Commercial real estate

Best Real Estate Investments for 2012

The receding economic recession left behind chaos and disaster in the financial and the real estate sector. As a result the confluence of these sectors that is the real estate investing and the mortgage industry have been worse affected. The result is that even in 2011, the real estate market in the USA was generally dull and several investment portfolios performed poorly. From the point of view of investment, it seems that the same issues will haunt us all through 2012. While many of us may think that way, the truth is that this can also be quite a good opportunity to invest money into the real estate.

Now, before we go any further, make a note that this article is quite generic in nature and applies to most of the regions of the United States. However, in high real estate markets, some of these facts, equations and theories may not apply because the market still remains driven by factors such as prestigious locations and also prices of surrounding estates.

Economics of Real Estate Investments

The aforementioned ‘weird’ trends in the real estate markets have arisen as a result of the sub-prime crisis and also the overall recessionary cycle. The problem plaguing the real estate market is that in several places the market and equity value of the real estates have been in limbo as a result of the market conditions. Nevertheless, with the speedy recovery of the harsh economy, estate markets can be attractive investment tools to make decent money. Let us understand the general scenario of the estate markets.

The real estate markets operate on the basis of the laws of demand and supply.

In a nut shell, these laws principally imply that more the demand for a particular property, the more is the cost of the property, and hence the high real estate cost in New York City or other desirable places. Conversely, when the demand is less, so is the cost of the property.
Usually, the supply side of the graph also affects the cost side of a commodity. However, the supply side is absent for the real estate market as let’s face it, we cannot produce land and we also cannot increase the land area of earth (beyond a certain extent).

The reason that the real estate market collapsed in the United States, in the last couple of years was because of the sub-prime lending and the recession. There are a lot of factors to blame.

When the sub-prime crisis led to the recession, foreclosure and bankruptcy become rampant and people even resorted to short sale. In such a case, the market saw time where the properties were sold or were valued for much lesser than their prior valuation.
Further due to the drastic fall in the economy due to nationwide job cuts, unemployment and salary delays, it meant that the demand for properties dwindled even further, decreasing the market prices.
After the end of the recession, as of now, bad credit scores, unemployment and a general decrease in the growth rate of the economy have affected the real estate and mortgage markets.
As of now, in 2012, reports from several industry specific magazines and sources have indicated that foreclosures in 2011 were lesser than the previous year. So, it can be believed that this year will propel the real estate sector, faster than ever.

Owing to the general negative atmosphere regarding investments in property and difficulty in availability of capital to buy the property, real estate markets have shown a relatively slower trend. Nevertheless, under the guidance of expert brokers, dealers, best property deals are still very much possible. By properly analyzing budget, chalking out a timeline to buy the property and planning carefully about the return on investment, one can make successful deals. However, some questions like the kind of real estate one should invest or how is the investment to be done, must be pondered. Let us understand more about them.

Insights into the Real Estate Market

Some common trends of the real estate investments have been suggested in the following paragraphs.

1. Mortgage Loan Trends
Now when you consider investing in the real estate, you will have to obviously take a mortgage. In such a case, the common problem that is usually faced today by a number of people is that lenders simply refuse to grant loans owing to falling real estates market rates. In such a case there are two good alternatives which would help you to get a loan: proof of steady income and a really good credit report, with a rating that goes beyond 600 or 650. Apart from these two conditions, make it a point to purchase a real estate, in a locality where price fluctuations have been relatively low.

2. Smaller and More Compact Homes
The usual market trend of the larger suburban homes, has given away to smaller compact homes and in certain cases, even apartments. Hence, buying a villa or a large house and then, separating its rooms into independent units and selling them or even better, renting them out is a great option. Of recent, houses and bungalows which are quite nearer to the cities and urban areas are being torn down and converted into big apartment complexes with the intention of selling or renting the property.

3. Buying Foreclosed and Short Sold Homes
Purchasing and using short sold homes always proves to be beneficial, there is only one problem which would be experienced. Foreclosure or short sale would usually bring down the market prices and values of all the real estates in the given area, and it would be a couple of years before the price rises. Assess the economic premise of the real estate for clues such as crime-free or beautiful locality or even proximity to commercially important places such as business avenues or prominent business complexes because such properties tend to have good value projections.

As the value of real estate is determined on the basis of demand and supply, you need to worry about the value rise of property. Since the world population is always on the rise and the real estate supply is limited, the price or value of your real estate is bound to go up in years to follow. The rate of rise however, differs quite a bit. Actually, this factor makes the real estate one of the best investments.

