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

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

The homes in Cordoba, Spain feature a central patio with some dating back to the days of the Romans.  This is to keep the house cool due to the hot and dry climate of the area.  The residents fill the central patio with plants and water features primarily to keep the house cool.  However, as you will see in these photos they make the homes inviting, relaxing and extremely beautiful, especially when the flowers are in bloom.

Having a small space is not a disadvantage.  Even without the modern technology of vertical garden structures, they were able to create a wall full of plants and flowers by hanging pots and using climbing plants.

The patios of Cordoba, Spain are a visual feast of colorful flowers, ceramic decors and even stone mosaics.  Moreover, the various scents of flowers and plants truly make this city enchanting.  The public can view these gorgeous displays of plants and flowers during the city’s “May Patio Festival“.

Now, I’ve got a whole dose of inspiration to make our patio a colorful and relaxing outdoor living area!

Photo Source: Flickr.com submitted by bestfor (Photo-1), alvaro carnicero (Photo-2,3,4), hoja de reyes (photo-5), McPrior (Photo-6), Chris Juden (Patio-7), Gerry Balding (Patio-8, 9)

]]> http://globalrealestatehighlights.com/2008/10/03/famous-patios-of-cordoba-spain/feed/ http://globalrealestatehighlights.com/2008/10/02/dont-overcapitalize-on-your-reno-project/ http://globalrealestatehighlights.com/2008/10/02/dont-overcapitalize-on-your-reno-project/#comments Thu, 02 Oct 2008 10:01:21 +0000 Maricel Ferrer-Custodio http://globalrealestatehighlights.com/2008/10/02/dont-overcapitalize-on-your-reno-project/ Right now, the real estate slump is big news everywhere.  Everyone is urged to save for more tough times ahead.

The recent real estate turmoil is a reality check that we should spend our money more wisely.  Finding value in your real estate investments is the new name of the game.

If you have to renovate, make sure you concentrate on the things that would add the most value in your house.

HGTV.com has a good list of top home updates that will provide the maximum return at resale.

HGTV’s Top 15 Home Updates

1. Minor Bathroom Remodel
2. Landscaping
3. Minor Kitchen Remodel
4. Vinyl Siding, Fresh Paint, Front Entry
5. Attic Bedroom Conversion
6. Major Bathroom Remodel
7. Major Kitchen Remodel
8. Deck, Patio or Porch Addition
9. Basement Remodel
10. Replacement Windows
11. Family Room
12. Bonus Room Updates
13. Living Room Updates - Decor
14. Bedroom Updates
15. Living Room Updates

If you noticed, the ones that provided the most return are the ones that cost the least.  Thus, spending more on renovations does not guarantee that you’ll get more come selling time.

Make sure that your total cost does not go over the market price of your property.  Capitalize on the essentials and the areas which can have a maximum impact.  Get several quotes to make sure you’re not paying too much for your renovation project.  If you think you can do-it-yourself then do it!  Just make sure that you leave the major repairs to the experts such as electricity and plumbing.

Be creative!  Sometimes it can give you a better return than the most expensive decor.  Browse the net for some inspirations.  You can even checkout auction sites such as eBay for some great bargains.

Remember, whatever money you save now means more profit later when you sell.

Photo Source: Flickr.com by Just Taken Pics

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

]]> http://globalrealestatehighlights.com/2008/08/20/logic-over-emotion-a-must-in-real-estate-investment/feed/ http://globalrealestatehighlights.com/2008/08/19/the-lure-of-credit-cards-hate-it-or-love-it/ http://globalrealestatehighlights.com/2008/08/19/the-lure-of-credit-cards-hate-it-or-love-it/#comments Tue, 19 Aug 2008 10:07:35 +0000 Maricel Ferrer-Custodio http://globalrealestatehighlights.com/2008/08/19/the-lure-of-credit-cards-hate-it-or-love-it/ Credit cards, plastic money, advance cash, whatever you call it; many people are attracted to its many benefits.  It gives the cardholder the ability to make instant purchases, even if they don’t have any money to spend.

In principle, credit cards are this century’s most powerful tool.  It allows people to purchase a lot of things from food, clothing, cars and travel.  You can also use it to pay the rent and in some cases, the deposit for your real estate purchase.

The love-hate relationship with your credit card starts when you can no longer afford to pay your purchases, especially if the accrued interest has blown out of proportion.  I’ve seen many people who earn big bucks faced with a mountain of debts due to their credit card purchases.  They started with purchases they can initially afford.  However, after maximizing their credit card limits, they realize that they spent way too much than they can actually afford.  It will take several months’ salary and sometimes several years’ income to pay for it.

However, the problem doesn’t stop there.  It is like an addiction that is hard to control.  Even if people realize that they are faced with a lot of debts, they are still lured to apply for more credit cards.  It can come to a point that it is almost impossible to pay for the total accumulated debt.

Overall, most debt counselors would recommend getting rid of credit cards.  However, in my opinion it is good to have one for as long as you know how to control it and it doesn’t control you.  For instance, don’t make any purchases that you can’t pay off without incurring any interest.  Take advantage of using it for big ticket purchases where you can convert the accumulated points for free travel or even gift cards.

