http://www.foxrealtyllc.com Tue, 24 Aug 2010 19:00:45 +0000 http://wordpress.org/?v=2.8.6 en hourly 1 http://www.foxrealtyllc.com/the-5-disadvantages-of-condominium-ownership.cfm http://www.foxrealtyllc.com/the-5-disadvantages-of-condominium-ownership.cfm#comments Tue, 24 Aug 2010 14:06:44 +0000 admin http://www.crawbot.co.cc/?p=2898

In the past condominiums were not necessarily considered to be a good

investment for a variety of reasons, however that image has since

changed dramatically. With the high price of single family homes,

condominiums and townhouses are becoming more attractive to many

buyers such as singles, retiring couples that are downsizing and small

families that would like to purchase in excellent school districts.

However, for those home buyers that have only considered a single

family home as the definition of homeownership they may not be

familiar with what options are available in the form of condominiums.

Condominiums are buildings in which individuals separately own the air

space inside the interior walls, floors and ceilings of their unit,

but they jointly own an interest in the common areas that they share

such as the land, lobby, hallways, swimming pool, grounds and parking

lot. While many condominiums are designed to look like apartments or

are built in high rise city buildings, more and more builders are

designing them where they can be referred to as townhouses.

Townhouses are usually attached to one or more houses and can run the

gamut from duplexes and triplexes to communities with hundreds of

homes

In addition to paying a mortgage, each owner is responsible for paying

a monthly fee to the condo association, usually referred to as the

homeowner’s association which is made up of the unit owners. The fee

covers maintenance, repairs, grounds keeping and building insurance.

In the past condominium ownership suffered with a negative image for a

variety of reasons, however that image has since changed dramatically.

Once the thorn in homeowner’s sides, condominium associations have

worked hard in recent years to clean up their negative image where

disputes and lawsuits were once rampant. Homeowner’s associations have

become savvier and much more professional about property management

and have taken steps to prevent legal problems and disputes before

they happen. However, there are some disadvantages that still need to

be considered before you buy.

1) Monthly Homeowner’s Association Fee

If there is a homeowner’s association, you will usually have to pay a

monthly maintenance fee that is separate from your mortgage payment.

Many condominium owners factor this expense as similar to the costs

they would have incurred for someone to do the lawn care and other

maintenance if they owned a single family home. However, you should

watch for unnecessarily high monthly charges and ask to see a copy of

the latest financial statement from the homeowner’s association.

2) Less Privacy

There is also less privacy than with a detached single-family home.

Communal living is not always desirable for some people and the noise

level generated by living in close proximity to others can influence

some buyers to simply look elsewhere. Usually, the biggest concern is

about parking for the owners and for their guests. However, many

condominiums are being designed with their own garages and have common

parking areas available for guests.

3) CCR’s Can be Very Restrictive

CCR’s or Covenants, Codes and Restrictions are defined as the bylaws

that govern the use of the property. Most CCR’s are reasonable, but

some can be very restrictive. There usually are limits on the type of

exterior changes or improvements you will be able to make to the

property. In addition, you may find, among other things, that they

prohibit or restrict pets and the renting or subletting of units.

Make sure that you get a copy of the CCRs and review them (they

usually have a summary booklet) before you decide to make an offer.

4) High Tenant Ratio

Also, make sure you find out the owner-to-tenant ratio. Because many

condominiums are often purchased as investments, there could be a high

percentage of tenants in the building. Although this trend is also

changing, especially in condominiums which are located in urban areas

where they provide convenient shopping, access to transportation and

other amenities thereby attracting owners who intend to live in their

condos.

5) Resale Value

In some real estate markets, such as Las Vegas and Florida, builders

have overbuilt condominiums and townhouses and they are being sold at

a loss. However, in other real estate markets they have held their

value as an investment despite economic downturns and problems with

some homeowner’s associations.

While some of these factors would discourage some buyers from

purchasing condominiums, it may be just the right investment for

others because it suits their lifestyle. In spite of these

disadvantages, the high price of single-family homes in some real

estate markets such as California and the influx into the housing

market of more single homebuyers have made condos relatively hot

national investments. A professional realtor can assist and guide you

in showing you which are the great deals in your local market and

city.

]]> http://www.foxrealtyllc.com/the-5-disadvantages-of-condominium-ownership.cfm/feed 0 http://www.foxrealtyllc.com/five-real-estate-investing-tips.cfm http://www.foxrealtyllc.com/five-real-estate-investing-tips.cfm#comments Tue, 24 Aug 2010 07:07:28 +0000 admin http://www.crawbot.co.cc/?p=2829

There are always new things to learn about real estate. Hopefully one or more of the following real estate investing tips will teach you something new and useful.

