Investing In Prescott AZ
There is a real fascination with investing in real estate these days. This has been partially fostered by an abundance of television shows extolling the virtues of real estate prospecting and flipping. This may be a huge factor in the popularity of investing, but the continued interest is founded in the fact that this vein of investing makes money. It is one of the most accessible forms of investing to the average joe and it is also one of the safest forms of investment as it is quite flexible. For example, if you buy a home with the intention of flipping it and the market goes into a slump where not many homes are being bought, you have the option of renting the home until the market picks up.
Planning is essential to any investment and real estate is definitely no exception. You will want to plan your purchase very carefully and consider every aspect of the purchase. Start by looking through some of the neighborhoods where there are homes for sale. Take note of things like schools, shopping, public transportation and other amenities. These will be important assets to consider when buying as the needs of prospective buyers or tenants must be considered.
The next thing you should look at in prospective homes is any renovations or upgrades/fixes that will need to be done to make the home suitable for sale or rent. Be careful not to purchase a home that will need too many things done to make it a viable investment. This is especially important if you are planning to flip the home. You must be able to do your desired improvements and fixes and still realize enough profit to make the investment worth the time and effort. Every fix you do will cut into your profit margin so try to find a home that needs only minor and cosmetic upgrades. Keep in mind, the less you have to spend fixing the home, the more you stand to make when selling. If renting, then make sure that the home is clean and has all the necessary appliances and amenities to make it a desirable place to rent.
Scott Baxter is a long time real estate investor and is also a real estate agent who specializes in Prescott AZ real estate. Scott's passion for real estate has enabled him to become a leading expert in relocation to the Prescott area. Contact Scott today for more information or visit him online at www.prescottscott.com
Flip Or Rent?
Flip or rent? It's a difficult question to answer. Both have some really great assets and both have some particular drawbacks. As investments go, both are excellent ways to build wealth. The main difference is whether or not you choose to go for the quick cash of a flip or building equity through longer-term ownership.
Lets investigate the flip first. The idea here is to purchase a home in need of a bit of work at a nice low price. Once you close on the home, make a list of the necessary improvements and get to work. Ideally the changes will be only cosmetic and intricate alteration of the home's structure or workings will not be needed. Good candidates for change are things like the paint, fixtures, appliances and other easily changeable things. Try putting down new floors for an added touch or refinishing existing hardwood if it possible. Another great idea is new cabinets for both bathroom and kitchen. The pros of the flip are fairly simple, it's all about the bottom line profit when the home sells. However, keep in mind that the profit will be taxed as normal income. Also be mindful that the home may not sell right away. You should investigate local real estate trends first and make sure that your property is as competitive as possible.
Renting is an entirely different ball of wax. Purchasing a property for renters is going to be quite the opposite from flipping. You do not need a property that will be attractive to buyers, rather a home with the necessary appliances and utilities that is well priced and clean. Keeping a property like this has some nice assets like long-term appreciation of the property and a monthly income. However, you must be ready to be a landlord, and be willing to wait until you have the RIGHT tenants. Also be prepared that you may occasionally have to kick someone out, be strict when it comes to rent collection and any number of other tasks a landlord is responsible for. The choice is your, but remember to be planned and ready for any eventualities that occur with either investment.
Scott Baxter is a long time real estate investor and is also a real estate agent who specializes in Prescott AZ real estate. Scott's passion for real estate has enabled him to become a leading expert in relocation to the Prescott area. Contact Scott today for more information or visit him online at www.prescottscott.com
Wisconsin Foreclosures Are up by 17%
In Rock County Wisconsin, during 2006 Sheriff’s sales of foreclosed properties stood at 350 a 17 percent increase over 2005 figures. This increase is reflected nationwide in a growing surge of foreclosures filings.
Rose Oswald Poels, of the Wisconsin Bankers Association blames the growth of sales for adjustable rate mortgages, which were popular in a red-hot housing market a few years ago. Adjustable rate mortgages purchased with a monthly rate at the far limit of the customer’s purchasing power are like ‘loss leaders’ in the retail world. The merchant offers something at a price level, which will lose money, with the expectation that the loss will be made up by other purchases.
In the case of the adjustable rate mortgages, the initial interest rates were extremely low, but once the locked rate grace period was completed, the rate, tied to a fluctuating index, has climbed dramatically. An adjustable rate mortgage interest rate can increase by several interest points in a matter of months, which can add hundreds of dollars to the borrower’s monthly payment.
Because fixed rates were so low, it is surprising that ARM’s were as popular as they were, but homeowners looked only at the initial monthly payment and not at the larger picture. They did not take into account the disaster that could occur if and when the adjustable rates when up as they almost invariably do.
Another factor was the fact that banks were somewhat easier with loan qualifying requirements because money was available and interest rates were low. This allowed for more ‘creative’ financing options than would normally be available.
Other factors which enter into the picture of foreclosure loss include high credit card debt with higher interest rates and minimum payments, higher bills for energy and for deductibles on health insurance premiums. For those depending on two full-time incomes, the loss of one job or reduction of hours can be a disaster.
The easy availability of nationwide lenders entering into a local market can create problems as well. First and second mortgages higher than the house value, which may not include insurance and taxes is a recipe for disaster. Some of the lenders can only be considered predatory.
The other factor which cannot be discounted is the emotional attachment of the homeowner to the property. People try to hang on long past when they should have moved on to something more in line with their income and expenditures.
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Bob Smith is the writter of Mostlyforeclosures.com. For more information on Wisconsin Hud Homes for sale please visit http://www.mostlyforeclosures.com/.