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5 Reasons Why Real Estate Investment Has Never Been Hotter

Courcheval unit E, Mountain Village, Telluride, Colorado.

Courcheval, Unit E, Telluride, Colorado – Listed by Bill Fandel, Telluride Sotheby’s International Realty

Takeaways:

  • Investors have turned more than 3 million former foreclosures into rentals, which made single-family rentals the fastest-growing rental category.
  • According to NAR, 86 percent of today’s investment buyers report that now is a good time to purchase real estate.
  • Plus the five reasons now is the time for investors.

Whom would you rather represent: the average American homeowner who moves once every eight years or the average American homeowner/investor who moves every eight years, buys an investment property every two years and sells one every five years?

With the decline in foreclosures and the corresponding decline in investor purchases, many people have the impression that residential real estate investing is dying out or returning to pre-boom levels. Nothing could be further from the truth.

Real estate investing is a big business. In the six years that have passed since the foreclosure floods first hit, investors have turned more than 3 million of them into rentals, which made single-family rentals the fastest-growing rental category.

Those who have been bitten by the investment bug are eager for more. According to NAR, the bulk of today’s investment buyers (86 percent) report that now is a good time to purchase real estate.

Newcomers are signing up every day, drawn by single-family rentals’ dual revenue stream that can produce returns exceeding 8 percent. Like all real estate, rentals generate capital gains from appreciation.

Investors who bought foreclosures are doing OK; they fixed them up, rented them out and created capital gains that are hard to beat today, but investors who buy wisely in today’s hot markets are doing just fine.

The second revenue stream is cash flow from rental income, which sets single-family rentals apart from the vast majority of securities investments that most Americans are familiar with.

Rents are soaring and vacancy rates declining, which makes it easy for landlords to keep their properties rented, and their rental income is outpacing inflation. Even in moderate markets, millennials find single-family rentals to be the perfect steppingstone to home ownership, and they are creating extraordinary demand for rentals.

For agents and brokers who understand single-family rentals, these changes and others are creating new opportunities that didn’t exist at the peak of the foreclosure floods.

It’s a different way of looking at real estate, where capacity rates and operating costs are just as important as resale value. Here are five reasons why this is a great time to do business with investors:

1. Millions of small-time investors are looking for good agents

Four years ago, foreclosure auctions and preforeclosure sales — transactions that don’t create a commission — accounted for the lion’s share of deals in the hottest markets.

Those days are over. According to the National Association of Realtors’ Realtors Confidence Index in June 2014, distressed sales were only 8 percent of total sales that month.

Investors are hunting harder for properties, which make them a great market for buyer’s agents who know what constitutes a good investment property and for sell-side agents who know that investors aren’t so limited by geography.

Buyers might live 50 miles away — or across the nation.

2. Commissions are higher today 

With investors buying more REOs and properties listed in MLS, the days of the 30 percent foreclosure discount are gone, and many investors pay close to full price.

The properties they buy cost less to put into rent-ready condition, which saves investors 10 to 20 percent of their purchase price, but higher purchase prices mean larger commissions.

3. Fewer deals fail

Your sellers will love dealing with investors because they pay all cash (though usually not their own cash — most investors have their own investors). Buyers who don’t need financing also don’t risk losing a deal to a low appraisal or a last-minute problem with financing.

4. You can stand out in the crowd 

Investors don’t hire agents because they’re referred by a relative. Relationships are all business, and they are looking for competence, brains and expertise.

Whether you are buying for investors or selling to them, learn your local market from the perspective of an investor. Network with local real estate investment clubs and social media.

5. There’s been a change in perception

Perhaps the most important reason it’s a great time to be working with investors is change in the way many people think about it today — people who just a few years ago would never have considered real estate investing.

“Many of my customers ask me how they can attempt to buy their next home, while holding on to the one they already have — a complete turnaround from the mentality of the seller of yesterday,” said Will Stein, broker and owner of Belair Realty in Bowie, Maryland.

“Many mom-and-pop homeowners might not be savvy investors, but they call me all the time saying they just want one rental property to help with long-term cash flow. It’s becoming the new 401(k) — and it’s smart.”

It’s a completely different world out there. Investors have become anyone who can afford to buy a second home and put it on the rental market. And with soaring rents and a decline in vacancies, now is an excellent time to assist your clients in becoming investors.

Steve Cook is editor and co-publisher of Real Estate Economy Watch and provides communications consulting services to leading real estate organizations. 

