Wilkommen zu Deutschland!
What could possibly not be great about wanting to invest in German real estate, a place that serves beer in pitcher sized mugs and is beautiful to boot? I mean the country, not the beer, though it might be beautiful too, served by a beautiful waitress in beautiful traditional garb in a huge tent full of people clinking massive tankards of draft…so grab your lederhosen and let’s go!
Germany is a great place to vacation or live
Ahhh… Deutschland – Germany to us westerners. A country with eons of history and as diverse a geography as any in Europe. Part of the European Union, Germany is not only know for great (and strong!) beer,
but for cleanliness, safety pretty much everywhere in the country, a strong economy, and open arms to diversity. Couple that with cutting edge quality, precision, and technical skills, and you have a business environ that is healthy and stable compared to many other places in Europe.
Germany has long been known for quality manufacturing and practical application of materials and workmanship to make things that work, run, and last. From tools to electronics to autos, Germany sets a high mark. Even the Autobahn is a work of practicality – you can go as fast as you want. You are, however, personally responsible for any damage you cause. However, getting a driver’s license in Germany is like many other things there, a lot more challenging than what we are used to in the U.S.
There are advantages to living in Germany
There are some advantages to living in Germany, especially if you are out of the really popular areas like Munich or Bavaria. Rent, for one, is generally cheaper, running around $450/mo for a flat. Groceries are generally cheaper than stateside. Utilities, too. Things like petro, well, they make up the difference on the expensive scale. Health care is good, public transportation great, Germany is very culturally diverse and green energy progressive, and they have strong beer and great schnitzel. A lot of alternative music comes out of Germany, too. Did I mention the beer?
Buying an East German castle ever been your dream? It won’t be East German, because it does not exist any more, but yes, castles can be bought in Germany. A farm in Schleswig-Holstein? (You really didn’t think the cow was named after someone, did you?) Ditto. Homes, apartments, flats, even just buy a room can be a real estate investment in Germany, a concept that might seem a bit odd in the West. Germany in general is stable in their real estate market and happy to take the money of foreigners, and was pretty much unaffected by the recession while the rest of the EU suffered.
How to prepare for investing in German real estate
If you are thinking of investing in German real estate, perhaps a vacation home in the Bavarian Alps or a studio in a major city so you can enjoy the popular German nightlife, you need to first educate yourself on investing in property in a foreign country. Look for what is called a “Global Property Guide – Germany”. It will contain a lot of information about investing in German real estate. It will also list German real estate websites, what is involved for foreigners buying real estate in Germany, the German commercial real estate market, Germany real estate fees, and other topics you need a solid working knowledge about before heading into this venture.
Communicating in Germany as a tourist you would find relatively easy, as over half of Germany speaks an acceptable level of conversational English. When it comes to legal documents and negotiations, however, it is smart to engage a translator with knowledge in those areas. Germany has stricter laws than the US in many things. A word to the wise is always know what you are signing and agreeing to. The Germans will make sure you do, but it will be delivered in German.
It is fairly easy for foreigners to buy property in Germany
There are no real barriers to an expat buying a home or apartment in Germany or through the EU. You can stay in Germany up to 90 days without a visa, as long as you have a valid passport (good for 6 months). You do not need a residence permit to do so, but remember that buying a place to live does not guarantee Germany will issue you one, either. Having one first makes a big difference in getting a mortgage. While an expat can borrow to buy property in Germany, if you have your residency permit you can only borrow up to 80% of the valuation, but if not, banks will limit you to 55-60% of how much the property is worth. There are also rules for the amount of income you have to prove, as well as that the mortgage can be met with 35% or less of your monthly income.
Buying real estate is a long-term investment in Germany, not a flippers paradise. If you decide to buy, and want to make income from it, look at rental property in a vacation area, or commercial real estate. Germans tend to buy (if they do, about half rent) or build a house, and live there. Forever. Seriously. Unless something like work makes them move, Germans as a general rule do not move around. Buying or building a home is considered a permanent thing, so the supply of property on the market is much smaller than here. That said, there simply is not a lot of cheap property for sale in Germany.
Since buying a home or castle in Germany is kind of a permanent thing, at least in terms of how the Germans look at it, getting a mortgage is more restrictive, especially if they think you are a short-timer. Another factor is commission rates and fees are much higher than you are used to. The average home sale price is $345,00 USD, so they make a bunch of Euros off the 
average home sale. German real estate agents act as house headhunters due to lower supply, German incentives for nationals, and local real estate investors (who hold the lion’s share of all German real estate), as finding what you want can be very challenging. You pretty much have to use a German real estate broker if you don’t have personal insider info just to find out something is for sale, as no real estate for sale signs appear in German yards.
