|
|
| Home Buying 101 -- How Much House Can You Afford? |
|
Saturday, January 5, 2008
Are you ready to buy a home? How much of a mortgage loan can you afford? How's your credit? What size house do you need? How are your cash reserves? The more Q&A, research and soul searching you do in advance, the smoother the process will be later on. Let's look, then, at one of the key questions from this list. What Can You Afford? Before house hunting, you should determine how much of a mortgage you can comfortably afford. "Comfortably" means you can pay your mortgage each month and still have money for living expenses, savings, and quality-of-life niceties. In other words, you don't want a mortgage payment that forces you to "squeak by" each month. To determine your mortgage comfort-zone, you need three things: a budget, a price and a mortgage calculator. For the price, just start with the cost of a house you think you might be interested in buying. At first, don't worry about whether the price is too high -- you'll find that out soon enough when you run the numbers. Next, run the home price through a mortgage calculator at current interest rates and at a 30-year fixes mortgage. You might choose a different mortgage type later on, but this exercise is just to get a ballpark mortgage payment based on home price. So choose the 30-year fixed option for the sake of simplicity. Mortgage calculators can easily be found on the Internet. Just type "mortgage calculator" into any major search engine, and you'll find several. Or, you can use the calculators we provide at HomeBuyingInstitute.com. Once you've obtained an approximate monthly payment for various mortgage sizes, you can more accurately figure the price ranges into your budget. It's a quick and easy way to see what homes are inside your comfort zone -- and to find out exactly what your comfort zone is in the first place. Copyright 2006, Brandon Cornett. You may republish this article in its entirety, provided you leave the byline, author's note and website hyperlink intact. About the Author Brandon Cornett is the editor of HomeBuyingInstitute.com, one of the Internet's largest and most respected libraries of home buying information -- more than 100 expert articles in 12 different home buying categories! Put this knowledge to use by visiting http://www.HomeBuyingInstitute.com. Greece: The Mediterranean Choice for Real Estate Investors The Greek real estate market is currently one of the most exciting in the Mediterranean region because it offers real estate investors the chance to build an entire and well diversified property portfolio within one country. The wealth of opportunities available in Greece for the international property investor really became known after the Athens Olympics in 2004. The promotion of Athens and mainland Greece to the wider world not only promoted the appeal of the country for investors, it resulted in a massive influx of tourists particularly to the mainland throughout 2004 and 2005. Now add these growing tourism numbers to the large volume of visitors who annually holiday on the Greek islands and the total level of interest in this Mediterranean country has surged which has created more demand for rental and resale accommodation. In terms of the immediate opportunities available to real estate investors they include commercial and retail investment property in the main cities of Greece - the majority of demand and the highest yielding assets are available in Athens - tourism accommodation to let out along the Greek coastline and in every resort on every Greek island, retirement and second home demand in the main Greek resorts and of course residential accommodation to rent across Greece particularly in the main employment hotspots. And for those who seek emerging market opportunities there's the Peloponnese region of Greece where property investment is just beginning to return attractive dividends. Another underlying factor supporting the appeal of Greece currently is the fact that large swathes of the real estate sector are highly competitively priced – especially when you compare the country to another Mediterranean favourite, namely Spain – this means that an investor can get far more for their money in Greece than elsewhere on the Med and are therefore potentially buying into a market with healthy room for growth. As there are very few restrictions placed on the foreign freehold ownership of property in Greece and the property buying process is very straightforward, more and more investors looking for portfolio diversification opportunities are examining the wealth of opportunity in Greece currently and therefore Greece is emerging as the Mediterranean choice for real estate investors in 2006. Rhiannon Williamson writes about real estate investment around the world and has just published information about the property buying process in Greece on her site AmberLamb.com A Beginners Investment Property When buying an investment property it is advised that you start small. Just like most aspects of life, it is good to get your feet wet before your dive right in. Before you buy a large apartment complex it is best try an investment property that will be easier to manage, such as a single family rental home. The advantages of learning the tricks of the trade with a relatively inexpensive investment property are not always so obvious. To begin with, an investment property such as a small rental home offers a small financial footprint. The price of learning the business and potentially failing is therefore much smaller than it would be if you started out with a million dollar apartment complex. Even if the venture to manage a rental home doesn't work out for you and you decide to exit your real estate investment strategy, more than likely you will recoup most of your money on the sale of the property. You stand to lose some money make no mistake, but it won't be enough to break the bank. On the other hand if you decided to dive right into the investment property business then you may have dug yourself a hole you will never be able to get out of. Should things go awry and you are forced to sell the million dollar property, even a small 5-10% loss on the investment could result in long term financial damages. Starting off with a small investment property can also help you become a better property manager. It is easier to adequately address the needs of just one tenant than it is trying to solve the problems of several tenants at once. Part of making an investment property successful is adding value to the rental. If you can learn how to please one tenant, then you will be in a better position to extend what you have learned and please all the tenants in a larger complex. Indeed, experience is priceless. When you invest in a single family dwelling your financial investment is relatively low. This financial investment directly relates to your commitment level to the venture. Somebody who has invested a large amount of money in an apartment complex will be all the more committed to seeing that the investment property turns a profit. There is no shame in working hard and seeing to it that things work out for the best, but if you are unable to walk away from the investment then you may stand to lose a whole lot more money than you should. Thus a lower commitment level allows you to more accurately reassess whether investing in real estate is right for you. If you decide it isn't right it will be easier to walk away from a rental home investment property than a more expensive apartment complex. Purchasing and turning a profit on an investment property is just like any game one might play in life. To be successful you must learn and completely understand the rules. Once you have the rules mastered then you may go ahead and play your hand aggressively, but until then it is in your best interest to take it slow and learn the ins and outs of the game. Starting out slow with a single, lower value investment property will help you stay alive in the real estate game longer and hopefully become a powerhouse down the line. Adam Smith is an internet marketer specializing in affiliate program management for 10Xmarketing.com. More information on earning a positive cash flow on an investment property can be found at One Minute Millionare . |
|
||||