This MAJOR news affects you)
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This DIRECTLY AFFECTS YOU:
so read it all:
"I made 40,000$ on the easiest deal I ever did
with The-Done-For-You-Deals System."
Bryan West
Silverdale Florida
-->So what does that have to do with you?<--
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PS.
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Appraisers lower costs for federal tax savings on small property depreciation
Tax savings through cost segregation is no longer out of reach for investors in small and medium size properties. With appraiser expertise, fees for analysis are often one-third to one-half lower than those charged by traditional preparers.
Several years ago a definitive court case ruled that tangible personal property included in an acquisition or in overall costs should be depreciated as personal property for asset recovery, using the old Investment Tax Credit principles to classify personal property.
This meant that owners of improved properties could distinguish between real property and personal property to depreciate component costs over varying useful lives. Basically, instead of depreciating an entire commercial property over 39 years, or residential roperty (single-family rentals or multifamily) over 27.5 years, certain components are correctly identified as depreciating in much less time. For about 135 items, useful life periods can be 5, 7 or 15 years. This is known as cost segregation.
The result of increasing depreciation is lower taxable income (which would have been taxed at 35%) and more income taxed at the capital gains rate (15%) when the property is sold. Furthermore, it works for any type of improved property.
Until recently, primarily large accounting firms or engineering firms implemented cost segregation studies, addressing large and newly built properties and sometimes outsourcing the analysis.
Prices for those analytical reports, usually in the $10,000 to $40,000 range, were out of reach for owners of small properties, especially those holding less-than-new assets. Unfortunately, those owners representing the largest segment of real estate investors in the country were mostly overlooked by previous providers of cost segregation services.
Now a revolutionary paradigm shift is opening the door to very significant savings for owners of small properties. Much of the change is based upon introducing the efficiencies of highly knowledgeable real estate appraisers who often apply industry-accepted cost estimation techniques before determining remaining asset life. By not “over-engineering” the staffing or production process, professional fees are lower. Yet, results can usually meet or exceed those of far more expensive reports. This approach has been successfully field-tested by IRS auditors.
Changes that appraisers are introducing to cost segregation analysis and reporting are addressing: 1) the size of the property being analyzed, 2) the age of the property, and 3) an affordable price point. O’Connor & Associates, a nationwide real estate service firm, is taking advantage of such techniques to effect these beneficial changes:
1. Owners of property with an improvement basis as low as $500,000 can benefit from cost segregation. This compares to the limited properties worth $5 to $10 million and above that previously benefited.
2. Existing properties built or purchased after 1986 offer significant savings in year-one of cost segregation, even without producing original cost documents. Capturing non-segregated depreciation from prior years is perfectly allowable by the IRS. This compares to firms previously applying the methodology only to new construction.
3. Fees are no longer prohibitive. To prepare an analysis and report for many small properties, prices are low enough to generate at least 3 times the report cost in the first year.
This compares to the traditional fees ranging from $10,000 to $20,000 and up for comparable size properties.
It is wise to keep the owner’s CPA or tax preparer abreast throughout the process. For older properties, the CPA may need to complete a Form 3115 to submit with the tax return so the owner can realize savings on items not previously depreciated - without filing an amended return.
Income producing properties worth as little as $500,000 can achieve a 3:1 payback ratio of tax savings over the modest price of a cost segregation report. If owned for 3 or more years, the typical payback ratio is 10:1.
In late 2005, O’Connor’s pipeline of cost segregation work was up more than 100%. As owners are preparing for 2005 federal tax filings, many are tapping into this opportunity to lower their federal taxes. Even general partners who are not paying federal income taxes should use this depreciation method since K-1s will reflect lower taxable income to benefit their limited partners.
Several years ago a definitive court case ruled that tangible personal property included in an acquisition or in overall costs should be depreciated as personal property for asset recovery, using the old Investment Tax Credit principles to classify personal property.
This meant that owners of improved properties could distinguish between real property and personal property to depreciate component costs over varying useful lives. Basically, instead of depreciating an entire commercial property over 39 years, or residential roperty (single-family rentals or multifamily) over 27.5 years, certain components are correctly identified as depreciating in much less time. For about 135 items, useful life periods can be 5, 7 or 15 years. This is known as cost segregation.
The result of increasing depreciation is lower taxable income (which would have been taxed at 35%) and more income taxed at the capital gains rate (15%) when the property is sold. Furthermore, it works for any type of improved property.
Until recently, primarily large accounting firms or engineering firms implemented cost segregation studies, addressing large and newly built properties and sometimes outsourcing the analysis.
Prices for those analytical reports, usually in the $10,000 to $40,000 range, were out of reach for owners of small properties, especially those holding less-than-new assets. Unfortunately, those owners representing the largest segment of real estate investors in the country were mostly overlooked by previous providers of cost segregation services.
Now a revolutionary paradigm shift is opening the door to very significant savings for owners of small properties. Much of the change is based upon introducing the efficiencies of highly knowledgeable real estate appraisers who often apply industry-accepted cost estimation techniques before determining remaining asset life. By not “over-engineering” the staffing or production process, professional fees are lower. Yet, results can usually meet or exceed those of far more expensive reports. This approach has been successfully field-tested by IRS auditors.
Changes that appraisers are introducing to cost segregation analysis and reporting are addressing: 1) the size of the property being analyzed, 2) the age of the property, and 3) an affordable price point. O’Connor & Associates, a nationwide real estate service firm, is taking advantage of such techniques to effect these beneficial changes:
1. Owners of property with an improvement basis as low as $500,000 can benefit from cost segregation. This compares to the limited properties worth $5 to $10 million and above that previously benefited.
2. Existing properties built or purchased after 1986 offer significant savings in year-one of cost segregation, even without producing original cost documents. Capturing non-segregated depreciation from prior years is perfectly allowable by the IRS. This compares to firms previously applying the methodology only to new construction.
3. Fees are no longer prohibitive. To prepare an analysis and report for many small properties, prices are low enough to generate at least 3 times the report cost in the first year.
This compares to the traditional fees ranging from $10,000 to $20,000 and up for comparable size properties.
It is wise to keep the owner’s CPA or tax preparer abreast throughout the process. For older properties, the CPA may need to complete a Form 3115 to submit with the tax return so the owner can realize savings on items not previously depreciated - without filing an amended return.
Income producing properties worth as little as $500,000 can achieve a 3:1 payback ratio of tax savings over the modest price of a cost segregation report. If owned for 3 or more years, the typical payback ratio is 10:1.
In late 2005, O’Connor’s pipeline of cost segregation work was up more than 100%. As owners are preparing for 2005 federal tax filings, many are tapping into this opportunity to lower their federal taxes. Even general partners who are not paying federal income taxes should use this depreciation method since K-1s will reflect lower taxable income to benefit their limited partners.
The Art Of Buying Distressed Real Estate
Real estate turning into a distressed property through being confiscated by the lender or mortgagee due to the non-payment of taxes or mortgage amounts (loans) is an unfortunate outcome that no investor wants to happen. However, when it happens the mortgagee or the legal authorities become the owners and the previous owner or the debtor has no say in any matter related to the property. The legal authority, for instance a bank, has all the right to hold back such properties and take absolute charge of it from the owner. These properties are later sold in the market by the bank holding it. The selling price of the property is much less than its actual estimate, but it helps the lender to recover most of its dues, occasionally giving them a little profit too. This is called 'foreclosure' or 'mortgagee-in-possession sale'.
People often think that buying such a property is always profitable. Yes, it is but only if you pay due attention to all its implications before you buy it. There are a lot of things and procedures that are to be kept in mind before investing in such properties. Here's how you can actually invest your money in distressed properties and expect good yields on them.
Searching and locating such properties:
Almost every bank faces such situations and have to resell properties confiscated by it. Keeping track of such banks and searching on the Internet could be important sources of your information. The best thing would be approaching a Realtor who has specialized in such properties. Actually, seeing such properties for yourself gives you a comprehensive idea of the property. You can picture the situations the previous owner was in and situations that can occur. For example, if you assume that after you buy a certain held-back property you would give it on lease, you very well have to forecast the leasing prospect. There is a possibility that the property is not worth renting and that's why the previous owner could not pay the dues . Maybe you would like to live on that property or start a new business there. Again, you would have to evaluate the surroundings and neighborhood for yourself. Probably, it is not that exciting and could be the reason for the previous owner to incur the losses. Therefore, it is important to assess the neighborhood of the property by seeing it for yourself.
Hiring a specialized Realtor:
A Realtor always has the best knowledge about these kinds of deal and can very well guide you on buying such properties. Paying him his commission for the deal is always worth. He knows the true worth of such properties because he has links with lending banks and other financial institutions who hold properties like this.
Analyzing the paper and documents of the properties:
Be very cautious while reading through the documents. The documents will tell you why the previous owner fell back on paying the charges. Secondly, they will give you the outstanding amount details, square feet area of the property, owner's name, what was done on it, etc. These are very important details one mustn't ignore.
Take a second opinion:
If you are in a dilemma about buying such properties, preferably take a second opinion. This could be from a friend, another agent (Realtor) or a Realtor from the neighborhood of the property. This will help you clear a lot of mental cobwebs and come to a definite decision.
Buying the properties:
After you and your Realtor have analyzed the papers thoroughly, you can now negotiate on the price with the authorities who are the new owners of the property, if you are the sole/first buyer. However, if the property is to be bid, the highest bidder would have the right to take it away. Remember, always make your payments in the form of a check. Besides, make sure that the previous owner has no more links with the property and the previous owners or mortgagees have cleared their names from the property and you are the sole legal owner now.
People often think that buying such a property is always profitable. Yes, it is but only if you pay due attention to all its implications before you buy it. There are a lot of things and procedures that are to be kept in mind before investing in such properties. Here's how you can actually invest your money in distressed properties and expect good yields on them.
Searching and locating such properties:
Almost every bank faces such situations and have to resell properties confiscated by it. Keeping track of such banks and searching on the Internet could be important sources of your information. The best thing would be approaching a Realtor who has specialized in such properties. Actually, seeing such properties for yourself gives you a comprehensive idea of the property. You can picture the situations the previous owner was in and situations that can occur. For example, if you assume that after you buy a certain held-back property you would give it on lease, you very well have to forecast the leasing prospect. There is a possibility that the property is not worth renting and that's why the previous owner could not pay the dues . Maybe you would like to live on that property or start a new business there. Again, you would have to evaluate the surroundings and neighborhood for yourself. Probably, it is not that exciting and could be the reason for the previous owner to incur the losses. Therefore, it is important to assess the neighborhood of the property by seeing it for yourself.
Hiring a specialized Realtor:
A Realtor always has the best knowledge about these kinds of deal and can very well guide you on buying such properties. Paying him his commission for the deal is always worth. He knows the true worth of such properties because he has links with lending banks and other financial institutions who hold properties like this.
Analyzing the paper and documents of the properties:
Be very cautious while reading through the documents. The documents will tell you why the previous owner fell back on paying the charges. Secondly, they will give you the outstanding amount details, square feet area of the property, owner's name, what was done on it, etc. These are very important details one mustn't ignore.
Take a second opinion:
If you are in a dilemma about buying such properties, preferably take a second opinion. This could be from a friend, another agent (Realtor) or a Realtor from the neighborhood of the property. This will help you clear a lot of mental cobwebs and come to a definite decision.
Buying the properties:
After you and your Realtor have analyzed the papers thoroughly, you can now negotiate on the price with the authorities who are the new owners of the property, if you are the sole/first buyer. However, if the property is to be bid, the highest bidder would have the right to take it away. Remember, always make your payments in the form of a check. Besides, make sure that the previous owner has no more links with the property and the previous owners or mortgagees have cleared their names from the property and you are the sole legal owner now.
Tips For Successfully Negotiating A Real Estate Deal
One of the most frequently asked questions is “ how to negotiate for something?”
Many can't negotiate and a few think it’s below their dignity to negotiate. There's nothing wrong in saving money in a deal, is there? Well, instead of paying extra or being fooled for money in a big business or a real estate deal, you might as well negotiate and save some bucks. Everything can be negotiated it’s only the party with good negotiating skills that walks away with the best deal. Here are a few strategies for negotiation that can help you get a good deal. These tips can be used regardless to selling or buying any property.
Be a listener and not the speaker:
Many people say “we don't have the gift of the gab, so we can't negotiate”. Well, it’s a notion people carry! In fact, while striking a deal one should listen to the other party and get facts and figures out of them. If the party finishes their presentation, make sure you ask them questions persistently. With this your doubts would get cleared and you would gather substantial information. Don’t jump to any figure (amount) or conclusions unless you've spent enough time with the other party. Since this is the initial and the most crucial stage, you have to spend serious and sincere time with the opposite party in order for them to be serious and sincere too. This shows the amount of interest you are both investing in the deal.
Get emotionally involved with the opposite party:
This is one of the oldest and the most common methods used by old-time sellers and buyers. You have to take the other party in confidence and portray that you believe everything they say. Make them believe that you are the ultimate party striking the deal with them. This helps them feel that your the one they were looking for. With this, the opposite party opens up more and you get the exact picture about the person. Sometimes, it may happen that you come across a reluctant buyer/seller.
Fixing the price:
Most times it’s the seller who has to quote the price first. It’s actually very confusing for the seller specially so if he is new to the industry. If one is new and wants to strike a deal it’s advised he take some tips from a professional before starting. Actually, it’s best if a seller can influence the buyer to quote his price instead of quoting his selling price first. Thus, it’s advisable for the seller to learn skills to analyze the opposite party’s budget. One can learn this only after lot of practice, patience and interacting with different people.
Once you have disclosed the price, try not to budge, because you are looking for your profit and that’s why you've quoted the price. Again, there's another side to it, which is, you also have to compromise somewhere to the closest deal. You don't always get a perfect deal or a deal at par. Remember, with your slick and smooth talks you can make the party strike a deal at your terms and costs.
Many can't negotiate and a few think it’s below their dignity to negotiate. There's nothing wrong in saving money in a deal, is there? Well, instead of paying extra or being fooled for money in a big business or a real estate deal, you might as well negotiate and save some bucks. Everything can be negotiated it’s only the party with good negotiating skills that walks away with the best deal. Here are a few strategies for negotiation that can help you get a good deal. These tips can be used regardless to selling or buying any property.
Be a listener and not the speaker:
Many people say “we don't have the gift of the gab, so we can't negotiate”. Well, it’s a notion people carry! In fact, while striking a deal one should listen to the other party and get facts and figures out of them. If the party finishes their presentation, make sure you ask them questions persistently. With this your doubts would get cleared and you would gather substantial information. Don’t jump to any figure (amount) or conclusions unless you've spent enough time with the other party. Since this is the initial and the most crucial stage, you have to spend serious and sincere time with the opposite party in order for them to be serious and sincere too. This shows the amount of interest you are both investing in the deal.
Get emotionally involved with the opposite party:
This is one of the oldest and the most common methods used by old-time sellers and buyers. You have to take the other party in confidence and portray that you believe everything they say. Make them believe that you are the ultimate party striking the deal with them. This helps them feel that your the one they were looking for. With this, the opposite party opens up more and you get the exact picture about the person. Sometimes, it may happen that you come across a reluctant buyer/seller.
Fixing the price:
Most times it’s the seller who has to quote the price first. It’s actually very confusing for the seller specially so if he is new to the industry. If one is new and wants to strike a deal it’s advised he take some tips from a professional before starting. Actually, it’s best if a seller can influence the buyer to quote his price instead of quoting his selling price first. Thus, it’s advisable for the seller to learn skills to analyze the opposite party’s budget. One can learn this only after lot of practice, patience and interacting with different people.
