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Alternate Investment Ideas

Alternate Investments
Over the past few weeks we have discussed the varying types of investments. Many of which all fit into this category of alternate investments, but have only really touched base on stock market and traditional lines of investment options. However, there are very different investment options available to you when it comes to investing or loaning out your money in order to gain a return on it. Like all types of investments, alternate investments require just as much research as any line of potential traditional investments to give you a better return on your monetary investment. Essentially an investment that streams from that of the normal routes that are used for investments, so ideally the stock market, would be considered to be an alternate investment.

A Look At Realty

Investing in realty (homes or property) can be a lucrative investment if you know what you are doing. Even with mortgage rates as low as they are, high foreclosures, and high inventories of homes compiled with a bad economy, lack of jobs available, and fluctuating quarterly profits which are all adding to an unbalanced scale where any type of investment could potentially drop value and you could lose everything, or possibly make a profit on your initial investment. What is important to understand when buying property, of any kind in the current market, there are simple rules to follow that will ultimately lead to profit or at the very least, not losing all your money. Researching your investment interest is important, because it gives you the best education on the subject matter that gives you the best chance to make a profit. As far as an alternate investment goes, property can offer you the best chance to make a profit, long term, even with a faltering economy, as long as you understand what types of properties to invest in depending on what the market is calling for. So if the economy is in bad shape, then even with low rates, chances are that loans are not being given out so freely, therefore investing in apartment complexes may turn out to be a solid investment, or homes for tenants that can pay a monthly rate to you.

Location, Location, Location!

Location is important in all aspects of life and investment. What is near the property? Is it close to anything important? Like a hospital. If the property is set aback from a town, it is important to pay attention to county and municipal zoning plans. These plans are made public and accessible and will help you make a more educated decision before you put any money into this type of investment. By seeing what zone plans are being put into place can help to determine whether or not the property is a worthy investment. So what does this all mean? For example, if you are in a developing town and you find out that the property you are looking at is within 20 miles of a hospital and fire engine house, then chances are there is very little development going on, and will then be a harder if not impossible to resale. However, if you look at the zoning plans, and they are showing multiple banks and pharmacies, strip malls and shopping centers, retail and grocery centers, then it is very likely that you are on your way to a solid investment. And if the property already has a house on it, it comes down to stripping the property down to bare bones, but presentable and getting ready for sale. If the property is empty, it is possible that you may be able to flip the property, or allow for any of these perceived buildings to be built on your land if in fact that your land is zoned for. Many towns that are updating are looking for landowners to take ownership or remain landlords to property for strip malls so that taxes can be collected on them. If you choose not to sell the property and flip it, then you have an opportunity to gain residual income, on a monthly basis by which you can pocket as profit.

Property can be a lucrative investment as long as you know what to look for. Although different from the more traditional forms of stock market investment options, this type of alternative investment can yields profits in both good and bad markets, depending upon how savvy of an investor you are. Location and municipal zone plans can give you the best chance at flipping or turning a profit on your initial investment with the least amount of extra cash being dumped into the investment after purchase. Alternate investment ideas are all around you, and gives you other markets that can grow faster than traditional business.

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Posted in Alternative Investments, Investing, Real EstateComments Off on Alternate Investment Ideas

Reasons to Invest in Real Estate

Now I know that many of you are probably looking at this confused, perturbed that we would even suggest such a wild idea during a housing market downturn. Right? I kid you not, there are various reasons to to invest in real estate at the moment. Before getting into the specifics consider these three reasons why you should. First off, by investing in real estate and purchasing a rental property will diversify your portfolio. Secondly, the benefits in tax alone is enough to get you started. The last one tends to be one of the most overlooked, especially by younger generations, which is planning for retirement. Though many of you may think that its not smart to invest in real estate, it’s time you took a look at how you could benefit from it.

(Photo credit to: ReallyToast.com)

(Photo credit to: ReallyToast.com)

Why Should You Invest in Real Estate?

As we started saying earlier, investing in real estate is usually the next logical step for any investor looking to truly diversify their portfolio. Before this though, they should definitely be participating in one of their company’s long-term retirement benefit plans. A 401(k) or IRA can do so much go for you, besides for diversification purposes.

When looking at the various tax benefits that accompanies investing in real estate, there are quite a few. You’ll even gain some leverage with a rental property investment as it’s the simplest to use the bank’s money on. If you can make the down payment, you’re able to sit back and increase your overall return on investment and leverage your capital.

Here’s another way the tax pot gets sweetened. If you are leveraging your capital correctly, you should have tax-free cash flow available. An investor rarely ever pays taxes on their cash flow and can wait for capital gains on the sale of their rental property years down the road. Also, have you realized that as a rental property owner, you’ve now gone into legitimate business? Any expense related to your rental property, whether its travel, renovations, etc are all tax deductible!