While buying any real estate, think and analyze the situation of the real estate, also analyze the locality and the geographical location in which it is located. Such things often serve to be great pin-pointers as to the value projections of the real estate.
By Scholasticus K
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Commercial real estate

Investing in Real Estate for Retirement

Over the last few years, the interest rates of various investments have fallen and despite all the attempts taken to make the economy stable, millions of people had to extend their work years just to maintain the minimum standard of living. Yes, everything lost has its value, but one asset has only risen in spite of this recession – real estate. Most people dream about spending their retirement period in a calm and quiet place. A place where the crime rate is low and the entire surrounding is filled with intelligent people who are just living the much-needed peaceful and retired life. However, all these dreams can only turn into reality if an individual makes intelligent decisions regarding his/her investments.

How to Invest in Real Estate for Retirement

There’s no doubt that investing in real estate is a smart move, but it is advised to check out all the loopholes before putting money in a piece of property. Buying real estate is more than just living on a piece of land. The practice of property selling and buying has become a popular practice over the last few years, and more and more people are joining this bandwagon. Yes, the real estate market has plenty of lucrative opportunities for investors, but sometimes dealing in real estate can be more complicated than dealing in stocks and bonds. In this piece of information, we understand different and safer ways of investing money for real estate.

Giving on Rent
An vacant, habitable house can rented to a tenant for a considerable period of time. The owner pays for its maintenance, mortgage and various additional taxes. The rent on the property is usually decided on the basis of its location. The land owner earns a fixed income every month which is known as rent. In due course of time many landowners charge more rent in order to gain more profit. However, the best thing to do is to charge rent which would be enough to cover the mortgage payment. Plus the value of the property is likely to have appreciated with time. As soon as the tenant moves out due to various reasons, it is advised to put up the property on the market to earn additional profits.

Real Estate Trading
This is perhaps the fastest form of making money in the market of real estates. In real estate trading, the traders buy properties from owners with the motive of holding them temporarily and selling them for a better profit later. This practice is also called ‘Flipping Properties’ and traders who follow this usually purchase properties which are highly undervalued or are very high-priced. In some cases, when traders purchase a low priced property, they try to increase its value by doing some renovations on the property. This customization can actually result into a huge profit for the trader.

One of the most easiest ways of investing in real estate is putting money in the Real Estate Investment Fund (REIT’s). A RIET is created when a trust or a corporation uses the investor’s money to buy and operate properties. RIET’s function just like stock trade. The trust or corporation has to pay out 90% of all its taxable profits in the form of dividends to its various investors. By paying the dividends, the REIT is exempted from paying corporate income tax. RIET is the perfect choice for people who want to earn regular income.

401 (k)
Most people believe that the money saved through the 401 (k) plan is simply for retirement. However, there are some smart investors who have figured out ways to invest in real estate without disturbing the money saved for retirement. 401 (k) account holders can take out a loan against their account. The money which comes from the loan can be used to buy real estate. However, there are some limitations which come with the loan. First and foremost, there’s a cap on the amount which can be borrowed. Normally the cap is of $50,000 but it can be less depending on the money in the 401 (k) account of an individual. Another thing to remember is that real estate purchased through this method is not eligible for any tax benefits.

Roth IRA
Almost everyone in the US knows about the Roth IRA (Individual Retirement Account), it is a great form of investment and is non taxable. People who open an IRA account deposit some money from their salary in the IRA for retirement. In some companies the employer deducts some part of the salary and deposits it in the IRA of the employee. The good news here is people can use the IRA money to invest in real estate. Let’s make it more simple; If you have $50,000 in your IRA account and you want to purchase a property which is priced at $100,000. You can put in $50,000 of your own money and put in more $50,000 from the IRA. This makes your IRA account nil but you can put back that $50,000 once you sell that property at a better rate.

For legal advice regarding these investments, it’s necessary to get in touch with your attorney.

Investing money in real estate for retirement is a good idea if the investor keeps himself/herself updated with the latest regulations and strategies of the market. Real estate is perhaps the best way of earning easy money in retirement but before the game of investment begins it is a good idea to know all the rules.
By Kulbhushaan Raghuvanshi
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Commercial real estate

Investing in Commercial Property

In the aftermath of the real estate property market meltdown, people were naturally averse to taking risks, by investing in residential and commercial property. As a seasoned investor would advise you, in such bearish times, there are a lot of opportunities to take advantage of. With the real estate prices hitting rock bottom in recent times, many properties can be bought, at a fraction of the price they would have earned during boom time. While there is substantial amount of risk involved in buying commercial property, with proper research and wise choice, there’s profit to be made. At the outset, let me expound some of the advantages of investing in properties of the commercial kind.

