Archive for the ‘Insights’ Category

If the Price is Right, then it’s Sold!

November 6th, 2008 Maricel Ferrer-Custodio

ikea A few weeks ago I went to IKEA to get some few items for my children’s room. I was surprised to see how packed it was.  I’ve never seen that much people in IKEA even during the clearance season.  I’m pretty amazed that a lot of people are still buying things, even if the news is all about tough times.  I was even observing if people are just there to browse or to really buy.  Based on my observation, people are spending money to buy things in IKEA and some are even hoarding things from IKEA.  I’ve seen a lot of carts packed full and some cars stuffed with items (with the only space left is the driver’s seat)! ikea in car I feel sorry for some of the retailers near IKEA.  Most people seem to go to that particular shopping complex only to shop at IKEA. However, I’ve seen some stores offering some sale items that benefit from the crowd who go shopping in IKEA. 

In the current market situation, people still spend.  However, many are looking for great deals, bargains and value for money.  Some businesses maybe losing money, but some are growing their market shares.  The real winners during a downturn are the discount shops, bargain centers or any establishment offering low-priced items.  People tend to flock to them and veer away from buying luxury items.

The same applies to real estate.  There are still buyers in the market.  However, most are looking for good deals and bargains.  Gone are the days when people are motivated to buy based on the look and feel of the house. Having the right price is one of the main considerations of most real estate buyers now.  During the real estate boom, “Monopoly” is the name of the game.  In the current real estate downturn, “The Price is Right!” is the new name of the game!

Photo Source: (1) flickr.com by OiMax, (2) flickr.com by milele

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Posted in Home Staging and Decor, Insights No Comments »

Will Today’s Falling Home Values Affect Every Homeowner?

October 9th, 2008 Maricel Ferrer-Custodio

outdoor living Gone are the days of rising home values and easy mortgage.  Most real estate news is about the doom and gloom of falling house prices, foreclosures and mortgage stress.

However, in reality it does not affect everyone.  The general morale of the real estate sector may be down, but if you’re not financially struggling then there really is nothing to worry.

The decline in home prices will only be greatly felt by those:

1)  who want to tap on their home equity to travel or renovate their house

2)  those who want to sell because they need the money to retire

3) those who are selling because they cannot afford to maintain their mortgage payments

If you don’t fall in any of these categories then don’t let the real estate gloom affect you.  Think of your home as a long-term investment.

If you have the money to invest, look for opportunities in the market.  In fact, that’s what Warren Buffet is doing right now. You can read more about it in these articles “Warren Buffet to invest $6bn in Goldman Sachs“  and “Buffett’s company to buy $3B of GE preferred stock“.

Instead of losing faith, why don’t you focus your energies and thoughts on more positive things?  If you’re not planning to sell your home anytime soon and you don’t have enough money to go on vacation because of the tough times…why don’t you redecorate  your home to look like your favorite resort?  In fact according to this news report,  more and more Australians are converting their homes to look like a five-star resort.

I personally think it is a good idea.  Nothing beats coming home everyday to a relaxing environment. It is like switching off the stress, once you enter your own resort-style abode.  It is a bonus for the kids too!

Photo: www.flickr.com by decor8 and www.frontgate.com

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Posted in Foreclosure, Home Renovation, Insights, Outdoor Living, Real Estate News No Comments »

Logic Over Emotion, a Must in Real Estate Investment

August 20th, 2008 Maricel Ferrer-Custodio

two men Two people who invested in two different real estate properties at the same time, who started with the same amount of capital, can have a significant difference in realized profit and income. One can come up with a winning property that will have a strong potential for capital growth and income.  Meanwhile, the other investor can end up with a property that is not only draining his finances, but suffering from negative equity as well. Both started in real estate investment in good spirits, but one ended up in a losing streak.

Actually, real estate investment is not really about being lucky, unlucky, good vibes or bad vibes.  It is a business of logic.  Sadly, just like most buying attitudes, many buyers are easily persuaded by their emotional convictions.

Some people are easily convinced to invest on a property based on its price, presentation and ambience.  These are what make the product standout in the marketplace from a marketing perspective.  However, these are not the main things to consider from a financial or investment standpoint.

The price can be a deciding factor in terms of budget range.  However, it should be analyzed together with location, rental income, existing infrastructures within the area, future developments, job availability, demographics and security.

The price by itself cannot be the main consideration.  In fact, many people lost more money in considering price alone.  Anything that has a cheap tag price does not mean it is a bargain.  It can be cheap because of the existing high crime rate or the trend of foreclosures within the area.  It could also be due to structural problems with the building.

Failing to distinguish a real bargain can make or break the deal.  If the property comes with negative issues that are beyond your control or would be too expensive to fix, then it is not a real bargain.  Come selling time, you might lose more money or sell cheap too, defying the purpose of buying the property as an investment.

Thus, next time you buy a property, analyze it well.  Although presentation helps, look beyond the physical attributes of the property.  Analyze all the other factors and do your own research about the area.  But most of all, do the necessary computations and study the existing statistics within the area.  Is your capital investment worth the risk? Does it have a good rental return?  What is the projected price growth in the area?  What was the historical price growth within the area? What are the recent sold prices?

In the end, property investment will always have risks involved just like any investment.  However, you can minimize the risk by being more logical about your real estate purchase.  You will have more assurance that you made the right choice.

How about you, did you have a good investment property?  Do you have any tips to share?

Photo Source:

Flickr.com by Stanrandom

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Posted in Buying a Home, Insights, Investment Tips No Comments »
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