I walk in a commercial area I have been in before, but there is a new sign for a real estate agency. Being a realtor requires a widely variable skillset. You must not only have people skills and nurture the buyers and sellers, but also have mathematical, language and technical skills to master interest rates and payments, read real estate contracts and communicate effectively. My favorite TV realtor is Phil Dunphy from Modern Family. I don’t know that he was a great salesman, but was always good for a laugh. Being a realtor requires spending lots of time showing people houses often with little financial reward. There really is no instant gratification in the real estate business. It takes months of hard work. Of course, making that high-dollar sale can taste very sweet. Let’s learn more about real estate.
According to Wikipedia, real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, more generally buildings or housing in general.
Real estate is different from personal property, which is not permanently attached to the land, such as vehicles, boats, jewelry, furniture, tools and the rolling stock of a farm.
Residential real estate
Residential real estate may contain either a single family or multifamily structure that is available for occupation or for nonbusiness purposes.
Residences can be classified by and how they are connected to neighboring residences and land. Different types of housing tenure can be used for the same physical type. For example, connected residences might be owned by a single entity and leased out or owned separately with an agreement covering the relationship between units and common areas and concerns.
Apartment
An apartment (American English) or flat (British English, Indian English, South African English) is a self-contained housing unit that occupies only part of a building, generally on a single story. There are many names for these overall buildings. The housing tenure of apartments also varies considerably, from large-scale public housing to owner occupancy within what is legally a condominium to tenants renting from a private landlord.
Brownstone rowhouse
Brownstone is a brown Triassic–Jurassic sandstone that was once a popular building material. The term is also used in the United States to refer to a townhouse clad in this or any other aesthetically similar material.
Condominium
A condominium — often shortened to condo in the United States and in most Canadian provinces — is a type of living space (often, but not necessarily, similar to an apartment) but independently sellable and therefore regarded as real estate. The condominium building structure is divided into several units that are each separately owned, surrounded by common areas that are jointly owned. Condominiums are a type of common-interest development. Similar concepts in other English-speaking countries include strata title in Australia, Malaysia, New Zealand and the Canadian province of British Columbia; commonhold in England and Wales; and sectional title in South Africa.
Residential condominiums are frequently constructed as ordinary apartment buildings, but there has been an increase in the number of "detached condominiums," which look like single-family homes but in which the yards and gardens, corridors, building exteriors and streets — as well as any recreational facilities like a pool or pools, bowling alley, tennis courts, golf course, etc. — are jointly owned and jointly maintained by a community association.
Unlike apartments, which are leased by their tenants, condominium units are owned outright. Additionally, the owners of the individual units also collectively own the common areas of the property, such as corridors/hallways, walkways, laundry rooms, etc., as well as common utilities and amenities, such as the HVAC system, elevators and so on. Many shopping malls are industrial condominiums in which the individual retail and office spaces are owned by the businesses that occupy them while the common areas of the mall are collectively owned by all the business entities that own the individual spaces.
The common areas, amenities and utilities are managed collectively by the owners through their association, such as a homeowner association.
Scholars have traced the earliest known use of the condominium form of tenure to a document from first-century Babylon. The word condominium originated in Latin.
Italy uses condominio, which is simply the modern Italian form of condominium.
Both condo and condominium are used colloquially in the Canadian province of Quebec, where the official term is divided co-ownership or copropriété divisée. In France, the term is simply copropriété or "co-property," and the common areas of these properties are usually managed by a syndicat de copropriété or "co-property union" — "union" in the sense of "association."
Spanish-speaking Latin American nations often use the term propiedad horizontal, literally meaning "horizontal property" but abstractly meaning that all owners of the property have equal interest. The word condominio is also used. In Spain, the legal term is comunidad de propietarios and the popular term is comunidad de vecinos.
Duplex
A duplex house plan has two living units attached to each other, either next to each other as townhouses, condominiums or above each other like apartments. By contrast, a building comprising two attached units on two distinct properties is typically considered semi-detached or twin homes but is also called a duplex in parts of the northeastern United States.
The term "duplex" is not extended to three-unit and four-unit buildings, as they would be referred to with specific terms such as three-family or triplex and fourplex or quadplex/quadruplex or a more general multiplex. Because of the flexibility of the term, the line between an apartment building and a duplex is somewhat blurred, with apartment buildings tending to be bigger, while duplexes are usually the size of a single-family house.
