Category: General Lending

February 25. 2022

Bridge loans can often provide a worth wile solution for investors to take advantage of solid deals being offered especially when time is a competing factor. For example, often times when purchasing properties through an auction it is very important that buyers have fast access to funds as most auctions require funding within a month window.  In short, bridge loans are simply loans that help to “bridges the gap” between the selling of one property and the purchasing of the next one. There are other reasons and ways to use a bridge loan but this is the main one.  What few investors may not know, however, is that bridge loans can also be used to purchase and redevelop land in some scenarios.

The Basics

The basics of using bridge loans to purchase and redevelop land works the same way as if you were to purchase property. Either way you utilize a bridge loan you can expect higher interest rates compared to other traditional loans, but access to funds is typically a lot quicker than with other types of funding.

When it comes to purchasing land with a bridge loan, your exit strategy is of critical importance, and will likely be the deciding factor as to whether or not a lender agrees to loan you the necessary funds. A credit check, a significant upfront deposit as well has proof of previous experience will most likely also be needed.

What You Need?

While planning permissions are not an absolute requirement for obtaining a bridge loan, they can certainly help you to seal the deal. Lenders will generally have more confidence in the project’s completion if you have relevant permissions to proceed with any proposed enhancements ahead of time. The lower the risk of the deal you have the more lenders will likely be interested in your offer.

Increase Your Odds Of Success

Given their increased liability, lenders are often more conservative when it comes to approving applications for bridge loans for land purchases. In an effort to help guide our discussion on the specifics, in order to help increase your chances of being approved for a bridge loan for land development, you should focus on the following areas:

Property Portfolios — if you can show a portfolio with a proven track recorder of previous successfully completed projects, most lenders will be more inclined to approve you for bridge loan funding.

Exit Plan — A solid and detailed exit strategy is critical to secure a bridge loan for land improvements. A good exit plan should map out the specific ways you intend to pay back the loan by the end of the agreement.

Credit Score – While it is true that bridge loans are not only given to those with great credit, a higher credit score does offer a lender more assurance that you will be able to fulfill your financial obligations and therefore make you more likely to be approved for a bridge loan.

Planning Permission – You should plan ahead on most lenders requiring that you submit sufficient evidence of permission to develop any land before they will agree to fund your project with bridge loan financing.

Buying land with the use of a bridge loan is a valuable option for investors and land developers looking to acquire land, providing they have a clear exit strategy and sufficient evidence of any required permissions which may be needed.

February 18, 2022

Before entering into a new relationship with someone, it is not uncommon to ask yourself a series of questions first. Does this person’s values align with mine? Etc. It is no different when making a serious financial commitment like borrowing money from a potential new lender. There are some important questions you should always ask yourself and questions to ask the potential future lender before agreeing to anything in writing.  Below we will discuss several questions you should ask yourself before acquiring a new loan.

How Is Your Credit?

Make sure you have reviewed and understand your credit history as well as your credit score. The better your credit score, the lower the interest rate you will likely qualify for. Interest rate matters. If, for example, you were to borrow $25,000 for 60 months, the difference between how much you could pay with an excellent credit score and how much you might pay with a fair score, could be night and day. While a 100-point difference in credit score may not seem huge, it can be costly. With a fair score, your monthly payment could be hundreds of dollars higher, and you might end up paying thousands more for the loan over five years. Before taking out a loan, try to increase your credit score if you feel it is not where it needs to be. While it will take some time and effort, it is likely to pay off in a big way.

What’s Your Actual Budget?

The fact that you’re approved for a loan doesn’t mean you can actually afford it, particularly if you have lots of financial obligations that don’t show up on your credit report. For example, if you’re paying for your children’s education, monthly memberships, vacations, and several different hobbies, you may have trouble repaying the loan as agreed.  Even if you’ve been approved for a personal loan, take a hard look at your budget, including how much you spend on the things you enjoy each month. That way, you can make sure you can easily afford the monthly payments. In doing so, you may find you need to cut certain expenses in order to make way for a new financial obligation.

Is A Loan The Best Long Term Option?

We often spend money on things which provide great experiences and memories but no financial return. A great meal at a fancy new restaurant may be worth the price in terms of experience, but in terms of finances, you won’t likely see a return on this type of investment.  On the other hand, If you’re considering taking out a loan to remodel your bathroom or to install some new landscaping features, you could recoup your entire investment and then some. Before contacting a loan lender, determine whether or not you will likely see a return on your investment.  Now that you have a better idea of what you’re looking for in a loan, here are some more questions to inquire about with potential lenders:

What’s The Best Interest Rate Offered?