To visit the many properties of Telluride Luxury Properties, click here

WSJ: A HIGH-TECH CALIFORNIA HOME IS LISTING FOR $35 MILLION

THE BRAND NEW, 10,100-SQUARE-FOOT HOUSE OPENS ITS GARAGE AND TURNS ON ITS LIGHTS AND FOUNTAIN WHEN THE OWNER DRIVES THROUGH THE GATES

Mr. Barnick estimated that he spent about $30 million on the design, construction and build-out of the home.
A newly built, fully automated California home is listing for $35 million.
In the living room, the owners commissioned an artist to create the colorful sculpture surrounding the fireplace. Standing nearly 20-feet high, it is intended to be an abstract image of the nearby Channel Islands.
The property sits on a bluff overlooking the ocean, and has a private pathway to the beach below.
The home also has three built-in aquariums, which can be programmed to automatically change the water and check the conditions.
The home’s lighting, music, televisions, heat, air conditioning, window shades, fireplaces and door locks can all be controlled remotely by tablet or smartphone.
The master bedroom. The staircase leads to a tower topped with an observation deck and an outdoor hot tub.
The property is about 3.7 acres, with a swimming pool, tennis court, greenhouse and a workshop for owner Michael Barnick’s various projects.
The home has four bedrooms.
Mr. Barnick is a tech entrepreneur who got so involved in designing the systems for this house that he ended up starting a home automation business, called Quantum Integration. “This business just sort of started because I wanted to do this house myself,” he said.

Tech entrepreneur Michael Barnick was retired when he started designing his oceanfront California house in 2005. But he got so involved in the home’s gadgetry that he ended up starting a business called Quantum Integration, which installs home-automation systems.

The house was completed a few weeks ago. Designing and building the roughly 10,100-square-foot, four-bedroom contemporary took so long “our kids kind of grew up,” said Mr. Barnick, leading him and wife, Sujittra, to conclude they no longer needed such a large home. So the new house is going on the market for $35 million.

Located in Hope Ranch in California’s Santa Barbara County, Mr. Barnick’s home sits on 3.7 acres on a bluff above the ocean. The home’s lighting, music, televisions, heat, air-conditioning, window shades, fireplaces and door locks can be controlled remotely by tablet or smartphone. But Mr. Barnick is proudest of the home’s automated features. When he drives through the home’s gates, the lights turn on, the garage opens and the fountain starts running, for example. And when the shower starts, the towel warmer turns on.

The home also has three built-in aquariums that can be programmed to automatically change the water and monitor water temperature and quality. One of the tanks is intended specifically for jellyfish. “For me it’s all about the technology and doing it well, not flashy,” said Mr. Barnick, a 53-year-old former Apple executive who retired in 2000 after SonicWall, an Internet security company he co-founded, went public. He said he bought the land with his wife in 2001, and estimates that he has spent about $30 million on the home.

The house also has a movie theater with seating for 12, and a staircase in the master bedroom leads to a tower topped with an observation deck and an outdoor hot tub. In the living room, the Barnicks commissioned an artist to create the colorful sculpture surrounding the fireplace: Standing nearly 20 feet high, it is intended to be an abstract image of the nearby Channel Islands.

The listing agent is Suzanne Perkins of Sotheby’s International Realty.

To visit Telluride Luxury Properties, click here

Mansion Global: Featured Listing of the Day – “Paradiso”

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To visit Mansion Global and read more, click here

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US NEWS & WORLD REPORT: WHY REAL ESTATE COULD BE A BETTER INVESTMENT THAN STOCKS

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By  Aug. 20, 2015 | 9:45 a.m. EDT

Once you’re on track with your financial goals – such as retirement contributions or repaying student loan debt – you may find yourself exploring real estate investments in lieu of the stock market. Buying real estate as an investment can be lucrative, but it’s also cash-intensive and carries risks.

As you weigh your options, consider the following points in your analysis.

Risk versus expected returns. Whether putting cash into the market or purchasing real estate, you need to assess the risk versus the expected returns. Traditional equity investments are much easier to analyze in this way. You have historical data, and although past performance is not indicative of future results, you have a bit more control over how much risk you’re exposed to when deciding what amount to invest, the asset allocation and so on. Investing in single stocks versus an index fund is a calculated risk some are willing to take in search of higher expected returns.

The risks when buying real estate can be much harder to quantify. While there is data available, such as comparable home prices in the area and average rents, unpredictable changes in the market can be costly. When investing in the equity market, your risk of loss is limited to your initial investment. This isn’t the case with real estate – you could wind up owing the bank more than the value of your property if the market experiences a downturn, or even due to changes that negatively impact a neighborhood.

