What is Real Estate

Writen by Roselind Hejl

When buyers make an appointment to see your home they have already made several important decisions. They have selected your neighborhood as a possible location. Your lot and exterior style appeals to them. Your price is within their range. If the floor plan and interior style works for them, and if the buyers feel a sense of trust in your home, they will move to the contract stage. Here are some tips to help you make the most of this important step in the sale of your home - the showing.

1. Setting Showing Appointments

Homes may be shown by appointment with the Realtor, appointment with the owner, or by using the house key placed in a lockbox. The lockbox is a popular system in many areas, and facilitates showings by all members of the local Multiple Listing Board. To arrange a showing, agents must first call your home or cell number. If you do not answer, they may leave a message, and proceed with the showing. Most lockboxes record the agent's identity and time of showing. Whether your home is shown by special appointment or by the lockbox system, the objective is to make your home easy to show to potential buyers. This is your first contact with the buyer, and you should make them feel welcome in your home.

When you receive a call from a Realtor for a showing, keep in mind that he/she is showing lots of homes, and it is difficult to set precise times. Be flexible on the timing, and allow a window of one hour for arrival, if possible. If you are going to be at home, you may ask the Realtor to alert you when they are 15 minutes away. You may occasionally receive a last minute call, with the visitors already in your driveway. If you are prepared for a showing, invite them to come in. If you are not ready, let the Realtor know that you need some time to prepare. Always thank Realtors for trying to show your home. You need them to come back!

2. Consider Children & Pets

If you have children it is very important to educate them on the showing procedure. They should know that real estate agents will be calling for appointments to show their home, and they should know how to respond. If they are at home by themselves during the day, they will need to let in the agent and buyers, and vacate the house during the showing. They may wait in the backyard or go to a neighbor's house. Televisions and video games should be turned off. Hopefully, they will know how to tidy up the kitchen. Children must know that an advance phone call by the agent is required for a showing. They must not allow entry to anyone who comes to the door without an agent.

Pets pose special problems for showings. If pets are left in the home during the day, leave a note alerting the agents that a pet is in the house. Give instructions as to how your pets should be handled. For example, "Cat must not be allowed outdoors." Often pets are fearful or uncertain about strangers entering the house when you are not home. Many people are afraid of (or allergic to) pets, and are not happy to encounter them in the house. It would be best to crate your pets during showings, place them in a restricted area, such as the laundry room, or take them out of the house. Keep in mind that a great variety of people may enter your home, including children. If there is any uncertainty as to how your pets will react to strangers, you should remove them from your home during showings.

3. Provide Lots of Information

Have brochures laid out on a table for prospective buyers. Anticipate the information that would interest your buyers. Examples are: a copy of your survey or floor plan, photos of neighborhood amenities, school information, neighborhood newsletter, nearby country club, golf course, etc. Answer their questions early. Remember, prospective homeowners are choosing a home and community - a lifestyle.

4. Don't Hang Around

Do not be present for the showing. Sit outside or run an errand. When you are there, buyers may feel that they are intruding. They will not discuss changes they might make to your home, or how they would use the space. This could limit the time spent in your home. Never take over the showing or attempt to sell your house. You do not know the buyer's special interests, and may inadvertently turn them off. Remember that this not a social visit. Buyers need to make an emotional commitment to your home. They usually need some quiet time to experience your home and sense how they would enjoy living there. Your presence is distracting and inhibiting to potential buyers.

5. Appeal to Buyers With Sights, Sounds and Scents

People gather impressions about your house from all senses - sight, sound and smell. Improve your home's appeal to all senses. Leave blinds open, and consider removing some screens. Natural light sells houses! Increase the sizes of your bulbs if the light is dim in certain areas. Put on some instrumental music, but keep it very low and mellow. Do not leave televisions on. Have the temperature cool in summer and warm in winter. Use pleasant scents, such as candles or potpourri. An unpleasant odor will have a very negative impact on a buyer's reaction to your home. In particular, cigarettes and pet odors are a turn-off. Do not try to mask an unpleasant smell with another smell. Work toward a clean, fresh smell.

6. Have a Safe Showing

Keep in mind that the public will be entering your home, and consider their safety and yours. Do you have rugs, wires or small toys that could be stumbled over? Buyers should be able to move easily from room to room. You may need to remove some furniture to keep traffic patterns open. Leave your stairs completely free of clutter. Replace any missing handrails. Remove valuable objects from tables where they may be accidentally bumped. If you use candles for a nice scent, do not leave them burning when you leave the house. Do not leave money, guns, medicines, jewelry, x rated magazines or any personal items in public view. Consider your security, and the buyer's safety as you prepare your home for viewing.

7. Set the Stage

Consider using a staging service to help you present your home. It should be perfectly clean and clutter free. Homes generally look better with furniture, but they must not appear crowded. Your furniture and accessories should give your home a very general appeal. Avoid strong political, personal or artistic statements. The focal point should be the house, rather than your family. Use decorative objects, such as pillows, framed photographs, books, fresh towels and flowers. Create a mood with natural and lamp lighting and soft music. The goal is to make potential buyers feel that they could move right in. Home buying is an emotional process. You must build a sense of trust and attachment to your home during the short time that buyers are in your home. They must positively imagine themselves enjoying your home and gardens.

Showing your home is an important part of the sales process. You only have a short time to gain the buyer's interest in your home. Their time in your home should be handled with care and respect for their time. Each showing is important. Remember, you only need one buyer, but you don't know which one.

Roselind Hejl is a Realtor with Coldwell Banker United in Austin, Texas. Her website - http://www.weloveaustin.com - offers homes for sale, market trends, buyer and seller guides. Let Roselind help you make your move to Austin. Austin Texas Real Estate Guide

Writen by Chris Anderson, PhD

In last week's article, we discussed how substantial profits could be made by investing where baby boomers may want to relocate or buy a second home. This seemed to confuse readers since they were thinking that our web site is about preconstruction and preconstruction to them means buying condos…… In this article, I hope to broaden your horizons considerably.