Once you have disclosed the price, try not to budge, because you are looking for your profit and that’s why you've quoted the price. Again, there's another side to it, which is, you also have to compromise somewhere to the closest deal. You don't always get a perfect deal or a deal at par. Remember, with your slick and smooth talks you can make the party strike a deal at your terms and costs.
Appraised Value: The Ups & Downs Of How Much A House Is Worth
Determining Fair Market Value is an eternal struggle and major balancing act. That’s because buyers want a house to appraise on the low side—to keep the purchase price down. While sellers want the same house to appraise on the high side—to make the sale price higher. And then you’ve got the owners of the house—who also want the appraisal to be on the low side, in order to keep the property taxes down.
So with all these different agendas and points of view, how is the fair market value of a real estate property actually determined?
Once a year, your county sends all area homeowners official notices that put a dollar value on their property. And property taxes are based on those dollar values. But before those notices get sent out, a long, detailed process usually takes place. First, the land is valued as if it’s vacant—an empty lot, in other words. Then any improvements are described and measured. Improvements consist of the house and any other structures, pools, sheds, garages, and so forth. Next, most counties check the Marshall Valuation Service Cost Guide. It’s a standardized nationwide guide for determining the value of the cost per square foot to build a building that fits the description of the improved property. Next, if the house isn’t brand new, the replacement cost is considered, as well as depreciation; the year the house was constructed and the condition of the property are factors here. Appraisers then must take the critical step of comparing the value of the house with recent selling prices of similar homes in the neighborhood. At this point, the appraisal might stand “as is”—or it might be adjusted upward or downward.
Market Value is a theory, in other words—not an unchanging fact.
In a perfect world, you have to have willing buyer and a willing seller. Neither is under duress. Both are in a position to maximize gain and are trying to do this. But in the real world, things are rarely that simple and equally balanced. Which is why people feel differently about the appraisal value of a house. It really depends how strong their position is as a buyer or seller.
Does the local economy come into it at all? You bet it does.
Ask a successful Realtor about that! He or she will tell you they’ve noticed that the Rio Grande Valley’s fast-growing economy is attracting people from other areas who consider real estate here a bargain. That helps fuel increases in property values.
So—now you know where that Grand Total comes from.
You’re armed with the information you need to make a better house-buying decision. For instance, you can understand how two virtually identical houses that are in two different neighborhoods could be very far apart in price and appraised value. And why your choice of the right house in the right neighborhood could be worth a not-so-small fortune to you right now—and years down the road.
So with all these different agendas and points of view, how is the fair market value of a real estate property actually determined?
Once a year, your county sends all area homeowners official notices that put a dollar value on their property. And property taxes are based on those dollar values. But before those notices get sent out, a long, detailed process usually takes place. First, the land is valued as if it’s vacant—an empty lot, in other words. Then any improvements are described and measured. Improvements consist of the house and any other structures, pools, sheds, garages, and so forth. Next, most counties check the Marshall Valuation Service Cost Guide. It’s a standardized nationwide guide for determining the value of the cost per square foot to build a building that fits the description of the improved property. Next, if the house isn’t brand new, the replacement cost is considered, as well as depreciation; the year the house was constructed and the condition of the property are factors here. Appraisers then must take the critical step of comparing the value of the house with recent selling prices of similar homes in the neighborhood. At this point, the appraisal might stand “as is”—or it might be adjusted upward or downward.
Market Value is a theory, in other words—not an unchanging fact.
In a perfect world, you have to have willing buyer and a willing seller. Neither is under duress. Both are in a position to maximize gain and are trying to do this. But in the real world, things are rarely that simple and equally balanced. Which is why people feel differently about the appraisal value of a house. It really depends how strong their position is as a buyer or seller.
Does the local economy come into it at all? You bet it does.
Ask a successful Realtor about that! He or she will tell you they’ve noticed that the Rio Grande Valley’s fast-growing economy is attracting people from other areas who consider real estate here a bargain. That helps fuel increases in property values.
So—now you know where that Grand Total comes from.
You’re armed with the information you need to make a better house-buying decision. For instance, you can understand how two virtually identical houses that are in two different neighborhoods could be very far apart in price and appraised value. And why your choice of the right house in the right neighborhood could be worth a not-so-small fortune to you right now—and years down the road.
The Art Of Buying Distressed Real Estate
Real estate turning into a distressed property through being confiscated by the lender or mortgagee due to the non-payment of taxes or mortgage amounts (loans) is an unfortunate outcome that no investor wants to happen. However, when it happens the mortgagee or the legal authorities become the owners and the previous owner or the debtor has no say in any matter related to the property. The legal authority, for instance a bank, has all the right to hold back such properties and take absolute charge of it from the owner. These properties are later sold in the market by the bank holding it. The selling price of the property is much less than its actual estimate, but it helps the lender to recover most of its dues, occasionally giving them a little profit too. This is called 'foreclosure' or 'mortgagee-in-possession sale'.
People often think that buying such a property is always profitable. Yes, it is but only if you pay due attention to all its implications before you buy it. There are a lot of things and procedures that are to be kept in mind before investing in such properties. Here's how you can actually invest your money in distressed properties and expect good yields on them.
Searching and locating such properties:
Almost every bank faces such situations and have to resell properties confiscated by it. Keeping track of such banks and searching on the Internet could be important sources of your information. The best thing would be approaching a Realtor who has specialized in such properties. Actually, seeing such properties for yourself gives you a comprehensive idea of the property. You can picture the situations the previous owner was in and situations that can occur. For example, if you assume that after you buy a certain held-back property you would give it on lease, you very well have to forecast the leasing prospect. There is a possibility that the property is not worth renting and that's why the previous owner could not pay the dues . Maybe you would like to live on that property or start a new business there. Again, you would have to evaluate the surroundings and neighborhood for yourself. Probably, it is not that exciting and could be the reason for the previous owner to incur the losses. Therefore, it is important to assess the neighborhood of the property by seeing it for yourself.
Hiring a specialized Realtor:
A Realtor always has the best knowledge about these kinds of deal and can very well guide you on buying such properties. Paying him his commission for the deal is always worth. He knows the true worth of such properties because he has links with lending banks and other financial institutions who hold properties like this.
Analyzing the paper and documents of the properties:
Be very cautious while reading through the documents. The documents will tell you why the previous owner fell back on paying the charges. Secondly, they will give you the outstanding amount details, square feet area of the property, owner's name, what was done on it, etc. These are very important details one mustn't ignore.
Take a second opinion:
If you are in a dilemma about buying such properties, preferably take a second opinion. This could be from a friend, another agent (Realtor) or a Realtor from the neighborhood of the property. This will help you clear a lot of mental cobwebs and come to a definite decision.
Buying the properties:
After you and your Realtor have analyzed the papers thoroughly, you can now negotiate on the price with the authorities who are the new owners of the property, if you are the sole/first buyer. However, if the property is to be bid, the highest bidder would have the right to take it away. Remember, always make your payments in the form of a check. Besides, make sure that the previous owner has no more links with the property and the previous owners or mortgagees have cleared their names from the property and you are the sole legal owner now.
People often think that buying such a property is always profitable. Yes, it is but only if you pay due attention to all its implications before you buy it. There are a lot of things and procedures that are to be kept in mind before investing in such properties. Here's how you can actually invest your money in distressed properties and expect good yields on them.
Searching and locating such properties:
Almost every bank faces such situations and have to resell properties confiscated by it. Keeping track of such banks and searching on the Internet could be important sources of your information. The best thing would be approaching a Realtor who has specialized in such properties. Actually, seeing such properties for yourself gives you a comprehensive idea of the property. You can picture the situations the previous owner was in and situations that can occur. For example, if you assume that after you buy a certain held-back property you would give it on lease, you very well have to forecast the leasing prospect. There is a possibility that the property is not worth renting and that's why the previous owner could not pay the dues . Maybe you would like to live on that property or start a new business there. Again, you would have to evaluate the surroundings and neighborhood for yourself. Probably, it is not that exciting and could be the reason for the previous owner to incur the losses. Therefore, it is important to assess the neighborhood of the property by seeing it for yourself.
Hiring a specialized Realtor:
A Realtor always has the best knowledge about these kinds of deal and can very well guide you on buying such properties. Paying him his commission for the deal is always worth. He knows the true worth of such properties because he has links with lending banks and other financial institutions who hold properties like this.
Analyzing the paper and documents of the properties:
Be very cautious while reading through the documents. The documents will tell you why the previous owner fell back on paying the charges. Secondly, they will give you the outstanding amount details, square feet area of the property, owner's name, what was done on it, etc. These are very important details one mustn't ignore.
Take a second opinion:
If you are in a dilemma about buying such properties, preferably take a second opinion. This could be from a friend, another agent (Realtor) or a Realtor from the neighborhood of the property. This will help you clear a lot of mental cobwebs and come to a definite decision.
Buying the properties:
After you and your Realtor have analyzed the papers thoroughly, you can now negotiate on the price with the authorities who are the new owners of the property, if you are the sole/first buyer. However, if the property is to be bid, the highest bidder would have the right to take it away. Remember, always make your payments in the form of a check. Besides, make sure that the previous owner has no more links with the property and the previous owners or mortgagees have cleared their names from the property and you are the sole legal owner now.
Appraisal - Valuation of Subsidized Housing
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:
1. low-income subsidized apartments, which receive above-market rental rates from HUD or another government agency, and
2. 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:
a. exposed for sale in the open market with a reasonable time for the seller to find a purchaser,
b. 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
c. 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:
1. to compensate for the inconvenience of dealing with a bureaucratic government program which mandates detailed inspections not typically required in the private market; and
2. 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:
http://www.poconnor.com/article.asp?id=48
1. low-income subsidized apartments, which receive above-market rental rates from HUD or another government agency, and
2. 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:
a. exposed for sale in the open market with a reasonable time for the seller to find a purchaser,
b. 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
c. 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:
1. to compensate for the inconvenience of dealing with a bureaucratic government program which mandates detailed inspections not typically required in the private market; and
2. 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:
http://www.poconnor.com/article.asp?id=48
The Art Of Purchasing Real Estate At Public Auctions
If you plan to invest in distressed property, you can always try to get a good deal at the public auctions of such properties. You will acquire such homes that are auctioned to recover dues payable to the banks, HUD, IRS etc. You may get a good home at a price lower than the market value at such auctions, if you are the highest bidder. It is an art to purchase at the public auctions and you have to follow a scientific approach and prepare for it.
The financial institutions undertake public auctions on the foreclosed properties that they hold. The auctions are undertaken, when the homeowners fail to honor the legal commitments of payments or mortgage loans repayment and taxes like property tax and income tax. Other reasons may also exist, like death of owner, government seizure for illegal activities, lawsuit, divorce or even property abandonment. The foreclosure auctions are conducted literally outside the courthouse, where the buyers keep bidding on the properties and the highest bidder gets the property. These biddings are highly intense and process very fast. You need to be well prepared before you participate in such an auction to purchase property.
It is very important to conduct a thorough research about the property that is auctioned. Make yourself aware about the market prices for that area, where such homes are located. If possible, you should check out the property and inspect it, if allowed to do so. At least get an idea of the extent to which you may have to conduct any repairs and improvements on it. You will have to budget it and then consider a maximum price that you will bid. It is necessary that you also find out the liens and overdue property taxes on the property, which you may be liable to pay as homeowner later. You will have to be prepared to undertake some repairs and maintenance jobs on the home, as it would not be in the best of shapes for want of funds on the part of previous owners.
Before you bid, you should plan, how much returns you expect from this investment. Consider the expected returns and establish the maximum bid that you can make. You should be prepared with some amount that you may have to pay as deposit. Some states require the entire amount to be paid on the day of the auction. Be ready to pay something extra. There could be some payments that you are not aware of and you need to pay them on the day. You should also have some cash in hand to pay for the closing cost at the auction. You should also be prepared to pay a deposit by way of your cashiers check or certified funds.
Last but not the least, you have to be perfectly dressed for the auction. Your appearance can give others a feel that you have ample funds to bid and some may pull out of the war of bids. Moreover, do not get deeply involved with the properties and also do not be carried away by the excitement of bidding. You have to be realistic in your expectations of the outcome. You also need to be aware of the redemption period for the owner, if the property owner plans to buy back the property.
To prepare for a public auction is the key to get the right property to invest in. Put in a few more dollars to spruce up the place and you would be ready to reap the profit of bidding perfectly.
The financial institutions undertake public auctions on the foreclosed properties that they hold. The auctions are undertaken, when the homeowners fail to honor the legal commitments of payments or mortgage loans repayment and taxes like property tax and income tax. Other reasons may also exist, like death of owner, government seizure for illegal activities, lawsuit, divorce or even property abandonment. The foreclosure auctions are conducted literally outside the courthouse, where the buyers keep bidding on the properties and the highest bidder gets the property. These biddings are highly intense and process very fast. You need to be well prepared before you participate in such an auction to purchase property.
It is very important to conduct a thorough research about the property that is auctioned. Make yourself aware about the market prices for that area, where such homes are located. If possible, you should check out the property and inspect it, if allowed to do so. At least get an idea of the extent to which you may have to conduct any repairs and improvements on it. You will have to budget it and then consider a maximum price that you will bid. It is necessary that you also find out the liens and overdue property taxes on the property, which you may be liable to pay as homeowner later. You will have to be prepared to undertake some repairs and maintenance jobs on the home, as it would not be in the best of shapes for want of funds on the part of previous owners.
Before you bid, you should plan, how much returns you expect from this investment. Consider the expected returns and establish the maximum bid that you can make. You should be prepared with some amount that you may have to pay as deposit. Some states require the entire amount to be paid on the day of the auction. Be ready to pay something extra. There could be some payments that you are not aware of and you need to pay them on the day. You should also have some cash in hand to pay for the closing cost at the auction. You should also be prepared to pay a deposit by way of your cashiers check or certified funds.
Last but not the least, you have to be perfectly dressed for the auction. Your appearance can give others a feel that you have ample funds to bid and some may pull out of the war of bids. Moreover, do not get deeply involved with the properties and also do not be carried away by the excitement of bidding. You have to be realistic in your expectations of the outcome. You also need to be aware of the redemption period for the owner, if the property owner plans to buy back the property.
To prepare for a public auction is the key to get the right property to invest in. Put in a few more dollars to spruce up the place and you would be ready to reap the profit of bidding perfectly.
Join us tomorrow for Virtual Investing Revealed Online Radio Show
Happy Thursday to all of you!
We want you to join us at 12 pm or 4pm EST TOMORROW for our next Virtual Real Estate Investing Internet Radio Show where we will be talking about how to buy and sell properties from the comfort of your own home in TODAY's real estate market.
On this show we will cover
*What is Virtual Real Estate Investing? *Our favorite virtual real estate strategy?
*The 5 most important keys to success in today's market
*The best way to take advantage/profit of all the foreclosures in today's real estate market
*The best types of deals you can profit from in today's market
*The single most important thing to ask yourself before you start this business(hint: Not knowing this will almost guarantee your failure!)
*How do you find buyers that will crawl over broken glass to buy properties from you!
*What is this Virtual Real Estate System we have all about/how does one get started?
This is a radio show that you can listen to online or over the phone. Here's how you tune in:
You can listen in online on your computer at
http://www.blogtalkradio.com/VirtualRealEstateInvesting
You can also call in and listen at 347-838-9663
That's Friday 12pm or 4pm EST (the archived recording of the show will be on the site after the show)
See you in prosperity! Kim and Charles www.KimandCharlesPetty.com
Follow us on twitter...http://twitter.com/KimandCharles
Follow us on MySpacehttp://www.myspace.com/visionary_properties
Follow us on Facebookhttp://profile.to/kimandcharlespetty.
