Be Careful How You Evaluate Real Estate Data/Statistics: 4 Examples

In today’s world, we are often over – loaded with statistics, data, etc. Some of these might be relevant and significant, while at other times, they may be over – reaching, misleading, or unnecessary! We often hear or read discussions regarding mortgage interest rates, so – called – housing starts, number of mortgage applications, and the number of houses on the market, etc. Often, discussions focus on seeming to need to label the real estate market, either as a buyers or seller market! While there may be times these are valuable indicators and information, like most data, the skill is in how well one can interpret these, understand them, know what the numbers really mean, and how to use them. Let’s review 4 examples of how statistics are related to real estate, etc.

1. Average or median price: The first thing to understand is the difference between an average and a median price. Average means one adds up all houses sold in the specific target region, and dividing by the number of sales. Median, on the other hand, is listing all the sales prices, and the one in the 50 percentile, is the median price. Simply stated assume 10 houses sold are reviewed, and 2 are sold at $500,000; 2 at $600,000; 1 at $750,000; 2 at $900,000; 2 at $1 million; and one at $1.5 million. In this sampling, the average price is $757,000 and the median price is $750,000. However, why is this information important, since if the sampling is not large enough, wouldn’t it depend on which specific houses sold, whether there was more strength at the higher or lower end of the market, etc. When pricing is discussed, it’s important to put it into perspective, and see the number of units compared in both periods of time.

2. Housing starts: This refers to number of new builds in an area, but doesn’t it make sense, to also consider how much empty or available land/ property, might be available to build on. Always put all statistics into some sort of perspective!

3. Mortgage applications: Are these predominantly for new mortgages or refinances? Are they conventional mortgages? Might it also be important to look at the term of the mortgages? Shouldn’t we also look at the criteria being used, and how many/ what percentage, are approved?

4. Houses on market: It is generally considered a buyer’s market when there are significantly more houses on market, than buyers, and a seller’s market, when circumstances are reversed? Look at the inventory of houses being offered, and the locales. How long do they seem to be staying on the market?

Like in most things statistics – related, it is important to know and evaluate what things mean, rather than making false assumptions, and/ or speculating. Beware of statistics, because they might turn out to either be your friend, or enemy!

Contact South Africa's best computer shop for the latest specials on IT equipment
Posted in Uncategorized | Comments Off

Sale Of Immovable Property in Cyprus

Land is considered as one of the most valuable commodities, so its value is steadily increasing. Moreover, land investment is interrelated with high social and economic status, as well as, with financial stability and progress. Inflation, the instability of the monetary systems and restrictive fiscal policies of advanced economies are among the primary consequences of the recent economic crisis. Therefore, the investment in immovable property becomes highly attractive. Despite the fact that there is a moderation in property values in the short term, land prices have essentially shown stable growth in the long run.

Why invest in immovable property in Cyprus?

The geographical location of Cyprus between Europe, Asia, Middle East and Africa combined with the well-established legal, communications, banking and accounting infrastructures urge Cypriot and non-Cypriot business people to invest in immovable property. Cyprus joined the EU in 2004 and adopted the euro in 2008, two facts that facilitated the sale and purchase of immovable property in Cyprus. In addition to this, the demand for real estate investment increased. A primary advantage of the Cyprus legislation is the protection of ownership without discriminations. In other words, Cypriot and foreigners may enjoy all the rights associated with ownership of their property without any intervention from the State or other individuals. Furthermore, Cyprus maintains double taxation treaties with more than 40 countries.

Sale of Immovable Property Regulations:

The Sale of Land (Specific Performance Law) No. 81(I)/2011 provides the necessary protection to both purchasers and vendors.

On the one point of view, the law provides that a buyer of immovable property may safeguard its interests by submitting a duly stamped copy of the contract to the Cyprus Land Registry within six months from the date of its execution. Consequently, the provisions of the law impede the vendor from transferring the property elsewhere or charging it as long as the contract is valid and legally effective. In case the seller does not transfer the property, then the purchaser may apply to the Court for an order to transfer the property into his/her name.

