients with a full compliment of professional real estate services. We can help you, the individual real estate investor locate and build a solid portfolio of real estate investments, managing your transactions from negotiation to settlement.


Ten reasons to work with Eric Slifkin and his support team:


-We handle transactions ranging from single family homes and condos to multifamily units.
-We are experts in Stuart area real estate and understand the investor mindset, wants and needs.
-We help you identify suitable investment properties that match your criteria.
-We provide objective opinions on your selections based on local knowledge, construction expertise and comparative market analyses reports (CMAs).
-We have direct access to both Florida Regional MLS and Martin County MLS systems, which jointly serve South Florida’s Treasure Coast.
-We work with REO banks and brokers, short sale properties and FSBO sellers.
-We offer In-house title services as well as lender and insurance resources.
-We will manage your transaction from property search through settlement, acting on your behalf to spot problems before they grow too big.
-We can find qualified and screened tenants for your rental properties.
-We are affiliated with Keller Williams Realty, one of the most progressive and highly ranked brands in Real Estate.


If you are serious about investing in real estate please contact us to discuss your needs and experience our personalized real estate services for investors.


This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.