Foreclosures and short sales pretty much don’t exist in Germany
Germany has a very low default rate on mortgages. One way Germany makes sure everyone is on the same page is the notary does a lot more than here. They check for liens, verify salability of the property, and at the signing, must read verbatim the entire contract to all present. Yes. The entire contract. I tend to think this is a preventative to default, as not many people would want to live through that a second time. And notaries there charge a hefty fee.
Fees are very expensive when buying property in Germany
The buyer, not the seller, generally pays the German real estate house hunter. Between that, application fees, notary fees, registration and transfer taxes, and German real estate broker fees, the total runs 9-16% of the valuation, plus 19% VAT. Ouch. You cannot deduct mortgage interest if you live in the place, and if you rent it out the income has income tax from 14-42%, plus a 5.5% charge for solidarity (whatever the heck that is) on top of the tax. Commercial property fees and taxes are similar.
The process gets reversed when you go to sell. If you hold the property less than 10 years and make money on the sale, capital gains are taxed at 42% or your income tax level, whichever is higher. That is on top of seriously high Grundsteuer, property taxes. There are also inheritance and gift taxes that range up to 50% of valuation, so plan accordingly for heirs.
Lots of people make Euros off your German real estate purchase. Is your wallet bleeding yet?
That fairytale castle is not so cheap now, huh?
I like my digital real estate a lot better. It does not cost me nearly as much to maintain, there are no expensive fees and taxes, and I own it. Check out this link for information about how you can own digital real estate with a 80-90% return https://www.bestrealestatedirectory.com/lead-gen/
Just finding a property to buy in Germany can be challenging
While it is possible to find something a Privatverkauf, or private sale, it is hard. Most real estate listings will be online or published in a newspaper, and nearly all of those are contracted to a real estate agency. It is important to know what your target property is, and price range. Prices vary tremendously between old East and now unified West, popular cities are much higher in general (as are their fees and taxes) and even block-to-block can make a huge difference on pricing. If you are just venturing into German real estate investment, there are “specialty agents” who can help with information about locations and demographics. Their fees, though, are costly.
A big challenge is Germany underwrites their own on mortgages. If you are pensioned through the statutory program or are buying a “used” home, the government gives incentives or provides subsidies for German nationals to buy property. It might be easier to just get acquainted with a real estate investment firms in the area you are hunting, or look into the German Real Estate Association. Their directories, besides brokers, list accountants, real estate attorneys, appraiser, surveying companies, notary of the public, and others that you may need to find in the future.
If you are looking to finance the property, another good place to check is the local savings bank, what we would call a savings and loan. They often have property for sale, and not always foreclosures. Germany has a very low default rate on mortgages, so there is very little foreclosed property to purchase. Germans also tend to take better care of their properties. Derelict properties are not readily available, either, as municipalities monitor run down properties and the fines are stiff, so owners tend to take care of what they hold. Buying a property a savings bank holds can increase your chance of being approved for a mortgage and make the whole transaction run easier.
Sprechen Sie Deutsch? You better, or be prepared to pay
Applying for a mortgage in Germany can be overwhelming and unnerving, especially to an expat not appreciating close examination of their finances, lifestyle, job, and other aspects. German mortgage applications are lengthy, tedious, and detailed. They ask things most Americans would be pretty uncomfortable answering, especially by an institution they have no feelings towards. You have to be very prepared when you start the process. There is a long list of documents you must provide, ranging from tax returns to 12 months of pay stubs to questionnaires…. all of which must be translated accurately into German by a translator who knows legal and financial issues, i.e. forget the free online translation site. German financial institutions are not known for much sense of humor with clients that waste their time or expect a lot of coddling.
One of the weird things about getting a mortgage in Germany is there is no guarantee system on mortgages. This makes it really hard to get a mortgage approved if you have or had credit challenges, are within half a decade of retirement, can not prove income that meets what the bank wants to see, or can not cover in cash all the fees, charges, and other costs including the 20-40% down and closing costs.
Is rental property a good investment in Germany?
Yes. No. Depends. Rental rates vary widely, much wider than in the US. Some areas like Leipzig you can rent an apartment for around 330 EU a month, or about $375 USD. That does not leave a lot of meat on the bone for ROI. Rents, as well as house prices, have seen substantial increases in popular places like Munich, Hamburg, Berlin, and Bavarian Alps, so much so there have been public protests and unrest over it. In contrast, mortgage rates are at all time lows due to the situations the EU facing in international politics and trade, Brexit, and otherwise.