On the other point of view, the provisions of section 15 of the law protect the vendor from any breaches of contract. For instance, if the purchaser is late in making a payment or refuses to pay the purchase price or any part of it, then the vendor may take legal actions against the purchaser. Prior taking any legal action, the vendor must send a written notice to the purchaser asserting that if the purchaser fails to pay within a specific time period, then the vendor will take legal actions against the purchaser.

According to section 3 of Law 81(I)/2011, in case the property is part of a jointly owned property, such as a flat or a percentage of land, and there is not a separate registration in the District Land Registry then all the property owners must duly sign a distribution statement. The signatures must be duly certified. Afterwards, the distribution statement will be submitted to the District Land Registry and it will enable the sale of the property. Note that the distribution statement will be taken into account upon the issuance of the title deed.

Posted in Uncategorized | Comments Off

Is It Good To Let Your House Stay On The Market During Holidays?

If you think that only the warmer months of the year are good times to sell your house, think again. The colder months brought by the upcoming holiday is also a good opportunity to sell your house. Listed below are some of the reasons you can take advantage of.

Fewer home owners sell during holidays.

The holidays, specifically Christmas, send signal to many homeowners that it is an inappropriate time to let their homes stay on the seller’s market. Many homeowners are also busy with their shopping lists, gift-giving, and Christmas parties.

This creates a unique opportunity for you because their will be fewer competitors. This means more chances for your house to get noticed by more buyers who are also taking the opportunity to buy their new homes.

One precaution to observe is to have your house in its best show condition. Have it clean, simple, and attractive.

Home buyers during the holidays are serious buyers.

The Christmas season is a time when most people busy themselves with various activities related to this festive time of the year. Do you think home buyers during this time will waste their times just to make fun of the homes listed in the seller’s market?

There are various reasons prompting home buyers to grab the holidays as a more serious time to buy a house. There are some who are relocating when the year changes. There are also some people who buy homes for tax reasons. Some buyers also grab the holiday vacations to actually conduct ocular of the houses they see on listings.

And because the holidays is a very busy time, be sure to adjust your showing times to the schedules of potential home buyers.

Less hassles to make your house attractive.

Home staging may be a difficult process to homeowners. But because you are selling your house in a time when decorations are fittingly good additions inside and outside your house, you can be sure that it will bring less hassle to make it more attractive.

Be sure to add decorations that will make the overall atmosphere joyous. Do not over decorate that will tend to make your house look and feel cluttered. You can let your house be a mirror of a home in which your potential buyers can imagine themselves celebrating their next holidays on it.

Posted in Uncategorized | Comments Off

Indian Real Estate – A New Investment Haven

Indian real estate has always been an attractive investment option, even more so for non-resident Indians (NRI’s). The escalation of real estate prices has always been higher than in most other countries and the growth prospects in the long term is high. NRI’s world over are investing heavily in the real estate market, both for investment purposes as well as residential. Most NRI’s prefer to retire to their hometown in India, surrounding themselves with friends and relatives – primarily Kerala, Karnataka, Tamil Nadu, Maharashtra and Delhi NCR.

Most NRI’s are spread across the globe, but there is a huge concentration of them in the Gulf. The advantage that they have is that they earn in currencies that have traded strongly against the Indian National Rupee coupled with the fact that their earnings are not taxed off-sets a part of the house cost already. The Kerala Gulf diaspora in 2008, was numbered to be more than 2.5 million and this number has only gone up since. Most malayalees invest in residential real estate and they expect the best for the substantial amounts that they spend.

Developers in Trivandrum (capital of Kerala) have started capitalizing on these investments by building more apartment in Trivandrum. They have noticed a few trends that are fast becoming prevalent and driving demand. Most clients want luxury projects, which has seen a rise in luxury flats for sale in Trivandrum, Cochin and Kozhikode. Real estate developers are becoming very careful about the ideal size to pricing ratio. We have seen that these Developers in Trivandrum are always constructing apartment in Trivandrum for people of all classes. Townships arealso becoming a lot more prevalent, with customers demanding accessibility to all amenities and a better, more affluent lifestyle.

