"Someone’s sitting in the shade today because someone planted a tree a long time ago." Warren Buffet, regarded as one of the world's most successful investors, quoted what I believe is a very significant and true statement. Investments, if done right, do help secure a bright and calm financial future. However, many people today don’t believe it can be an easy process, especially in this economy. The current financial state the country is facing has challenged individuals, young and old, with financial burdens unlike any other past times. The struggling economy has made many people regard the future as an unstable and nail biting state. In other cases, people do not believe secure investments are attainable or realistic. However, if you are up to date with investments, specifically the investments that are resulting in higher returns, you can see that real estate is the most profitable area, where houses are more affordable than ever before. Real estate investing is better than other investments such as stocks, because there are fewer risks in involved and real estate can receive capital multiple ways. According to James Kimmons, “While stocks and bonds are inflation-sensitive, and they typically involve only value appreciation potential… we see here that real estate provides multi-faceted investment returns.”
The great thing about a property is that it gains appreciation, or value, over years, and can also provide owners with residual income, from renters. Aside from providing income, Real Estate owners are also provided with financial security and stability. As a young man, who has done much research in the Real Estate market, I have come to the conclusion that distressed properties provide the maximum return, both in financial ...
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...it can be done on your own terms, exactly how you want it to look and it also provides personal satisfaction if you were to participate in its reconstruction. A newly rebuilt property has now become my own comfortable living space for the next couple of years while attending Sacramento State University. The investment has also provided itself as a financial profit, due to its continuous value gain and when it becomes a rental to future students and families.
Works Cited
. "Sacramento foreclosure rate was No. 10 in U.S. in August ." Sacramento Business Journal. N.p., 12 Sep 2008. Web. 1 Dec 2011. .
Kimmons, James. "Why Should I Invest in Real Estate?." About.com. James Kimmons, About.com Guide, n.d. Web. 1 Dec 2011. .
In existence is $150,000, specifically set aside for the purchase of distressed real estate. This essay will outline a detailed strategy ensuring a maximum return in regard to the financial investment made on the home. Including a description of distressed real estate and foreclosure in addition to how utility can play a role in the decision-making process.
In the essay “The Mansion: A Subprime Parable,” Michael Lewis unfolds the real face of the American dream. He talks about his own personal experience in his look out for a house and his struggle with the house he rented. Most Americans have bought houses they cannot afford. Banks offered loans, they have lent mortgages that many don't have enough financial resources to pay them back. Agents have falsely guaranteed that real estate prices will be in constant rise, they promised them that there will be no declination in prices.
Because of the amount of overdeveloped areas that are now vacant, the desire to renovate old vacant properties and land plots has all but disappeared. What if there was a beneficial solution to unused land plots in need of rehab and redesign? What if, instead of paving over every leftover inch of grass and dirt in urban areas to make room for more parking for our daily commuting polluters, we instead reinvent that land for a purpose that is both beneficial to our
After a generation of portfolio managers and investors profiting from decades of favorable returns on stocks, they believed the modern economy was impervious to major calamities (“Rethinking” 20). As inflation rates fell from record highs in the late 1970s and early 1980s to the record lows that they are today, interest rates followed, enabling Americans to borrow more money from lenders which, in turn, increased housing prices to all-time highs (“Rethinking” 21).
The trend for home ownership is down. Millennials, those born between 1980 and the early 2000s, are waiting longer before buying their first home. (Rent Jungle, 2015) For them, purchasing a home represents a much higher cost relative to income than it did in years past. To illustrate this point, in the 1970s, the cost of a house represented about 1.7 percent of annual income; today that figure is at almost 3 percent. (Rent Jungle, 2016) Single-family home prices are continuing to trend upward (Hanley Wood Data Studio, 2016), making home ownership an unaffordable option for
American urban housing system was not in a very good state at the end of Second World War. Hundreds of thousands of soldiers had started to return back to the mainland, filled with the dream of better and improved life (Baxandall and Ewen, 2000). Euphoric and buoyed by a hard fought and historic win, where U.S had established its military supremacy in the world, these people had great dreams and aspirations to continue in the legacy of that supremacy. This aspiration manifested itself most prominently in their demand for housing infrastructure, built with modern age planning, design, and latest infrastructure: houses that could symbolize the United States great power stature and their own triumph in being a part of this transition. Meanwhile the Congress announced special housing loans for returning war veterans where they could get loans on zero down-payment and little mortgage. Suddenly there was a great boom in the demand of urban housing, compared to which the available apartments fell drastically short (Baxandall and Ewen, 2000). Millions of war veterans and citizens were homeless or living in makeshift...
This will cause lower income residents to move out of their homes. It is also stated that the action of restoring damaged property would be a positive because it attracts those who can afford the newly renovated homes. This also includes the physical rehabilitation of certain neighborhoods that are in poor conditions. Once these neighborhoods are renovated this will invite those who choose to invest in this area and new businesses will open. However, the negative would be that lower income residents will still be forced to move out because rent prices would increase due to the new demand.(Atikinson, 2004, p.
Warren Buffet once said, “Someone is sitting in the shade today because someone planted a tree a long time ago” (Buffett, Cunningham 51). During the deepest and longest-lasting economic downturn in history, which sent Wall Street into a panic and wiped out millions of investors, the Great Depression, Warren Buffet was buying and selling his first stocks. Amid the difficult times, Warren Buffett became one of the greatest investors ever and is regularly ranked among the wealthiest people in the world with a net-worth of 66.7 billion dollars (“History”).