One thing you need to know about buying rental, or renting property in Germany. It is notoriously hard, if not nearly impossible, to get a renter evicted in Germany. The full process of eviction is long and expensive. Keep that in mind if you are buying an occupied place and you plan to move in. It might get crowded.
While it is nice to be able to buy a place in a cool spot like Germany, the question of inheritance tax alone is enough to make me pause. I want to leave a legacy for my family. My lead generation business, which I regularly make 80-90% returns on, does that. My lead gen sites are real estate – digital real estate – and I do not have to take out a mortgage to have a rentable property with a high rate of return. Getting $450/mo average rent for a property that I paid $345,000 just does not make good financial sense to me. It shouldn’t to you either. Check out how I make my money here https://www.bestrealestatedirectory.com/lead-gen/
So what’s up with Brexit? Why should it matter? It’s British, right?
Short answer, it is an EU challenge, it can cause economic issues and fluctuate the Euro a lot, and it affects every member of the EU, of which Germany is one. Since Germany is on the Euro, and the Euro is used all over Europe, everyone gains or suffers by Britain’s leaving the Union. It also affects things like trade agreements, tariffs, fuel prices, fees at borders/ports/terminals, and many other things. Things ripple out, and Germany is one of the biggest frogs in the pond to get jostled around by major issues within the EU, political or economic.
When I get into something that is going to require obvious long term commitment, I like to study it first and look at what is financially and personally best for me. Investing in a vacation home that I can get some, but not a decent rate of return on might soothe a vacation desire, but it does not do a lot for my finances. Wouldn’t it be a lot better to pump up the bank accounts first, then invest so I am not so worried about the return on the rental property? That seems a lot more rational to me.
There is a better way to buy real estate in Germany
I learned when I got to the point of wanting – needing – a vacation from my grinding $35/K a year corporate job that it was going to take a lot more money for even a conservative staycation than I was able to put away, let alone enough for a rad trip overseas to a neat place like Germany. And that was not even beginning to think about buying a place there. I’m sure you can relate.
The job in my field I got right out of college I thought would provide both financial returns and an opportunity to grow quickly. It provided finances, but just enough to pay the bills, and not much chance of growth. I wanted more. I began to look for a way to make some decent side money while still working the 8-5.
I was tired and discouraged to say the least. I was still not getting ahead, doing something for me. I knew I had to find a small business of my own that could provide a good return on my investment. I had already invested tens of thousands in programs, trainings, super schools, you name it, and was seeing pennies go into the savings, not dollars. And, by now, I pretty much hated the job, the shipping, all of it. I really needed a vacation, which I could not afford. I just wanted my sanity back and feel like I was moving in the right direction.
The future of business starts with www
It hit me researching one night that the future of most everything in business was on, or going to be on, the Internet. So I started to search, and came across an article about a guy who had put together training to teach you how to build lead generation websites. It talked about how little business owners knew and how much help they needed getting customers to call them instead of someone else. That made sense to me. I knew from experience most business owners were only concerned about their stuff and were pretty clueless how to sell their stuff or service. The article went on to talk about the training guy, Dan, and how he worked his business every day, had built it from scratch, and was making a killing. That got my interest.
After checking around I found out this Dan guy looked pretty legit. He was making a lot of money and the return was really good. They had a link https://www.bestrealestatedirectory.com/lead-gen/ for information and to sign up for a no cost, no obligation call to get information. I figured what the heck, so I filled out the form and sent it in. Dan himself contacted me at the time I had asked him to. We had a nice exchange and he came off really straight and level. He made it clear this was business model training, and what I got out of it was up to me, and that the sky was pretty much the limit. That part was yet to be seen I told myself. But the program did look solid, lots of help was available, and it was reasonably priced. After thinking about it for a few minutes, I thought what the heck, signed up, paid the tuition, and got to work.
Man, I am so glad I did.
The first part of the training I wrote my first website in six hours and was surprised to find it was not hard to do. It was this one:
I launched it and got leads the first couple days. I called around and quickly found a customer to rent the leads to. The guy still rents this same site from me, five years later, at $750/mo. My return is really high on lead gens, as there is not a lot of expensive overhead. To date in five years I have cleared over $36,500 on this site, and I hardly ever touch it. Same site. Pretty good return for six hours of work writing it while I was learning!
I kept studying and learning and writing sites. In five months I turned in my resignation, and all the stuff exited my place not too long after. I put in some work the first six months, but any job is work and I got to keep the profit. It amazed me that in just five months I was not only paying all my bills, I was also able to expand my business and monetize it with the profits from my own business. It was mine. Sweet.
Dan was right. The sky is the limit. I just turned 30. In less than five years I am approaching a seven figure income this year. I work part time. I travel when I want to and do not have to worry how am I going to pay for it or do I have the time accrued. My ride is first class. I live in a really nice house in a really nice place. And I paid cash for all of it, out of my own cash. Mine.
