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Real Estate - Buying Or Rental Real Estate House
The following article presents the very latest information on realestate. If you have a particular interest in realestate, then this informative article is required reading.
Are homes a good investment? As a fairly general rule, homes appreciate about five percent a year. Some years it will be more, some years less. The year 2004 was an exception though when real estate prices really zoomed and homes appreciated in double digits. Generally homes appreciate more slowly but steadily. The figures again will vary from neighborhood to neighborhood, and region to region.
Let's look at the figures in a little more depth for a particular case.
Suppose you bought a home for 300,000 dollars. At the end of next year if your home appreciates by 5%, your home would be worth $315,000 and if it appreciates by 4% your home would be worth about $312,000.
When you buy a home you are not going to pay the whole $300,000 at one go. You may have paid 20% cash down as the initial down payment of $60,000. So your return on investment is not on $300,000 but on that $60,000. So now when we calculate the return on investment it is 25 % for 5% increase in property prices and 20% for a 4% appreciation.
Now that we've covered those aspects of realestate, let's turn to some of the other factors that need to be considered.
But, of course you need to pay interest on your mortgage and property taxes. Suppose you pay 6% on your mortgage of $300,000 - which is $18,000 and $6000 in property taxes, you will have a total outgo of $24,000 in interest and taxes. But remember that your mortgage and property taxes are tax deductibles. So if you pay taxes at 30% you straightaway save $7200 in taxes.
(There are some conditions like you can claim these deductions only if you live most of the time in the house for which you have secured the mortgage and you can't claim deductions on appraisal fee, title insurance fee, settlement fees etc that you pay when purchasing your home. You need to consult with your tax accountant to clarify these matters. Here we are assuming that you are following all the IRA rules)
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Real Estate Resources
The first part of this decade was glorious for home sellers. Just stick up a sign on your home and get an offer. Well, things have changed and so must your approach. Here are some advice that will help.
1. When you are selling your home, allow it to be shown at a moment's notice. Qualified buyers aren't "a dime a dozen."
2. When you are selling your home, keep it clean and tidy ALL the time. Let it get out of hand and an otherwise serious buyer WILL show up. If you don't have time to clean, hire a cleaning service.
3. If you have a limited budget for sprucing up your home, consider devoting a good chunk of it to getting your kitchen in top shape. Consider replacing appliances and fixtures. Whatever steps you take, just make sure your kitchen is in top shape.
4. With the fluctuating home prices we are currently seeing, buyers can have problems getting financing regardless of their credit. Don't drop the buyer! Instead, offer him or her a second mortgage.
5. When it comes to selling your home, your driveway tells potential buyers a lot about your property.If it has cracks and nasty oil stains, it is a blight on your property. Make sure to clean it thoroughly and repair all cracks.
6. You're a seller who really needs or wants to sell your home within the next three months and the market is slow in your area. Getting enough people to come and look at your house is the secret to achieving your goal. Make price reductions until you do get 1 to 3 showings per week, and your home will sell.
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