Houseboat
A houseboat is a boat that has been designed or modified to be used primarily as a home. Some houseboats are not motorized, because they are usually moored, kept stationary at a fixed point and often tethered to land to provide utilities. However, many are capable of operation under their own power. Float house is a Canadian and American term for a house on a float or raft; a rough house may be called a shanty boat. In Western countries, houseboats tend to be either owned privately or rented out to holiday-goers, and on some canals in Europe, people dwell in houseboats all year round. Examples of this include, but are not limited to, Amsterdam, London and Paris.
Housing cooperative
The photo shows Co-op City in The Bronx, New York City, the largest cooperative housing development in the world with 55,000 people.
A housing cooperative or housing co-op is a legal entity, usually a cooperative or a corporation, which owns real estate, consisting of one or more residential buildings; it is one type of housing tenure. Housing cooperatives are a distinctive form of home ownership that has many characteristics that differ from other residential arrangements such as single-family home ownership, condominiums and renting.
The corporation is membership-based, with membership granted by way of a share purchase in the cooperative. Each shareholder in the legal entity is granted the right to occupy one housing unit. A primary advantage of the housing cooperative is the pooling of the members' resources, so that their buying power is leveraged, thus lowering the cost per member in all the services and products associated with home ownership.
Another key element in some forms of housing cooperatives is that the members — through their elected representatives — screen and select who may live in the cooperative, unlike any other form of home ownership.
Housing cooperatives fall into two general tenure categories: non-ownership (referred to as non-equity or continuing) and ownership (referred to as equity or strata). In non-equity cooperatives, occupancy rights are sometimes granted subject to an occupancy agreement, which is similar to a lease. In equity cooperatives, occupancy rights are sometimes granted by way of the purchase agreements and legal instruments registered on the title. The corporation's articles of incorporation and bylaws, as well as occupancy agreement, specifies the cooperative's rules.
The word cooperative is also used to describe a non-share capital co-op model in which fee-paying members obtain the right to occupy a bedroom and share the communal resources of a house owned by a cooperative organization. Such is the case with student cooperatives in some college and university communities across the United States.
Mobile home
A mobile home — also known as a manufactured home, park home, trailer, trailer home, house trailer, static caravan, RV, residential caravan, motorhome or simply caravan — is a prefabricated structure, built in a factory on a permanently attached chassis before being transported to a site, either by being towed or on a trailer. Used as permanent homes or for holiday or temporary accommodation, they are often left permanently or semi-permanently in one place, but can be moved, and may be required to move from time to time for legal reasons.
Mobile homes share the same historic origins as travel trailers, but today the two are very different in size and furnishings, with travel trailers being used primarily as temporary or vacation homes. Behind the cosmetic work fitted at installation to hide the base, there are strong trailer frames, axles, wheels and tow-hitches.
Single-family detached home
A stand-alone house — also called a single-detached dwelling, detached residence or detached house — is a freestanding residential building. It is sometimes referred to as a single-family home, as opposed to a multifamily residential dwelling.
A single-family home, house or dwelling means that the building is a structure maintained and used as a single dwelling unit. Even though a dwelling unit shares one or more walls with another dwelling unit, it is a single family residence if it has direct access to a street or thoroughfare and does not share heating facilities, hot water equipment nor any other essential facility or service with any other dwelling unit. In some jurisdictions, allowances are made for basement suites or mother-in-law suites without changing the description from "single family." It does exclude, however, any short-term accommodation (hotels, motels or inns), large-scale rental accommodation (rooming or boarding houses and apartments) or condominiums.
Most single-family homes are built on lots larger than the structure itself, adding an area surrounding the house, which is commonly called a yard in North American English or a garden in British English. Garages can also be found on most lots. Houses with an attached front entry garage that is closer to the street than any other part of the house is often derisively called a snout house.
Terraced house
In architecture and city planning, a terrace or terraced house (UK) or townhouse (U.S.) is a form of medium-density housing that originated in Europe in the 16th century, whereby a row of attached dwellings share side walls. They are also known in some areas as row houses or row homes — especially in locations such as Philadelphia, New York, Baltimore, Boston, Chicago, Pittsburgh, St. Louis and Washington, D.C.
