March 5th, 2009 by John krol

Okay, so it finally hits you that investing in real estate is the best possible move you can make with your money. With your heart is set on buying an apartment building, your search for reading material on the topic has brought you to this article. So what do you need to consider when making this investment?

The answer is simple; use, use and use. Use is possibly the most important factor in terms of the property’s value. For your investment to be a success, you need to think of the building?s use for you as well as for your tenants. Hence, you need to also put yourself in the shoes of your customers, i.e. your tenants. To kick start things, first attain information on the demographics of the area in which you want to invest in. This should give you a basic idea of who your target audience is and will also allow you to build a general profile of your typical tenant.

With that profile in mind, think then of what the average tenant would need if he/she lives in your building. For starters, regardless of who you rent out to, people will always need basic amenities near by. Thus, you have to ensure that the apartment building you buy is located near a grocery store, entertainment facilities, medical facilities and the like. You should note that although people might have cars, they won?t like driving for more than 10 minutes to get the basic necessities. For example, in an emergency situation, no person would like to drive more than 10 minutes to get to a hospital.

Following the universal needs, you need to look a little more closely into the profile you have outlined. The more you breakdown this profile, the greater will be chances for success. For instance, if currently you feel that your building will primarily be occupied by families, then you should study the demographic data carefully to figure out what kind of families are we talking about. Will the families be newly married couples or families with school-going children? If it?s the former of the two cases, then your building should ideally be located near a good quality daycare center. Meanwhile, if it?s the latter of the two cases, then you will be best positioned if the building is a near a good quality school.

Use is possibly the most important factor when one is to make a purchase. Combine that with customer profiling, and you have the recipe for success. However, always remember that you shouldn’t venture outside your comfort zone unless you absolutely have to. Comfort zone here refers to areas with which you are familiar and have possibly had experience in previously. This point is important always but even more when you are initially starting out as a real estate investor. When starting out, stick to what you know and try out new things only when you feel you have a handle on the situation. And always, always, keep your eyes and ears open to absorb whatever information you can about your location so that you are never left in the dark.

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March 4th, 2009 by Doc Schmyz

If you have not already heard the term reverse mortgage, it sounds like a strange thing. Reverse mortgages are becoming more and more popular these days, but are they scams or are they legitimate?Is it really possible to sell your house back to the bank and still retain the deed to it? Will the bank really pay YOU the mortgage payments? Let’s review what a reverse mortgage is so these questions can be answered.

The name is somewhat misleading. A reverse mortgage is a loan that is structured like a mortgage, with YOU as the lender and the BANK as the buyer. In the U.S., homeowners wanting to initiate a reverse mortgage must be at least 62 years old, and own all or most of their home. These backwards mortgages are usually performed through a bank or broker. The homeowner essentially sells his or her house to the bank, in return for receiving periodic mortgage payments. Sometimes the payments can be structured as a lump sum, line of credit, or a combination of the three methods.

Why would retired persons want to have a reverse mortgage? It provides a constant and dependable stream of retirement income. Many retirement plans such as 401(K) or Individual Retirement Accounts (IRA) generally increase in value, but are still tied to stock market interest rates. The amount of money they provide during retirement can vary. Social Security, Medicare, and other U.S. government programs have endangered funding, so they may not be reliable sources of income. A reverse mortgage can supplement a senior citizen’s income. The amount depends on the homeowner’s age, equity of the house, interest rate on the loan, closing fees, and a few other factors.

One very common misconception about the reverse mortgage is that the bank eventually takes ownership of your house. This is not true! The deed remains in your name throughout the entire term of the process. Note that there is interest on the loan payments, but it is deferred until the loan is repaid.

The homeowner can remain living in the house during the entire term of the reverse mortgage. The loan becomes due only when the homeowner moves out, such as moving into a nursing home, or becomes deceased. At those times, the survivors can repay the loan themselves if they want to keep the house. They can also sell the home and repay the loan plus the interest in full. The money paid to the homeowner as mortgage payments must be repaid to the lender when the loan becomes due.

These mortgages can provide much needed financial support during retirement. It is a time when medical costs are likely to increase, as well as unforseen costs can creep up. Use a reverse mortgage to help yourself or your aging relatives to gain the financial security in retirement that they worked so hard to achieve.

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