Unlike many people, I have a very broad definition of preconstruction investing which can be summarized as follows:

Preconstruction investing is the pursuit of real estate projects that offer the opportunity to ride rapidly increasing prices over time without the need to put tenants in place to defray costs. Since no tenants are involved, this opens the possibility to making investments in locales that are far removed from where you live.

If you adopt this point of view, then a whole world of "alternative" preconstruction investments opens up to you. Today, we are going to look at one specific type of investment: investing in developing land projects where baby boomers might want to retire or own a second home.

Before we get into the specifics, let's talk about what all investors want:

• Low risk

• Good investment returns; and

• Minimal use of their capital;

Quite frankly, these 3 reasons are what got me into preconstruction real estate investing in the first place. Now let's see how these might be achieved on a purchase of investment land that we believe to be VERY desirable to baby boomers.

Suppose we are considering the purchase of a piece of property for speculation of future returns. If, like me, you believe in the impact of the baby boomers, then you will do 3 things to control your risk:

1. Carefully select a land project where you are solidly convinced that baby boomers will want to possess it at any costs;

2. Make sure that you believe that baby boomers will be AWARE of this project in the future do to somebody's marketing; and

3. Manage your finances and investment portfolio so that if you are wrong and you do take a loss, it is not catastrophic to you.

For the time being, let's assume that you have met these conditions on a project and now you are ready to analyze your returns and your use of capital.

Now we have to resort to hard analysis. Let's look at the following ASSUMPTIONS:

1. The land project is assumed to increase at least 25%/Yr in price;
2. We plan on holding the land for 2 yrs and then resell.
3. $200,000 purchase price with $5,000 in closing costs.
4. Annual taxes/association fees of 1%.

If you take a look at the three cases in a spreadsheet format, here is how things might turn out under this scenario.

Case 1: 10% down payment, interest only, all payments made by BUYER.

Case 2: 10% down payment, interest only, all payments made by SELLER.

Case 3: 5% down payment, interest only, all payments made by SELLER.

Cases 2 and 3 require a bit of explanation. There are some early stage land projects available where the developer will take a percentage of your purchase price and escrow an amount that will make your payments for a period of time---- typically 2 years. This means that during your 2 year hold, you would only pay taxes and association fees. To enter this in the spreadsheet, we just show a 0% rate during the holding period.

If you scroll down, you can review the performance of each case. It may surprise you that even under Case 1, where you paid in a total of $48,600 out of pocket, you still see a return on investment of 127%! That equates to 51% annual return on investment. Compare that to what your friendly banker is giving you in your CD.

For many investors, beginning or not, they would prefer not to have to put in that much money so let's look at Case 2 where the developer has escrowed 2 years worth of payments. In this case, we invest a total of $29,000 with a total, out the door profit before taxes of $81,625 thus providing a total return of 281%. If you then extend that to Case 3, where only 5% down is required, then the return goes off the charts to well over 500%!

So hopefully this article has given you a very different way to think about old fashioned land purchases in your real estate investing portfolio.

Dr. Chris Anderson is a leading authority on real estate investing and has been referenced in many venues including the New York Times and USA Today. Free sign up at GetPreconstructionDeals.com for education and articles. Visit Mastermind Group for world class investing projects.

Writen by B Shelton

Many first time home buyers out there end up bankrupt because of an unrealistic way of looking at their capability to pay for their investment. So, when you are one of those first time home buyers, it is wise to read a lot and take heed of wise counsel so that you don't get caught up in the cold midstream. The first thing that a streetwise financial adviser would give you would be that you should make sure what you are going to buy is within your capability to pay -- whether in full-up front or by installment through time.

There is nothing more pleasurable than to purchase, amortize and finally own a home that agrees with your lifestyle, financially and aesthetically. You should not "over-buy." This means you should not purchase a house that's too big or too grand or too posh for your means to pay for. That'd be an overkill, especially if you are a member of the mid-range or lower income bracket. Knowing that institutionalized professional lenders, like the banks or real estate brokers, could pad the purchase cost with exorbitant hidden charges that could bloat the price in the long run, it should be your last option to go to these institutions.

When you have found the house you'd want to really cherish and nurture and call your own, and you find it's really not too big or too expensive -- it's just that you are short of cash, then it's time to strike a bargain directly with the owner first, and inquire about the famous owner-financed arrangement. If you are lucky, the owner just might allow you to just pay the down payment and then pay the balance on an installment basis.

The premise here is that the owner does not have to follow a rigid schedule of payment and hide service charges that could unnecessarily bloat the loaned amount -- but there is no law that says he could not touch the ceiling in terms of government-allowed interest on the balance of the loan; the owner also does not need to pay the government-imposed taxes until the sale is closed (meaning the buyer has paid up the last installment for the property in question).

These are only a few of the useful tips for first-time home buyers. There are more to reckon with out there, and it is wise for first time home buyers to be counseled into educating themselves first before plunging head on into an investment as big as buying a property that is going to be the first home of your very own.

Brian Shelton makes home buying in the Dallas easy! Visit http://www.StopRentingDFW.com/

Writen by Andrew T. Johnson

How many years have you been working in the real estate profession?
-There are a lot of Real Estate Agents that are new to the field due to the real estate boom over that last several years.

Can I see your Wisconsin Real Estate Salesperson License?
-Take down the Wisconsin Real Estate Salesperson License so you can check to see if the prospective agent has had any legal problems pertaining to his or her real estate transactions.

Are you a Wisconsin REALTOR?
-A REALTOR is a special designation that helps ensure prospective buyers and sellers of real estate are represented properly and professionally.

