Land for Sale in UK - Low Risk and High Rewards

Writen by Stephen Brewood

You already know you are not going to get rich quick (and neither should you expect to) but wouldn’t you like a low risk investment that produces double digit capital growth?

In case planning permission is granted by local councils investors could reap returns of up to 10 times there original investments but even otherwise undeveloped land, tends to increase historically in price anyway over the longer term with increase in acute shortage of housing in UK. Why UK Land Prices are Booming?

250,000 to 3,500,000 new homes are needed over the next 15 years rising to 4,400,000 new homes are needed over the next 20 years.

90% of towns in the UK are unaffordable for 1st time buyers.

The UK is the second most densely populated country in Europe and has a fast rising migrant population

The UK suffers from some of the oldest housing stock in Europe and a huge shortage of supply of affordable and mid priced housing.

Over the last 30 years the demand for new homes has increased by 30%. Whereas the same period house building rates have dropped by over 50%.

Since 1997, the Government has increased the average number of new homes built per hectare from 25 to 40.

Why Invest in UK Land Plots?

Recent volatility in equity and bullion markets world over and underdeveloped real estate markets in developing countries makes UK land for sale market only safe heaven to park investments for common investors expecting decent returns on there investments

Land Investment market in UK is very well regulated and is comparatively safe for common investors in comparison to markets in developing countries

In view of the above arguments it is advisable for individual investors to explore UK Land market as an investment option.

Stephen Brewood
Land For Sale in UK

Where Real Estate Investing and Speculation Collide

Writen by Bruce Ford

Some uninformed folks would describe someone who rehabs distressed property as a “speculator” or even a “property speculator.” Don’t be fooled! There is a VAST CHASM of difference between rehabbing and property speculation.

Let me explain. According to Dictionary.com, the definition of speculation where business is concerned is:

“Engagement in risky business transactions on the _chance_ of quick or considerable profit.”

“A commercial or financial transaction involving speculation.”

While all investing…in anything… has some element of risk to it, I want to highlight a key difference between speculation and investment. When you speculate, risk is higher and by the nature of the word speculation, more risk than usual is implied.

So, in that context speculation doesn’t fit what I advocate at all. I’ll explain further, but first let me illustrate the difference between investment and speculation in real estate rehabber terms from something that happened to me just this week.

I got a call; a “hot” lead from my wholesaler. The property was located on the fringes of a hot area of my town called Riverside. Riverside is an area where historic homes are being bought at inflated prices and fixed up very nicely! Put simply, properties in Riverside at in demand. Well, that’s in the heart of Riverside, but this house was on the distant edge of that part of town.

The house was 934 square feet. Great area, yadda yadda. My wholesaler needs $81,900 and he was the house’s “repaired value” will come in at around $120,000. He continually repeated something he heard from an appraiser about values “around” Riverside being a great investment over the coming years.

I agreed to go and take a look. Before I did, I do some of my own checking. From the tax records available online, I learned that the house was built in 1942, just changed hands last year for $72,000 and was of wood construction with asbestos shingling on the outside.

It didn’t look good when I looked at the numbers. IF…and in my mind a big if…the appraisal came back at $120,000, then the 70% I can get a hard money mortgage for is $84,000. So, my mortgage would only cover a portion of my closing costs, but none of the rehab. In addition, a few months ago, I bought a property a few blocks away for $38,000. I’m just not seeing the value in this property BEFORE I look at it.

When I looked at the property, it had some things going for it. It looked to be in pretty good shape and was on a corner lot. In truth, it needed $10 12K rehab. One negative is that it was square and there is no porch under the roofline to easily add square footage for increased value. The neighborhood is fair but two things jumped out at me:

There is a couple of very old apartment buildings on the street. Normally this would not bother me in the least, but these will prevent the yuppie crowd from rushing into the area in a buying frenzy.

Every other house within sight was also very small and of simlar construction. This means the houses on this street are not the architectural gems in the historic and sought after areas of Riverside.

If the money situation would have been better, that is to say, if this was a better investment, I would buy, Buy BUY! If the spread allowed me to buy and rehab it with little or none of my own money, I would have.

But, if I bought this house and rehabbed it with considerable out of pocket investment, I would be speculating on the area, and I had my doubts.

