Guidance for Residential and Commercial Property

Archive for the Blog Category

The Reality Of Real Estate And What You Need To Know

An image showing the front view of Modern and Luxurious Home for sale.

An image showing the front view of Modern and Luxurious Home for sale.

The Real Estate Price Will Not Rise Indefinitely.

The theory goes something like this. More land cannot be built, but the population will steadily rise. As the demand for land, thus homes, increase, and the supply shortens, the prices of real estate will keep growing. This cycle will go one indefinitely. This writeup aims to give you a more realistic picture of the real estate.

When you go down history, it is apparent that till 2004 the price of homes kept on soaring. After that year, the market flattened. It was in 2007 that the prices started declining and by the time 2010 came around the market has crashed enough to reach the same prices as in the year 2004.

Presently, the value of homes in most parts of the country is rising again because of increasing demand and low supply. But the same does not apply to all regions.

The Two Real Factors That Effect House Prices

When we see trends in real estate, we see them at a national level. This is a gross error. A potential homebuyer should consider the market of their city. Just because Orlando is booming with houses doesn’t mean that San Francisco will too. Prices of homes differ from city to city and state to state. Sometimes, even two neighbourhoods in the same town can have vastly different price points.

Real estate business person pointing towards the screen which displays real estate graph.

The second factor that makes an impact on house prices is the mortgage rate. When the economy is healthy, mortgage rates increase. A high mortgage means more interest which in turn reduces the allure of homes. On the other hand, when rates are low, i.e., the chances of people buying homes rises because the credit taken will be less. Mortgages have an auxiliary influence on home prices, but they do have one.

To Buy A Home Or Not To Buy One

With the reality of real estate more complex than what theory says the question of buying a home or not becomes complicated. If you have an exit strategy in hand, then buying makes good sense. Without a doubt, the value of a property does increase over time. So, selling your home 10 or 20 years down the line will be profitable. But if you plan to live in the abode for all of your life, you will not gain any profit from it.

Ways to Invest in Real Estate without Buying Property

A Real estate agent preparing a contract for a real estate deal.

A Real estate agent preparing a contract for a real estate deal.

Are you in the plans of investing time and money in the real estate? Well, it is a good idea. But there are also other ways to invest in housing that takes no pains in the dealings of landlord works or tenants.

Invest in Real Estate ETFs

ETF also known as Exchange Traded Fund is a single fund collection of bonds or stocks. They are very much similar to mutual funds and index funds for they have all the same low costs and broad diversification overall. So, if you are thinking to invest in real estate, but also want to try your luck in ETF, it sure is a smart and great move.

Invest in Real Estate Mutual Funds

When you can invest in ETF, you can also try your hands in the mutual funds. The reasons are many like the low costs and also the track records give one person enough confidence about the stable future.

Invest in REITs

The reasons to invest in REIT is the same as to invest in mutual funds and ETF. The investment can be made without actually holding the property physically. And REIT does exactly the same job as diversifying the holdings.

Invest in Real Estate Focused Company
There are multiple companies that manage and own the real estate without the REIT being operational. To know the difference, one will have to search deep for they pay dividend lower than the REIT. The focused real estate companies include the resort operations, hotels, real estate commercial developers and timeshare companies. Make sure to research thoroughly before you start investing in any of these companies. Also it is a smart move if you know the companies background, history, and other related details.

Invest in Home Construction
The housing inventory has seen rapid growth in the past few years and it is a great investment to construct a new home that would be beneficial in the coming years. By looking at this point of view, it is a smart investment to invest in the home construction industry.

Hire a Property Manager
There is no need to have physical property in the real estate business, but there is one strategy that would be very helpful to you. There are many investors who buy the rentals and starts with the plan, but then they take the help of property manager for all the heavy lifting jobs. This way the investor and the manager are benefitted in the real estate business.

A Guide to the Foreign Buyers

Image That Shows Four Hands Trying to solve a puzzle.

Image That Shows Four Hands Trying to solve a puzzle.

How to buy a home in the United States?

When the talk is about Real Estate, the words cannot be more described and illustrated than the Global Marketplace. If you stand a place among the Canadian snowbird, international investor or the immigrant of the first generation, who has made a living in the United States, it would be a hard experience to get inside the unfamiliar market. So the following guide will help you in purchasing a home in the U.S.

Things to consider before property purchase

Before you get into the property search, one must think about the importance of the place as how will it be used and helpful. One must take into considerations the following

  • Will this serve as a home for vacations?
  • A place to reside in the U.S. when doing business
  • A place for your children when they are doing their graduations
  • Investment?
  • A long term residence.