1. Time Your Sale For Tax Savings

We once had a December closing on a property that we had owned for a few months. By pushing the closing up to the first week of January, we were able to put off paying tax on the gain for a year. If you have a property to sell that will result in a taxable gain, you might also want to hold off the sale if it is near the end of the year. Consider also in which year you are likely to be in a higher tax bracket. If the tax will be substantially more in the following year it is better to close now and pay less.

2. Use Home Equity For Investing

Whatever people say about zero-down investing (and yes it is possible), it is easier and often more profitable to invest in real estate when you have some cash to work with. Short on cash for investing? You can borrow against your home if you have a good chunk of equity. An even safer way – if you are serious about investing – is to downsize to a smaller home to free up that equity. That way you get money to invest without having larger payments on your own home.

3. Check For Code Violations

Check for any code violations or problems before you buy (or put a contingency in the purchase agreement). Once, while looking at a property, we learned that in order to keep using a property as a triplex, we would have to provide two parking spaces for each unit. That just happened to be the rule in that particular community, and there were only three spots total at the time. Problems like this don’t have to be deal-breakers, but you need to know what the costs of bringing a property into compliance will be before you make an offer, or adjust your offer before you close the deal.

4. Crucial Clauses Your Offer Needs

If you are buying through a real estate agent they will most likely provide a purchase agreement for you to make your offer with. These normally cover the important points, but be sure you have the few truly important clauses in the contract. These include a financing contingency (unless you are paying cash) specifying that the offer is only valid if you can obtain a loan (and specify the terms you need on the loan). There should be a clause that gives you the right to an inspection and to renegotiate or cancel the contract if the results are not satisfactory. There should also be a “liquidated damages” clause (common in many pre-prepared contracts now), which says that if the deal falls through because of some fault of yours, the seller only gets to keep the good faith deposit. If there are other obvious issues, like junk that needs to be removed, be sure to address these in the offer as well.

5. Learn A Few Negotiation Techniques

This is one of the more important of these real estate investing tips, because your profit is often determined by how you buy a property. You might use the “limited authority” ploy, for example, to get a lower price when negotiating directly with a seller. This involves hesitating and saying something like, “Well, I would have to check with my wife to go any higher than this.” Hopefully the seller then imagines the wife saying no to the whole deal, and so agrees to what you are offering. There are dozens of great techniques used by master negotiators, but even learning and using just a few can boost your profits.

]]> http://www.foxrealtyllc.com/five-real-estate-investing-tips.cfm/feed 0 http://www.foxrealtyllc.com/what-do-you-want-when-buying-a-new-home.cfm http://www.foxrealtyllc.com/what-do-you-want-when-buying-a-new-home.cfm#comments Tue, 24 Aug 2010 02:57:50 +0000 admin http://www.crawbot.co.cc/?p=2760

Buying a new home is probably the largest financial commitment anyone makes in their life. It stands to reason, then, that people want the home to provide as much benefit as possible. When you purchase your home make sure that it benefits you both personally and financially in the long term.

It’s a very good idea to write down what you are looking for when buying a new home. It will help tremendously to have this list when you go house hunting. All too often when people go searching for their new home, excitement overtakes their sensibilities and the buyers end up with a home that is short on what is really important to their family needs. With a list, at least you can keep track of the pros and cons of each home that you visit.

Another good idea is to ask your friends and family ideas of what you should be looking for in a new home. Something as simple as the air filtration system can end up costing you a lot of money if not included in your list. For example, if the house has separation air units for each room, as opposed to central air, you could end up fixing a lot of small systems, rather than one central system that may have a better unit.

Bonus rooms are often overlooked because generally people tend to seek out bedrooms and bathrooms. A room is considered a “bedroom” if it has a closet. In many cases, some of the bonus rooms can be converted to a “bedroom” by a simple addition of a small closet. This will tremendously help the resale value of your home when you go to sell. When buying a new home, many buyers do not tend to look at bonus rooms as an extra bedroom sometime in the future.

What about the dining room? You should think about how often you will entertain and have family and friends over. In many cases, people tend to think of their immediate family needs only. Then when a special holiday comes and more people show up then you can ever imagine things get a little stressful and crazy.

It’s not a bad idea to create a spreadsheet template for your house hunting needs. For example, you can list on the left side all of the features you want your new home to have. At the top, list out each property that you’ll be visiting. And, check off each item as you go along. It will be so much simpler than to try to remember all of these features at the end of the day.

Another question to ask yourself is do you want a fixer upper or one that has already been renovated. This is an important question that should be asked BEFORE house hunting. Of course fixer uppers will generally be a lot less expensive than homes that have already been renovated. But, by how much is the question? And, can you afford the higher price for a house that’s already been renovated?

There are hundreds of more tips in my book that I share in my book House Buyers Boot Camp. These secrets include information that some people don’t want you to know.

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