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Despite the negative press that the housing market experienced at the beginning of 2005, there are a number of reports circulating that suggest that figures have shown an increase towards the end of the year. This is of course good news at the end of what some predicted would be quite a difficult year in the housing market.

However, there still remains a high level of activity from Landlords and investors alike with a number of buy to let mortgage providers suggesting record levels of applications being received.

There is of course the question of what will happen in 2006 and the property market. It is never a precise prediction as there can be many influencing factors but what we do know for certain is that over the last few months we have seen interest rates stabilize and property pricing stablising as a result of this. So does that mean we should avoid investing in property until the market starts to increase again. In some respects many people might suggest that investing in property at any time is a good investment. When you consider that historically property has doubled in value, and sometimes tripled in value, every last 10-15 years, then it is likely to see you a good return on your investment if you are prepared to take a long term view. For those looking for a get rich quick overnight scheme, then this is not for you. But when you consider the long term gains, it might be worth reading on and don?t forget that it is worth doing plenty of research and finding out as much as you can about investing in property. Perhaps pick up a Free Buy to Let Guide.

How to make ?166,500 in 15 years

According to research from the Centre for Economics and Business Research (CEBR), the average cost of a home in the UK could be ?300,000 by the year 2020. Currently that figure stands at around ?157,000 in 2005 which represents an increase over the next 15 years of 91%.

This figure of ?300,000 is achieved by the economic forecaster basing its prediction on the ever increasing population compared to a slower production of house building. As with many commodities, it is the result of lower supply and higher demand that will push up these prices.

With buy to let residential investment property, the maximum loan you can apply for is 85%. Based on an average value property in 2005 of ?157,000 this would require you to put down a deposit of 15% ?23,550 subject to valuation and rental cover which can vary between 115% to 130% in most cases.

Potentially over the next 15 years, this one investment could realize a return of ?166,550. This is based on selling the property at ?300,000 less the loan of 85% of the property value in 2005.

Over previous years there have been times when property has declined in value and other times where it has signifcantly increased in value but a good property investor will clearly see the benefits in both a rising and declining market and will utilize the facilities of a good buy to let mortgage provider to assist in this. For example:

During a rising market, a property investor may decide to use this window of opportunity to release some of that equity realized in the value of the property, to use for additional property investment. However, the property investor is less likely to use that capital released during a rising market. Instead, the landlord will wait until the market has re-stablised itself or experiencing a decline. At this point, they will then use this window of opportunity to purchase lower priced property and the circle continues. That is why property investors are in it for the long term and why they see the market as being profitable to them in all conditions. And when you consider that property prices only need to increase by an average of 4.4% year on year, it is easy to see why this type of investment is so achievable.

Successful property investors will do a lot of research on areas that they believe will become property hotspots and areas which are less likely to perform. There are many areas experiencing high levels of growth and financial investment with a lot of regeneration programmes in place or planned in the future. Even by simply monitoring publications such as Construction News can give a good indication of where new commercial premises are being built which can be a good indicator of new businesses moving to the area which it turn can lead to an increase in demand for property locally.

It is the general consensus that interest rates have stablised and there is even speculation of a drop but either way, they have been steady for a good number of months now. Slower capital growth does result in buyers having to put more effort into managing and developing their portfolios. And more importantly making a profit from property. Buying property at discounted prices can be done but you must do your homework to make sure they are genuine discounts and incentives. And don?t forget that in a slowing market, vendors will be more likely to listen to your offers. Albeit if they are a bit cheeky. In particular, you can use the negative press that is often surrounded by the property market to your advantage. For example when the media are circulating stories of a dropping property market, Read more…

Suggesting the use of a franchise business as a vehicle for family estate and tax planning. Specifically using as an example, The Car Wash Guys, a portable car wash franchise, where you will be purchasing a completely designed and outfitted car wash truck and the right to develop a specific city or regional area with out of pocket start-up costs between $25-50,000. There are many other types of mobile franchise busiensses in the same general price range due to competitive market components.

Many questions on the minds of parents wishing to establish and perpetuate multigenerational estate assets for growth and eventual transfer. Programs they wish to develop can range from the simple gift to complex estate restructuring.

