A Few Points About Interest Rates
Less is more!
If you’re new to investing or real estate and don’t know the first thingabout interest rates, here’s a good tip: the higher the interest rate,the more expensive it’s going to be. High interest rates mean you willhave to pay back more on the money you borrow. Another good rule ofthumb is that affordability increases if you use an adjustable ratemortgage (it’s easier to qualify this way). Of course, there will be awide range of prices that you can choose from, depending on what kind offinancing you choose..
Not even the Fed knows for sure
The Fed holds a considerable amount of power, but they can’t controleverything. Mortgage interest rates are affected by many unpredictablepolitical, economic and social events. So there is no guarantee whatdirection interest rates will go, despite the forecasts of the experts.Therefore, make your financial decision based on where things are todayincluding your budget, your needs and your future plans.
Locking in rates assures your lowest interest
If you do decide you want to lock in at a certain interest rate, youwill need to complete a loan application and send it to your lender assoon as possible. This must be done so that your commitment doesn’trunout before your loan is approved. Follow up and be se sure that thelender is receiving all of the necessary documentation. Get a propertyappraisal, which usually costs about $300, through your loan agent assoon as possible.
Don’t obsess and miss a good real estate deal
Although rising interest rates can create more problems for home buyers,waiting and hoping for low rates is not necessarily a smart move. Youmay end up paying a higher price. Also, refinancing is always an optionin the event that interest rates come down.
Visit again soon! I have more information that you will need!
Finding the Best Agent For You
Finding the right real estate professional requires doing a littleresearch and asking a few questions. You need to know everything aboutthe selling process. What is the marketing strategy? What kind ofadvertising will be done? Is the REALTOR® capable and willing tocommunicate effectively? Can the REALTOR® effectively present and sellthe less-noticeable assets of the property?
Real estate professionals also need to be knowledgeable about thecommunity. They need to have a feel for the history of the area and theapproximate price that people will be willing to pay. Also, real estateagents should know what the competition is and how much it will effectyour sale.
NEVER choose a REALTOR® on price alone. Remember that a REALTOR®cannot magically raise the selling price of the house. Consider thebuyer. The purchaser won’t willingly pay too much; it’s most likely thathe or she will do research on the market and try to find the bestproduct for the best price. The facts simply cannot be changed, nomatter which REALTOR® you select. In spite of these unchangeablefactors, the REALTOR® you select must still be diligent andknowledgable.
If your property does not elicit attention within several weeks, thecause can most likely be attributed to one of these three factors:location, condition, and price. The location obviously cannot bechanged. You should consider examining the conditioning of your propertyand reevaluating the marketing strategy. Ask your REALTOR® to offer anexplanation of the competition and your pricing strategy.
How to Make Money in Real Estate Investing
Lower Your Taxes
Tax incentives for real estate investors can often make the differencein your tax rates. Deductions for rental property can often be used tooffset wage income. Tax breaks can often enable investors to turn a lossinto a profit.
For which items can investors get tax breaks? You could claimdeductions for actual costs you incur for financing, managing andoperating the rental property. This includes mortgage interest payments,real estate taxes, insurance, maintenance, repairs, property managementfees, travel, advertising, and utilities (assuming the tenant doesn’tpay them). These expenses can be subtracted from your adjusted grossincome when determining your personal income taxes. Of course, thesedeductions cannot exceed the amount of real estate income you receive.In addition to deductions for operating costs, you can also receivebreaks for depreciation. Buildings naturally deteriorate over time, andthese “losses” can be deducted regardless of the actual market value ofthe property. Because depreciation is a non-cash expense — you are notactually spending any money — the tax code can get a bit tricky. Formore information about depreciation and various tax alternatives, askyour tax advisor about Section 1031 of the U.S. Tax Code.
Have a Positive Cash Flow
There are two kinds of positive cash flows: pre-tax and after-tax. Apre-tax positive cash flow occurs when income received is greater thanexpenses incurred. This sort of situation is difficult to find, but theyare usually a strong and safe investment. An after-tax positive cashflow may have expenses that outweigh collected income, but various taxbreaks allow for a positive cash flow. This is more common, but it isgenerally not as strong or safe as a pre-tax positive cash flow.
Regardless of what kind of real estate you choose to invest in,timely collections from your tenants is absolutely necessary. A positivecash flow — whether it be pre-tax or after-tax — requires rentalincome. Be sure to find quality tenants; a thorough credit andemployment check is probably a good idea.
Use Leverage
One of the most important factors in determining a solid investment isthe amount of equity you are purchasing. Equity is the differencebetween the actual worth of the property and the balanced owed on themortgage.
Benefit from Growing Equity
While investing in real estate is relatively complex, it is often worththe extra work. When compared to other financial investments, like bondsor CD’s, the return on investment for real estate purchases can oftenbe greater.
The key to real estate investing is equity. Determine an amount ofequity that you want to achieve. When you reach your goal, it’s time tosell or refinance. Determining the proper amount of equity may requirethe assistance of a real estate professional.
Moving Tips
Easing the Transition to Your New Home
Use the right boxes, and pack them carefully. Professional movingcompanies use only sturdy, reinforced cartons. The boxes you can get atyour neighborhood supermarket or liquor store might be free, but theyare not nearly as strong or padded, and so can’t shield your valuablesas well from harm in transit.
Use sheets, blankets, pillows and towels to separate pictures andother fragile objects from each other and the sides of the carton. Packplates and glass objects vertically, rather than flat and stacked.
Be sure to point out to your mover the boxes in which you’ve packedfragile items, especially if those items are exceptionally valuable. Themover will advise you whether those valuables need to be repacked insturdier, more appropriate boxes.
The heavier the item, the smaller the box it should occupy. A goodrule of thumb is if you can’t lift the carton easily, it’s too heavy.Label your boxes, especially the one containing sheets and towels, soyou can find everything you need the first night in your new home.
For your family’s safety and comfort
Teach your children your new address. Let them practice writing it onpacked cartons. You can lighten your load and reduce any storage spaceyou need to rent by hosting a garage or yard sale.
Fill two “OPEN ME FIRST” cartons containing snacks, instant coffee ortea bags, soap, toilet paper, toothpaste and brushes, medicine andtoiletry items (make sure caps are tightly secured), flashlight,screwdriver, pliers, can opener, paper plates, cups and utensils, a panor two, paper towels, and any other items your family can’t do without.Ask your van foreman to load one of these boxes, so that it will beunloaded at your new home first. Why the second box? In case the moversare delayed getting to your house on the day of the move.
Keep your pets out of packing boxes and away from all the activity on moving day.
Let all your electrical gadgets return to room temperature before plugging them in.
Since you may need to call old neighbors or businesses from your new home, pack your phone book.
Work hand in hand with your mover
Give the mover’s foreman your reach numbers and email addresses so you can stay in contact.
Read the inventory form carefully, and ask the mover to explainanything you don’t understand. Make a note of your shipment’sregistration number, and keep your Bill of Lading handy.
If you’re moving long distance, be aware that your property mightshare a truck with that of several other households. For this reason,your mover might have to warehouse your furniture and belongings forseveral days. Therefore, ask your mover whether your goods will remainon the truck until delivered. If they have to be stored, ask whether youcan check the warehouse for security, organization and cleanliness.