We want you to join us at 12 pm or 4pm EST TOMORROW for our next Virtual Real Estate Investing Internet Radio Show where we will be talking about how to buy and sell properties from the comfort of your own home in TODAY's real estate market.
On this show we will cover
*What is Virtual Real Estate Investing? *Our favorite virtual real estate strategy?
*The 5 most important keys to success in today's market
*The best way to take advantage/profit of all the foreclosures in today's real estate market
*The best types of deals you can profit from in today's market
*The single most important thing to ask yourself before you start this business(hint: Not knowing this will almost guarantee your failure!)
*How do you find buyers that will crawl over broken glass to buy properties from you!
*What is this Virtual Real Estate System we have all about/how does one get started?
This is a radio show that you can listen to online or over the phone. Here's how you tune in:
You can listen in online on your computer at
http://www.blogtalkradio.com/VirtualRealEstateInvesting
You can also call in and listen at 347-838-9663
That's Friday 12pm or 4pm EST (the archived recording of the show will be on the site after the show)
See you in prosperity! Kim and Charles www.KimandCharlesPetty.com
Follow us on twitter...http://twitter.com/KimandCharles
Follow us on MySpacehttp://www.myspace.com/visionary_properties
Follow us on Facebookhttp://profile.to/kimandcharlespetty.
Join us tomorrow on our Internet Radio Show: Virtual Real Estate Investing Revealed....
Happy Thursday to all of you!
We want you to join us at 12 pm or 4pm EST TOMORROW for our next Virtual Real Estate Investing Internet Radio Show where we will be talking about how to buy and sell properties from the comfort of your own home in TODAY's real estate market.
On this show we will cover *What is Virtual Real Estate Investing?
*Our favorite virtual real estate strategy?
*The 5 most important keys to success in today's market
*The best way to take advantage/profit of all the foreclosures in today's real estate market
*The best types of deals you can profit from in today's market
*The The single most important thing to ask yourself before you start this business(hint: Not knowing this will almost guarantee your failure!)
*How do you find buyers that will crawl over broken glass to buy properties from you!
*What is this Virtual Real Estate System we have all about/how does one get started?
This is a radio show that you can listen to online or over the phone. Here's how you tune in:
You can listen in online on your computer at http://www.blogtalkradio.com/VirtualRealEstateInvesting
You can also call in and listen at 347-838-9663
That's Friday 12pm or 4pm EST (the archived recording of the show will be on the site after the show)
Social Media is blowing up! We will be having a special teleseminar or webinar on this very soon! (Kim's idea :)) It's a great way to find deals/find buyers/private money/have fun!!!
*****************************************
Kim and Charles' Recommended Resources
Use video and audio to market properties to buy and sell.
www.VirtualTrafficGeyser.com
Recruit and train an army of virtual birddogs:
www.VirtualBirddogSystem.com
Best Templated websites for buying, selling,raising private money and more..
www.virtualrewebsites.com
Do you want to work a 17 hour work week?
Check out:
www.replaceyourselfvirtually.com
Motivated seller leads on a silver platter....
www.Virtualhousedeals.com
In order to be successful, you must be productive. You must be able to balance your life..your business, your personal life, family, etc...... Well, if you want to be more productive check out what my friend Jeff' Vaceks videos: go here: Check out the videos that our friend Jeff has on being productive (he's also giving away over $600 worth of free gifts...
http://www.gobeproductivenow.com/visionary
See you in prosperity!
Kim and Charles
www.KimandCharlesPetty.com
Follow us on twitter...
http://twitter.com/KimandCharles
Follow us on MySpace
http://www.myspace.com/visionary_properties
Follow us on Facebook
http://profile.to/kimandcharlespetty.
We want you to join us at 12 pm or 4pm EST TOMORROW for our next Virtual Real Estate Investing Internet Radio Show where we will be talking about how to buy and sell properties from the comfort of your own home in TODAY's real estate market.
On this show we will cover *What is Virtual Real Estate Investing?
*Our favorite virtual real estate strategy?
*The 5 most important keys to success in today's market
*The best way to take advantage/profit of all the foreclosures in today's real estate market
*The best types of deals you can profit from in today's market
*The The single most important thing to ask yourself before you start this business(hint: Not knowing this will almost guarantee your failure!)
*How do you find buyers that will crawl over broken glass to buy properties from you!
*What is this Virtual Real Estate System we have all about/how does one get started?
This is a radio show that you can listen to online or over the phone. Here's how you tune in:
You can listen in online on your computer at http://www.blogtalkradio.com/VirtualRealEstateInvesting
You can also call in and listen at 347-838-9663
That's Friday 12pm or 4pm EST (the archived recording of the show will be on the site after the show)
Social Media is blowing up! We will be having a special teleseminar or webinar on this very soon! (Kim's idea :)) It's a great way to find deals/find buyers/private money/have fun!!!
*****************************************
Kim and Charles' Recommended Resources
Use video and audio to market properties to buy and sell.
www.VirtualTrafficGeyser.com
Recruit and train an army of virtual birddogs:
www.VirtualBirddogSystem.com
Best Templated websites for buying, selling,raising private money and more..
www.virtualrewebsites.com
Do you want to work a 17 hour work week?
Check out:
www.replaceyourselfvirtually.com
Motivated seller leads on a silver platter....
www.Virtualhousedeals.com
In order to be successful, you must be productive. You must be able to balance your life..your business, your personal life, family, etc...... Well, if you want to be more productive check out what my friend Jeff' Vaceks videos: go here: Check out the videos that our friend Jeff has on being productive (he's also giving away over $600 worth of free gifts...
http://www.gobeproductivenow.com/visionary
See you in prosperity!
Kim and Charles
www.KimandCharlesPetty.com
Follow us on twitter...
http://twitter.com/KimandCharles
Follow us on MySpace
http://www.myspace.com/visionary_properties
Follow us on Facebook
http://profile.to/kimandcharlespetty.
Real Estate Investment Seminars
There are many dedicated professionals who organize real estate investment seminars to keep the industry components aware of the innocent and naive and the avariciousness of certain market players and conditions. These targeted traits basically add to the volatility of the industry and the uncertainty that prevails. The real estate investment seminars help slight immunization within the system. The seminars are organized by real estate investment and management gurus. They are widely advertised in the local classifieds, yellow pages, national and international online listings and splashed all over the ‘secure your reservation’ segment of newspapers and magazines.
The real estate investment seminars offer real estate secrets that are shared with the intent of understanding the real estate market better and analyzing the pros and cons of investments so far. The seminars act like a rostrum for a lot of introspection and prioritizing of investments. These sensitive areas of the real estate investment seminars are taken care of by the industry tutors, who have years of experience behind their understanding. The seminars are great places for buying software, books and guides, availing of dedicated lists, tips, advice and strategies that are tested and tried the world over.
The real estate investment seminars are usually attended by the existent players – buyers and sellers and agents, and the prospects. These workshops also enable you to get a better view and idea of the workability of the various activities behind the scenes. The speakers are people who have been a part of the industry for many years and are absolutely trust-worthy and transparent in all their deals. These professionals are truly dedicated and interpret comments easily for other seminar attendees to benefit from the mentoring. The attendees are usually freshers and those who are one and two investments old in the industry. The real estate investment seminars help the attendees to express their fears and opinions.
The speakers are charismatic and come with experience. The real estate counseling sessions can be registered with and attended via a fee and application form. The seminars are designed to help the seller to find out how much money the buyer is willing to invest and bag the best deal, and vice versa. The attendees are usually pre-screened and given name badges that help to identify financial situations with the help of color codes.
The pre screening also helps to identify specific investment goals. The real estate investment seminars help each attendee to identify specific methods to buy real estate across the continents. The ideas and strategies shared at such seminars and workshops are feasible and well within the paradigms of the governing law. The techniques taught are steered towards the greater understanding of the average investor. Much of what is shared by the current crop of real estate investment and management mentors is ethical.
The information shared on the nothing-down and lease options help many first time investors make informed decisions. The foolishness of unethical conduct, lying about the market value of a property and bribery is highlighted at these real estate investment seminars. The big advantages in increasing values via zoning changes and transactions with sophisticated people are also highlighted at the seminars.
The real estate investment seminars offer real estate secrets that are shared with the intent of understanding the real estate market better and analyzing the pros and cons of investments so far. The seminars act like a rostrum for a lot of introspection and prioritizing of investments. These sensitive areas of the real estate investment seminars are taken care of by the industry tutors, who have years of experience behind their understanding. The seminars are great places for buying software, books and guides, availing of dedicated lists, tips, advice and strategies that are tested and tried the world over.
The real estate investment seminars are usually attended by the existent players – buyers and sellers and agents, and the prospects. These workshops also enable you to get a better view and idea of the workability of the various activities behind the scenes. The speakers are people who have been a part of the industry for many years and are absolutely trust-worthy and transparent in all their deals. These professionals are truly dedicated and interpret comments easily for other seminar attendees to benefit from the mentoring. The attendees are usually freshers and those who are one and two investments old in the industry. The real estate investment seminars help the attendees to express their fears and opinions.
The speakers are charismatic and come with experience. The real estate counseling sessions can be registered with and attended via a fee and application form. The seminars are designed to help the seller to find out how much money the buyer is willing to invest and bag the best deal, and vice versa. The attendees are usually pre-screened and given name badges that help to identify financial situations with the help of color codes.
The pre screening also helps to identify specific investment goals. The real estate investment seminars help each attendee to identify specific methods to buy real estate across the continents. The ideas and strategies shared at such seminars and workshops are feasible and well within the paradigms of the governing law. The techniques taught are steered towards the greater understanding of the average investor. Much of what is shared by the current crop of real estate investment and management mentors is ethical.
The information shared on the nothing-down and lease options help many first time investors make informed decisions. The foolishness of unethical conduct, lying about the market value of a property and bribery is highlighted at these real estate investment seminars. The big advantages in increasing values via zoning changes and transactions with sophisticated people are also highlighted at the seminars.
Appealing Property Taxes for Apartment Owners
Property taxes are one of the largest line item costs incurred by apartment owners. However, many owners do not appeal effectively. Even though owners realize that property taxes can be managed and reduced through an appeal, some view taxes as an arbitrary estimate provided by the government which can't effectively be appealed. It tends to boil down to the old adage, "You can't fight city hall".
Fortunately, the property tax appeal process in Texas provides owners multiple opportunities to appeal. Handled either directly by the owner or by a property tax consultant, this process should involve an intense effort to annually appeal and minimize property taxes. Reducing the largest line item expense has a significant effect in reducing the owner's overall operating expenses. While it is not possible to entirely escape the burden of paying property taxes, it is possible to reduce taxes sharply, often by 25% to 50%.
Why some owners don't appeal
Some property owners don't appeal because they either don't understand the process, or don't understand that there is a good probability of achieving meaningful reductions in property taxes. Some owners believe that since the market value of their property exceeds the assessed value, then it is not possible to appeal and reduce the property taxes. Although appeals on unequal appraisal are relatively new, there is a clear-cut way to appeal property taxes at the administrative hearing level based on unequal appraisal. Unequal appraisal occurs when property is assessed inconsistently with neighboring properties or comparable properties. Also, some owners are reluctant to hire a property tax consultant, even though many consultants will work on a contingent fee basis, in which there is no cost to the owner unless property taxes for the current year are reduced.
Overview of appeal process
The following are the primary steps in the annual process for appealing property taxes:
· Request notice of accessed value
· File an appeal
· Prepare for hearing
. Review records
. Review market value appeal
. Review unequal appraisal appeal
· Set negotiating perimeters
· Administrative hearings
· Decide whether binding arbitration or judicial appeals are warranted
· Pay taxes timely
Requesting a notice of assessed value
Property owners have the option of requesting a notice of assessed value for their property annually. Section 25.19g of the Texas Property Tax Code provides the owner the option to request a written notice of the assessed value from the chief appraiser. Owners benefit from requesting and receiving a written notice of assessed value for each property because it ensures they have an opportunity to review the assessed value. This notice should be sent on an annual basis. The appraisal district does not have to send a notice of assessed value if the value increases by less than $1,000. However, if an owner was not satisfied with a prior year's value and the value remained the same, the appraisal district probably will not send a notice of the assessed value for the current year. In this situation, the owner might forget to protest since a notice of assessed value for the property was not received.
How to file and appeal
On or before May 31st of each year, the property owner should file an appeal for each property. However, while many owners are comfortable with an assessed value, in many cases there is a basis for appealing. Two options for appealing include:
1. unequal appraisal, and
2. market value based on data the appraisal district provides to the owner before the hearing.
You can appeal by completing the protest form provided by the appraisal district and indicating both excessive value (market value) and unequal appraisal as the basis for appeal. In addition, the property owner can simply send a notice that identifies the property, and indicates dissatisfaction with some determination of the appraisal office. The notice does not need to be on an official form, although the comptroller does provide a form for the convenience of property owners. (You can access the protest form at www.cutmytaxes.com .)
House Bill 201 - helpful information
House Bill 201 is the industry jargon for a property owner's option to request information the appraisal district will use at the hearing, and to receive a copy 14 days before the hearing. The name House Bill 201 is derived from the bill used to enact the law. The details for House Bill 201 are located in sections 41.461 and 41.67d of the Texas Property Tax Code. When filing a protest, the property owner should additionally request in writing that the appraisal district provide a copy of any information the appraisal district plans to introduce at the hearing. The appraisal district will typically require the property owner to come to the appraisal district office to pick up the information and charge a nominal fee, typically $0.10 per page. While the cost for House Bill 201 requests are quite low (typically $0.50 to $2.00 per property for residential and commercial) the information is invaluable in preparing for the hearing. In addition, filing a House Bill 201 request is important because it limits the information the appraisal district can present at the hearing to what was provided to the property owner two weeks before the hearing.
Preparing for the Hearing
Start by reviewing the appraisal district's information for your property for accuracy. If the appraisal district overstates either the quality or quantity of improvements, this will justify a deduction. The next step is to review the information on market value and unequal appraisal provided by the appraisal district in the House Bill 201 package. If the subject property is an income property, review the appraisal district's income analysis versus your actual income and expense statements. Consider the following areas as opportunities to rebut the appraisal district's analysis:
· Gross potential income
· Vacancy rate
· Total effective gross income, including other income
· Operating expenses
· Amount of replacement reserves
· Net operating income
· Capitalization rate
· Final market value
Many property owners and consultants start with the actual income and expense data, and use one or two of the assumptions provided by the appraisal district. However, they primarily utilize information from the actual income and expenses in preparing their own income analysis and estimate of market value for the subject property.
When comparable sales are the primary issue in determining market value, start by reviewing the comparable sales data provided by the appraisal district versus the assessed value for your property. Convert the sales prices from the appraisal district to either a per square foot or per unit basis. Then compare the sales to the per square foot or per unit assessment for your property. Sales can be helpful during the hearing.
The cost approach is not typically used in the property tax hearings except for brand new or relatively new properties. If your property is new, the appraisal district will probably want to review the cost information and you probably won't want to show it to them. In many cases, the actual cost of a property is higher than the estimate provided by the appraisal district. If this is the case, you will likely want to appeal on unequal appraisal instead of on market value. No matter how good your argument or how passionately it is expressed, the appraisal district staff and Appraisal Review Board (ARB) members tend to believe that cost equals value for new properties.