How the real estate market work in the United States?

A foreign investor does not get any privileges or rights regarding legal status or stay by just investing or buying in the United States. If you got plans to stay longer than the standardized Visa, then make sure to contact with an immigration lawyer.

By clearly determining the property usage to your real estate agent, they will help you in sale and search. So make sure to clearly state the reasons and your plans to stay for how long.

The real estate in the United States works a lot differently than in your home place. The States in the U.S. have their own rules and regulations when it comes to the real estate purchase, which includes the purchase contract, the sale closing method and also the titles and duties of the individuals those who are involved in the process.

The listing of real estate information is shared only by the agents with the help of many listing services. The information’s can be accessed by the consumers by going through the real estate site like the Zillow. In other parts of the world, the agents will have to knock the doors of many property holders to buy or sell a property. Also, the buyer’s must pay a sum of a fee to the agents whereas, in the case of United States, only the seller will pay from the sales commission.

The United States follows strict rules and regulations in the real estate business and demands licenses from the agents. The foreign buyers must look into things like the transfer of international wire, exchange rates of currency, banking systems, accounting issues and many more.

The Process of Property Purchase

Image That Represents The Real Estate Concept.

Image That Represents The Real Estate Concept.

Is it difficult to buy property in the United States?

Being an NRA – Non-Resident Aliens, one has to face few minor restrictions in the real estate market of America. But they play the role of trivial in investment purposes. When it comes to federal level, there are only few restrictions for the NRAs investing or owning in the real property. These restrictions are mostly considered unimportant whereas in the state of Oklahoma, the foreigners are restricted in buying land, but they are allowed to buy condominiums.

Procedure followed in New York city for property purchase

There are many procedures that are followed in a different state and vary from different countries as well. Let’s take a look at the procedure that is observed in the City of New York.

An offer must be made to your agent orally, who will pass on to the seller or to the seller’s agent. The seller may offer you, starting from the process of negotiation and will lead to an agreement on terms, price and the date of closing.

The attorney of the seller will start with the beginning of contract preparation of sale. The document will be then obtained and reviewed the survey, deed, promissory notes, policy of title insurance, the mortgaged property, tax bills, occupancy certificates, utility and fuel bills, elevator permits, leases, pools and many more.

The condominium’s financial condition will be examined by the buyer’s attorney.

He will then negotiate and review the deed of contract, the policy of title insurance, and also the documents that are referred in the policy title such as occupancy certificate, survey, tax bill of real; property, cooling, heating, and bills of electricity.

Once the condominium’s financial status, the building by-laws and the sale contract is satisfactory, the buyer’s attorney will give you permission to sign the contract. 10% of the price purchased must be deposited and it will precede to the seller for his/her signature. The money deposited will be handled by the escrow of the seller’s attorney until the closing period.

The application materials and the board requirements will be received from the agent of real estate. If you are not purchasing from the developer directly, then you will have to follow the rules of Board of Managers. You must completely cooperate the requests from the condominium’s board and must provide documentation if required.

The revival of application will be done and if all the materials required are included and is in the right order, then the approval will be granted.

The Real Estate Market Condition In Top-Growing Cities Of The US

An Image of a compact real estate property.

An Image of a compact real estate property.

Orlando And Austin Lead The Way

Orlando has set a record by becoming the top tourist destination in the country for a few years which has led to massive job creation. The increase in demand in the hospitality and leisure industry required an influx of workforce. This workforce, in turn, boosted the home sales and rental needs making the city a leader in real estate.

The capital of Texas is not far behind. Austin is, without a doubt, the fastest rising metro in the nation thanks to its many tech firms. These companies are luring in young workers who require homes. Add to it the housing demand generated by the students of the University of Texas, and real estate is rising fast here. One of the biggest factors in the housing market is Apple’s campus that employs a considerable number of millennials.

The Two States Of North Carolina

The University of North Carolina, the Duke University and the North Carolina State University as Raleigh are one reason the real estate market has shown a constant incline. The presence of the Research Triangle, home to over two hundred businesses that employ sixty thousand workers, adds to the housing demand.

Charlotte is the second NC metro that ranks high in the real-estate market growth. Most of the demand is due to the robust job market in the city. In the past few years, big names like Corvid Technologies and EY have staked their presence in Charlotte. They created hundreds of jobs and the need for homes.

Image showing a real estate property kit on a blur background.

