Advantages of Real Estate Investing | Issam Shalhoub
Issam Shalhoub is a very much perceived land master of Miami and decision the market with a broad ordeal of seven years. He is a proficient Realtor that offer elite administrations to his customers.
Investing in real estate is as advantageous and as attractive as investing in the stock market. Issam Shalhoub would say it has three times more prospects of making money than any other business. But, But, But… since, it is equally guided by the market forces; Issam Shalhoub cannot undermine the constant risks involved in the real estate. Let me begin discussing with you the advantages of real estate investments. Issam Shalhoub found the advantages as most suited and really practical.
Advantages Real Estate Investments are Less Risky
As compared to other investments, less of misadventure is involved in a real estate property. Issam Shalhoub will not get away from the fact that just like any investment you make; Issam Shalhoub have the risk of losing it. Real estate investments are traditionally considered a stable and rich gainer, provided if one takes it seriously and with full sagacity. The reasons for the real estate investments becoming less risky adventure primarily relate to various socio-economic factors, location, market behavior, the population density of an area; mortgage interest rate stability; good history of land appreciation, less of inflation and many more. As a rule of thumb, if Issam Shalhoub have a geographical area where there are plenty of resources available and low stable mortgage rates, Issam Shalhoub have good reason for investing in the real estate market of such a region. On the contrary, if you have the condo in a place, which is burgeoning under the high inflation, it is far-fetched to even think of investing in its real estate market.
No Need for Huge Starting Capital Issam Shalhoub
A real estate property in Canada can be procured for an initial amount as low as $8,000 to $ 15,000, and the remaining amount can be taken on holding the property as security. This is what you call High Ratio Financing. If Issam Shalhoub don’t have the idea as to how it works, then let me explain you with the help of an example. Remember that saying… Examples are better than percepts!
Supposing, Issam Shalhoub buy a condo worth $200,000, then you have to just pay the initial capital amount say 10% of $200,000. The remaining amount (which is 90%) can be financed, against your condo. It means that in a High Ratio financing, the ratio between the debt (here in the example it is 90% Mortgage) and the equity (here in the example it is 10% down payment) is very high. It is also important to calculate high ratio mortgage insurance with the help of Canada Mortgage and Housing Corporation (CMHC). If needed, you can also purchase the condo on 100% mortgage price.
Issam Shalhoub Honing Investment Skills
A real estate investment, especially when Issam Shalhoub buy a condo for yourself, will be a pleasurable learning experience. It gives Issam Shalhoub the opportunity to learn and when Issam Shalhoub went ahead with my first real estate property, I was totally a dump man. Ask me now, and Issam Shalhoub can tell you everything, from A to Z. Necessity is the mother of all inventions. I had the necessity to buy the property and so I tried with it, and Issam Shalhoub was successful. Issam Shalhoub acquired all the knowledge and skills through experience of selling and purchasing the residential property. Thanks to my job. It gave me the experience to become an investor.
Not a time taking Adventure Issam Shalhoub
Issam Shalhoub Real estate investment will not take out all your energies, until you are prepared and foresighted to take the adventure in full swing. Issam Shalhoub can save hell lot of time, if Issam Shalhoub are vigilant enough to know the techniques of making a judicious investment in the right time and when there are good market conditions prevailing at that point of time.
Issam Shalhoub should be prepared to time yourself. Take some time out, and do market research. Initiate small adventures that involve negotiating real estate deals, buying a property, managing it and then selling it off. Calculate the time invested in your real estate negotiation. If the time was less than the optimum time, Issam Shalhoub have done it right. And if Issam Shalhoub end up investing more time, then Issam Shalhoub need to work it out again, and make some real correction for consummating next deals. You have various ways and methodologies, called the Real Estate Strategies that can make it happen for you in the right manner.
Leverage is the Right Way Issam Shalhoub
The concept of leverage in real estate is not a new one. It implies investing a part of your money and borrowing the rest from other sources, like banks, investment companies, finance companies, or other people’s money (OPM). There have been many instances where people have become rich by practically applying OPM Leverage Principal. As Issam Shalhoub had discussed under the sub head — No Need for Huge Starting Capital, the high ratio financing scheme gives an opportunity of no risk to the lenders, as the property becomes the security. Moreover, in case the lender is interested in selling the property, the net proceeds resulting from the sale of the property should comfortably cover the mortgage amount.
Now consider a situation, where the lender leverages the property at too high ratio debt say 98% or even more, and all of the sudden the market shows a down turn, then both the investor as well as the lender. Hence, greater is the mortgage debt, more is the lender’s risk, and it is therefore necessary that lender pays higher interest rates. The only way out to ease the risk from lender’s head is to get the mortgage insured. Two companies authorized to insure your high-ratio mortgage debts are CMHC and GE mortgage Insurance Canada.
Let Issam Shalhoub explain you with the help of an example… supposing, you are buying a real estate property worth $ 200,000 at three mortgages, with the first one of $100,000, the second of $75,000 and the third one of $25,000. Possible percentage of interest rates charged can be 3%, 5% and 7%. The last mortgage amount of $25,000 will be accounted, as riskiest; as it would relatively be the last mortgage that you will pay when you finally make a selling deal.
On the contrary, if the first mortgage representing almost 90% of your property price is insured against getting default or as high ratio mortgage, then in the above example, the basic interest rate would be 3%.