Deferred Maintenance and Functional Obsolescence
Another issue that is important for the market value appeal, and to some extent for a unequal appraisal appeal, is information on deferred maintenance and functional obsolescence. Deferred maintenance could include items such as:
· rotten wood
· peeling paint
· roof replacement
· substantial repair
· landscaping updating and other similar items
Most appraisal districts give minimal consideration to requests for adjustments based on deferred maintenance, unless the property owner provides repair costs from independent contractors. There are some exceptions where a cooperative informal appraiser or sympathetic ARB will take an owner's estimate of deferred maintenance and make adjustments based on those costs. Most appraisers and ARB members are much more inclined to make adjustments if third-party cost estimates are provided. In addition, the appraisers and many ARB members are inclined to only deduct a portion of the total cost using the argument, "we've been giving a replacement reserve allowance for this item for the past years and it'd be double-dipping to deduct the whole value off it in the current year." While this is an incorrect appraisal argument, it does tend to be the practice at many appraisal districts. The reality is, the cost of curing deferred maintenance is deducted from the offer by a prospective buyer.
Examples of functional obsolescence would be a three-bedroom apartment unit that only has one bathroom, or a two-bedroom apartment that does not have washer/dryer connections in an area where those connections are common. Another example would be an apartment that has a window air conditioner in an area where central HVAC is typical and expected.
Unequal appraisal analysis
The Texas Property Tax Code, section 41.43(b)(3), provides for appraising or appealing on unequal appraisal including ratio studies and "a reasonable number of comparable properties appropriately adjusted." Virtually all unequal appraisal appeals involve a reasonable number of comparables that are appropriately adjusted. Comparables are similar properties.
This is primarily because of the difficulty and cost of performing a ratio study. Historically, the position of many appraisal districts was that the property owner needed to get a fee appraisal for each comparable property and compare the market value estimated by the appraiser to the assessed value. The cost of getting multiple appraisals made this process financially impractical. Compiling a reasonable number of comparables appropriately adjusted is simple and straightforward. The first step is to choose a reasonable number of comparables. Usually four to five comparables is the typical number used at a property tax hearing, but in some cases, property owners choose ten to thirty. In some cases, there may only be one to four comparable properties that merit consideration. Most unequal appraisal presentations include three to ten comparables. The number of reasonable comparables depends on the location, type, size and age of the property. For example, there would be fewer five-year-old bowling alleys in the northern part of Harris County compared to recently built apartment complexes.
After choosing a reasonable number of comparables, array them in a table format, including fields of data such as account number, net rentable area, year built, street address, assessed value and assessed value per square foot.
You should also review the information in the appraisal district's House Bill 201 packet on an unequal appraisal. In many cases, the appraisal districts unequal appraisal analysis will document a reduction in your assessed value! If the appraisal districts unequal appraisal analysis documents a reduction, either the informal appraiser or the ARB should make the adjustment in assessed value for you. Having the opportunity to get an assessed value reduced automatically based on the appraisal districts unequal appraisal analysis is one of the reasons to appeal every property every year.
Completing Hearing Preparation
After reviewing the appraisal district's information on your property, the House Bill 201 package, and your market value and unequal appraisal analyses, determine the strengths and weaknesses of each approach and decide which basis of appeal provides the best opportunity for a meaningful reduction. Although appeals on unequal appraisal have clearly been the law of the land since 2003, some appraisal districts and review boards have chosen to disregard the option for unequal appraisal put forth by the Texas Legislature. Although there is litigation underway which should resolve this issue within the next year, it would be prudent to visit someone who is knowledgeable in local property tax appeals to determine whether the county appraisal district and ARB in your area are considering appeals on unequal appraisal.
Set Negotiating Perimeters
After reviewing the information, it is important to set the highest level of assessed value you will accept at the informal hearing because after you accept an assessed value, the appeal process will be complete for the year and you will not be able to appeal further.
Administrative Hearing Process
The two steps to the administrative hearing process are the informal hearing and the appraisal review board hearing.
The Informal Hearing
The following procedure and rules are typical at the informal hearing:
· Meet with an appraiser representing the appraisal district. You should be polite and prepared at this meeting. While many property owners are frustrated and angry at the high level of real estate taxes, the appraisal district appraiser does not control the tax rate set by various entities nor the policy regarding property taxes in the area or the state. The appraisal district appraiser is trying to execute his job in a professional manner and appreciates it when property owners work with him on that basis.
· Provide the appraiser information on your property and he will review that information and information he has available.
· The appraiser will likely make an offer to settle the assessed value of your property fairly quickly. You can either accept the value or negotiate further. Either way, you should know within ten to twenty minutes whether the appraiser will offer an acceptable value. If the value is acceptable, conclude the negotiation by agreeing to the value for the current year. If the value offered is not acceptable, ask to go forward with an ARB hearing.
Appraisal Review Board Hearing (ARB)
The ARB hearing panel consists of three impartial citizens selected and paid by the appraisal district. The age of most ARB members ranges from fifty to eighty. There is an unfortunate bias in the system since the ARB members are selected and paid by the appraisal district, but most ARB members are reasonable people who want to make appropriate decisions.
Like the appraisal district appraiser, the ARB does not set tax rates or tax policy. The members are also not responsible for the effectiveness of local government. It is unlikely to help your case if you complain to the ARB members about either the high level of property taxes or the poor quality of some aspect of local government.
The ARB will expect you to make your presentation in about three to ten minutes. They will typically wait patiently while you make your presentation and may have questions after you conclude. An appraiser from the appraisal district, who may or may not be the same person who attended the informal hearing, will represent the appraisal district at the ARB hearing. The appraiser will comment on the evidence you presented and will often present other information the appraisal district has available. If you requested a House Bill 201 package for your property, it substantially limits the evidence the appraisal district appraiser can offer at the hearing. The ARB members may have questions after the appraisers presentation. Then the property owner will be given a final opportunity to rebut evidence presented by the appraisal district appraiser and quickly summarize the evidence. The ARB members strongly prefer you not repeat your entire presentation at this point.
After hearing the evidence, the ARB members will confer and make a decision. This decision is not subject to negotiation and they will not revise the decision if further evidence is presented. When this decision is announced, the hearing is effectively over. The ARB will send a letter two to four weeks later summarizing their decision and notifying the owner of a 45 day limitation from the date receipt of the ARB decision to either request binding arbitration or file a judicial appeal.
Binding Arbitration or Judicial Appeal
Beginning September 2005, owners of properties with an assessed value of $1 million or less may file a request for binding arbitration. The owner must file with the appraisal district no more than 45 days after receipt of the notice of the ARB's decision. The binding arbitration option is interesting because it includes a loser pays provision. The appraisal district pays for the arbitrator's fee if the final value is closer to the owner's opinion of value, and the owner pays for the binding arbitration if the final decision is closer to the appraisal district's opinion of value. Binding arbitration was passed to provide an alternative to judicial appeals, which can be expensive to prosecute.
Many owners pursue judicial appeals to further reduce property taxes. In 2005, O'Connor & Associates filed over 1,200 judicial appeals on behalf of property owners in the state of Texas. The judicial appeals can be expensive if the property owner and attorney don't understand the process and have a plan in place to minimize the cost of legal and expert witness fees. Judicial appeals are typically successful. However, success requires cooperation from the property owner, such as providing responses to questions, documents and a deposition if requested. The judicial appeal is meaningful as an option to minimize property taxes since it reduces the base value. This is important because the appraisal district and ARB consider the base value in the subsequent year when setting the administrative hearing value.
Conclusion
Property owners can generate substantial reductions in property taxes by appealing annually. Consider appeals on both market value and unequal appraisal and obtain the House Bill 201 information when preparing for the appeal hearing. Property owners should consider all three levels of appeal: informal hearing, ARB hearing and judicial appeal/binding arbitration. While the ARB hearing and judicial appeal/binding arbitration can be an intimidating process, each is straightforward once you understand the mechanics.
Fortunately, the property tax appeal process in Texas provides owners multiple opportunities to appeal. Handled either directly by the owner or by a property tax consultant, this process should involve an intense effort to annually appeal and minimize property taxes. Reducing the largest line item expense has a significant effect in reducing the owner's overall operating expenses. While it is not possible to entirely escape the burden of paying property taxes, it is possible to reduce taxes sharply, often by 25% to 50%.
Why some owners don't appeal
Some property owners don't appeal because they either don't understand the process, or don't understand that there is a good probability of achieving meaningful reductions in property taxes. Some owners believe that since the market value of their property exceeds the assessed value, then it is not possible to appeal and reduce the property taxes. Although appeals on unequal appraisal are relatively new, there is a clear-cut way to appeal property taxes at the administrative hearing level based on unequal appraisal. Unequal appraisal occurs when property is assessed inconsistently with neighboring properties or comparable properties. Also, some owners are reluctant to hire a property tax consultant, even though many consultants will work on a contingent fee basis, in which there is no cost to the owner unless property taxes for the current year are reduced.
Overview of appeal process
The following are the primary steps in the annual process for appealing property taxes:
· Request notice of accessed value
· File an appeal
· Prepare for hearing
. Review records
. Review market value appeal
. Review unequal appraisal appeal
· Set negotiating perimeters
· Administrative hearings
· Decide whether binding arbitration or judicial appeals are warranted
· Pay taxes timely
Requesting a notice of assessed value
Property owners have the option of requesting a notice of assessed value for their property annually. Section 25.19g of the Texas Property Tax Code provides the owner the option to request a written notice of the assessed value from the chief appraiser. Owners benefit from requesting and receiving a written notice of assessed value for each property because it ensures they have an opportunity to review the assessed value. This notice should be sent on an annual basis. The appraisal district does not have to send a notice of assessed value if the value increases by less than $1,000. However, if an owner was not satisfied with a prior year's value and the value remained the same, the appraisal district probably will not send a notice of the assessed value for the current year. In this situation, the owner might forget to protest since a notice of assessed value for the property was not received.
How to file and appeal
On or before May 31st of each year, the property owner should file an appeal for each property. However, while many owners are comfortable with an assessed value, in many cases there is a basis for appealing. Two options for appealing include:
1. unequal appraisal, and
2. market value based on data the appraisal district provides to the owner before the hearing.
You can appeal by completing the protest form provided by the appraisal district and indicating both excessive value (market value) and unequal appraisal as the basis for appeal. In addition, the property owner can simply send a notice that identifies the property, and indicates dissatisfaction with some determination of the appraisal office. The notice does not need to be on an official form, although the comptroller does provide a form for the convenience of property owners. (You can access the protest form at www.cutmytaxes.com .)
House Bill 201 - helpful information
House Bill 201 is the industry jargon for a property owner's option to request information the appraisal district will use at the hearing, and to receive a copy 14 days before the hearing. The name House Bill 201 is derived from the bill used to enact the law. The details for House Bill 201 are located in sections 41.461 and 41.67d of the Texas Property Tax Code. When filing a protest, the property owner should additionally request in writing that the appraisal district provide a copy of any information the appraisal district plans to introduce at the hearing. The appraisal district will typically require the property owner to come to the appraisal district office to pick up the information and charge a nominal fee, typically $0.10 per page. While the cost for House Bill 201 requests are quite low (typically $0.50 to $2.00 per property for residential and commercial) the information is invaluable in preparing for the hearing. In addition, filing a House Bill 201 request is important because it limits the information the appraisal district can present at the hearing to what was provided to the property owner two weeks before the hearing.
Preparing for the Hearing
Start by reviewing the appraisal district's information for your property for accuracy. If the appraisal district overstates either the quality or quantity of improvements, this will justify a deduction. The next step is to review the information on market value and unequal appraisal provided by the appraisal district in the House Bill 201 package. If the subject property is an income property, review the appraisal district's income analysis versus your actual income and expense statements. Consider the following areas as opportunities to rebut the appraisal district's analysis:
· Gross potential income
· Vacancy rate
· Total effective gross income, including other income
· Operating expenses
· Amount of replacement reserves
· Net operating income
· Capitalization rate
· Final market value
Many property owners and consultants start with the actual income and expense data, and use one or two of the assumptions provided by the appraisal district. However, they primarily utilize information from the actual income and expenses in preparing their own income analysis and estimate of market value for the subject property.
When comparable sales are the primary issue in determining market value, start by reviewing the comparable sales data provided by the appraisal district versus the assessed value for your property. Convert the sales prices from the appraisal district to either a per square foot or per unit basis. Then compare the sales to the per square foot or per unit assessment for your property. Sales can be helpful during the hearing.
The cost approach is not typically used in the property tax hearings except for brand new or relatively new properties. If your property is new, the appraisal district will probably want to review the cost information and you probably won't want to show it to them. In many cases, the actual cost of a property is higher than the estimate provided by the appraisal district. If this is the case, you will likely want to appeal on unequal appraisal instead of on market value. No matter how good your argument or how passionately it is expressed, the appraisal district staff and Appraisal Review Board (ARB) members tend to believe that cost equals value for new properties.
Deferred Maintenance and Functional Obsolescence
Another issue that is important for the market value appeal, and to some extent for a unequal appraisal appeal, is information on deferred maintenance and functional obsolescence. Deferred maintenance could include items such as:
· rotten wood
· peeling paint
· roof replacement
· substantial repair
· landscaping updating and other similar items
Most appraisal districts give minimal consideration to requests for adjustments based on deferred maintenance, unless the property owner provides repair costs from independent contractors. There are some exceptions where a cooperative informal appraiser or sympathetic ARB will take an owner's estimate of deferred maintenance and make adjustments based on those costs. Most appraisers and ARB members are much more inclined to make adjustments if third-party cost estimates are provided. In addition, the appraisers and many ARB members are inclined to only deduct a portion of the total cost using the argument, "we've been giving a replacement reserve allowance for this item for the past years and it'd be double-dipping to deduct the whole value off it in the current year." While this is an incorrect appraisal argument, it does tend to be the practice at many appraisal districts. The reality is, the cost of curing deferred maintenance is deducted from the offer by a prospective buyer.
Examples of functional obsolescence would be a three-bedroom apartment unit that only has one bathroom, or a two-bedroom apartment that does not have washer/dryer connections in an area where those connections are common. Another example would be an apartment that has a window air conditioner in an area where central HVAC is typical and expected.
Unequal appraisal analysis
The Texas Property Tax Code, section 41.43(b)(3), provides for appraising or appealing on unequal appraisal including ratio studies and "a reasonable number of comparable properties appropriately adjusted." Virtually all unequal appraisal appeals involve a reasonable number of comparables that are appropriately adjusted. Comparables are similar properties.
This is primarily because of the difficulty and cost of performing a ratio study. Historically, the position of many appraisal districts was that the property owner needed to get a fee appraisal for each comparable property and compare the market value estimated by the appraiser to the assessed value. The cost of getting multiple appraisals made this process financially impractical. Compiling a reasonable number of comparables appropriately adjusted is simple and straightforward. The first step is to choose a reasonable number of comparables. Usually four to five comparables is the typical number used at a property tax hearing, but in some cases, property owners choose ten to thirty. In some cases, there may only be one to four comparable properties that merit consideration. Most unequal appraisal presentations include three to ten comparables. The number of reasonable comparables depends on the location, type, size and age of the property. For example, there would be fewer five-year-old bowling alleys in the northern part of Harris County compared to recently built apartment complexes.
After choosing a reasonable number of comparables, array them in a table format, including fields of data such as account number, net rentable area, year built, street address, assessed value and assessed value per square foot.
You should also review the information in the appraisal district's House Bill 201 packet on an unequal appraisal. In many cases, the appraisal districts unequal appraisal analysis will document a reduction in your assessed value! If the appraisal districts unequal appraisal analysis documents a reduction, either the informal appraiser or the ARB should make the adjustment in assessed value for you. Having the opportunity to get an assessed value reduced automatically based on the appraisal districts unequal appraisal analysis is one of the reasons to appeal every property every year.
