Before I break down the risks of investing, one of the most important things you need to look at is; what is the risk of not investing?
Whether in businesses, real estate, stocks or mutual funds – what's the risk of not investing your cash?
What is the risk of just putting it under the mattress and saving your money, or putting it into a bank account that makes a tiny interest rate every month – what are those risks?
Incomes are dropping. And that’s not good for the real estate industry, nor is it good news for the American Dream of home-ownership. More Americans view themselves as slipping out of the middle class according to a recent survey by the Pew Research Center.
The trend began in the 1970s, Pew claims, but it has accelerated since the Great Recession. In the past five years, the percentage of Americans who consider themselves middle class has fallen sharply, dropping from 44% in the latest survey from 53% in 2008. 40% now identify as either lower-middle or lower class compared with just 25% in February 2008.
Money may not buy love, but it appears to buy years.
Economist Barry Bosworth at the Brookings Institution crunched the numbers and found that the richer you are, the longer you’ll live. And it’s a gap that is widening, particularly among women.
Mr. Bosworth parsed this data from the University of Michigan’s Health and Retirement Study, a survey that tracks the health and work-life of 26,000 Americans as they age and retire. It is especially valuable as it tracks the same individuals every two years in what’s known as a longitudinal study, to see how their lives unfold.
Housing is local again! Our partners, consultants and clients see vastly different housing markets all across the country. I categorize them into three groups (booming, busting, and muddling) in this article and provide anecdotes from our team members — but it is really more complicated than that.
I find three primary reasons that certain housing markets are booming:
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This article is Part 3 of a four-part series on Land Trusts. You can find Part 1 here: Understanding Land Trusts
Now you may be asking — how is the land trust going to help me with my lender?
The answer lies in why the land trust was created, and why it’s perfectly legal. It’s basically a compromise between two opposing forces. On one side is the bank which is interested in generating income from loans and at the same time protecting itself through a security interest in real property — on the other side is the borrower (real property owner) who desires to transfer title to his property without fear of foreclosure or forced refinancing. The bank acts as the protagonist by incorporating a “due-on-sale clause” into most, if not all, mortgages its writes.
Landlords have enjoyed the upper hand since the housing crisis as increased interest from renters coincided with little new supply of rental units. Rising mortgage rates, tighter borrowing requirements and higher home prices have taken many people out of the home-buying market. Plus, many remain burned by the housing crash and don't want to own a home.
Want to know how to predict real estate prices?Every investor wants to know how to predict real estate prices and the process is not as mysterious as it may appear.
While I focus on investing for cash flow, loan amortization, and tax benefits, I also appreciate the warm and fuzzy feeling you get as an investor when your real estate values climb! So, what are the things I look for when figuring out how to predict real estate prices?
Since 1971, when mortgage rates first started being tracked, they have ranged from a high of 18.63 percent in the early 80′s to a low of 3.20 percent in late 2013. Currently, rates are still relatively low and for many prospective home buyers, low rates can greatly affect the affordability of a home and the monthly mortgage payment. But, what will the future hold?
On Monday January 26th, 2014 the price of a first class stamp went up 6.5%, from $0.46 to $0.49. No one is really surprised by this, so where’s the lesson and how can it help you be a more successful real estate investor?
LESSON 1: Utility — The utility of a stamp today will be exactly the same as the utility of that stamp on Monday. The VALUE or UTILITY of the stamp are the benefits that the stamp provides. Regardless of the price, the UTILITY of the stamp will remain the same; what really happened is that the utility or value of your CURRENCY went down. Today, it takes more dollars to buy the same amount of stamp utility as it did before Monday.
Talk about an amazing reversal of fortune! This may be the most amazing, under-reported demographic fact today.