For landlords, vacancy and repairs can eat into profits. Once you calculate your expected mortgage, operating costs, taxes and maintenance, how much can you expect to earn in net rental income? The answer for every investor will be different, but for some, the anticipated return will not be worth the risk and effort involved in owning real estate.

Required capital. Virtually anyone can invest in traditional equity assets. Some shares can be very inexpensive and you can often determine the volume as well. The same cannot be said for real estate. To purchase a property, you need to either come up with a down payment yourself, or enlist partners to invest with you. Typically, you need to put down 20 percent for a traditional mortgage, and although various programs can help you to put down a smaller percentage, there are fewer options for investment properties.

The initial cash outlay is what deters many would-be real estate investors, as you could easily spend upwards of $100,000 on a down payment and initial repairs. Furthermore, real estate requires additional capital to maintain the property, often not at the owner’s behest. With stocks, you can make a one-time investment or purchase additional shares later, at your discretion.

Taxes. Another aspect to consider when deciding to invest in real estate or the stock market is taxes. If you own property, you will be required to pay property taxes every quarter, based on the assessed value as determined by the city or country. This is included in your mortgage payment. Whether you want to flip the property or hold onto it as a landlord, you will also have to pay tax on the sale or rental proceeds.

There are certain tax benefits unique to owning real estate as a landlord, however. The interest expense on your mortgage is tax deductible, along with operating expenses, property taxes, insurance and depreciation. Exactly how much you can deduct will likely depend on the rental income. In most situations, under the passive activity loss rules, you cannot write off deductions that are more than the rental income, which would generate a loss. Working with a CPA can be very helpful, particularly when investment properties or multiple residences are involved.

Stocks have tax consequences as well; first, you are required to pay a capital gains tax on any profits you made from selling stock. Furthermore, even without a sale, you are also required to pay a tax on any dividends you receive.

Inflation. Real estate can be a potential hedge against inflation as historically, rental rates and home prices rise with inflation. This provides a potential inflation hedge for both your rental income and sale of the property. Since your mortgage payments will not increase with inflation, it offers a benefit over time.

Traditional equity investments are not as directly linked to inflationary measures. Although prices do tend to rise over time, the market cannot offer the same potential inflation protection as real estate.

Time. Another factor to consider when choosing to invest in real estate or the stock market is to factor in your time as a cost during the analysis. While you do need to do some research when deciding which funds to buy, you can purchase traditional equity investments in a matter of moments. There is a lot more time required in buying and maintaining a property, as well as managing any improvements.As a landlord, you will be on call for the tenants as problems arise. Hiring a property manager is an option, but depending on the size of your property, could eliminate your profit margin.

With the right property, neighborhood location and cash reserves, investing in real estate can be a great option. Many investors are drawn to the ongoing “coupon” payment of rental income, and as a long-term strategy, the ultimate sale of the property can fund a large portion of their retirement. If you’re considering whether you should invest in the equity market or buy an investment property, carefully weigh these factors and determine whether your expected income is worth the risk it carries, especially in light of other investment options.

To visit Telluride Luxury Properties click here

Luxury Living | Saunas and Spas

Whether it’s decompressing in a steam room or sauna, finding your Zen in a personal salt cavern or relaxing in the shower while taking in some of the most sought after views from around the world, the perks of having spa-equivalent amenities in your home are undeniable. Imagine yourself unwinding in one of these exclusive homes.

Poland

Price Upon Request | Wroclaw, Poland | Poland Sotheby’s International Realty

Poland – Nestled at the foot of the Sleza Mountain Range, this unique country estate sprawls over eight acres of parklands. Once a private enclave for renowned philanthropist, humanitarian and art collector Barbara Piasecka Johnson, this home enjoys a spa, sauna and bijoux salt cavern lined with mineral-rich Himalayan bricks among its offerings.

BVI

$3,995,000 USD | Tortola, British Virgin Islands | British Virgin Islands Sotheby’s International Realty

British Virgin Islands – Located on one of the most captured beaches in the Caribbean, Sunset Villa is in a highly sought after part of Long Bay. Imagine mesmerizing sunsets, panoramic views and the tranquil sounds of the surf at your doorstep. Enjoy unforgettable vistas from one of the en-suite spa showers at this island escape.