Salt Lake City And Houston Are Not Far Behind

The one city that has the most promising future in concern with employment is Salt Lake City. The Amazon fulfillment center, the SLC Port Logistics centre and the International airport combined will generate a boom in jobs. This sharp rise in career prospects will lead to a corresponding surge of real estate market.

The year over year, growth in jobs in Houston increased by 2.7%. The employment picture in the city is soaring due to higher energy prices. Corporates are either relocating to the city or expanding to it. Together, the Texas city is on the brink of a good housing market situation.

These six cities make for the highest-growth real estate market in the nation currently based on employment.

What Should A First Time Home Buyer Consider?

Image showing a family starring their property's front view.

Image showing a family starring their property's front view.

The Quagmire Of Purchasing A Home For The First Time

The current home market is not forgiving, especially to those who are searching for their first abodes. The slowing economy, the higher mortgage rates, and the lower newer construction have all mingled to create a uniquely tight Gordian knot. In such circumstances, what is a first-time homebuyer got to do?

This article explores some of the steps virgin house buyers can take to ease the process.

Look For Long Term Mortgages For Properties

The first obstacle to purchasing a house is affordability. Few can do it. Thankfully 30-year long fixed-rate mortgages appear as saviours. With as less as 4.42% rate, the monthly payment is shaved down to a number that can be easily achieved by many potential buyers. Therefore, look for such mortgages.

The second step is to look for listings that are slightly above your budget and then haggle of concessions. Currently, the market has shown that 75% of home is being sold for an amount much lower than their list price. This is happening because both buyers and sellers are negotiating more. Simple concessions like repair cost or closing fee when borne by the seller can considerably alter the price for the buyer.

A Hand-holding real estate kit in a construction planning background.

Be Financially Prepared Before Jumping In The Real Estate Market

With 2019 more than halfway through, the market has some good and some bad news for buyers. The level of inventory in the housing market has increased slightly in some areas of the country. But entry-level inventory is dwindling, which means for first time home buyers, it is a prominent setback. Since March, the number of properties gone up for sale with a price of USD 200,000 or below has reduced by 9%.

The lack of supply of affordable homes has given rise to bidding wars. While part and parcel of real estate, for first-time purchasers these battles are often demoralizing. To get over this hurdle try to save as much as possible.

When you are financially prepared, you can take part in the bidding wars and come out as the winner. For people searching for homes in locales with expensive tags and low inventory, this is even more crucial.

Therefore, keep your eyes open, purses tight and bargain as much as you can to get the best deal. With patience, you will soon be the proud owner of a home!

Trends In Real Estate: Region Wise Exploration

An Image Showing US Downtown Real Estate Properties.

An Image Showing US Downtown Real Estate Properties.

The Current State Of Housing In The US

A continually rising interest rates on mortgages and a steadily following availability of existing houses combined to form a unique situation in the US. The prices on homes surged to such an extent that they made monthly payments for majority home buyers entirely out of reach. This has been apparent through the country.

But as like with every sector, the real change from region to region of the USA varied. In this article, we take a peek at the decline or rise of existing housing prices across the country.

Housing In The West And The Northeast Part Of The US

From March of 2018 till December of 2018, the west of the USA has a steep decline in sales of existing homes. The drop-in valuation was about 20%. From November of 2018 till February of 2019, the same sector experienced a recovery of about 5%. The improvement is primarily due to:

  • A rapid lowering of mortgage rates in recent months.
  • Stagnation in the prices of house sales.

In the northwest regions of the United States of America, a similar story is apparent. The total worth of home sales has declined by 1.4% (overall) since last year. The rebound the regions have seen starting from September of 2018 is around 9%.

A Close up view of Real Estate property kit.

The Existing Housing Market In The Midwest And South Of The USA

Both the Midwest and the South tell a very different tale, with the latter more concerning When compared to the west and northeast, the worth of house sales in the Midwest hasn’t had the same precipitous decline. States like Illinois, Dakotas, Missouri, Michigan, Minnesota, Ohio, and Kansas bore a 2% lowering in the home market. There has been no rebound experienced in this part of the country.

It is the south that includes Oklahoma, Carolina, Alabama, Arkansas, DC, Florida, Georgia, Kentucky, Tennessee, Texas, Louisiana, Maryland, and Virginia, among which is most worrying. The home market here peaked in June 2018. Since then, it has been steadily declining. By February 2019 the fall was by 3.4% with no hopes of a rebound.

When the entire US existing home sales are considered, the picture is far from rosy. There are myriads of reasons for it with the foremost being the unsteady and lowering economy. Here’s hoping that the South and Midwest will buck up in the coming months.