What is limiting your sky?
Do what I did and book a call to find out more about how different your future can be with your own lead gen business. You own the real estate. And unlike Germany, you do not have to hold it at least ten years to see a break. Put some work and action into doing something for your own future and not some boss who thinks he is….
Well, you get the picture.
Do it now. There are businesses waiting to fund your vacation – and castle – in Germany. https://www.bestrealestatedirectory.com/lead-gen/
Thinking about investing in Atlanta real estate? Not much beats a vibrant, exciting, younger mind-set big city with anything you can imagine to do. When mixed with cutting edge technology and business, as well as some well steeped history and four distinct seasons, nothing compares. That is why you should look at the Atlanta real estate market when you are thinking of investing money in real estate.
Atlanta, the capital of Georgia, is a key business hub for the southeast. Historically significant from the Civil War to the Civil Rights Movement, Atlanta is a vibrant, growing, progressive modern city with a diverse population. Home to the 1996 Summer Olympics, Atlanta has embraced a broad spectrum of culture and diversity to move into the 21stcentury. The Atlanta Development Authority created 
some prime incentive programs to draw real estate investment to the city with heritage zones, dream down payment assistance, homebuyer incentives, and what they call opportunity zones, areas they are seeking urban and suburban revitalization. Atlanta has been aggressive in getting people to buy their way out of recession.
including I-75, one of the heaviest traveled in the U.S. All this makes accessible Atlanta a primary location for business and growth.
One of the top ten fastest growing cities in the U.S., Atlanta boasts a younger average age population than most large cities. The greater Atlanta metro area has about 5.8 million in it, expected to gradually grow to 7 million by 2030. The unemployment rate is a decent 3.4%, and average income sits around $54K, well above the national average of $40K. It is also more evenly ethnically and racially diverse than most cities its size. This gives Atlanta an edge for up-and-coming technology, medical development, and business innovation and incubators, and corporate relocation. All those things need skilled labor to push them into the future.
Atlanta does have some safety and crime issues, especially in some downtown neighborhoods. If you are in the suburbs, though, you generally are ok. Buckhead, Marietta, Decatur, Alpharetta, Johns Creek, or lovely man-made Lake Lanier are all really nice (read: luxury for the most part) neighborhoods. In fact, several Atlanta suburbs were voted as one of the top places in the US to raise a family last year, if you can afford to live there.
The fact that a lot of the better neighborhoods have had bidding wars going on over listed property, and that the price advertised versus sale is still in the single digit range, tells you that Atlanta property is still hot. It makes a tough and not cheap investment market, though. You have to really hunt, or be willing to be creative or take some risk in a less healthy or more remote area to really be able to buy a property you can make investment dollars on, though.
Another fact they do not advertise is last year Atlanta had one of the largest major market mark-downs on real estate in the nation due to it sitting and not selling. Atlanta was averaging about a 9% drop in prices between listing time and sales previously. Last year the figure went up to 27.9%. Yikes. That means that Atlanta real estate is stalling and falling. Is it really safe to buy an investment property in Atlanta? It sure would make me pause hard.
Access to public transportation and major business zones is a key factor in those hunts, too. People simply do not want to have to deal with the brutal Atlanta traffic. Due to this, being on-site to view and immediately make an offer on a property helps a lot if you are determined to buy property now in Atlanta. Otherwise you should consider a trusted, vetted real estate investment group with a lot of Atlanta area experience to put equity money into. And remember, people in Atlanta do not like to commute from far outlying areas, so know where the location is and proximity to things before you invest.
A challenge to this, though, is the strong potential for a rising prime interest rate. Real estate market experts are saying they expect the average mortgage interest to reach 5% in 2019-2020. That means a tougher approval process and harder to save down payment for Generation Z and X, Millennials, and other first time home buyers. Many federal programs are also in jeopardy of being gone. Many of these buyers will seek a rental until they can afford to try and buy their own place.
While browsing around I ran across an article about lead generation, and how businesses needed vast amounts of help getting hooked up with their customers who were already hunting the internet for their goods and services. Now that was something I could relate to because I knew it was totally true from my corporate job. The article mentioned a guy named Dan who was killing it with lead generation websites, and he had written a training program to show how it was done. He was working the business himself, day in and day out. I liked that idea, as it told me he probably was pretty legit or he would not be doing it himself. I did some serious research and found out that yeah, this Dan guy was for real and was making serious money at what he was doing in lead gen.