Of course I didn’t buy it, but if I had, that would be speculating!

So, how would I define speculating?

Speculating involves taking on more than usual risk.

Speculating involve banking on values that aren’t there today, and aren’t projected to be there based on NORMAL conservative appreciation rates.

Speculating is banking on external or environmental factors to make you money.

***External and Environmental Factors (that pertain to property) are factors that are not part of the property itself such as neighborhood, infrastucture, city, the paper mill down the road, rental demand, etc. ***

What is investing, but not speculating?

Buying property that you are “safe” in, meaning you could rehab it and sell it in the short term and make money.

Buying property that will make you money based on what you bought it for, current environmental factors, and conservative appreciation rates.

Buying property such that hope is not part of the strategy!

One of the key factors in STAYING a successful real estate investor is strict adherence to your investment strategy and criteria which are tied closely to your investment goals.

A good real estate investor does what works over and over again and does not take on more and more risk as they go. Smart investors only ventures into other, uncharted investment areas (e.g., single family homes to commercial property) after careful investigation.

I think I can safely speculate that the most successful real estate investors incrementally decrease their risk as they gain experience. Not the other way around.

Bruce W. Ford is the editor of Rehab Real Estate.com and an ACTIVE rehab real estate investor. Get Bruce’s important Special Report entitled “12 Things Real Estate Gurus Won’t Tell You” at http://www.rehab real estate.com.

How to Decrease the Value of Your Own House

Writen by Christoph Puetz

Owning a house is part of the American Dream. Depending on where you live in the US home ownership can be around 70%. That means that 70% of people own their own home. That is very high compared to other countries. Owning a home is usually a nice piece of independence and also part of building a nest egg for retirement. Home ownership is considered an investment. But then it is surprising how many home owners treat their own home as if it would be something they don’t own.

Imagine the case of a lady in Highlands Ranch, Colorado. She bought a ranch style home in late 2004 for $265,000.00 mainly financed through a mortgage. She owes about 95% of the house value to a mortgage company. Highlands Ranch, Colorado is a covenant controlled neighborhood. Strict rules are in place of how to maintain a certain level of landscaping and to keep the property in shape (+ many more things). The covenant rules give a development a more standard appearance, and control some of the activities that take place within its boundaries. When enforced, covenants protect property values. When buying a house in Highlands Ranch the new owner agrees to obey the covenant rules by contract.

The lady from our example above decided to let maintenance of her landscaping slip. The grass was growing out of control. Then summer came along and as she did not have an automated sprinkler system for her yard no watering was done at all. This took care of the fast growing grass in a certain way. The grass started dying in the dry Colorado summer. The outside appearance of the former $265,000 home took a toll. Currently a real estate agent estimates the value of this house in question at $250,000.

The lady from our example took her home and did not treat it as an investment. If she would have to sell her home now she will have difficulties to receive her invested money back. If she would continue to treat her home not as an investment she will eventually turn the investment into a liability and risk her credit history. Especially as her home is in a covenant controlled area she faces extra cost associated with her house. The covenant community association can even put a lien on her home and enforce the covenant rules by sending in a landscaping company to fix the problem at the owners expense.

In our example the Highlands Ranch Community Association has started the initial process of getting the property back on track. A dated notification has been send to the home owner to bring the property back into compliance with the rules.

Overall if investing money and letting interest in maintaining the investment slip, means the person involved is throwing money out of the window. If you have enough cash this is not a problem but who has enough cash to do this? Buying a house means to take on the burden to maintain it. Failing to do basic maintenance means to lower the value of the property.

About The Author

Christoph Puetz is a successful Entrepreneur and international book author.

Websites operated by Christoph Puetz are Web Hosting Guide and Highlands Ranch Information and Reminder Service.

This article can be published by anyone as long as the resource box (About the Author) is posted on the website including the links. These links must be clickable.

Brazil: The Latest Exciting Emerging Real Estate Market

Writen by Rhiannon Williamson

Since 2003 the Brazilian Government have committed to making major fiscal, political and fundamental changes to the country to improve the entire environment for foreign direct investment, as a result GDP growth rate is up, inflation is down and real estate prices are beginning to soar as overseas interest in the stunningly beautiful and amazingly diverse country of Brazil is intensifying.

