6 ways to make a profit in real estate investment
Many homeowners get into real estate investing by buying a home and using this home as a rental when they upgrade to a larger home. Called "serial purchasers", they continue to buy (and hold onto) additional properties.
Other investors prefer to find a quicker path to real estate investment success through one of the following ways.
Buy and Flip
Flipping means selling the property you just bought for a higher price as soon (or in some cases before) you take title on the property. While flipping allows you to make money fast in a hot market (or on a property you purchased well below market value), you may need to pay capital gains (talk to your tax advisor).
Buy and Scrape
Scraping is tearing down an existing home and building a new home. To capitalize on this idea look for areas where home prices are rising, vacant lots are few, and there's an inventory of older homes. While there are many permits you need to obtain, scraping can be a very lucrative process.
Buy and Split
Just as you can buy one lot and split into two, you can also buy one house and subdivide into two homes right down the middle, or buy a larger house and develop each floor into several condominiums. Another variation is to buy a house with a large lot, subdivide the lot, rent out the house, and sell off the land.
Smart real estate investors look at existing properties with new uses in mind (and they check into all building and zoning regulations). The Davidson Team can help you by identifying potential rental properties in the North Central Washington areas. Please call or email with any questions you have.
Warm regards,
The Davidson Team
Real Estate Investor Series: Part 2 of 6
Market indicators tell you when to invest in real estate
Real estate prices cycle through highs and lows. Tracking the following market indicators will help you decide if it's a good time to invest in real estate in your area.
Job Growth
People go where the jobs are, and home prices follow jobs. A strong local job market is a sure sign of a healthy real estate market. While the Wall Street Journal gives you insight into the nation's overall economy, check the Wenatchee World and other local resources for North Central Washington specifics.
Housing Inventory
The housing inventory is the number of houses for sale at one time in the area. If there are more houses than buyers, prices tend to fall and if there are more buyers than houses, the opposite happens. Also look at the number of months or days it is taking to sell a home. If it's less than 60 days the market is typically considered hot.
Number of Repos on the Market
A repo is a house that has been taken over by the bank because the owner failed to meet the loan payment-in other words, it's a foreclosure. The more foreclosures in your area, the weaker the real estate market.
Number of Multiple Offers on Homes
Multiple offers are when two or more buyers "bid" at the same time for the same house. It's a sure sign of a hot market, usually resulting from a limited inventory creating the need for buyers to compete on price for the same property.
To learn about the local conditions in our market, please don't hesitate to call or send an email. We will be happy to get you the information you need.
Warm regards,
The Davidson Team
Real estate prices cycle through highs and lows. Tracking the following market indicators will help you decide if it's a good time to invest in real estate in your area.
Job Growth
People go where the jobs are, and home prices follow jobs. A strong local job market is a sure sign of a healthy real estate market. While the Wall Street Journal gives you insight into the nation's overall economy, check the Wenatchee World and other local resources for North Central Washington specifics.
Housing Inventory
The housing inventory is the number of houses for sale at one time in the area. If there are more houses than buyers, prices tend to fall and if there are more buyers than houses, the opposite happens. Also look at the number of months or days it is taking to sell a home. If it's less than 60 days the market is typically considered hot.
Number of Repos on the Market
A repo is a house that has been taken over by the bank because the owner failed to meet the loan payment-in other words, it's a foreclosure. The more foreclosures in your area, the weaker the real estate market.
Number of Multiple Offers on Homes
Multiple offers are when two or more buyers "bid" at the same time for the same house. It's a sure sign of a hot market, usually resulting from a limited inventory creating the need for buyers to compete on price for the same property.
To learn about the local conditions in our market, please don't hesitate to call or send an email. We will be happy to get you the information you need.
Warm regards,
The Davidson Team
Real Estate Investor Series: Part 1 of 6
5 Reasons To Invest In Real Estate
According to the National Association of Realtors (NAR), second-home sales (for vacation homes and investment homes) accounted for four out of 10 homes sold. While vacation-home buyers purchase primarily for enjoyment, investment-home buyers are looking to generate income in the following five ways.
#1: Appreciation
Returns of 10 percent and more are not uncommon if you select good real estate properties and a solid market. It's a return rate you won't find on bank products or with most stocks.
#2: Cash Flow
More than half of all investment-home buyers rent out their properties. Month in and month out these properties create income from renters AND gain long-term appreciation.
#3: Less volatility
While real estate cycles through periods of highs and lows, it doesn't change dramatically day-to-day like stocks. Investing in real estate is viewed as being less speculative than stocks.
#4 Tax Advantages
Your real estate investments offer you two tax advantages: you can deduct property expenses and depreciation. Plus doing a 1031 exchange lets you avoid paying tax on profits from the sale of rental property if you roll it into another real estate investment property (talk to your tax advisor).
#5 Value-Added Improvements
The saying "buy it low and sell it high" applies to stocks and real estate. The advantage with real estate is you can buy inexpensive property, fix it up, then raise the rent or sell it for more money.
If real estate investing is a path you are interested in pursuing, please feel free to call or email with any questions you have.
Have an outstanding day!
The Davidson Team
According to the National Association of Realtors (NAR), second-home sales (for vacation homes and investment homes) accounted for four out of 10 homes sold. While vacation-home buyers purchase primarily for enjoyment, investment-home buyers are looking to generate income in the following five ways.
#1: Appreciation
Returns of 10 percent and more are not uncommon if you select good real estate properties and a solid market. It's a return rate you won't find on bank products or with most stocks.
#2: Cash Flow
More than half of all investment-home buyers rent out their properties. Month in and month out these properties create income from renters AND gain long-term appreciation.
#3: Less volatility
While real estate cycles through periods of highs and lows, it doesn't change dramatically day-to-day like stocks. Investing in real estate is viewed as being less speculative than stocks.
