Tel Aviv Properties

Tel Aviv is the capital and second largest city of Israel. With an estimated population of approximately 391,300, it is the most populated city in Gush Dan, a metropolitan area that accommodates over 3.15 million people. It is located on the Israeli Mediterranean coast and has a land area of 51.8 square kilometers. Tel Aviv is regulated by the Tel Aviv-Yafo municipality.

Founded in 1909 on the borders of the ancient port city of Jaffa, Tel Aviv witnessed rapid growth that soon outpaced the growth of Jaffa. In 1950, two years after the formation of the state of Israel, Jaffa and Tel Aviv were merged into a single municipality.

Tel Aviv contains more than 5,000 Bauhaus buildings. Due to this, it is popularly known as „the White City“. In July 2003, UNESCO’s World Heritage Committee declared „the White City“ as a unique and historical architectural site.

Additionally, Tel Aviv is Israel’s commercial and economic capital. Due to this factor, real estate prices of Neve Tzedek properties are generally higher in comparison to the real estate prices of other cities in Israel. Real estate properties in Northern Tel Aviv are relatively expensive.

Factors that Affect the Prices of Tel Aviv Properties:

Just as any other commodity, real estate prices are affected by supply and demand. In Tel Aviv, the supply of new housing is quite low, as the city is already built up. Thus, the real estate prices are bound to increase.

The three major sources of new home supply in Tel Aviv are:

  1. Replacing older low-style buildings with high residential towers
  2. Constructing new buildings in open spaces
  3. Relocation of the military installation (that is currently present in the heart of Tel Aviv) outside Tel Aviv, thereby leaving an adequate amount of area for the purpose of civil construction

Tel Aviv, classified as a beta+ world city, is the most expensive city in Israel and the 17th-most expensive city worldwide. Its urban area is considered to be the second-largest city economy in the Middle East. Also, it ranks 42nd on the list of global cities by Foreign Policy’s 2008 Global Cities Index.

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Marcia Henin

Things You Should Know Before Relocating To Los Angeles

Moving to a new city is like opening up a new chapter in your life. You will be met with a wide variety of challenges, complications, opportunities, and adventures. It might not be easy at first, as it will likely take some time for you to adapt to the new situation.

However, having a reasonable knowledge about the city before you make the move can help to smooth out the transition process. This article will provide you with some information on general life in Los Angeles, as well as apartments for rent in Los Angeles.

Remember to save money beforehand

Los Angeles is not the cheapest of cities, to say the least. You can expect to spend a good amount of money during the intitial phase of relocation. The general cost of living is high, with Los Angeles ranking 23rd on the international index. For these reasons you should make sure that you have a guaranteed job waiting for you before you plan your relocation, or at least have a financial back-up plan. Save a good amount of money before you move, so that you can absorb any complications that could be experienced along the way.

Apartment rentals & real estate prices

Being an extremely popular international tourist destination, Los Angeles welcomes a large number of visitors every year. Apartments for rent in Los Angeles can be quite expensive, but with thorough research it is possible to find some decently-priced offers. Rental and real estate prices will vary according to the area of Los Angeles that you intend to relocate to. High-end locations such as Beverly Hills will be much more expensive than areas such as Highland Park or North Hollywood. Depending on your budget, you will need to take these factors into consideration when looking for a Los Angeles apartment for rent.

Establish a network

The process of relocating to Los Angeles can be made much simpler and hassle-free if you have a network of friends or family that you can contact. Having connections will make things run smoother and help you to adapt to your new life with relative ease. If you know people in the city beforehand, they may be able to provide you with valuable information on housing and accommodation prices, or even help you get set up with a job. If you know people in the area, now is the time to get in touch with them. Maybe you have old buddies from high school that have moved to the area. You could use Facebook to reconnect with them, for example.

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Charli Jhonson

Bahamas Real Estate: Where Should You Buy?

With 20 major islands to choose from, deciding where to buy real estate in the Bahamas can be overwhelming. This quick primer will make it easy to find the island that best fits your tastes and budget.

Nassau and Freeport

The cities of Nassau on New Providence Island and Freeport on Grand Bahama are the only choices for buyers who want urban or suburban surroundings and the amenities that come with it–extensive shopping, a wide array of cultural opportunities, hospitals, multiple golf courses, and direct flights to many major airports.

New Providence, a small island dominated by Nassau and its suburbs, is home to 215,000 people—fully three-fourths of the Bahamas‘ population. Nassau has a busy downtown with both modern and historic architecture, and on the outskirts, a strip of high-rise hotels and casinos along Cable Beach. Paradise Island, connected to New Providence by a bridge, is home to the gargantuan Atlantis and other resorts. New Providence and Paradise Island have many gated subdivisions and townhouse developments, as well as high-rise condominiums. On average, real estate prices here are much more expensive than elsewhere in the Bahamas. Expect to spend $1.5 million for a typical canal-front house in one of the popular gated communities. A one-acre beachfront lot (the yardstick we will use throughout this article) would cost at least $3 million.

Grand Bahama, the northernmost of the major Bahamian islands, has a population of 50,000, the greatest part in and around Freeport. Grand Bahama is almost 100 miles long, however, and unlike New Providence, has less populated regions with deserted beaches and tropical pine forests. Lucaya, the residential area of Freeport, has a vast network of interconnected canals lined with thousands of home lots. Canal-front lots are reasonably priced–in the $125,000 to $250,000 range. One-acre beachfront lots in Lucaya sell for $1.5 million and up.