You can invest in real estate with little to no money down
If you really want to try your hand at real estate investing and have little money to do it, there are some ways to reach that goal. It can be done running it from home, with little cash or no credit to start out.
Sometimes sellers will agree to finance the property, or “carry the paper.” This works well for people with little credit history or poor credit, if the seller agrees to the deal. Interest rates often are a higher than regular lenders. There is a legally binding agreement between the seller and buyer, as the seller is literally lending you that amount of money for a set period. It is a good way to get your foot in the door, though, when you have little or no credit history, or are recovering from bad.
Taking over a mortgage is pretty much a thing of the past
Don’t bite off a fixer upper you don’t have the skills to fix it
Look for low, or no, closing costs
Crowdfunding, real estate investor groups, and real estate investment trusts (a corporate investment group over which you have little say, but are closely regulated) are the newer ways to invest in real estate with little money down. A group of people pools their resources to buy or invest in the equity for a property, and share in the profits. It is important to know who you are working with and their experience and track record in picking and then selling the properties. Often you can start investing for as little as $500 – $1000 in these types of groups, but you do not stand to make a lot, either.
What a good feeling to finally see a healthy balance in the nest egg account. The emergency fund is funded, the bills paid down, and time to make some smart investments. You have looked around and real estate keeps coming up in conversations and articles. There is about $50,000 sitting in the account, and you are wondering – how can I make money with $50,000? Is that enough to realistically invest in real estate?
I did a lot of research when I started to make good money in my lead gen business and wanted to find a source for second income. There are different ways to invest in real estate, and you can invest $50,000 and make a return. I will touch on a few of them. If you are interested in how I made my extra cash to invest quickly in my lead gen business, you can click on this link and get some free information, no obligation 
One of the most common ways to invest a small amount for real estate is to buy a property that needs repaired. This could be a distressed property, one that is older, or went through foreclosure and was damaged. The common term is a rehab or flip property. A flip often needs repairs, remodeling, or cleaning up, requiring time and money. Some people buy and flip, some buy, remodel, and rent out, referred to as a buy and hold, utilizing the rental income to pay the mortgage.
Renting works best when the property is a duplex, four-plex, or multi-unit, as it allows you to leverage your $50,000 investment. You can live in one, and the rent from the other units pays the mortgage and hopefully at least a portion of your expenses. Some buy and hold investors also buy like they are going to flip, remodel/repair, then refinance the property to use the rental income to pay the mortgage, and the gained equity to invest in another property – the best of both worlds. Multi-units that are rental ready may prove easier to find than ones needing repairs, however. The later inventory overall is less, and they are snapped up quick.
Planning for emergencies and the unknown is a must
A variation on the buy and flip is the buy and live in flip. You have to have a place to live, right? Maybe the house needs a bathroom and kitchen remodel, and you can do the work, and can also live with what is there while you do it. This can be a good way to build up equity in a property, and once the remodeling is done, list the house and use the added value to find your next house to live in. Each time you can go up in value, or use the extra cash to finance additional properties while living in the current project. This model also may have tax advantages if you stay in the house long enough, as profits usually are not taxable after so long a time of residency. Talk to your tax professional about your state laws and your particular tax situation.
Is a real estate investment joint venture or group right for you?
It is important to know who you are dealing with, especially if the investments are flip properties. Are they a seasoned investor who is willing to share their real estate financials with you? It takes a lot of money pooled together from a number of sources to buy larger properties, making it sometimes more challenging to know who you are dealing with.
Last but not least is real estate investment trusts, or REITS. These funds are purchased usually through your brokerage account, and act like other funds groups. They vary tremendously by the initial investment amount, but most must distribute 95% of their earnings to shareholders. They range from private to traded accounts, and fees vary and may be higher than other forms of real estate investment. Ask your broker for clarification and what is currently available as they tend to bury information in massive bulletins. Know not all are liquid, so you may be locked into something you do not want to be in the future. Make sure to ask questions about fees, returns, values of the company, risk factors, and how they distribute.
I know mine was when I started looking into real estate investing when I had my first nest egg out of my lead gen business. I knew when I graduated from college that I had to find another means to put money away, so after starting the corporate grind for $35K, I looked into many money making opportunities, ranging from MLM and drop shipping to real estate. I did not have enough to invest in real estate at the time, so I hunted for a good business to do on the side. Since my background was in computers, I started there. I made a little, but the hours, along with the corporate job, were killing me. Rehabing real estate is kind of like that, every weekend spent cleaning, tiling, fixing, plumbing, painting, digging, pounding. Not the most fun. Especially for a 25 year old. We want to snowboard and party some!
