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Key Takeaways What are low-risk investments? 12 best low-risk investments Low-risk real estate investments The best way to build a successful investment portfolio is to focus on one main thing: balance. By including various investment types, you can help maximize your profits while minimizing your overall risk. To properly execute this strategy, you’ll need to... View Article

The

Key Takeaways What are low-risk investments? 12 best low-risk investments Low-risk real estate investments The best way to build a successful investment portfolio is to focus on one main thing: balance. By including various investment types, you can help maximize your profits while minimizing your overall risk. To properly execute this strategy, you’ll need to... View Article

The post The Best Low Risk Investments In 2022 appeared first on FortuneBuilders.

Learning how to invest in the S&P 500 is an important step for any investor, new or experienced. As a proxy for the whole U.S. equity market, understanding how to navigate the country’s most popular index gives investors valuable insight into the broader market and economy. Investors who can extrapolate their experience from investing in the S&P 500 to the rest of Wall Street will exercise a penchant for better decision-making and a broader understanding of the national economy.

Many

Learning how to invest in the S&P 500 is an important step for any investor, new or experienced. As a proxy for the whole U.S. equity market, understanding how to navigate the country’s most popular index gives investors valuable insight into the broader market and economy. Investors who can extrapolate their experience from investing in the S&P 500 to the rest of Wall Street will exercise a penchant for better decision-making and a broader understanding of the national economy.

Many of today’s most prolific investors have enjoyed a very lucrative career by implementing what they learned from investing in the S&P 500, and there’s no reason new investors can’t do the same. That said, now is as good of a time as any to learn how to invest in the S&P 500; doing so may potentially set investors up for years of compounding returns.

What Is The S&P 500?

To understand what the S&P 500 is, investors must first familiarize themselves with the concept of a stock market index. Otherwise known as a stock index, a stock market index tracks a subset of companies traded on Wall Street. Instead of tracking every publicly traded company, stock market indices allow investors to focus their attention on a simple grouping of business, not unlike a cross-section of the market as a whole. That said, the S&P 500 is one of many stock market indices that focuses on a specific set of stocks. As its name suggests, the S&P 500 tracks the performance of 500 large companies listed on stock exchanges in the United States.

Thanks—largely in part—to its size, the S&P 500 is not only one of the most popular indices tracked by investors, but it’s also used as a benchmark to gauge the performance of the entire U.S. stock market. With many leading companies across prominent industries, looking at the S&P 500 typically gives investors a good idea of Wall Street’s overall performance.

According to the Global Industry Classification Standard (GICS), the S&P 500 can be broken up into 11 sectors:

With a broad and diverse distribution of sectors, the S&P 500 has been seen as a proxy for the U.S. equity market since its introduction in 1957. Therefore, when investors choose to diversify their holdings within the S&P 500, they are typically betting in favor of the broader market. Subsequently, betting on Wall Street has worked out very well for investors over the long run, which bodes well for anyone getting started today.

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What Is Required To Be Included In The S&P 500?

To be perfectly clear, not every publicly traded company is granted access to the S&P 500. Instead, companies with aspirations of making it onto the S&P 500 (and increasing their exposure to investors) must be selected by a special committee. A select group of individuals is tasked with maintaining the statuesque of the popular index, which uses a number of prerequisites to help make their decisions. In order to even be considered by the committee, companies must:

As its name suggests, there’s a finite amount of companies allowed on the S&P 500. As a result, the index is recalibrated quarterly, which means companies are constantly being added to and taken off the S&P 500.

