Visa Changes Should Help Chinese Buy US Property

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Investment in US real estate from overseas buyers could increase dramatically next year due to changes to the reciprocal US/China visa agreement. Students can be issued with five year multiple entry visas, while business travelers and tourists can be issued with ten year multiple entry visas.

These changes took effect earlier this month, and should make it easier for Chinese who wish to invest in US property. Often Chinese parents will purchase a home for children studying abroad, and the five year visa will also help students on a four year degree course.  Chinese investors who are currently undecided about purchasing US property should find these new changes encouraging.

According to the article in RisMedia, these changes could bring about a 15% increase in Chinese investment next year. Data from the NAR 2013 Profile of International Home Buying Activity shows the fastest-growing source of International clients has been from China and Canada. Real estate purchases by Chinese buyers have accounted for 12% of international transactions, and many of these are paid for in cash. Apparently Chinese buyers tend to look for property in the highest average price range and will pay cash around 70% of the time. Buyers have an average budget of $3 million and the median property purchase price is $425,000. This is much higher than the US median of $199,500. Popular areas for real estate investment by Chinese purchasers include Houston, Detroit, Philadelphia, Los Angeles and New York City.

Experts also point out that these recent changes to visas provide an opportunity for real estate agents as international buyers tend to greatly appreciate the knowledge and assistance conveyed by real estate agents. It’s not always necessary to be fluent in the overseas buyer’s native language. Home sellers may also prefer to find a real estate agent who markets their listings in China, as this is the fastest growing group of overseas buyers and could mean a quicker or better transaction for the seller. Real estate agents are also being advised to make international marketing part of their weekly business plan.

It’s thought that the extension of the student visa could have more impact on the US housing market than the changes to the business traveler and tourist visas, as a considerable number of Chinese students are educated in American schools. Even though every Chinese investor is in a slightly different situation, most will have an underlying belief in the US real estate market.

Rent to Own Comes With Many Options

News Source: http://www.canadianmortgageupdates.ca/

  

There are many ways for both the seller and buyer to both benefit from rent to own homes. Rent to own contracts are not standard purchase contracts. The seller and buyer can write almost any clauses into the contract that meet their needs. Today’s real estate market is showing signs of recovery but it would be even stronger if more buyers could qualify for loans.

Back on January 10, 2014, new mortgage underwriting criteria went into affect requiring a debt-to-income ratio of less than 43 percent for most qualified mortgages. The result is fewer potential buyers qualifying for a loan. Under the right conditions, rent to own homes become a good option for both the buyer and the seller.

Structuring the Contract

Rules vary from state to state but you can create a contract allowing lease options that benefit both the seller and the buyer. Typically, a lease option agreement allows the renter to buy the house within a set amount of time but doesn’t require him or her to make the purchase. Often the down payment and debt to income ratio are the major obstacles preventing the want-to-be buyer from qualifying for a traditional mortgage.

The lease option agreement can be written so that the renter qualifies for a loan some time in the not to distant future. The lease option can help the tenant/buyer over come the common mortgage stumbling blocks by helping the buyer earn equity in the house. This can be done by charging a higher than market rate of rent and applying a portion of the rent towards the down payment.

If the house is selling for $125,000 and $400 of the rent is applied towards the down payment, it will take about 5 years for the renter to accumulate a 20% down payment. If the lease option fee is applied towards the down payment, needed equity will be in place sooner.

Another option for lease option can include a version of seller financing. This is when the seller carries the mortgage instead of having the buyer qualify with a bank. Since the seller is going to want all of their money sooner rather than later, a balloon payment is included in the contract. The buyer then finances the balloon payment with a traditional mortgage at a future date.

The seller can help the buyer qualify for a traditional loan by reporting timely payments to the credit bureaus. Of course, the buyer needs to stay current with the payments or the seller will foreclose on the house in a seller financing arrangement or evict the tenant in a lease option arrangement that hasn’t been converted into a sale.

How the Seller Benefits

There are several ways the seller benefits from a rent to own home contract. The first way is that typically the selling price of the homes is about 10% higher than the current market rate. The buyer should accept the higher selling price for a couple of reasons. First, a lease option allows the renter to buy the home but doesn’t require him or her to. This means the seller has more risk than in a traditional sale. Second, the house is most likely to be worth more money when the renter converts to a buyer at a future date.

However, rent to own home contracts need to have some built in protections for the renter as well. For instance, the current owner should not be allowed to take out a new mortgage on the property. The renter should also have the title checked to be sure the owner is fully entitled to sell the home.

While rent to own homes contracts are a good tool for both sellers and buyers in today’s credit strapped economy, they are not without risk. Both parties to the transaction are best served by having a real estate attorney draw up the rent to own homes contract.

Buy A Property With This Valuable Advice

Article Source: http://www.canadianmortgageupdates.ca

There is so much to learn when it comes to purchasing real estate. This is why it is helpful to learn as much as you can about buying real estate before you make your decision. Here are some helpful tips you can use when thinking about the type of real estate you want to purchase.

