Category Archives: Home Improvement

6 Commercial Real Estate Myths

There are a number of misconceptions floating around in the market when it comes to commercial real estate and it becomes important to identify them. These misconceptions can deter investment and risk-taking behavior that is required in this market to be a successful investor.

You need considerable funds to start

This is one of the most common misconceptions in the real estate industry, you don’t need to be swimming in funds to invest in your first property. Banks don’t only look at your balance to approve your funding, they look at the potential profits of your deal as well. The more appealing the deal is the more likely you will be to get your funding, however, you don’t need to rely on just your banks there are always private money lenders who’d be willing to help out if you check out.

The numbers are too hard

These days there are plenty of software options in the market to do the legwork for you, you just need to know your figures and the software will compute the rest for you. The rest just boils down to you being able to interpret the figures to make informed decisions when it comes to your real estate needs.

Most commercial properties are advertised

Contrary to popular belief most of the available commercial properties aren’t listed in newspapers nor will you find any bandit signs advertising the properties of your desire. You will need to consult a real estate broker who has considerable contacts among investors and property owners alike to get a comprehensive list of all the available properties in the area of your interest.

Managing commercial property is much more of a hassle than residential property

Managing a property is no joke, but the hitch is that the proceeds with commercial properties is much more than that of residential properties. So one can afford to hire a management service that operates in your stead and takes care of all the management aspects of your property, including using their comprehensive list of vendors.

Good deals are difficult to find

No matter the market situation it will always be possible to find a good deal in the real estate market, there are always certain types of properties and other factors that make this reality a possibility. All this is dependent on you making a reasonable effort to make the deal happen though.

A single agent can fairly represent both sides

An agent will invariably have the interests of the landlord at heart and not the investor or the buyer, the agent will always have vested interests and therefore act as a dual agent in a way. So it’s always better to hire your own agent to represent your interests.

These are some of the common myths surrounding the commercial real estate industry.



Source by Shaik Arif

Buying a Property in Romania – Real Estate Law in Romania

If you are looking to buy a holiday or second home or invest in Romania, Transylvania or at the Black Sea and you are a foreign citizen/investor, there are few aspects you should know about the procedure an the costs for the acquisition of Romanian land or Romanian houses.

After 2012, foreign citizens EU citizens (non-Romanian) may purchase a home or apartment in Romania may freely buy and sell any Romanian property, without restrictions. Along with the sell price for the property, buying real estate in Romania has other costs associated with it.

If you have chosen to collaborate with a Romanian real estate agent/ broker you can expect to have an additional commission of approximately 2-4% of the price of the property. The local tax will be 2-4% of the price of the property. The signing of a contract must be witnessed by a public notary who submits it for certification by the Land Registry in charge of real estate records. The fees for the Romanian public notary is about 0.5-1% of the purchase price. You will also have to pay fees to the Land Registry (“Cartea Funciara”) to register the Transfer Deed. The Romanian Land Registry Fee for a purchase of a property will vary from 1-3% according to the length of time that the seller had owned the property and the property’s value.

The Romanian law on property states that Citizens of EU member states, legal persons incorporated in the EU member states and stateless people domiciled in an EU member state can purchase land in Romania only if the land is used for secondary residences or for secondary headquarters after a 5 (five) years term from the accession of Romania to the EU (starting with January 1st, 2012); only for the agricultural land and forest land 7 (seven) years term from the accession of Romania to the EU ( starting with January 1st, 2014).

But for the Citizens, legal persons and stateless people not from a EU member state, the Romanian legal system establishes that they can purchase land in Romania, under the conditions of international treaties between Romania and the states of origin on these persons, under a reciprocity basis.

In our point of view, a prudent investor will hire a Romanian lawyer/ a Romanian Law Office, who will liaise closely with the notary on the verification of the title, obtaining the Land Registry excerpt and the drafting of the agreement for the transfer of ownership of the real estate. This means that the Romanian lawyer will be solely acting for and is responsible to his or her client, whereas the notary will not have the same degree of responsibility to the purchaser.

Under Romanian law there are three basic rights to land and buildings such as right of ownership; usage rights as lease, usufruct, superficies; concession right. The principle of contractual liberty represents the key core of the property law in Romania.