Top 10 Companies In The S&P 500

Before we go over how to invest in the S&P 500, here are some examples of the companies you can invest in. Sorted by weight index, here are the top 10 companies in the S&P 500:

How To Invest In The S&P 500 In 5 Steps

Investing in the S&P 500 is just like investing in the broader equity market. Buying and selling shares of the companies on the index is as simple as making trades through a brokerage. That said, there are investing methods investors may use to concentrate their portfolios on the S&P 500, and nothing else. Let’s take a look at how a new investor can start their own positions in the S&P 500 in as little as five steps:

Predetermine A Strategy

Any investment strategy begins with just that: a strategy. Before taking any action, investors first need to come to terms with why they are investing, how long they want to invest for, and how much risk they are willing to take on. Answering these simple questions will require a lot of due diligence, but doing so will set the foundation for years of investing in the S&P 500. Understanding exactly what investors need from Wall Street will pave the way for a more clear investment strategy.

Investors on the brink of retirement, for example, will want to pay special considerations to less volatile and more risk-averse stocks. With a smaller investment window, older investors will have less time to make up for any losses, which suggests their portfolios are better off consisting of safer companies. Since retirees will most likely need access to their capital sooner, it’s a good idea to invest in stocks that are less likely to drop. Younger investors, on the other hand, have the luxury of investing in more volatile stocks that exhibit a larger propensity for upside. Fortunately, the S&P 500 awards options for any investor, no matter their investment timeframe.

Open An Account

With a clear investment strategy mapped out, investors will need to open an account with a brokerage, if they haven’t already done so. It is the brokerage, after all, which will allow investors to buy stocks on the S&P 500 in the first place. That said, not all brokerages are created equal; some have inherent advantages over their peers, and vice versa. Some brokerages may charge several fees, while others have made a name for themselves for dropping many of the fees that have become synonymous with trading. Others specialize in exchange traded funds (ETFs) while their counterparts prioritize options trading. Case in point: There are several different brokerages with a number of different things investors need to consider.

Investors should align their services with the brokerages that met their needs the best. Here’s a list of today’s most popular brokerages for investors to start their own research:

Do Your Homework

Now that investors have a clear plan and an avenue to execute their investment strategy, it is time to do a little homework. Instead of simply buying the first stock they set their eyes on in the S&P 500, investors will need to evaluate each company based on a number of merits. The more fundamentally sound a company is, the more it will make a valuable contribution to any portfolio. Here’s a look at some of the most important indicators investors need to take into consideration when investing in the S&P 500:

Alone, each indicator only provides a peek into the company’s performance, but together they can paint a much clearer picture. The culmination of these metrics will help investors determine their optimal investment strategy, and ultimately help them decide which stocks to buy.

Invest In Funds Or Individual Stocks

With a strategy in place and a mind for due diligence, it’s finally time to actually invest. There are two primary ways people invest in the S&P 500: individual stocks and ETFs. In other words, investors may choose to invest in individual stocks they deem worthy of their capital, or they may invest in an exchange-traded fund that tracks the respective index.

Investors who choose to invest in individual stocks are doing so with the sole purpose of beating the index as a whole. While doing so requires more acute attention to detail and an appetite for risk, the rewards for individual stock investors may be more lucrative than those who choose to track the index. Of course, investing in individual stocks requires active involvement in a portfolio. Investors will need to sift through the entire S&P 500 and select the individual stocks they think will help them the most. Again, this strategy coincides with more risk, but the upside is very attractive over longer periods of time.

In addition to individual stocks, investors may choose to invest in ETFs which track the S&P 500. Not unlike individual stocks, there are several ETFs that allow investors to increase their exposure to the entire index. The Vanguard S&P 500 ETF (NYSE: VOO), for example, “seeks to track the performance of a benchmark index that measures the investment return of large-capitalization stocks” in the S&P 500, according to Yahoo Finance. In tracking the S&P, returns and losses will mimic the entire index. Investors who choose this strategy will ultimately find the time is their best friend, as the index has trended upwards for decades. That said, the lack of volatility results in less upside.

Be Patient

As Warren Buffett once said, “The stock market is a device for transferring money from the impatient to the patient.” Simply put, the S&P 500 (and the stock market as a whole) tends to reward patient investors who can buy and hold for long periods of time. That’s not to say the S&P 500 is guaranteed to go up; only that history has shown us it is more likely to go up than down. Therefore any investor tracking the whole index can extrapolate past performance into future expectations.