Housing Slowdown In US: An Early Indicator Of Economic Cooling

A Front view of a real estate property.

A Front view of a real estate property.

The US Housing Market Continues To Soften As Demand Falls

For the past half-decade, the prices of homes in the US have been gradually increasing. Recently, the market showed a cooling with real estate prices decreasing. The reason for it is the slow-down in demand and the subsequent lessening of construction. Moreover, the interest rates on a home are increasing. Altogether, homebuilders have seen the lowest point in the past three years!

The national home price index by S&P showed a 5.16% rise. This is a sharp deceleration from the 6.09% growth the industry saw previously. Rather, it is the slowest pace visible in a year or two. The seasonally-adjusted house price index (purchase only) by the Federal Housing Finance Agency supports the statistics. The y-o-y rise in 2016 was 6.37%, while in 2017 it was 6.27%. Last year, the number was a mere 5.76%.

A House Price Rise In Major US Cities

S&P numbers show that despite the slow-down, the home prices have risen across twenty main cities of the USA. They are given below in descending order:

Home For Sale Sign infront of the beautiful new house.

  • The maximum increase was in Las Vegas at 12.07%
  • Phoenix at 8.1%
  • Seattle at 6.33%
  • Denver at 6.22%
  • Atlanta at 6.2%
  • Minneapolis at 5.77%
  • Detroit at 5.75%
  • Tampa at 5.68%
  • San Francisco at 5.6%
  • Boston at 5.59%
  • Charlotte at 5.45%
  • Miami at 4.96%
  • Cleveland at 4.63%
  • Los Angeles at 4.44%
  • Portland at 4.38%
  • Dallas at 3.96%
  • New York at 3.5%
  • San Diego at 3.35%
  • Chicago at 3.11%
  • Washington at 2.72%

The most significant hike was visible in the Mountain region of the country with a y-o-y of 7.44%, says FHFA. The region-specific change in other areas was:

  • East South Central at 7.32%
  • South Atlantic at 6.68%
  • East North Central at 5.73%
  • West North Central at 5.59%
  • New England at 5.29%

The Impact On Sales Price Of Homes

While the average sales price of homes increased to US$362,400 (a 1.8% y-o-y), the median sales price reduced to US$302,400 (an 11.9% drop). The US Census Bureau provided these numbers for the sale of new homes in the same period. A corresponding increase in the median sales price for existing homes was also noticed. The price is at US$253,600 (a 2.9% hike) from last year. 

The forecast for home sales is not too bright, which portends a significant slow-down in the economy of the nation.

Impact of GST on Real Estate Sector

Image which represents The Impact of Real Estate Industry and GST.

Know How GST Has Made Changes In The Real Estate Sector 

GST is the Goods, and Service Tax levied for most of the businesses of India. It is a kind of service tax. 

The GST rates have been changed recently, and it is up to the real estate developer to choose the old GST rate or new GST rate. The early GST rate had the benefit of the input tax credit, which does not apply to the old GST rate. Anyhow the real estate buyers would not face difficulties with the current GST rates. In this article, we would talk about GST and its effect on the real estate business. 

GST And Real Estate

Image of A Hand Holding The Real Estate Buildings Which Describes The Concept of GST on Real Estate Sector. 

In the past, the GST with the input tax credit benefit was 12 percent for real estate properties. It was 8% for affordable housing. After the revision in the GST tax rates by the Central Government, the GST rates were reduced to about 5% for real estate and 1% for affordable housing. , and this made the real estate developers unhappy. Thus Government offered a choice for the real estate developers to choose either the old GST rate or new GST rate. Read More about the GST on Real estate.

The recent changes made in GST rates would be beneficial to people for whom the input stock is accumulated. The construction projects that have been started before April 1st, 2019 can choose any of the tax rates. But the construction projects that commenced after April 1st, 2019 must follow only the new GST rate. Real estate experts had expected this recent change on the GST rates announced by the central government. The recent change in the GST rates does not affect the prices of homes. The real estate developers cannot increase real estate rates. 

New GST Rates

Recently the GST council met and came up with a transition plan for implementing the new GST rates. This new GST rates announced would be applicable from April 1st, 2019.  Thus it is up to the real estate developer or homeowners constructing building before April 1st, 2019 to choose either the old GST rate or the new GST rate. According to the new standards mentioned, GST would be levied for 5% for real estate properties and 1% for affordable housing properties. A residential house or plot comprising of 90 sqm is called as an affordable housing property. The GST council has also decided that the procurement of materials for construction purposes must be from only registered dealers. The commercial spaces are considered as residential for 15% for calculating the GST. It is, of course, difficult for tier 2 and other smaller cities to meet the 80% procurement criteria from registered dealers. 