Do you work in the real estate field full time?
-There are many part time real estate agents that are trying to make it in the real estate profession. Most part time agents don't have the experience that it takes to help the buyer or seller make the most of there transaction.

Do you work as a buyer's agent and a listing agent?
-Some agents specialize in one or the other agents work as both on the same transaction which is known as dual agency. Dual agency involves ethical and conflict of interest issues.

What designations have you earned in your career?
-There are many designations that Wisconsin Real Estate Salespersons can earn to enhance there knowledge and understanding of there profession.

How long have you been working in your local Wisconsin real estate market? -You want a real estate agent that intimately knows your particular region of Wisconsin and understands the issues that may come up due to geographic location, laws, zoning, neighborhood information etc.

Andrew Johnson
Wisconsin Realty Solutions
Wisconsin Real Estate Salesperson
http://www.wisconsinrealtysolutions.com

Writen by Gloria Smith

People think that if you're a landlord, you've got it made! You just stay at home, make sure that the rooms or houses that you've leased out are well maintained and, at the end of the month (or at the end of the week, depending on your arrangement with your tenant), you will receive a check amounting to the rent that's due.

If you live in an ideal world, that would be great. But you live in the real world – a place where tenants are remiss with their responsibilities; where the cost of maintenance may be more than what you earn in rent; where rent is not always paid on time.

As a landlord, you would have to deal with all these issues, and of all the problems a landlord can face, the most difficult task would be collecting or reminding tenants of late rent. Not all landlords are like the nasty ones shown on TV, where they would knock endlessly on your door until you cough up the rent money. A lot actually find this task disconcerting because it seems like an invasion of privacy. However, landlords cannot, not collect rent. It's their source of income and their livelihood. So to make this daunting task much easier for non-confrontational landlords, a form called, Notice of Overdue Rent can be used instead of actually coming up to the tenant and asking them to pay.

The Notice of Overdue Rent is simply a letter reminding the tenant that the due date has passed. The format of standard Notice of Overdue Rent forms are fairly simple: It should contain the date the notice was penned, the names and addresses of both the landlord and the tenant, a short text reminding the tenant when rent (how much) was due and finally, it should also indicate how the late rent should be paid (bank transfer, deposit, by check, etc).

Since the contents of Notice of Overdue Rent reminders are basic, you don't need to ask a real estate lawyer or a real estate agent to draft one for you. You have the option of either composing one yourself (just make sure that all the pertinent details are included) or just purchase and download a form from the internet and modify this to suit your needs.

Through the Notice of Overdue Rent form, collecting money from delinquent tenants will definitely be easier.

This article is brought to you by LegalHomeForms.com. Find a Notice of Overdue Rent and other Downloadable Real Estate Forms at our website.

Writen by Rhiannon Williamson

The thought of owning a second home in the sun or a ski lodge or mountain retreat where we can escape whenever the mood takes us is of course a commonly held dream.

And with the simplification of re-mortgaging facilities, the affordability of home loans and the growth in underlying equity many of us have enjoyed on our principal residences, there couldn't be a better time to turn that dream into a reality than today.

Here's how to buy a holiday home abroad and avoid all the common traps and pitfalls that people can fall foul of.

First things first you need to decide whether it make sense for you to release the equity that has built up in your principal residence to buy a property overseas, to raise a mortgage on the overseas property or to pay for it in cash.

Unfortunately there is no straight answer to this dilemma! The answer will lie somewhere among your own personal circumstances, your ability to afford an extension on your home loan or an overseas mortgage, the country in which you're buying abroad and whether or not it offers good investment potential. However, there are two simple facts that the majority of financial advisers and mortgage lenders agree upon and these may help you make your decision: –

1) taking the money that has built up in equity on one property and using it to buy another property is probably the most sensible thing to do when releasing equity 2) over the medium to long term real estate as an equity class is one of the most consistent returning investment mechanisms.

The next issue relates to which country you should buy your holiday home in. You may have a very positive idea of which country you would most like to spend your holiday time in – if you have a country in mind it's probably a country you know well and have had enjoyable times in before.

If on the other hand you're unsure and are looking abroad for a holiday home as an investment property in an emerging market or a market with strong room for growth, you should draw yourself a shortlist based upon what you're looking for in a holiday home – i.e., if you want a European beach house with 300 days sunshine a year you're more likely to look at the Mediterranean region rather than the Ukraine or the UK!

Whichever country you're considering, do research into the laws relating to foreign freehold ownership of real estate in that country and on the projected prospects for the property sector over the medium term – all this sort of information is available on the internet.

Once you have a country in mind you need to set yourself a realistic budget – realistic in that it is an amount you can afford and also that it is an amount that will buy you a quality property abroad. Going back to the Mediterranean region in Europe for a moment, those with a large budget could acquire a decent property on the Spanish coast, those with a small budget could only acquire substandard or renovation property on the Spanish coast but could purchase something far more substantial in the interior of Spain. Think about the amount you can afford and then look at the country you're interested in – where will you get the most for your money?

Always employ independent legal representation to assist you in any transactions you enter into abroad. You may not fully understand the language or legal system of the country you're buying your holiday home in so you need a lawyer who does! Furthermore you need a lawyer who is working solely for you and not representing your interests together with those of the vendor or property constructor as well!

Get any contracts or papers you sign officially translated into English before signing, have any promises made or deals verbally brokered written into the contract, make a will that includes your new property purchase and don't rush into a decision because pressure is being put upon you or because your time abroad to organise everything is short. The world will not run out of holiday homes for sale in our lifetime. If you keep your wits about you and remember the golden rule – i.e., if something seems too good to be true it probably is – you'll be just fine!

Rhiannon Williamson is a freelance writer whose many articles about international property investing have appeared in publications around the world. Visit this link to read her latest articles about property in North Cyprus

Writen by Chris Yarbrough

VA Homes and Home Loans

VA stands for U.S. Department of Veterans Affairs. To get a home loan through the VA, you must have served in one of the branches of the Armed Forces.

