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5 essential steps to invest buying a property

By MPI4th July 2018Real estate, Smart moneyinvest, investing, investor, loan, maintenance, market, property, real estate, real estate investments, rent

Real estate invest

The first steps as an investor in the real estate world can be risky and complicated. Like any new approach, there is a learning process and by allocating time and studying the problem, the results will be positive. Before you buy a property, here are some steps to keep in mind.

Prepare the advance and set the rates for the loan

Financing through a loan an investment in a property is not the same as the financing of your own home. If you decide to invest and buy a property, expect a fairly important advance. Get ready the advance and study bank lending offers. Funding conditions are very important.

Decide if you want to rent or sell the property

Renting or selling an investment involves different strategies, so it is important to know what method you intend to apply. If you bought a property and you want to sell it after you arrange it, it is a quick way to earn capital. Renting requires shorter repairs and smaller investments, but it has a much lower return. The gains accumulate over time and the investment is amortized over a long period of time. Rental properties involve long-term commitments to keep tenants, but provide a long-term secure income.

Understand the local economy

Studying the current situation may be helpful. If you intend to rent, it is important to think long-term. Is the city potentially economical, or is the local economy declining? You need an economy that attracts potential tenants who will pay for long-term rent or you can always find quality buyers. Researching this economic situation will take time. Nobody knows the situation better than a local. Create relationships to understand if it is advisable to rent or sell a property. You can start investing in real estate in an area that will be familiar, close to your resentment.

Study the market

If you like a building, look for similar properties on the market. It is helpful to orient yourself according to the market price. Make a comparative study to see at what price you could rent your property, compared to other similar properties. Do not focus only on pricing. Verify if certain properties are for long available for sale on the market, then there are reasons why they are not leased. If real estate agents offer discounts, this indicates a market with few buyers. If the prices are high and few properties are available then the market is weak in quality offers and there are many buyers, that is, you have to compete.

Find out the costs for repair and maintenance

When buying a property, you also have to estimate the costs for repairs and improvements so that it is suitable for rent or later sale. Call a specialist who can find hidden building defects. If you intend to resell, evaluate correctly what costs are involved in the arrangement of the building. External repairs, painting, overhauling are much cheaper as structural defects or electrical network reconfiguration. Take into account not only repairs but also maintenance costs. If you want to resell, then you have to include these expenses in your plans, so you will not to lose. If you want to rent, avoid major repairs and renovations. Renting will bring long-term income, and the investment should not involve large expense.

Rent or own? The advantages and disadvantages of each case

By MPI31st July 2017Real estate, Smart moneyinvest, money, real estate, rent, smart

“I’m tired of paying money on rent!”
Have you heard that phrase?
If not … maybe on this one:
“Money on rent is money thrown out the window.”
There are many who claim that being the owner of the house and not just a tenant is the best option.
But there are plenty of people who are on the other side of the barricade and prefer to pay the rent monthly instead of getting tired for paying for decades to the bank.
Have you ever heard your friends say, “I’m not crazy to pay for 30 years to the bank! Who knows what can happen in the mean time? It’s just too long!!!”

The question is:

Who is right? How is it best: to own or pay rent?

We will try to find the answer to this question in this article.
What I want to clarify, however, from the very beginning is this: the information I will provide further, will not make you permanently pass on either side of the barricade and to be pro or against rent for the rest of your life .
That’s because, in our decisions we have to take alongside our lives, and there are, besides our preferences, a number of other factors. Some of these factors are static.
There are also dynamic factors. And these dynamic factors makes that what seems to be the perfect choice now, over the next 5 years will no longer be a good idea.
That is why, I’m proposing to address both the owner and tenant in terms of the advantages and disadvantages offered by each of them.
So, anytime, during your life, reading this article, you can review all these advantages and disadvantages according to your situation at that time, and as a result, you will be able to make the best possible decision.

Why buy a house or apartment?

You buy a house once in your life

A house is more than a roof over your head.
The feelings you associate with your home can be even stronger if they mark a new beginning.
For example, if you just married and together with your half bought a house, you think at it as your home, the home that, over the years, will shelter countless dreams, hopes, but it will also witness many events in live through which every man passes, at some point in his life.
That is why a word from the old says: “In a man’s life you must make a child, build a house and plant a tree.”
Whether you agree or disagree with this phrase, I’m sure you understand the point of having a home. That’s because this house is the foundation for everything that’s going to happen.