Sometimes, an investor/purchaser can opt for closing a pre-sale agreement, by which the seller undertakes to transfer ownership to the buyer at a certain date in exchange for an agreed consideration. The content of the pre-sale contract will stipulate all commercial and legal conditions for the transfer of ownership, as conditions precedent to the final transfer of ownership. The closing of such pre-contract for purchase does not means the transfer over the property, but the stipulate binding obligations for the parties, in regard to, as example, damages or penalties set out in them, if the seller refuses to sign the final notarized deed of transfer at the agreed deadline.

The closing of the pre-sale agreement is to protect the investor/buyer from any possible purchase to other buyers and to matters regarding the fixed price and duration of a future purchase. In our point of view, it is a must that the pre-sale agreement to be concluded at a Public Notary and clearly stipulate the sale price and other clauses regarding duration of future purchase. In this case, it can be enforced in court on the buyer’s request as a deed to transfer ownership.

A sale agreement signed in Romania, according to the Romanian legislation will mandatory stipulate: obligations of the parties for the fulfillment of the sale contract, delivery and quality conditions of goods and/or services, terms, payment methods and payment guarantees, payment instruments and price insurance, contractual risk, as well as method of solving eventual litigations arising from the contract. Other required elements include the full name and identification details of the parties (for legal entities) and name of the person signing the contract (representing a legal entity).

Our team of romanian lawyers offer a wide variety of legal services in the real estate law http://www.lawyersinromania.com



Source by Simona Rotaru

Real Estate Agent Job Description

Real estate agents liaise between home owners and buyers to conduct the sale, purchase or rent of properties. They work for brokers and play a major role in assisting people buy or sell residential, commercial or industrial property. They keep and maintain an up-to-date account of property listing and other relevant housing information to stay abreast with properties available on the real estate market. They subscribe to several listing services to advertise and market properties up for sale. They also contact property and market properties up for sale. They also contact property owners to obtain information regarding a property.

As part of their responsibilities, estate agents present sales and purchase offers to clients for consideration. They advise them on property rates, legal requirements and general market trend. They also interview clients to determine their property preference or specification. Usually, they prepare a list of properties that best match the needs and requirements of clients. They visit and inspect properties in order to establish precise property value. They also proffer recommendations to clients on properties that best suit their budget and preference.

Most estate agents oversee the preparation of closing statements, purchase agreements, representation contracts and other necessary documents required for estate trade. They conduct negotiations between property sellers and buyers to establish price and other terms of sales. They also liaise with pest control operators, home inspectors etc. to ensure the terms and conditions stated in a purchase agreement are met prior to the closing of sales.

In fulfilling their role, real estate agents oversee the closing of property sales, they ensure payment is complete and appropriate documents signed. They maintain contact with clients to offer them real estate services/products and assist with the resolution of issues. They also provide consultation services to clients to recommend strategies for the speedy sale of property. They often conduct training programs for junior/trainee sales agents to enhance their sales skill. This job position requires at least a high school diploma, state license for practice and an aptitude for sales. Qualities needed for the job include persuasion, interpersonal skills and problem-solving skills.

Real Estate Agent Job Description Sample

Given below is a sample of the job description usually handed real estate agents by most employers:

  • Act as liaisons to conduct real estate trade between property buyers and sellers
  • Present sales offers to clients as well as bid on available properties
  • Carry out investigations to determine client credit status and ability to complete payment
  • Inspect properties to appraise its value and estimate the worth on the property market
  • Interact with clients to identify their requirements and proffer recommendations on properties that best suit their budgets
  • Assist home sellers in promoting their buildings on property listing services to attract clients for purchase
  • Prepare and deliver sales pitches to clients in order to secure real estate contract
  • Provide clients with a list of properties available for sale to assist them in making choice selection
  • Conduct price negotiations between property buyers and sellers to ensure a fair bargain for both parties
  • Provide clients with a tour of residential, industrial or commercial properties to showcase and explain property features
  • Carry out investigations to confirm clients have clear property titles
  • Provide appropriate reply to client’s enquiries concerning property appraisals, financing, maintenance etc.
  • Examine property premises to recommend maintenance measure required to improve the face value
  • Assist clients in evaluating mortgage options to obtain the best rate and terms
  • Attend conventions, conferences and seminars to improve existing job knowledge and expand personal network.