Yeah, it was scary at times, and it took some work, but since I had already been in business on the side, I knew any business, period, took work. I continued to build my websites and grow from my home. Today, 4 ½ years later and less than 8 after graduating from college, I am going to clear close to seven figures in profit this year, and I have not passed my 30th birthday yet.
Being in your 20’s is the sweet taste of you. It is dope to have your own place, car, job, and friends. Being in your twenties means you are adulting, make your own decisions, and are still learning what you are about. We express fast and furious, in the moment. Multi-tasks? Normal.
Buying a house is an American dream for most 20-somethings. According to realtor.com, Millennials are being seen as a strong force in real estate these days, especially in the high ticket (think luxury) real estate, where they received 49% of those jumbo (over $417K) mortgages last year. It looks like that trend is going to continue for 2019. That’s fire.
My new friends from my lead gen business, well, they can qualify for those high ticket mortgages, straight up lead gen money. And yeah, a bunch of them are 20-something Millennials. They see the future in the Internet and helping businesses grow and get customers.
Finding savings that pay above 1% can be very challenging, though. What you need is a return on investment, or ROI, that keeps up with inflation and also provides funds for reinvestment.
Smartasset.com in the May 2, 2016 article Top Three Reasons 20-somethings should invest in Real Estate, pointed out that real estate can be a hedge against the market as real estate is not as volatile as the stock market. Millennials are especially uncomfortable with investing in a roller coaster stock and bond portfolio, and often keep 70% of their assets in cash. Cash does not work for you a lot, though, when interest rates are so low. Real estate can be a more stable buffer with more ability to make a profit.
Some other options are out there, like private real estate purchasing, investment real estate which often requires sweat equity including flips and repos, investment clubs where you have little say in how the money is invested but can start small, and real estate crowd funding. Crowd funding lets you start investing in real estate with little money – at least of your own.
Learning all you can up front about how to invest in real estate for income, how to invest in out of state rental property (challenging when you are a newbie), or even how to buy your first rental property are all topics you need to become well acquainted with. Believe it or not, Zillow and Trulia are really good sources for education on a geographical area, what median sales prices are, crime statistics, school locations (a big consideration for resale on flippers), and other topics.
Wouldn’t it be easier if you started with the cash first? You can.
I tried multi-level marketing, and quickly alienated most my friends and family, as well as had a lot of money tied up in products, paperwork, you name it. I kept looking around and Amazon started taking over, so I tried reselling on their platform. I made some money, not a ton, but decent, but I also was working myself to death for a slim profit margin by the time I paid for the product, shipping, packaging, and listing and selling fees. I still needed something stronger with more potential and less overhead. I mean, life at 25 was not supposed to be so dang serious, right?
Guarantee if you have ever had to rip out and rehang drywall on a ceiling, or retile an entire room, you know it takes a lot longer than six hours and you are not going to get back clear that kind of money every month off rent, anytime soon. Oh, maybe in 20 or 30 years after the mortgage is paid off. Of course by then you have had to replace the roof, some of the plumbing, painted umpteen times, remodeled the kitchen costing 10’s of thousands, snaked a toilet at 2 a.m. in freezing temps, replaced the HVAC unit (another 4 digits)….
At 770 miles long and 250 wide, California only follows Alaska and Texas in size. Believed to have been inhabited for over 10,000 years, over 70 native tribes inhabited the area when first visited by Portuguese explorer Joao Cabrilho in 1542, only 50 years after Columbus visited the southeast coast of the US. Spanish missionaries set up residence by the mid-1700’s building a trail of missions near the coast stretching from San Diego to San Jose. An interesting fact is that even though explored and settled, European maps showed California as a massive island up until the 1840’s after cross continental routes were found by trappers in the 1820’s.
California has a solid economy
Like most states, California has some challenges
Climate plays a role in property prices in California
California is not cheap to buy real estate
Real estate is in a flat-line currently in the Bear State
How expensive is a house in California?
What about northern California where the girls are warm? Sacramento -Roseville – Arcade – Arden — $469,050.
And if you really want to be a bay area real estate mogul – San Francisco – Oakland – Hayward — $1,000,015.
California real estate investment interested me early on, since it was a younger environment and there was work there in my field, computers. I looked around, but man, I simply could not justify the prices of residential real estate and really see it as an investment at the prices they were getting 8-9 years ago. Even after the recession and the housing bust in California with all the mortgage defaults, it still would have taken every cent I earned to pay a mortgage, if I could have even qualified for a real estate loan.
I looked into MLMs, and spent some money on a couple. My friends and family soon disowned me. I quickly learned only the top dogs make bucks. Then I looked at other web options, and started a reselling business via Amazon. I made some decent side money, not a killing, but the hours it took to do it and keep the 40++ going nearly killed me. I also had inventory in every nook and cranny of my already small place. Something had to give.
