How Do Real Estate Markets Differ And Which Should You Buy In?

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get asked quite a bit… “Well how do I decide which market to invest in?” Great question, how do you know? The first step is to narrow down the markets that will be advantageous to invest in at all. For flippers, this isn’t as big of a deal because you can flip properties in just about any market. 

Some markets will be better than others, but you can really do that anywhere. More so for rental properties, it’s imperative you find a market that will actually put a profit in your pocket.

The primary factor in an advantageous rental market is the price-to-rent ratio. You have to be able to rent a property for enough money to cover the cost of the purchase of the house and all expenses, and then hopefully have some left over for profit.  I talked about this concept in more detail in The 5 Fastest Ways to Lose Money with a Rental Property. Note the example of an Atlanta property versus a Los Angeles property to understand this concept.

So, let’s say you have found a handful of markets that have good price-to-rent ratios and, therefore, can definitely put a profit in your pocket. Of those markets, how do you know which to choose? For the purpose of this article, I’m only going to look at known (as of today) investor-advantaged, larger markets and compare the advantages of those in order to explain how the benefits of various markets differ. I’m only going to look at the larger markets to keep it simple. There are many smaller markets out there that would be great for investors, and you can apply what I’m about to say to those.

Oprah Winfrey Reportedly Bought House For Half-Sister

​Erika Riggs

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prah Winfrey is famously generous - and it turns out, perhaps even more so with family. She reportedly dropped $490,000 on a home in Wisconsin for her half-sister Patricia Lofton, whom she met in 2010.

Lofton was born a few years after Winfrey to Winfrey's mother, Vernita Lee, but was put into foster care as an infant. At that point, Winfrey was already living with her father. Lofton was later adopted.

According to property records, Winfrey bought the home in late 2012, just two years after getting to know Lofton. A Winfrey spokeswoman was quoted by DailyMail.com saying, "Patricia's greatest dream was to go to college and become a social worker. Oprah wants to support that dream."

 Lofton has a dream home to return to at the end of a long day. A 2011 report by TMZ stated that Lofton was living in a four-bed, one-bath home measuring 1,070 square feet. Lofton's new home, care of Winfrey, is quite the upgrade. The house sits on nearly a third of an acre with four bedrooms and 2.5 baths.

Winfrey may feel comfortable visiting Lofton's new place; according to the listing, the home is private and partially wooded.

Source: AOL Real Estate

Fake Contractors Jailed For £4m VAT Scam

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leven members of a gang who set up 23 fake construction companies to steal £4m in a VAT fraud have been sentenced.

The gang used ”puppet” directors, fake invoices and bogus building contracts for housing developments as a smokescreen to hide their crimes.

People were paid up to £35,000 to act as directors and allow the gang to use their names and addresses to set up the bogus companies, with the sole purpose of claiming illegal VAT refunds.

HM Revenue and Customs officers became suspicious after they carried out checks on a number of companies involved in the building trade across the North West of England.

Lagos 2014 Budget, Infrastructure And Nigeria’s Real Estate

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e are obviously not going to recover from the frenzy of Nigeria’s Mortgage Refinance Company, NMCR; at least not anytime soon. Since it was launched, no week has passed without an item of news, opinion, report, broadcast or sundry details about it – such is the faith our industry has in the scheme.

Experts such as Mr. Hakeem Ogunniran, Managing Director, UACN Property Development Company; Mr. Niyi Adeleye, Head of Real Estate Finance, Stanbic IBTC West Africa and others have however hinted that the NMRC, though a welcome development, is not a magic wand.

While their arguments are telescoped by the myriad of other challenges slowing down the industry, my concern has always been; giving the “mathematical wonder” expected of the scheme, where is the land? That is, even if all mortgage seekers receive mortgages at reasonable rates, where are the houses for them to buy? 

We all know the housing units in large supplies are not those targeted at the average Nigerian. Those targeted at them are not in the city centres, besides the fact that they are also in short supply.

Official Speech of Governor Babatunde Fashola At The Launch of Lagos H.O.M.S

BEING SPEECH BY HIS EXCELLENCY, THE GOVERNOR OF LAGOS STATE, MR. BABATUNDE RAJI FASHOLA, SAN, ON THE OCCASION OF THE LAUNCH OF THE LAGOS STATE HOME OWNERSHIP MORTGAGE SCHEME ON MONDAY, FEBRUARY 3, 2014

 

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 welcome you all our distinguished guests to this occasion very warmly and with a lot of pride.