As the above scenario shows, monthly interest payments matter. A difference of 1%-2% can save you a lot of money long term. This is why it’s important to get comparative quotes from several lenders before settling on one.  The great thing about most loan lenders is that they will typically only run a “soft” credit check before letting you know if you qualify for a loan, and if so, what your interest rate will be. A soft check does not impact your credit score. It’s only when you decide to proceed with a loan that the lender runs a “hard” credit check that may ding your credit score a bit. Don’t worry, though. As long as you make regular payments on the loan, your credit score should rebound relatively quickly.

Is A Secured Loan Better?

Say you are interested in making several upgrades to your home to add to its overall value. If you’re trying to get the lowest possible interest rate, it pays to determine how much that rate would be if you opted for a secured loan rather than an unsecured loan. Most personal loans are unsecured, meaning you don’t put anything of value up as collateral.  On the other hand, a secured loan requires you to put up some form of collateral like a home or car in return for a lower interest rate. As long as its value is enough to pay off the loan if you fail to make the required payments, a lender may be interested.  Although a secured loan is likely to save you money, it’s worth remembering that If you don’t make payments as agreed, the lender has the legal right to repossess the collateral, sell it, and recoup their losses.

Are There Extra Charges?

With an excellent credit score there is no reason to pay for extras like an origination fee or an early payoff penalty. If your credit score makes you appealing to potential lenders, make sure to ask about fees. The difference between making a financial decision that works for you and one you may grow to regret is in asking questions before signing your name to a contract. Use the above guide to help make the right decision before you move forward on your next loan.

February 11, 2022

Before deciding whether or not a bridge loan makes sense for you, it is important to explore all of the variables and do your homework.  This process is critical to help make sure that a bridge loan is in fact the best solution for you. In an effort to help guide those out there who may be considering these types of loans, we will discuss a few key factors worth considering about bridge loans below.

Research

Before you even apply for a bridge loan, it is essential that you fully understand everything involved and this includes learning how bridge loans  work as well as considering all of the potential fees for this type of financing.  By definition, bridge loans are intended and designed to ‘bridge’ the short-term financial needs relating to a property or land purchase, but as with any loan, not all applications are straightforward and not all bridge loans are created the same. It’s important to get the correct expert advice at the right time in order for you to understand the process more fully and help ensure you get the best quote possible based on your individual circumstances.

Exit Strategy

Since bridge loans are based on a short-term repayment plan, having a clear ‘exit strategy’ will help both you and any potential loan provider rest easier knowing that you will be likely be able to repay the loan in a timely manner based on the loans specific terms.  When considering your repayment options, you should also account for the loan interest rates as well as any other fees that may be applicable, and to not just simply factor in the initial loan amount for repayment. Bridge loans are often of a short term nature so the monthly interest rates are often higher compared to longer-term traditional financing. This may mean that you will need to demonstrate to your loan provider that you can pay off the total loan in a shorter period and also have enough to cover the additional loan fees.

There are a few key ways of repaying a bridge loan on time. The first is to use funds that are due to you, but have not yet been received from the sale of a property. Second, is to re-finance your property and either pull out equity or lower your monthly interest and use the difference to payback the bridge loan on time.   As well as having a clear plan to pay off the loan, the length of the payment term is also a crucial decision. It can be tempting to simply pick the shortest loan period possible to minimize the total interest you’ll have to pay with the higher interest rates, but you should also factor in any potential delays in obtaining your repayment funds. For example, selling a property can often times be prone to falling behind schedule, which could mean you don’t have all of the funds needed to repay a bridge loan when payment is due.  This could result in defaulting on the loan if you’re not prepared as well as incurring additional financial penalties.  Similarly, if you decide to refinance an existing property, it’s a smart move to request an offer indication from your lender before applying for or deciding on your bridging loan repayment terms.

Choose A Trustworthy Loan Provider

Taking out a bridge loan is a huge decision and utilizing the best advice available to you is important in making a well informed decision. Finding the right bridge loan provider is also critical to ensure you get the right product and all of the processing runs smoothly and on time.  The factors we discussed above regarding bridge loans will hopefully assist you in accounting for all of the essentials and help make your final decision on whether or not to obtain this type of short term finance the right one for your specific financial needs.