Foreclosure in America has been a rising and prominent problem recently, and has destroyed many Americans hopes and dreams. Over 2.3 million homes were foreclosed in 2008, and an estimated four million homes will be foreclosed by the end of this year. Despite the efforts of many banks and lending companies, over half of homes will foreclose that have received their help. I believe that we have only started in the right direction in solving the foreclosure crisis. Giving money and lowering mortgage rates will help, but I believe we should find out why Americans are in this situation in the first place. We are being too stereotypical when we think the only reason someone is foreclosing is because of irresponsible payments or buying a home out of a person’s capabilities to pay for it. If we understand their situation, we will be better enabled to help and solve their crisis.
Each step of the appraisal process involves an unknown amount of estimation error. The combination of these errors is unlikely to produce a perfect, error-free estimate of value. Thus, appraisal error is virtually unavoidable. Investors need reasonable estimates of value when buying, selling, or retaining commercial property, so an unknown amount of appraisal error adds uncertainty to the decision-making process. Despite the uncertainty, investors have learned to make allowances for appraisal error in their decision-making processes. The way in which real estate investors interpret appraisal errors has a material effect upon the decisions that they make. In particular, the predominant belief among real estate professionals is that appraisal error is random. This belief materially influences investor attitudes toward portfolio management and the valuation process itself. Lack of understanding of the relative magnitudes of random and nonrandom components of total appraisal error has consequences for optimal portfolio strategies. For example, investors who deem the bulk of total appraisal error to be random may reasonably conclude that error in estimates is beyond their control or influence. To minimize total portfolio valuation error, such investors may assemble large, diverse portfolios even though the cost of owning an array of properties of various types and in various locations is expensive. On the other hand, if the bulk of total appraisal error is nonrandom, investors would do better to pay attention to improving value estimates on each property rather than hoping that the errors in values of a large pool of properties will offset one another. In particular, investors should institute valuation controls and procedures to minimize the errors in each valuation of individual portfolio assets. Such controls might include obtaining multiple simultaneous estimates, changing appraisers for each periodic revaluation, or increasing the frequency of valuations. This conclusion becomes particularly significant in light of studies like Miles that determine that the typical magnitude of total appraisal error is about ten percent of appraised value. Information in three recent empirical studies provides evidence that previous appraisal research has been mistaken in assuming most appraisal error to be random. The demonstration that most appraisal error is nonrandom should encourage real estate investors to focus additional attention on individual asset selection and valuation at the expense of portfolio assembly.
. It is impossible for any living organism to survive without owning anything. From insects to mankind, owning some sort of property, whether tangible or intangible, is our way of surviving. As the most complex of all living organisms, our expression and demands towards property and ownership vary numerously (LeFevre 1). In the “American Dream”, one of the main ideals is to be able to own a home or land. In August 2013, President Obama addresses the issues of modern economy and kick starts a new housing finance system. “Thanks to reforms of the financial system that cracked down on the most reckless practices that led to the housing crisis, responsible Americans can feel more confident and secure when they borrow money to purchase their own home” (Donovan). However, the mistake that many people make is seeing property as their home or land as itself and nothing more. What humans fail to acknowledge is that it is not just the property or object itself, it is the relationship that we attach ourselves to that object, “Property viewed as the object or objects of man's drive to own, is of far less importance than the drive itself” (LeFevre 2). Before being able to own property, the desire to strive and longingly want to own property must be prominent. Without it, no one would have the desire to own or even care to own anyth...
“One out of every two hundred homes will be foreclosed every month, making 205,000 new families enter into foreclosure,” Mortgage Bankers Association. The housing industry in the United States is undergoing an unfortunate crisis. There are way too many homes being foreclosed, which cause a ripple of problems.
Valuation of real estates or properties basically, refers to appraising a property or a real estate to form an opinion about the value of the property. This value is normally the properties’ market value. Properties are heterogeneous in nature; meaning they are not all identical or alike and thus, they have different values. However, it is possible to get a range for the values. There are some obvious factors like physical location of a property that automatically makes the market value of different properties differ. The materials used on a property and other features also contribute to making property differ in their value. Other factors such as the physical size of a property still determine a property’s market value (Histon Fine Homes, 2008
In order to understand the concept of financialization and the housing market on the global and local level, one must know that there is a global pool of money that is simply the worlds savings bank. In 2000 the pool had $36 trillion and has since doubled in size (Blumberg 2008). Its most recent profit increase was a result of developing countries and cities such as India, Abu Dhabi, and China making money. This doubled the cash pool available for investments, but left fewer solid investments for the taking. The solution was residential mortgages and the US housing market. The investment managers thought the low-risk high-return investment in the housing market was a good, stable idea. The glo...
Introduction Real estate is a fixed, tangible and immovable asset in the form of houses or commercial property (Seldin & Richard 1985). Real estate market involves developing, renting, selling/purchasing and renovating of these assets (houses). Market participants include developers (contractors, engineers, and so on), facilitators (mortgage companies, real estate brokers, banks, management agents and so on), owners, renters (leasers) and renovators (Seldin & Richard 1985). Like other economic markets, real estate markets have internal and external forces that impact the market (Seldin & Richard 1985). Demand and supply forces have the major impact on the industry as they determine growth or decline in the market (Seldin & Richard 1985).