#4 Tax Advantages
Your real estate investments offer you two tax advantages: you can deduct property expenses and depreciation. Plus doing a 1031 exchange lets you avoid paying tax on profits from the sale of rental property if you roll it into another real estate investment property (talk to your tax advisor).
#5 Value-Added Improvements
The saying "buy it low and sell it high" applies to stocks and real estate. The advantage with real estate is you can buy inexpensive property, fix it up, then raise the rent or sell it for more money.
If real estate investing is a path you are interested in pursuing, please feel free to call or email with any questions you have.
Have an outstanding day!
The Davidson Team
Featured Listing: 206 Goldcrest St, East Wenatchee, WA 98802
You can find this week's featured listing at:
http://www.wenatcheehouses.com/address.php?property_ID=9
Warm regards,
The Davidson Team
Thought Provoking: 7/26/07
One of my favorite quotes of all time:
To laugh often and much;
To win the respect of intelligent people and the affection of children;
To earn the appreciation of honest critics and endure the betrayal of false friends;
To appreciate beauty, to find the best in others;
To leave the world a bit better, whether by a healthy child, a garden patch or a redeemed social condition;
To know even one life has breathed easier because you have lived.
This is to have succeeded.
--- Typically attributed to Ralph Waldo Emerson, it may also be the work of Bessie Stanley, nobody really knows. Both have versions which are almost exactly alike. Needless to say, it's beautiful!
To laugh often and much;
To win the respect of intelligent people and the affection of children;
To earn the appreciation of honest critics and endure the betrayal of false friends;
To appreciate beauty, to find the best in others;
To leave the world a bit better, whether by a healthy child, a garden patch or a redeemed social condition;
To know even one life has breathed easier because you have lived.
This is to have succeeded.
--- Typically attributed to Ralph Waldo Emerson, it may also be the work of Bessie Stanley, nobody really knows. Both have versions which are almost exactly alike. Needless to say, it's beautiful!
Your Buyer's Bill of Rights
Our preferred Mortgage Advisor's, Kevin Nelson of Discover NCW Mortgage in Wenatchee (http://www.kevinnelson.biz/), monthly newsletter:
Dear Blaine,
I appreciate the trust you've placed in me and recognize that you have many choices when selecting a loan representative. My standard of care for clients includes a belief that all buyers have certain rights when entering a real estate transaction.
* You have a right to talk easily, quickly, and directly with those who provide services to you in connection with your purchase or refinance. This includes access to the status of your loan file any time up to closing.
* You have a right to benefit from technology that connects all parties electronically so there are no information blackouts. You have a right to clear, concise answers from specialists trained in their field.
* You have a right to pre-qualify for financing or seek online loan pre-approval quickly and expect that your transaction will be handled in a professional and confidential manner.
* You have a right to settlement cost information early in the process, allowing you to comparison-shop and discuss alternatives with an experienced lender.
* You have a right for the disclosed loan costs to be as firm as possible to avoid a surprise at settlement. If there are changes to loan costs, you have a right to be informed of them quickly.
* You have a right to benefit from new products, competition, and technological innovations that could lower the cost of acquiring a home. If there are options that save you money, you should be informed of them up front.
* You have a right to choose from a wide variety of loan programs with payment options that fit your needs.
There are always plenty of questions about the purchase and sale of real estate, and I am a career professional ready to help you.
Sincerely,
Kevin Nelson
Discover NCW Mortgage
(509) 663-9521
E-mail: kevin@kevinnelson.biz
Web site: http://www.kevinnelson.biz/
In parts of the West, housing is still hot
Here's an article out of Indianapolis, plugging the West's still-hot housing market, and in particular Wenatchee.
In parts of the West, housing is still hot
By Aaron Clark Associated Press
http://www.indystar.com/apps/pbcs.dll/article?AID=/20070722/BUSINESS/707220309/1003/BUSINESS
The Wenatchee excerpt reads:
"The Pacific Northwest was a little bit late coming to the party," said Andrew Leventis, an economist with a federal housing agency. "The extreme appreciation over the past five or six years in the country only just began in the Northwest a few years ago." In Wenatchee, Wash., a 30,000-resident town east of the Cascade Mountains, homes appreciated an average of 25 percent from the first quarter of 2006 to the first quarter of 2007, according to a study by the Office of Federal Housing Enterprise Oversight. The agency tracks average home appreciation for mortgages and refinancings not greater than $417,000 on single-family properties. Bob Seltzer, a real estate agent, said the boom there is being fueled by an influx of retirees from rain-plagued Seattle who are looking for warmer weather. "The economy here does not support high-paying jobs," said Seltzer. But "people can come from Seattle and buy an equivalent house for half the price.""
In parts of the West, housing is still hot
By Aaron Clark Associated Press
http://www.indystar.com/apps/pbcs.dll/article?AID=/20070722/BUSINESS/707220309/1003/BUSINESS
The Wenatchee excerpt reads:
"The Pacific Northwest was a little bit late coming to the party," said Andrew Leventis, an economist with a federal housing agency. "The extreme appreciation over the past five or six years in the country only just began in the Northwest a few years ago." In Wenatchee, Wash., a 30,000-resident town east of the Cascade Mountains, homes appreciated an average of 25 percent from the first quarter of 2006 to the first quarter of 2007, according to a study by the Office of Federal Housing Enterprise Oversight. The agency tracks average home appreciation for mortgages and refinancings not greater than $417,000 on single-family properties. Bob Seltzer, a real estate agent, said the boom there is being fueled by an influx of retirees from rain-plagued Seattle who are looking for warmer weather. "The economy here does not support high-paying jobs," said Seltzer. But "people can come from Seattle and buy an equivalent house for half the price.""
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