Because Brazil is such a large country covering such a huge landmass it traverses many different geographic, environmental and climatic changes and offers a lifestyle alternative to suit everyone. The appeal of the country is immediately obvious to anyone who travels to Brazil on holiday and because the path has been smoothed for foreign freehold ownership of real estate in Brazil, more and more people who visit the country are choosing to buy a holiday home or investment property in the country.

The most popular area with holiday makers, second homers and now retirees is the north east of Brazil where the weather is at its best and where the coastal regions are home to stunning palm fringed beaches and growing communities of expatriates who are enjoying the laid back, low cost lifestyle they can achieve in Brazil.

It is in this part of the country that real estate prices are really starting to go up. The demand for real estate to buy and let is growing rapidly and the purchasing power of those overseas investors entering the market place is strong enough to support property price increases.

Anyone considering the world’s emerging real estate markets for maximum opportunity will find what they’re looking for in Brazil. The country has an active commercial property market, an active tourism market and local and overseas demand for housing is strong, therefore sufficient demand for real estate in Brazil exists creating the perfect environment for profit and gains.

A final additional tick in the suitability box for Brazil as a destination for investment is the fact that the real estate buying process for foreign purchasers is straightforward, and additional taxes and fees associated with purchasing and owning property or land in Brazil are very low.

Rhiannon Williamson writes about real estate investment in emerging markets worldwide. To read her Brazil Real Estate Buying Process Guide click here.

Real Estate Feasibility Study (Cost Side) $1.2 Billion Developer Tells You How To Do One

Writen by Colm Dillon

There are two sides to real estate development feasibility study: The Cost Side & The Income Side.

I am going to concentrate in this article on The Cost Side.

Having told you that a feasibility study is vital when applying for finance, it is however, just another cog in the wheel of the property development process.

To help you come to grips with the term, feasibility study, it might help you if I call it a, Financial Analysis, of all the costs and income revenue that tell you if your development will produce a profit.

Where To Start?

When you are at the very beginning of preparing a feasibility study - I mean when you are just thinking about buying the land on which you propose to develop a building, your initial cost figures are liable to be a bit ‘rubbery.’

They’re general - they are not exact and can’t be exact, because all you know at the beginning is the ‘asking price of the land.’

Hopefully the land cost will be less than the asking price after you complete the buying negotiation. Can you see that there is going to be a difference in just that first item of the feasibility study - land cost?

OK - if you accept that, you’ll also accept that the associated land costs will also vary. Items like conveyance costs, legal charges, stamp duty, adjustment of utility charges and other costs.

That should demonstrate to you that a feasibility study goes through several stages.

The first stage uses figures that are the ‘best’ figures you have available at the time. The last stage is when all your cost figures are firm and final.

But as you are only at the stage of deciding to buy the land or not, you figures are “general and loaded with safety” - in dollar terms.

Let’s be clear about what I mean here. For the land cost you would use the full asking price and all the associated costs, at full calculation for your initial entry in the feasibility study. Then if you negotiated a lower price you are safe.

If you first feasibility study shows a satisfactory profit return for the risk of doing the development, you will proceed and gain legal control of the land.

Well, to gain control, you must have concluded a negotiation on the land sale price - so you have now “firmed up” on one of the cost items. Hopefully it is lower than, or the same as the figure you allowed in the feasibility study.

In the first feasibility study you will allowed a figure for the fees of the design consultants.

People like the architect, the engineer and so on. Well now you have to engage them to create the initial design for you and again this is a negotiation that will either be within your feasibility study allowance or not.

The next major item in your feasibility study will be the constructions cost.

If your development comprises ten town homes, that are aimed at the luxury end of the owner occupier market, your market knowledge may tell you that you should allow $180,000 per to town home or $1.8 million to build all ten.

Your design team will have to design well within those cost parameters and after the initial design is complete in preliminary format, you will need to get a few master builders to give you a price.

If you are well within the $1.8 million, then you may decide to leave the $1.8 million figure in your feasibility study. This would be smart if the buider’s figure was say, $1.7 million.

The extra $100,000 acts as a safety buffer as you are only pricing off non detailed preliminary design plans.