How does this concern the non-veteran? Simple: When a veteran defaults on a VA backed loan, the VA pays off the mortgage, assumes title to the property and then liquidates it. Anyone can buy a VA owned home.

The Differences Between HUD Homes and VA homes

Homes owned by the VA are almost always in better shape than those owned by HUD. It is a simple matter of demographics; HUD through the FHA will loan to almost anyone, while the VA is very exclusive. There tend to be far fewer VA homes available in relation to HUD homes as a result of the limited applicants, but VA homes can still be found for sale in almost every market in the U.S.

Dealing with the VA is completely different than dealing with HUD. The VA does not have an auction process. They have an offer process, much like that of a private owner. The difference is, the VA is a motivated seller. They are not looking to cash in on equity like a private owner is.

Chris Yarbrough writes for the eBay-Guides.com His home buying guides can be viewed here.

Writen by Patrick O'Connor

The purpose of this article is to analyze valuation methodology for several atypical types of apartments. Various circumstances and situations can cause an apartment complex to have above-or below-market rental rates, occupancy rates and operating expenses. This analysis examines the following two situations: low-income subsidized apartments, which receive above-market rental rates from HUD or another government agency, and projects that are part of the Low Income Housing Tax Credit (LIHTC) program.

The LIHTC program was established by the U.S. Congress to encourage development of affordable housing in economically disadvantaged areas. Project developers receive a tax credit for following the guidelines established by the program. They typically sell these credits to Fortune 500 corporations for 45 percent to 60 percent of the total project cost, excluding land.

The first step in the valuation process is analyzing market value definitions. The following is the definition from the Texas Property Tax Code, Section 1.04 (7): market value means the price at which a property would transfer for cash or its equivalent under prevailing market conditions if: exposed for sale in the open market with a reasonable time for the seller to find a purchaser, both the seller and the purchaser know of all the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions to its use, and both the seller and the purchaser seek to maximize their gains and neither is in a position to take advantage of the exigencies of the other.

Section (b) of the Texas Property Tax Code further requires: the market value of property shall be determined by the application of generally accepted appraisal techniques, and the same or similar appraisal techniques shall be used in appraising the same or similar kinds of property. However, each property shall be appraised based upon the individual characteristics that affect the property's market value.

The definition of market value, according to the 10th edition of The Appraisal of Real Estate published in 1992 by the Appraisal Institute, is: market value is the most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress.

The term which requires further review in the above definition is "knowledgeably." Is the purchaser knowledgeable regarding the effort required to comply with subsidized housing program requirements and tenants? Does he consider the effort to be rent for real estate or compensation for services? Does the purchaser of an LIHTC project understand that maximum rents are now established for at least 15 years based on deed restrictions? (LIHTC deed restrictions are now required for 30 years in Texas and most other states.)

Fee simple estate is defined in the third edition of the Dictionary of Real Estate Appraisal published by the Appraisal Institute as: absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat.

The practice in Texas is to base the assessed value on the value of the fee simple estate as opposed to the leased fee estate. This analysis is based on valuation of the fee simple estate instead of the leased fee estate.

The definition of leased fee estate in the third edition of the Dictionary of Real Estate Appraisal is: an ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the lessee are specified by contract terms contained within the lease.

The primary difference between the fee simple estate and the leased fee estate is that the tenant and landlord are each bound by commitments to pay rent and allow use of the property for a term. The contract rent agreed to between landlord and tenant may or may not be equal to market rent. For example, if a landlord entered into a 30-year lease for rent of $5 per square foot 15 years ago (when market rent was $5 per square foot) and the current market rent is $10 per square foot, the tenant has a substantial advantage. The tenant has a leasehold estate which may or may not have value depending on the term of the lease, the contract rent and market rent.

The Dictionary of Real Estate Appraisal defines leasehold estate as the interest held by the lessee (the tenant or renter) through a lease conveying the rights of use and occupancy for a stated term under certain conditions.

Conversely, if the tenant agreed to a rental rate of $15 per square foot in a strong market 10 years ago, and is committed to pay that rent for another 10 years, there is a substantial advantage to the landlord, and the tenant has a leasehold estate with a negative value. Practice in Texas is to establish the assessed value based on the fee simple estate instead of the leased fee estate. Therefore, the relevant criteria for determining market value includes market rent, market expenses, market occupancy and market derived capitalization rates. If a taxpayer made a poor business decision 10 years ago and has substantially below-market rent, it is inequitable for the taxing entities to reduce their ad valorem tax due to the bad business decision of the property owner. Conversely, if a property owner made a fortuitous or wise business decision and entered into an above-market lease, it is not appropriate to collect an above-average level of ad valorem tax from him because of his luck or prudence.

Market rent is defined by the third edition of the Dictionary of Real Estate Appraisal as: the rental income that a property would most probably command in the open market; indicated by current rents paid and asked for comparable space as of the date of appraisal.

Market rent is the compensation paid for the use of the real estate. It should not include compensation paid for factors other than the use of the real estate such as additional services which are not typically provided.

The next step in this process is to analyze valuation of properties which participate in subsidized programs which receive above-market rental rates. The final section will address valuation of projects in the LIHTC program.

Valuation of Subsidized Housing

This analysis will consider both the income and the sales comparison approaches to value. The cost approach is not utilized since it would provide similar results after calculating external obsolescence due to differences in rental rates.

Income Approach:

Apartment owners who participate in subsidized housing programs may or may not receive above-market rental rates. For many years, HUD offered above-market rental rates as an inducement to property owners to participate in the program. There are two reasons for HUD paying an above-market rental rate: to compensate for the inconvenience of dealing with a bureaucratic government program which mandates detailed inspections not typically required in the private market; and to compensate for working with residents who tend to be at the lowest socioeconomic level in our society.