How can you help your children start a business that does not have extreme start-up costs, extensive asset liability and has a greater chance of being profitable?

What type of business could you establish, nurture and grow, that has a greater chance of being successful, increase in value over the years and is easily divisible among children with different management abilities, different interests in owning or running a business and who live in different cities?

What type of business can be owned and operated by a family limited partnership that wishes to diversify their holdings and add a ?business interest? to insure qualification by the IRS for the valuation discount when gifting minority interests?

Family Gifting Using the Annual $10-20,000 Exclusion Gift Per Child

Usual gifts are the funding of IRA?s, pensions, additions to stock, bond, mutual fund or annuity accounts, purchase life insurance, fund education or special travel expenses. There is a desire for these gifts to be productive, protective, have long-term value, distribute income and have growth potential. A franchise business addresses all these issues.

Why not help your heirs purchase a mobile type franchise, such as a Decorating Den, Oil Butler, Dog Grooming Franchise or perhaps a Car Wash Guys franchise business? Two parents can gift in one tax year the out of pocket start-up costs to purchase this business. The other costs can be financed. When there are several children that live in different cities or just have different ideas of how to run things, the purchase price of this franchise business is low enough so that each child can have their own business. To accommodate the annual exclusion gift amounts per heir for families with multiple children and grandchildren and for families that wish to establish business area dominance, arrangement can be made with These types of mobile franchises like the Car Wash Guys can be purchased for several cities or several regions. If you discuss this strategy with the franchisors of such businesses they can assist you in accomodating your needs, after all they also want to sell franchises and extend their brands in as many places as possible.

Planned Asset Transfers To Children

Assets managed by parents for later transfer to their heirs include securities investment portfolios, real estate portfolios and personally owned business interests. There is a desire for these assets to have a greater chance of maintaining their success, increase in value over the years and be easily divisible so that all the children can be treated individually and fairly. A franchise business addresses all these issues. And when selecting an appropriate opportunity, why not make your new business venture an adventure full of personal growth, civic recognition, financial reward, fun and enjoyment for all.

Why not purchase a multiple city or multiple region Mobile Franchise franchise business? As a franchise purchaser you will be joining a proven system so that no prior business experience is needed for your new venture. You will be putting more odds for success on your side. As a Franchisee purchaser you will be joining a dynamic team that will enable you to be in business for yourself but not by yourself. A franchise business has an established ?floor value? that should Read more…

Seems almost every situation in our lives is centered on communication. Good or bad, the way we express our thoughts, wants, and needs to each other determines how we live, love, and learn together.

As a guy who is a regular on the seminar circuit, does a live radio show, an HGTV television show, writes books, columns, and articles, and all the while runs a thriving home inspection company, I get to do a great amount of communicating. Some of that communication is by transmitting; some of it is by receiving. After much reflection, I have come to the conclusion that nothing is learned when we transmit, but great gains come from receiving. That is to say, we learn when we listen, not when we speak.

Not a day goes by that I am not listening to Realtors. Most days I listen to more than a few, some days more than a dozen, and on occasion, I listen to hundreds at a single seminar sitting. The things Realtors tell me help me get better. Better at home inspecting, better at dealing with customers, better on the radio, just better at every aspect of my professional life! But all that input is not without moments. Those moments range from the amazing to the zealous, sad to humorous, and brilliant to well, less than brilliant!

One of my favorite Realtor quotes follow, complete with my thoughts and commentary. A disclaimer before we begin, if this particular quote sounds like you, know that none of what follows is from a single source, but representative of things I hear on a near daily basis.

“You don’t need a home inspection, you’re getting a home warranty”.

Seems to make sense to some that if items are warranted, their condition is of little importance. But among the problems with this thought are:

All items that might fail may not be warranted, and
Items presently not functioning would be exempted from coverage as an existing problem.