Advantages of Investing in Commercial Property

Commercial properties primarily include office spaces, shops, storage warehouses, industrial spaces or any other piece of real estate that is leased out or used for commercial purposes. Location and space are two of the prime requirements of businesses and leasing a property is a much more affordable option for them, instead of buying it. This presents commercial property investors with an opportunity to make substantial profits.

One of the prime advantages of investing in commercial properties are the long leases and high rent that owners can earn. Compared to residential properties, commercial ones tend to maintained a lot more professionally, which automatically reduces expenses. The high percentage of return on investment, in excess of 8% to 9%, justifies commercial real estate investment.

Properties in prime locations can expect an annual hike of 3% to 4% in rent, which guarantees higher returns in the future. By handing over the maintenance and administration to a commercial property management firm, you can simplify your life and reap profits in the long term. Commercial property that are located in prime business zones are always in demand and hence you can expect a decent resale value in the future, when the prices in that locality appreciate substantially.

Commercial Property Investment Tips

You need to appreciate the prime importance of ‘Location’, when it comes to investing in commercial real estate. Businesses are looking for office, shop spaces, warehouses with all the necessary amenities and resources in their vicinity. So choosing a commercial space in the right location is the first important thing and it requires a substantial amount of market research to find such properties. You will have to network with real estate agents, who have a database of such properties on sale.

Decide on how much you are willing to invest, which will automatically limit your choices and help you focus on what kind of properties you can afford to invest in. Once you have shortlisted a few properties, determine the asking price and the projected returns through lease, after accounting the maintenance and taxation costs. If you are thinking of buying commercial property and plan to arrange for the investment corpus through a mortgage loan, do the math and determine the profits you will gain in the future after maintenance costs and loan installments. If the math shows you that the investment is a feasible one and you are guaranteed that your principal is safe with decent returns, go for it!

If you have a commercial space in a prime location, there is always going to be demand from businesses and the chances of your investment being highly profitable are higher. Work out the yearly maintenance costs for the property, research every aspect of the investment thoroughly before going ahead. Here’s me wishing you all the very best for your commercial property investment endeavors!
By Omkar Phatak
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Industrial revolution

Robber Barons

In the Cartoon:
Cyrus Field, Jay, Gould, Cornelius Vanderbilt and Russel Sage are represented here basking in their luxury while laborers who work with cheap wages work hard to hold up their profits and lifestyle.


In 1870  The Robber barons, or the captains of industry were industrialists who controlled the whole industrial market. Robber barons could make prices lower and then , once they owned the market, could hike up prices
they donated a lot of their money but the government was worried about crushing free competition.
With all the new inventions capitalism grew, Rockerfeller began
to use horizontal and vertical integration to control the market.
Commercial real estate

How to Start Investing in Real Estate

Real estate has always been a good investment option. It is also a much safer option compared to other forms of investment such as the stock market. However, before you invest your hard-earned money, it is necessary that you are aware of the risks and expected returns from the investment. So, this article will give you some pointers on how you can go about beginning your foray into the real estate business.

Market Study
If you wish to invest in real estate, but have a limited budget, then conduct a thorough market research to know about attractive investment opportunities. By doing a careful study, you will understand which property deal suits you the best and will generate the maximum returns.

Fix Your Budget
First fix the budget for your realty investments. Decide what is your investment capacity first. Before you decide the amount to be invested, take into consideration factors such as your annual income, current liabilities, monthly expenses, etc.

Finalize the Type of Property
There are different kinds of properties you can choose from. Apartments, row houses, independent villas, bungalows, penthouses, offices, shops, residential plots or commercial land are some options which you can explore. Be aware that commercial establishments will cost much more than the residential ones.

Finalize the Location
Location plays a crucial role in all kinds of real state investments. Whether you get good returns for your property will depend on where your estate is located. So, study the areas in the city and find out the current property rates and scope for further price appreciation there. Ideally, you can try to invest in upcoming locations where you can get properties at cheap prices.

Check the Developer’s Reputation
Checking the reputation of the property developer/builder from whom you will be purchasing the property is extremely important. You should buy a property from a developer who has a good track record of delivering properties on time and having the best construction standards and quality in the real estate industry. Make sure that the developer has followed all the necessary laws while constructing the project and there are no controversies and legal hassles.