The Out Islands

After Freeport, the largest „city“ in the Bahamas is Marsh Harbour, with a population of only 5000. And the majority of settlements in the Bahamas are even smaller, with just a few hundred souls. This is the world of the Out Islands—large areas of untouched land with the occasional house or small village.

Abaco and Exuma

The Abacos and Exumas are not adjacent physically, but they have much in common. They are the most popular yachting destinations in the Bahamas, and their islands and cays provide beautiful cruising grounds. Abaco and Exuma are better known than the other Out Islands, and they each have several major resort developments. Prices are therefore higher. One-acre beachfront lots on Great Exuma are selling in the $1-2 million range. Abaco has prices in this range as well, but also less expensive beachfront in some locations.

Bimini

Hemingway made his „island in the stream“ famous as a center of deep-sea fishing, and it remains so today. Bimini is also just 50 miles from the east coast of Florida, which ensures a good yachting crowd. Bimini has one major resort development, Bimini Bay Resort and Casino. Bimini Bay has no casino, but it does offer condos with boat slips in the $600,000 range. The only beachfront lot listed on Bimini, for comparison purposes, is a 2.7 acre parcel for $1.7 million.

Eleuthera

With sixty miles of beaches and only a few dozen hotel rooms, Eleuthera is a paradise for beach lovers who enjoy privacy and unspoiled natural beauty. Eleuthera has four major resorts planned or underway, but none is near completion yet, and overall, the island is still rustic and relatively unknown. Eleuthera is therefore less expensive than Abaco and Exuma–one-acre beachfront lots sell in the $500,000 range. With a population of 8000 and close proximity to resort-rich Harbour Island, Eleuthera has good infrastructure, stores, and services. If and when Eleuthera’s nascent resorts succeed, prices may catch up to Exuma and Abaco. For more information about Eleuthera and its real estate, click here.

Andros, Cat Island, Long Island

These three islands are the next step up in remoteness and the next step down in name recognition, infrastructure, services, and prices.

Andros is said to be the largest unexplored landmass in the hemisphere. The island’s interior is home to the six-foot iguanas, the rare Bahamian boa constrictor, and who knows what else. The east coast of the island, the only populated area, has scattered villages and miles of deserted beaches. For those not afraid of who-knows-what-else, beachfront lots on Andros are selling in the $200,000 to $250,000 range.

Fifty miles long and with a population of only 1600, Cat Islandis one place where you’ll never have to wait in line. Cat has many miles of spectacular pink-sand beaches and several delightful boutique resorts. A one-acre beachfront lot will set you back $350,000-400,000.

The aptly named Long Island is 96 miles long and only seven miles wide at its widest point. Long Island has a varied topography ranging from hills and cliffs in the north, to flatlands in the south. Deadman’s Cay, the commercial center, is fairly well equipped, with a medical clinic, banks, and well-stocked food stores. Prime beachfront lots on the island sell for $375,000, and lots on a narrower beach are currently selling for as little as $185,000.

San Salvador, Acklins, Crooked Island, Mayaguana, Inagua

For the true pioneers among you, these islands are farther south, more remote, and less populated. But the prices are tempting. A four-acre beachfront lot on Crooked Island is selling for $525,000—95% less than you would pay in Nassau.

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Matthew Simon

Bahamas Real Estate: Where Should You Buy?

With 20 major islands to choose from, deciding where to buy real estate in the Bahamas can be overwhelming. This quick primer will make it easy to find the island that best fits your tastes and budget.

Nassau and Freeport

The cities of Nassau on New Providence Island and Freeport on Grand Bahama are the only choices for buyers who want urban or suburban surroundings and the amenities that come with it–extensive shopping, a wide array of cultural opportunities, hospitals, multiple golf courses, and direct flights to many major airports.

New Providence, a small island dominated by Nassau and its suburbs, is home to 215,000 people—fully three-fourths of the Bahamas‘ population. Nassau has a busy downtown with both modern and historic architecture, and on the outskirts, a strip of high-rise hotels and casinos along Cable Beach. Paradise Island, connected to New Providence by a bridge, is home to the gargantuan Atlantis and other resorts. New Providence and Paradise Island have many gated subdivisions and townhouse developments, as well as high-rise condominiums. On average, real estate prices here are much more expensive than elsewhere in the Bahamas. Expect to spend $1.5 million for a typical canal-front house in one of the popular gated communities. A one-acre beachfront lot (the yardstick we will use throughout this article) would cost at least $3 million.

Grand Bahama, the northernmost of the major Bahamian islands, has a population of 50,000, the greatest part in and around Freeport. Grand Bahama is almost 100 miles long, however, and unlike New Providence, has less populated regions with deserted beaches and tropical pine forests. Lucaya, the residential area of Freeport, has a vast network of interconnected canals lined with thousands of home lots. Canal-front lots are reasonably priced–in the $125,000 to $250,000 range. One-acre beachfront lots in Lucaya sell for $1.5 million and up.

The Out Islands

After Freeport, the largest „city“ in the Bahamas is Marsh Harbour, with a population of only 5000. And the majority of settlements in the Bahamas are even smaller, with just a few hundred souls. This is the world of the Out Islands—large areas of untouched land with the occasional house or small village.

Abaco and Exuma

The Abacos and Exumas are not adjacent physically, but they have much in common. They are the most popular yachting destinations in the Bahamas, and their islands and cays provide beautiful cruising grounds. Abaco and Exuma are better known than the other Out Islands, and they each have several major resort developments. Prices are therefore higher. One-acre beachfront lots on Great Exuma are selling in the $1-2 million range. Abaco has prices in this range as well, but also less expensive beachfront in some locations.

