Some people choose to rent because they're involved in an activity that requires them to live away from their hometown on a temporary basis. For example, students attending college and contract workers may prefer to rent because they can't afford to buy a home or because they're current residency is temporary. These areas make great rental markets.
Philadelphia, Pa. or Baltimore, Md. are examples of college or corporate towns with reasonably priced rental real estate and higher than average rents. Baltimore saw a 21.32% gross rental yield in Q2 of 2014 while Philadelphia County saw 20.78%.
Secured credit cards can build your credit
Building up your credit has become even more important over the past few years as credit is harder to come by. Secured credit cards can help people with little credit history build credit and even save some from bad credit.
When lenders look at a credit report, one of the things they want to see is that you have a history of repaying loans in a timely manner. If you've never taken out a loan before or have only been using credit for a short time, lenders often lack the information they need to decide how creditworthy you are. In cases like this, a secured credit card might be your only option.
In the same way, if you had a rough period where your bills went unpaid or were only paid sporadically, it can be difficult to convince lenders that you are going to pay off any new loans. If you do manage to get a loan or credit card while having these black marks on your credit report, you will likely have to pay high fees and high interest rates.
Rebuilding your credit
There is a way to build -- or rebuild -- your credit. A secured credit card works like a debit card. Once you are approved, you make a deposit into an account linked to this new credit card. The card you receive will have a Visa or MasterCard logo on it, but you will not be able to charge more than the amount you previously deposited onto the card.
Over time, as you continue to make payments and stay within your credit limit, you are building credit history and improving your credit score.
Be a careful consumer
Some secured credit cards have fees. Also, ensure the card issuer reports your account to at least one of the three main credit bureaus so it can help improve your credit score. It is important to research the card the same way you would an unsecured card. Also, check whether your current bank or credit union might have a secured credit card to offer you.
A feasibility study also referred to as a feasibility analysis is an evaluation and analysis of the potential of a proposed project.
A feasibility is used by real estate investors to analyze the possible negative and positive outcomes of an investment before investing too much time and money.
A 1031 exchange derives it's name from Section 1031 of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes.
Taxes on capital gains are not charged on the sale of a property if the money is being used to purchase another property - the payment of tax is deferred until property is sold with no re-investment.
The idea behind this section of the tax code is that when an individual or a business sells a property to buy another, no economic gain has been achieved. There has simply been a transfer from one property to another.
For example, if a real estate investor sells an apartment building to buy another one, he or she will not be charged tax on any gains he or she made on the original apartment building.
When the investor sells the original apartment building and purchases a new one, the value used from the original to buy the new one has not changed - the only thing that has changed is where the value is being held.
A bi-weekly mortgage is a mortgage payment plan where payments are made every two weeks, as opposed to the more traditional monthly payment plan. Making mortgage payments every two weeks, as opposed to monthly, will result in the equivalent of one additional monthly payment being made each year.
This extra payment is applied toward the principal balance of the mortgage, and will lead to substantial interest savings over the life of a long-term mortgage.
When a bi-weekly payment plan is set up, most mortgage servicing companies simply hold the first half of the monthly payment until the second half arrives and then make the full monthly payment. If a simple interest bi-weekly mortgage plan can be set up, each payment received is immediately applied toward the principal balance of the mortgage leading to additional interest savings.
Converting an existing mortgage to a bi-weekly plan usually carries some fees. A self-disciplined borrower can gain the same benefits of a bi-weekly plan by making one additional mortgage payment each year, or by paying an extra amount each month equal to 1/12 of the scheduled monthly payment.
Paydown is when a mortgage borrower pays the principal and interest of a mortgage. In doing so, the borrower is paying down his or her debt.
Paydown also refers to an investment objective when a mortgage borrower pays the principal and interest of a mortgage from income received from a tenant. This is considered another source of income because it is money the borrower would otherwise have to pay.
Paying down the principal and interest increases the borrowers equity and can increase the borrowers capital gain and income if sold or refinanced.
Real estate investment groups are like small mutual funds for rental properties. If you want to own a rental property, without the hassle of being a landlord.
With real estate investment groups the company will buy or build a set of apartment blocks or condos and then allow investors to buy them through the company, thus joining the group. A single investor can own one or multiple units of self-contained living space, but the company operating the investment group collectively manages all the units, taking care of maintenance, advertising vacant units and interviewing tenants. In exchange for this management, the company takes a percentage of the monthly rent.
There are several versions of investment groups, but in the standard version, the lease is in the investor's name and all of the units pool a portion of the rent to guard against occasional vacancies, meaning that you will receive enough to pay the mortgage even if your unit is empty. In theory, it is a safe way to get into real estate investment, but groups are vulnerable to the same fees of the mutual fund industry.