Check the Plan
The next step is to check the floor plans with the developer. Visit the developer and understand each and every minute detail and specification of the project. Take along a property agent/realtor whom you know so that he can guide you in your property selection.

Get Finance from Lenders
Real estate is one of the biggest investment options in the life of any person and a lot of money is required for that. So, you might feel the need for finance and hence you should approach top banks with your income and personal information details. Also take the project details to get your loan sanctioned easily.

One way to invest in real estate is by selling a property you own and buying a new one for higher returns. So use these tips and some advice from an expert before you dabble in the world of real estate.
By Charlie S
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Industrial revolution

Industrial Causes and Invention Time Line

Link to time line

During the industrial Revoltion a plethora of new inventions came about to make working more efficient. These inventions also helped to reduce the need of labor. This would later lead to the use of cheap labor with immigrants.
Commercial real estate

Real Estate Vs. Stock Market Investing

Recently in the Forbes magazine, I came across, a delightful term, ‘accepted wisdom’. My interpretation is that accepted wisdom is something that is handed out, free of cost, and is irrational and illogical. But here, I will provide some insights that are based upon logic, not on accepted wisdom and certainly not my personal wisdom that are sure to help you tackle your dilemma about investing in real estate or stocks. The problem with both the fields is that you cannot set an arithmetic equation which is 100% correct, to ascertain the rate of return on investment that you would receive. Hence the confusion and dilemma, as both options seem equally pleasing and at the same time uncertain. Well, every channel of investment has its own pros and cons.

Investing in Real Estate

When clearing the dilemma about where to invest – real estate or stock market, you must have a time frame in your mind. The time frame for any kind of real estate investment ranges from 7 to 30 years depending upon the size and the purchase cost of the real estate. The actual amount invested in it would amount to about 15% or so of the equity value of the real estate. To gain a good return on the total invested amount, you will have to look for a real estate which has a rising equity value, that is the market value of the real estate should be on the rise. So here’s how the usual mechanism works out:

First off you will have to finalize the actual property or what kind of real estate you are looking for. It can be anything right from bare and barren land to a studio apartment.
Now, when you try to find and finalize the type of real estate there are some very essential factors which you would have to consider. How safe is the neighborhood?, is a prominent factor of these. A safe neighborhood means a rise in the equity value of the investment in future. Similarly, a huge mall nearby, means a rise in the equity of the real estate. A New Mount Rushmore like site in construction near your property, can bring rise in the equity.

Thirdly, you have to improve your credit score as the more is your credit score, the less would be the interest on the mortgage. The interest on mortgage plus charges such as closing costs and commissions are your only expenses in the total investment deal. Because the principal amount of the mortgage, which you would be borrowing and paying off in the mortgage loan, would be ultimately owned by you as the equity.
The only problem with such an investment, is that the rate at which the equity would grow is unpredictable. It can be very fast or at the same time quite stagnant.
This real estate can be used as money-maker in 3 ways. The first option is that you can rent it out to people. You can borrow loans and lines of credit by pledging the real estate and its equity as a collateral. Such loans are known as home equity loans and are personal loans. Lastly, you can sell off the property if the real estate prices in the locality sky rockets.

Let’s take a look at the probable pros and cons of this investment.

Cons: There is always a chance of facing foreclosure, however you have the option of short sale. Secondly, you have the liability of the mortgage loan for quite a long time period. Thirdly, the investment is in bulk, you can lose everything in one go in case of any financial crisis which might result into real estate price drops.
Pros: It’s a very secure investment and the chances of losing everything is very, very less. Secondly, if you have a well-paying secured job then getting and paying off the mortgage is not a big deal.

Best of all, if you are in your middle ages, 35+, with a well-paying job then this is a really, really good investment for you. Just make sure that you pay off the mortgage on time.

Investing in the Stock Market

The stock market is also another quite a good option, though there are a few disadvantages of this investment option. Again like the real estate, it’s impossible to figure out the rate of return on investment. A very nice word can be used to describe this investment, ‘dicey’ yet profitable. The thing that scares several people away from the stock market investments is that there is always a possibility that one might lose all the money invested. There are of course, several strategies and methods which are followed by the professional and institutional investors. The following are the basic mechanisms.