Bimini

Hemingway made his „island in the stream“ famous as a center of deep-sea fishing, and it remains so today. Bimini is also just 50 miles from the east coast of Florida, which ensures a good yachting crowd. Bimini has one major resort development, Bimini Bay Resort and Casino. Bimini Bay has no casino, but it does offer condos with boat slips in the $600,000 range. The only beachfront lot listed on Bimini, for comparison purposes, is a 2.7 acre parcel for $1.7 million.

Eleuthera

With sixty miles of beaches and only a few dozen hotel rooms, Eleuthera is a paradise for beach lovers who enjoy privacy and unspoiled natural beauty. Eleuthera has four major resorts planned or underway, but none is near completion yet, and overall, the island is still rustic and relatively unknown. Eleuthera is therefore less expensive than Abaco and Exuma–one-acre beachfront lots sell in the $500,000 range. With a population of 8000 and close proximity to resort-rich Harbour Island, Eleuthera has good infrastructure, stores, and services. If and when Eleuthera’s nascent resorts succeed, prices may catch up to Exuma and Abaco. For more information about Eleuthera and its real estate, click here.

Andros, Cat Island, Long Island

These three islands are the next step up in remoteness and the next step down in name recognition, infrastructure, services, and prices.

Andros is said to be the largest unexplored landmass in the hemisphere. The island’s interior is home to the six-foot iguanas, the rare Bahamian boa constrictor, and who knows what else. The east coast of the island, the only populated area, has scattered villages and miles of deserted beaches. For those not afraid of who-knows-what-else, beachfront lots on Andros are selling in the $200,000 to $250,000 range.

Fifty miles long and with a population of only 1600, Cat Islandis one place where you’ll never have to wait in line. Cat has many miles of spectacular pink-sand beaches and several delightful boutique resorts. A one-acre beachfront lot will set you back $350,000-400,000.

The aptly named Long Island is 96 miles long and only seven miles wide at its widest point. Long Island has a varied topography ranging from hills and cliffs in the north, to flatlands in the south. Deadman’s Cay, the commercial center, is fairly well equipped, with a medical clinic, banks, and well-stocked food stores. Prime beachfront lots on the island sell for $375,000, and lots on a narrower beach are currently selling for as little as $185,000.

San Salvador, Acklins, Crooked Island, Mayaguana, Inagua

For the true pioneers among you, these islands are farther south, more remote, and less populated. But the prices are tempting. A four-acre beachfront lot on Crooked Island is selling for $525,000—95% less than you would pay in Nassau.

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Matthew Simon

Holding Investment Real Estate – LLC, Trust, Or Both?


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The Issue: How to Hold Property in California?

Countless individuals invest in real estate every day. Some dream of becoming the next real estate mogul, while others simply wish to supplement their salary with additional income. Whatever your motivations, owning investment properties can produce big rewards, but also big problems. This is why it is important to hold title to your property in the most beneficial way. The internet is saturated with various posts and articles touting the most effective techniques to manage your property. It can often be a daunting task weeding through the mass of information in an attempt to discern what advice is reliable and what advice can get you into trouble. Our goal here is to provide a succinct and clear summary of the safest and most important strategies for holding investment property in California. We hope the result will be a valuable starting point in considering the best ways to both protect you as the owner/landlord from liability and also guarantee the best treatment of your assets.

The Risks of Owning Real Estate

As stated above, while property can be a valuable investment, there are also significant risks. One of the biggest risks is lawsuits. From common slip and falls, to environmental contamination, landlords and owners are easily exposed to legal judgments. Landlords have also been successfully sued by victims of crimes — such as robberies, rape, and even murder — that occur on their property on the theory that the landlord provided inadequate security.

Options for Holding Real Estate

Faced with the risk of lawsuits, it is crucial that you do not own investment real property in your own name. (The only real property you should hold in your own name is your primary residence.) Thankfully, there are several ways in which an individual can hold property other than in his/her own name. These include as a corporation, limited partnership, limited liability company („LLC“), trust, and many others. While there are many options, when it comes to real estate investment, LLCs are the preferred entity by most investors, attorneys and accountants.

For many reasons, few investors hold investment real estate in C corporations. A corporation protects the shareholders from personal liability, but the double taxation of dividends and the inability to have „paper losses“ from depreciation flow through to owners make a C corporation inappropriate for real estate investments.

In the past, partnerships and limited partnerships were the entities of choice for real estate investors. Limited partners were protected from personal liability while also being able to take passed through tax losses (subject to IRS rules–you’ll need an accountant or attorney to sort out the issues of at-risk limitations and so on) from the property. However, the biggest downfall with limited partnerships was that someone had to be the general partner and expose himself to unlimited personal liability.

Many small real estate investors also hold property in a trust. While a living trust is important for protecting the owner’s privacy and provides valuable estate planning treatment, the trust provides nothing in the area of protection from liability. However, although a trust provides no liability protection, it should not be overlooked, as it can easily be paired with an LLC.

1. Benefits of a LLC

LLCs appear to be the best of all worlds for holding investment real estate. Unlike limited partnerships, LLCs do not require a general partner who is exposed to liability. Instead, all LLC owners — called members — have complete limited liability protection. LLCs are also superior to C corporations because LLCs avoid the double taxation of corporations, yet retain complete limited liability for all members. Furthermore, LLC’s are rather cheap and easy to form.

