.Given the choice between two investment properties—both 3-bedroom, 2-bathroom, 1,700-square-foot single family residences listed at $125,500, one a turnkey in Stockton, California, and the other a fixer-upper in Chapel Hill, North Carolina—and the singular goal of turning the maximum profit on my investment, I would choose to purchase the Chapel Hill home. Because I believe that the listing price of that property is lower than its true value, and because I expect a growing real estate market to increase the value of the home by 10 percent over the next two years, I think that with an additional investment of $50,000 in renovations and a two-year buy-and-hold rental strategy, I could flip the Chapel Hill home for more than $180,000 in profit. As is, the Chapel Hill home is worth significantly more than $125,500. In October of 2013 (the most recent month for which data is available), a middle-of-the-range 3-bedroom home on the market in Chapel Hill was listed for $154 per square foot, and sold for $150 per square foot, according to real estate market data aggregated and reported by Zillow. For a 1,700-square-foot home such as the one on offer here, those numbers equate to a current median listing price of $261,800 and a current median sale price of $255,000. Other estimates of 3-bedroom prices-per-square-foot in Chapel Hill, such as those provided by Trulia, are only higher. Even granting a generous 30 percent discount on Zillow’s median list price for this property’s needed cosmetic updates, $125,500 is still a full $53,000 less than the property’s true market value. The data suggests that if I were to simply buy the home and the following day relist it at its true value price, I could expect to sell the home—without waiting ... ... middle of paper ... ...y 2011 prices, and after significant renovations to the property—I believe I could easily sell the Chapel Hill home for $338,640, the projected median sale price of $282,200 ($166 per-square-foot for a 1,700-square-foot home) increased by 20 percent for the property’s turnkey condition. Less the purchase price and the $50,000 cost of the renovations, plus the rental income of $17,419.65, the total profit would be $180,559.65—an outstanding 143.9 percent return on my initial investment. And that is assuming that Zillow’s price data—the lowest I found—is the most accurate, and assuming that the real estate market merely recovers to 2011 prices rather than surpasses them, and assuming that the rental rate I can charge for the newly-renovated property in 2014–2015 is still even with the 2010 market average; the true return on my initial investment could be even higher.
Richard Romano is one of the three principals at Cruickshank, Gath, & Romano. With eight years of experience and recognized by industry insiders as one of Canada's leading real estate experts, Richard wants to complete the appraisal according to his best estimate of the pro...
The housing market is very unique as unlike other goods and services, houses have permanence, it is a fixed location good causing the rules of supply and demand to be taken to new extremes. In the case of the Toronto housing market we can view in almost real time the role supply and demand play on he ever increasing house prices, additionally the fundamental economic issue of scarcity is made extremely apparent by the limited size of the city of Toronto.
After analyzing a sample of 40 gulf view condominiums and 18 no gulf view condominiums it becomes evident that variations exist between the two different types of properties. When reviewing the data it becomes clear that luxurious gulf view condominiums can fetch larger selling prices and are listed on the market for fewer days than no gulf view condominiums. No gulf view condominiums fetch lower selling prices and sit on the market for longer periods of time since they are not as popular as condominiums that have wonderful views of the gulf.
When working within the realm of real estate, flipping houses is one of the most lucrative projects one can undertake. The premise of this idea is buying a home in need of repair, renovating it, and selling it at its newly appraised value. In high school, I worked alongside my mother to renovate a home in our small town of Trinidad, Colorado. The invaluable lessons I learned throughout this business venture gave me insights into the inner workings of house flipping. What I gained from this experience will lead to better decision making if I choose to take on another project. With a $150,000 budget, the most important aspects to focus on in a renovation would include updating appliances, applying fresh paint, installing proper flooring, and revamping the exterior. Assuming that the home being foreclosed on costs $110,000, I would allocate $20,000 of my budget for renovation expenses. This leaves a $20,000 buffer to be used as an emergency fund.