In the end, if you can manage to handle your credit card debt, then you’re one step closer to owning your own home.  You won’t only show your potential lenders that you have  a good credit history, but you have the discipline in managing your debts, income and expenditures.

What’s your credit card experience? Do you love owning one or do you hate the debts that came with using it?

Foto Source:  Flicker.com by ralphbijker

]]> http://globalrealestatehighlights.com/2008/08/19/the-lure-of-credit-cards-hate-it-or-love-it/feed/ http://globalrealestatehighlights.com/2008/08/06/individual-buyer-vs-investor-in-real-estate-part-1/ http://globalrealestatehighlights.com/2008/08/06/individual-buyer-vs-investor-in-real-estate-part-1/#comments Wed, 06 Aug 2008 08:21:05 +0000 Maricel Ferrer-Custodio http://globalrealestatehighlights.com/2008/08/06/individual-buyer-vs-investor-in-real-estate-part-1/ In Matt Woolsey’s article “Top Global Real Estate Hotspots“,  I would like to emphasize some of his views about real estate investment.

Firstly he mentioned that:

“While an individual buying a home is interested in price, appreciation and perceived value based on the location or the surrounding neighborhood, investors look more at capitalisation rate, the interplay between how much property costs and how much it can be rented for.”

This statement will differentiate a professional investor from an ordinary property buyer.  As a former Realtor, I’ve met a lot of different real estate buyers from those who have really big budgets to those who are just starting to buy their first homes.

Most first-home buyers are more particular about the aesthetic look of the homes they are buying, some take notice of the environment, but many are just happy to find something that will fit their budget.

Meanwhile, there are those who did their research before buying.  These are the people that fit perfectly in Matt’s description of an individual buyer.  They are looking for good buys in a good neighborhood, with a potential for capital appreciation.  Although, this type of buyer can do well with the property he bought, the real movers and shakers of real estate investment are the professional investors.

I refer to them as “professional investors” not only because they know what a good investment is, but they know how to gauge which can be a top performing asset in terms of return.

Here in Australia, investors can refer to the many moms and dads who were convinced that “negative gearing” is a surefire way to get most out of one’s property investment.  I wish it was.  There were some who did well, but there were some who really did worse.  In my personal opinion, the only sure winners in negative gearing are the tenants.  More investments properties mean more choices and an increase in supply means more competitive rental rates.

However, with Sydney and other states in Australia experiencing rental rates at an all-time high, this can also indicate that many mom and dad investors realized that negative gearing is not for them.  The combination of inflated prices, high interest rates, tax rate cuts made property investment a less popular choice.  Many are experiencing negative equity, higher repayments they can no longer afford and the tax savings is simply not worth it.

In the end, a loss is still a loss, regardless of any tax savings.  Hoping that the property will appreciate high enough to recover all those losses can be “tough love” for some.  As I’ve said before the only real winners are the tenants.

I was a tenant before.  My husband and I enjoyed living in a brand new half a million dollar unit, by paying only (I assume) around 1/3 of what the owner is paying for the mortgage.  This does not include the strata fees, council rates, insurance and other fees for the account of the owner. The hard part is right now, that unit can only be sold for substantially less than the price they paid four years ago.  Sure they were able to claim a lot of losses but in reality, in the investor’s book of performing assets…this is definitely a LOSS.

With several properties on the market in various locations, a budding investor can get lost in the sea of investment properties available.  Every property owner, developer and real estate salesperson  can claim that they are selling an investment property. Thus, every good investor should have the eye for detail and the logic to calculate, if the risk and returns involved can truly make it a good investment property.

Photo Source:  FreeFoto.com by Ian Britton

]]> http://globalrealestatehighlights.com/2008/08/06/individual-buyer-vs-investor-in-real-estate-part-1/feed/ http://globalrealestatehighlights.com/2008/08/02/top-10-best-places-in-the-world-to-invest-real-estate/ http://globalrealestatehighlights.com/2008/08/02/top-10-best-places-in-the-world-to-invest-real-estate/#comments Sat, 02 Aug 2008 08:11:10 +0000 Maricel Ferrer-Custodio http://globalrealestatehighlights.com/2008/08/02/top-10-best-places-in-the-world-to-invest-real-estate/

1. New York, New York - It is still very popular among investors, in spite of a slowing economy, residential and commercial sector. The main investment consideration of New York is its long-term strength.

2. London - Just like New York, London is also facing a slowing residential and commercial sector. However, it is still considered as one of the most attractive markets for international real estate investment.

3. Washington, D.C. - Many opportunity funds are looking for bargain buys in D.C.’s falling residential market, mainly due to overbuilding and poor loans. However, the commercial property market is worth the look because it benefits from all the government-related businesses in the area.

4. Paris - It is not only popular for being one of the most romantic cities in the world, but also one of the best office markets too. Vacancies are at all-time lows, supply doesn’t meet demand especially with limited construction in the pipeline.

