Properties Investors

1. Get the best possible deal on your home loan

Did you know that most banks only give their new customers the best discounts on their loans?

The banks know that if you have your cheque account, credit card and home loan all with one bank then you are less likely to change lenders. So of course they try to get more money from you!

The solution is to talk to your mortgage broker to see what is on offer from your bank and other competing banks. Best of all this is free!

The savings can be substantial! If you have a loan of $300,000 at 7.00% instead of 7.15% you can save a fortune, and this is a small loan with a tiny rate difference!

Here is an example:

$300,000 @ 7.15% over 30 yrs = $2,026.22 / month = $729,439.20 over 30 yrs

$300,000 @ 7.00% over 30 yrs = $1,995.91 / month = $718,527.60 over 30 years

A saving of $10,911.60!

Want to save even more? What if you switched to the cheaper loan at 7.00% and paid $2,026.22 / month (the repayment on your old loan)?

$300,000 @ 7.00% paying $2,026.22 / m = 28.55 yr term = $694.195.31 in total

A saving of $35,243.89!

And this is all without changing your budget!

2. Make extra payments

Every dollar you put onto your loan is saving you money! You would be surprised how much you can save just by paying a little extra on your loan.

Did you know that with a new loan of $300,000 at 7.15% over 30 years that your payment can be broken up as follows: Interest = $1,787.50 Principal = $238.72

Regular monthly payment = $2,026.22 Total payments over 30 yrs = $729,439.20

So less than 12% of your repayment is actually paying off the loan!

Note: As you repay the loan the principal component becomes a higher % of the repayment. The above example is showing the payment breakdown for your first repayment. So what would happen if you paid $2,500 / month?

Interest = $1,787.50 Principal = $712.50

Regular monthly payment = $2,500.00 New loan term = 17.61 yrs Total payments over 30 yrs = $528,252.55

That’s a saving of 12.39 yrs and $201,186.65! You can save even more by switching to a better rate as well!

3. Use an offset account or line of credit

An offset account is a normal cheque account that is linked to your home loan. Interest is calculated on the overall balance of the home loan and the offset account. If you had $5,000 in your offset account and a $300,000 home loan then interest would be calculated on only $295,000.

A line of credit is a flexible loan which acts just like a bank account. You get your salary paid into the loan and can access your available redraw via ATM, credit card or cheque. Because all your day to day funds are in your loan account the balance is lower and you pay less interest.

You can save even more by paying all your bills on your credit card. This increases the day to day funds in your offset account or line of credit, and so pays less interest. If you have a good rewards program you may even be able to get a free holiday each year! This will only work for you if you are good with your money and pay the credit card off in full during the interest free period.

Both types of loans essentially work on the same idea. However offset accounts are far easier to manage.

How much can you save on your $300,000 loan at 7.15%?

Home Loan = $300,000 Average offset balance = $5,000 Interest is calculated on = $295,000 You would end up saving $10,725 over 30 years!

Did you know some lenders are giving FREE offset accounts with unlimited FREE transactions via any ATM in Australia (yes even other banks ATMs)?!

4. Know when to fix and when to stay variable

Did you know that the banks often try to make extra money by increasing their fixed rates when the media is running lots of scare stories about interest rates?

Australians are terrible at choosing when to fix! Historically more people tend to fix when rates are high compared to when rates are low!

Why do we get it wrong? Because we let emotions get in the way of a decision that should be based on logic!

Ideally you would want to fix your rate for longer terms when economists say rates are near the bottom of the interest rate cycle. Lock your rate in for shorter terms if rates are rising.

“I didn’t get the rate I applied for???” When applying for a fixed rate you get the rate that applies on the date your loan is advanced. Most lenders allow you to choose to “rate lock” your loan for a small fee, so you are protected if rates move before your loan is advanced.

A fixed rate is not flexible! If you repay the loan or make extra payments during the fixed rate period then you may have to pay the lender “break fees” which can be extortionate! Some lenders allow you to make extra repayments without these penalties. If you think this may affect you then tell us when applying for your loan.

Talk to your financial advisor or accountant to get the right financial advice for your situation. We aren’t economists or financial advisors and so can’t help you predict the likely direction of interest rates.

Talk to your broker to see which lenders are offering the best fixed rates. It is quite common for some lenders to run fixed rate promotions well below the fixed rates offered by the other banks.

5. Buy an investment property

Do you have a high disposable income? If so, then this can be the best way to get rid of your debt in seven to ten years!

On average Australian property doubles in value every 7 to 10 years!

It costs less than you think to own an investment. The tenant pays you rent and the government may give you tax deductions, making the debt less of a burden.

There are HUNDREDS of books that can teach you how to invest in property. Some of our favourites are from Steve McKnight or Peter Spann.