February 4, 2022

If you are like many who are trying to figure out the best way to set aside enough money for retirement but are not quite sure which financial decisions are wise and which are risky, the whole process can be a bit overwhelming.  The good news is that no matter what your current retirement portfolio looks like, chances are, you are not alone. The good news is that there are some tried and true retirement strategies that are less daunting than some traditional methods which allow you to retire in comfort.  Below are a few key steps to build up your retirement portfolio through real estate.

Rental Properties

Rental properties are perhaps the number one best way to build up passive income. If done correctly, rental properties can bring in a positive cash flow from day one, adjust with inflation, and keep or even grow in value over time.  The right rental properties do not require much of your time or deplete too much of your set aside money for repairs.  Using a highly rated property management company can also take even more of the stress of maintaining a rental property off of your plate.  Depending on how you structure the deal, you could instantly begin earning hundreds of dollars a month or more for a commercial property while you are still earning and setting aside money each month. The best part though is that the tenants occupying the property are also helping to pay off the mortgage loan for you. If timed properly, rental property income can substitute your working income, giving you enough monthly cash flow for retirement.

Mortgage Notes

Mortgage notes are another potentially great income stream you should consider investing in. As opposed to owning a rental property, when purchasing mortgage notes, you simply fund the loan and lend money to someone else as they purchase a property and pay you back overtime, usually in the form of some sort of hard money loan.  Before moving forward, however, it’s critical that you completely understand the risks and do all of the necessary homework needed related to purchasing mortgage notes, including potential future scenarios involving the need to foreclose if the borrowers are unable to repay the loan according to the terms laid out in your purchase agreement.

Pay Off Your Mortgage

If you have a low interest rate, paying off your mortgage doesn’t need to be the first item on your list but it should be prioritized at some point before reaching the age of retirement. Paying off your mortgage before retirement is definitely recommended by most financial advisors as a wise investment strategy.  It’s smart to proceed with caution before considering pulling out equity by refinancing in order to make needed repairs around the property and should be considered along with many other factors including your age before deciding whether or not to do so. Refinancing can be beneficial depending on your situation, but that type of decision should be considered from all angles and with at net positive end goal in mind at all times.

Vacation Rentals

If you’re financially able and planning on buying a vacation rental for your retirement years anyways, It may make since to purchase the property now and have it start generating money for you in the meantime until you are ready to retire.  Vacation rentals in high demand tourist locations will often earn top dollar per night compared to more distant locations from local attractions on most online rental sites. You can use this additional rental revenue to pay down the mortgage on your vacation rental so that by the time you are ready for retirement, you have either paid down the mortgage significantly or entirely and ideally will only have to worry about property taxes and upkeep on the property as you age.  The best part about vacation rentals is that whenever you want to use it, you can block out the calendar, enjoy it, and then continue to collect monthly income once you are down using it for your own relaxation needs.

Purchasing real estate is a great way to increase your monthly income streams while continuing to keep up with fluctuating inflation and other market trends. Best yet, if they are set up as a passive income stream you can often hold them well into retirement without demanding a significant amount of your time or money to maintain. The passive income you can generate from purchasing real estate, is one smart strategy you can utilize as you approach retirement, to offset the money previously brought in through a monthly paycheck, in order to live the type of life you desire well into your retirement years.

January 21, 2022

Before you jump in and decide investing in real estate is a smart financial decision for you, it’s important to make sure that you understand the risks and rewards.  Below we will look at some of the most important criteria someone should consider prior to making any major real estate investments.

Geographic Area

It’s important you understand where the property you’re considering investing in is located and what the obstacles are for investing in one particular area over another.  You should consider where exactly you want to be investing based on your unique circumstance. Is it best for you to invest in a city or rather in the suburb or a more rural area? Some investors prefer investing closer to cities because there is more demand for housing and it can be easier to find tenants. That said, if you’re willing to spend the necessary time looking for good renters, then perhaps for your situation the suburbs would be a better fit since they tend to have lower crime rates than more populated cities.