It provides stability

You know that you have where to come back every night; a place where you can put your head down and rest after a full day.
You know that you are not at the owner’s mercy that can ask you anytime to leave the house within … or change the terms and conditions whenever he wants or … even worse, maybe sell the property if he is offered a tempting sum of money.
In this situation, you are the one who decides.
And as most of the owners do, if you’ve chosen to pay a 25-30-year credit to the bank, you know that with every single payment you make, every passing month, you’re a step closer to owning 100% of of your house.

There are no surprises

Even if small incidents can occur from time to time (for example: the neighbor above has flooded you and you have to paint again), that does not mean that this will happen every month. Normally, the expenses for your home remain the same.
This will help you to keep track of your expenses, forecasts and financial goals.

Diversification of income sources

Although investing in buying a house to live in, in the long run, does not necessarily prove to be a profitable one, the fact that you own a house can help you a lot in getting new loans from the bank if, from the situation your account, resides that you are a good payer.
If instead, you’re thinking about buying a house, in order to rent it is a good idea. Real estate is nothing but another source from which you can receive passive income month by month from the people you rent it.

Why rent a house or apartment?

You do not need the bank’s approval

There are people who, for various reasons (theirs or the employer) can not go to the bank to opt for a credit for buying a home.
For them, this second option works best. That’s because the system is simple, fast and works in 3 steps: Seen. Pleased. Rent. No more months of running and dozens of approvals and of course … without the burden of thinking that they will have to pay 25-30 years to the bank, no matter what.

Flexibility

And when I say flexibility, I do not necessarily mean the flexibility of the location but also the budget.
Think about it this way: maybe you want to live in the capital city today because, why not … here are the most interesting events?
Later, the agglomeration and madness of the capital don’t feel no longer so good, and you decide to move to a smaller town.
To the retirement age, you may want to live out of town for a simple and quiet life in the country to be closer to nature.
All of these changes can be done quite quickly, because you do not have a real estate already bought to keep you moving from where you want, when you want.
This is perfect for you if your job or business forces you to travel a lot and as a result you have to move often.
We also talk about cost flexibility. If you want to stay in a central area you will pay a price. If, then, for various reasons, you want to pay less, you can rent a property on the outskirts of the city.
Your family is growing up and the studio you lived in until yesterday, has now become a snap? No problem. You can rent a house or apartment with 2 or 3 rooms at any time.
As you see, as a tenant, you have a very high flexibility, both in terms of location and in terms of the amount paid for the rent and the size of the rented dwelling that can be changed, as said above, consistent with the changes that occurs in your family.

Avoid extra expenses

Do not imagine that if he owns the house, the owner of the house has escaped other expenses. Not at all. There are a lot of expences that gather in time and need to be resolved, so you can still live in good conditions in that house and continue to pay rent.
That’s not to mention the taxes that the landlord has to pay annually. You, as a tenant, do not have to take out any money from your pocket for that.
As a tenant, you avoid the costs of removing the furniture, redecorating the new home, etc.

Access to liquidity

A house can not be converted into cash from one day to the next. From this perspective, it is illogical to put your lifetime savings in one thing: in a building.
That’s because it cannot be turned easy into liquidity and also, depending on the evolution of the real estate market at that moment, no one can guarantee you that the real estate you own will be sold over the years at a price above acquisition.

Instead of a conclusion

Now, at the end of the article, I’d like to know your opinion. From your point of view, if you have the choice now: to rent or to buy a house, what would you choose and why?

6 tricks to negotiate a smaller rent and be a winner

By MPI31st July 2017Real estate, Smart moneymoney, real estate, rent, savings, smart

Are you looking to rent an apartment, a studio or a house and want to get a monthly rent as small as possible? Then the tips below will definitely help you when you negotiate with the owner of that building.