Now. let’s say it’s your intention to sell all these town homes at a profit, so you have allowed some marketing costs to cover sales commissions, brochure printing etc. in your feasibility study.

At this stage the biggest figure is the sales commission and so you have been out talking to agents and so you have a good idea that your figures are OK.

At this stage we have wrapped up all of the “major” costs except the finance costs or interest on you borrowed development finance.

By now, hopefully you will have bought my e book, and know how to go about seeking development finance the correct way and not the dumb way.

So you will not only know the best interest rate, but more importantly, have the correct type of loan and on the correct “terms” - you know the small print stuff.

At this stage everyone I teach wants to buy a software program so that they can get all the calculations done “easy like.”

Well I have a problem with that - I know, and believe, that for you to get to know your development intimately, you have to go to the trouble of doing the feasibility study figures manually it is only adding, subtracting and multiplying some figures.

It is not difficult and the benefit is that you get to “know” the importance and interplay of each figure on the end result, being profitability.

So a simple spread sheet broken up into months on an XL is all you need.

In month one you buy the land for $286,500 and associated costs of say, $21,700 so you enter a figure of $310 ($308,200 rounded up to $310,000 - you have added a bit of safety in this one item)

Note: never use the full figure allways round up and take off the last three zeros so $310,000 becomes $310l; $3,500 becomed $3.5 and $800 becomes $8. This makes it easier to read and creates less mistakes.

You then spread the design costs across the page to reflect the negotiated deal you did with the designers.

Then the construction costs - marketing costs and so on. You can divide these individual costs up into a many smaller items as you wish.

But the real thing you are doing is setting out your best estimate of the flow of cash that is required from the Lender and also from your own equity funds the Cost Cash Flow.

Once you have these figures spread across the page you add then vertically for a total monthly figure - and also horizontally for each item total.

Hopefully the big development cost total in the bottom right hand box is equal to the vertical and horizontal totals.

It is - great; go to the top of the class.

Earlier I mentioned that you will have concluded the terms of your development loan.

Well, let’s say that the Lender has agreed to lend you 80% of your costs. This means you have to provide 20% from your own capital resources.

Having got the monthly totals you can now calculate 80% of each figure, because this is the amount on which you will pay interest.

It is these figures that you now calculate interest on each monthly cash flow and arrive at a total cost of the finance for your development.

You now add the total interest figure to the Cost Total and arrive at what we call the Total Capital Cost of your development.

There are a total of about 44 item headings that make up the Cost Side of a Feasibility Study.

Author & $1.2 Billion Developer, Colm Dillon, Has Written The Best Selling ‘How To’ E book, “Residential Development Made Easy,” With Readers In All States Of The USA, Canada, Australia, New Zealand, UK, Ireland and 79 Other Countries Of His Independent Web Site, http://www.realestatedevelopmentcoach.com/ez

Advantages and Disadvantages to Selling a House on Your Own

Writen by Nicole Soltau

As with any business transaction, there are pros and cons to selling your own home. Many people are intimidated by the whole process, but if you know what you are up against, and if you are aware of what needs to be done, you will be more effective at selling on your own, or you will be better at making sure your agent does what you prefer. No matter how you decide to sell your home, involvement in the process is important to ensure that you get the best deal possible.

ADVANTAGES

You do not pay commission. This is the biggest advantage people who sell their own homes receive by not hiring a real estate agent. Some agents charge a flat fee while others take a percentage of what the selling price. By selling on your own, you could save anywhere from $4,000 dollars to more than $13,000 dollars. Whether you want to use the proceeds to purchase another property, invest or save, creditunionrate.com can help you make the most of the every dollar you save.

Home showings take place around your schedule. You can set up scheduled home showings and have open houses to fit the needs of your life, rather the needs of a real estate agent. Additionally, you know that you are home for the showings, and you do not have to worry about someone entering your house when you are not there.

Full concentration on your house. Real estate agents often have multiple homes they are selling at once. This means that you do not have your agent’s undivided attention. When you sell your own home, you know that full effort and attention is going into getting your home sold for the best possible rate.

You control the transaction. Nobody else is in charge of negotiations. You decide when to sell for less, and whether to hold out for more. You can make sure things are done your way, and you do not have to consult an agent before closing the deal. Plus, you “own” your mistakes. At least you do not have to worry about whether the agent is making a mistake on your behalf.