A. One LLC or Multiple LLCs?

For owners of multiple properties, the question arises whether to hold all properties under one LLC, or to create a new LLC for each additional property. For several reasons, it is generally advisable to have one LLC for each property.

First, having a separate LLC own each separate property prevents „spillover“ liability from one property to another. Suppose you have two properties worth $500,000 and they’re held in the same LLC. If a tenant is injured at property 1, and wins a $750,000 judgment, he will be able to put a lien on both properties for the entire $750,000 even though property 2 had nothing to do with the plaintiff’s injury.

On the other hand, if each property had its own LLC, then the creditor could only put a lien on the property where the plaintiff was injured (assuming that they cannot pierce the corporate veil).

Additionally, many banks and lenders require separate LLCs for each property. They want the property they’re lending against to be „bankruptcy remote“. This means that the lender doesn’t want a problem at a separate property to jeopardize their security interest in the property that they’re lending on.

2. Benefits of a Trust

As stated above, an LLC may be used concurrently with a trust to provide the best protection and estate treatment for your property. There are many types of trusts, but the revocable living trust is probably the most common and useful for holding title to real estate. The major benefit from holding property in a trust is that the property avoids probate after your death. As many are aware, probate is a court-supervised process for transferring assets to the beneficiaries listed in one’s will. The advantages of avoiding probate are numerous. Distribution of property held in a living trust can be much faster than probate, assets in a living trust can be more easily accessible to the beneficiaries of the trust, and the cost of distributing assets held in a living trust is often less than going through probate. [Note: One should also be aware of other ways to avoid probate. For instance, property held in joint tenancy with a right of survivorship automatically avoids probate whether or not the property is in the living trust. Consult an estate planning attorney for more advice regarding probate matters.]

3. Use Both an LLC and a Trust

Because an LLC and a trust both provide significant benefits to the owner of real property, a smart investor should consider using both a LLC and a trust to adequately protect himself and his property. Utilizing both a trust and a LLC creates the best combination of liability protection and favorable estate planning. To accomplish this, the owner should hold the investment property in a single member LLC, with the living trust as the sole member of the LLC. Here, the trust is the owner of the company and holds all of the interests of the LLC. This form of ownership gives you an added layer of protection from the LLC as well as the additional estate planning benefits of a trust.

A. Costs

For the most part, the costs of forming and maintaining an LLC and trust are rather minimal. For an average LLC, the costs are simply nominal filing fees and an $800 per/yr fee to the state of CA. While simple incorporations may be done on your own, it is strongly advised that you seek the advice of a knowledgeable attorney so that no mistakes are made. The same may be said for forming a trust. A little money now is worth the price of avoiding big problems in the future.

B. The CA LLC Fee

While the costs of forming a LLC are generally small, there are additional fees that may be imposed on LLCs in California depending on gross profits. The California Revenue and Taxation Code Section 17942(a) includes an additional fee on LLCs if total gross income (i.e. rent) exceeds $250,000. „Total gross income“ refers to gross revenues (not profits). Under this Tax Code Section, the amount of the fee is determined as follows:

1. $0 for LLCs with total gross income of less than $250,000;

2. $900 for LLCs with total gross income of at least $250,000 but less than $500,000;

3. $2,500 for LLCs with total gross income of at least $500,000 but less than $1,000,000;

4. $6,000 for LLCs with total gross income of at least $1,000,000 but less than $5,000,000; and

5. $11,790 for LLCs with total gross income of $5,000,000 or more.

Although the fee is relatively small, one must consider that the fee is assessed against gross revenues, not profits. This means that the fee is due whether or not your property is profitable. For a property with high revenues but narrow profit margins, the fee would reflect a higher portion of the property’s profitability than it would on a property that is highly profitable. For example, a company that owns an office building with revenues from rent totaling $1 million, but a mortgage of $995,000, would actually operate at a loss after the $6,000 fee was imposed. Furthermore, the fee would be particularly irksome for those companies that foresee incurring losses in their early stages of development.

4. Limited Partnership: a Possible Strategy if Gross Receipts Exceed $250,000

For the vast majority of investors, the CA LLC fee should not dissuade you from forming an LLC. If, however, the impact is severely detrimental, there are several potential solutions that may be explored. A competent attorney or accountant may be able to work with you to avoid this fee. One method may be to form a Limited Partnership. The partnership should be set up with an LLC as the General Partner (assuming liability) and the owner(s) of the property as the limited partner(s). By forming a limited partnership with an LLC acting as the general partner, the landlord can likely avoid the higher fee imposed on an LLC while still protecting his/her personal liability. While this may be a possible solution, it is strongly recommended that you consult with an attorney or accountant regarding the best course of action.

While there are risks associated with real estate, with intelligent decision-making and thoughtful preparation, real property can be a valuable investment. The first step though, is to make sure that you have adequately protected yourself and your property. We hope that this article helps property owners begin to discover the various ways in which one may hold investment property, as well as the protections and benefits provided by such ownership.

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Is Buying a House a Good Investment?

Intended Audience

Individuals looking to purchase a home for personal use or as an investment. As well, looking into conventional wisdom’s statement that buying a house is one of the best investments someone can make.

Summary Points to Take Away

  • Why a House is good investment: (1) Forced Savings Plan (2) Leverage (3) Inflation Resistant (4) Tax Free Capital Gain (5) Control over Asset.
  • Points against a House as an investment: (1) Lack of Diversification (2) Maintenance Costs (3) Historically lower returns than equities (4) Unavailable to take advantage of other opportunities (5) Limited Scope.
  • Additional points to consider if planning on purchasing property for personal use: (1) Doesn’t provide any cash flow (2) No tax shelter from interest expense (3) Can get personal joy out of investment.