It has not been unusual for HUD to pay contract rent of $0.70 to $0.80 per square foot per month for subsidized housing projects, even though the market rent for competing projects might only be $0.45 to $ 0.50 per square foot per month. The rent and sales comparables used in this analysis are located in a neighborhood characterized by income levels in the bottom quartile of the Houston area, minimal new construction of residential or commercial buildings for 25 years and heterogeneous levels of quality and appeal. Some sections, such as Riverside, have experienced gentrification, but other areas are marked by poorly maintained properties. Both the market rent projects and the subsidized rent projects are located in the area south of downtown Houston, bound by 288 to the west, Interstate-45 to the east, and Almeda-Genoa to the south. Consider the following tables which list rental rates for projects which do not participate in a subsidy program (market rent projects) and projects which do participate in a subsidized rent program:

Sources at the Houston HUD office indicate that expiring contracts for subsidized properties are being reviewed - if the owner so desires - for only one year. After that term, it is uncertain which course the plan will take. Indications that are subsidized programs are changing from the current contract rent method to a resident voucher program. The voucher method would involve issuing certificates to individuals who may then use the voucher at any participating property. The voucher amount would be based on individual's income. In addition to the plan to phase out above-market subsidized rents, another reason not to use contract rent when valuing subsidized housing is it is inconsistent with national public policy to penalize apartment operators participating in this program since the difference between market rent and contract rent is compensation for participating in the program and working with the low-income residents. It would also be inconsistent with practice in Texas to use contract rent instead of market rent when performing the income approach to value.

The three reasons contract rent should not be used in valuation are: it may include compensation for participation in the program and may not be equal to market rent, current plans are to eliminate the program and, it is inconsistent with national public policy Another factor to consider when performing the income approach is the market occupancy. Since tenants at the subsidized housing projects do not pay their rent or pay very minimal rent, the occupancy tends to be at above-market level. Consider the following tables which list the occupancy rates for both market rent projects and subsidized rent projects:

Sales Comparison Approach:

The sales comparison approach analysis further demonstrates the typical market values in this submarket. We have utilized information on comparable sales both from our internal database and from the Harris County Appraisal District database. Most sales within the submarket are listed:

Valuation of LIHTC Projects

The key difference between Low Income Housing Tax Credit project (LIHTC) and a market rent project is that the LIHTC project has deed restrictions which limit the maximum rent that can be charged. The restrictions also limit the maximum income of the residents. The Oregon Supreme Court ruled that the assessed value for LIHTC projects should be less than the assessed value for market rent projects since the rent at LIHTC projects is less than market rent, and the rents restrict the market. In Texas and most other states, the LIHTC project is limited by a 30-year deed restriction which runs with the land. In other words, it may not be revoked unilaterally by the property owner even if the property is sold or foreclosed. In exchange for these onerous restrictions, the LIHTC property owner receives a generous tax credit allowance from the U.S. government. Developers typically sell the tax credits for approximately 45 percent to 60 percent of the project development cost.

The primary difference between LIHTC projects and market rent projects is the rental rate. Operating expenses will be similar in either case, but the LIHTC project will likely have higher occupancy due to its below-market rents. Section (b) of the definition of market rent in the Texas Property Tax Code is as follows: both the seller and the purchaser know of all the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions on its use.

The LIHTC projects are located in targeted areas established by the federal government which have below-average income levels.

Income Approach:

The following are three income analyses of hypothetical 200-unit apartment complexes which each has 160,000 net rentable square feet. Contract rent is estimated to be $0.62 per square foot at the LIHTC project based on what is typical in the Houston area. (Our firm prepares approximately 20 market studies for LIHTC projects each year.) Market rent at new complexes in the Houston area is typically $0.80 to $1.10 per square foot per month. For the purposes of this analysis, market rent for new complexes is estimated to be $0.85 per square foot. Market occupancy is estimated to be 96 percent for the LIHTC project due to the below-market rents and 92 percent for the market project. Operating expenses may be slightly higher at the LIHTC project to account for accounting and communication with government agencies because of the LIHTC requirements, but this amount is expected to be offset by the lower ad valorem taxes. The analysis shows three income approaches. In addition to the LIHTC and upscale market rent projects, a mid-range project with rental rates roughly between the others is included for comparison purposes. A 10 percent capitalization rate for the LIHTC project has been included based on its below-market rents, which appear to make the income stream more stable. An 11 percent capitalization rate is used for the mid-range project since its rental rates would be far above market for the area. The capitalization rate for the upscale market rent project is 9.5 percent based on data in our files.

It appears clear that using market rent in the valuation of an LIHTC project would produce an appropriate result. Further, it appears the capitalization rate used in valuation of the LIHTC project using contract rents would overstate the values based on comparable sales. While investors would appreciate the stable income stream due to the below-market rents, few investors would want to pay $25,000 per unit for an apartment complex in an area where most complexes sell for $5,000 to $15,000 per unit.

Valuations of real property with above- and below-market rental rates offer challenges to property owners and assessment officers. There will likely be legitimate differences of opinion for the foreseeable future. Using the sales comparison and income approaches to value indicates a wide range of value. Thoughtful consideration and negotiation will be required to form a consensus on these issues.

Pat O'Connor, MAI is president of O'Connor & Associates, 130-person firm in business since 1974. O'Connor & Associates is the largest tax consultant in Texas, handled more than 43,000 administrative appeals in 100 counties in 2005 and is currently coordinating over 2,000 judicial appeals. O'Connor & Associates also provides real estate appraisal, cost segregation and market research services. To view entire article, visit http://www.poconnor.com.

Writen by Sergio Haros

As home prices continue to appreciate throughout the nation, down payments become harder to make. Housing down payment from HUD may be the answer.