Great property in California really is possible
South of the Border Real Estate Investing is Hot! Hot! Hot! Or Not?!
Mexico is healthy, youthful world economy that has been growing by leaps and bounds, especially the last 20 years. A lot is broadcast about drug cartels and death in Mexico, and there are some issues, in small areas, and almost exclusive to drug gangs. Tourist areas and big cities have some violent crime – but hey, so do we.
Is Mexico a good place to invest in real estate?
What the heck is a restricted zone for Americans and Mexico real estate?
You can still own property and hold the title in the interior of Mexico. Be prepared to have the same responsibilities as a Mexican citizen, including taxes and annual fees, as well as a few challenges with local officials, haulers, and law enforcement who require “handling fees”.
Infrastructure is a big issue you need to look into thoroughly when thinking about buying a piece of real estate in Mexico. You might think it would be fun to “camp out” some, but try it in retirement and you will find it tends to not be nearly as enjoyable. And if you are looking at is as a rental or for investment value, there is not a lot of hope for most areas to improve quickly enough under their new president to make a difference.
Some Mexican banks are now beginning to lend money to foreigners for real estate purchases, but it usually requires a large deposit on hold to secure the loan, and considerable background information. And some U.S. banks are tentatively adding in Mexican property loans, but they will take a hard look at you. You better have solid evidence of the use of the money, the market, and who is handling the purchase. And you better have a lot of collateral to back it or money in their bank. Foreign banks are not keen on holding titles in a foreign country on a real estate loan.
Another challenge to the investment game is after 2008, Mexico quietly put a number of economic regulators in place, allowing internal investing of pension funds into real estate in-country. I think it made them nervous that more than $10 billion was sitting in a REIT run by Prudential. And we all know the history of mismanagement at Prudential when it comes to investments from their life insurance debacles. The uncertainty was enough that just in the first three quarters of 2018, investment in Mexico real estate funds was down 40%. And those bank-trust-investment groups you have to put your restricted property titles into? The ones that invest in property? Some have devalued by 41% in the last two years. That does not sound like a good investment to me
And modern luxury condos on the beach? The only millenials I know that can afford something like that are the ones I hang out with! Period. And it is because we all are making our own money in our own legitimate businesses helping businesses get more customers. And we are making good money. I will push 7 figures this year. Not bad for a not quite 30 year old who was making $35K a year working stupid hours four years ago while trying to run an at-home MLM and re-shipper business at the same time.
Like everything, real estate investing in Texas is big.
There are real estate opportunities in Texas
There is something for everyone in Texas
West Texas has more abandoned towns than Nevada does ghost towns from the gold rush. The reasons are economics, and resources. No jobs, little water. But if solitude is what you want, you can buy your own small town for next to nothing in many parts of West Texas. Just make sure you have a way to support yourself. By mail. 3 days a week. ‘Cause that is as often as the postman gets out there.
Texans are not only proud of Texas, but look after their own
Texas is a big oil and agricultural state, among many other things. Cattle are king in Texas and oil flows instead of blood in many Texans’ veins.
Oil is also traded on the world market and is joined at the hip to world politics. Let there be a barf in Saudi Arabia or Korea or Russia or China and prices bounce all over the place. That said, Texas’s economy can fluctuate dramatically on the turn of a dime. I prefer to have a business like mine that is not blown around by political winds and is a lot more stable. Every business needs more customers, and that is what my lead gen business provides them – more qualified customers.
While Dallas (+8%), Houston (7%), and Austin (7%) are all up in home values in the last year, you have to dig a little deeper to get the real feel for home prices versus the economic conditions of the area. When you look at home price versus income last year, Dallas is at -24%, Houston at -23%, and Austin at -31%. In other words, people lost that amount of buying power versus how much they make towards a home. Anything over 20% is considered an over priced market. The more over 30%, the higher chance of a crash in local real estate values.
Other areas like El Paso, while home values are slightly up, still have serious disparity with regard to wages versus home prices. You can tell a lot about the local area by how cheap rent is. Nearly all areas damaged by hurricanes are down in jobs. If they are in a building boom, that seems a bit strange. Even San Antonio, the state capital, is up on home prices, but down on employment and wages.
Florida Real Estate: Investing is Not Just for Snowbirds Anymore!
You have to put that in perspective, though, since the “official” population stands at 21.7 million, and does not count the millions of snow birds (winter residents) nor the dual property holding boomers, still licensed in their home states while finishing up their careers. That brings the state to a functional population of around 27 million, with an overall increase in state population of 11.7% since 2010. Some areas have seen in excess of 40% per year in the hottest properties in suburbs of Naples and elsewhere.