Understand All Costs

You should have an in-depth understanding of all of the costs associated with making a large investment in real estate before making a final decision. For instance, it’s important to understand that there are legal fees and other expenses involved with purchasing real estate.  Making sure ahead of time that your budget is prepared for those extra costs as well as any other potential startup costs will put you ahead of your less informed competition. Don’t forget to account for the taxes on your investment returns, so you know what to expect at tax time every year.  Additionally, if you’re considering a residential property, then you should make sure to not forget about maintenance costs and utilities because those can eat into your profits often times before you realize it.

Get Clear On Your Goals

Being really clear on what your short- and long-term financial goals are ahead of time will help you determine the type of property that’s right for you. For instance, if your goal is to use this investment property as a retirement home, then maybe look into purchasing a vacation rental in a gated community since these properties are often good for retirees because they generally have a lower amount of crime.  If, on the other hand, your objective is to gain revenue from renting out a property long term, that will require an entirely different approach than focusing your time on vacation properties.

Get Insurance Coverage

You need to make sure you are covered in the case of an emergency with a good home insurance policy. There are many different insurance plan options designed to fit your investment properties specific needs, so it’s a must that you know what common things could happen ahead of time and protect your investment accordingly. For instance, if you’re considering purchasing commercial real estate, the property should be covered under property insurance because commercial properties are often more valuable than residential ones which often put them at a higher risk of being the target of theft and other crimes.  On the other hand, if you’re thinking about purchasing a vacation home, you’d be wise to have an insurance policy that covers natural disasters like earthquakes or flooding.

Above are just a few examples of the types of information you should consider when you’re thinking about investing in real estate.  Make sure that you take the time before making any final decisions to understand the specific market conditions, know what kind of property type is best for you, and always remember to protect your investment with good insurance coverage.

January 14, 2022

Real estate is one of the wisest assets someone can invest in. One big advantage real estate investment has over other industries is that the value of a property does not tend to fluctuate much from day to day. This is one main reason many investors choose real estate as their primary source of investment. Of all the various real estate options available; commercial, land, and residential properties are the 3 primary types of investment available if you’re ready to give real estate a try. Commercial properties specifically in most markets are in constant demand. Investing in commercial properties will likely increase your ROI overall.

Commercial real estate values are growing rapidly in many major markets. These are the primary properties that are home to a wide range of office spaces, retail stores, and countless different businesses. Any non-residential real estate that is not used for business operations is known as commercial real estate. Investing in commercial real estate is one of the smartest ways to expand your financial portfolio. Below we will look at a few of the top benefits of investing in commercial real estate specifically.

Positive Cash Flow

Compared to the many investment options out there such as the stock market, company shares, and cryptocurrency, the ROI from commercial real estate investment is generally higher. The generated ROI for commercial properties also tends to perform better than simply purchasing bonds. The stability of investing in commercial real estate makes for a healthier environment even if real estate markets temporarily become more volatile.

Build Equity

Equity is commonly described as the difference in value from what a property is currently worth versus how much money is still owed on the investment. When investing in commercial real estate, it is not uncommon to build equity in a much smaller time frame than other investment strategies allowing for more flexibility to leverage the earned returns as your investment in commercial real estate appreciates.

Investment Security

With commercial real estate, both the structure and land the land the property sits on can have significant value. This is one main reason why commercial real estate can be such a valuable asset. If you are able to invest in commercial real estate in the right location, you can often times avoid a negative income stream even during off-seasons or economic down turns. This is a very positive advantage if you have an investment portfolio with several different types of investments and want to help insure that the performance of said portfolio doesn’t take a hit overall. For these reasons and many others, commercial real estate has become the primary source of resource allocation for many successful real estate investors.

Leverage

The reality is that most of the time, even the savviest investors are not able to purchase a new real estate investment with cash alone and most utilize a mortgage or seek funding through the use of a hard money loan in order to secure their investment. This ability to acquire a new asset without paying for all of it up front is the leverage many investors require in order to grow substantial wealth over time. This is one reason so many investors have been able to build wealth by utilizing a loan from a bank or other 3^rd party lender service.  Commercial real estate can be a secure way to ensure you can repay the loan in a timely manner while building a higher ROI with an asset you will one day potentially own.

Above are just a few of the top ways investing in commercial real estate can be a significant financial benefit to your long-term investment portfolio. As with any investment it is important to do your research and make sure you understand the terms of any investment or loan you need to take before the deal is finalized.   Hopefully the above guide will assist you in learning more about the advantages of investing in commercial real estate.