One of the biggest financial hurdles to the American Dream of owning a home is the down payment. The magic number with down payments is twenty percent of the value of the home. If you can put down this amount, you avoid expenses such as private mortgage insurance and get a head start on building equity in the property. It can be hard, however, to come up with twenty percent on a home selling for $300,000, to wit, you need $60,000!

Homes can then be purchased through HUD and financed through FHA-approved low interest loans. In addition, HUD offers other services including housing down payment assistance. Although HUD does not offer these directly to the public, it has DAPs in place. A DAP is Downpayment Assistance through Secondary Finance Providers. These providers are backed by HUD and offer no to low interest loans that be used for down payment assistance when it is needed. Instead of financing your home purchase, they finance the down payment required for the purchase.

As you might imagine, financing you down payment in addition to your overall real estate purchase raises some questions. First, should you buying the property in question if you have to pursue both financing options? Owning a home is a great financial move, but you might be biting off more than you can chew by going in this direction. Second, perhaps you should choose a home with a lower price? This double finance situation means you are going to be paying a lot of interest to get into that home. Ultimately, you might regret doing so when you realize you will never see it again.

Housing down payment assistance through HUD can be incredibly useful. In fact, all of the services offered through HUD can greatly assist any potential homebuyers. They offer great, low cost homes and offer assistance to homeowners who are struggling to make the payments on their own home. This service should be taken advantage of when necessary.

Sergio Haros is with Great Western Mortgage - San Diego home loans provided by San Diego Mortgage Brokers.

Writen by Martin Dell

Only 20 minutes from the coastal resort of Salobrena, this is Moorish Spain at its best. With the ancient Muslim terracing and irrigation system still used to this day, Los Guajares is sandwiched between the mountain ranges of Sierra del Chaparral and Sierra de Los Guajares.

This area boasts spectacular scenery, an abundance of wildlife, and is one of the most unspoilt environments in Granada. Running away to the south is the Sierra Nevada, stretching to the Costa Tropical, a 100 kilometres stretch of relatively undiscovered coastline that's full of hidden coves and resorts such as Salobrena, Motril and Almunecar. For those seeking low prices and a rural retreat, Los Guajares is ideal.

Why buy there?
This stunning valley offers a temperate climate that's warm during the winter months but slightly cooler than inland areas due to its proximity to the coast. There are many species of deer, birds and mountain goats, along with a number of hiking and walking trails.

The valleys abound with orange, chirimoya (custard apples), almond and olive groves, while the narrow streets and houses are covered in geraniums. The area is also easily accessible, only 20 minutes from the coast and Motril, and only an hour from Granada, which now receives direct flights from the UK.

This is an old part of Andalucia where the villages are whitewashed and the streets are narrow and winding. There's culture and history at every turn, with the Alhambra Palace in Granada, the Alpujarras, the swathe of coastal towns, and the ruined Arab castle in Los Guajares itself. Add authentic tapas and fresh seafood, and you've got an unspoilt slice of traditional Andalucian life.

Where to buy
In Los Guajares itself, you have the three villages of Guajar Faraguit, Guajar Fondon and Guajar Alto. This old rural community offers a handful of bars and restaurants, and spectacular scenery. A two bedroom house can be picked up for a mere 67,000 euros, while 72,000 euros can secure you a fully renovated, traditional townhouse.

Further to the southeast is the whitewashed hilltop town of Salobrena. Surrounded by sugar cane fields, Salobrena is a picturesque seaside town, with many shops and resturants. Its maze of cobbled streets are overlooked by the ruins of a Moorish castle. Spend 145,000 euros and you can pick up a four bedroom apartment in the centre of Salobrena, while 155,000 euros will buy you a traditional house in the old town.

Molvizar is another traditional village. Situated on the edge of the Sierra del Chaparral, it lies in the stunning Lecrin valley, which is covered with almond and olive groves, and enjoys stunning views.

Molvizar is becoming popular with people looking for a quite village location but with access to the lively coastal town of Salobrena. There are many pretty, typically Spanish town houses for sale. A two bedroom cortijo here costs 284,000 euros, while a three bedroom townhouse is 106,000 euros.

Located near Motril, the village of Velez de Benaudalla nestles at the foothills of the Sierra Nevada and is a typical mountain village, with sugar cube houses, mountain views and a traditional church. A new feature to Velez is the newly constructed dam, which promises water sports, picnic areas and more. In the not-too-distant future it will also be a haven for bird watchers and walkers, providing many aspects of rural tourism.

Property here starts at 116,000 euros for a one bedroom townhouse, while a two bedroom townhouse requiring some work can be purchased for 99,000 euros.

The property market
Granada is relatively unknown compared to much of Andalucia. Currently, over 48 per cent of property here sells for between 50,000 euros and 150,000 euros, and a quarter of all homes sold are village houses. On average, property sells for 85,000 euros less than the national average price of 245,000 euros.

The market in Los Guajares is very different from that of a few years ago, when people were buying everything from renovation projects to off plan investments and luxury villas. Over the last five years, prices have increased dramatically, at a rate of 15 to 20 per cent per annum. A property such as a cortijo, or village home, has risen in price from 30,000 euros to over 100,000 euros. Nevertheless, there are still bargains to be had, especially in villages such as Jete and Otivar.

There has also been an increase in the number of people buying and investing in the area. The market is very international, although recent months have seen more properties being sold to Spanish clients than in previous years, more city based Spaniards are looking to the Costa Tropical and inland areas of Los Guajares for second homes, especially those from Madrid and Barcelona.

This has helped to keep the market for 2005 successful in what appears to otherwise be a sluggish year, particularly in terms of the number of British buyers. 2005 is seeing a mix of buyers seeking both property to let and also property for permanent relocation. Although there are still bargains to be had, this could all change when the motorways are finished and Los Guajares becomes more easily accessible.