If you are a recruiter needing the best real estate agent to hire, you can use the sample job description above in making one for your company, for use in hiring and assigning duties to the successful candidates.



Source by Dan Faris

How To Buy The Best Real Estate Property For Investment

Many people are looking to buy a real estate property. They can use this as an investment or as a place to build a house. In any case, it is important for anyone to realize the importance of some buying tips. This way, you can easily get the most value out of your purchase. Of course, if you want to invest on a property, you have to make sure it is problem free. On the other hand, you could also use the property to build a new house. Usually, people are buying real estate assets for the family. Therefore, it is best that you could choose one without problems. Here, we will give you a few tips on how you can select a good real estate property.

One thing that you need to consider is to find a good location. The location of the property spells its true value. The more accessible it is, the better is the price. However, the initial buying price could be big for you to avail. This is normal because you are just investing on an asset. In the long run, your property will be worth more than what you paid for. This means you could increase the value of your asset so you can have better return of investment. Initially, a person needs to render a big amount of money to buy a property. If the location undergoes development in a few years, then the buyer could increase the value of his asset. Then he could sell it at a much higher price. Only this way can profits be realized.

Aside from location, it is also good to check if the property has no legal obligations. One of the basic problems of property buyers is legal problems. A property may have come from a bad owner who did not pay the previous tax requirements. This can be a pain to the buyer especially if the amount is too much to pay. On the other hand, there could be some foreclosure problems if the property has a built structure. This is also a concern for any buyers because it requires being resolved first. Upon solving it, one can then ask for the price of the property if it is for sale.

One more thing that you need to do is to find a broker or agent. We all want to save money when buying properties. However, we can save time and effort if there is an agent. A real estate agent will know everything that needs to be done. He can handle the legal issues of the properties if there is a problem. He can also let you bargain for the price when you want to buy or sell a property. Moreover, he can monitor the prices of the real estate so you can have better decisions. There are so many agents that you can find. Online, you may find them from real estate websites or those freelancers. It is best that you contact any of these agents so you can buy your property today.



Source by Sanjuanita Jandreau

Real Estate: What You Need To Know

People generally get confused with the term real state and real estate Business. Real estate itself is not related to business as it represents a property of land and building that too, including the natural sources, such as flora, fauna, crops, parks, pools etc. that are immovable and lies in the property’s premises. Whereas real estate business is the profession of selling, buying or renting these properties.

Real Estate Agents

It’s a tough task to match the needs of buyer and property sellers, as buyer may not get his dream property and at the same time the seller also may not get the price of his wish. To establish a good connection between buyer and seller and to find the right buyer for a seller and vice versa, Real Estate Agents can be hired that are easily available in the market. Real estate brokers or agents are the ones, who acts as an intermediate between property buyer and seller and tries his level best to match their demands. Buyers for buying and property owner for renting or selling their property get in contact with the agent. The agent listens to their demands and try hard to fulfill them, for a property sold or rented in his supervision, the agent charges some percent of the price of that property from both the parties, i.e. the owner and the buyer. Agents use websites to promote the sale of properties, often work at nights and weekends busy in showing properties to buyers.

Things you should know about Real Estate Agents

Although agents are such a bliss to those who are struggling to get a property or a price of their interest, but we have to be wise when it comes to choosing an agent. Agents are not bound to show you best properties or tell you all the things they know, they might get greedy sometime and show you properties that are going to profit them more than you. On the other hand, for property owners they might end up, leaving you with paying guest that can trouble you in future, in fact, as the general goal of an agent is to sell the property as soon as possible, they may excite you and ask you to sell your property at comparatively lower prices than that you expected, and would be getting after some days. It’s better recommended to choose your agent and the other party to buy or sell wisely, after taking your time, and not to get excited on every other offer you get.

New Real Estate Business Mediums in market

Now-a-days many online sites and applications have been developed to remove the work of agents. Both the parties contact with each other directly and choose the deals of their interest. Though, this move has increased the transparency between both the parties, but because of being fully online, may result in misleading each other. That’s why it is highly recommended to see the property in person before booking it. As the thing that seems to be good and satisfying online can be completely opposite from that what you will be getting in real.