Now, when you invest into any stock related investment, you will need to consider the total commission, loads, charges and minimum balances that you will have to pay the brokers. The amount though small, if not complied with can incur dire and mortifying actions from the United States Securities and Exchange Commission. Hence making appropriate and effective provisions for such charges is an absolute necessity. Again note, compliance is of negligible cost.
Now, the basic trick of the trade, to make money though the stock market is to buy the stock at lower market price and sell it at a higher one. This shall always be your basic motive of trade, buy at the lowest possible and sell at the highest possible. Now, you would have to keep a watch on the stocks which you buy on a daily basis for this purpose.
Secondly, you can also buy stocks which remain really stable yet, give a pretty good dividend.
Lastly, it is also necessary to obtain a good overall yield. A yield is chiefly, the total of the dividends that you received from a said investment plus the total sales value of stock minus the price at which you bought the stock. Now, it goes without saying that the dividend plus sale price of the stock should exceed the purchase price substantially.
The best way to attain the aforementioned objectives is to research continuously about the stocks, on company websites, stock exchange websites, economic news, etc. Being well aware would substantially help you purchase and sell at the right time and price.

Let’s take a look at the pros and cons of this investment option.

Cons: There is a possibility that you may lose everything that you have invested as, prices rise and fall rather quickly in stock markets. Secondly, you have to keep on updating your knowledge non stop and round the clock.
Pros: In comparison to the mortgage, you invest relatively low volumes in the stock markets. Yet you can have substantial rate of returns. Secondly, you do not have a prolonged liability on your balance sheet.

If you are in your twenties, then this is the best investment for you as you can take the risk of trading. In such a case, you can afford to take such a risk. If the investment fails you then you will still have ample time in your life to recover from it than an investor past his 50’s.

Before you invest, there are two things that you need to consider. Firstly, is the stock is worth investing in, and which one is better for me. Secondly, can I take up other options such as annuities or mutual funds and still get similar (equal) rate of return on investment.
By Scholasticus K
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Industrial revolution

Interstate Commerce Act

Granger laws were made to regulate trains and the railroad, but in 1886 Surpreme Court ruled that the granger laws were unconstitutional.

In 1887 The Interstate Commerce Act gave the federal government the right to supervise railroad activity through a 5 member Interstate Commerce Comission (ICC)

The ICC was not powerful enough, especially after supreme court ruled that the ICC could not set a max rate. The ICC only got power in 1906 when President Roosevelt came into office

“American Frankenstein”

This picture shows how the train, a mans creation has turn against its creator by attaking the people of the nation.
Industrial revolution

Effects of the Industrial Revolution: Child Labor

 A child millworker is shown here. She runs 4 sides of the mill on 48 cents a day. When asked how old she was, she hesitated, then said, “I don’t remember,” then added confidentially, “I’m not old enough to work, but do just the same.”


Here shows several young boys working in a textile factory in the late 19th century.
Industrial revolution

Effects of the Industrial Revolution: Labor Unions and Strikes

Labor Unions/Reformers:
Due to the increase in poverty, child labor, dangerous conditions in factories, and lower standard of living from the industrial revolution many labor unions came about. One of the main figures of these labor unions was Eugene Debs. Eugene Debs was the head of the IWW- Industrial Workers of the World- a group of radical unionists and socialists in Chicago. The IWW wanted to included workers skilled and unskilled.

an illustration of the Haymarket Affair
The Social Gospel Movement brought about reforms that preached salvation through service to the poor. Many women at this time were a part of this including Jane Addams and Janie Porter barrett. Jane Addams created the first settlement house in 1886 while Janie Porter Barrett founded the Locust Street Social Settlement, the first settlement home for African Americans. These people worked to educate and help the poor in cities and slum areas. These many acts of kindness inspired many to join to help in this act. By 1910 about 400 settlement houses were operating across the country.

Women and girl winding wire onto a machine
During the late 1800s many workers began going without pay causing several violent strikes to start. Railroads workers in Baltimore and Ohio went on the Great Strike of 1877 to protest their second wage cut in two months. Another major strike was the Haymarket affair on May 4th, 1886 which was a protest against police cruelty. A bomb was thrown and 7 police officers were killed while many workers were injured. The Homestead Strike included steel workers on June 29th, 1892 which caused the national guard to step in. Many women were not allowed in labor unions, but they supported much of the work of unions. Women such as Mary Harris Jones, or Mother Jones, demanded for better working conditions, end to child labor and equal pay for equal work. Mary Harris Jones spoke on child labor,

“The employment of children is doing more to fill prisons, insane asylums, almshouses, reformatories, slums, and gin shops than all the efforts of reformers are doing to improve society.”

In 1903 she led 80 million children to Theodore Roosevelt’s home to expose the injuries and horrors of child labor this would later lead to the passing of child labor laws.

Mary Harris Jones in the Children’s Crusade