The lettings market
Due to the longer winter season than in the coastal areas, the short term lettings season in Los Guajares is shorter than it is in much of Andalucia. The region is more suited to those looking for a walking holiday, rather than a beach vacation. However, some owners do let their property during the summer, and most do this privately via the internet. This shows the quieter nature of the lettings market.

The income generated is less than you'd expect along the Costa del Sol, although prices are rising in conjunction with increased interest. There has also been a significant turnaround in the number of clients looking to secure a long term rental in the Los Guajares area prior to buying. This trend started in 2004 and has grown significantly over the last eight months.

In terms of rental returns, a one bedroom traditional property in Guajar Alto can generate 210 euros per week in low season and 320 euros in peak season. A two bedroom townhouse in Velez de Benaudalla can secure between 205 euros to 365 euros. In the more popular coastal area of Salobrena, a three bedroom villa can generate between 500 euros and 850 euros per week, depending on the season.

Living in Los Guajares
There is much to recommend this area, not least the tradition, culture and awesome scenery. However, there are negatives too. The region has a limited infrastructure and the remote location of many villages means limited resources, such as schools and hospitals.

The streets are often steep and narrow, which can hamper access by car, and the weather can also be harsher during the winter months than on the coast. If you're looking to buy here, you must be prepared to learn Spanish, and to respect the locals and their traditional way of life.

There is a strong local presence here, with a growth of Spanish second home buyers investing in the area. Foreign buyers tend to be semi retired couples and middle aged families who are looking to escape the busy coastal resorts. There are still relatively few British people here, and the foreigners who have bought property are a cosmopolitan mix of Canadians, Scandinavians and Americans. There's also a thriving artistic community keen to take advantage of the area's natural beauty.

Salobrena and the surrounding resorts are more touristy and built up than the inland villages, but the level of development remains acceptable. There's more of an expat community here, and certainly more attractions, but again, it hardly reaches the levels seen further west in the Costa del Sol.

Granada in figures
Unemployment: 19%
Total EU population: 8,032 (35% of which are British)
Language: Castilian Spanish
Average property price: 160,000 Euros
Total area of Granada: 12,635km2
Population of Granada Province: 818,959
Population density: 64.82km2
Tallest peak, Mulhacen: 3,481m
Length of coastline: 100km

Martin Dell is Managing Director of Kyero Media S.L. - publisher of the largest English-language property portal in Spain, http://www.kyero.com

Writen by Alan Taylor

Today everyone is looking for the easiest way to learn for how to buy commercial properties. Most people keep asking as what they should do, so that they can buy their commercial property. Well the answer to all such questions could be that: you should be aware of all the rules and regulations of the game. By becoming a commercial mortgage broker, you can solve a lot of your problem while buying a commercial property for yourself.

Now the question may arises that what will I gain if I become a commercial mortgage broker?

Unless you have a lot of money, you will need to borrow money in order to buy commercial properties. Well if you are a commercial mortgage broker then you will certainly have good working relationship with a lender. This will help you in having a better chance for you loan approval. And also you are not breaking any rule for this special treatment. It is only because you have worked with the lender. You will be aware of what are the property types they lend loan on and what are the applicable conditions. You will also be aware of what are the criteria you need to satisfy. Remember the clients may have different needs from yours you are required to know different programs for the same. Your knowledge about the different programs should be up to date as the programs differ with different needs. Also if you are working with a borrower, you will know what are the properties you should own and which type of properties can benefit you.

Now that you are a commercial mortgage broker you will be able to have contacts in the commercial appraisal industry, also with commercial realtors and with commercial property managers too. This can help tremendously. It helps you in judging the properties as which one are good and which one is bad. And these contacts are not only restricted to your place you can develop a network across the country. So you can increase the number of options for yourself.

Obviously if you are working as a commercial mortgage broker and you are providing a good service to clients by getting the best financing for their projects then you are paid handsomely for it. Commercial mortgage broker's fee generally depends on the complexity of the loan and the level of the services you are providing. He/ She can earn anywhere from 0.5 to 3 points.

There are different points that can help you buy a commercial property if you are a commercial broker yourself as you will be able to know all the facts and the ground reality for the property you are looking for. It would be easier for you to manage the loan, as you will be having different contacts. And as you are working in the same field and earning handsomely funds are no problem. So if you are looking for a commercial property be in the same field to be aware of all the facts.

Alan Taylor is editor of http://www.realbighome.com and http://www.hotelmotel.in

Writen by Joel Teo

Real estate investment is one of the best long term forms of investment anyone can do and is readily understood by most of us. Some of us may be interested in buying properties that we can fix and flip, others might be interested in buying rental properties and make money from them. This article is for both kinds of investors and highlights three simple things you can do to make more money from your real estate investment whether it be in terms of rental or capital appreciation.

Tip #1 - Paint it up

Spend some money to paint up the fence and the rest of the property. You will be surprised at the difference this makes to the buyer of the property. Which would you rather see when you visit a property, a drab old looking building or a nice newly painted building? In addition, you might consider buying a nice front door to match the newly painted building.

On paint choices, depending on who you intend to sell the property to. For residential properties, try to get neutral colours and choose colours that make the place look welcoming. Colours that make someone upon seeing it say to themselves, "yes this is home". This would increase your chances of getting a tenant for your property and thus the price of your real estate investment will rise accordingly.

Tip #2- Fix the windows

Another simple trick, when residential viewers come into the house they love to look out of their house into the vista that surrounds your property. Thus you would want to work on the windows a bit so that they look nice and new and complement your new coat of paint.

Another thing that you can do is to install grilles in high crime areas and highlight it as a feature to your prospective buyers and tenants and tell them that you have considered their security when installing the grilles. But always check if they want the improvements unless it comes with the property when you first bought it.

Tip #3- Mow the lawn

This trick comes along with the neighbourhood. Let me explain what I mean by this. If you are investing into a residential property in a neighbourhood, take a look at the surroundings. If the properties in the area are in a state of disrepair, avoid even purchasing the property since you might be buying into a neighbourhood where the property prices will not increase by much.

