Start Building Wealth Through Real Estate

May 15, 2012

If you’ve been thinking about buying a home or rental property, experts at bankrate.com say low prices combined with low interest rates make this a good time to do it.

As one real-estate specialist puts it, “When money is cheap to borrow and houses are cheap to buy, it’s absolutely the best time to invest.”

While the timing is right, these tips can help investors take advantage of what might be the opportunity of a lifetime, say Bankrate advisors.

• Find a rental property in your area. Your real estate agent can help identify good properties, will work with you and share investment knowledge. Or, if you have the time and inclination, you can search foreclosure listings, read the newspaper ads, walk or drive through neighborhoods, and seek recommendations from friends.
• Look for the right location. Properties in highly populated areas can draw from a larger pool of potential renters. Renters are generally looking for properties with multiple bedrooms and bathrooms that are located in low crime areas. They want to feel safe and send their kids to good schools.
• At MSN Money, they ask, “Why buy a rental?” Their answer: “To get richer.” In today’s market, you may be able to buy a property for less than its actual value. Over time, you will realize most or all of that value.
• In the meantime, you can generate a reliable cash flow from the property.
• Because of depreciation and other deductions, you won’t pay federal or state tax on the income.
• Some prospective investors worry about the work involved in owning a rental house or duplex. You won’t have to worry about it if you hire a property manager to do the job for you. You’ll still have income.

Common First Time Homebuyer Mistakes

February 1, 2012

Many first-time homebuyers make simple and common mistakes that are easily avoidable.
They face multiple challenges anyway, such as finding the right home, the right agent, getting approved for a mortgage, and staying within their budget. By avoiding these common mistakes, the process of buying a home can be much less stressful.

1. Overlooking extra costs of homeownership
While some see themselves as ready for homeownership once they can afford a mortgage payment, it is important to remember the other fees that come along with owning a home. Property taxes, home owners association fees, maintenance, higher water and electrical bills, and property insurance are among the extra costs of owning a home, and should be calculated into your budget.

2. Not getting preapproved
It is very important to get preapproved for a loan before you go out searching for the perfect place. That way, you will be making financially sound decisions versus unrealistic emotional ones as to what you can afford.

3. Spending your entire savings on your down payment
This is one of the most common mistakes first time homebuyers make. Homebuyers who put 20 percent or more down don’t have to pay for mortgage insurance when getting a conventional mortgage, which often translates into substantial savings on the monthly payment. However, it is smarter to keep your rainy day savings intact instead.