The Real Estate Bubble-when Will It Burst?Written by Nicole Soltau
More and more individuals are realizing that real estate is much safer, and a better return on investment than many traditional investment vehicles. Unlike stocks or bonds, real estate investments can usually be liquidated in order for investor to access funds in far less time. Additionally, unlike many other investment vehicles, real estate does not come with stiff penalties associated with early withdrawal. In most cases, investors can liquidate and not have to worry about losing large sums of money. Finally, real estate provides assurance of a higher yield of return than other types of investment.
On average, real estate appreciates about 4% per year. That means that a property you purchased five years ago, under normal circumstances with no significant wear and tear, would be worth at least 20% more than amount you paid for it five years ago. Some real estate markets perform significantly better than others at given times and with a mild remodeling or upgrade you could be looking at substantially higher returns on your investment.
Given these facts, itís no wonder so many people are jumping on real estate investment band wagon. It begs question however; when will real estate bubble burst?
There has been some speculation that wild investment in real estate market and they hype of outrageous investment returns has no where to go but crashing back down to Earth. After all; how is possible that real estate investments could possibly continue to double as they have in last few years? Some critics even point to fall of real estate market in Japan in late 1980ís. Homes that were worth thousands of dollars are now only worth a fraction of that amount while homeowners still owe almost entire full amount of first mortgage.
Choosing A Reputable Real Estate AppraiserWritten by Nicole Soltau
When you are considering purchasing a property; either for investment or personal use you will need to hire a real estate appraiser. If you are financing purchase through your credit union or another financial institution will most likely be required to hire a real estate appraiser to perform an appraisal on property. This is because your Credit Union (CreditUnionRate.com)wants to ensure that your dream home doesnít become a nightmare and that purchase they are financing is really worth amount loaned.
In best case scenarios appraisal is returned indicating that fair market value of home meets or exceeds sales price. The problem comes in when appraisal indicates that fair market value of home is less than sales price. In latter case, prospective buyer would either need to drop deal or renegotiate sales price with seller.
As you can see, it is critically important that you find a reputable and competent real estate appraiser. That one appraisal can easily make or break a deal. Even if you are not financing purchase through a lending institution it is still worth effort to insure that property you are investing in is really worth amount of purchase. If you should hire a less than competent real estate appraiser you find out hard way later on that property you purchased was not really worth amount that you paid.
Real estate appraisers perform an evaluation of a property and then provide a written evaluation after consulting standardized checklists and comparing property in question to county land value sources and sales information on nearby similar properties. The estimation of replacement costs is also taken into consideration. Finally, real estate appraisers must be able to verify legal land descriptions. As you can see, there is quite a bit of work involved in performing a competent real estate appraisal and it is important that each step be performed accurately.