If you have found a good neighbourhood with well maintained lawns and the real estate investment that you found is not well maintained, spend some time looking to see if the soil and the foundations of the building are good. If you think all is well, call in the professionals to re turf and mow the lawn and do some basic landscaping. You will be surprised at how much more a property with a well kept garden will fetch over a normal unkempt property within the same vicinity.

In conclusion, we have highlighted three simple steps anyone can take to make more money from their real estate investment. Try doing them today and hopefully it makes you more money along the way. Take massive steps and action and you will find that your real estate riches will start coming your way.

By Joel Teo 2006 All Rights Reserved

Joel Teo is the owner of several websites and takes a keen interest in real estate investment. For more real estate investment resources go to: http://www.realestateinvestment101.info/Investment_Resources.html

Writen by Luigi Frascati

Combining the advantages of apartment occupancy with those of home ownership has long been a dream of urban dwellers. But there are times, however, when dreams turn into nightmares. Throughout my plurannual Real Estate career, I think I have seen my fair share of horror stories when it comes to people who bought apartment units. So much so, in fact, that I have decided to lay out in brief the foundations of condo-buying, which every responsible and prudent condominium Purchaser should always follow, irrespective of price, location and taste.

Here we go:

[ ] Strata Documentation: Read It Like The Bible

Why? Because it is your Bible, as a condo-purchaser. Yes, the law says that your Agent, during the course of the fulfillment of his/her duties, is responsible for reading all the Minutes, reports, bylaws, condominium rules, the Strata regulations ... and raise all sorts of red flags, should something not be the way it is supposed to be. Which is all very fine, fair and dandy. But in practicality, it is you the one that will move in, come Possession Date, not your Agent.

You may discover things that your Agent is not under any obligation to disclose, and which nevertheless will have an impact on the quiet possession and enjoyment of the unit you are set to buy. For example, you may find out that the owner next door has been fined repeatedly for playing the drums at midnight. Or that the fellow two floors up has this habit of tossing cigarette butts out the window, which will invariably land on your balcony. Or that there is no clothes washing and drying allowed from 7:00 p.m. to 7:00 a.m. Even an unusual number of noise complaints involving stereo and television sets will affect the quality of life in your new apartment.

When you move in and make the place you bought your home, it is the little things that count, not the legal garble - as much as that is also very important. So, if you discover that hanging red drapes is forbidden and you are just so crazy for red drapes - well, you may want to think twice about finalizing the purchase.

[ ] Do Condos Need Inspections? You Betcha!

In fact I am always fond of telling my Clients that condos need triple inspections: the ordinary professional home inspection to cover the elements of the unit you are about to purchase, such as electrical system, plumbing and heating components. The extraordinary professional inspection to establish the condition of the exterior upkeep of the building, roof, basement, recreational facilities if any, parking and storage areas and ventilation system as well as fire exits and hallways. Your own inspection of the building envelope and rainscreen, if any, by going through and understanding all Strata Minutes and Engineering reports commissioned by Strata, and by having your Agent do exactly the same.

It must be remembered that a strata development consists of strata lots, common property and common assets. Every strata owner owns a proportionate interest in the common property and common assets of the strata corporation. The owner cannot separate his or her interest in the strata lot from the proportionate interest in the common property and common assets, which means that the owner is liable for their maintenance, upkeep and eventual replacement. So therefore, get a professional to inspect them all.

[ ] Stay Away From High-Rent Developments

If you buy a house, you want to make sure that your neighbourhood is made up of people like you, who really make a commitment to the upkeep of their homes and to maintain the safety of the streets. This is the reason why it is not the best idea in the world to move into a street where most homes are rented. The same goes for condos.

When buying into a condo development, find out the ‘rental rate', that is the percentage of units that are rented out. The higher the percentage, the more concerned you should be. This is so, because the more tenants - and landlord/owners - there are in the building, the fewer people you will see willing to pitch in for long term improvements and ameliorations which, in ultimate analysis, will be counterproductive to the appreciation and stability of your investment.

If the rental rate is over 50 percent, do yourself a favour: go buy somewhere else.

[ ] Share As Few Walls As Possible

The rule of thumb in residential condominiums purchasing is that the more walls you share with other units, the more you will feel like being on Main Street on the Fourth of July - every single day for the rest of your life. The same goes for the floor and ceiling. It is going to be quieter, much quieter, to have only someone below you than to have people above and below you. This is the reason why corner suites are usually more expensive, and why top floor corner suites are ‘la crème de la crème'.

[ ] Check For Signs Of Aging

Old apartment buildings can be charming indeed, especially when the new high-rises look like big blob of concrete to you. But there are times when the old fashioned ‘character' can put you all the way back to prehistory, at the time when Homo was scavenging and foraging in the high plains of the East African savannah. Alright, I confess - I am not the ‘character' type of buyer, as I like everything new and ultra modern. However, if you are entertaining the idea of taking a leap into prehistory and buying a condo in an old apartment building, check for signs of dilapidation such as crumbling walls or roof, as well as verify whether the heating, cooling and ventilation systems are regularly serviced. If they are not, you may soon be paying extra monthly maintenance fees to fix breakdowns.

And do not disturb the ghost ...

Luigi Frascati

Luigi Frascati is a Real Estate Agent based in Vancouver, British Columbia. He holds a Bachelor Degree in Economics and maintains a weblog entitled the Real Estate Chronicle at http://wwwrealestatechronicle.blogspot.com where you can find the full collection of his articles on Real Estate Economics and Finance. Luigi is associated with the Sutton Group, the largest real estate organization in Canada, and is based with Sutton-Centre Realty in Burnaby, BC.

Luigi is very proud to be an EzineArticles Platinum Expert Author. Your rating at the footer of this Article is very much appreciated. Thank you.