California

Price Upon Request | Orinda, California | Bay Sotheby’s International Realty

California – Enter through the hand-forged iron gates into this majestic estate. The Hilltop offers a seemingly infinite offering of amenities including an entire separate sports complex complete with rock climbing wall, tennis, golf simulator and luxurious sauna and spa. Enjoy the views and meticulous craftsmanship of this home from the numerous indoor and outdoor entertaining spaces.

Italy

5.300.000 € EUR | Siena, Italy | Tuscany Sotheby’s International Realty

Italy – This historic estate dates back to the 17th century. Its quintessential architecture and idyllic setting epitomize the Tuscan lifestyle while the wide array of amenities befits a modern one. Complete with a world-class spa, this rustic retreat spans well over four thousand acres of Italian countryside.

Sweden

5.700.000 KR SEK | Skane, Sweden | Sweden Sotheby’s International Realty

Sweden – Positioned on Kullahalvön’s majestic slopes, this inviting summerhouse is a private natural getaway. Floor to ceiling windows and sliding glass doors blend interior and exterior spaces through the property providing an organic living experience complete with incomparable sea views.

To visit Telluride Luxury Properties click here

Telluride Empty Leg Flights for August 2015

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Talking Tenacity, Drive and Horses with Santa Barbara’s Real Estate Queen

Suzanne Perkins

Suzanne Perkins. Photo Courtesy of Paul Wellman.


The S.B. Questionnaire: Suzanne Perkins

Talking Tenacity, Drive, and Horses with Santa Barbara’s Real Estate Queen


Monday, August 10, 2015

Suzanne Perkins was one of the first people I met when I moved here in the late 1990s, and I’ve admired her tenacity and drive ever since. She’s the type of person who excels at everything she does, and is consistently named in such publications as Variety and the Wall Street Journal as one of the top real estate agents in the country.

Suzanne is also a third-generation horsewoman and, with her husband Perry, breeds, trains, and shows world-class Arabian horses, including four national champions. She’s also been a licensed United States Equestrian Federation Judge since 1989. A former flight attendant for Pan Am, Suzanne heroically participated in the Saigon evacuation flights at the end of the Vietnam War.

The indomitable Suzanne answers the Proust Questionnaire.

What do you consider your greatest achievement?

My success in real estate and in becoming a world-class Equestrian Judge. Also, during the Vietnam war, while flying for Pan American World Airways, I volunteered for the Department of Defense to fly in and out of Vietnam, transporting troops. Having been raised in the military, it was important for me to assist our country.

Who do you most admire?

My father and mother, for teaching me at a very young age to be self-reliant, not to depend on others to determine my self-worth, and, whatever I do, to be responsible for it. And to never, ever blame others for mistakes I make.

What is your idea of perfect happiness?

Knowing I have done an incredible job for my clients. And at the end of the day, my clients are thrilled that they have hired me. As you can see, most of my happiness is centered around my work.

What do you like most about your job?

The amazing people I have been able to meet and work with. Each day is completely different and always exciting.

What is your greatest fear?

Actually, I do not have any fears!

What is your greatest extravagance?

The incredible horses my husband and I breed and show. They bring us a great deal of joy and pride.

What is your current state of mind?

Peaceful and focused.

What is the quality you most like in people?

Truth, honesty, and hardworking.

What is the quality you most dislike in people?

Excuses, bitching, and laziness.

What do you most value in friends?

Honesty, and their ability to be themselves with me.

What is your most marked characteristic?

I do what I say and say what I do!

Which words or phrases do you most overuse?

“Okay!”

Which talent would you most like to have?

If I didn’t have horses, I would have loved to have been a world-class runner and an Olympic equestrian.

If you could change one thing about yourself, what would it be?

Nothing!

Where would you most like to live?

Right here!

What is your most treasured possession?

Peaches, my Saddlebred mare.

Who makes you laugh the most?

My assistant, Kalai.

What is your motto?

Get it done and hold the BS!

Which historical figure do you most identify with?

Ronald Reagan

On what occasion do you lie?

Never.

PROPERTY WIRE: US HOME PRICES UP 6.5% YEAR ON YEAR, LATEST INDEX SHOWS

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Home prices across the United States, including distressed sales, increased by 6.5% in June 2015 compared with the same month in 2014, according to the latest index.

It is the 40th month in a row of year on year price increases and values were also up month on month with growth of 1.7% in June compared to May, the CoreLogic home price index also shows.