January 7, 2022

Making the decision to purchase a vacation property as an investment is a serious life commitment. These decisions should never be made in the heat of the moment. It is vital to weigh all the advantages and disadvantages, and calculate the potential risks in order to avoid an unpleasant surprise for you. Below we will weigh the pros and cons of investing in vacation properties in the hopes of providing readers with the information they need to make a more informed decision before the next potential investment comes along. First, let’s look at a few pros of owning an investment property:

New Income Stream

One of the main reasons people decide to invest in vacation properties is the potential they offer in providing a new stream of income to their monthly financial positioning. Renting out just one vacation property in a good location can add hundreds if not thousands of dollars to your monthly income.  Owning multiple vacation rentals over time can lead many to make it their primary source of living.  There are a number of online hosting sites available nowadays to assist you in the process of keeping your vacation property occupied, especially during off season times.

Investing In Your Future

You have more flexibility with vacation properties to schedule rentals according to your future plans. Whether you’re looking to get away over a long weekend, gathering with family for the holidays, or simply planning some alone time, with a vacation property, you likely won’t have to look for a place to stay. Even better, you will be able to sell your vacation property when the right time comes and live on the money from the sale or use it to cover other expenses. The equity should allow you to spend money on your future health, travel, and other needs.

Now let’s take a look at a few of the potential cons of investing in a vacation property:

Expenses Increase Over Time

Vacation rental properties are not a thing that can be left unattended. You will need to make sure that cleanliness is maintained inside and out of the property, that needed repairs are handled in a timely manner, and that all bills are paid on time. It is also important that you not forget about paying for insurance.  There are many property management companies out there that can perform many if not all of these routine tasks for you but beware, they all come with a cost. If you do not have enough upfront funds and need a mortgage, keep in mind that your monthly expenses will increase significantly and there is no guarantee that the rental income will cover them until the end of payments.

Advertising and Maintenance Cost

You should expect to advertise your vacation property on several online platforms. You need to monitor these relationships closely, including review issues, looking at how your competition is performing, and improve your rental conditions to attract new renters continuously.  It may be necessary to add special amenities, such as allowing pets or having a pool. These types of amenities can increase customer demand significantly. The increased level of comfort can easily attract guests, but with the added enhancements comes added costs that will take time to recover.

HOA Restrictions

It’s important to research and make sure you understand all of the potential HOA requirements in the neighborhood before purchasing a vacation property in a particular area. Unfortunately, it is often the case where someone does not do their proper homework only to discover that the local HOA restrictions severely limit their ability to make enough revenue off of a vacation property to make it worth their while.

Prepare Before Investing

Before investing in vacation property, you need to consider several important factors, so that the business will bring not only money but also pleasure.  Vacation property investment can be a profitable investment with proper budget preparation and management. When buying a rental property, you should be well aware of the demand for rents in the region, prices, as well as costs. Prepare the accommodation for guests, always keeping in mind not about what you like, but the amenities that attract specific renters to your property.

December 17, 2021

Managing a property can take a lot more time than many people may realize. Successful property investment also demands money, and dedication in order to be profitable. Luckily, you don’t need to do everything on your own.  For example, property managers, online platforms, and virtual assistants can take some of the stress out of the experience.  Investors looking to turn their properties into a more hands off investment can outsource any number of responsibilities, from screening residents, to collecting rent, to answering emails. Below we will look at a few key areas where it may be worth considering to outsource certain responsibilities related to your investment property in order to provide your life with more balance overall.

Securing Tenants

Once you have found potential prospects for tenants, you still need to make sure they will be a good fit for your property.  Traditionally, it has fallen on the landlord of a property to conduct a thorough background check.  That said, discovering the full truth about an applicant’s prior rental history can be quite the scavenger hunt.  Luckily, there are many online platforms which allow owners to quickly put in an applicant’s name and email to generate their full rental application, credit report, criminal background check, and any previous evictions they may have had.

Rent Collection

Accepting checks by mail has largely become a thing of the past. Renters expect easier options to complete their payments online.  Whether you decide to go with an app or some other an online solution, it’s important to find a way to eliminate the need to write a physical check.  With online payments, renters can securely link their bank account and send in rent through an electronic funds transfer. This is not only convenient for your tenants but also gets payments collected in a much timelier and more seamless manner.  Tenants can also schedule payments based on their other monthly expenses, so they don’t have to worry about being late or missing a payment.

