Advertising Amenities Architecture Bizarre and Interesting Real Estate Commercial Real Estate Condo Sales and Prices Construction Credit Dream Home Economics Electricity and Alternative Energy Flipping Properties Gardening Home Insurance Home Related Home Sales House Prices Housing Starts Interest Rates Landscaping Legal Issues Montreal Real Estate Mortgages Moving Notes Off Grid Homes Ontario Overseas Real Estate Parking QUEST FOR A CONDO Real Estate Brokers Real Estate Bubbles Real Estate History Real Estate Humour Real Estate Investment Real Estate Quotes Renovations Renting Taxes The Home Office Toronto Real Estate Trends Urban Planning US Real Estate Vancouver Real Estate
Thursday, April 19, 2012
American real estate websites are interesting
Lets take midsouthhomebuyers.com for example, a website which specializes in Memphis real estate investing which basically means they take your money and invest it in rental properties, rent the property out and then you receive a portion of the rent.
Its an interesting concept... but what is more interesting is the question of how much these properties are actually worth. Remember that Memphis was hard hit during the US recession of 2007-2009.
From 2006 to early 2009 the median prices of homes in Memphis dropped from $105,000 and dropped down below $75,000. Right now the median price is hovering around $85,000.
Compared to prices here in Toronto, real estate in Memphis is dirt cheap.
Now I admit that is not as cheap as some other locations (ie. Detroit), but it is still a bargain.
What midsouthhomebuyers.com does therefore is hunt around for bargains, then flip them as rental properties and eventually (when the real estate market has recovered) sell it for a profit.
Lets say you buy a property for $100,000 and rent it out for $1,000 per month. 2 years later, depending on the demand, you might be able to sell the same property for $110,000... and better yet you've pocketed $24,000 (minus property taxes, income taxes, maintenance costs and lawyer fees) from the rent.
I do think you could do this yourself, assuming you had enough spare cash. My uncle David and an investment partner did this years ago back during the 1970s and 1980s. They bought several properties near Niagara Falls, waited for them to shoot up in value and then sold them all. Then (for fun) the two of them had the bank give all the money to them in cash, bought some champagne and rolled around in the cash. My uncle even has photos of the event of him and his buddy rolling around drunk in all the cash.
So you can make a lot of money investing in real estate. You can go through a company or broker that specializes in it or you can do it by yourself or with an investment partner.
And in places like the USA where the economy collapsed a few years ago its easier to find deals where if you invest wisely (and spread the money over multiple properties, thus alleviating the risk) you can make a bundle.
During the height of the recession in Detroit there was properties being sold for $1. Just one dollar. They had been seized by the federal government for failure to pay back taxes. If a person wanted to buy those properties they could fish around, check which properties could be snapped up for $1 and whatever the back taxes were and they could get a chunk of land which 10 years from now might be worth $50,000 to $100,000 or more when the economy has recovered and Detroit becomes a desirable place to live in again. Too late now. All the really nice properties have been snapped up.
Cities like Memphis in comparison are less risky. The economy there is better. The prices are higher and the ROI is less, but at least there is comparatively little risk.
Food for thought.
Okay, maybe not worth dying for. After all if you're dead, you can't enjoy the beauty of these interesting and inspired kitchen desi...
If you've been following MY QUEST FOR A CONDO then you know I am trying to trade up and eventually get a condo in Toronto... via tradin...
The photo you are looking at above is a Google Street View photo of Antoine Berthelet Avenue in Montreal. The reason why is because th...
Did you know Toronto is one of the most expensive places to rent an apartment? In Toronto the average price of a two-bedroom apartment is $1...
CANADA - Looking to buy a cottage in Muskoka this summer? Good luck with that! (sarcasm) The cottage prices in the region are sky high (ie....
The Bank of Canada has raised interest rates again, making it more difficult for people to get a mortgage at an affordable rate. The key ove...
I was looking for something else when I found this artist's rendering of an architectural piece that looks like a King Cobra. I though...
Some people who are superstitious would prefer to avoid a house with a history... ie. its supposedly haunted. Wooooooooo... spooky! Others...
Kyle MacDonald is a Canadian Blogger who created a website called "One Red Paperclip". What he did was barter and trade his 1 re...
Whether you are building your dream home or looking to flip a house for a handsome profit, polished concrete is the way to go. I first s...