Affordable Housing and Real Estate Investment

Affordable Housing and Real Estate Investment

Recently, the problem of housing has come to dominate the conversation in many countries around the world. The UK, with its tradition of council housing, has faced shocks to its system. Housing is more and more out of the reach of many working people there. The US is facing a housing crisis, too. Migration of millennials to cities has created increased demand for housing there. This has driven rents up and out of the reach of working-class people. It almost seems that no matter where you are, rents are soaring up and reasonably priced homes are far and few between.

A companion problem is that working-class wages have stagnated since the Great Recession. Working-class people often lack cars and can’t find a workable way to make a move to the suburbs. All of this has created a seemingly intractable housing crisis in cities like New York, San Francisco and Los Angeles. All of this has been immensely frustrating, both for the people who live in these cities and for politicians. However, there’s also a great opportunity in this crisis, if only people will take the time to think it through.

Currently, four out of ten low income people are either homeless or spending over 50% of their income on rent, which is unsustainable in the long-term. The US is short by at least several million low income housing units. This is a tremendous opportunity for investors, if they are able to play it right. Social housing in the United States often gets a bad name. However, there are real advantages to landlords when it comes to dealing with social housing programs.

For example, section 8 arrives on time every month. Renting to lower income tenants can mean missed, partial or late payments. Dealing with government agencies means much more reliable cash flow, even if there can be a lag initially. Social impact investment firms have also made affordable housing one of their pet causes. Groups like Turner Impact Capital and Building Opportunity have made it a point to focus on affordable housing. This investment takes many forms, from crowdsourcing online to REITs.

Avalon Communities, a company known for providing corporate apartments, has also shifted their focus to renovating older buildings for more middle-income and lower-income clientele. As these big investments by big players demonstrate, there’s a very healthy future in providing low income housing.

Safer Real Estate Investments During a Recession

Safer Real Estate Investments During a Recession

Countless successful investors have a diversified portfolio that includes select real estate investments. Due to the cyclical nature of the nation’s economy, there are times when it is naturally more advantageous to invest in real estate. Real property, whether residential, commercial, or industrial, is generally considered a long term investment. Decades of economic growth and recessions have proven that no type of investment can be considered safe or recession proof. However, there are several proven ways to designate investment portfolio options in a way to prevent unnecessary fluctuation. Real estate investments can be safer than many other investment vehicles during the inevitable storms of recession.

Rental Properties

Investing in rental properties has been a lucrative career move for many different types of investors. Whether experienced or novice, real estate investors soon learn the ins and outs of successful property rentals. Individual rental properties such as single family homes, townhomes, condominiums, or duplexes are a great starting point. These investments, when properly managed, will provide some protection against inflation and recession.

The key to safer real estate investments during a recession is to carefully select renters. When taking on a new tenant, consider their consumer credit, employment, and criminal background. This will provide a fuller picture of the individuals before they sign a lease agreement. Reducing turnover and keeping rental units occupied are essential for long term investment strategies to be successful. Shelter is necessary for survival and tenants are not going to stop paying rent during a recession. They may discontinue cable subscriptions or gym memberships, but they will maintain their housing.

Vacation Properties

Depending on the location, a real estate investment in vacation property can provide consistent income year round.  Especially when the location of a property is located in popular vacation spots like Miami, New York, or Las Vegas.  Unlike standard rental properties which require ongoing property management services, vacation properties are relatively simple to manage. Turnover services may include simple tasks such as cleaning, providing new linens, and managing inventory supplies. These routine turnover items can be contracted out to a local service provider for a very low fee.

Whether a new investor decides to purchase a modest home for the intention of renting to a family or has the resources to purchase an entire apartment building, they will likely find that real property is a worthwhile investment. Rental properties provide consistent income streams and virtually pay for themselves over time.

Why Invest in California Real Estate

Why Invest in California Real Estate

While California may have a reputation for being one of the most pricey real estate markets in the world, it has proven to be one of the best areas to invest in. Investors who are looking to get single family real estate properties have a golden opportunity to do so. The golden state offers up gorgeous beaches, vibrant culture, and an ever-growing population for those looking to invest. With the land of opportunity awaiting new investors, the opportunity to capture returns on the rising home values is just around the corner.

California has an extremely strong job market which serves as one of its most attractive attribute to investors. The state boasts 54 of the Fortune 500 companies headquartered right here in their very own backyard. The market shows that California will continue in job growth, and will provide investors with a continuous cash flow as more and more people are flocking to the state.