When explaining the relationship of the home inspection to the home warranty, consider the home inspection to be a physical exam and the warranty to be health insurance. Would you ever expect to hear someone say, “you don’t need a physical exam, you’ve got health insurance”? Doesn’t seem to make much sense, does it? That is essentially what we are saying to our customers with the “you don’t need a Read more…

Everyone knows that at the end of a home inspection, a report is generated that outlines the findings of the home inspector. But did you know that this is not intended to be a “hit list” of negatives? Us home inspectors do what we do in order to objectively describe the home. This is not the place for emotion, rather a simple stating of the facts. Homes do not pass or fail inspections, they merely describe the strengths or weakness.

Inspections are also not intended to favor buyer or seller. In fact, the greatest flattery an inspector can receive is for the seller of a recently inspected home to call the same inspector to inspect their next home. This action tells all that the inspector discovered every defect known to the seller, discussed and documented those defects in a fair and objective manner. Furthermore, any unknowns discovered were likewise handled with objective fairness. This outcome should be the inspector’s goal for every inspection.

Sometimes situations do arise where the person who contracted for the home inspection chooses not to or is unable to complete the transaction. When a new buyer is found, it is a common thought to use the previous report as a decision tool for this new buyer.

This is an extremely dangerous practice!

This is among the prime reasons that nearly all inspectors stipulate in their inspection agreement that the home inspection is considered a confidential communication between buyer and inspector.

Why do inspectors feel so strongly about this particular piece of the issue? Primarily because?

The written inspection document is not the complete home inspection experience!

What? How can this be?

Because, the written document only supports the observations and dialogs exchanged by all parties at the inspection. While it is certainly correct that all that is written in the report and all that is said at the inspection should be consistent, the total understanding by the buyer of the inspection comes from blending the observed with the spoken and with the written.

A new buyer viewing only the written portion of the inspection is missing much in the understanding, perspective, and context of the total inspection experience. This is a high-risk practice and should always be avoided.

Old Reports for New Buyers. When the original buyer leaves the transaction, generally the inspection report goes with that buyer. Because of the issues of confidentiality and, just as importantly, the completeness of understanding by the new buyer, a new inspection should be ordered.

However, in some cases, the original buyer, being the kind and decent souls that they are, will sometimes give the now “useless” report to the agent, who now has another party interested in the home. How wonderful! More often, however, the original buyer of the home inspection does not know of the report handoff.

The agent and the new buyer can now use the old report as a decision tool, and all without expense. The agent is a hero to the new buyer!

Yikes! No one told the new buyer about confidentiality, or about completeness of the inspection report and experience. But, even more importantly, no one told the new buyer that there is another key reason not to engage in such a practice – things change!

An inspection report is a snapshot in time of the observable conditions of the home. That picture can change in an instant!

Things do happen to homes. Should the roof now leak or the air-conditioning now not cool, this would be an unknown to the buyer. Whether or not the seller knew is a whole other issue.

The buyer, after taking possession of the home and discovering the failure and expense to repair of failing systems, has been harmed by the lack of documentation of defect in the written inspection report. When people feel harmed, they seek relief.

When such is the case, most buyers will initially seek relief from the home inspector. Several Read more…

As sure as the spring flows at the Fountain of Youth, a home inspection provides a stream of knowledge to wash away the fears of homebuyers. But fear may be replaced by frustration if the wrong inspector is chosen!

Should Tradesmen be Home Inspectors?
There are some who say that the best home inspection is an inspection where all the trades are represented by a tradesperson from each specialty. It is said that this situation brings individual and specific expertise to each system. Reports would then be made separately to the homebuyer. This argument states that no one knows plumbing better than a plumber, roofs better than a roofer, or electric better than an electrician, etc.

I will support the idea that no one knows each trade better than a person specifically from that trade, but that approach to home inspecting has several glaring flaws.

Flaw #1.
To inspect the entire home using individual trades people would require more then a dozen people. Roofer, plumber, electrician, framer, mason, heating, insulation, painting, landscaper, pool, fireplace, appliance, tile, and we still have windows, doors and more! For scheduling and crowd control alone, this is a bad idea. However, if we can overcome that problem, then why not? Moving on.

Flaw #2.
It would be difficult to find a dozen or more trades people to do this inspection without the intent to solicit repair work. There is no ethics position that precludes each tradesperson from soliciting work in their chosen trade. That is what trades people do; they work in their trade.