Excluding distressed sales, home prices increased by 6.4% in June 2015 compared with June 2014 and increased by 1.4% month on month with only Massachusetts (-1.5 percent) and Louisiana with an annual price fall of 1.5% and 0.1% respectively.

Including distressed sales, that is short sales and real estate owned sales (REO), some 35 states were at or within 10% of their peak prices in June 2015 and 15 reached new price peaks.

The firm’s latest house price forecast indicates that home prices, including distressed sales, are projected to increase by 0.6% month on month from June 2015 to July 2015 and by 4.5% on a year on year basis from June 2015 to June 2016.

Excluding distressed sales, home prices are projected to increase by 0.5% month on month from June 2015 to July 2015 and by 4.2% year on year from June 2015 to June 2016.

The index report also shows across the country there was 4.8 months supply but the measure varied greatly across cities. In San Jose and Denver, there was only 1.6 months’ supply of homes on the market, whereas Philadelphia had a seven months’ supply and Providence had a 6.6 months’ supply.

Frank Nothaft, chief economist for CoreLogic, explained that the stronger appreciation was registered in cities with limited inventory and strong homebuyer activity, such as San Jose and Denver.

According to Anand Nallathambi, president and chief executive officer of CoreLogic pent-up buying demand and affordability, together with higher consumer confidence buoyed by a more robust labour market, are a potent mix fuelling the 6.5% jump in home prices with more increases likely to come.

Including distressed sales, the five states with the highest home price appreciation were Colorado with growth of 9.8%, Washington up 8.9%, New York up 8.3%, South Carolina up 8% and Nevada also up 8%.

Excluding distressed sales, the five states with the highest home price appreciation were Colorado up 9.3%, New York up 8.5%, Washington up 8.3%, Oregon up 8.2% and Nevada up 7.9%.

Including distressed sales, only four states experienced home price depreciation with the biggest fall of 5% in Massachusetts, while Connecticut was down 0.6%, Louisiana down 0.4% and Mississippi with a fall of 0.3.

The five states with the largest peak to current declines, including distressed transactions, were Nevada with a fall of 32.2%, Florida at 28.7%, Rhode Island at 26.5%, Arizona at 25.8% and Maryland down 21.2%.

Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, some 93 showed year on year increases while seven showed year on year declines ranging from 8% to 0.1%.

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Greatest Value Opportunities

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To view these properties and more, visit Telluride Luxury Properties here

New & Notable Luxury Properties For Sale | July 2015

Beginning with the majestic Stone Mansion in New Jersey to an iconic estate in Brazil, this month’s collection of exceptional properties for sale features homes in some of the world’s most sought after destinations.

NJ$48,880,000 USD | Alpine, New Jersey | Prominent Properties Sotheby’s International Realty

New Jersey – This gated estate sprawls over approximately 30,000 square feet. Built of solid granite and steel, the Stone Mansion boasts twelve bedrooms, nineteen bathrooms, indoor basketball court, movie theatre, 4000-bottle wine cellar, fitness center and three exquisite bars for entertaining. There is a ballroom, formal dining room, great room, library, den, master suite including 2 spa bathrooms with dressing suites and the estate has a fully equipped staff apartment and separate pool house.

London£25,000,000 GBP | London, England | London Sotheby’s International Realty

London – This striking home is both inviting and elegant. With an enduring brickwork exterior and large windows looking out over the garden, this private residence offers sophisticated living in close proximity to the city. Seven bedrooms and bathrooms, conservatory bar and two rooftop terraces are among the vast amenities offered.

HongKong$280,000,000 HKD | Hong Kong | Hong Kong Sotheby’s International Realty

Hong Kong – Offering views of the surrounding greenery and the harbor, this home showcases its abundance of outdoor space including an 8,000 square-foot private garden and swimming pool. The immaculately appointed interior features high ceilings and boasts bright floor-to-ceiling windows.

BrazilR$ 80.000.000 BRL | Sao Palo, Brazil | Bossa Nova Sotheby’s International Realty

Brazil – This iconic mansion features a Social area with several lounges, dining room for eighteen people, great library and a winter garden. The meticulously manicured outdoor area showcases the spacious garden, swimming pool and fitness areas.

FrancePrice Upon Request | Cannes, France | Côte d’Azur Sotheby’s International Realty

France Showcasing exquisite panoramic and sea views, this Belle Epoque mansion is located in the heights of Cannes. The villa’s lush gardens, indoor pool, electrically-operated glazed roof and oversized Winter Garden with lounge are just a taste of the elegant amenities offered.

View Newly Listed Luxury Properties for Sale >

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