5. Shanghai - Investors are bullish with Shanghai’s continuing growth and development potential. Moreover, Shanghai properties, especially in the residential sector offers better value for investor dollars. Properties are substantially cheaper in Shanghai compared to Hong Kong, but rental rates in Hong Kong are only a bit more expensive. The capitalization rate in Shanghai is 7%, while in Hong Kong, it is only 3.3%.

6. Tokyo - Japan is a stable bet among investors because of its extremely low inflation rate of 1%. Moreover, Japan’s economy was spared from the effects of the sub prime crisis due to its lack of exposure from the sub prime banking debacle that affected other Western banks.

7. Singapore - Home sales dropped, but the retail sector’s outlook is bullish due to consumer spending and tourism at all-time highs. Moreover, the growth of its medical tourism made medical properties as the fastest-appreciating real estate in Singapore.

8. Munich, Germany - The lease rates of the office sector is at all-time highs largely due to the strong international investment in the city. In 2005, $2.6 Billion was invested in real estate, it jumped to $10 Billion by 2007.

9. Sydney, Australia - Australia’s industry and materials resources helped fuel much of Asia’s growth. This continued growth in the macro economy increased rental yields in the residential, commercial and property sectors. As long as commodity prices continue to rise, the future looks bright. Although, it is important to note that Australians are currently experiencing the least affordable housing market in the nation’s history.

10. Hong Kong - Hong Kong is one of Asia’s financial capitals, which makes the office-space sector a critical market for real estate investment. Due to a lack of space, demand usually outruns supply, especially in the Traditional Center and Cheung Sha Wan.

You can read more about this report, sourced from Matt Woolsey at Forbes.com

Interestingly, from Matt Woolsey’s report, there is a growing trend of investors diverting their funds into commercial real estate. This only confirms that real estate is still a good investment, in spite of the sub prime mortgage meltdown.

Real estate covers diverse types of property. Although, it is no secret that the residential sector is down; especially on major economies such as US and London, there are still a lot of investment opportunities available, particularly in the office space sector.

Thus, if you have the extra money to invest, don’t sit around waiting for the next real estate boom! Look for growth areas and explore other cities for great real estate deals.

Photo Source: Flickr.com by laffy4k

]]> http://globalrealestatehighlights.com/2008/08/02/top-10-best-places-in-the-world-to-invest-real-estate/feed/ http://globalrealestatehighlights.com/2008/07/31/bring-in-the-plants/ http://globalrealestatehighlights.com/2008/07/31/bring-in-the-plants/#comments Thu, 31 Jul 2008 07:34:30 +0000 Maricel Ferrer-Custodio http://globalrealestatehighlights.com/2008/07/31/bring-in-the-plants/ I was looking for a privacy screen or divider for our house when I chanced upon these web sites with some great "green" ideas for indoors.

www.ecospecifier.org

"Breathing Wall"

www.treehugger.com

"Vertical Garden"

www.eltlivingwalls.com

"Living Wall"

My version of plants on the wall in our house…

The Chinese refer to plants as the "living energy".  It can add instant life to any dull corner of your house or even office.  Moreover, according to scientific studies having plants inside your home can be good for you physically, emotionally and psychologically. They are also proven to remove harmful chemicals from the air, absorb the noise and promote the feelings of relaxation and well-being.

Here is a link to the Top 10 Plants for Purifying the air.  It is also good to take note of some indoor plants classified as poisonous, such as those listed in the Canadian Poisonous Plants Information System.

Do you have indoor plants? Which one do you like best, the "Breathing Wall", the "Vertical Garden" or the "Living Wall"?

Since we bought our house one and a half years ago, we have added bits and pieces of furniture and new appliances. We added curtains, a new floor in one room and did some minor landscaping in some sections of our yard. Throughout these months, I felt I need to do some more revisions, redecorating and landscaping…until my eldest daughter’s affirmation brought me back to my senses.

While I driving to bring my daughters to their swimming class, my eldest daughter blurted out from the back seat of the car “Mom, I love our house…I really, really love our house”. My daughter is just four years old. She said it with such vigor and innocence that I felt pride and calmness that maybe I already did good in decorating our house.

But, on the other hand…I just realized that the biggest change that happened to our home is not so much the physical changes we made, but the great memories and deeper relationships we developed.

I do get a lot of compliments from the different people who have visited our house, especially those who noticed the changes we’ve made. However, the best one is from my daughter. What her young mind says, matters to me a lot…because I wanted her to have good memories of her childhood, the house where she grew up and most of all the love we share as a family in our house.

In the end, I can say that my husband and I did great. We did everything within our budget. We added value to our house without spending too much. But, most of all everyone is happy. There’s a place for us to get together, an area where we can all have our private moments and a designated area to play.

Thus, if you’re thinking twice of fixing your house or just need a nudge to start that weekend project, I’m encouraging you not to procrastinate. Your house is your castle. It doesn’t matter if it’s big or small, what matters is it is presentable, comfortable and it fulfills your family’s needs… and maybe some wants too.

Photo Source: Flickr by Jule Berlin