Some of the realtors are pushing the home owners to sell the house; therefore,
Chapel Hill Community Overview, 2014. The Town of Chapel Hill – Residential Market Study. Retrieved from: http://www.ci.chapel-hill.nc.us/Modules/ShowDocument.aspx?documentid=9018
$1.5 million dollars to possess a piece of land in Manhattan may seem like a vast ocean but if nuts and bolts are revealing in decreasing of price, then why wait for the sunrise, go for it today. Reports poring from all over the places are shouting that metropolitan areas knocked by almost by 24 percent (%) from their highest in May 2006 to October 2008, according to Standard and Poor's S&P/Case-Shiller Home Price Index, as it is stated on the article. If that is indeed the case, then 24% out of $1.5 million turns out to be approximately $ 1.1 million dollars. If one even negot...
The real costs of home ownership Because of the high prices of homes in the United States, people often focus on only the buying price when considering the costs of owning a house, and neglect many other aspects of home ownership. A house is not your regular item that you buy, store or use for a limited amount of time. Houses come in a package with upkeep costs and taxes, and it’s wise to take these into account when analyzing your finances. The average cost of a house is estimated to be around $200,000 in 2013. As such, it’s no wonder people are distracted by such a significant amount and overlook other aspects.
I decided to buy because I could make a profit when I want to sell it and I can make renovations to the area. After thinking it through, I concluded that my total budget for the house/condo was about $250,000 but I wanted to stay under that price so that I was not house poor (which is when you put too much money into a house to the point where you can barely pay for it or live). My apartment is in Teton Village, Wyoming since I am being a larger animal vet and they have a lot of livestock and ranches out there. This condo is located at 7680 Granite loop Road (Unit 651). This space has two bedrooms, two and a half baths, and is 1,720 square feet. My condo also has a beautiful view of the mountains, good prices ($110,000), and has a beautiful living area. The complex has an asphalt driveway, a pool, and an underground parking garage.I decided not to have a roommate because I can pay for the property myself and I wanted the space to
Another reason why we saw the price of houses rise was due to the low
Everyone will experience buying a house at one point or another. Why not have a real estate agent help you and guide you through the process? I chose this occupation because it interests me for many different reasons. Wouldn’t you like a job where your schedule revolved around your life? Or you could control the growth of your business? Or basically over time, be your own boss? These are a few of the many reasons the real estate industry has caught my eye.
For fiscal 2011, the real estate allocation was around 28% of its assets. The real estate portfolio of Yale was reviewed by their real estate managers and Yale’s had exercised a wide range of control and continuously reviewed the investment decision of the real estate managers. Additionally, they had pared its portfolio to focus on those managers with whom the staff was most comfortable in terms of people and execution. Since there has a lot of challenges invest in the real assets, recently, Yale’s has considering to reclassify the real assets into two groups, real estate and natural resources (oil and gas, minerals and mining, and timberland).
location and had been vacant for a number of years, Daniel estimated the value to be $1.9 million
Buying and owning your home is part of the American dream. Although the dream itself has since changed, the home still remains the main focal point. Today owning a home doesn’t necessarily mean a house. People now buy duplexes, cooperative apartments, and condominiums. For some families it could take up to a couple of generations before it’s able to have the capabilities of buying a home. To many people it means a certain achievement that only comes after years of hard work. It is a life altering decision and one of the most important someone can make in their lifetime. The reasons behind the actual purchase could vary. Before anything is done, people must understand that it’s an extraneous process and it is a long term project.
Rebecca Young has finished taking her Master of Business Administration and decided to move to Toronto in May 2013. She moves to a new place to follow her desire on finding a new job in investment banking. She rents a spacious condominium with two bedrooms in it with the rents of $ 3,000 per month. In July 2014, the same condominium unit next to her condominium are decided to be sold. Young believed that she could afford the condominium for $ 600,000. However, she felt that she bought a condominium that will not meet her long-term needs. Thus, Young decided to sell it in two to ten years. Analysis of Young's decision to buy or rent a condominium from the quantitative side is the suitable way to get the best financial decisions.