Did you know that different lenders assess investment properties in different ways? Choosing the wrong lender can restrict the amount you can borrow! Contact a home loan expert to discuss which lenders are suitable for you.

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School holidays are here and many people across the State are likely to return home from their hols with something much more positive than a case of back to work blues.

According to Real Estate Institute of Queensland (REIQ) executive manager Elissa Keenan a treasured holiday can often lead to families buying a holiday home in that location.

“As well as retiring baby boomers, many younger people buy homes in their favourite holiday locations in preparation for when they finish work,” she said. “These buyers prefer to buy now and rent the property out so it will be available for them in 10 or 20 years.”

The Sunshine State has long been a favourite holiday destination with people from across the country with many long-time annual visitors often deciding to buy a holiday home.

“Areas around the Gold and Sunshine Coasts are often targeted by baby boomers retiring to seaside locations from places as far a field as Melbourne and Sydney,” Ms Keenan said.

“Less well-known locations such as Brisbane’s islands, parts of the Gold and Sunshine Coasts’ hinterland and smaller coastal locations between Noosa and Bundaberg usually attract a higher proportion of Brisbanites.

“Locations south-west of Brisbane – such as Stanthorpe and Boonah – continue to be popular places for holiday homes. These areas offer an escape from the city yet are only a few hours’ drive away.” But Ms Keenan said, similar to other property investment decisions, rental returns and capital growth should be considered when buying a holiday home.

‘“Most families dream of owning a holiday unit on the beach and letting it to tourists when they don’t need it, however few have much idea of what income it is likely to generate,” she said.

”Unlike standard residential investment properties that are rented out on a long-term basis, income from holiday-let properties relies not just on the rental rate but on the occupancy level.

“Even if you get a good room rate on your unit, the return from your investment will depend on how often it’s occupied.

“Potential buyers also need to take into account the operating costs of the complex, which include management fees, maintaining the room through cleaning, repairs and replacements, marketing and advertising.”

On average, these costs can eat up 40 per cent to 50 per cent of the gross income from the unit, Ms Keenan said.

“And if you want to maximise your income, you won’t be able to use the property in peak periods such as school holidays.”

However, according to Tourism Queensland, all sectors of the state’s accommodation market performed well for the year ending December 2006. Occupancy rates and average daily room rates were both up in all establishments.

“And if you can afford it, it is always a good time to invest for your future, and a holiday home is a good way of doing this,” Ms Keenan said.

When buying, selling, renting or investing in real estate, look for the 2007 REIQ accredited agency logo as a sign of an agency dedicated to the highest standards of business practice.

“It is important for consumers to be aware that not all real estate agents are REIQ accredited agencies. The accredited agency logo serves as a visual safeguard to help consumers make informed and confident choices,” Ms Keenan said.

For a list of REIQ accredited agencies in your local area visit http://www.reiq.com.au or phone 07 3249 7347.

For more information contact:

Nicola McDougall - REIQ Communication Coordinator - 3249 7302 or 0405 801 979

Summary: Are you “upside down” with your real estate investment? Or to put it another way, are the outstanding loans on your property greater than what you could get if you sold the house or property in today’s real estate market? If you are in such a situation it is possible to make a “short sale” and cut your loses before they grow bigger. Here is a step-by-step guide to making a successful short sale on your real estate:

Are you “upside down” with your real estate investment? Or to put it another way, are the outstanding loans on your property greater than what you could get if you sold the house or property in today’s real estate market? If you are in such a situation it is possible to make a “short sale” and cut your loses before they grow bigger. Here is a step-by-step guide to making a successful short sale on your real estate:

1. Verify the value of your property

If you are selling the property through a real estate broker, your broker will provide you with an estimate of market value. If you are selling the property yourself, do your own market analysis of the area and your property.

2. Add up all the costs of selling the property

If you are using the services of a real estate broker, the broker will provide an estimate of closing costs. If you are selling the property on your own (for sale by owner), call a local title company or real estate attorney and ask, as a seller, what the closing costs will be.

3. Determine the amount owed against the property

This will be the total of all loans against the property.

4. Do the calculations

Subtract the total amount owing against the property from the estimated proceeds of the sale. On a short sale, this will be a negative number.

5. Contact the lender or lenders

Talk to someone in the customer service department and tell them the situation. They may direct you to a specific department. Talk to a supervisor or manager if possible; this person will have more authority.

6. Ask the lender what its procedures are for a short sale

Some lenders are willing to work with you by reducing the amount owed or making other arrangements. Others will look to the agents involved (if any) or anyone else who’s making money from the transaction to see if they are willing to make concessions to make the transaction happen. Still other lenders will tell you that your debt is your responsibility, one way or the other.

7. Sell the property

Tips & Warnings

Closing costs will include title and escrow fees (if the seller is responsible for any portion of them, which will depend on your county), attorney fees, a portion of unpaid property taxes, re-conveyance fees, notary fees, delivery fees, documentary fees and/or transfer fees.

