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In Australia over the past 50 years property has averaged around 10% p.a. compound growth. (Carefully selected properties have averaged even greater returns). Not forgetting that investment properties also generate an income from rent.

Median priced property has averaged growing at 2 ? 4% p.a. higher than inflation, making it a very solid investment.

It seems apparent that one of the most effective ways to build riches is to accumulate a portfolio of investment properties (over the space of 7 to 10 years) and then let the power of Compound Interest work to your benefit.

The main reason that property can be utilised more effectively than shares as an investment, is due to the added benefit of being able to highly leverage an investment property.

Leveraging is where you use a small portion of your own money along with a large portion of someone else?s money (a bank loan) to secure an investment of a far greater value than you could have, using only you own money.

If you invested $10,000 directly into shares that were growing at 10%, then in 7.2 years they would be worth around $20,000. On the other hand if you had used that $10,000.00 as 5% deposit on a $200,000.00 property and borrowed the remaining 95% plus establishment costs. If this also grew at 10% then in 7.2 years your investment would be worth $400,000.00. Meaning that by leveraging your investment you have gained an additional $190,000.00.

It is possible to borrow 100% of the purchase price of a property plus expenses by securing the deposit against your own home, so that you don?t need a cash deposit.

There are two types of Debt. Good Debt is where you borrow funds to secure a capitally appreciating, income-producing asset. Bad Debt is where you borrow to buy a capitally depreciating, non-income producing item such as a car, boat or holiday.

There are many different strategies for property investing, which suit different people depending on their current income or financial position.

A combination of using Good Debt to buy property and then allowing Compounding to do its work ? is probably the most effective way of creating wealth. But this is definitely not a ?Get rich quick scheme?, on the contrary it is Read more…

Baby boomers face a bleak financial future. This all too common line seems to be finally sinking in, as many of the baby boomer generation are beginning to take a proactive approach to their retirement planning. As well as increasing personal superannuation contributions, many have begun to look at direct investing in both the share market and property markets. Unfortunately many of the property marketeering companies operating in Australia have sought to take advantage of this, and have targeted their marketing campaigns at them.

Two tiered marketing, where property companies sell investment properties (often off the plan) to interstate buyers, who are unaware of the current genuine market climate at highly inflated prices often $30,000.00 to $50,000.00 above true market value, have been rife in Australia for several years. The companies have a highly organised and professional approach, beginning with a free seminar that highlights the advantages of property investment and then offers a free assessment with one of their representatives to see what their current financial position will allow them to afford. After the initial pre-approval for finance process is complete they are offered free, or highly subsidised air fares to view interstate properties. The condition being that if they don?t purchase they will have to foot the bill for the air fares. On arrival the first stop is to visit the finance broker to confirm how much they can borrow, followed by an intensive tour of properties in their price range. The day concludes with another trip back to the office, where they are encouraged to sign the dotted line and purchase the property on that day. High pressure sales tactics are employed throughout.

The book ?How to Research Investment Properties? by Debra Lohrere aims to educate people about how to carry out their own assessment of properties, so that they will be able to recognise the difference between a good buy and a highly inflated proposition. It begins with a brief introduction of the amazing potential that property investment has for creating substantial wealth and providing for a financially secure future. It discussed what type of property should be sought after and the various features that are desirable to make a property both easy to rent, and give it the potential for the greatest capital gains.

It discusses the varying price ranges of property – low end, median priced and high end properties and explains the advantages of each.
It covers the topic of Positive, Neutral and Negative gearing with an explanation of how these can all effectively be used. It Read more…

Would you like to receive 15% to 50% return on investment (ROI) guaranteed by the government? Tax lien certificates (TLC) offered in many states and counties in the U.S., U.S Virgin Islands and Puerto Rico offer returns that high. While most states offer less than 50% your investment may be safe because it is secured with real property. A TLC is a note issued by the county or municipality on properties that are in arrears with their property tax. Some states allow these notes to be senior to all other mortgages and liens, including federal tax liens. These notes are sold at auction by the individual counties, municipalities and/or states that issue them. Investors receive a fixed amount of interest monthly written on the note for a specific time period. This amount is state mandated. If the outstanding debt is paid before the term of the loan ends, the government will send the investor a check for the initial investment and all outstanding interest due. These note terms typically run for one to three years. If the property owner does not pay, you may have foreclosure rights; the government may send you the deed to the property. This means you may realize a huge ROI.