Should You Invest In The S&P 500?

Owning stocks and exchange-traded funds associated with the S&P 500 has proven to be a lucrative strategy for investors with long-term investment horizons. Historically, long-term investments in the S&P 500 have worked out well for those who prove patient enough. According to Investopedia, “the average annual return since its inception in 1926 through 2018 is approximately 10%–11%.[cite] The average annual return since adopting 500 stocks into the index in 1957 through 2018 is roughly 8%.” That is, of course, if investors attempt to mimic the returns of the S&P 500 with an ETF or mutual fund. The returns will vary for investors who choose to invest in individual stocks of their own. It is entirely possible to beat the returns of the index, but investing in individual stocks will increase risk exposure.

Benefits Of Investing In The S&P 500

Investors who learn how to invest in the S&P 500 may be granted access to the following benefits:

Disadvantages Of S&P 500 Investing

Not unlike every investment strategy, learning how to invest in the S&P 500 also coincides with some disadvantages:

Summary

Learning how to invest in the S&P 500 is less a practice in trading and more of a broader understanding of the entire market. As the most popular proxy to Wall Street, the S&P 500 does its best to mimic the returns of all U.S. indices. Therefore, a bet on the S&P 500 is almost like a bet on the broader U.S. economy. Nonetheless, the S&P 500 has historically increased over long periods of time. Investors who partake in the index now will most likely be happy they got in earlier than later.

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Whether or not you are planning to sell your property soon, or you just want to enjoy a few simple upgrades, there are several ways to boost your home improvements ROI (return on investment). However, it is important to note that not all home improvements are created equal. While transforming a bathroom into a spa-like space may sound appealing, the cost may not pay for itself when it comes time to sell. Replacing gutters or fixing a leaky roof, on the other hand, is more likely to increase a home’s

Whether or not you are planning to sell your property soon, or you just want to enjoy a few simple upgrades, there are several ways to boost your home improvements ROI (return on investment). However, it is important to note that not all home improvements are created equal. While transforming a bathroom into a spa-like space may sound appealing, the cost may not pay for itself when it comes time to sell. Replacing gutters or fixing a leaky roof, on the other hand, is more likely to increase a home’s value (despite not sounding quite as luxurious).

As housing prices continue to increase, now is the perfect time to invest in your home’s infrastructure. Prioritizing home improvement ROI could increase your home’s value even more so, which begs the question: how can homeowners be sure their home improvements are worth the investment?

10 Best ROI Home Improvements

[ Know your numbers! Use this FREE Repair Estimator worksheet to determine your fix-up costs with pinpoint precision. ]

1. Minor Bathroom Remodel

There are essentially two types of rooms that sell houses: kitchens and bathrooms. As it turns out, however, the greatest home improvement ROI coincides with remodeling the bathrooms. Instead of initiating a little project in each room, conducting a minor bathroom remodel may be better. There’s no need to gut the whole room, but giving each bathroom an updated look could go a long way. Try replacing the shower head with a rain shower; it’s a feature most homebuyers will appreciate. Also, try replacing the vanity, as nobody wants to feel like they are using someone else’s old bathroom. At the same time, try updating the lighting to make things brighter.

2. Landscaping

Few rehabbing dollars go farther than those spent on the outside of the house. If for nothing else, curb appeal helps sell homes. New landscaping could be just what the home needs to look fresh and appealing. The aesthetic appeal of both the front and backyard may actually be the first thing buyers see, so make a good first impression and update the landscaping. There’s no need to go overboard. The best landscaping designs are the simplest, but the “lines” need to be trimmed and clean. A good landscaping job should look nice, but also not suggest a great deal of work is to be done.