This ?looking for work? mentality puts the objectivity of the inspection process in jeopardy. While it may be appropriate for the tradesperson to make suggestions for improvement or upgrade to a homeowner, this approach is not best suited in the buying process, where the desire is principally of the inspection process to determine if exiting systems are functioning as intended, and perhaps answer component life expectancies questions.

Flaw #3.
The biggest problem, however, with bringing in a Read more…

Congratulations! You’ve decided to purchase a home. We all know that when purchasing a home, every detail is an important one. And choosing a home inspector is no exception. It’s critical to choose an inspector the same way you’ve chosen a real estate professional – very carefully! You’ll get a great educational experience when you hire a professional with the right credentials.

Working with a home inspector isn’t complicated; however, unless armed with the right questions to ask, you may get stuck with a less than capable individual. Here are my top 8 questions to ask your next home inspector:

Does the inspector come from a construction background?It’s great that your inspector is a nice person, but what did they do before inspecting homes? Do they bring a wealth of knowledge about the construction trades, building, or remodeling? Or were they a hairdresser in a previous life? Don’t get me wrong, I’m not picking on hairdressers – but that occupation certainly doesn’t have anything to do with inspecting a house!
Does the inspector hold the appropriate license and meet all requirements for home inspectors in your area or state, and where can you go to verify this license? This question may not be applicable in all states – there are states without licensing requirements for home inspectors. But if your state has some kind of requirements, you need to know what they are, and where you can go to verify that your chosen inspector has done what it takes to be state-compliant. Verification is essential, because many states have the capability to track continuing education of the inspector as well as complaints.
Is the inspector a member of the American Society of Home Inspectors (ASHI)?This is critical! ASHI is the oldest, largest, and most respected organization for home inspectors in the country. They also maintain the highest standards and ethics for home inspectors. If your inspector is a member of this organization, you can be sure that they have passed The National Home Inspectors Exam, and they have completed all training and administrative requirements for membership. You can even verify membership status at www.ASHI.org. The inspector may be a member of other organizations, but none have requirements as strict as ASHI. And don’t be fooled by those companies who claim to inspect to “ASHI standards” – if they aren’t a bonifide ASHI member, find another inspector.
How long has the inspector been in the inspection business, and how many inspections has he performed during this time?Longevity gives comfort that the inspector will be with you in the future as new needs and issues arise. But if he’s only done 12 inspections during his several years in business, that’s not good! Your home buying decision is far too important to be a practice place for a part-time inspector.
Does your inspector have experience in homes similar to the home you are having inspected?All homes have some systems and features in common, but a brand new home has risks and issues that differ from an historic beauty from the year 1855. Only someone who has walked the walk and crawled the crawl numerous times in similar homes can sleuth out those important items that are specific to your age, size, and type of home.
Will your inspector walk on the roof, crawl in the crawlspace, go into Read more…

I do not profess to ?Know? what the real estate market will do in the next year or two, but I would like to share some information with you that might help you in making decisions regarding buying or selling property in today?s market. The following information relates to the types of mortgages that are currently being taken out by those who are currently purchasing or refinancing homes. Statistical surveys of the mortgage market shows that the percentage of adjustable rate mortgages comprised over 60% of the loans obtained in the last fiscal quarter. Even though the traditional 30 year mortgage is still very low in terms of historical comparison, buyers and homeowners that are currently buying or refinancing are electing to go with the adjustable rate almost two thirds of the time. Does that mean that they expect interest rates to go down even more, or is it because they can no longer afford the Read more…

Do you feel there is going to be a real estate bubble?

Nash: No. Are some coastal and resort markets over-heated, yes. I don?t feel that markets will collapse. But investors and property owners should be ready for longer market times, diminishing over-full-price and multiple offers in over-heated markets. Prices could plateau and appreciation levels will hover at more historical levels. If you live out-of-town from where you purchased property on appreciation speculation, I would keep in very close contact with a un-biased professional in the market, daily.

Have real estate appraisers contributed to the rapid increase in home prices?