There is some risk involved with the purchase of TLC?s. The purchase of tax sale liens of properties under the control of Federal Deposit Insurance Corporation (FDIC) and those affected by the Drug Enforcement Administration (DEA), or if the owner files bankruptcy could possibly result in the loss of your investment. With due diligence, this risk can be reduced. Remember, not all TLC?s are equal, some are better than others. Sometimes you will have to fight it out in court with other lien holders if it gets to the foreclosure stage. Proper title and bankruptcy research should be done or your tax lien may end up worthless. Inspect the property to insure you are getting some value. I Read more…

Turkey has provided big advantage to the investors since it is a growing market and has friendly environment with one-stop investment opportunity. In the year 2002 its market share is 1.7 by visited13.2 million tourist and generated 8.5 million revenue. Those figures were recorded 5% higher for 2003. According to World Tourism Organization Turkey will be the fastest growing country in tourism demands with an annual rate of .

As it has been ranked in the world first fifteen destination by 14 million visitors a year Turkey has tried to offer different projects to have developed its accommodation facilities and tourism kinds. In order to diversify the tourism product Turkey has promoted the sites located inland areas to those having different taste than 3S (sea, sand and sun) combination and coastal region as well. Currently, tourism activities in the country are concentrated along Aegean and Mediterranean coasts where about 80% of Turkey?s bed capacity exists. However investments have been made on accomadations are not sufficient to correspond the future tourism demands that will be directed to Turkey, therefore Turkey has a strong desire to attract both the national and intenational investors particularly in the regions mostly visited.

The sites and lands that would officially declared as `preservation and development areas of culture and tourism regions are being planned by the ministry of Culture and Tourism. Ministry has opened up the areas for investments in terms of its priority having as a destination. For the officially designated sites, the land allocation process for the investors will be started by the approval of the macro physical plans. The physical plans for the whole region or the sub-regions, are made/get made and approved by the Ministry.

Those sites where investments would be directed are Dalyan, Tarsus, Didim, Antalya and Istanbul. Attached you will find power point presentation on the regions above. Moreover so far 160 tourist centers have been designated under the Tourism Encouragement Law. Aside those sides that are still in progress, Ministry of Tourism has provided parcels on the coastlines in the well developed tourist regions such as Belek, Kemer, Fethiye.

The Tourism Encouragement Law was newly updated. According to new procedure, whole region or one lot of it may be allocated to a main investor. In this case the decision is put in force by Council of Ministers and pre-permission is given to this investor by the Ministry. In case of approval of the project of the investor by the Ministry, following the arrangement of the investment license, the pre-permission is turned into the final permission by the Ministry. Investors will be determined via open tender and in the designated sites and regions, they would get an easement, including autonomous and permanent right of construction. This type of right institution allow investors to get mortgage from national or international markets. Furthermore investors have the right to sell the area or the construction to the third parties without permission of the Ministry.

The idea behind this Law is to encourage land development projects and tempt international chains and trademarks.
Furthermore those provided under the The Encouragement of Tourism are mainly:
– Allocation of public land to investors for tourism investments
– Permission to employ foreign personnel and artists
– Discounts on water, electiricity and gas prices
– Priority in allocations of telephone, fax and telex lines
– Tax, Duty and Fee exceptions, such as VAT and Customs Duty

To benefit from incentives, investors should obtain an incentive certificate from the Treasury Undersecretariat and a Tourism Investment Certificate from the Ministry of Tourism.
The following are the types of investment for which Tourism Investment Certificates may be issued:
1. Accomodation Facilites
2. Dining and Entertainment Facilities
3. Auxiliary Service Facilities (such as, beach facilities, congress and exhibition centers, theme parks, golf facilities)
4. Tourism Complexes
5. Personnel Training Facilities
6. Yacht Tourism Facilities

The most important aspect of any investment, particularly a tourism investment, is location. A choice of location has a direct impact Read more…

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…

When looking to invest in property it?s always important to take a structured approach to ensure you get only what you are looking for.

Step 1 – Research Research Research :

This is possibly the most important aspect of any investment decision. When talking about ‘researching’ a potential investment, what it means is to do all the necessary homework to find out if the investment is right for you and if it will provide the return you’re looking for.

Sometimes it is tempting to overlook research and maybe follow a tip from a friend on a potential investment. Many people also don’t do research because they don’t know where to find the required information and so they may make a blind investment, hoping on good returns. Even worse, they may put off making the decision (to invest or not to invest) and stay stuck in procrastination while the asset starts to show strong growth.

So what needs to be researched before investing in property?

Location – such things as the population, main industry, main employers, future investment in infrastructure, tourism, local universities.

Property prices – average, median, recent sales, potential rental returns, previous and predicted growth.

Tax and ownership laws ? country and state laws, occupier/investor tax rates.

There may be more areas you need to research depending on your situation but the main objective here is to carry out the research to a level you are comfortable with. You can never do too much research.

Thorough research will give you peace of mind to make confident investment decisions.