But the hit did not last long. Florida’s building never really slowed down, at least around Orlando, Naples, most the Treasure and Sun coasts, and points in between. The builders were looking into their crystal ball, which showed more people retiring soon and wanting to shed their parkas for flip flops. The educated gamble worked, and their building binge has only increased, rental prices have increased, and so has traffic. After all, the boomers escaping snow had to go somewhere. Why not Florida?
Orlando, according to Forbes Feb. 2018, “Best Buy Cities: Where to Invest in Housing in 2018” states Orlando was up 35% over 3 years, and considered Orlando the #1 hot spot. Why? Orlando is still 22% below national housing median costs. That is one reason the boomers are flocking. Orlando has a 3 yr population increase of 7.6% alone. Jacksonville stands at 5.9% in that same time, Last year Orlando averaged 9% increase in property values on homes. It is predicted to gain 21% by 2021.
Programs for the elderly are lacking, health care needs such as primary providers are popping at the seams, and finding home health care is a big challenge and extremely expensive. And you might not find Florida the retirement bargain you once thought of, as cost of living has greatly increased. Long term average rental rates have outpaced Minneapolis-St. Paul.
There are communities in Florida like Edgewater below Daytona that are facing the entire town being flooded by 2030 with 11-30 inches of water per the State Consortium on Sea Level. Discussions have not even touched on all the areas off canals built from trenched marl, or blackwater swamp areas in Big Bend, salt marsh below Ft. Myers, or areas along the Intracoastal Waterway. Tallahassee has been real quiet as it is bad for business if they state the facts. They have been working on it for 8 years.
So even if you get ahold of a decent little shopping plaza, what can you expect? 10.6%.
Do you really want to start a new career, or own a business you are married to, again? Or have to bust your butt repairing real estate destroyed by an irate foreclosed-on owner? Not me. I like the ease of my lead gen business. If you are looking for some of that comfort and self-indulgence, maybe you should consider lead gen in your future. The view is pretty darn good from where I work.
Michigan has a lot of diverse advantages going for it
All this rental magic return talk never addresses once you buy the homes what you have to put into the homes to get them into rental condition. No information is shared about what is so attractive about Kalamazoo, Lansing, or Detroit. Sure, Wayne State is in Detroit, Michigan State is in Lansing, and Western Michigan is in Kalamazoo, but outside of freshman orientation and graduation and a few Big 10 games at MSU, there is not a lot of happening stuff going on here. Two weekends a year is not going to get you a return on your cash real estate investment.
Back to the winter farm purchase, though. A little geology is a good thing here. Michigan, like other states around the Great Lakes, was pretty much formed out of glacial moraines pushed up during the last ice age. Put that in every day language and you are talking dirt and rocks pushed up together. Rocks. Lots of rocks. To rockhounds Michigan is a paradise of agates, copper ores, and other pretties of every color and pattern. To a farmer they are a nightmare.
Recreational property in Michigan is usually scarcer than hens’ teeth. Michigan has three main interests for tourist business – the lake shores, the hunting areas in the north, and the UP. (Going for a weekend in Detroit can be more like going with Xminks into Call of Duty, so we are not going to call that a holiday stop.) The challenge with recreational areas in Michigan is many of them have been settled and are in the same family ownership, or belong to the state. Lake cabins, fishing resorts, boating operations, up state hunting preserves, usually are limited, have high insurance, taxes, and very seasonal revenue streams.
Flint everyone knows is tragic and may never recover from the environmental issues it faces. Many Michigan cities have environmental challenges, as manufacturing and industry were pretty lackadaisical about chemicals, leftover industrial waste, toxic cleaning materials, and the like just being dumped onto the nearest land or into the nearest water. Sometimes it was just left right where it landed on commercial properties. This means ground water and ground, period, on many properties face expensive clean up, disposal fees, inspections, and health concerns.
There is another thing about real estate investing in Michigan. Across Michigan reported on patch.com, January 24, 2019, that a recent study by 24/7 WallStreet found that Michigan’s property tax rate is the highest in the nation. Above downtown New York City and Beverly Hills. Wow. Add that to 6% flat income tax, 6% state sales tax, and the fact that all pensions and retirement monies are taxable in Michigan and you have a heavy burden on people already praying their jobs do not go away.
I did a lot of research and reading, and got involved with several MLM’s and then drop shipping via Amazon. I was still working the 40+ hour job, too. I worked my backside off and made some money, but had zero life and was exhausted all the time. I made a little decent money drop shipping for Amazon, but it was killer to keep up with the time, tracking, and issues generated by such an enterprise. So I kept looking.