Completing Hearing Preparation
After reviewing the appraisal district's information on your property, the House Bill 201 package, and your market value and unequal appraisal analyses, determine the strengths and weaknesses of each approach and decide which basis of appeal provides the best opportunity for a meaningful reduction. Although appeals on unequal appraisal have clearly been the law of the land since 2003, some appraisal districts and review boards have chosen to disregard the option for unequal appraisal put forth by the Texas Legislature. Although there is litigation underway which should resolve this issue within the next year, it would be prudent to visit someone who is knowledgeable in local property tax appeals to determine whether the county appraisal district and ARB in your area are considering appeals on unequal appraisal.
Set Negotiating Perimeters
After reviewing the information, it is important to set the highest level of assessed value you will accept at the informal hearing because after you accept an assessed value, the appeal process will be complete for the year and you will not be able to appeal further.
Administrative Hearing Process
The two steps to the administrative hearing process are the informal hearing and the appraisal review board hearing.
The Informal Hearing
The following procedure and rules are typical at the informal hearing:
· Meet with an appraiser representing the appraisal district. You should be polite and prepared at this meeting. While many property owners are frustrated and angry at the high level of real estate taxes, the appraisal district appraiser does not control the tax rate set by various entities nor the policy regarding property taxes in the area or the state. The appraisal district appraiser is trying to execute his job in a professional manner and appreciates it when property owners work with him on that basis.
· Provide the appraiser information on your property and he will review that information and information he has available.
· The appraiser will likely make an offer to settle the assessed value of your property fairly quickly. You can either accept the value or negotiate further. Either way, you should know within ten to twenty minutes whether the appraiser will offer an acceptable value. If the value is acceptable, conclude the negotiation by agreeing to the value for the current year. If the value offered is not acceptable, ask to go forward with an ARB hearing.
Appraisal Review Board Hearing (ARB)
The ARB hearing panel consists of three impartial citizens selected and paid by the appraisal district. The age of most ARB members ranges from fifty to eighty. There is an unfortunate bias in the system since the ARB members are selected and paid by the appraisal district, but most ARB members are reasonable people who want to make appropriate decisions.
Like the appraisal district appraiser, the ARB does not set tax rates or tax policy. The members are also not responsible for the effectiveness of local government. It is unlikely to help your case if you complain to the ARB members about either the high level of property taxes or the poor quality of some aspect of local government.
The ARB will expect you to make your presentation in about three to ten minutes. They will typically wait patiently while you make your presentation and may have questions after you conclude. An appraiser from the appraisal district, who may or may not be the same person who attended the informal hearing, will represent the appraisal district at the ARB hearing. The appraiser will comment on the evidence you presented and will often present other information the appraisal district has available. If you requested a House Bill 201 package for your property, it substantially limits the evidence the appraisal district appraiser can offer at the hearing. The ARB members may have questions after the appraisers presentation. Then the property owner will be given a final opportunity to rebut evidence presented by the appraisal district appraiser and quickly summarize the evidence. The ARB members strongly prefer you not repeat your entire presentation at this point.
After hearing the evidence, the ARB members will confer and make a decision. This decision is not subject to negotiation and they will not revise the decision if further evidence is presented. When this decision is announced, the hearing is effectively over. The ARB will send a letter two to four weeks later summarizing their decision and notifying the owner of a 45 day limitation from the date receipt of the ARB decision to either request binding arbitration or file a judicial appeal.
Binding Arbitration or Judicial Appeal
Beginning September 2005, owners of properties with an assessed value of $1 million or less may file a request for binding arbitration. The owner must file with the appraisal district no more than 45 days after receipt of the notice of the ARB's decision. The binding arbitration option is interesting because it includes a loser pays provision. The appraisal district pays for the arbitrator's fee if the final value is closer to the owner's opinion of value, and the owner pays for the binding arbitration if the final decision is closer to the appraisal district's opinion of value. Binding arbitration was passed to provide an alternative to judicial appeals, which can be expensive to prosecute.
Many owners pursue judicial appeals to further reduce property taxes. In 2005, O'Connor & Associates filed over 1,200 judicial appeals on behalf of property owners in the state of Texas. The judicial appeals can be expensive if the property owner and attorney don't understand the process and have a plan in place to minimize the cost of legal and expert witness fees. Judicial appeals are typically successful. However, success requires cooperation from the property owner, such as providing responses to questions, documents and a deposition if requested. The judicial appeal is meaningful as an option to minimize property taxes since it reduces the base value. This is important because the appraisal district and ARB consider the base value in the subsequent year when setting the administrative hearing value.
Conclusion
Property owners can generate substantial reductions in property taxes by appealing annually. Consider appeals on both market value and unequal appraisal and obtain the House Bill 201 information when preparing for the appeal hearing. Property owners should consider all three levels of appeal: informal hearing, ARB hearing and judicial appeal/binding arbitration. While the ARB hearing and judicial appeal/binding arbitration can be an intimidating process, each is straightforward once you understand the mechanics.
Secrets Of Making Big Money With Short Sales
The real estate market is ruled by fluctuations and different market conditions. However, the industry all over the world and like any other has its secrets that enable many a small and big time first timer to earn huge profits. The secrets of making big money with short sales come from real estate gurus, who are committed to the endeavor to make profitability accessible to all. A short sale is one, where the profit lies to capitalize on the owner’s distress.
There are many times, when the inability to make mortgage payments on time and a sudden financial crises help buyers to access properties that have great future price-potential at really low prices! The secrets of making big money with short sales include how to identify properties that may be dilapidated, but have good future potential, the urgency of sale and the best temporary finance options available. The presence of foreclosures is the most profitable way to make money via short sales.
There are a number of online and offline resources dedicated to the real estate market and short sales that offer great tips and advice on how to close profitable deals. Some of the points elaborated on, include shopping for property owners, who are in financial distress, the correct market conditions to invest in foreclosed properties, ways and means to generate equity in the real estate, which are available, the importance of FHA and VA in a short sale, to understand real estate terms like escrow and title insurance and auction purchases.
The secrets of making big money with short sales are elaborated in a number of dedicated ebooks and ezines too. The secrets include details from finding properties to negotiating with lenders. In the case of short sales, there is no room to think about a boom or gloom in the market. By capitalizing on the seller’s urgency and the condition of the property, short sales are easily manageable to your advantage. The experienced investors wait patiently for short sales to come by, while the first lesson that novices learn is to look out for such properties.
The sky rocketing real estate prices for most part of the financial year make it necessary to identify cheap properties with future potential, as soon as they arrive on the scene. Another aspect of the real estate industry that makes it necessary to act wisely in the face of a short sale is the easy access to loans. Short sales offer real investors the opportunity to fish for millions of dollars in profit making. The secrets of making big money with short sales lie in the features of the different types of properties, market price updating and the comparison ratios of the past and present.
Short sales are not only features of an upscale market; they also offer buyers the chance to close profitable deals in a downscale scenario. In fact, their presence in every kind of market condition allows investors to survive hanging trends and economy swings. Short sales are expected to rise extensively within the next couple of years, when the real estate investors would deal envisaging the scarcity of land and a higher demand for it.
The conditions that rule short sales help seasoned and amateur investors to create huge amounts of equity. With this the market demand would increase and make any real estate market to survive. Hence, all the more opportunities of making big money with short sales.
There are many times, when the inability to make mortgage payments on time and a sudden financial crises help buyers to access properties that have great future price-potential at really low prices! The secrets of making big money with short sales include how to identify properties that may be dilapidated, but have good future potential, the urgency of sale and the best temporary finance options available. The presence of foreclosures is the most profitable way to make money via short sales.
There are a number of online and offline resources dedicated to the real estate market and short sales that offer great tips and advice on how to close profitable deals. Some of the points elaborated on, include shopping for property owners, who are in financial distress, the correct market conditions to invest in foreclosed properties, ways and means to generate equity in the real estate, which are available, the importance of FHA and VA in a short sale, to understand real estate terms like escrow and title insurance and auction purchases.
The secrets of making big money with short sales are elaborated in a number of dedicated ebooks and ezines too. The secrets include details from finding properties to negotiating with lenders. In the case of short sales, there is no room to think about a boom or gloom in the market. By capitalizing on the seller’s urgency and the condition of the property, short sales are easily manageable to your advantage. The experienced investors wait patiently for short sales to come by, while the first lesson that novices learn is to look out for such properties.
The sky rocketing real estate prices for most part of the financial year make it necessary to identify cheap properties with future potential, as soon as they arrive on the scene. Another aspect of the real estate industry that makes it necessary to act wisely in the face of a short sale is the easy access to loans. Short sales offer real investors the opportunity to fish for millions of dollars in profit making. The secrets of making big money with short sales lie in the features of the different types of properties, market price updating and the comparison ratios of the past and present.
Short sales are not only features of an upscale market; they also offer buyers the chance to close profitable deals in a downscale scenario. In fact, their presence in every kind of market condition allows investors to survive hanging trends and economy swings. Short sales are expected to rise extensively within the next couple of years, when the real estate investors would deal envisaging the scarcity of land and a higher demand for it.
The conditions that rule short sales help seasoned and amateur investors to create huge amounts of equity. With this the market demand would increase and make any real estate market to survive. Hence, all the more opportunities of making big money with short sales.
Appealing Business Personal Property Tax Assessments in Texas
"Collecting more taxes than is necessary is legalized robbery." These words of wisdom, spoken by the 13th president of the United States, Calvin Coolidge, still ring true in today's society for homeowners and business owners. Robbery may seem like a harsh word, but what would you say if someone tried to sell you one-year-old motel sheets for 90% of the original cost? Based on the appraisal district's depreciation schedule, this is a fair deal.
Most people would not consider this a fair deal and either reject the offer or request a lower price. This should be the same thought process when the appraisal district overassesses your business personal property (BPP). Texas law requires business owners to report BPP, personal property used for the production of income, to the appraisal district for assessment and taxation. Although there are no criminal penalties for not complying with the law, there is a penalty of 10% of the taxes. For example, if you have a BPP account assessed for $100,000, your annual BPP taxes are $3,000, based on a 3% tax rate. The 10% penalty for this BPP account would be $300 ($3,000 times 10% equals $300).
The huge range of assessed value for business personal property (BPP) makes obtaining substantial property tax reductions highly probable. It is not unusual for the range of assessed value for BPP accounts for similar properties to vary by 5,000%! For example, furniture and computers for companies within the same office building sometimes vary from $1 to $50 per square foot. Market value and unequal appraisal are two options for appealing BPP assessments. Given the inequity in BPP assessments and the subjectivity of valuing BPP, property owners have a high probability of success when properly prepared for a BPP assessment appeal. Protest both market value and unequal appraisal.
How to appeal?
To appeal your BPP, you can either use the Comptroller's form, or send a letter to the appraisal review board (ARB) on or before May 31st of each year. The protest letter to the ARB should identify the property and the reason for your protest (section 41.44d of the Texas Property Tax Code).
Tips:
· Since the appraisal district's staff tends to become more motivated to resolve appeals later in the season versus earlier in the season, it is better to appeal or protest on May 31st or shortly before the deadline date.
· Even if you do not receive a notice of assessed value for your BPP account, it is still important to send a written notice of appeal or protest. The appraisal district does not have to send a notice of your assessed value if the value does not change by more than $1,000. If the notice of assessed value gets lost in the mail, and you do not send a protest notice, you lose your right to appeal for the current year.
When sending a notice of appeal to the ARB, also send the appraisal district a House Bill 201 request. House Bill 201 refers to section 41.461 of the Texas Property Tax Code that allows property owners to obtain a copy of any evidence the appraisal district plans to use at the ARB hearing 14 days before the hearing. This request prohibits the appraisal district from using any information that was not provided to the property owner 14 days before the ARB hearing.
Market Value, Book Value & Comptroller Schedule
Three popular options for describing value for BPP are: market value, book value, and the Comptroller's schedule. Market value is defined in section 1.04(7) of the Texas Property Tax Code that reads as follows:
"Market value" means the price at which a property would transfer for cash or its equivalent under prevailing market conditions if:
(a) exposed for sale in the open market with a reasonable time for the seller to find a purchaser,
(b) 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, and
(c) 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.
Let's compare the differences in value resulting from using market value, book value and the Comptroller's schedule. The BPP for a typical motel room includes items such as bedding, linens, window air-conditioning unit, towels and a television. Based on market value, after one year, these types of items could probably only be sold for 10% to 30% of the original cost. Book value, based on federal depreciation schedules, indicates a value of 80% of the purchase price after one year. The Texas Comptroller's schedule for BPP for motels has an eight-year life with 10% depreciation for the first seven years. Hence, the Comptroller schedule indicates one-year old hotel furnishings are worth 90% of their original purchase price. This is clearly inconsistent with market value for these items.
Inventory
There are a number of controversial issues related to how inventory is assessed. These include shrinkage, damage, functional obsolescence and economic obsolescence. For example, what is the market value of merchandise returned during the week after Christmas on January 1st (the effective date for valuation)? Since returned merchandise has usually been opened, damaged, missing parts or may be an unpopular item, it is worth less than cost in many cases. Market value is relevant in determining the assessed value for inventory for Texas BPP taxes.
Preparing A Summary For Your Hearing
The appraisal district would prefer to see a fixed asset listing, which includes the original cost and date of acquisition for every asset purchased. However, a fixed asset listing is not required. This is good news for small businesses that do not maintain a fixed asset listing.
Unequal appraisal
Assessed values for BPP accounts often range from ten-times to fifty-times on a per square foot basis for companies in the same industry. For example, real estate brokerage offices, which have 10,000 square feet of office space, may have assessments ranging from $10,000-$500,000. It seems unlikely that the computers and furniture in one brokerage office are 50 times as valuable as those in a competitor's firm on a per square foot basis.
Appraisal districts tend to accept the assessed value rendered by property owners. Many large companies render using fixed asset listings. Appraisal districts use the cost basis information and the Comptroller's schedule to calculate the "market value" for property. The valuations for these rendered accounts tend to grossly distort the actual value of these properties. Property owners who do not render have values on the lower end of the range of value. While it seems intuitive that appraisal districts would penalize owners who do not render by sharply increasing their assessed values, the practice is the opposite. Appraisal districts tend to reward property owners who do not render by leaving their assessed values at modest levels. This creates a disincentive to render. It also unequally taxes property owners who render with a fixed asset listing. These factors have caused a high degree of dispersion in BPP assessed values.
How To Appeal On Unequal Appraisal
Contrary to popular belief, it is possible to appeal BPP utilizing unequal appraisal, a concept that is fairly new. Most property tax consultants and large property owners have not considered or utilized unequal appraisal regarding BPP. Appraisal districts are resistant to the concept of appealing BPP based on unequal appraisal. (It is inappropriate to tax property owners who render using a fixed asset listing at the highest level, based on utilizing the Comptroller schedule, when allowing property owners who do not render very lean levels of assessment.)
Preparing an appeal based on unequal appraisal for BPP is simple and straightforward. Start by obtaining information on the assessed value, and amount of office space/manufacturing or warehouse space for property owners similar to the subject property owner. This is typically done by using companies with the same Standard Industrial Code (SIC) as the subject property owner. You can obtain this information by sending an open records request to the appraisal district. When appealing, research the assessed value for your competitors. Compile data regarding the assessed value and building area for the subject and comparable accounts into a summary:
When should you appeal?