If you sell the property without the assistance of a real estate broker, you will save the amount of the commission and have more to apply toward paying off your loan.

If you feel more secure having a real estate broker handle the transaction, consider using a discount broker to market your property. You could also try to negotiate the sales commission with your broker.

Remember that the amount on your monthly loan statement does not include interest. Interest is accrued until the date a loan is paid off, so you may have as much as 30 days of interest on top of the balance owing, and you’ll need to include this interest in the total payoff amount.

And, two more important points:

1. If a property is sold under a short sale, the lender may require the buyer to make up the difference, either through a personal obligation or a collection.

2. The IRS often gets involved with short sales, because they are seen as a relief of debt and may be treated as income. Check with your accountant.

Follow this step-by-step guide and you will be able to make a successful short sale on your real estate. If you need help, then contact a capable broker or real estate agent.

Izzy Buholzer is a Miami Real Estate agent specializing in residential, business and investment real estate in South Florida. You can learn more about investment and business real estate at his website: http://www.ibmiami.com and if you are looking for a home in sunny Florida then visit his website today and get the best deals in Florida residential real estate.

http://EzineArticles.com/

Summary: Contrarian investment is a philosophy that goes against what most of the crowd is doing. In other words, it is investing contrary to the majority of thinking at particular times in investment or market cycles.

Inside PropertyTM with John Maher FAPI

Contrarian Investment

Contrarian investment is a philosophy that goes against what most of the crowd is doing. In other words, it is investing contrary to the majority of thinking at particular times in investment or market cycles.

Basically, it means buying when everyone else is selling and selling when everyone else is buying. By investing in this way, the theory is that the investor will ‘sell high’ and ‘buy low’. It is remarkably simple and obvious that people should buy when property prices are low and sell when property prices are high, but they don’t.

By far, the majority of people follow the crowd and get caught up in the ‘positive’ investment environment of good news and favourable market and economic conditions and invest when prices are high. When the investment environment is ‘negative’ and the news is bad, people start to ‘get out of the market’ and sell; the majority of the crowd follows and low demand pushes prices down.

As the property market has moved from boom to lower values, now is a good time to explore the virtues of contrarian investment. When the market turns, as it has with current market conditions, the amount of property on the market is steady but demand is low, there is less competition between buyers and so prices fall.

Also, the perception is that prevailing market and economic conditions are unfavourable due to rising interest rates, low market confidence and competing markets such as the sharemarket rise. Under these circumstances, homebuyers and investors leave the market; values fall and buyers pay lower prices for property.

Contrarian investment theory suggests that this is the time to buy as the market will eventually move through the investment cycle again and values will rise. For a contrarian investor this is a time to buy, not sell.

It is difficult to time equity markets, especially the sharemarket however, the property market moves through the investment cycle much more slowly and is therefore easier to watch. It just requires patience and confidence that the market will turn. However, it may take years to move through the investment cycle.

This is not advice. The article is for general information purposes only. Readers should seek independent advice before taking any action. John Maher produces the property magazine Inside Property WealthTM, is a registered practising valuer and a Fellow of the Australian Property Institute. John can be contacted through http://www.insideproperty.com.au

Summary: The following is an extract from a report by Luke Hatigan for Jones Lang Lasalle on propoerty Derivitaves. Over the past year or so, news has reached Australia about the exceptional growth seen in the UK’s property derivatives market – the world’s leading market. Property derivatives are becoming a topic of interest in Australia. However, details about the area and what they involve are still relatively scarce. This month’s Economic Insight hopes to provide a brief overview of the topic.

The following is an extract from a report by Luke Hatigan for Jones Lang Lasalle on propoerty Derivitaves.

Over the past year or so, news has reached Australia about the exceptional growth seen in the UK’s property derivatives market – the world’s leading market. Property derivatives are becoming a topic of interest in Australia. However, details about the area and what they involve are still relatively scarce. This month’s Economic Insight hopes to provide a brief overview of the topic.

What is a Property Derivative?

A derivative is a financial instrument whose price is dependent upon, or derived from, one or more underlying assets. The security itself is merely a contract between two or more parties, and its value is determined by fluctuations in the underlying asset. They are primarily designed to be used in risk management.

Property is the last major asset class in Australia without a developed derivatives product, and while this is still a relatively new idea, it is a tool property professionals should not ignore as investors seek ever greater flexibility in relation to property investment.

Property derivatives require a well-constructed, broadly based index to act as a proxy for the performance of the underlying asset for which these derivatives refer. The underlying asset in this case is, unsurprisingly, physical property.

The main form of property derivative in use in the UK and elsewhere is known as a ‘swap.’ Swaps are an over-the-counter (OTC) product, which means they are not traded on an exchange like equities. They allow an investor to exchange property performance against either an interest rate (total return or capital return swap) or the performance of another property sector (sector return swap), where performance is measured by the change in the relevant property index measure.

