I’m sure if you’ve had any interest at all in investing in real estate you’ve also read a lot of information on real estate investing both in magazines and online. You will likely have discovered that many of the millionaire’s around the world claim to have made their fortune in the real estate market.

This makes it an exciting thought for anyone with the means necessary to throw what they have into the pot and get started on their own real estate portfolio. But as there are many wrong ways that they can go about this, it may not always be the easiest path to riches using investing in real estate as the best investment strategy that they can make.

You will be aware that wrapping properties is my particular niche. And investing in real estate, particularly in positive cashflow properties is an investment that can easily be seen and tracked as they occur. (more…)

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There have been quite a number of naysayers in the positive cashflow property investing market who have been increasing the debate about the ethics of property Wraps (wrap around mortgages).

While there has been a small number of Wrappers who have not always completed a Wrap in an honest or ethical manner, you will find that in any area of property investment you will get a similar number of people who choose to walk over people’s lives in order to make a ‘quick buck’.

Thankfully sooner or later, these minor few to get their come-uppance and (more…)

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In case you are a little confused as to what a positive cashflow property WRAP is, let me give you a brief but concise outline.

You as a wrapper have purchased a property with the intention of making it a positive cashflow investment for yourself. In order for it to become a WRAP property, you then must sell it to another person (the wrappee) with an agreed instalment plan over an agreed timeframe.

For this purpose, you have become the Vendor Financier, you are acting as the financial institution to the other party and the majority of your profit is earned on the interest you gain from this.

Because it is your decision whom to become the Vendor Financier too, you will attract the multitude of people around Australia who would otherwise be unable to get a mortgage through the normal route of a lending authority.

This does not necessarily mean that the other party has defaulted on payments in the past or is a huge risk to you. We all are aware of how strict the guidelines are within financial institutions and it could simply be that they are self-employed or retired but do have the funds available to make the required payments on the property. (more…)

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What are the Benefits of Rent to Own over Traditional Renting?

No one can dispute that the economy has softened in recent times. These days, getting a mortgage has become much more difficult, making buying a home all the more troublesome. Well, with a rent to buy situation, you can still get the home of your dreams.

On the flip side, if you are a home owner, and you have been trying to sell a place for a long time, you might want to think about offering buyers a lease purchase option. From the point of view of sellers and buyers, rent to own options make sense. With a rent to buy, everyone can win.

Sellers

As the seller, you get someone to move into your vacant house. That means it starts to generate income for you. Now, granted, it may not be much – only enough to cover your monthly mortgage payment, but that is all you really need. And, consider the alternative: an empty house is very tempting to vandals and thieves.

Without someone living in your place, much needed repairs may not get done; the elements might start to chip away at the place – and with it, your equity. By putting a tenant in there, you forestall all such events from ever occurring.

Then there is yet another reason for offering someone a rent to own option: a lack of equity. If your home’s value barely covers your mortgage, you may not be able to sell it for a good price. You could sell it and find yourself coming away form the deal with next to nothing.

Not a good idea. Yet, if you rent the place, and give the renter a lease purchase option, then that gives your home time to appreciate in value. If the tenant likes the idea of a rent to buy, and rents for a year or so before coming up with the down payment, your home’s value will go up, and the mortgage will go down.

Also, consider this: very few homes get put on the market with a lease purchase option. So many sellers just want to sell and be done with it. Well, that is all well and good when buyers can get a mortgage. But, for those who can’t, yet still can make the monthly payments, they will welcome a rent to buy offer.

The key to making a rent to buy situation work is careful screening of the tenant / buyer. Now yes, this is more time-consuming than just selling, but if you truly feel a rent to buy is the best way for you to go; then putting forth a little effort to ensure your home stays safe is well worth it.

In the end, you’ll sell your home at a good price, and know it went to a good buyer.

Buyers

For buyers, rent to own options provide a cheap way to own the house of your dreams. You are making an investment each month as the money you pay in rent is taken off the eventual property price, instead of being dead money as in traditional renting. Also, the price of your house will be fixed, and that will be at a lower price with housing markets as they are. In time, the chances are that your home will be worth more, but you won’t have to pay more!

The time you get to pay into your home allows you to build credit, so that borrowing money at a later date will be easier and cheaper. You don’t even have to buy the property you’re in at the end of your lease period.

The choice remains yours.

Therefore,  to own deals have many advantages over traditional renting, for both the buyer and the seller and they allow far more people to get their first step up onto the property ladder.

Make sure you check out the http://www.aussiewrapper.com.au for more update information on “Wrapping Property For Cash Flow!”

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5 Tips To Paying Your Mortgage That Every Property Investor Will Want To Know

The buying and selling of property is one of the most profitable investments currently on offer.  In addition to making huge profits, one of its nicest features of property investment is that it does not require in-depth financial knowledge to either enter or to exit.

Some of richest people in Australia are in the property market.  Among the biggest property magnates, you will find Frank Lowy, whose Westfield Group of Companies owns many shopping malls and Richard Pratt whose investments in real estate range from commercial to residential holdings.

These investors will always have a story to tell about how they actually acquired these properties.  Most of these stories will revolve around the use of bank loans and other lenders.

Whether you use a mortgage to purchase that residential home that you have always admired or whether you use it for purchasing property for sale, there are questions that you must always answer.

Here are 5 tips that will help you have a hassle free mortgage servicing experience:

1- Investigate your intended property financier – Some lenders may not be registered by the proper government authorities to offer mortgage financing.  It will therefore be important for you to take up loans that have a legal backing and a proper system of redress in the event of the lender flouting the provisions of law.

For example, lenders are expected to structure their repayment programs in a manner that allows the equity of the property to revert to the borrower in equal  proportion to the repayment that has been made.  This will protect the borrower,   as the more equity he/she gains, the better the chances of securing their property.    Legality of the whole transaction may affect the pattern of payment and it is in your interest to seek after the best lender.

2- The use of rental income from the property- As a property investor, you may want to rent out your building and use the net income from it to fund the repayment of the loan.  It is therefore be critical, from the outset, for real estate investors to identify property that will yield quick and consistent returns.  Renting out of property that is valued highly may also be a choice for these who desire long term property investment but do not have the ability to pay the mortgage or just want to reduce their monthly expenses.

3- Conduct a personal due diligence – The often ignored principle in property purchase is research. Yes, research.  It is paramount to know what your financial position is, the best rates in the market, and the fees for the transaction, any prepayment penalties and the needed commitments.  From your investigation, it will be easy to pin point the best possible lenders in the mortgage market and thus help yourself during repayment.  Insistence is placed on this point for the simple reason that most people will sign documents even without knowing what is at stake.

4- Agree on a way out – Many foreclosures may be avoided by simply agreeing with your lender on the best mode of repayment.  Companies, for example, may pledge part f their equity so as to lessen their mortgage burden.

5- Sell – If you are in the property business as an investment, then you may consider selling your property to pay off the mortgage.  For these investors, a good selling price will definitely be able to service the loan.

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