It would take some time to know if the new GST rates can create a significant impact on the real estate sector, which is currently facing various challenges. The GST council has decided to make use of the input tax credit on a proportionate basis. There would be a clear segregating of projects that are under construction and new projects so that builders would benefit from the input tax credit. 

Image That Represents the Estimation of GST on buyers payout by 6 per cent - 7 per cent on the overall purchase.

GST Impact

GST would create a significant impact on the real estate sector. Thus it would influence the buyers, real estate developers, and stakeholders. GST would be levied only for houses or building that are under construction. Thus completed real estate projects are not bound to GST reforms. Therefore there would be a decrease in the price of ready to sell properties. This would be beneficial to buyers. Buyers must follow wait and watch approach so that they can understand the effects of GST with property prices. With the new GST regime, the construction cost has been reduced due to the input tax credit. Thus real estate developers, construction engineers, contractors benefit from the GST reforms. The GST rates also have a positive impact on other stakeholders like labor, material suppliers, etc. The effect on stakeholder is based on tax levied on the goods and services used for construction. 

The above inputs offer a clear insight into the GST reforms in the real estate industry.

How Helpful Are Cobots in Construction?

A collaborative robot in construction work being utilised by various companies.

Changes in building regulations and making them friendlier to the consumers have created a need for the housing sector to improve continuously.  If the organizations in this industry want to revive themselves and start thriving after that, then they need to innovate regularly and adjust to the changing scenarios. The use of cobots at the opportune times to enhance the rate of construction will be one of the areas that the builders must focus on optimally. 

The Future Beckons For Automation

All experts from within as well as outside the construction industry will tell you that the use of robots has already led to several positive changes within the fraternity. Yes, smaller projects can be carried out with the older methods, but when it comes to sizable and complex operations, the need for automation becomes immensely crucial. Technology is being used not only in the execution of plans but also when it comes to designing the entire project. Architects can rest assured about the accuracy of their designs with the help of 3D printing technology and other modern methods. Find out how cobots will be trending in the construction industry.

Repetitive jobs become efficient and accurate

The best thing about using collaborative robots in the construction industry is that they can easily accomplish a large number of monotonous tasks. Shifting of material from one place to another is among the functions that can take a lot of time if human resources are used in completing it. If companies start using collaborative robots in their place, then the job can be done the minimal time. The overall cost will also decrease because you will not have to hire people for it.

Why Are Collaborative Robots Needed?

With time, the design of buildings and other infrastructure that needs to be built has become more complicated than before. The requirements of people must be at par with the changing global scenario in terms of scientific development and standard of living. As a result, the construction industry must keep on moving at the desired speed to ensure that things do not get out of hand.

Collaboration Robots used in construction industry and automation made easy.

Automation can be useful for the environment

Some of you might find this statement a little hard to digest, but the more you think about it, the more evident it becomes. It is safe to say that an increase in the use of collaborative robots to handle various tasks in the construction industry will lead to an immediate decrease in the use of fossil fuels.

At the same time, high-quality automation will curtail the levels of noise pollution in cities and suburbs. So, it must be kept in mind that in the long run, collaborative robots can be beneficial in saving the environment and conserving natural resources for a prolonged period. 

Microsoft HoloLens for the present and the future

Automation will also be one of the most effective methods that can be used to supervise the efforts of human resources on construction sites. A substantial number of construction companies has already implemented the use of augmented reality techniques for constant observation. Cobots enter the construction projects and are expected to provide greater benefits.If you have heard about Microsoft HoloLens, then you would probably be aware of its applications in showcasing architectural designs to clients. All the probable glitches in the building plan can be removed at the earliest with this technology.

3D printing in the construction industry can be valuable in the times to come. Execution of plans and completion of projects in a timely fashion becomes convenient and easily achievable with the help of this technology. The accuracy of 3D printing is phenomenal, to say the least. A small-scale virtual models of buildings and other infrastructural entities can be created as per the requirements of a project. All the pros and cons of selecting different methodologies of architecture can be assessed with the use of this technology.

Cobots and IOT- a deadly futuristic combo

The optimum combination of internet of things and other advanced analytics technology can be a boon for the entire construction industry. Collaborative robots with these features will not only decrease the time taken for the completion of construction projects, but they will also be beneficial in improving the overall quality.

Other Profiles