Finding the right neighborhood for first- time buyers can be hard. Many people struggle with this. A great way to find the perfect neighborhood for you is by doing your research online and touching base with some local real estate agents. Many websites online deal with statistics of what kind of people live in an area and how high or low a crime rate is. Calling a real estate agent in a local area can be of big help too; they can give their personal opinions of a given neighborhood. These are some tips to help you find the right place to live.

To avoid bad surprises, find out everything you can about a neighborhood before you move in. Find out what kind of people lives there, and ask yourself if you could fit with them. Learn as much as possible about the school your children will be attending. Research the crime rate and how much city taxes you will have to pay.

When considering buying a particular house, take a good look at the immediate neighborhood. If you buy the home, they will be your neighbors. Getting a good look at who these people might be is a good idea when deciding where you are going to live for the next few decades of your life.

As stated in the beginning of the article there is much to learn when it comes to purchasing real estate. These were but just some helpful tips that could help you make your decisions. Make sure you always seek more knowledge about real estate as well as remember everything you learn, including tips from this article. The more you learn the better decisions you are most likely to make when you purchase real estate.

These Tips Can Make Your Dream Home A Reality

Article Source: http://www.canadianmortgageupdates.ca/

Buying real estate can be quite intimidating to many people. It really should be a bit scary, but not to the point where you are afraid to consider doing it. There are many decisions to be made and the wrong ones could affect your life for many years. Use the information in this article to help you in your decisions.

Don't be caught off guard by hidden fees. Ask your Realtor upfront for an estimate of what the closing costs will be. Items like commissions, attorney fees and home owner association fees should be disclosed upfront. Review the settlement and all the terms before you are ready to close.

Inspecting the property you are buying is very important. Most people only order the structural inspection of the house. In older houses it is also advisable to look for the signs of rodent infestation. This is not only an aesthetic issue. It can also cause long term health problems and clearly shows poor maintenance.

Hire an appraiser with years of experience. They should be certified, and should not be recommended by your Realtor. The more experience the appraiser has, the better they will be able to judge the home you are interested in, the market, and the areas surrounding the home. A Realtor should not recommend your appraiser, because there may be conflicts arising from such a situation.

Owning a home will usually offer you more room inside and out. When you rent, most places like to maximize the space, therefore offering you little room for your money. When owning a home, your space is customizable. You will often times have larger bedrooms, a laundry room, and more living area.

Take the time to read through these tips as many times as you need to, so that you can remember each individual tip. You are going to save a great deal of time and grief by spending the extra time to learn the tips that can help you in your real estate buying journey.

Alternative Commercial Real Estate Investments

News Source: http://www.canadianmortgageupdates.ca

When you think about commercial real estate investments, you probably think of apartment buildings, office space, retail, industrial, and hotels. In recent years, Institutional investors and developers have been narrowing their investment horizon into niches of these traditional and not so traditional sectors. They’ve been specializing in niches like student housing, seniors housing, medical office buildings, and self-storage facilities. These and other nontraditional commercial real estate sectors are worth taking a closer look at.

Farmland. Although it fell out of favor following WWII, farmland has been commercially exploited since the beginning of written history. Mostly in the form of leasing and sharecropping. Recently, the Gladstone Land Corporation became one of the first publicly traded farmland REITs. This company invests in farms that grow annual farm crops, as well as investing in storage facilities, processing plants, packaging plants, and distribution centers.

Data centers. There can be little doubt that technology will continue screaming forward at break neck speeds. Cloud storage of all this data has made its way to the forefront of today’s technology. But there’s no cloud out there. All of that data requires millions of square feet of specialized storage facilities and equipment. Networking firm Cisco, estimates global “cloud” traffic will quadruple between 2013 and 2017, to 5.3 zettabytes. Whatever a zettabyte is?

Billboards. You may not think of roadside advertising billboards as real estate but that’s how the IRS qualifies them, which means they can be expensed and depreciated like commercial real estate. There are REITs working on this commercial real estate model. With billboards you at least don’t have to deal with live-in tenants.

Self-storage. All across the country, self-storage facilities are coming online. As baby boomers downsize, this market can be expected to continue growing. Currently, demand exceeds supply and according to research by Marcus & Millichap Real Estate Investment Services, this commercial real estate sector will continue growing by double digits for years to come.

Student housing. Since the turn around from the recession, developers have been stepping into the student housing market where state institutions once dominated. The state universities and colleges seem to be fine with this since it frees up limited funds for better academic uses.

Medical buildings. This asset class is only going to grow from the combined pressures the Affordable Care Act and the millions of baby boomers needing more medical care as they age. The trend is towards more localized, lower cost services adjacent to the more expensive hospital settings.

Several types of senior housing. Along with more medical facilities, the tens of millions of retiring baby boomers are driving up the demand for more senior housing. This comes in several forms that vary from 55 and over secure communities of smaller houses, to assisted care, to fully staffed nursing home facilities.

Although some or all of these emerging opportunities will become highly profitable, you still need to perform your due diligence. There’s probably not enough money to go around for the wants and needs of everyone. The market for the Millennial and Generation X first time homebuyers didn’t make the list because it appears to now be served by the institutional rental house REITs that have come to dominate the market. Also, after the baby boomers pay for their children’s student housing and education they may have to put off moving into senior housing for many years.