For the full report on Property Derivatives download the report here. http://www.piaa.asn.au/reports/Property_Derivitaves

The sea change phenomenon has arguably been the most talked about Australian property trend of the past decade. In the summer edition of Queensland Property & Lifestyle, the sea change affect is examined to ascertain whether the hype is warranted and, more importantly, if it is here to stay.

Real Estate Institute of Queensland (REIQ) figures show that since September 2002 coastal Queensland towns have experienced strong growth rates. Traditional South East Queensland hotspots, the Gold and Sunshine coasts, have seen median prices rise by 85.6 and 97 per cent respectively. Yet it is the mid to northern parts of the Sunshine State’s coastline where the most exceptional results are to be found. Queensland Property & Lifestyle editor Lauren Cameron says seaside towns within an easy commute of major centres have experienced remarkable jumps in median house prices over the past five years. Cairns (up 121.5 per cent) Townsville (up 153.6 per cent), Rockhampton (up 180 per cent), Mackay (up 175 per cent) and Bundaberg (up 163 per cent) are some examples.

“However, the increasing population and median house price growth in seaside locations such as Townsville, Bundaberg and Mackay can also be attributed to the resources boom. More and more people are choosing to buy a house on the coast and spend their days off there, rather than staying in the mining towns,” Ms Cameron says. “In other words, now that the initial passion for and headlong pursuit of the seaside has settled down, Australians are seeking a more sophisticated sea change – one that combines the sun and the sea with viable career opportunities, comprehensive services and perhaps even a decaf macchiato on the side.”

Meanwhile, even the sleepier seaside towns have shrugged off their “backwater” branding with a range of cosmopolitan developments and remarkable property price increases. Bowen, at the tip of the Whitsundays, has had a median price rise of 267 per cent over the past five years. Cooee Bay in the Livingstone LGA and River Heads in Hervey Bay have also seen very strong growth, recording a 239 and 206 per cent increase in median sale price respectively.

To learn more about the sea change phenomenon pick up a copy of the summer edition - available in newsagents nationwide in late December - of Queensland Property & Lifestyle. Other features include Brisbane’s Trade Coast, the rise and rise of Hervey Bay, and renovation tips when preparing your property for sale.

Queensland Property & Lifestyle is the only place to access the latest REIQ Queensland median house, unit and townhouse, and land data, suburb by suburb, and is available in newsagents or online at:  http://www.propertylifestyle.com.au

New Developments

Saas Fee - ‘The Pearl of the Alps’
A high altitude traditional traffic free village in a dramatic setting surrounded by glaciers. It’s only about two and a half hours drive from Geneva or Milan, most of the skiing is between 2500m and 3500m and you can ski for 10 months of the year.

Our Growing Student Housing Portfolio of Properties

We take pride in our buildings. We only rent apartments we own and have a vested interest in keeping our apartments in great shape with satisfied residents.

All properties are located very convenient to their respective campuses. There is no better place for students to live if they want to walk to campus and local college area shops and restaurants.

All buildings are meticulously maintained and all have been remodeled with many upgrades.

Our campus offices are staffed by friendly local professionals. We are committed to support the local communities and Universities we serve.

Purdue University-West Lafayette Indiana

Florida State University-Tallahassee Florida

University of Tennessee-Knoxville Tennessee

University of Nebraska-Lincoln Nebraska

Indiana University-Bloomington Indiana

University of Illinois-Champaign Urbana Illinois

Prime Property Investors, Ltd. based in Northbrook, Illinois is an innovative and leading edge real estate investment firm founded by Co-CEOs Michael H. Zaransky and Barbara J. Gaffen in 1994. The Co-CEO founders remain active in the business and are well recognized for their experience, leadership, and knowledge within the real estate investment community.

PPI is by no means an ordinary company. PPI is a well respected and nationally know niche real estate investment firm building a nationwide portfolio of student housing properties on major university campuses throughout the United States. As a niche real estate investment firm, with a specialized expertise in the hot student housing property asset class, PPI stays focused on real estate providing an opportunity for increased cash flow and large appreciation.

The firm has received many honors and recognition for the quality of its properties and commitment to the community. PPI has received the Vintage Property of the Year Award from a major Apartment Association, multiple Good Neighbor Awards from Realtor Associations, and the Excellence in Housing Design Gold Key Award from the Home Builders Association. Due to Prime’s tremendous growth, the company was recognized by Inc. Magazine for placement on the Inc. 500 list of the fastest growing companies in America. Additionally, the firm was ranked one of the 50 best companies in the nation to work for in the residential development industry in an independent survey by Professional Builder Magazine.

The firm maintains a strong commitment to its community through membership, leadership, and financial support in numerous trade, civic, and charitable organizations.