Source by Shalini Madhav

Real Estate Investing Opportunity: How to Locate a Property to Buy

Are you looking for a profitable commercial real estate investing opportunity? Below are some helpful tips for locating a commercial property to buy.

Before you start your search, you need to decide on your desired property type. Determine the size, type and the location of the commercial property you are looking to purchase. It is possible that you may be looking for a multi-tenant office building instead of a small single-user office building. In such cases, make sure you are clear on these distinctions before you start your search.

Once you have the type of property clearly in mind, there are a number of sources you can use to locate that property:

Internet

The internet is a great platform to use to locate a real estate investing opportunity. There are several commercial real estate industry sites that give you detailed descriptions of properties offered for sale, as well as videos and other statistics that can be a helpful complement to your search. In addition, there are websites that are hosted by professional commercial real estate agents that will show listings of commercial properties for sale.

Another good source to use on the internet is to connect with user groups and real estate forums that can help you in your hunt.

The only downside to the internet is that it can be restrictive, especially if you are looking for a local commercial property. Most local areas do not have a multiple commercial listing service for commercial properties like the MLS (Multiple Listing Service) for residential properties so listed properties are not readily available to research.

Networks

Networking is another good technique used for finding properties. All you have to do is to visit your local real estate investment group and discuss your needs, clearly indicating the specifics of the type of property you are looking for as well as the financial requirements.

The same approach is valid at Chamber of Commerce meetings. You can also join groups of apartment owners, building owners, and associations of shopping center owners.

Professional Commercial Realtors

Last but not least, you can seek the assistance of professional commercial realtors. Good commercial realtors can be a great helping hand in your hunt for commercial properties. Not only will they provide you assistance but they will also help you in locating the most suitable property for your specific investment plans.

Sellers typically are represented by brokers and it is in your best interest as the buyer to have your own professional representation in any transactions you enter into. If you are worried about the realtor fee – it is usually paid by the seller and, therefore, you do not have to bear any expense.

In summary, homework is important if you wish to find a commercial property that suits your requirements. So do your homework and get the professional advice of a commercial real estate broker who will look after your best interests.

There are a lot of financially lucrative real estate investing opportunities in the marketplace. Good luck with your hunt!



Source by David Earl Morgan

Real Estate Property Management

One of the biggest decisions you will make as a landlord is whether you should hire a property management company or not. Many landlords manage properties on their own or with the help of an employee, such as a resident manager. Sometimes it happens that landlords need more help when property issues are complicated. This is when landlords need to seek the help of real estate property management companies.

Real estate property management companies can be a huge asset to your company but they don’t come cheap. They deal directly with prospects and tenants, saving you time and worry over marketing your rentals, collecting rent, handling maintenance and repair issues, responding to tenant complaints, and even pursuing evictions. A good property management company brings its know-how and experience to your property and gives you the peace of mind that comes with knowing your investment is in good hands.

A real estate management business is an independent contractor and this helps you avoid the hassles of being an employer. Along with the benefits, hiring a real estate property management company also comes with a drawback of being an expensive one. If you are living far from your rental property, it will be difficult for you to handle property issues from afar. Most of the landlords look forward to finding good tenants to maintain their property in good and attractive condition.

On the contrary, there are few landlords who look at their property purely as an investment and are not interested in lending them to any tenants. In this case, the best option is to hire a real estate property management to handle the property and manage the related issues. Even if you enjoy hands-on management, you will run out of time to concentrate on the growth of your business which will put you in a situation to hire help for your property. Hiring help of a real estate property management company is an attractive option if you can afford the fees for the same. While interviewing management companies, expect to hear quotes ranging between 5% and 10% of what you collect in rent revenue.

Trying to choose a property agent can be daunting, after all you need someone with experience, energy and a passion to succeed! Perhaps even more importantly, someone who will talk to you and honestly discuss how the real estate industry can work successfully for you. In real estate, it’s about service – and that’s what gets results!