Analysis

Conventional wisdom states that buying a house is one of the smartest and best investments an individual can make. This article is geared towards challenging this conclusion to see whether this statement rears any truth to it.

Why a House is a Good Investment?

Forced Savings Plan

Most individuals claim that the purchase of their personal home was the best investment they’ve ever made, which is true in most cases because it is the only investment they’ve ever made. The general public struggles with saving for retirement; thus, purchasing a house assists in that problem as it forces individuals to continuously pay down the mortgage (or lose the house in a foreclosure to the bank); therefore, allows the storing of equity for the owners. This built up equity (i.e. market value of home minus remaining mortgage) can be borrowed against during their retirement years or they can downgrad into a less expensive house in order to provide some retirement funds to the owner. If individuals take a disciplined approach to saving, then the benefit of being forced to save in order to pay for a house diminishes

Leverage

Typical real estate purchase require only a 5% deposit, while the remaining amount can be borrowed through bank debt. Few alternative investments outside of real estate can the acquirer obtain such significant leverage, which can enhance investment returns.

Example, suppose that you purchased a home for $200k, for which you made a 5% deposit down ($10k). During the next few years the house appreciates in value and you sell it for $220k (10% higher than the level you purchased it). Though the return on the house is only 10%, the return to the investor based on invested funds sunk into the home ($10k) is 200% ($20k earned over $10k investment) –  that is the power of leverage. On the negative side, more debt means higher fixed monthly mortgage payments; thus, higher risk of being able to make the monthly mortgage payments. As long as cash flow is not a concern and the mortgage payments can be met – investments should be leveraged to maximize returns to the investor. Could you imagine walking into a bank and asking for $100k to invest in equities while only putting 5% down – likely to never happen, this is a major benefit of real estate ownership.

Inflation Resistant

Real estate holds its value during inflationary periods; thus, acts as a hedge against the investors other assets that aren’t protective against inflation (ex. Currency). The asset will continue to hold its buying power (store of value), which is difficult to get outside of investing in precious metals. The reason real estate holds its value is there is the same number of houses that the increased monetary supply of dollars are chasing; thus, it’ll take more dollars to purchase the houses as the supply of houses stays stagnate while the demand rises (due to the increase in the number of dollars in everyone’s hands). This can become critical given the current economic times and numerous expansions of monetary supply across many nations, which will have the aftermath affect of higher inflation.

Capital Gain is Tax Free

In Canada, every home owner is provided with a capital gain exemption on amounts earned in excess of cost for their principal residence. Only one piece of real estate can be claimed as the principal residence per individual. For example, if you owned a home and a cottage, only one of those houses upon selling could take advantage of the principal residence exemption. No other asset class has such advantageous tax reduction characteristics. Unfortunately this is a onetime event; thus, those holding numerous pieces of real estate can only apply it to one property.

Allows for Control over the Asset

Real estate is typically an investment an individual has control over (assuming you’re the majority owner – which is typically the case) by the means of the owner has the ability to increase the value of the asset, which may not be the case in most other investment opportunities. When purchasing real estate, owners can make capital improvements to the home (ex. Finished basement, new porch, etc.), which will increase the value of the property (capital appreciation) as compared to purchasing stocks or mutual funds as assets where the owner can’t take action to increase the value of those assets (unless they’re a significant owner, greater than 20% – which is typically unlikely). The ability to control an asset adds value to the owner through what is known as a control premium, as a real estate asset may be more valuable in the hands of some individuals over others.

Why a House is a Bad Investment

Lack of Diversification

Average individual thinks the stock market is very risky while investing in real estate is more of a certainty. Purchasing equities allows the owner to conveniently hedge their risk amongst various companies in numerous industries, countries, etc. The purchase of real estate doesn’t provide the ability to diversify risk away as easily unless an investor plans on owning numerous pieces of different types of properties (ex. residential, commercial, resorts, etc) across various markets (North America, Europe, etc) – which is probably very unlikely for the average investor. Purchasing real estate prevents the diversification of risk because it’s dependent on the economic, migration, and regulation trends of the local area.

For example, assume you purchased a home in Oshawa, Ontario – which is a town extremely reliant on the large manufacturing facility of General Motors (GM). Should GM cut back on production or move their facility housing prices would fall sharply as it is the biggest employer in the area; thus, demand from individuals will decline as unemployment rises and real incomes fall. With a decline in demand and supply staying stagnate (as you typically can’t “un-build” a house once it’s constructed) the price will have to shift towards in order to align demand with supply.

Real estate doesn’t allow the investor to diversify away the specific risks in the local area as compared to purchasing equities, which allows the investor to spread risk amongst investments that perform differently during different points along the business cycle. Most individuals when purchasing real estate have all their eggs in one basket.

Maintenance Costs

Transaction and maintenance costs are significantly higher for real estate investments than stocks, mutual funds, etc. When purchasing stocks costs are typically broker commissions ($20 per transaction if using an online discount broker), while when purchasing a home it is typically 2% commission on the transaction value, significantly higher than purchasing equities.

Once you purchase shares, no further cash is required from the investor unlike real estate, which requires constant annual expenditures that continue to increase the investors cash committed towards the property, such as property taxes, insurance, utilities, maintenance and repairs of the asset, etc. These are costs that real estate investors or home purchasers don’t factor into their expected return, but play a significant role as the payment of property taxes (etc.) doesn’t contribute to the value of the property for eventual sale in the hopes of capital appreciation.