Marketing

Marketing your rental and finding tenants is one of the most time-consuming aspects of being a property owner. Coming up with a compelling listing, taking pictures of the space, and managing inquiries all at once can at times feel completely overwhelming.  Luckily, there are many realtor services that can help lighten the load for you. Digital marketing experts can also help you create your brand identity as well as content that is attractive to the eye. It is important not to overlook what a well-done website, blog, or social media presence can accomplish.

Maintenance/Repairs

When something goes wrong with an investment property, the landlord is generally the first person a tenant will reach out to. That said, it doesn’t mean you need to physically repair whatever is going on yourself. Whether it’s an air conditioner that’s not working properly, a water heater that’s past its life span or trees that need to be trimmed back from the roof line, there are lots of qualified professionals who are more than happy to take care of it for you for a reasonable rate. It is a good idea to have a handyman on speed dial if you do own an investment property.  Some landlords allow their tenants to reach out to an approved handyman directly, but it is important to have a clear understanding and communicate with both parties ahead of any repairs to clearly outline what constitutes a “necessary” repair.

Cleaning

Cleaning is especially important if you own a short-term rental. It’s best practice to clean the unit after each guest completes their stay, and most online platforms will require it if you post your property on their sites.  Instead of spending all your time with laundry and dishes, consider hiring a maid to come in and help out. Truth be told, most maid services take great pride in their work and will likely do a better job cleaning and provide higher quality of service to your tenants than you can offer day in and out when it’s all on your shoulders.  Best of all, The maid can be scheduled in advance and at any frequency you need depending on your budget and how often guests are coming and going.

Bookkeeping

Owning an investment property requires money, and as we all know, money can often times become mismanaged. A bookkeeper can help you develop systems to manage all of your properties expenses and revenue, saving you many headaches down the road. They will also know about certain tax breaks and write-offs to help you save money.

While some investors prefer to be more hands-on, an active approach is not for everyone. It’s understandable and completely acceptable to outsource certain responsibilities your investment property may require as long as you are managing the people and areas you have outsourced effectively. Hopefully the above guide will help you determine what areas you may be able to find help in managing your investment properties in the new year.

December 10, 2021

As the holidays rapidly approach, you may have been working on achieving one of life’s biggest goals; purchasing a new home. During this time of year, continuing to save for a down payment and closing costs for a new home, can seem like a never-ending uphill battle. Instead of putting off your home-buying plans for yet another year, try making these few adjustments to your holiday spending and save more for a home or other important investments with these smart tips.

Set Spending Limit’s In Advance

It’s vital in order to meet your financial goals that you define and set your budgets spending limits before you begin making holiday purchases.  The average American plans to spend around a thousand dollars on holiday purchases in 2021.  Just because that is the “norm”, if those numbers are not in line with your financial goals, you do not need to feel pressure to spend more than you can afford.

Along with setting holiday spending limits, it is wise to not use credit cards but instead utilize cash or debit cards when making holiday purchases. The process of spending real money and watching it immediately leave your banking account instead of paying it off down the road over a prolonged period can seriously reduce your desire to spend more than you can afford. If you do decide to pay with catch this year, using physical envelopes to allocate spending can help you split up your money into categories before you make any major purchases, you’ll regret come January.

Disabling push notifications and location-tracking from retail apps on your phone, is another great way to help you avoid advertisements about sales that could tempt you to spend more than you had planned.

Set Expectations

If you are feeling pressure during the holidays for how you’ve historically given gifts to loved ones, get ahead of those seasonal expectations by sharing your financial plans with everyone on your list. Along with helping your loved ones recognize why this year might be different, you’ll help them understand what’s on your own list: cash for a down payment!  It is also smart, in all of your social circles, to consider imposing a maximum price on gifts this year. If setting spending limits makes you feel uncomfortable, know you’re likely not the only one who wants to save money.  Whether or not the spending limits hold long term, you can save even more by hosting a Secret Santa exchange, which limits the need to buy for multiple recipients, and delivers a bonus benefit of mystery and fun to the holiday season.

Enjoy Free Or Cheap Fun

Consider sharing experiences with your loved ones instead of just buying gifts for everyone. In many cases, these experiences are more memorable, and much more affordable.  To start, look for fun activities in your local community. Many chamber of commerce websites around the country feature an events calendar detailing free or cheap seasonal outings, such as tree lighting ceremonies, holiday markets and pop-up ice skating.