3. Minor Kitchen Remodel

A minor kitchen remodel can boost home improvement ROI without demolishing an entire room. Instead, try minor upgrades that make a big difference. Start by replacing the existing appliances with better, newer ones. Next, instead of replacing the cabinets, try refinishing the existing ones. A fresh coat of paint or gloss could make old cabinets look new, and that, combined with new hardware, can completely transform a kitchen.

4. Attic Bedroom Conversion

Homes with the luxury of having a convertible attic should consider turning the space into an extra room. One of the single greatest ways to increase the value of a home is to increase the number of available rooms. Therefore, anyone who can add to their current room count should at least consider the possibility.

5. Major Bathroom Remodel

Now is the time to take the previously discussed minor bathroom remodel a step further. Instead of simply replacing amenities and upgrading a few items, homeowners should consider boosting their home improvement ROI with a complete overhaul. Everything, from the shower pan and flooring to the lighting and plumbing, should be analyzed and criticized; if it’s not adding to the appeal of the bathroom, it’s taking away from it. Therefore, it may be a good idea to start with a clean slate. Upgrading the bathrooms completely, especially the master bath, can actually convince homebuyers they are making a good decision.

6. Major Kitchen Remodel

Not unlike the major bathroom remodel, a major kitchen remodel should require a complete overhaul; this is where everything will be taken out and redone. It is also a good idea to incorporate an open concept. If at all possible, try getting rid of a wall to open things up. Buyers like kitchens with a lot of space, to host and to cook. Quite honestly, one of the best things homeowners can do is remove an unnecessary wall that separates the kitchen from the rest of the house.

7. Entry Door Replacement

As the simplest item on the list, the entry door replacement is perhaps one of the most impactful. Not unlike the landscaping, an entry door will most likely be one of the first things buyers see. This is the owner’s chance to make a good first impression. Remember, most people will decide whether or not they want to buy a home in the first few minutes of looking at one. As a result, it’s in a homeowners best interest to put their best foot forward and increase curb appeal.

8. Deck/Patio/Porch Addition

Provided there’s room, homeowners should consider the addition of a deck, patio or porch. The addition of an exterior structure like these can add a lot of perceived value to a home. At the very least, a deck could increase the usable living space in a given yard. At most, however, it could be a selling point a buyer was looking for all along.

9. Basement Remodel

Not all homes are granted the luxury of having a basement, but the that have underground living quarters may want to remodel them. Doing so could very easily increase the usable living space of a home. Instead of retaining a dark and dingy basement (which could actually hurt the prospects of a sale), try turning the basement into its own selling point.

10. Replace Windows

Outside of a fresh coat of paint, a new entry door, and perhaps a garage door replacement, nothing can make a home’s exterior look better than a brand new set of windows. The clean lines of new windows can very easily make a home look better from both the inside and outside. Additionally, new windows should be a lot more energy efficient. Proper windows could save new homeowners a lot of money on energy bills, which is always appreciated.

The Importance Of Curb Appeal

Even in the most popular housing markets, curb appeal plays an essential role in marketing your home. If your home is unappealing on the outside, no one will want to see the inside — plain and simple. If someone will spend a large amount of money purchasing a property, the first thing that influences their decision is the exterior. This should be one of the most important aspects of any home improvement project.

Curb appeal is why siding replacements and other exterior projects are ranked so highly on our home improvements ROI list. Curb appeal is meant to create interest in your home, and in turn, drive those who are interested inside to see more. Any home improvement project that improves curb appeal will result in higher interest in your property, and a higher ROI once purchased.

Consider Your Area’s Trends

Trends are another interesting component to think about when updating or remodeling your home. This does not necessarily refer to home design trends, but instead any factors that are influencing the home buying market in your area. For example, people have become much more environmentally conscious in recent years. It this is true of your area, you may find that energy-efficient appliances and smart home features have a high ROI. Not only can these elements save homeowners on utility costs, but they are also increasingly desirable features. Research a few recently sold properties in your area through listing websites like Zillow or RedFin. These may provide you with more ideas on attractive home trends or renovations in your area.