Whatever you are trying to achieve, someone has already done it before and the information is out there. It may be in books, newspapers, special reports, published on the Internet or available from real estate agents. You can find the information you need to make a confident investment decision.

Step 2 – Know your Numbers :

Note: This step primarily deals with rental returns and does not take a property?s annual appreciation or depreciation into account.

Before investing in property it?s important to do the numbers to know

What you can afford to purchase.

Purchase and ongoing upkeep costs.

Potential rental returns

Monthly cash surplus or deficit

Once you know all of these figures you can then decide how much you can afford to spend within your budget, what rental return you?re looking for and whether you will gain a monthly cash surplus or if you will need to contribute towards its monthly upkeep.

So what are the common numbers to know and calculate?

The Purchase Price

Purchasing Costs ? items such as Stamp Duty, legal fees, real estate agents? commission, legal fees.

Rental Income ? If the property is rented to tenants, how much rent can you charge?

Ongoing Costs ? Management Fees, mortgage repayments, repairs and maintenance, letting fees, Municipal or

Council rates.

Net Return ? this is the end result once you have accounted for all of the income and expenditure and it will show if you will have a cash surplus or deficit.

The more properties you calculate returns on, the better idea you will have of what is available in the market to suit your requirements. You?ll also protect yourself from any surprise costs. It?s wise Read more…

First – buy in a rising market.

Try to select a country or region where property prices are rising. A totally obvious statement, but this underpins most successful investment plans. It just makes everything easier.

People who buy in flat markets to make money have to work a lot harder to find property that is valued below the market price because it is less visible and so has been overlooked.

People who buy in falling markets must have motives other than making money.

Rising markets are driven upwards by demand exceeding supply. This usually happens in the early stages of the market?s development where builders cannot ?tool up? as quickly as the buyers rush in. When they do ?tool up?, unless inhibited by restrictive planning laws, supply will ultimately match demand making for a flat market. After that supply will exceed demand for a while making for a collapse in prices and a period of stagnation before demand and supply rebalance.

We are seeing this over supply happen in some areas of Spain at the moment, most obviously on the Costa del Sol but in other areas property prices are still rising e.g. Costa Calida property Murcia.

Second – know when to sell.

Having decided to invest an exit strategy is needed. You need to be able to sell the property at a profit. This can be done in a rising market. If you purchased early in the rising market you can sell in a flat market and still profit. You can?t purchase in a flat market and sell in the same flat market and make a profit without first adding some value to the property, perhaps by refurbishment or building an extension, etc.

You must also take into consideration the selling costs although there are an increasing number of web sites offering free property sales services under the banner of ?for sale by owner?.

The difficulty is in knowing when the market is going to turn flat. This can only be known with hind sight. The last year of a rising market is also the first year of a flat market if the year following turns out to be the same as its predecessor. This gives rise to the TWO YEAR rule ? If you purchased within 2 years of the market going flat you purchased too late and into a flat market.

Third ? recognise the market cycles.

A typical market cycle of ten years might be four years rising, two years flat, four years falling. The problem is that you don?t know that the market has turned until year six, when it is too late.

The answer is to be an ?early bird? investor. In a ten year market cycle you have just the first three years to stake a profitable claim and no more than the three following years to exit with your profits. This is the ONE THIRD RULE. Buy in the first third of a rising market.

Fourth ? investing for the long term.

Some people invest for say twenty years ahead. The logic might be that although they miss out on the first market upswing, the following one will start from a higher base and the top of the second upswing will be even higher. The issue then becomes how can the property investment earn its keep in the years before it is sold?

The usual answer is to ?rent it out?; buy-to-let investing has become very popular over recent years. This is also the plan of many investors who don?t have the capital to put down and finance the purchase on borrowings. There is a very simple calculation that tests the validity of this approach.

Start by ascertaining the realistic rental potential of the property. If it is a holiday property and it will only rent during the holiday season you will usually get a maximum of 90 days rent per year. From this you have to deduct any fees agents might charge. Good examples of this type of property are coastal holiday apartments in Bulgaria.

If it is a holiday property with added attractions e.g. golf, sailing, winter sports, theme parks and or a long or year round season; then the property can be rented out for longer, perhaps 60 ? 80% of the time or more. Good examples of this type of property are Bulgarian apartments in the mountain ski resorts, property in the Canary Islands and property in Southern Spain.

If it is a year round rent it will be being offered in the local market at lower rates. Whichever is appropriate you will have a net figure to count as income. However, also remember that in most countries income is subject to tax and property taxes also apply, so the net figure has to be carefully considered.