Source by Stanley Samuels

Property Taxes Vs Real Estates Taxes – What’s the Difference

If you are new to the world of real estate, you might be a bit confused by all of the taxes that get assessed. To many people, the words ‘property taxes’ and ‘real estate taxes’ sound like they are the same, but there are some significant differences. Let’s take a look at them.

Real estate taxes are taxes based on the property’s assessed value. They are assessed on privately owned properties and funds are collected by local governments. Real estate taxes are the ones we often hear about that fund schools and pay for road repairs.

Property taxes have two sub-categories. There are certainly real property taxes that are real estate taxes, but there are also personal property taxes. Think of real property as something that cannot be moved. These are things like the house, an external garage, a storage building, or a barn.

Personal property is defined as things that can be moved, like furniture. These taxes are sometimes called excise taxes. Your car is also personal property. Believe it or not, but that licensing fee you pay for your car is a type of personal property tax. If you have a business that repairs items or sells merchandise, that inventory is personal property. In many cases, you are exempt from taxes on the first $50,000 or $100,000 of inventory, depending on your state.

If you own an RV, this is counted as personal property because it can be moved, even though you might be living in one full time. If it is sitting on land you own, you might have to pay real estate taxes on that land, but not in combination with the RV.

So what is the assessed value that these taxes are based on? Each local government has a department that looks at what the value of a property really is. They look at the structure and the land value itself. Sometimes they calculate these values separately and sometimes they are looked at together. The assessment rate is a lower percentage of the assessed value. For many areas, the assessment rate is 70% – 80%, which then reduces the value of the house, and therefore the amount that the tax rate is calculated against.

It should be noted that HOA or condo association fees are not the same as real estate or property taxes. Those fees go directly to the association to cover costs of common area repairs and maintenance.

Personal property taxes are assessed as a percentage of the value of the item. Each state and county will have their own regulations on how they calculate personal property taxes. Also, each state as well as the federal government allows for a tax deduction on personal income tax forms for real estate taxes that have been paid in a given year.

There are also exemptions that certain homeowners might qualify for that help reduce the tax burden. These exemptions are often for wounded military, the disabled, and the elderly.

Hopefully this has helped clear up the differences between property taxes and real estate taxes. Though they sometimes do overlap, they are also quite different. It just depends on what the item is that is being taxed.



Source by Bill Len

Real Estate Investing and Property Management in West Chester PA

Residential property management in West Chester, PA involves serving two different rental communities.

The first community includes students who attend West Chester University. As certain geographic areas of West Chester do not allow student rentals, it is very important that you make sure what part of town your investment property is located. Student housing is very time consuming for property managers and requires extra man hours to serve their needs. For example, with student housing we get calls to change light bulbs, remove snow or ice, clean rooms and many other requests that we typically do not get from non-student tenants. As an investor you want to make sure that you have a property management company in West Chester, PA lined up to handle these issues or be prepared to handle them yourself.

Also, with student housing you will get a lot of turnover and most students stay one year and move out. So be sure to plan high tenant turnover when considering investing here.

The second community in West Chester, PA is non-students. This may include individuals that live in this very popular community or in some cases people that work at West Chester University. These types of tenants tend to be more mature and easier to manage the properties in which they reside. Additionally, they tend to pay rent on time and do not need nearly as mush maintenance or attention. As an investor this may be the better option, but these types of investment properties tend to cost more per unit.

The good news is non-students may live in your investment property for many years and reduce your vacant time.

West Chester, PA is a very popular community with lots of shops and restaurants in the downtown section. West Chester, PA is also the home of QVC, one of the largest employers in the area.

This town continues to be a very hot market for both sales and rentals. The average sales price for home as of November 2018 is $414,100. The average sales price is up 3.4% over the last year. The rental market is also seeing nice price appreciation. The average rental is $2,242 per month and is up 1.5% over the last month. This compares to the average rental in Philadelphia of $1,581 and nationally of $1,449. Given the strong popularity and strong employment in the area I would suggest this a great place for real estate investors to look for investment properties and above average returns.



Source by Mike Lautensack

Real Estate and the AMT: Rental Or Investment Property

The Alternative Minimum Tax is a very important consideration for taxpayers who own real estate because just about every tax rule applying to real estate is different for the AMT than it is for the Regular Tax. This article on Real Estate and the AMT will address those situations where the individual holds the real estate as an investment, typically as rental property. The differences in tax treatment between the Regular Tax and the AMT can be significant.