Appeal annually on market value and unequal appraisal. To effectively appeal on these two options, research unequal appraisal based on assessment comparables on the appraisal district's web site and evaluate the market value of your BPP. After reviewing both the unequal appraisal and market value options, determine your primary focus for appealing your BPP account. If neither market value nor unequal appraisal provides a basis for appealing your property taxes, you can withdraw the notice of protest or just skip the hearing.
Tips for your hearing (Informal & ARB)
Informal hearing
· First meet with the appraiser and politely explain the basis for your adjustment. Give the appraiser a copy of your evidence and explain it in a methodical way.
· The appraiser will review your information and the information he/she has available, and will then likely make an offer to settle. Consider the appraiser's offer and explain why your evidence is better than his/her evidence, and again request your value or a value between your value and his/her value.
· You will quickly learn the lowest value the appraiser is willing to accept. At this point, you need to either agree to that value or proceed to the Appraisal Review Board (ARB) hearing.
· If you settle the appeal at the informal level, you will not be able to pursue an ARB hearing or a judicial appeal. However, it does resolve the issue in a timely manner.
ARB hearing
· Introduction of the two parties at the hearing
· Explanation of the hearing process
· Property description (address any errors in the description of your property after the appraiser's description of your property)
· Property owner presentation
· Questions from the ARB panel members
· Appraisal district presentation
· Rebuttal and closing evidence from the property owner
· ARB announces its decision
Summary Points
· Annual appeals will minimize your BPP property taxes.
· There are huge differences between the market value estimated by the Comptroller's schedule and actual market value.
· Based on excessive assessments for BPP for companies who render using a fixed asset listing, a low percentage of property owners who render and the low assessed values for property owners who do not render, there are rich opportunities for appealing BPP by using unequal appraisal.
Most people would not consider this a fair deal and either reject the offer or request a lower price. This should be the same thought process when the appraisal district overassesses your business personal property (BPP). Texas law requires business owners to report BPP, personal property used for the production of income, to the appraisal district for assessment and taxation. Although there are no criminal penalties for not complying with the law, there is a penalty of 10% of the taxes. For example, if you have a BPP account assessed for $100,000, your annual BPP taxes are $3,000, based on a 3% tax rate. The 10% penalty for this BPP account would be $300 ($3,000 times 10% equals $300).
The huge range of assessed value for business personal property (BPP) makes obtaining substantial property tax reductions highly probable. It is not unusual for the range of assessed value for BPP accounts for similar properties to vary by 5,000%! For example, furniture and computers for companies within the same office building sometimes vary from $1 to $50 per square foot. Market value and unequal appraisal are two options for appealing BPP assessments. Given the inequity in BPP assessments and the subjectivity of valuing BPP, property owners have a high probability of success when properly prepared for a BPP assessment appeal. Protest both market value and unequal appraisal.
How to appeal?
To appeal your BPP, you can either use the Comptroller's form, or send a letter to the appraisal review board (ARB) on or before May 31st of each year. The protest letter to the ARB should identify the property and the reason for your protest (section 41.44d of the Texas Property Tax Code).
Tips:
· Since the appraisal district's staff tends to become more motivated to resolve appeals later in the season versus earlier in the season, it is better to appeal or protest on May 31st or shortly before the deadline date.
· Even if you do not receive a notice of assessed value for your BPP account, it is still important to send a written notice of appeal or protest. The appraisal district does not have to send a notice of your assessed value if the value does not change by more than $1,000. If the notice of assessed value gets lost in the mail, and you do not send a protest notice, you lose your right to appeal for the current year.
When sending a notice of appeal to the ARB, also send the appraisal district a House Bill 201 request. House Bill 201 refers to section 41.461 of the Texas Property Tax Code that allows property owners to obtain a copy of any evidence the appraisal district plans to use at the ARB hearing 14 days before the hearing. This request prohibits the appraisal district from using any information that was not provided to the property owner 14 days before the ARB hearing.
Market Value, Book Value & Comptroller Schedule
Three popular options for describing value for BPP are: market value, book value, and the Comptroller's schedule. Market value is defined in section 1.04(7) of the Texas Property Tax Code that reads as follows:
"Market value" means the price at which a property would transfer for cash or its equivalent under prevailing market conditions if:
(a) exposed for sale in the open market with a reasonable time for the seller to find a purchaser,
(b) 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, and
(c) 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.
Let's compare the differences in value resulting from using market value, book value and the Comptroller's schedule. The BPP for a typical motel room includes items such as bedding, linens, window air-conditioning unit, towels and a television. Based on market value, after one year, these types of items could probably only be sold for 10% to 30% of the original cost. Book value, based on federal depreciation schedules, indicates a value of 80% of the purchase price after one year. The Texas Comptroller's schedule for BPP for motels has an eight-year life with 10% depreciation for the first seven years. Hence, the Comptroller schedule indicates one-year old hotel furnishings are worth 90% of their original purchase price. This is clearly inconsistent with market value for these items.
Inventory
There are a number of controversial issues related to how inventory is assessed. These include shrinkage, damage, functional obsolescence and economic obsolescence. For example, what is the market value of merchandise returned during the week after Christmas on January 1st (the effective date for valuation)? Since returned merchandise has usually been opened, damaged, missing parts or may be an unpopular item, it is worth less than cost in many cases. Market value is relevant in determining the assessed value for inventory for Texas BPP taxes.
Preparing A Summary For Your Hearing
The appraisal district would prefer to see a fixed asset listing, which includes the original cost and date of acquisition for every asset purchased. However, a fixed asset listing is not required. This is good news for small businesses that do not maintain a fixed asset listing.
Unequal appraisal
Assessed values for BPP accounts often range from ten-times to fifty-times on a per square foot basis for companies in the same industry. For example, real estate brokerage offices, which have 10,000 square feet of office space, may have assessments ranging from $10,000-$500,000. It seems unlikely that the computers and furniture in one brokerage office are 50 times as valuable as those in a competitor's firm on a per square foot basis.
Appraisal districts tend to accept the assessed value rendered by property owners. Many large companies render using fixed asset listings. Appraisal districts use the cost basis information and the Comptroller's schedule to calculate the "market value" for property. The valuations for these rendered accounts tend to grossly distort the actual value of these properties. Property owners who do not render have values on the lower end of the range of value. While it seems intuitive that appraisal districts would penalize owners who do not render by sharply increasing their assessed values, the practice is the opposite. Appraisal districts tend to reward property owners who do not render by leaving their assessed values at modest levels. This creates a disincentive to render. It also unequally taxes property owners who render with a fixed asset listing. These factors have caused a high degree of dispersion in BPP assessed values.
How To Appeal On Unequal Appraisal
Contrary to popular belief, it is possible to appeal BPP utilizing unequal appraisal, a concept that is fairly new. Most property tax consultants and large property owners have not considered or utilized unequal appraisal regarding BPP. Appraisal districts are resistant to the concept of appealing BPP based on unequal appraisal. (It is inappropriate to tax property owners who render using a fixed asset listing at the highest level, based on utilizing the Comptroller schedule, when allowing property owners who do not render very lean levels of assessment.)
Preparing an appeal based on unequal appraisal for BPP is simple and straightforward. Start by obtaining information on the assessed value, and amount of office space/manufacturing or warehouse space for property owners similar to the subject property owner. This is typically done by using companies with the same Standard Industrial Code (SIC) as the subject property owner. You can obtain this information by sending an open records request to the appraisal district. When appealing, research the assessed value for your competitors. Compile data regarding the assessed value and building area for the subject and comparable accounts into a summary:
When should you appeal?
Appeal annually on market value and unequal appraisal. To effectively appeal on these two options, research unequal appraisal based on assessment comparables on the appraisal district's web site and evaluate the market value of your BPP. After reviewing both the unequal appraisal and market value options, determine your primary focus for appealing your BPP account. If neither market value nor unequal appraisal provides a basis for appealing your property taxes, you can withdraw the notice of protest or just skip the hearing.
Tips for your hearing (Informal & ARB)
Informal hearing
· First meet with the appraiser and politely explain the basis for your adjustment. Give the appraiser a copy of your evidence and explain it in a methodical way.
· The appraiser will review your information and the information he/she has available, and will then likely make an offer to settle. Consider the appraiser's offer and explain why your evidence is better than his/her evidence, and again request your value or a value between your value and his/her value.
· You will quickly learn the lowest value the appraiser is willing to accept. At this point, you need to either agree to that value or proceed to the Appraisal Review Board (ARB) hearing.
· If you settle the appeal at the informal level, you will not be able to pursue an ARB hearing or a judicial appeal. However, it does resolve the issue in a timely manner.
ARB hearing
· Introduction of the two parties at the hearing
· Explanation of the hearing process
· Property description (address any errors in the description of your property after the appraiser's description of your property)
· Property owner presentation
· Questions from the ARB panel members
· Appraisal district presentation
· Rebuttal and closing evidence from the property owner
· ARB announces its decision
Summary Points
· Annual appeals will minimize your BPP property taxes.
· There are huge differences between the market value estimated by the Comptroller's schedule and actual market value.
· Based on excessive assessments for BPP for companies who render using a fixed asset listing, a low percentage of property owners who render and the low assessed values for property owners who do not render, there are rich opportunities for appealing BPP by using unequal appraisal.
Real Estate Investment Opportunities
The real estate industry analyses and uses active and passive strategies for investment in the highly fluctuating industry. The real estate investment opportunities are governed by the pre determined decisions and responsibilities of the various components. These opportunities come in the form of buying and selling land and built up property or leasing the same for a profit. The real estate investment opportunities are determined by choice of what a buyer or seller looks upon as the best. There are a number of international strategies that are accessible online and offline to enable you to make the most of every opportunity that comes your way.
The real estate markets across the globe function along the same paradigms and the only areas of difference are probably the laws and by laws that govern the transactions. The real estate investment opportunities come in the form of foreclosures, stock investments, property investments and even income-sensitive retirement investments. These opportunities come from putting your money into assets like land or built up property. The real estate industry enables you to place your capital at various international and domestic locations that may generate higher profits in the long run.
There are real estate markets of different kinds to cater to the needs of different investors. Some markets are overexploited and cater to the needs of investors who refuse to invest their money in traditional markets with a number of barriers. The real estate investment opportunities can be capitalized on the basis of variables such as growth, safety and income. In the real estate industry, the main objective of growth is the accumulation of precious capital for re-investment purposes. The other objective is to ensure the safety of your capital with each transaction. The real estate investment opportunities are an excellent way of securing a constant flux of income and a main source of revenue.
The investments enable you to sit back and watch your money/capital grow and expand in scope with every transaction. The real estate industry is designed to enable you to earn enough money through your investments. The deals and interactions via networking help every investor to learn from past experience and move towards the application of strategies evolved over a period of time. The real estate management gurus define real estate investment opportunities as ways by which you can dedicate energy and time to transactions that provide you with a lot of money, with limited investment.
The opportunities arise out of understanding the market conditions, differentiating between active and passive investment strategies, knowing thoroughly different market conditions and the peculiarities of specific markets. Real estate investment opportunities enable you to place your money in relatively safe international and national investments. You could tap the potential in government schemes and individual undertakings that help to finance determined projects. You can also avail of really lucrative real estate investment opportunities by investigating and researching on global markets and strategies.
It is very important to remain updated and well informed to make the most of the real estate investment opportunities available. Investment in land and built up properties are bound to appreciate on account of the scarcity of the resource and the demand generated by a growing world population. The opportunities that the industry provides banks on this very scarcity!
The real estate markets across the globe function along the same paradigms and the only areas of difference are probably the laws and by laws that govern the transactions. The real estate investment opportunities come in the form of foreclosures, stock investments, property investments and even income-sensitive retirement investments. These opportunities come from putting your money into assets like land or built up property. The real estate industry enables you to place your capital at various international and domestic locations that may generate higher profits in the long run.
There are real estate markets of different kinds to cater to the needs of different investors. Some markets are overexploited and cater to the needs of investors who refuse to invest their money in traditional markets with a number of barriers. The real estate investment opportunities can be capitalized on the basis of variables such as growth, safety and income. In the real estate industry, the main objective of growth is the accumulation of precious capital for re-investment purposes. The other objective is to ensure the safety of your capital with each transaction. The real estate investment opportunities are an excellent way of securing a constant flux of income and a main source of revenue.
The investments enable you to sit back and watch your money/capital grow and expand in scope with every transaction. The real estate industry is designed to enable you to earn enough money through your investments. The deals and interactions via networking help every investor to learn from past experience and move towards the application of strategies evolved over a period of time. The real estate management gurus define real estate investment opportunities as ways by which you can dedicate energy and time to transactions that provide you with a lot of money, with limited investment.
The opportunities arise out of understanding the market conditions, differentiating between active and passive investment strategies, knowing thoroughly different market conditions and the peculiarities of specific markets. Real estate investment opportunities enable you to place your money in relatively safe international and national investments. You could tap the potential in government schemes and individual undertakings that help to finance determined projects. You can also avail of really lucrative real estate investment opportunities by investigating and researching on global markets and strategies.
It is very important to remain updated and well informed to make the most of the real estate investment opportunities available. Investment in land and built up properties are bound to appreciate on account of the scarcity of the resource and the demand generated by a growing world population. The opportunities that the industry provides banks on this very scarcity!
Apartments In Madrid Boast Your Elegant Stay In Madrid
Though Madrid is one of the most sought after tourist destinations it is affordable in comparison to other for the availability of apartments in Madrid . Madrid attracts tourist for its royal palace, the museums that store memories of history of Spain, internationally renowned art galleries and grand public squares. Hence, many fun lovers prefer Madrid to deviate from regular busy schedule. ChicRentals is in the service of arranging apartments in Madrid for a comfortable living of the tourists.
Madrid is enticing tourist place for the people who know how to enjoy life. Accommodation is Madrid is the suitable way to create a feel-like-home atmosphere in the alluring city of Madrid. We opt for selecting excellently decorated apartment as we realize you value good taste. While booking apartments in Madrid for you we strictly follow the criteria that satisfy most of your demands for a pleasant stay.
Our site has got precise and extensive information about the apartments in Madrid . You can click to view the description about each apartment, the rent and the facilities that are provided. Each apartment that we select for you is exquisitely designed along with being cozy and functional. We know how to handle your booking with utmost efficiency. You reservation of apartment in Madrid can be done through internet or over phone. The reservation procedure is mentioned in ‘how to book’ page of ChicRentals.com. We email or fax you about the details of your reservation and the apartment that you are going to board in.
Our service at ChicRentals is exclusive for the people who are sure of what they want form the trip to Madrid. After your arrival to the previously mentioned address of apartment in Madrid, you will get our staff to welcome you at the apartment. The personnel will give you in detail about your living and functioning of appliances and answer any other query if you have.
Contact us to book an apartment in Madrid through our given email addresses or the phone number. We are proud to maintain long lasting relation ship with our customers by our service. We do our best to make your holiday in Madrid a perfect and memorable stay.
Madrid is enticing tourist place for the people who know how to enjoy life. Accommodation is Madrid is the suitable way to create a feel-like-home atmosphere in the alluring city of Madrid. We opt for selecting excellently decorated apartment as we realize you value good taste. While booking apartments in Madrid for you we strictly follow the criteria that satisfy most of your demands for a pleasant stay.
Our site has got precise and extensive information about the apartments in Madrid . You can click to view the description about each apartment, the rent and the facilities that are provided. Each apartment that we select for you is exquisitely designed along with being cozy and functional. We know how to handle your booking with utmost efficiency. You reservation of apartment in Madrid can be done through internet or over phone. The reservation procedure is mentioned in ‘how to book’ page of ChicRentals.com. We email or fax you about the details of your reservation and the apartment that you are going to board in.