Other Improvements To Make

Some valuable home improvement projects that are not at the top of the list may actually bring you a great ROI. If you are looking to see the greatest return on your investment, consider these changes.

Common Mistakes To Avoid

One of the most common mistakes when improving a property is ignoring local trends. Essentially, you need to pay attention to what’s selling in that specific area. Look at home sales in the neighborhood, as well as in the surrounding area. What features are most valuable? What design choices were made in these properties? Pay attention to local trends to increase the value of your home. Ignoring them could cost you.

Another common mistake is to spend too much when renovating the property. While there are numerous high ROI changes you can make, there is a limit. Pay attention to how much you are spending on each project and ask yourself if you will realistically get that back. One common pitfall is spending upwards of $100,000 installing a pool, only to sell the property for $10,000 more. Plan your moves carefully and think about the potential value add.

Summary

If you plan to live in your home for five or more years, you should feel free to make upgrades that fit your preferences and lifestyle; however, if you want to turn a profit when you sell, try increasing your home improvements ROI. The top home improvements for increasing ROI can simultaneously improve demand and value. Therefore, homeowners can’t simply make any upgrades they want; they need to make the right upgrades. The highest ROI home improvements will prove more efficient and worthwhile than all others.

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The raw land development process is often viewed as a complex investing strategy—one that only “experts” should consider taking on. While investing in undeveloped land is a complex strategy,  beginners shouldn’t necessarily avoid it. In fact, I would argue that new investors can successfully invest in raw land if they mind due diligence and prepare for more work than what usually accompanies traditional exit strategies. If for nothing else, developing raw land comes with more steps.

There

The raw land development process is often viewed as a complex investing strategy—one that only “experts” should consider taking on. While investing in undeveloped land is a complex strategy,  beginners shouldn’t necessarily avoid it. In fact, I would argue that new investors can successfully invest in raw land if they mind due diligence and prepare for more work than what usually accompanies traditional exit strategies. If for nothing else, developing raw land comes with more steps.

There is no shortage of opportunity in the real estate industry as an investor. The real estate industry offers scores of options investors can pursue from investing in residential, multifamily, and commercial properties. One of the more under-utilized investment opportunities is raw land investing, and there is no reason to ignore it anymore.

What Is Raw Land Development?

Raw land development is the process of purchasing a parcel of land with the intent of either developing and building on it or holding onto it for long-term appreciation. Raw land investing has an array of configurations but will essentially provide a multitude of advantages from other types of investments; whether it be from selling the property, renting it out for passive income, or simply earning appreciation while performing little to no work.

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The Raw Land Development Process: How To Develop Land In 6 Steps

The fact of the matter remains: undeveloped real estate has the ability to deliver the same consistent cash flow as any other type of investment opportunity.

Fortunately for investors, raw land is a limited resource, making it extremely valuable. If you purchase land in an area headed towards development and growth, there’s a chance your land can become worth even more.

Investors looking to develop raw land should mind their due diligence and thoroughly educate themselves on the market where they plan to invest. The best way to do so is to pay attention to market trends.

If you can track the market’s cyclical movement, you will better understand when to buy. You must first examine the recent developments in your selected market. If there has been a recent surge in development projects in the area, buyers will likely be looking for land. It is also wise to look at the growth in surrounding markets.

Now that you have an overview of raw land as an investment, we’re going to go through the raw land development process step by step:

1. Economic Feasibility

The first step of raw land investing is to determine its economic feasibility. Like any real estate investment, it’s critical to determine your desired return on the property before getting started. This is important because it will lessen the market’s uncertainty and provide a model of your investment’s costs versus profit aspect. Although the numbers will be an estimate, understanding your project’s feasibility, including the estimated costs, revenue, and overall return, will help investors succeed.

2. Acquisition

Once you understand the costs you’re likely to encounter—including what you should receive in return—you can better determine the offer price. Investors need to have contractors submit actual bids for the project at this stage of the process. This will not only provide estimated costs for the project, including the numbers of what you’re expected to spend, but also a max offer price.