Terraced housing can be found throughout the world — though it is in abundance in Europe and Latin America — and extensive examples can be found in the United Kingdom, United States, Canada and Australia. The Place des Vosges in Paris (1605–1612) is one of the early examples of the style. Sometimes associated with the working class, historical and reproduction terraced houses have increasingly become part of the process of gentrification in certain inner-city areas.
Though earlier Gothic ecclesiastical examples — such as Vicars' Close, in Wells, Somerset, England are known — the practice of building new domestic homes uniformly to the property line really began in the 16th century following Dutch and Belgian models and became known in English as "row" houses. For example, in "Yarmouth Rows," Great Yarmouth, Norfolk, the building fronts uniformly ran right to the property line.
The term terrace was borrowed from garden terraces by British architects of the late Georgian period to describe streets of houses whose uniform fronts and uniform height created an ensemble that was more stylish than a "row." Townhouses or townhomes are generally two- to three-story structures that share a wall with a neighboring unit. As opposed to apartment buildings, townhouses do not have neighboring units above or below them. They are similar in concept to row houses or terraced houses except they are usually divided into smaller groupings of homes. The first and last of the houses is called an end terrace and is often a different layout from the houses in the middle, sometimes called mid-terrace.
As an investment
In markets where land and building prices are rising, real estate is often purchased as an investment, whether or not the owner intends to use the property. Often investment properties are rented out, but "flipping" involves quickly reselling a property, sometimes taking advantage of arbitrage or quickly rising value, and sometimes after repairs are made that substantially raise the value of the property.
Luxury real estate is sometimes used as a way to store value, especially by wealthy foreigners, without any particular attempt to rent it out. Some luxury units in London and New York City have been used as a way for corrupt foreign government officials and businesspeople from countries without strong rule of law to launder money or to protect it from seizure.
Best places to invest in real estate overseas
Panamá
According to Kathleen Peddicord’s Dec. 27, 2019 article “10 Best Places to Buy Real Estate Overseas in 2020” at liveandinvestoverseas.com, Panamá is by far one of the best places to buy real-estate overseas. She recommends Panamá for two things specifically —apartments for rental and agricultural opportunities.
She remains very bullish on the Panamá City rentals market. Yields continue strong, though not as strong as they were a couple of years ago, primarily because rents have softened.
Argentine, Colombian and Venezuelan buyers have helped to keep the Panamá City market stable and growing over the last 10 years, even while other markets in this region have struggled or even collapsed.
Today, North Americans and Europeans continue to invest, but it’s Panamá’s new relationship with China that she predicts will fuel the economy through its next stage of growth. If the Chinese come in volume, as they did in Vancouver in the 1990s, Panamá City property prices will soar to new levels.
The second big opportunity for making money from real estate in Panamá is productive land. This country’s interior is a fertile breadbasket. Individual investors can participate in organic plantations for turnkey agro-profits.
A great website to look for real estate in Panamá is www.encuentra24.com.
Brazil
Brazil is a big country of many different property markets, some more interesting than others. She recommends focusing on the Fortaleza area. This coastal region is a top destination among Brazilian tourists. Rentals targeting the local holiday market can earn better than 8% net yield reliably.
She also recommends an investment in beachfront along this coast, where lot prices are a global bargain.
The Brazilian real remains stable against the U.S. dollar at around 3.81 reals to US$1 and historically weak relative to the rate of 1.6 reals to the dollar of a decade ago.
Good yields and a weak currency make this country a very strong buy.
Dominican Republic
In the Dominican Republic, Peddicord recommends focusing on the capital, Santo Domingo. The Dominican Republic is enjoying continued strong growth, as well as increasing foreign direct investment. All those business travelers coming to get in on the country’s economic boom pass through Santo Domingo, and they all need places to sleep.
Meantime, tourism figures continue to impress, as well; this country saw more than 6.2 million tourists in 2017, up 3.9% from 5.9 million in 2016.
A furnished rental for either of these markets — the business traveler or the holiday-goer — can be an excellent source of cash flow and, if you buy right, should enjoy good capital appreciation.
One of the best opportunities, specifically, is to invest pre-construction in an apartment intended for the business traveler market. Businesspeople staying longer than a week prefer an apartment to a hotel.
Note that it can be possible to qualify for financing as a nonresident. She doesn’t recommend financing property overseas, however, unless you are sure you can cover the mortgage payment even without any income from the financed property.