DISADVANTAGES

You are responsible for all of the necessary legal and financial paperwork. This is one of the most intimidating parts of the home selling process. If you sell on your own, all of the transfer of deed, bill of sale, escrow, assessment, and other paperwork is your responsibility. The only thing the seller should have to do is sign. You need to make sure that you have everything in order so that sale of your home is legal and binding.

All listing and advertising costs must be paid by you. The Multiple Listing Service (MLS) that realtors have access to can be pricey. If you want your home advertised, you are responsible for all of the associated costs. Flyers, newspaper ads, online classifieds, and other means of marketing your home can get expensive.

Limited free time. In order to get the best possible price for your home, you must be willing to invest the time. You may that you do not have time to participate in leisure, as you must concentrate on selling your home. And you do not want to be away when potential buyers want to look at the house.

Negotiating skills may not be good. Some people have good negotiating skills, while others do not. If your negotiating skills are questionable, you may find yourself out a few thousand dollars. Be aware that many buyers feel that if you sell on your own, the savings received because no commission is paid should be theirs. Likewise, if you do not do your homework on home values, you may find yourself lacking the confidence you need to effectively negotiate.

After evaluating your strengths and weaknesses, and determining how much time you can devote to the process, you should be able to figure out whether or not advantages of selling your own home outweigh the disadvantages.

Nicole Soltau is the President and Founder of CreditUnionRate.com. The Leading Credit Union Directory. Search, Find, Join. http://CreditUnionRate.com

Fix And Flip The Formula

Writen by Steven Gillman

Making money with a “fix and flip” property is a great way to make money in real estate. However, it isn’t about repairing drywall and planting flowers. It’s all about how you do the numbers.

People often buy and sell a fixer upper without a definite plan. They buy a house, fix it up, then add $10,000 or $20,000 onto their costs. They then put the house up for sale at this price.

Have you ever bought a house according to what the seller has into it? Of course not. You look at similar houses to determine the value. If you have $110,000 into a fix and flip project, and similar homes are selling for $105,000, how much will you get? It has nothing to do with what you’ve spent, does it?

The Fix And Flip Formula

1. Determine the after repair value of the house you’re looking at. Get an appraiser’s help, or look at what similar houses have actually sold for (not asking prices). The price it’s likely to sell for is going to be your starting point.

2. Calculate costs: closing fees, loan fees, document prep, homeowner’s insurance, title policy, repair costs, interest on loans, property taxes, sales commission, fees, title policy, etc. You want projected costs of all four categories: buying, improving, carrying, and selling. Subtract all costs from the expected sales price.

3. Subtract a profit that makes it worth the effort. Now you have the highest price you can pay. You have to walk away if you can’t get it for this price or less. You’ll offer thousands less, of course, to give yourself negotiating room.

A Fix And Flip Example

You’ve found a fixer upper, and determined you can get $98,000 for it when it’s done. Buying costs will be $2,000. Repair estimates add up to $8,000. Carrying costs will be $2,500. Sales commission and other closing costs will be around $8,000. You figure in $1,500 for the “unexpected.” For you effort, you want a $10,000 profit.

When you subtract all of that from your expected sales price, you have $66,000. That’s the most you’ll pay if you want a safe real estate investment. Offer $61,000, and walk away if you and the seller can’t settle on something under $66,000.

You always start with the eventual sales price and work your way back. This is the right way to safely do a fix and flip.

Steve Gillman has invested in real estate for years. See a photo of a beautiful house he and his wife bought for $17,500 on his home page, or go straight to the section on Investing In Real Estate: http://www.HousesUnderFiftyThousand.com

Buying Outer Banks (OBX) Investment Property

Writen by Chandler Spawr

So, you’re thinking of purchasing a rental property at the beach. Historically, real estate investments have proven to be a wise investment strategy. The name of the game has always been maximizing cash flow. Years ago, one could realize a healthy rate of return based on cash flow generated from rental income alone, however, with rising property costs, the number of beach properties with a substantial positive cash flow are dwindling. Fear not investors! The goals have changed, but the market is still strong. In today’s arena, the goal is break even or slight positive cash flow while capital is grown through equity. With annual appreciation rates of 30 40%, investors are eager to tackle a small negative cash flow! Let’s look at an actual example:

Mr. and Mrs. Mainland purchase an Outer Banks rental property in February 2003 for $575,000. They finance 75% of the purchase with a mortgage rate of 4.5% ($2,250 monthly P/I). The 2003 season nets $30,577 in rental income. They cover their mortgage expense ($27,000) with the income generated. Other expenses (taxes, insurance, utilities, property management, etc.) add up to $5,860. That leaves the Mainlands with a negative cash flow of $2,283 for the year, or $190 per month.