For most NRI’s who are retiring to Kerala, investment in one of the cities seem a good option. With a massive renovation in the infrastructure both civic and social, accessibility and connectivity to all basic necessities as well as a better quality of life is possible.

As is with all other investments, investors should be careful as to who they are investing with. Real estate developers who have been in the industry for several years or have been researched thoroughly are your best bet. Better discounts can be availed by pre-booking, several luxury flats for sale in Trivandrum which are ongoing are sought out by investors mainly because of their longstanding reputation as on-time builders, trustworthiness and quality.

There are also several avenues for real estate as a rental income source, once the primary residence is bought. However there are several laws and tax regulations with regard to rental income and double taxation. These need to be thoroughly examined, usually a good real estate developer should be able to throw light on the same.

Posted in Uncategorized | Comments Off

Multifamily Vs Single Family: Which Is Better?

It reminds me of the old Miller Lite commercials; “Less Filling!” “Tastes great!,” the constant debate on what is a better investment, multifamily/small apartments or single family homes. So where is the best place to put your hard earned profits? I often think about where to put profits, and it is a big variable when analyzing when to sell an asset. I can get offered more than a property is worth and turn it down if I don’t have a good place to put the money. Knowing what you are going to do with your excess cash is essential to your overall objective. The way I process this is to compare alternatives against each other. Typically it is specific opportunities, but that all starts with a much broader view. I actually don’t land on one side or the other in the debate. I am usually the one asking questions that get the conversation going or gets people thinking. I think both are good, so let’s take a look at the positive aspects of each one when you compare to the other.

SMALL APARTMENTS

I am lumping all residential property that is more than one unit into this category. What is not included would be extended stay hotels or short term lease units. I have a handful of small apartments in my portfolio and here is why I like them.

One Roof: I use one roof only as an example. Multiple units offer economies of scale. Let’s assume we have a 20 unit building. If I replace one roof, I replaced the roof on 20 units at one time. Same will go for painting or any number of other maintenance or improvement items. When you do the math, the price per unit is significantly lower than that of single family homes.

Economies of scale are not limited to maintenance. You will get other savings as well, like marketing expense when you have a unit or two go vacant. You can create a prospect tenant list that you can tap into whenever a unit becomes available. In larger buildings, you will have units coming available each month so you can have a steady marketing campaign constantly running, saving you time and money. It is also likely you will get referrals from other tenants if a unit goes vacant. Insurance is another example of some cost savings per unit.

Easier to Manage: This is not always the case as we will discuss below, but at certain times small apartments can be easier to manage. Sometimes you will have onsite management which will put someone there all the time. They will keep the place clean and take the initial impact of any tenant problems. Even without an onsite manager, multifamily can be easier to manage because all the units are in one location so you are not driving all over town.

Better to Finance: Financing is always an important component when you are a real estate investor, and it becomes more challenging as you get more rentals. One easy way to accumulate more rentals without getting cutoff with your loans is to buy multiple units with one loan. Also, most multi-family loans are considered commercial loans, so there could be more flexibility with the number of loans you have, making it easier for some investors to finance. Commercial loans often times do not get reported to your personal credit, even if you personally guarantee them, which has its own benefits. As mentioned, the big benefit to financing multifamily is you can buy a lot more units. The downside is the loans have shorter terms (you cannot lock them in for 30 years very often) and they have higher interest rates.

Cash Flow: This is not always the case, but from the properties I have reviewed or purchased the cash flow is higher on small apartments, which is a big benefit.

SINGLE FAMILY HOMES

I am considering single family homes as anything where it is just one unit owned. This could be single family detached or attached. Although I am including them in this discussion, condos and town homes sometimes come with their own unique set of advantage and disadvantages.

Less Maintenance: It has been my experience that tenants that live in apartments are much harder on the property than those that live in houses. Often times the lower rent levels attract tenants that care less. There is also common space with small apartments that no one wants to take care of, so that will be additional maintenance for the manager.

Posted in Uncategorized | Comments Off