Historical Lower Returns Compared to Equities

During any 20 year period throughout history, no other asset class has outperformed equities, which includes real estate. This is from the perspective of asset vs. asset without consideration of leverage and how that may enhance returns (as discussed earlier). While it is true that over the long run real estate prices go up in value, this is typically due to inflation incurred. Recent spikes in housing prices seen in the past 10 to 15 years has been due to changing demographics, specifically the baby boomer generation (who makes up largest segment of the population in North America) go through life stages at the same time (same goes for starting a family and purchasing a home and real estate investment property). The result was a large influx in demand without a corresponding increase in supply as construction requires lead time; thus, leading to rising real estate prices.

Will this high demand continue? That’s where the argument lies. Likely there will be softness felt in overall real estate demand as baby boomers already have their homes and they’re likely to either stay put, move to retirement homes or downgrade into a smaller place in order to obtain some retirement income. Immigration will continue into North America that will prop up demand, but likely not the extent to fulfill the whole in demand left by the baby boomer generation; therefore, the future appreciation in real estate properties is likely to flatten out.

Can’t Take Advantage of Available Opportunities

The purchase of a home or real estate property requires the individual to tie up a significant portion of their net worth into the property (in a lot of cases, all of it). Having all your net worth in real estate is a risky strategy as you’ll be severely impacted by movements in real estate prices as compared to having your cash tied up into several asset classes; thus, less vulnerable to swings in any one asset class. Similar to the discussion had under the “diversification” section of this article.

With the majority of an investors net worth tied up in a real estate property, there isn’t available cash to take advantage of other opportunities that come along; thus, significant opportunity costs are involved in venturing into real estate. This should be considered before purchasing an expensive personal home or making a real estate investment.

Limited Scope

Real estate is a local good, unlike gold for example – which can be bought and sold throughout the year for the same market price. An individual looking to buy a personal home or make a real estate investment doesn’t have access to all available properties as there are physical limitations to contend with. It comes down to wanting to live where you grew up or currently work or not wanting to buy a rental property far from your home in order to reduce logistical issues. For example, if you live in Toronto, Ontario and are looking to make an investment in a rental property, you’re unlikely to consider properties in Paris, France though the opportunities may be better than those surrounding Toronto due to language and logistic issues. Equities (and etc.) are globally traded and available; thus, users can take advantage of opportunities around the world; thus, their scope is not limited to the local area of their current surroundings like real estate is.

Additional Points to consider if you’re purchasing a Home for Personal Use.

Doesn’t Provide Any Cash Flow

An asset typically provides you with cash flow, i.e. puts cash in your pocket. When purchasing a home, cash only flows out (property taxes, repairs, etc.); some would argue that if it appreciates in value then it is an asset. In this instance it is only an asset when converted into cash and if that is the case, where will you live? Likely end up buying a new house, which has also gone up in value similar to your house.  This makes it difficult to realize the value of your personal home appreciation, which acts more like a liability than an asset since it takes cash out of your pocket instead of putting some in there.

Tax Deductibility of Interest

Interest expense paid due to bank loans taken to finance investment properties is deductable against income because the investor is pursuing income and tax legislation allows deduction of any expenses incurred in the pursuit of income. This is not the case for a mortgage taken out to purchase a house for personal use as the individual is not in the pursuit of income; thus, interest expense is paid with after tax dollars, with no tax shelter provided. If those funds had been borrowed to invest in equities or mutual funds, the interest would be deductable because again that would count towards the theme of pursuing income.

Can Get Personal Joy Out of It

Unlike equities and other alternative investments, the investor can’t personally use or get joy out of it as compared to purchasing a home, which the individual can live in and enjoy during the investment process. An investor who purchases shares in General Motors (GM) can’t exactly borrow and test drive cars whenever they please simply because they’re a part owner. This is a qualitative benefit that is difficult to quantify, but should be considered.

Where to go from here?

The main reason to purchase a house is to have somewhere to live and enjoy their life, don’t think of it as an investment. Buying a home isn’t a bad decision; it is the investor’s perception that may be tainted because it is important to realize that there are many arguments against a home as an investment to be considered. Don’t buy real estate property with the mindset that an individual can’t lose and that there is no better investment opportunity than to purchase a home, etc. Beware of conventional wisdom that states there is no better investment than purchasing a house.

THANKS,

SIMON GIANNAKIS

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Simon Giannakis

Chennai Property & Real Estate Market 2008

India is witnessing a rapid growth in real estate industry that’s leveraged in all parts of the country – be it Chennai, Hyderabad, Bangalore or Cochin real estate, the property prices are touching unforeseen heights.Chennai real estate has massive demand in all real estate development areas like commercial, residential and retail. Chennai real estate is developing as strong real estate market in India. The market demand for both residential apartments and individual houses is on the rise Chennai property & Real Estate prices differ depending upon the parameters such as location, type of building construction, accessibility, amenities and other services . SEZ’s are the major growth drivers of Chennai’s property market. Chennai real estate market is witnessing an upward trend in terms of values.

Real growth drivers

There is a huge demand for Chennai property market is due to the following factors:

· It is well connected to its satellite cities and other parts of the country

· It is well equipped with high-tech communication channels like high –speed internet connectivity and digital telephone networks

· The city is home to many prestigious educational institutions and

· The city is home to a lot of advanced medical and healthcare facilities

· IT/ITES and SEZ’s growth

· Rising incomes from the IT/ITES sector

· Flexible home loan options

· NRI’s who are returning to Chennai for better opportunities

Residential Real Estate
After undergoing recession for the last few months, Chennai residential property market is moving towards recovery path. The demand for residential apartments and individual houses are the hottest one in Chennai property market. The most expensive areas for Chennai apartments are: Besant Nagar, RA Puram, Mylapore, Egmore, Adyar and Annamalaipuram.