1. Do the research. Study the market.

You need to know at what prices are rented other similar buildings in the area.
And when I say: to know at what prices are rented, I do not refer to the price displayed on real estate sites, but the actual amount the tenant pays after negotiating with the landlord.
This will take you some time. I know that. However, in order to be able to negotiate effectively, you need to have enough valid arguments at hand in negotiating with the owner. Of the two of you, the one who comes up with the strongest arguments will win.
If you do not like it or do not have the time to sit and study the market, you can call a real estate agency in the area, to come a real estate agent with you, inspect the apartment you want and help you in the negotiation process.
An experienced real estate agent has much more knowledge than you could get from watching a few housing deals. However, consider that, in this case, you will also have to pay a commission to the real estate agency. But do not worry about it. Think of it this way: if eventually all the parties involved win, that’s all that matters.

2. Count on honesty

Mutual trust is an important factor in the long run if you reach an agreement with the owner and sign the rental agreement.
That’s why, when the negotiation process takes place, do not fall in the temptation to use false informations, in order to make the owner take decisions that favors you. If he feels like you are trying to force his hand, he will withdraw from the bargain and look for another client, and you will have nothing to gain from the whole process.
The reverse is also valid. If in the bargaining process you feel the owner is trying to bloom things so they seem much better than they are in reality, it’s time for you not to get tired anymore. Signing a contract with a liar owner will only bring long-term additional headaches and is not worth it.

3. Treat the man in front of you with respect

Try to keep a constant attitude throughout the negotiation process. If you annoy or offend the owner, or do cynical affirmations, you will not look smarter and will not be able to turn back the situation in your favor.
Look at the situation also from the owner’s point of view. Respect his opinion, because you want, in turn, for him to respect your point of view.

4. Go on the win-win idea

Think that if you come to an agreement in the long run, both you and the owner will win: you will pay a lower rent and he will not have to lose time constantly running after new tenants .
So when negotiating, do not try to win all your battles. If the owner gives up something, when you talk about a particular aspect, give up on yourself when you negotiate another aspect of renting the building.
If you can give more rents as an advance from the beginning, it can be a great asset for you. So, in the eyes of the owner, you are perceived as a trustworthy tenant, without any financial problems, which will not make for him every month’s trouble when it comes to paying rent.
At the same time, the bigger amount you give him from the very beginning can make him look so much to be willing to offer you a lower rent than he would have initially wanted at the beginning of the negotiation.
You can also, in return for a smaller rent, to renovate his apartment or fix some of the faulty things in the apartment.
Also, if you are good at something and the owner needs that service, you can try a bargain: for the amount that reduces the monthly rent, you will provide services periodically, in the field you are skilled in.

5. Whatever happens, stay calm

When emotions are involved, and each one holds at their point of view and are not willing to change it, then negotiation becomes almost impossible, and a conflict is reached rather than an amiable understanding.
The higher the tension between the two parties, the more likely the two parties to sign a lease contract decreases. That’s why, although I know it’s hard, in a bargain you have to look at everything “at cold”.
Detach yourself from emotions and try to look at the whole situation from the outside, from both angles – the owner and the tenant.
This will give you a clearer perspective on the whole process, and at the same time it will be easier for you to keep calm, compared to the situation where you see this whole transaction as a matter of life and death.
Also, even if you are desperate to rent that home, do not show you’re desperate desire even if:
– You know that tomorrow you do not have where to stay and you will sleep under the free sky or
– You think you cant’t find a home like this anymore even in your most beautiful dreams.
The more you are desperate to become a tenant in that building, the more the owner will “smell” you more easily and will get harder in the negotiation process.
As I said earlier … leave your feelings home.

6. Do not let yourself intimidated

Do not rush to make the decision to rent the house at the price proposed by the owner, depending on events such as:
– as you visit the apartment, there are other potential customers who have also found themselves to watch it at the same time as you. Most likely, it’s a “production”, meant for you to rush to make a decision.
– while the landlord shows you the home, his phone rings and the alleged clients at the other end of the wire makes him to come back to you and say, “So what is it … you’ll take the apartment or I will talk to the customer on the phone to come and see it?”

In conclusion: when you start the negotiation process for the monthly rent in that building, remember the advices above and you will be much more satisfied with the outcome of the negotiation.