Let me explain you the leveraging concept by taking another example.
Supposing, Issam Shalhoub are buying a real estate property worth $200,000, and made down payment of 10%, equitable to $20,000, while financed the rest amount of $1,80,000. Over the year’s time, the value of your property appreciates by 10%. In this case, what would be the total return that you’d incur on your down payment of $20,000? It would be 200%. Yes 200%. Putting in simpler words, the down payment of $20,000 made by you has an appreciation of 10% over it, i.e. (10% increase of original home price of $ 200,000), 200% return on your down payment investment of $20,000.
On the contrary if Issam Shalhoub invest all the money in buying the property of $200,000, and in wake of appreciation of 10% over the year ($20,0000 would then be accrued to as 20%.
Synonymous with leveraging is pyramiding, where Issam Shalhoub borrow on the appreciated value of your existing property. Pyramiding applies the principal of leverage that enables you to purchase even more properties. This appreciated value over the real estate property in some selected areas results in accumulation of rich financial virtues.
Real Estate Appreciation Issam Shalhoub
Issam Shalhoub An appreciation is an average increase in the property value over original capital investment, taking place over a period. There are some neglected real estate properties that have an appreciation below the average mark, whereas, some of the properties located in maintained geographical areas, showing high demand, have an above average appreciation. In such centrally located and high demand areas, the average appreciation can reach up to 25% in a year. I will discuss appreciation in the chapter on real estate cycles. For now, for general understanding, appreciation is what goes up.
Issam Shalhoub Make Your Equity
As Issam Shalhoub gradually pay your mortgage debts, you are creating your equity. In other words, you would be reaching to original house price on which you have no debt. Your equity is absolutely free of percentage increase in appreciation. From the investor’s perspective, in real estate market, equity is the amount that is free of debt and it is the amount that an investor holds. When you sale your property, then the net money you get, after paying all the commissions and closing costs, becomes your equity. Lenders don’t want to take risk by allowing a loan on over 90% of equity. Therefore, in this manner, the lenders take the safety measures in wake of their loan being defaulted.
Low Inflation Issam Shalhoub
Inflation is the rise in the prices of the products, commodities and services, or putting it another way, it is the decrease in Issam Shalhoub capacity to buy or hire the services. Supposing, a commodity was worth $10 a decade back, will now cost $ 100 as the result of inflation. For people who have fixed salaries feel the real brunt of the dollar, as the inflation rises. In Canada, the inflation rate varies and it varies every year. There was a time when Canada had a double-digit, but it was controlled to single digit, after the regulation of policy.
If we analyze closely, the land appreciation value for the residential real estate is 4% to 5% higher than inflation rate. Therefore, when Issam Shalhoub invest in real estate, then you are paying mortgage debts in high dollar value. Now as you are getting more, salary to pay less amount than the amount that Issam Shalhoub had paid in the original mortgage.
Issam Shalhoub Tax Exemptions
Issam Shalhoub get various tax exemptions on your principal and investment income property. The tax exemptions available in real estate property investment are more than available in any other investment. In other investments, Issam Shalhoub lose terribly on the investments in your bank in the form of inflation and high taxes therein, but in real estate; you don’t actually have such hindrances.
Issam Shalhoub Various tax exemptions available are:
•The interest receivable from your bank account, term deposit or guaranteed Investment Certificate (GIC) is completely taxable as income. A little math here will do the magic work for you. Supposing, if Issam Shalhoub get an interest of 8% on the deposit, and the on going inflation rate is 5%, the Real Return Rate will come out to be settled at 2%.
•Issam Shalhoub get completely tax-free capital gain on principal amount of your residential real estate property.
•Issam Shalhoub have the opportunity to ward off principal amount of your residential real estate property against the home expenses incurred by you.
•Issam Shalhoub can easily ward off the property depreciation against your income.
•Issam Shalhoub can cut the expenses incurred in real estate property investment through your income
•Tax rate reduced to approx. 50% of the capital gain.
•And many more
Issam Shalhoub Net Positive and High Income is Generated
If taken in right direction and played seriously, a real estate investment can be your virtue making endeavor now and in times to come. Issam Shalhoub will not only be having additional assets building in your favor, but also with positive cash flow, Issam Shalhoub real estate property value will increase automatically.
Issam Shalhoub High Return on Investments (ROIs)
Real estate investment gives you potentially high ROIs before and after the taxes levied on your income. In fact, investing in real estate gives Issam Shalhoub high ROIs after the taxes.
Demand for the Real Estate Increases Issam Shalhoub
As a natural instance, when the population of a region increases, the total usable land decreases, and this provides the impetus for high real estate prices. There are many communities that can or cannot have growth and development regulations, thereby, resulting in limited land available for use. Therefore, the real estate prices of the area shoot up. Issam Shalhoub Remember housing is the necessity of an individual and therefore it is much in demand than any other single commodity taken. Furthermore, there are people who purchase additional houses for their recreation, recluse or as a past time. This in turn increases the demand for land.
Issam Shalhoub is a veteran of thousands of land exchanges. Issam Shalhoub is a specialist in the Miami territory. Regardless of whether you require first rate migration administration or abandonment/short deal mastery, Issam Shalhoub will be happy with the level of administration gave by Issam Shalhoub