The last reason to definitely consider investing in real estate is its’ basically a forced retirement plan. Caring for and operating a rental property is a huge commitment. It causes us to kickstart our self-discipline, forcing us to constantly maintain the property with a long-term goal in mind. Rather than going into retirement apprehensive you will be absolutely grateful for maintaining the property as you did!

Will You Invest in Real Estate?

Well there you have it. What better reasons are there for investing in a particular market? You’ve got all those appealing tax free reasons in addition to a well diversified portfolio. Plus your older self will be thanking you for putting in the commitment to maintaining the property, giving you some foundation for your retirement. The problem with many of the working professionals currently is that their generation was always impulsive and lived in the moment. There was no method behind the curtain, no thought of the bigger picture. There are so many individuals going into retirement with almost nothing. Don’t let that happen to you!

What do you think? Are you going to try to invest in real estate?

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What You Need to Know About the Current Mortgage Market

Since the economic crisis began, we have see a very volatile mortgage market. The likes of Fannie Mae and Freddie Mac usually sharing articles and story space on news sites and papers alike throughout the past year. As we entered into 2013, we even saw some major changes coming to the current mortgage market. With so much new information available each day on the current mortgage market, the housing industry and other pertinent aspects it’s important to get your facts straight so you know what to prepare for as you go into to purchase a new home, apply for a loan, or even consider refinancing your home. The market is not the same as it was a few months ago, let alone the state it was in previously. Here, we’ll tell you some of the most important factors and facts that you should know about the current mortgage market.

(Photo credit to: HomeEquityLoan.net)

(Photo credit to: HomeEquityLoan.net)

Recent Developments in Current Mortgage Market

In recent weeks the mortgage market has received it’s fair share of the spotlight with announcements regarding guarantee fees and President Obama’s plans for the current mortgage market. First, let’s take a look at Freddie Mac’s announcement of cutting it’s guarantee fees as they continue to lose market share to Fannie Mae. A guarantee fee is charged in order to accrue the necessary finances that have risen from mortgage default. Fannie Mae has yet to announce it it will do the same to match Freddie, though if Fannie does it means that the fees will be passed onto consumers while paying a little bit less for their mortgages.

Mortgage backed securities have been taking a beating lately, Freddie Mac recently reported the highest 30-year fixed rate mortgage in almost 2 years. There’s currently a lull in major economic changes and meetings (though we’re bound to see some new housing data and the Fed’s committee minutes soon) there’s two likely options for the mortgage market. For the time being, the current mortgage market will either receive a short time to relax and catch up, or will be a victim to the momentum gained from last week’s losses. Economic data is still very mixed, and what makes market timing even more difficult is the lack of notice for the Fed’s stimulus taper.

(Photo credit to: IKnowDC.com)

(Photo credit to: IKnowDC.com)

As for President Obama’s recent announcement, he wants to change the fact that the U.S has a non-existent mortgage market. Current mortgage market has the government supporting almost 90% of newly issued mortgages through government programs like Fannie Mae, Freddie Mac, the Federal Housing Administration and more. Obama wants to put a majority of the default risk on investors rather than the government. The major problem with this is the 30-year fixed rate mortgage service. Its a very steep commitment that many banks would absolutely refuse to take on. While we are puzzled with how Obama plans to resolve this issue, the rest of the speech offered no real plan, leaving this idea’s strategy very broad.

With the Current Mortgage Market, Is It a Good Time to Buy?

With the guarantee fee cuts from Freddie Mac, many housing market professionals are fearing an overly competitive real estate market. Though this would not be an issue in other business aspects, the real estate market cannot house a competitive mortgage market. This type of market results in thin margins which can yield dramatic results in dire market conditions. These thin margins can be destroyed in no time by a widespread decline in house prices or by seizing up capital markets that have nothing to do with housing.

Even though the mortgage rates are low enough to make buying a home look appealing, consumer affordability has declined. There are less purchase and refinance applications being submitted according to a weekly survey by the Mortgage Bankers Association. The increasing mortgage rates combined with rising home prices have contributed to why affordability is at the lowest level it’s been in over four years. There are even homebuyers who are not qualifying to borrow as much because of higher mortgage rates. In the current mortgage market every percent increase to a 30-year fixed rate mortgage on average loses approximately $24,000 you have in borrowing power. This is why so many mortgage and housing professionals urge homebuyers to lock in a rate as soon as they find the home they want. Trying to time the market will only hurt you now, causing to pay more in delays and fees.

What Can We Expect for the Future Mortgage Market?

At this point, it’s hard to say what we can expect from this current mortgage market status. It all depends on Obama’s plans to transfer the default risk to investors and off of government programs. Another factor the market is depending on is the Fed’s stimulus taper plan. As you can see there are plenty of different factors that can greatly affect the current mortgage market and it’s future. Our advice to you is to not wait for a decreasing rate. If anything, the rates will likely stay where they are for now, and continue to slowly increase as the year progresses.

How have you been affected by the current mortgage market? Let us know!