Our service at ChicRentals is exclusive for the people who are sure of what they want form the trip to Madrid. After your arrival to the previously mentioned address of apartment in Madrid, you will get our staff to welcome you at the apartment. The personnel will give you in detail about your living and functioning of appliances and answer any other query if you have.
Contact us to book an apartment in Madrid through our given email addresses or the phone number. We are proud to maintain long lasting relation ship with our customers by our service. We do our best to make your holiday in Madrid a perfect and memorable stay.
Apartments, One Man's Dream Is Another's Nightmare
Apartments. Usually somebody's first home after getting married. Can't really say they're relatively cheap anymore. Depending on where you live, apartments can run you anywhere from several hundred to several thousand dollars a month.
So what does one do when looking for an apartment? Believe it or not, there are many different types, styles, and pay plans involved. We'll try to cover the basic types in this article and what you can expect to find with each.
Starting off small there is your basic studio apartment. A studio apartment is usually 1 room with a kitchen and bath. Let's first off define what a room is when getting an apartment. A room is any room other than your kitchen and bath. Bathrooms do not count as rooms at all because they are required by law. Kitchens are a little different. Most walk in kitchens are considered a half a room. If the kitchen is simply an area in the apartment that is not cut off from the other rooms then it is not counted as a room. So a studio 1 room would have a kitchen area that's part of the 1 room, meaning it probably comes with just a refrigerator and a stove and sink. A studio 1 1/2 room would have a kitchen that is actually separated from the rest of the apartment by a wall and has a doorway. Most studio apartments are 1 room.
Studio apartments, contrary to what most people think, are not cheap. A studio in New York City can cost you $1000 a month. In some areas you can get a studio for about $500.
Then there are your basic apartments that are normally 3 or 4 rooms.
A three room apartment has a living room, dining area and 1 bedroom. Again, the difference between a 3 and a 3 1/2 room is the kitchen being either part of one of the rooms or cut off.
A four room apartment usually has a living room, dining area and 2 bedrooms. If a family needs a third bedroom the dining area is usually converted. The problem with dining areas is that they don't normally have doors to separate them from the other rooms. So to ensure privacy some kind of sliding door is usually installed. Actually most 4 room apartments, because of the extra room are really 4 1/2 rooms because in almost all cases the kitchen is cut off from the other rooms.
In apartments there is seldom a basement. Most apartments are assigned a basement area in a main basement used for the entire complex. In some cases each apartment section or group of apartments has a basement nearby.
Aside from the number of rooms there is also the issue of layout. Most apartments are single level, meaning all the rooms are on one floor. But in some cases there are apartment complexes that are what they call duplexes. These are two apartments side by side in each complex and each apartment is two floors as opposed to the 4 apartment complexes where each apartment is on a single level. In two level apartments the living room and dining area are usually downstairs with the bedrooms upstairs. Most two level apartments are 4 1/2 rooms.
Then there is the issue of what services come with the apartment and what services have to be paid for separately.
In some apartments your gas and electricity and water utilities are included in the cost of the rent. In other apartments only the water is paid for and your gas and electric are paid to your local public service company. Some apartments don't cover any of your costs. So when you get an apartment make sure you find out just what your rent covers. The reason for this is that an apartment for $900 a month with all utilities paid may actually be a better deal than an apartment for $750 a month if the latter apartment doesn't include any utilities at all.
Finally, in securing an apartment many require a security deposit equal to the rent of the apartment. Some require one month security and some require two months. This is paid back to you when your lease expires if you decide to leave. Breaking a lease will usually mean forfeiture of your deposit.
Which brings us to apartment rules. This is why there is nothing like owning your own home. Most apartments allow no pets. Playing music after a certain hour will bring complaints from your neighbors. The list goes on and on but I'm sure you get the point. Your freedom to do what you want in an apartment is limited.
Some people love the idea of not having to worry about repairs, as the super usually takes care of that, and live in apartments their whole life. Others can't wait until they can get into their own home. That's the wonderful thing about this world. One man's dream is another man's nightmare.
So what does one do when looking for an apartment? Believe it or not, there are many different types, styles, and pay plans involved. We'll try to cover the basic types in this article and what you can expect to find with each.
Starting off small there is your basic studio apartment. A studio apartment is usually 1 room with a kitchen and bath. Let's first off define what a room is when getting an apartment. A room is any room other than your kitchen and bath. Bathrooms do not count as rooms at all because they are required by law. Kitchens are a little different. Most walk in kitchens are considered a half a room. If the kitchen is simply an area in the apartment that is not cut off from the other rooms then it is not counted as a room. So a studio 1 room would have a kitchen area that's part of the 1 room, meaning it probably comes with just a refrigerator and a stove and sink. A studio 1 1/2 room would have a kitchen that is actually separated from the rest of the apartment by a wall and has a doorway. Most studio apartments are 1 room.
Studio apartments, contrary to what most people think, are not cheap. A studio in New York City can cost you $1000 a month. In some areas you can get a studio for about $500.
Then there are your basic apartments that are normally 3 or 4 rooms.
A three room apartment has a living room, dining area and 1 bedroom. Again, the difference between a 3 and a 3 1/2 room is the kitchen being either part of one of the rooms or cut off.
A four room apartment usually has a living room, dining area and 2 bedrooms. If a family needs a third bedroom the dining area is usually converted. The problem with dining areas is that they don't normally have doors to separate them from the other rooms. So to ensure privacy some kind of sliding door is usually installed. Actually most 4 room apartments, because of the extra room are really 4 1/2 rooms because in almost all cases the kitchen is cut off from the other rooms.
In apartments there is seldom a basement. Most apartments are assigned a basement area in a main basement used for the entire complex. In some cases each apartment section or group of apartments has a basement nearby.
Aside from the number of rooms there is also the issue of layout. Most apartments are single level, meaning all the rooms are on one floor. But in some cases there are apartment complexes that are what they call duplexes. These are two apartments side by side in each complex and each apartment is two floors as opposed to the 4 apartment complexes where each apartment is on a single level. In two level apartments the living room and dining area are usually downstairs with the bedrooms upstairs. Most two level apartments are 4 1/2 rooms.
Then there is the issue of what services come with the apartment and what services have to be paid for separately.
In some apartments your gas and electricity and water utilities are included in the cost of the rent. In other apartments only the water is paid for and your gas and electric are paid to your local public service company. Some apartments don't cover any of your costs. So when you get an apartment make sure you find out just what your rent covers. The reason for this is that an apartment for $900 a month with all utilities paid may actually be a better deal than an apartment for $750 a month if the latter apartment doesn't include any utilities at all.
Finally, in securing an apartment many require a security deposit equal to the rent of the apartment. Some require one month security and some require two months. This is paid back to you when your lease expires if you decide to leave. Breaking a lease will usually mean forfeiture of your deposit.
Which brings us to apartment rules. This is why there is nothing like owning your own home. Most apartments allow no pets. Playing music after a certain hour will bring complaints from your neighbors. The list goes on and on but I'm sure you get the point. Your freedom to do what you want in an apartment is limited.
Some people love the idea of not having to worry about repairs, as the super usually takes care of that, and live in apartments their whole life. Others can't wait until they can get into their own home. That's the wonderful thing about this world. One man's dream is another man's nightmare.
Real Estate Investment Bank
The real estate investment forum is vast. It is part of an industry that enjoys a global connectivity and appreciation. The real estate industry works within paradigms set exclusively to ensure profitability with very purchase or sale. The land and property investments all over the world are done in two ways. Buyers and sellers of land or property, globally, either invest ready cash in hand if they are big time players or rely on special real estate investment banks to provide the funds for the desired transactions.
Real estate investment banks are run by professionals from within the industry or professionals who are well versed with the needs of buying and selling real estate. The banks function as lenders in times of need, for both – the buyers and sellers. These real estate investment banks have set rules and regulations within which they operate and enable investors to benefit from slow and steady market spaces. The loans are provided according to the fiscal market rules on rates of interest, types of interest and loans and the profiles of the buyers and sellers.
The real estate investment banks are run just like any other fiscal component. The services provided are like regular banks – accounts, loans and facilities to negotiate lucrative deals. These banks are dedicated to the endeavor of enabling buyers, sellers and brokers and agents around the world to make a profit from real estate deals in land and property. The banks also address the need of the industry for foreclosure of properties, for buyers to avail of cheap deals and sellers to be able to close their financial obligation to the institute. The real estate investment banks are run in a very professional manner, catering exclusively to real estate investment segment.
The services and offers are designed by management gurus from within the industry, who enable synchronization between the lenders and the industry requirements. These banks are sensitive to the needs of the industry and keep addressing the upgradation of services from time to time. The financial institutions, private and public, strictly adhere to the law that governs the real estate industry and the advice and guidance of people who have been associated with the industry for years.
The real estate investment banks are accessible for sensitive information online and offline and they also assist industry components in the identifying of important strategies and applying the available resources to maximize profits. These bankers play assistants to every transaction in some way or the other. They either function as treasurers who take care of and help to re invest the earned profits or lenders who facilitate the basic transactions. Real estate investment banks are no different in design to the regular banks, except that their core functions are targeted towards the vital interests of the real estate industry.
These banks are funded by the industry and return the service as and when required. Their conditions that define whether or not a person is eligible for a facility are monitored stringently and well within the paradigms set by the industry. The banks are caretakers of the trust and fiscal instruments that are commonly exchanged within transactions. They act as trustees, where the components of the real estate industry play their wards.
Real estate investment banks are run by professionals from within the industry or professionals who are well versed with the needs of buying and selling real estate. The banks function as lenders in times of need, for both – the buyers and sellers. These real estate investment banks have set rules and regulations within which they operate and enable investors to benefit from slow and steady market spaces. The loans are provided according to the fiscal market rules on rates of interest, types of interest and loans and the profiles of the buyers and sellers.
The real estate investment banks are run just like any other fiscal component. The services provided are like regular banks – accounts, loans and facilities to negotiate lucrative deals. These banks are dedicated to the endeavor of enabling buyers, sellers and brokers and agents around the world to make a profit from real estate deals in land and property. The banks also address the need of the industry for foreclosure of properties, for buyers to avail of cheap deals and sellers to be able to close their financial obligation to the institute. The real estate investment banks are run in a very professional manner, catering exclusively to real estate investment segment.
The services and offers are designed by management gurus from within the industry, who enable synchronization between the lenders and the industry requirements. These banks are sensitive to the needs of the industry and keep addressing the upgradation of services from time to time. The financial institutions, private and public, strictly adhere to the law that governs the real estate industry and the advice and guidance of people who have been associated with the industry for years.
The real estate investment banks are accessible for sensitive information online and offline and they also assist industry components in the identifying of important strategies and applying the available resources to maximize profits. These bankers play assistants to every transaction in some way or the other. They either function as treasurers who take care of and help to re invest the earned profits or lenders who facilitate the basic transactions. Real estate investment banks are no different in design to the regular banks, except that their core functions are targeted towards the vital interests of the real estate industry.
These banks are funded by the industry and return the service as and when required. Their conditions that define whether or not a person is eligible for a facility are monitored stringently and well within the paradigms set by the industry. The banks are caretakers of the trust and fiscal instruments that are commonly exchanged within transactions. They act as trustees, where the components of the real estate industry play their wards.
Apartment Search
When you are apartment hunting, prepare a rental search plan. Be sure to know in advance what you want in an apartment and what you can live without. Decide in advance what areas of the city you could consider living in and make a list of apartment buildings within that perimeter.
Be sure to consider how far and how convenient it will be for you to travel to your job or your school or your family and friends. Also, how far is the apartment from stores, banks, hospitals, Church (if you attend) etc. If you have a car, make sure that there is adequate and convenient parking space 24/7. If you don't drive make sure that there is close by public transportation.
Narrow your apartment locating to the size of rental unit you need. Studio apartment or one bedroom apartment or 2 BR apartment or more. Are you considering a furnished apartment or do you possible need a short term rental. If you are renting an apartment with a cat, dog, or other pet, you need to find out which apartments allow renting with pets and which do not. And, if they do allow pets, is there an additional security deposit required and if so, how much it is. Do you need an apartment complex with an exercise room or tennis courts or a pool or a recreation room, etc. or do you simply need and desire a nice clean and quiet pad.
Be realistic about what you can afford. Most apartment renting guides suggest that your rent should not be more than 25% to 30% of your income. This can vary depending on the income bracket, but be sure to be "real world" when budgeting additional apartment expenses such as heating and air conditioning and other utilities. If you fall short of affording the apartment of your choice, you might consider sharing an apartment with a roommate or roommates. Keep in mind that living with roommates can help you afford an upscale apartment or even, in some cases, luxury apartments, but it also has extreme restrictions to your privacy.
If you are familiar with the area and its neighborhoods, that gives you a distinct advantage for your apartment search. If, however, you are relocating to a new city or are not particularly knowledgeable about the city, you may want to contact an Apartment Locator or an Apartment Finder.
Once you narrow your search for apartments down to apts which suit your needs and desires you must be well organized & well prepared for your visits to the apartment complexes. When inspecting the rental premises be on the alert for unsafe conditions, excessive noise from traffic or playgrounds or neighbors. Visit the apartment building at night as well as the daytime hours. This will give you a more comprehensive understanding of the total space you will be residing in.
When you find the apartment complex that meets your renting needs and desires, you must be ready to put your "best foot forward" when you meet the apartment's rental agent. This person may be the apartment building manager or a renting agent for the apts. You should prepare for this apartment renting interview in a professional and intelligent manner. Be advised that you are going to be asked to provide proof that you are a reliable prospective tenant. You are most likely going to need references from previous landlords. You may also be required by the apartments to show that you are gainfully employed and can afford the rent. Many landlords may require a credit report. If you are a first time renter and/or you have limited credit history you may be asked for references from family, friends, employer, professionals, etc. Likewise if you are renting with bad credit you will certainly want to come to the interview with a strong selection of references.
You are not necessarily restricted from apartment renting with less than perfect credit, but you may be required to put up an additional security deposit and possibly have a credit worthy person co-sign the apartment lease with you. Don't unprepared for by requests for any of these things. Be sure to fill out a 100% truthful apartment rental application and come to the interview with references, proof of employment, credit information and any other renting resources at the ready. If you do have a credit history or renting history that might be detrimental, going through an apartment locator or apartment finder may be the best solution. They will present your history to the landlord for you, (make sure they are 100% truthful about it) and they can also be quite helpful and save you a lot of time because they most likely will know which landlords and apartments are more lenient in these circumstances. They can also advise you as to exactly what kinds of references and documents you might need to prove that you can be a responsible tenant.
You Have Located Your "Dream Apartment"
Once you have located your "dream apartment", or as close to your perfect apartment as possible, now it is necessary to pay extremely close attention to the particulars of the rental agreement. An Apartment Lease is a contract between you and the landlord. Once agreed upon and signed by the tenant and the landlord, the rental lease creates obligations and restrictions for both parties. The most obvious covenants of the apartment lease are the length of the rental, (Six month lease, one year lease, two year lease, etc.) The amount of the security deposit, when the rent is due, who is responsible for what utilities. Also in that apartment lease, however, are stipulations, (sometimes in small print) that can cover a great variety of landlord and tenant obligations and restrictions.