While the rising cost of homes is pricey in the area, the state has rather low property taxes. Though California may not have the lowest property taxes across the country, the tax rates are aimed to help those investors who are looking to improve the flow of cash. Low tax rates mean that more and more people will continue to buy and rent in the area. Any area that people may feel they can capitalize on, is one in which they should consider to invest in.

There is an extremely high rental demand in the state of California. Everything from work, weather, entertainment, outdoor activities, and the overall growth has helped to make investing in California real estate one of the smartest financial moves right now. As this growth continues, the rental rate within the state will continue to go up over time.

Between the job market and desirable lifestyle that California has to offer, it only helps to increase the home values in the state. The housing market is one in which the most desirable areas to live constantly attracts new home buyers. This presents a high demand for the areas which in turn increases the property value in the state. This is just an additional reason to invest in California based real estate.

Common Mistakes Made in Commercial Real Estate Investing

Common Mistakes Made in Commercial Real Estate Investing

The commercial real estate industry is a lucrative investment option that is highly dynamic that can easily propel an aspiring investor to success. Much due diligence before investing in commercial real estate is necessary. Among the areas that an aspiring entrepreneur should focus on before establishing a business include understanding the common mistakes that are often committed when investing in commercial real estate.

Inaccurate property valuation

In the commercial real estate industry, property valuation is a crucial entity that should be mastered with great precision and accuracy. Sometimes, aspiring real estate investors make the mistake of underestimating or overestimating the net worth of a property. Failure to accurately consider all the variances that determine a property’s net worth in a market makes such an investor to invest more than necessary. Generating a profit from such investment becomes an uphill task.

Inaccurate sources of information

Investors In the real estate industry should rely on a great wealth of accurate and reliable sources of information when making decisions. Quite often, ambitious real estate investors fail to exercise the necessary due diligence when sourcing information to advise their decisions. Focusing on opinionated publications and failing to benchmark information may lead to wrong and costly decisions.

Taking too much risk

Risk-taking in the real estate industry is considered as a norm. As an investor, it is important to consider weighing each risk to ensure that it is manageable. Some of the common risks that investors have to bear include taking loans to finance investments such as property acquisitions. As part of the due diligence, the investor should consider aspects such as loan-to-value and the debt coverage ratio to ensure that they are within manageable limits.

Improper timing of decisions

Decision making in real estate investments should be precise and well researched. As an ambitious investor, it is quite common to make rushed decisions, such as acquiring large properties at times when the market is not favorable. Poor timing may cost the investor capital as they will have to wait for the market to stabilize before making sales and profits.

Choosing the wrong market

The choice of investing in the real estate industry should be precise and well-researched. Sometimes, investors fail to consider the numerous factors at play when choosing the right market and location to base their operations in. Poor choices, in this regard, may stagnate the business at a later stage as moving products in the market will be substantially tough.

Follow These Rules When Investing In Overseas Real Estate

Follow These Rules When Investing In Overseas Real Estate

Why Invest In Overseas Real Estate?

Overseas real estate investments can provide you with additional opportunities besides the ones in your home country. They can also offer handsome returns and let you diversify your investment portfolio. As with all investments, foreign real estate investment does have its risks. You can minimize these risks by following the following rules.

The Rules to Follow when Investing in Overseas Real Estate

One can be overwhelmed quite easily by a foreign culture. Don’t get culture shock by studying the place you want to invest in ahead of time. Find out about the local culture, the way business is done, and the lifestyle of the area you want to invest in. This will help you make a smarter and less risky investment.

The laws of the foreign country you want to invest in may differ from the laws of your home country. Make sure you know what the rules for foreign investment in property are. You should also make sure that you follow all the rules and regulations in that country. Otherwise, you may find yourself facing legal battles or lose your investment altogether.

Foreign investments may be extremely attractive to investors. That attraction may come with considerable risk. High returns usually entail high risk, so you don’t want to invest all of your money into foreign real estate. It is wise to start small at first and then increase investments if they are successful.

A certain area may look extremely appealing to you as an investor. You may want to invest only in that area. This will leave you vulnerable to a downturn or disaster in that area. You don’t want to concentrate all of your investments into one location or basket. Spread the foreign real estate investment around to minimize risk.

Financing for an overseas real estate investment can get complicated. It can also get expensive. Be sure to look at all your options. The best way to avoid expensive financing and loads of paperwork is to pay with cash.

Finally, you should not attempt the investment alone. Enlist the help of local experts and professionals such as accountants, real estate agents, and attorneys. They can help you locate the ideal foreign real estate investment for you. Be sure you consider liquidity needs as well and the tax impact the investment will have. Taking this into consideration can help you pay fewer taxes and have more cash readily at hand when needed.