3. Zoning

Stage three of raw land investing deals primarily with the design of the land. In essence, this pertains to what type of property should be constructed on the parcel, including looking into local zoning codes.

Depending on the type of property you’re looking to construct, or how you intend to present the property to buyers, zoning will play an important role in how you proceed. Zoning codes will essentially determine what types of properties—whether single-family, multifamily, condominium, or commercial—can be built on the lot. As an investor, this could ultimately hinder your investment approach. When getting started in raw land investing, it’s vitally important to understand the area’s zoning laws.

4. Financing

Like all real estate investments, how you intend to use the property will dictate the type of financing you obtain. The one aspect investors should care the most about is the loan-to-cost ratio (LTC). In essence, the LTC is the amount of money the lender will provide for the project, which will generally depend on the type of construction and use of the property. Although most lenders will only provide a percentage of the overall costs (generally between 80-85 percent), owner-occupied homes are eligible to get standard bank financing.

5. Construction

The second-to-last stage of the raw land development process is construction. In most cases, this will consist of horizontal development—like grading for roads, curbs, and utilities—and eventually building the property from the ground up. One element investors also need to be aware of is the construction financing aspect of the project. Generally speaking, contractors will be paid in increments of duties performed, including phases of the project. In many cases, construction lenders will hold approximately 10 percent of the construction loan until the project is completed.

[ Check out our guide about how to get started with constructing new build real estate on your land development to learn more. ]

6. Marketing

The final step to the land development process is marketing. This is where stage one is of critical importance. Researching the neighborhood, the market price, and demand for rentals will pay off when determining your marketing strategy. Investors should also have a marketing plan in place to attract buyers to the property. This may include working with a realtor, online listings, the MLS, advertising in newspapers, and even social media.

Top 5 Benefits Of Developing Land

The attraction to the land development process is easy to see: this undeveloped asset not only costs less to purchase than a developed lot but also is generally less expensive to own over time. There is more to like, however: it offers appreciation potential whether or not the vacant area is improved upon. While there are many risks and rewards in real estate investing, raw land is one of the more secure investments to make.

This is what experts at Precondo have to say about raw land: “Investing in raw land allows people to develop it according to their needs and wants. The cost of raw land is lower than that of developed land, which entails greater profits for investors. Investors can purchase raw land and then sell them as plots. It offers them more opportunities and profits and helps them build a great portfolio”. To gain a better understanding of the investor appeal, here are the five main advantages of raw land development:

1. Less Competition

Unlike regular real estate investments, which are currently experiencing higher-than-normal competition in most markets, raw land has virtually no competition to deal with. In most cases, investors are looking for established properties, such as residential or commercial properties, that provide an immediate income source. Unless optimized to do so, undeveloped land will generally not earn income regularly.

2. Opportunity For Seller Financing

Raw land investments award owners more opportunities to use seller financing. Since traditional lenders (i.e., big banks) are often more hesitant to loan money for vacant land, you—as the landowner—get to act as the bank. If someone is in the market for raw land and can’t acquire a loan, you can lend them capital but charge them higher interest rates. This is a win-win situation for every party involved.

3. Inexpensive

In comparison to acquiring a developed property, buying raw land is relatively inexpensive to acquire and own. It has minimal carrying costs, including lower property taxes and insurance, but maintenance costs are modest. In fact, performing maintenance on undeveloped land isn’t required, as a vacant lot can be purchased and held on to until appreciation rates reach a level where it can be sold for a profit. Also, undeveloped landowners are generally highly motivated to sell because they are typically absentee owners with little-to-no emotional connection to the property. That said, the right property can provide an immense upside for investors with a strategy in mind for the land.