That said, Santo Domingo city apartments rent well, and you should have no problem covering your mortgage payment from your rental income.
This classified website has the most listing of real estate in the Dominican Republic: inmuebles.mercadolibre.com.do.
Thailand
She likes Thailand for agriculture primarily but thinks this country deserves attention for its strong economy and expanding tourism industry, as well.
The downside in Thailand is that restrictions are placed on how foreigners can own property. Foreigners are only able to own land leasehold.
A foreigner can hold freehold title to the construction on the land, but unless your house is portable, you might not take comfort from that.
Foreigners are also permitted to own condos freehold, as long as foreigners don’t own more than 49% of the total area of the condo building.
For this reason, the condo market is where most foreign investors focus their attention. A condo is also cheaper and easier to manage as a rental than an individual property.
Bangkok was the No. 1 visited city in the world in 2018, according to one survey. This city last year received more visitors than London or Paris. Again, that’s worth the would-be property investor’s attention.
Portugal
Property markets in Portugal have been on the move since 2015, making Portugal one of the best places to buy real estate. Some neighborhoods in Lisbon, for example, are now priced beyond what makes sense for property investment. Other areas of this city, however, continue to offer good value and opportunity, especially if you’re up for a renovation project.
Peddicord recommends focusing on the lesser-visited areas along the country’s Algarve coast and the Porto region north of Lisbon.
Portugal is another country where it’s possible for a nonresident to get a mortgage.
France
She has been sold on the Paris real estate market for decades and has owned in the city for about 15 years. Prices go up and down, as they do everywhere, but a piece of Parisian real estate is one of the surest imaginable stores of wealth long-term.
The U.S. dollar is still creating euro bargains for American buyers. Another good reason to be looking right now at both Portugal and France.
Another of the most appealing features of the French property market is that this is another country where foreigners are eligible for in-country financing. In fact, interest rates for French mortgages for foreigners are at historic lows of less than 2% interest, with loan-to-values as high as 85%.
Mexico
Put concerns about the drug cartels aside. Mexico remains a top destination among Canadians and Americans for both tourism and retirement and is enjoying good growth in the local tourism market as the country’s middle class continues to expand. All that combines to make Mexico a top choice for a property rental investment.
Top markets include Puerto Vallarta on the Pacific coast and Playa del Carmen on the Riviera Maya. In both of these popular tourist towns, a rental property can generate an excellent yield.
Mexico offers financing options for non-residents, generally from U.S. lending institutions set up in Mexico specifically for that purpose.
Belize
Peddicord believes the tourism and resident expat markets on Belize’s Ambergris Caye will continue to expand, meaning this still-undervalued Caribbean island is another good choice for a rental investment making Belize one of the best places to buy real estate overseas.
Elsewhere in Belize she would focus on Cayo, where quality rental accommodation at a reasonable price is hard to come by. If you were to build a high-quality rental, you could make a good yield by pricing your property competitively relative to the local hotels that you wouldn’t let your mother-in-law stay in.
Turkey
The attempted coup in this country in 2016 has kept many foreign investors away since. Meantime, values in Istanbul have surged.
Istanbul was the world’s 9th most visited city in the world in 2018. That was behind brand-name cities like Paris, London, New York and Tokyo — but ahead of other major cities, including Berlin, Barcelona, Rome and Los Angeles.
In addition to tourism growth, Istanbul and Turkey in general are enjoying strong economic growth as the population increases and the middle class expands. I see both tourism rentals and student rentals as appealing rental investment options.
One of the biggest selling points for such an investment in Istanbul is the low cost of entry. A rental unit in this market can be within most any investor’s budget.
Turks and Caicos
At the other end of the budget spectrum is the higher-end Turks and Caicos.
People might not agree this is one of the best places to buy real estate overseas. Ordinarily, a high-end property does not generate the level of net rental yield that can be possible from a lesser investment.
Long-term rents for a luxury-standard house in the United States, for example, don’t generally reflect the premium price of the property.
A luxury purchase in the Turks and Caicos can be an exception to this rule. It can be possible in this Caribbean market to earn a net rental yield of 8% even from a high-end investment.
Banks in the Turks and Caicos will lend to nonresidents. At the price points of the luxury rentals in this market, you definitely want to be conservative with any mortgage you take out, in case rental income slows for any reason.
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