I am proud because this occasion affords me the opportunity to deliver on a promise made on behalf of our Party during the electioneering campaign.

I am proud because many years of grueling work, long hours and devotion by our team can now set us on a course that takes us closer to our desired prosperity.

I crave your indulgence to bear with me today because I may speak for a longer period of time than you are accustomed to. The reason is that I will need to explain the details of our Lagos HOMS Scheme which is why we are all here.

NHF e-card Will Eliminate Fraud In The Country – Jonathan

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resident GoodLuck Jonathan on Thursday said the National Housing Fund e-Card would eliminate fraud and promote accountability and transparency in the sector.

Jonathan made this known while commissioning the Aviation Village Estate and National Housing Fund e-Card in Abuja.

He said that the e-Card was one of the integral measures of his administration for more transparency and accountability to the management of the National Housing Fund (NHF).

He said that every economy, the housing sector played an important role in economic empowerment, job creation and wealth generation.

He said that the 270 housing units built by Sun Trust Real Estate Investment Ltd., and financed by Federal Mortgage Bank of Nigeria (FMBN) was another multiplier effects on the economy.

“I want to commend SunTrust Real Estate Investment Ltd., the strong partnership with the FMBN toward the completion of the aviation estates.

“This partnership illustrates the huge benefit in driving of the public private partnership arrangement for effective housing delivering and economic development,’’ he said.

Youngsters Told They Are “Too Clever” For Construction

Grant Prior

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oung people are being told by teachers and parents that they are “too clever” to pursue a career in construction.

A worrying survey by the Edge Foundation found that youngsters are being actively discouraged from opting for vocational education.

Over a third (36%) of students who pursued a vocational route were advised by school that they would be ‘more successful’ if they chose the academic pathway and almost a quarter (22%) were told that they were ‘too clever’ for vocational education.

Only half (51%) of parents encouraged their child’s choice to pursue vocational qualifications – compared to three quarters (74%) who were happy to support their child through an academic route.

Ireland Plots Its Return From Real-Estate Brink

Art Patnaude

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reland's commercial property market, which plunged the country into financial chaos when prices collapsed in 2009, is on the rebound.

A rush of foreign investment into Ireland is gaining momentum and driving values of hotels, stores and office buildings higher, particularly in Dublin. Growing confidence among businesses that the economy is recovering is helping fill office and retail space.

Fota Island Resort sold in 2013 for about €20 million

This year kicked off with a flurry of big deals, including Google Inc.'s purchase of an office building for €65 million ($88 million) and Blackstone Group LP's €100 million acquisition of three office properties, all in the capital's burgeoning Docklands business district.

Last week the government agency disposing of property taken over during the financial crisis agreed to sell Central Park—an office and apartment complex south of Dublin—for over the €250 million asking price to Kennedy Wilson, a U.S. private-equity firm, and Green REIT, a real-estate investment trust, according to people familiar with the matter.

Which Home Will Sell For $100 Million in 2014?

Robert Frank

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t least a half dozen homes in America are priced at $100 million or more.

The question is which—if any—will actually sell for nine figures in 2014?

Source: Sotheby's International Realty

The De Guigne Estate, Hillsborough, Calif.

The $100 million sale seems to have become an annual rite of passage for the luxury real estate market since the end of the financial crisis, a number that seems to sum up both the rising wealth of the super-rich and their growing appetite for trophy properties.

In 2011, Yuri Milner bought a mansion in Los Altos Hills, Calif., for $100 million. In 2012, Stan Kroenke bought a $132.5 million Montana ranch. And this year, a mansion in Woodside, Calif., sold to an unnamed buyer for $117.5 million.

In World's Best-Run Economy, House Prices Keep Falling

Eamonn Fingleton
 

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hen Americans travel abroad, the culture shocks tend to be unpleasant. Robert Locke’s experience was different. In buying a charming if rundown house in the picturesque German town of Goerlitz, he was surprised – very pleasantly – to find city officials second-guessing the deal. The price he had agreed was too high, they said, and in short order they forced the seller to reduce it by nearly one-third. The officials had the seller’s number because he had previously promised  to renovate the property and had failed to follow through.