In March of 2004, the Mainlands decide to sell the house and net $740,000 from the sale. In the one year that they owned the cottage, their out of pocket expense was $2,283. Conversely, their equity gain was $165,000.* Not a bad rate of return ! In this case, the Mainlands used an IRS 1031 exchange and did not have to pay any capital gains taxes from the sale of the property.

What to look for when choosing the right property.

* Proximity to the Water~> The closer the property is to the Ocean (or sound/bay) the more demand there will be from potential renters.

* Amenities~> Today’s beach homes have every conceivable bell and whistle (pools, elevators, game rooms, tiki bars, etc.). You will need to make sure your potential investment home is competitive with other properties in the area.

* Age of Structure~> Only consider homes that have years of enjoyment left in their lifecycle. If you plan to keep the house for the long haul, this will keep your maintenance and utility expenses down. If your goal is to exchange the property in one or two years, a newer home will be more marketable..

* Protection~> One of the most essential elements to comfortable ocean front ownership is the protective sand dune. You want to choose an area with a high, established, vegetated dune line. This will protect your investment in the case of a tropical storm system.

* Rental History~> If available, get accurate rental records for the cottage. This will illustrate the home’s rental rates as well as any repeat tenants.

* Respected, Hard Working Property Manager~> Your property manager ultimately controls your cash flow. They have the power to book every week available in your cottage, thus increasing positive cash flow or they can do a poor job and leave prime weeks un rented, therefore, increasing negative cash flow. They also have the responsibility of keeping your tenants happy.

* Keep Your Emotions in Check~> Remember, you are buying this property for the renter’s comfort not your own. You may not think a cottage is decorated up to your standards, but you are not the one living in it, the tenants are.

How to get started:

The most important things you will need to get started are:

^ Your target area (town, subdivision)

^ Pre qualification letter from local lender

^ Down payment amount

^ A reputable Real Estate Professional to help you find appropriate properties and generate cash flow analysis’ (CFA’s).

Purchasing an Outer Banks rental property has proven to be a wise choice in today’s investment world. This is evident in the number of investors that continue to re invest in the market. With property values half of that in other coastal markets and historically low interest rates, there is still a fantastic opportunity for growth. One thing is for sure, it would be hard to mirror this yield in today’s stock market!

To get started or the learn more, contact Chandler Spawr, ABR, RRS at 1 800 650 8238 x 225 or visit him on the web at

Chanrock.com

or

OBX Investment Property

*number based on pre closing costs

Chandler Spawr, ABR, RRS Outer Banks Investment Specialist

About the Author

Chandler Spawr is an award winning real estate agent specializing in Outer Banks investment properties. He is primarily a buyer’s representative in the Northern Outer Banks (Nags Head, Kitty Hawk, Duck, Southern Shores and Corolla). Chandler is an Accredited Buyer’s Representative (ABR) and a Charter member of the Worldwide Recreation and Resort Sales Council (RRS). He currently resides in Southern Shores, North Carolina with his wife and two daughters.

The Importance of Internet Marketing When Selling a Home

Writen by Kevin Scolastico

If you want to sell your home, a strong Internet presence is vital. This is because most buyers these days use the Internet to look for homes. Buyers can access more information on the Internet than from any other source. Multiple photos of homes’ interiors and exteriors, virtual tours, interactive maps, easy property search options, automatic email updates of new listings, and other real estate information is available online, making the Internet an attractive place to search for homes.

The use of the Internet by homebuyers has increased phenomenally over the years. An ample number of researches and surveys have been conducted which prove that an increasing number of consumers are using the Internet to buy, sell and invest in real estate.

According to the study conducted by the National Association of Realtors