Tag Archives: real estate

Three must-have qualities of a good real estate investment

Investing in real estate can be daunting, and some people find it difficult to choose the right property to invest in. There are many factors to consider when investing in real estate and below are three sure-fire ways to recognize a good real estate deal:

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It has a positive cash-on-cash return

Cash-on-cash return is the percentage of the before-tax income to the total cash investment (usually the down payment). When purchasing real estate, one should consider the cash-on-cash return of the investment. Using a simple formula (before-tax income divided by the total cash investment), the investor can determine if the cash-on-cash return for the property is positive or negative. Experts suggest that investors should avoid high-value properties (such as flashy condo units or expensive beach houses) because they tend to yield negative cash-on-cash returns.

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It has to be a low-risk investment

Real estate is a risky business but with the right papers and due diligence, it’s possible to lower the danger of losing money on real estate. It’s important to be smart about where and what investment to make to avoid scams or bust properties.

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It doesn’t take too much time or management

When buying real estate, investors should consider how much time and money they would invest in the long term. Expensive properties sometimes take too much effort to maintain compared to moderately priced residence or commercial properties.

Read more about real estate investments and other related articles from this The Remada Company blog.

Minnesota home prices and sales inventory on an upward trend

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The St. Paul and Minneapolis Realtor’s associations recently reported that the local median sales price increased to $209,000 in October, which is 7.2 percent rise, year-on-year. Inventory, meanwhile, also increased 4.3 percent. The trend goes against traditional assumptions of supply and demand as the drop in prices as supply increases hasn’t happened yet in the Twin Cities real estate market.

The disappearance of distressed properties, short sales, and foreclosures, is attributed as one of the reasons for the continued increase of home prices along sales inventory increases. Distressed properties dominated the market in the past and they used to artificially depress home prices. With those properties out of the way, traditional sales are now inflating prices.

Home sales, however, were reported to have gone down slightly in October. While sales of traditional single family homes continued to increase in the Twin Cities, the amount was rated as insufficient to offset the decline in distressed property sales, according to the Minneapolis Area Association of Realtors.

Closed home sales dropped by 1.5 percent, which is the smallest decline for the year. The decrease in year-over-year closed sales has been recorded monthly, except for June when the sales slightly rose.

Overall, realtors see the developments as positive as traditional activity stays strong. The housing market remains healthy with greater inventory for buyers and good prices for traditional sellers.

Banker and real estate investor Steve Liefschultz is the owner of The Remada Company, a real estate development and management company in Minnesota. For more news and updates on Minnesota real estate, follow this Twitter account.