Nash: Not necessarily. You have to understand their role in a real estate transaction. They are hired by the mortgage lender to appraise the property. The homebuyer pays for the appraisers services. The lender is in business to lend money and the real estate brokerages want to close the transaction and receive their fees. In most markets there are solid closed comparable properties that justify underwriting the loan. In rapidly appreciating markets, where there are no closed comparables to support the new value, all the participants in the transaction should be aware that there is risk involved in the new value assigned to a property in a real estate contract.

What should homeowners and investors do to protect themselves from a potential bubble?

Nash: Look for incentives by builders on completed new construction buildings or homes; this indicates an over-supply of new units. Research days on market or the length of time of property has been on market. If the typical time recently has been 30 days for sold properties and current market times for the majority of sold properties are 60 or more days, the market is softening. Home prices and mortgage rates effect each other, as interest rates drop, the more buyers can afford to pay for a home, but as rates rise buyers can afford less of a purchase price. Watch interest rates as an indictor of deflating prices.

What is your position on interest only loans?

Nash: Consumers need to look at the long-range implications of interest-only loans. They should keep in mind that if their home value declines, they still owe the loan amount, which could be higher than their homes market value when they sell. If appreciation remains low, in the two to five percent range and the cost to use a full-service real estate company to sell their home is five to seven percent, their appreciation will actually go to pay selling and marketing costs, ouch!

What do you think about two new books:? Irrational Exuberance? and ?Freakonomics? that touch on residential real estate?

Nash: Both make solid contributions for real estate consumers and investors in today?s environment. Everyone is looking for information to make real estate decisions. While there are many inflammatory headlines, I?ve found the majority of the accompanying dialogue; offer good market and real estate practices advice.

The term Realtor? is generic to most consumers but are all real estate agents Realtors??

Nash: No and the National Association of Realtors? (NAR) is diligent on protecting it?s status as an registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL Read more…

Once relegated to the classified advertising section of the local paper, real estate has jumped to front-page headlines and covers of national magazines. Leaders in the real estate industry are weary from interview requests for their perspectives on market conditions, the ongoing battle with the banking industry looking for entry into residential real estate brokerage, online brokerage commission discounters and investigations into their business practices from the U.S. Department of Justice.

The headlines threaten a correction in real estate prices, protectionist real estate trade associations, traditional versus Internet brokerage business models and a consumers right to a competitive marketplace for real estate services. Be aware of the issues and determine if they relate to your real estate investment goals.

Banking.

Two of the strongest industry trade associations, banking and real estate, have been waging a battle over the right of banks to offer real estate brokerage to consumers in addition to other financial instruments such as mortgages, securities and insurance which they currently market to customers. The National Association of Realtors? testified at hearings with the House of Representatives Committee on Financial Services that allowing banks into real estate will cost consumers more through increased real estate service fees.

Bubble talk.

It?s a fact that talk of a real estate bubble has the attention of consumers. Hitwire an online monitoring service reported that searches for ?real estate bubble? and ?housing bubble? peaked at their highest level in the last twelve months for the week ending May 28, 2005. The expanded coverage and dialogue of real estate market practices and markets is an overdue educational resource for individual real estate investors.

Discount commissions and the Internet.

Discounted commissions offered by limited-service brokerages which often feature a strong Internet presence, helped this real estate business model to flourish. At issue is a discount broker using the listing information originated by a competing broker on their website. The broker who originates the listing information feels that they own the information and can ?opt-out? of sharing it with competitors. Meanwhile the discount broker complains that being denied the information doesn?t serve the consumer and feels it?s anti-competitive. Read more…

Not so, says the author of this article and four real estate books including the recent ?1001 Tips for Buying and Selling a Home?. The upside of the hype is for real estate consumers and investors. The housing bubble topic has produced real estate market information for new or nervous investors about specific markets. Little reporting on the bubble topic exploits the ?sell now? syndrome. The downside of the hype is the occasional real estate industry naysayer (never say never?) who has a financial interest to protect.

Media stories have included balanced perspectives from real estate analysts, brokers, consumers, educators, and trade associations. Their experiences remind us that real estate remains a market based upon supply and demand. The value for consumers is the wealth of updated information about their market and current real estate practices. These new resources help them make informed investment decisions concerning the management of their Read more…