Another smart money-saving idea is to skip on the high cost of going out for dinner and instead invite your loved ones over for a holiday potluck. When everyone brings a dish, everyone shares the expense.  Likewise, there’s no shortage of holiday-themed movies to ring in the season, especially on streaming services. Instead of going out to a seasonal performance or a movie, invite everyone to your place to watch a classic holiday movie.

Develop Spending Habits Year Around

The benefits of developing healthy spending habits now can extend well beyond the holiday season.  By learning to follow a budget, you’ll be able to refine it after the holidays and continue to hold yourself accountable every week of the year, a skill that will come in handy when you do become a homeowner. By not increasing credit card debt during the holidays, you can more easily lower your credit to debt ratio, which will help increase your credit score, giving you an advantage when it comes time to find a mortgage and get the lowest possible rate.

The holidays happen every year, but what makes them special doesn’t involve Black Friday discounts or spending above your means. Reframe your budget to focus less on buying gifts and more on saving money. When your savings add up to enough to cover your down payment, you’ll be able to host next year’s holiday dinner in your brand-new home.

December 3, 2021

Are you in the market for a new real estate investment property? While buying real estate can be one of the best decisions you could make in terms of investments, it often comes with a high price tag and potentially a lot of risks. Like all investments, a good rule of thumb is to always have a solid understanding before jumping in heads first. Below is a list of a few important things you should consider before buying a real estate investment property.

Property Location

Location is still the primary attraction when it comes to real estate property investments. Buying the right property in the wrong location will not likely be the most profitable choice. It might seem counter intuitive to think about it this way. After all, it’s the building that you’re going to buy. However, people love convenience. The closer your property is to all of the amenities, green spaces, scenic views, market places, free-ways, and warehouses they utilize, the more attractive it will be to prospective buyers. The location of your investment property also plays a massive role in future property valuations.

Property Valuation

If you haven’t heard of property valuation before, it’s basically a report summing up your property’s current market price. It helps real estate investors find out the real worth of their investment properties based on their current condition, location, and other key factors. Knowing the property valuation of an investment real estate can help you determine whether it’s the right buy for you or if it’s best to look for another option. It also helps you come up with a fair and competitive rental price for your property if you were to rent it out to tenants. Property valuation can also help you determine mortgage prices, transfer fees, tax prices, and many other important metrics for performance potential.

Property Purpose

One of the most common mistakes that new real estate investors make is not thinking about the purpose of their real estate investment property. Not knowing what you want to do with your investment property can lead to unexpected negative results, such as financial hardships. This is especially true if your property is mortgaged. A few common examples of a properties purpose would be to buy for your own self-use, buy and then lease the property to someone, or to buy the property with the sole intention to sell it afterwards. It is important to the success of your investment that you try to identify your purpose before finalizing any transactions.

Existing Debt

Plenty of investors carry debt as part of their portfolio investment strategy. Your credit score affects the way mortgage lenders view you, and it also affects the terms your lenders are willing to offer you. This is why having a high credit score is important, especially if you’re planning to invest in real estate. People with higher credit scores are more likely to get smaller interest rates on their mortgages, not to mention rebates from their lenders for being good mortgagors.

Increase Your Credit Score

Always pay your bills on time. If possible, set up automatic payments so you never miss a date. Pay down debt before taking on larger debt. Aim to spend no more than 30% of the amount you plan to loan. As long as there are no annual fees, don’t close unused credit cards. Make time to review your credit reports and dispute inaccuracies. Following these steps will help make sure your credit score is where it needs to be before you go through the tedious process of submitting all of your financial information for a new investment opportunity.

Personal Readiness

Investment properties should be treated and run like any other business. Whether you’re renting or selling, the responsibility of getting a substantial return on your investment lies in your hands and your ability to manage it effectively. This can be an overwhelming responsibility, especially for new investors. Before finalizing any purchases, ask yourself if you are ready to take on the role of being a landlord or landowner. If you find that you’re not quite ready for the responsibility, we suggest you find ways to slowly ease yourself into the mindset of being a real estate investor.

Buying investment properties can be intimidating, to say the least. But as long as you have the right strategy in place, you can usually expect high returns on your investment. Keep in mind the important factors mentioned above. As always, seek additional advise from experts in your area as well before deciding what is the best decision for you to make when it comes to purchasing a new investment property.