Commercial Real Estate
Chennai real estate market is witnessing an unparalleled growth in the commercial sector. There is a large number of commercial projects are under construction. This is due to the IT companies demand for commercial space in Chennai property market.

There is always a continuous upward trend in commercial property values because demand for commercial activities surpasses its supply and expected to increase in future as well. The preferred business areas in Chennai property market are: Cathedral Road, Lloyds Road, Guindy, Ambattur, Nungambakkam, Tharamani, Old Mahabalipuram Road, and Anna Salai.

Chennai real estate market is exploring alternate avenues in commercial sector to attract companies from different industry verticals. Thus, the offerings are customized in design to suit the specific needs of the industrial sectors. There is availability of different grades for office space like

· Grade – A: Catering to the needs of multinational IT and ITES firms

· Grade – B and C: Catering to local and domestic companies


Future Perspective

Chennai property market has seen an upward trend in pricing almost by 200% in the last two years but it’s witnessing a downward trend. Even office rentals are also seen a 15% drop. Real estate experts say there has been a 90% drop in demand for residential projects since the start of the year (2008) but it is for short term only. Otherwise, Chennai real estate market seems to be vibrant in nature forever.

The investors who have invested in Chennai properties in turn generate sizeable returns which seem to be a good design. Chennai property market is offering the buyers, investors and NRI’s the space what they want, who are showing great interest in the city.

Immobilienmakler Heidelberg

Makler Heidelberg



Source by temp_86387

Commercial Real Estate in Japan

Japan is an island destination, situated in East Asia, in the Pacific Ocean. Bounded by the Pacific Ocean to the north, the Sea of Japan to the west, and the Philippine Sea to the south, Japan is the second largest economy in the world.

Japan is a developed nation, boasting of well-organized society and excellent infrastructure facilities. Apart from scores of tourist attractions, Japan boasts of a great number of high-rise buildings, multinational companies, business firms, and leading financial institutions. Perhaps for these reasons, commercial real estate in Japan is booming.

Commercial property market in Japan is considered the largest in the world, after the US. Japanese commercial real estate includes office space, executive suit, commercial land, industrial property, and retail space. Investing in a commercial property in Japan is regarded as a great way to diversify your portfolio as well as to build wealth and enjoy tax benefits. Further, Japanese commercial real estate is considered an excellent long term investment, yielding huge returns and profits.

The commercial real estate prices in many of the areas in Japan have record prices. For instance, a piece of commercial property in Ginza shopping district of Tokyo cost around 26 million yen per square meter. Likewise, commercial real estate prices are skyrocketing in such areas as Niseko, an enchanting ski resort in the northern part of the Hokkaido Island, Nagoya, situated along the Tokaido Shinkansen road between Osaka and Tokyo, and Osaka, at the basin of the Yodo River on Osaka Bay.

Anyone can purchase or acquire a commercial land or property in Japan. But, only appropriate visa holders can invest in real estate in Japan. It would be even better if one has a permanent visa. Likewise, it is quite difficult for a foreigner to obtain mortgage through a Japanese bank in order to invest in a real estate in Japan.

For the foreigners to apply for loan, it is mandatory to have at least permanent residency status and collateral in the country. A Japanese mortgage is considered a great way to finance for your commercial property. The interest rates are exceptionally low, and majority of the financial institutions provide a mortgage in yen.

Among the steps involved in the buying process of a real estate in Japan are ensuring that you have sufficient finance to buy property, making offer to the vendor, signing contracts written in Japanese which is translated in English, if required, and opening of a trust account. Additionally, the commercial property purchase transaction include expenses in the form of stamp duty, registration and license tax, property acquisition tax, and fixed assets tax.

A plethora of real estate firms, realtors, and property builders are now available to help you in locating a commercial property according to your budget and requirements, no matter it is industrial property, office buildings, or retail spaces. Many of the real estate firms have a section exclusively to cater to services with regard to commercial real estate. Some of them even provide the service of an expert lawyer to verify the authenticity of documents.

Mostly, these firms render a continuum of services in connection with commercial real estate, such as, helping you in locating a commercial land or property that goes with your requirements as well as effectively dealing with the procedures involved in the sale or purchase of a property. Apart from these, there are certain real estate firms providing the service of solicitors, who in turn offer services such as checking of the content written in the contract, ensure that the commercial property is unencumbered, trust fund services, and independent objective advice. In some instances, these firms offer services such as asset management, office leasing, and finding a suitable tenant.

But, it is important to make a thorough research with regard to the professionalism of a real estate firm, before approaching them. It is also vital to check the fee they charge, as some firms may charge huge fee in the form of hidden fee.

Next, analyze the way they render the service. The internet is perhaps the most suitable option to find an appropriate real estate firm in Japan. Many of the realtors have their own websites, with details of commercial property available for sale as well as lease. One can also lean on sources such as online directories, yellow pages, and reviews to find a competent realtor for your commercial real estate needs.

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Wantanee Khamkongkaew

The Real Estate Virtual Tour

Why Virtual Tour is famous in Real Estate?