As Locke, a retired historian, points out, the Goerlitz authorities’ attitude is a striking illustration of how differently the German economy works. Rather than keep their noses out of the economy, German officials glory in influencing market outcomes. While the Goerlitz authorities are probably exceptional in the degree to which they micromanage house prices, a fundamental principle of German economics is to keep housing costs stable and affordable.

It is hard to quarrel with the results. On figures cited in 2012 by the British housing consultant Colin Wiles, one-bedroom apartments in Berlin were then selling for as little as $55,000, and four-bedroom detached houses in the Rhineland for just $80,000. Broadly equivalent properties in New York City and Silicon Valley were selling for as much as ten times higher.

Mortgage Lending Hits 5-Year Low

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ortgage lending fell to its lowest level in five years in the fourth quarter of 2013, The Wall Street Journal reported, citing a report released by Inside Mortgage Finance.

The steep drop mostly reflects the end of a refinancing boom that reigned when interest rates hovered around record lows, but has come to a close in the wake of a sharp increase in mortgage rates last year.

At the same time, numbers released by the Mortgage Bankers Association suggest that the jump in rates may also have chipped away at purchase loan volume.

Source: The Wall Street Journal

In California Last Year, 39,145 Homes Sold For $1 million Or More

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By Lauren Beale

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rowned by the sale of a Malibu estate for $74.5 million, the number of houses sold last year at $1 million and above statewide jumped to a six-year high, according to real estate information service DataQuick.

In the strongest showing, the number of homes sold at $2 million and up, set state, Southern California and L.A. County records.

"The luxury market did bounce back last year," said housing market analyst Paul Habibi, a real estate lecturer at UCLA's Anderson School of Management. "A lot of people were stepping back into the waters."

Among them were lucrative investors looking for a place to park their dividends.

"The stock market lined the pockets of high-end buyers," Habibi said. "That translated into home purchases."

Appreciation-fueled gains in home equity allowed others who had been waiting on the sidelines to move up to bigger and better digs, releasing pent-up demand from recent years.

Homeownership Hope Dims As 2014 Housing Budget Shrinks 40% To N18.5bn

Odinaka Mbonu
 

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he hope of most mid-low income earners to become homeowners in 2014 may have dimmed as the Federal Government in this year’s budget estimate allocated just N18.5 billion to the Ministry of Lands, Housing and Urban Development, representing 40 percent decrease from the N36 billion that was given to the ministry in last year’s budget.

Of this figure, N5 billion is for recurrent expenditure, leaving only N13.5 billion for capital expenditure on housing and urban development, meaning that even if this allocation is spent 100 percent, the ministry would be able to build just 2,600 two-bedroom bungalows at a conservative unit price of N5 million.

Analysts say this is just a drop of water into an ocean in a country where housing deficit is over 17 million, a projected annual housing delivery of 72,000 housing units and home ownership level a little above 10 percent.

Lagos State Govt Rolls Out H.O.M.S

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agos State Governor, Mr. Babatunde Fashola (SAN) yesterday launched the official website for the state’s proposed Home Ownership Mortgage Scheme (H.O.M.S) and its Housing Arbitration Rules. The Governor explained that the scheme is designed as a means to ease home ownership for all Lagos residents.

According to the governor, the scheme is ‘’designed to make dream of home ownership achievable.” He added that the website will serve as a database for all applicants to the scheme which has been christened Lagos HOMS; where they will download all needed information, including rules of prequalification and the Mortgage Calculator which will enable prospective clients to calculate the quantum of their income and decide if the payment is suitable.

Housing Loans At 1.6% Interest

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ement manufacturer and marketer, Lafarge Wapco has decided to partner with LAPO, a Nigerian microfinance bank to provide affordable housing for low income earners by financing 400 clients for housing projects over the next six months. LAPO is in charge of disbursing the loans at a rate of 1.6 percent per month, which is one percent less than their usual lending rates. LAPO said they have so far serviced 50 clients.

The partnership was agreed on in October last year between Lafarge Wapco, Agence Francaise de Development and LAPO to provide affordable housing to low income earners in Nigeria. Under the agreement, LAPO will disburse the loans while Lafarge will see to the technicalities and ensure the project is strong and well executed to the plan and budget. The agreement is valued at 1billion Naira and was signed at Lafarge’s Sagamu Plant in Ogun State.