They can include, but are not limited to, the following:
* Maintenance of the apartment
* Care of the premises
* Cleanliness
* Insurance
* Governmental regulations
* Eminent Domain
* Nuisance and noise clauses
* Stipulations as to the circumstances whereby the landlord can enter the premises
* Use of Common Areas
* Keys and locks
* Loss or damage
* Parking
* Pets
* Plumbing
* What the landlord may do if the rent is in arrears
* What the tenant can do to bring the rent current before any kind of action might be started
* Non performance or breach of the contract by the renter
* Renter's penalties in the event of early termination
* Circumstances which might cause the tenant or the landlord to break the lease prior to the end of the term
* Heat and other utilities
* Removal of goods
* Surrender or Non-Surrender of the premises
* Waivers of various obligations
* Prohibited reprisals
* Garbage disposal
* Recyclables
* And the list goes on and on and on.
Prospective tenants should read an Apartment lease thoroughly. Prospective apartment renters should understand everything that is contained in that lease and make an informed decision to be 100% accepting of all the provisions for both the tenant and the landlord, that you are positive that you can live up to your end of the bargain and that you are comfortable with the provisions on the landlord's end.
If you do not understand every single clause of that apartment lease then do not sign it until you do understand it. If necessary and if possible, request assistance in interpreting the lease from a trusted source such as a knowledgeable friend or family member or employer or professional, or anyone else who can understand it and explain it to you. If necessary get legal advice. It can cost additional funds if you do not qualify for free legal assistance, but that additional cost might save you a ton of money and save you a ton of heartache and aggravation down the road.
If you do not agree with any of the provisions of that apartment lease and/or you feel that you can't live up to the tenant's obligations, or if you are not in agreement with any of the landlord's rights under the agreement, then do not sign the lease until/or unless it can be changed to your satisfaction. If the apartment rental agreement cannot be amended to meet your needs and desires and comfort level then do not sign the lease and do not rent that apartment. The Apartment Rental agreement that you sign as a prospective tenant will not change once you become the actual tenant of that apartment.
Good luck in your apartment search and good luck in your new apartment.
Be sure to consider how far and how convenient it will be for you to travel to your job or your school or your family and friends. Also, how far is the apartment from stores, banks, hospitals, Church (if you attend) etc. If you have a car, make sure that there is adequate and convenient parking space 24/7. If you don't drive make sure that there is close by public transportation.
Narrow your apartment locating to the size of rental unit you need. Studio apartment or one bedroom apartment or 2 BR apartment or more. Are you considering a furnished apartment or do you possible need a short term rental. If you are renting an apartment with a cat, dog, or other pet, you need to find out which apartments allow renting with pets and which do not. And, if they do allow pets, is there an additional security deposit required and if so, how much it is. Do you need an apartment complex with an exercise room or tennis courts or a pool or a recreation room, etc. or do you simply need and desire a nice clean and quiet pad.
Be realistic about what you can afford. Most apartment renting guides suggest that your rent should not be more than 25% to 30% of your income. This can vary depending on the income bracket, but be sure to be "real world" when budgeting additional apartment expenses such as heating and air conditioning and other utilities. If you fall short of affording the apartment of your choice, you might consider sharing an apartment with a roommate or roommates. Keep in mind that living with roommates can help you afford an upscale apartment or even, in some cases, luxury apartments, but it also has extreme restrictions to your privacy.
If you are familiar with the area and its neighborhoods, that gives you a distinct advantage for your apartment search. If, however, you are relocating to a new city or are not particularly knowledgeable about the city, you may want to contact an Apartment Locator or an Apartment Finder.
Once you narrow your search for apartments down to apts which suit your needs and desires you must be well organized & well prepared for your visits to the apartment complexes. When inspecting the rental premises be on the alert for unsafe conditions, excessive noise from traffic or playgrounds or neighbors. Visit the apartment building at night as well as the daytime hours. This will give you a more comprehensive understanding of the total space you will be residing in.
When you find the apartment complex that meets your renting needs and desires, you must be ready to put your "best foot forward" when you meet the apartment's rental agent. This person may be the apartment building manager or a renting agent for the apts. You should prepare for this apartment renting interview in a professional and intelligent manner. Be advised that you are going to be asked to provide proof that you are a reliable prospective tenant. You are most likely going to need references from previous landlords. You may also be required by the apartments to show that you are gainfully employed and can afford the rent. Many landlords may require a credit report. If you are a first time renter and/or you have limited credit history you may be asked for references from family, friends, employer, professionals, etc. Likewise if you are renting with bad credit you will certainly want to come to the interview with a strong selection of references.
You are not necessarily restricted from apartment renting with less than perfect credit, but you may be required to put up an additional security deposit and possibly have a credit worthy person co-sign the apartment lease with you. Don't unprepared for by requests for any of these things. Be sure to fill out a 100% truthful apartment rental application and come to the interview with references, proof of employment, credit information and any other renting resources at the ready. If you do have a credit history or renting history that might be detrimental, going through an apartment locator or apartment finder may be the best solution. They will present your history to the landlord for you, (make sure they are 100% truthful about it) and they can also be quite helpful and save you a lot of time because they most likely will know which landlords and apartments are more lenient in these circumstances. They can also advise you as to exactly what kinds of references and documents you might need to prove that you can be a responsible tenant.
You Have Located Your "Dream Apartment"
Once you have located your "dream apartment", or as close to your perfect apartment as possible, now it is necessary to pay extremely close attention to the particulars of the rental agreement. An Apartment Lease is a contract between you and the landlord. Once agreed upon and signed by the tenant and the landlord, the rental lease creates obligations and restrictions for both parties. The most obvious covenants of the apartment lease are the length of the rental, (Six month lease, one year lease, two year lease, etc.) The amount of the security deposit, when the rent is due, who is responsible for what utilities. Also in that apartment lease, however, are stipulations, (sometimes in small print) that can cover a great variety of landlord and tenant obligations and restrictions.
They can include, but are not limited to, the following:
* Maintenance of the apartment
* Care of the premises
* Cleanliness
* Insurance
* Governmental regulations
* Eminent Domain
* Nuisance and noise clauses
* Stipulations as to the circumstances whereby the landlord can enter the premises
* Use of Common Areas
* Keys and locks
* Loss or damage
* Parking
* Pets
* Plumbing
* What the landlord may do if the rent is in arrears
* What the tenant can do to bring the rent current before any kind of action might be started
* Non performance or breach of the contract by the renter
* Renter's penalties in the event of early termination
* Circumstances which might cause the tenant or the landlord to break the lease prior to the end of the term
* Heat and other utilities
* Removal of goods
* Surrender or Non-Surrender of the premises
* Waivers of various obligations
* Prohibited reprisals
* Garbage disposal
* Recyclables
* And the list goes on and on and on.
Prospective tenants should read an Apartment lease thoroughly. Prospective apartment renters should understand everything that is contained in that lease and make an informed decision to be 100% accepting of all the provisions for both the tenant and the landlord, that you are positive that you can live up to your end of the bargain and that you are comfortable with the provisions on the landlord's end.
If you do not understand every single clause of that apartment lease then do not sign it until you do understand it. If necessary and if possible, request assistance in interpreting the lease from a trusted source such as a knowledgeable friend or family member or employer or professional, or anyone else who can understand it and explain it to you. If necessary get legal advice. It can cost additional funds if you do not qualify for free legal assistance, but that additional cost might save you a ton of money and save you a ton of heartache and aggravation down the road.
If you do not agree with any of the provisions of that apartment lease and/or you feel that you can't live up to the tenant's obligations, or if you are not in agreement with any of the landlord's rights under the agreement, then do not sign the lease until/or unless it can be changed to your satisfaction. If the apartment rental agreement cannot be amended to meet your needs and desires and comfort level then do not sign the lease and do not rent that apartment. The Apartment Rental agreement that you sign as a prospective tenant will not change once you become the actual tenant of that apartment.
Good luck in your apartment search and good luck in your new apartment.
Real Estate Investing Strategies
The real estate market is not only as volatile, but also as profitable as the fiscal world. The real estate investing strategies are tried and tested and the result of years of careful observation. The experts in the field identify the movements in the various different markets, both the variants of the upscale and slow markets. Their past experience helps many new comers within the industry to make the right moves and survive even the slowest markets. The industry components like the buyers and sellers and the supporting group of agents and brokers benefit a lot by the application of the techniques and strategies that have evolved out of an in depth analysis of the market trends.
Today, there is no scope for simply putting up an entry in a sales or purchasers listing. You have to be adventurous and recognize potential the moment you come in contact with it. The real estate investing strategies are designed to take every investor beyond the MLS listings. Since the core operations within this highly fluctuating industry lies in the buying and selling of properties, the strategies too revolve around the 24x7 visibility, online and offline. There is no space to sit back; the global real estate scenario calls for aggressive action. The purchases and sales have to be made within a space that enables the two transactions almost simultaneously. The support services that take care of things other than the investment are handled by experienced real estate agents and brokers.
There are personnel who are dedicated to the study of the global real estate markets to design strategies as unique as the local scenario itself. The laws and by-laws of the real estate markets differ from one region to another and so the demands on property. A core real estate investing strategy involves understanding and capitalizing on the potential of a slow market or depressed-money market to sell quickly. The real estate market potential largely depends on factors such as the location of the built up property or land, the existent market trend, the presence and volume of competing properties and the market swings.
In order to sell and make a profit, you have to consider careful planning, investments to spruce up the property and mentoring from experienced hands. The real estate investing strategies focus on how to effectively and professionally present the land or property so as to close the deal almost immediately. Renovating or restructuring and adopting quick fixes are all integral parts of the prior-to-sale strategies. The aim is to ensure that the properties enjoy top positions on the listings and displays the property as irresistible.
The detailed enhancement of the exteriors and interiors like a coat of paint, addition of flowering plants and a canopy go a long way in closing a deal. There are a number of online and offline resources that enable you to access and discuss the real estate investing strategies one-on-one. These forums also enable you to interact with the experts and adapt to different market conditions. They provide you with ample of opportunity to close a profitable deal and make negotiations simple. The real estate investing strategies help you to capitalize on the power of the property market.
Today, there is no scope for simply putting up an entry in a sales or purchasers listing. You have to be adventurous and recognize potential the moment you come in contact with it. The real estate investing strategies are designed to take every investor beyond the MLS listings. Since the core operations within this highly fluctuating industry lies in the buying and selling of properties, the strategies too revolve around the 24x7 visibility, online and offline. There is no space to sit back; the global real estate scenario calls for aggressive action. The purchases and sales have to be made within a space that enables the two transactions almost simultaneously. The support services that take care of things other than the investment are handled by experienced real estate agents and brokers.
There are personnel who are dedicated to the study of the global real estate markets to design strategies as unique as the local scenario itself. The laws and by-laws of the real estate markets differ from one region to another and so the demands on property. A core real estate investing strategy involves understanding and capitalizing on the potential of a slow market or depressed-money market to sell quickly. The real estate market potential largely depends on factors such as the location of the built up property or land, the existent market trend, the presence and volume of competing properties and the market swings.
In order to sell and make a profit, you have to consider careful planning, investments to spruce up the property and mentoring from experienced hands. The real estate investing strategies focus on how to effectively and professionally present the land or property so as to close the deal almost immediately. Renovating or restructuring and adopting quick fixes are all integral parts of the prior-to-sale strategies. The aim is to ensure that the properties enjoy top positions on the listings and displays the property as irresistible.
The detailed enhancement of the exteriors and interiors like a coat of paint, addition of flowering plants and a canopy go a long way in closing a deal. There are a number of online and offline resources that enable you to access and discuss the real estate investing strategies one-on-one. These forums also enable you to interact with the experts and adapt to different market conditions. They provide you with ample of opportunity to close a profitable deal and make negotiations simple. The real estate investing strategies help you to capitalize on the power of the property market.
Real Estate Investing Ethics
In the real estate industry some people feel that real estate investors or agents lack conduct and ethics. This notion can be a little disappointing for investors. However, this notion is not absolutely true. Like every industry, real estate has their set of ethics as well. But, a few ignore them and this has led to the maligned image of the industry.
Sometimes agents work for the parties (the buyers and the sellers) and they do not disclose this information to the opposite party. This misconduct is unethical and could be profitable only for the agent. However, not all agents follow such practices. Thus, a generalization for unethical practices of agents would be unfair. In the real estate business ethics are not just about the agents, it’s also about lenders, appraisers, investors and even landlords and homeowners.
Customers: When you are dealing with your own customer it is necessary to disclose your identity. If need be you should be able to show your licenses, certificates, your experience and other details to your customers. You should inform the customer about all matters related to property. Disclose all information that may seem important, to help your customers. Whatever information you have about the customer, safeguard it and ensure that it is not misused.
If you’re an investor that deals in different properties, there would be times when clients of other investors or agents approach you for a particular property. If you’re aware that they’re clients for another agent then it’s advisable to ask them to approach you through their investor or agent.
Disclose any potential conflict of interest: It is ethical and sometimes statutory that you do not accept the advice of an advisor who has a conflict of interest with you.
Adhering to the laws: Real estate investment business has different laws that have to be adhered to. It is necessary for an investor to be aware of the existent laws and any amendments made recently. Relying on lawyers for all legal matters is not enough and your awareness about law helps you when you’re amidst such deals.
Lying to lenders: It is often seen that the mortgage brokers get faulty appraisals done to show the property value to be higher than the market value. This leads lenders providing risky loans to the buyers and leaving the buyers with marginal credit. The buyers are also not left with any equity if they do not have the credit to get such a mortgage. The lenders also end up risking higher amounts that may not be recovered.
Landlord ethics: Sometimes it’s observed that investors do not invest in neighborhoods where landlords have bad tenants or where properties are not maintained. These factors also affect the returns to investment. If you are renting out the premises to tenants it is necessary for you as a landlord, to ensure that your property is being used properly and no misuse for criminal activities is done. The upkeep and repairs on the property also need to be taken care of by the landlord.
If you’re an investor its advisable you consider the importance of ethical practices and try to follow them.
Sometimes agents work for the parties (the buyers and the sellers) and they do not disclose this information to the opposite party. This misconduct is unethical and could be profitable only for the agent. However, not all agents follow such practices. Thus, a generalization for unethical practices of agents would be unfair. In the real estate business ethics are not just about the agents, it’s also about lenders, appraisers, investors and even landlords and homeowners.
Customers: When you are dealing with your own customer it is necessary to disclose your identity. If need be you should be able to show your licenses, certificates, your experience and other details to your customers. You should inform the customer about all matters related to property. Disclose all information that may seem important, to help your customers. Whatever information you have about the customer, safeguard it and ensure that it is not misused.
If you’re an investor that deals in different properties, there would be times when clients of other investors or agents approach you for a particular property. If you’re aware that they’re clients for another agent then it’s advisable to ask them to approach you through their investor or agent.
Disclose any potential conflict of interest: It is ethical and sometimes statutory that you do not accept the advice of an advisor who has a conflict of interest with you.
Adhering to the laws: Real estate investment business has different laws that have to be adhered to. It is necessary for an investor to be aware of the existent laws and any amendments made recently. Relying on lawyers for all legal matters is not enough and your awareness about law helps you when you’re amidst such deals.
Lying to lenders: It is often seen that the mortgage brokers get faulty appraisals done to show the property value to be higher than the market value. This leads lenders providing risky loans to the buyers and leaving the buyers with marginal credit. The buyers are also not left with any equity if they do not have the credit to get such a mortgage. The lenders also end up risking higher amounts that may not be recovered.
Landlord ethics: Sometimes it’s observed that investors do not invest in neighborhoods where landlords have bad tenants or where properties are not maintained. These factors also affect the returns to investment. If you are renting out the premises to tenants it is necessary for you as a landlord, to ensure that your property is being used properly and no misuse for criminal activities is done. The upkeep and repairs on the property also need to be taken care of by the landlord.
If you’re an investor its advisable you consider the importance of ethical practices and try to follow them.
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