Next, take this net figure and divide it by the rate of interest you have to pay for the money. Don?t worry, if you use a calculator the process is easy (if you are good with figures you can show off and do it in your head!). An example goes like this:
Net rental income ?5,000 divided by the interest at say 5% = ?1,000.
Now multiply by 100 to bring the figure to one hundred percent = in this example ?100,000.
Thus your rental Read more…

Investment requires prudence. Whether the amount is small or big, you need to have complete information about the place or field where you are going to invest it. Investment is most often made with a purpose to accrue good returns in future. Investment is like a source of income where initially you put in some capital and expect it to multiply or boom in the near future. There are various types of investments nowadays and different strategies are associated with them. Investment can be in the field of property, land etc., in the stock market, in bank in the form of fixed deposits, in trusts and insurance policies.

? When you move out to invest say for instance in property, the strategy of buy for low and sale for high prevails. In the language of investment this is called the ?arbitrage?. What you require first of all is a perfect idea of the fluctuating market. When the market value is low, make as many purchases as possible. When the market as you assessed picks up pace, sell whatever you purchased at simply double the price. This profit however is not possible without a vigilant study of the market. An investor who has scrutinized the market from top to bottom predicts the highs and lows of market and makes purchases much before the onset of the profit season.

Arbitrageurs are very smart nowadays. In order to incur huge benefits, they even go about purchasing some very archaic piece of furniture or property from a low price market, invest a few more bucks in its renovation and then sell it in an expensive market or put it up at auction on the internet.

There are times when massive investments are being made in one area, this is known as the ?market bubble?. Take for example, if a piece of land in a specific area is inviting too many buyers and that too with unbeatable profit, there is a horde of investors to purchase land in that area and sell it for the maximum possible. Similar is the case with the stocks of a company that is giving brilliant dividends to its stock holders, if the company lowers even a single dollar on its stock, multitude of people gratify their desire to receive excellent gains later.

? Related to this is the ?value investment?. Here the investor estimates the value of the company in the form of its returns. If a company has a good record with its shareholders and its shares are relatively at a lower price in the market, Read more…

A lease, by legal definition, is considered to be a contract that allows the use or occupation of property for a specific period of time, with a specified amount of rent. There are different lease types, all with variable conditions and subject to the laws governing each state.

Different types of lease:

Finance lease

Also called a financial sale, it allows for the benefits of flexibility as payments are spread out to a period of several years, often the equivalent of the actual cost of the equipment or property.

A common misconception is that payments made for a finance lease equals to ownership, but this is not always true. Nevertheless, the lessee does have the option to purchase the property after the lease expires, for a significantly much lower percentage of the actual cost.

This kind of lease, however, is not suitable for individuals who wish to acquire rapid tax benefits.

True lease

Also referred to as a tax lease, this is the better choice when one wants to have rapid tax benefits.

It is also advantageous to professional institutions, as the lessor still remains the owner of the equipment, thereby trimming down costly investments when it comes to computers and other office-related gadgets that are prone to becoming technologically obsolete.

You will get the advantage of lower monthly payments as compared to that of a financial lease, and in some instances, these could actually be tax-deductible. When the contract expires, the lessee is given the option of purchasing the property for a very minimal amount.

Operating lease

This is considered, in general, as a short-term lease, usually three years or less. It is often associated with high-tech equipment, or property that is prone to becoming technologically obsolete.

In this type of lease, the lessor takes more of a risk in ownership, therefore allowing for much lower monthly payments for the lessee. The lessee also has the advantage of the lease being considered as neither an asset nor a liability when it comes to taxes.

The lessee also has the option of buying the Read more…

Every real estate investor dealing in rental homes has done his own clean-up and fix-up, at least in the early years. Landlords also become very skilled at managing tenants after being burned a few times.

You learn the tricks of the trade and how to get the best results for the least cost. Maybe a few of these tips will be new to you.

You can give kitchen cabinets new life with a liberal application of Liquid Gold.

Everyone has at least one chip or scratch in the porcelain on their refrigerator, bathtub, stove (except high heat surfaces), sink, washer or dryer. The solution? Touch up that nick with a tough porcelain glaze called “Porcelain Chip Repair”. Just dab it on with the built in brush and it hardens in 24 hours. If your hardware store does not carry it you can find it with a Google search.

You can quickly clean black scuff marks from vinyl floor covering with a squirt of WD 40 lubricant and a rub with a clean cloth.

Put a shiny new strainer in the sink drain. Then install new handles and drawer pulls and you often have a minor kitchen miracle.

Get rid of globs of sticky adhesive residue with Goo Gone.

When tenants move out they seldom do a really good cleaning job on the oven… or the dishwasher.

I’m sure you have discovered the many effective oven cleaners, but how about that gunk caked onto the inside of the dishwasher?

Try a product called “Dishwasher Magic”… found in many markets and some hardware stores.

The label reads “Removes Lime Scale, Rust