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Investing In Your Home For Long Term Gains

Investing In Your Home For Long Term GainsBy

Why Investing In Your Home For Long Term Gains Make Sense

With fixed-income investments earning low rates of return below 3% per year, many investors are looking for alternative ways to invest their money safely for the long haul.  While it may not be the first thing you think of when looking for long term investments, investing in your home for long term gains can actually provide a decent rate of return over many years, well above the low rates of return being offered by fixed-income investments.

Case-Shiller housing data released in April 2013 indicated that the average price of homes in the United States increased approximately 7% compared to the same time in 2012.  This sharp increase in average home prices was coming off of years of housing price declines after the housing bubble burst in 2006; however, historical housing data indicates that housing prices increase by an average of 5% per year over the long run, when decades of data are taken into consideration.  If you plan on staying in your home for a long time, then investing in your home can be a good long term investment that beats fixed-income investing and provides the added benefit of making your home a more comfortable and modern place to live.

Investing In Your Home | The Best Ways To Invest

The following are some ideas regarding how to get the best bang for your buck when investing in your home.  Not all home improvements have the same return on investment when it comes time to sell a home, so consider making ones that will appeal to home buyers.

  • Improve the curb appeal of your home.  Real estate surveys have found prospective buyers immediately form a positive or negative opinion about a home based on the initial view of a home from the curb.  Improving curb appeal can include:  a new front door and/or garage door, new shrubs or landscaping, refurbished front steps and/or walkway, and a new paint job or siding.

 

  • Repaint the interior of your home.  One of the cheapest and most effective ways of increasing the value of your home is to repaint the interior to refresh the look of your home.  Avoid using exotic colors and designs, as this may turn off future home buyers.

 

  • Add storage space.  Storage space is not be a high profile home improvement, but many prospective buyers take into account how much storage space a home has before making an offer to buy.

 

  • Update hardware on doors and cabinets.  If the knobs and hinges on your doors and cabinets look like they are from another era, update them to give a modern look.  If the doors or cabinets need to be painted, use this as opportunity to give them a fresh new paint job.

 

  • Update the kitchen and bathrooms.  While kitchen and bathroom updates can be quite expensive and do not always provide the best return on investment, they may be worth doing if your kitchen and bathrooms are severely outdated and you plan on living in the home for a while.  Not only will you benefit from living in a home with a newly updated kitchen and bathrooms, but over time the investment may pay off as home prices appreciate.

 

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What You Need to Know About Investment Properties

Investment Properties

The Truth About Investment Properties

Investment properties are more varied than you might think. While most might have the idea of a vacation house in mind when considering these properties, almost any building can be an investment. Whether you want to rent out a house near a college or plan on flipping foreclosures in a residential neighborhood, you can make money by turning property into an investment. While the process itself can be difficult and risky, the rewards often outweigh the risks. It is up to the individual investor, though, to figure out what can be done to make a property worth the investment.

Investment Properties and You

Every property has its own story, and any individual who wishes to get into the world of investment properties needs to know this. Figuring out whether or not a property is going to be worth the investment is a lot like investing in a stock. You not only need to know how the property is likely to perform in the future, but also how it has performed in the past. That means investigating  how often some investment properties have been rented in the past or looking at the sales rates of comparable properties before making an initial investment. If you can do that, you can make it through the process of investment and concentrate on making money.

There is no such thing as a perfect investment. Some great homes sit on the market for years, while others are snatched up before the ink on the initial contract dries. Investing in property is sometimes a matter of luck, but it is always a matter of good planning and research. If you want to invest in property, you have to be willing to take the risks and put in the work necessary to succeed. If you can manage that, you can begin life anew as an investor in investment properties.

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Time to Shift into Real Estate Investing?

Real Estate Investing

Is Real Estate Investing the Newest Trend?

Financial planners know that real estate investing is cyclical in nature, just the same as any other form of investment. There are times when holding assets in this category is a great idea, and times when there are better places to generate returns on investment. There are seldom, however, times when real estate is an absolute waste of money.

What the Crystal Ball Says About Real Estate Investing

For some time now, real estate has not been a particularly optimal opportunity for investment. Not only have prices collapsed and continued to drift downward, but there is a lack of qualified tenants for residential or commercial investment. That means that investors often purchase empty buildings which have to sit vacant until conditions finally started heading north again.

When it comes to real estate investing, time definitely heals all wounds. The natural increase in population gradually sucks up the oversupply of housing built during previous booms. New business formation kicks up as people find themselves unable to obtain regular jobs and thus elect to start their own companies. Foreign money continues to flee overseas markets and settle inside the United States.

Put these factors on one side of the balance. Add on the fact that mortgage rates are at levels approaching the concept of free money for the asking, and that gross market activity is finally starting to tick up on a sustained basis. That makes for a pretty substantial weight of evidence that indicates real estate is about to regain its former prominence in the investment plans of most Americans.

The old saying is that what goes up must come down, but the opposite applies as well. With regard to real estate investing, what goes down eventually comes back up, and that time appears to be now.

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