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Home Improvement
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Buying Your Dream House For A Lower Price
Did you ever dream of buying your own house?
Of course, everyone does! But the question is, can you afford it? For an average income earner, buying an affordable house is a $64 question. How can you save money out of a salary which has been allotted to fixed expenses like phone bills, electric bills, credit cards, health cards, taxes, etc.
You need not despair because there i... Read real estate article
Rates are Higher but Its a Buyers Home Market
Not much over a year ago, I was in a Jacksonville closing agents office. Everyone was scurrying around and the office was full of people there to close real estate transaction. On this same day, I witnessed a Realtor look at his cell phone ringing. He recognized the number and said to his assistant that he wasn't going to take the call "they only want to spend around $200,000, he said." Hmm? I am ... Read real estate article
Home Improvement
In recent years, it seemed that you just couldn't go wrong when improving your home. No matter what renovations were undertaken, or how much was spent, the property ended up being worth more than the original cost plus the cost of improvements.
In fact, many people have been making a living from flipping houses - buying a property, doing a quick make-over, and on-selling for a profit.
On paper, just about every renovation has seemed to be profitable. And yet the reality is that many home improvements are a financial disaster without people realising it. How can this be?
The answer lies in the steadily improving market prices of most properties, particularly those in sought-after areas such as California USA and Queensland Australia. A rising market will tend to hide poor home improvement decisions.
Let's take an example. Imagine a house bought in 2004 for $400,000. During 2005, $60,000 is spent on improvements, and in early 2006 the property is sold for $500,000. Leaving aside the transaction and holding costs for simplicity, that's a profit of $40,000 on the renovations, right?
Maybe. Maybe not. You see, what you have to take into account is what that property would be worth in 2006 if no improvements had been done. Let's say the general market growth had taken the value of that unimproved property to $450,000 during the 2004-2006 period. This represents a profit of $50,000, $10,000 more than the profit achieved through the home improvements being done.
By doing the improvements, the home owners needed $60,000 to fund the renovation costs, as well as all the time required to supervise the renovations and/or do some of the work. And they would have made more money by doing absolutely nothing!
You might be thinking, "Well, it doesn't matter really, because the property is still able to be sold at a profit", and to an extent you are right. The problem occurs when the market stops growing, and the market flattens out.
During 2005, thousands of property renovators on the east coast of Australia were caught out in exactly this way, when the property market in major cities went decidedly flat after a strong boom period ended in 2004. Because the market had stopped going up, many renovators who tried to sell their properties found that the market price of the property was less than the original cost plus the home improvement costs.
Those renovators who did not actually have to sell, had the option to wait for future increases in the overall market to lift the price of their property enough to cover their costs. But those who had to sell after carrying out unwise home improvements found that they were facing losses, in some cases very substantial losses.
The flow-on effect for the Australian market has been that there are few property investors around now, and expenditure on home improvement products is sliding.
The property market in the US is still quite buoyant, but there are many signs that the market's bull run is coming to an end. This is a time for home improvers to be cautious.
It is still possible to undertake profitable home improvements, but renovators need to follow strict guidelines and be very disciplined in their approach. Home improvements need to make financial sense whether the market is going up or not. After all, no-one wants to be caught once the music stops.
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High Rents Forcing People To Shift Their Location
The high rent prices are driving expatriates to live further from their place of work, causing traffic congestion. The trend has been noticed not only in Dubai, where a higher percentage of the expatriates tend to shift to Sharjah or even Ajman but in other Emirates, like Abu Dhabi as well. In Dubai, the hike in rent prices has generated three major tendencies:Ø Shifting location to other neighboring Emirates where the rents are lower;Ø Sharing accommodation, in an attempt to decrease the rent expenses;Ø Sending families home, to their country of origin as a last attempt to decrease costs;As a result of the first trend, accommodation tends to become more expensive in Sharjah and Ajman as well. In our previous articles we were presenting average prices for medium to top locations in Dubai. Other areas such as Bur Dubai, Deira, Al Ghusais have also followed the general upward trend in terms of rents. In Bur Dubai (Burjuman vicinity) the annual rent for a 2 bedroom apartment has increased to around AED 95,000 - 100,000 from a previous of around AED 70,000. A one bedroom apartment Bur Dubai is around AED 70,000 while a year before the same apartment would have been available for around AED 60,000. In Deira rents have increased as well, with a one bedroom apartment being priced at around AED 55,000. In 2004, one could have rented a similar apartment for AED 42,000. A two bedroom apartment can be rented out for AED 68,000 compared to only AED 60,000 or less in 2004. Apartment Rents AED/year
Area1 bedroom apartment2 bedroom apartmentsBur Dubai/Burjuman area70,00095,000Deira55,00068,000Karama58,00085,000Dubai Marina110,000140,000Sheikh Zayed Rd95,000125,000The Greens95,000120,000 While shifting to a less expensive location might be an option for families, for a single expatriate this might prove to be a lot easier said than done. In certain areas in Dubai, and even more in Sharjah, bachelors might have difficulties in renting an apartment. Some real estate companies are very circumspect about working with bachelors.Suppose you have found in the Classifieds an apartment and would like to go see it, even think of renting it. Do not be surprised if the agent will start asking you from the first telephone call annoying questions such as age, nationality, person on which the contract will be made. Upon giving the required information, they might inform you they will let you know on the apartment and never call back. Other real estate companies might simply tell you that the apartment available is for families only or that they need to re-check with the landlord if bachelors are accepted.
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