Virtual Tour is famous in Real Estate because clients don’t have to leave home to have a glimpse of the property they are rooting for. This is especially if the client is still in the phase of choosing the right home to buy. It is not practical for them to go and visit each houses to help them decide. Client who lives overseas find it beneficial as well.  They can already decide if the certain property is right for them or not after the virtual tour.

On the part of the realtor, virtual tour is cost efficient and time saving because having it in their website is like bringing each client to the house of their choice even if the realtor is sleeping or doing other business.

What is Virtual Tour?

There are two types of virtual tour. One is interactive floor plans and the other one is a more sophisticated one.

Interactive Floor Plans – this virtual tour shows images of the property with the help of arrows and a floor plan to show where each images was captured. By clicking on the arrows, the user will be directed to the position of the camera and which direction it was pointing.

Sophisticated Virtual Tour – is like a full service virtual tour which the expert photographers created. These photographers visit the property which was being sold and take some photos and run them in software.

Example of Sophisticated Virtual Tour:

Benefits of Virtual Tour for Realtors

Virtual Tour is a great real estate marketing tool that you can add in your website. Now that competition is tough online, you need to exert extra effort to be in front of your audience all the time and offer them a great service they could have not exchange for any other realtors. Aside from the benefits mentioned above, here are some more.

  1. Reach more buyers. Virtual tours can help you get more listings and increase sales rate. This is because buyers can decide right away. This online tour helps them to see all the angles they want to see and not just what the realtor wants them to see in a few selected photos. Virtual tour can convince the buyer and answer their questions on the spot.
  2. Help you target real audience. The process of real estate buying and selling can be time consuming and you don’t want to waste your time on audience who are not qualified and just want to visit the house. With an eye-catching virtual tour, you can assure that the audiences who reach out to you are qualified because they’ve seen it all and ready to take the final step. Whereas the non-qualified buyers are already entertained with the tours and feel like they are already there. Watching the 360 full color panoramas will give them the satisfaction they want and would no longer bother you.
  3. It gives buyer the freedom to walk through the house virtually. Virtual tour gives the buyer the feeling of walking through the property privately. They can savor the moment without interruption and this tour can help them feel how it is to live there. When you trigger the buyers’ emotion, be prepared to take them to the final steps.

It is unimaginable not to have a virtual tour in your listing. This marketing strategy eases up the selling process for both the buyers and sellers.

If you are not an IT graduate and you do not know about software, there are companies that can create a virtual tour for you in an instant, if you don’t have one yet. Ask for their portfolio so you can be sure that they create high definition virtual tours. Also see to it that it can be viewed at any devices.

Once you have a professional looking virtual tour, leads will come flowing in your real estate website. Making your customer happy should be your number one objective because when they are happy, they will most likely love to make business with you and they will even encourage their friends and family members to make a transaction with you as well. Make a happy customer now!

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Michael Yee

Buying property in Chandigarh

Chandigarh, the face of modern India is witnessing a boom in real estate zone these days. The demand for property in both residential and commercial sectors has risen manifold in the city and other nearby areas. As a result, prices of the property have catapulted high in this capital of the states of Punjab and Haryana. The tranquility and greenery of the place combined with the features of the city makes it one of the most sought after destinations.

To establish the city as a major IT hub, huge amount of investments are being made. Various big companies are now competing with each other to get hold of the most prime locations to set their foot in the city. Other companies trying to move in now may find it difficult to set up their offices as the prices are soaring high and most of it is actually sold out. The prices in some of the major areas in Chandigarh have gone so high that they can now be compared with the property in metro cities like Delhi and NCR, etc. Those who invested in property in Chandigarh few years ago are reaping riches today. The property prices in posh areas of the city have more than doubled, offering huge benefits to the owners. There is, in fact, no free land available in these areas and the ones that are already built are very expensive. Their worth is so high due to the presence of some of the most important government offices, central business districts, high-end malls, etc. Some of the privileged sectors include Sector 5, Sector 17 and Sector 21; the cost of property in these sectors ranges from Rs 3200 to Rs 4500 per sq. ft. The rent for a 3 bedroom house is anywhere from Rs 10,000 to Rs 12, 000.

The growth of real estate in Chandigarh has been phenomenal. Buying property in and around this city is the most happening activity of current times. Even high-end buyers like NRIs are putting in huge money in city’s infrastructure as an investment option. In areas like Mohali and Panchkula, the property is selling like hot cakes and is almost fully occupied now. The eyes of investors have now turned to residential and commercial properties in other areas like Zirakpur, Baltana, Dhakoli, Dera Bassi and Mani Majra. The rates of property in these areas adjoining Chandigarh are still affordable and thus property developers are making a beeline to make investments there. They are expected to make huge returns on these investments in near future with the considerable increase in commercial and infrastructure development activities taking place. In main city, owners are converting their spaces in into one, two and three bedroom apartments and giving them out on lease or rent. Also, floors are being refurbished into small shops and retail outlets to meet the demand for commercial property within the existing infrastructure.

The process of buying and selling property or flats in Chandigarh was earlier full of legal hassles but it has now been much simplified by Chandigarh Housing Board (CHB). Various steps are taken to make the process easier and to encourage the release of property lying blocked for years due to legal tangles. Also, it will help in minimizing the role of middlemen like property dealers and save the money spent on paying huge commissions to them.

Chandigarh, also known as The City Beautiful, is thus one of the best places to invest in with world-renowned architecture and an incomparable quality of life brought together. The convenient connectivity of the city with the national capital, Delhi also makes it a preferred destination for many business centers.

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Deepika Bansal

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