|
|
|
New Year May Bring New Opportunities in Atlanta Real Estate - 2009-01-11 |
The Roman god Janus was often depicted as a head with two faces: one looking back to the year past, and the other looking forward to the year ahead. And before we get too far into this new year, it's a good idea for homeowners and real estate investors to look ahead and plan for the future.
As I talk to owners, investors and real estate professionals, there are three questions that I hear most frequently these days. Each is a function of the current difficult market, and answering each involves some degree of speculation on the part of the answerer.
I certainly do not claim to know the future, and I would warn you that I have been charged in the past with "irrational exuberance" when it comes to the topic at hand. Even so, I would counter that my thirty years as an active broker, owner and investor in this local real estate market give me some degree of perspective, so here we go.
Q: What is making money today in the real estate market?
A: Because so many people are worried about paying their own bills and keeping their own jobs, it's hard to make money in this market as a residential sales professional. In fact, agents are leaving the profession in droves.
Even though home loans are at some of the most attractive fixed rates I have ever seen, buyers have been stripped of confidence, so not much is selling.
In this market, the smart homeowner needs to find a way to postpone his selling plans, make sure he stays current on existing mortgage payments, and watch for the right moment to refinance and lock in a lower long term interest rate.
I also think this is a great time for communities to come together to promote their common interests and boost neighborhood spirit. When we exit this current slowdown, one feature that will make your home more attractive is a strongly supported community school and a well organized neighborhood association.
Investors are now divided into two groups: those who can buy now and those who can't. Because of a Fannie Mae lending restriction, any investor with 4 or more real estate related loans is prohibited from borrowing more. Even though America desperately needs investors to buy and rehab the glut of bank-owned homes clogging our resale system, this arbitrary roadblock has sidelined the industry's most prolific rehabbers.
The answer to the original question is that now is a great time to buy a bank-owned foreclosure home at a heavily discounted price. The formula is to buy one of these homes at the right price, repair it to community standards, rent it at a fair price to buyers excluded under today's tougher lending policies, and make a good monthly profit every thirty days.
When the market recovers, and it will, the owner is in a strong position to then decide if he wants to keep the property as a long term rental or sell to his tenant under a lease-purchase program for even more monthly income.
Q: What's going to happen to my real estate in the next several years?
A: You should know that the amount of dollars being intravenously dripped into the American economy is historically without precedent. Sooner or later, this money will hit the economy and circulate throughout our lives. When it does, everyone will "feel" richer, and consumer confidence will return.
As that happens, the bargain sales will disappear, and traditional demand will return. In my opinion, any implication that the American people have (or will) abandon their faith in residential real estate as a part of the American Dream is, so far, without substantiation. I talk to a lot of prospective buyers, and they all tell me that still intend to buy one day. Just not now.
Anyone having to sell in the next year may have to sell for less than they want. Anyone who can buy in the next year is likely to get an excellent deal. But no one I have heard is suggesting that real estate will somehow enter a long-term decline in value. The turn-around is simply a matter of time.
In fact, the likely long term result of the current money transfusion will be inflation, hitting everything from soft drinks to new cars. Home prices will be affected accordingly, and this is nothing new.
Q: So, what should I do right now?
A: If you don't own real estate now and have a stable financial situation, I believe that the next 6 months will give you the opportunity of a lifetime to own a home at a great price and lock in a great fixed interest rate.
If you do own real estate, make the payments on time and try to avoid having to sell during the next year.
If you are an investor and can get financing, this is a remarkable opportunity to buy up to four "bank-owned" bargains, fix them up, refinance them with low rate loans, then rent them at positive cash flows until the resale market returns.
Legendary investor John Templeton advised clients to wait until the "moment of maximum pessimism" to purchase their investments. I believe we are very close to that moment as we enter the coldest month of the year.
Comments or questions? Send e-mail to
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
|
|
Upcoming Events
John Adams Presents
LANDLORD SURVIVAL TRAINING
with John Adams
Tuesday, February 28th
Being a landlord can be a rewarding experience. It can also be a difficult one if you don't have the knowledge and understanding of what the process requires.
Few schools offer degrees in property management, so most landlords learn "on-the-job" through acquired knowledge and on-the-job experience, essentially re-inventing the wheel. This is an expensive and depressing way to learn anything.
Whether you're a full-time landlord or just getting ready to purchase your first rental property, whether you are a licensed Georgia real estate professional or an accidental landlord, this seminar will help you improve your property's value, increase your cash flow and decrease your expenses, from attracting (and retaining) good tenants to maintaining your property to understanding your rights and obligations under the law.
For more details and to register click HERE
PROPERTY TAX REDUCTION WORKSHOP
with John Adams
Tuesday, March 27th
One of the significant annual expenses faced by any Georgia property owner is ad valorem property tax. Depending on where you live, it can be as high as three percent of the property's fair market value, and it must be paid year after year after year.
As a result, efforts to minimize this expense are not only worthwhile, they are encouraged by Georgia law. The phrase "ad valorem" means that each property is taxed based only on its value, and no one is required to pay a penny more than the minimum the law demands.
At the Property Tax Reduction Workshop, real estate expert John Adams will review the system he has used for over thirty years to reduce valuations and assessments in Georgia counties and municipalities, saving himself literally hundreds of thousands of dollars over the years.
In this 3 hour information packed seminar, John will teach you how to:
1. Understand the legal process of Property Tax Assessment
2. Meet the newly uniform Tax Deadlines
3. File your own Property Tax Return with a realistic valuation
4. Document your PT-50R with facts to support your case
5. Proactively meet with your Appraiser to reach an agreement
6. Protest your Notice of Assessment in an Intelligent manner
7. Give the Assessor an Opportunity to Save Face
8. Appeal to your Board of Equalization, in person or by mail
9. Make Your Case to the BOE
10. Take Your Case to Superior Court if necessary
If you are not doing all these steps now, you are likely costing yourself hundreds or thousands of dollars a year. If you own just one house, you could easily save over a thousand dollars over the next three years. If you own properties valued collectively over a million dollars, you are literally throwing away your profits year after year.
For more details and to register click HERE
|
Resources