Interest expense

Interest paid on the mortgage taken out to acquire the property is fully deductible, both for the Regular Tax and the Alternative Minimum Tax. Unlike itemized deductions that allow a tax benefit for what amounts to personal expenses, the tax law generally allows all deductions a taxpayer has to make in the pursuit of business income. Thus, the limitations discussed in the previous article on home mortgage interest do not apply.

If, however, the equity in the rental property is used as security for an additional loan – a second mortgage, for example – then the taxpayer must look to how the proceeds of that loan are used to determine interest deductibility. If the proceeds are used for a car loan or to finance a child’s education, for example, then the interest is nondeductible personal interest. If the proceeds are used to improve the rental property, the interest is deductible.

Suggestion – it is best that taxpayers keep personal borrowings separate from business borrowings. Mixing the two creates recordkeeping challenges and can result in disputes with the IRS.

Property taxes

Property taxes paid on rental or investment property are allowed in full both for Regular Tax purposes as well as for the Alternative Minimum Tax.

Planning idea – if you have an opportunity to pay your property tax bill either this year or next, pay it in a year when you have enough income from the property so as not to generate a rental loss. This strategy can help avoid triggering the passive activity loss limitations described below.

Example – in Florida property tax bills are mailed in October, and are payable under the following discount schedule: November – 4%, December – 3%, January – 2%, February – 1%. If you have a loss from the property in 2010 but expect to generate income in 2011, do not pay your bill in November or December – forgoing that small discount could help you avoid the loss-limitation rules.

Depreciation

Depreciation is allowed for property held for investment. The portion of the cost allocable to land is not depreciable, but for the building itself and the furniture, appliances, carpeting, etc. a depreciation deduction may be taken.

Real property (this is the legal definition of the house or other building) held for rental/investment may only be depreciated for Regular Tax purposes under the “straight-line” method, over a useful life of 27.5 years. Thus, a property with $275,000 allocated to the building would be depreciated at the rate of $10,000 per year.

Personal property (this is the legal definition of things such as furniture, appliances, carpeting and the like) may be depreciated for Regular Tax purposes under an “accelerated” method over a useful life of five years. An accelerated method allows a larger depreciation deduction in the early years, in recognition of an obsolescence or decline-in-value factor that you see in new property (cars are a good example).

For purposes of the AMT, however, personal property may be depreciated only by using a straight-line method. Thus, an AMT item will be generated in the early years if the accelerated method is used.

Planning idea – for personal property consider electing the straight-line method for Regular Tax purposes. While giving up a little tax benefit from the greater depreciation in the early years, it could mean avoiding paying the AMT.

Active/passive investment rules and the “at-risk” rules

A taxpayer who is not “active” in managing investment property may not use losses from rental property to offset other income such as salaries and wages, dividends, interest, capital gains, etc. Instead, these losses are deferred until the taxpayer either sells the property or generates passive income from this or other passive investment sources.

The at-risk rules similarly deny using these types of losses to the extent the taxpayer has acquired the investment with borrowed money and does not have personal liability on the debt.

Planning idea

If these loss limitations apply, consider the planning ideas mentioned above to minimize the losses being generated each year. They are not doing you any good anyway.

Sale of the property

Several different AMT issues can arise on the sale of rental/investment property. One is that your gain or loss may be different for the AMT than it is for Regular Tax purposes. This would be caused if different depreciation methods were used. For example, if the personal property was depreciated using an accelerated method for Regular Tax purposes, then the basis in that property when calculating gain or loss on sale would be different because the straight-line method had to be used for Alternative Minimum Tax purposes.

Gain on the sale of investment property generally is capital gain, although a portion may be treated as ordinary income depending on the accelerated depreciation method was used. Capital gains in and of themselves are not an AMT item, but nonetheless they can result in AMT being paid. This is because the AMT exemption amount is phased out for taxpayers at certain income levels, so this additional income can have the result of reducing the exemption which in turn increases taxable income for purposes of the Alternative Minimum Tax.



Source by George Bauernfeind