4. Appreciation Potential

Arguably the biggest benefit of investing in raw land is its appreciation potential. Even in times of economic uncertainty, raw land is a hard asset. Since land is such a scarce resource, it will always be valuable, even if market conditions are rough. Raw land will always be needed, regardless of whether or not it holds economic value. On the other hand, if the economy is thriving, there is a higher probability that your land’s value will appreciate. As land continues to be developed, vacant property becomes harder to come by. Consequently, the vacant land leftover becomes more of a commodity, especially in a popular area.

5. Development Possibilities

As an investor, the allure of raw land investing is in the opportunity it holds. Aside from earning long-term appreciation, the land can be developed into further possibilities, like a single-family home, multifamily property, or condominium. Although zoning and building codes may limit an investor’s opportunities depending on the location, raw land offers investors the ability to choose and develop their own investment path from scratch.

How To Develop Land: 5 Pro Tips

Raw land development is not for the faint of heart. The process can require extensive time and research, especially when compared to traditional residential investment. However, as I mentioned above, the right preparation will make a raw land investment well worth it. Read through the following tips on developing raw land before you get started:

5 Important Factors In Raw Land Development

When it comes to raw land development, investors essentially combine multiple investment strategies into one: purchasing land, building new construction, and renting or selling the final product. This deal type’s complexity will demand a significant amount of planning from investors before they ever even purchase the property. Do not let this intimidate you, as there are ways to systemize the process and make it easier to navigate. Investing hoping to prepare should research the following factors, so they know exactly what to look for (and evaluate) when developing raw land:

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10 Things To Consider Before Developing Land

The extra steps required of investors to successfully develop land extends beyond finding and purchasing it. There are several factors that investors will need to consider every time they evaluate a piece of land. While it may seem intimidating now, these elements will become second nature over time. Until then — review the following things to consider before developing raw land:

Summary

If you are looking for a profitable real estate investment strategy, it may be time to study the raw land development process. Investing in land is a great low-cost way to expand your real estate portfolio. Follow the steps outlined above if you hope to achieve success with raw land development. Remember to rely heavily on research as you venture into this investment strategy. Always consider how the area could change and develop your investment accordingly. Separate yourself from the competition today and add a raw land investment to your portfolio.

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Key Takeaways What Are Capital Expenditures? What Can Capital Expenditures Tell You? How To Calculate Capital Expenditures Capital Expenditures Vs. Regular Maintenance Today’s greatest real estate investors know it, and it’s about time you did, too: you need to spend money to make money. While it may sound counterintuitive, expenses are necessary for running a... View Article

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Key Takeaways What Are Capital Expenditures? What Can Capital Expenditures Tell You? How To Calculate Capital Expenditures Capital Expenditures Vs. Regular Maintenance Today’s greatest real estate investors know it, and it’s about time you did, too: you need to spend money to make money. While it may sound counterintuitive, expenses are necessary for running a... View Article

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Key Takeaways Boise Real Estate Market Overview 2022 Boise Housing Market Trends 2022 Boise Foreclosures In 2022 Boise Median Home Prices 2022 Boise Real Estate Market Forecast 2022 Should You Invest In The Boise Real Estate Market? The Boise housing market has been one of the hottest locales in the country, and the capital of... View Article

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Key Takeaways Boise Real Estate Market Overview 2022 Boise Housing Market Trends 2022 Boise Foreclosures In 2022 Boise Median Home Prices 2022 Boise Real Estate Market Forecast 2022 Should You Invest In The Boise Real Estate Market? The Boise housing market has been one of the hottest locales in the country, and the capital of... View Article

The post Boise, ID Housing Market Forecast & Trends In 2022 appeared first on FortuneBuilders.

Key Takeaways What is the price-to-rent ratio? How to calculate price-to-rent ratio What is a good price-to-rent ratio? Example of price-to-rent ratio How to use PTR ratio for investments 10 best cities by price-to-rent ratio The price-to-rent ratio (PTR ratio) is a simple valuation metric with several valuable applications. In its simplest form, the PTR... View Article

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Key Takeaways What is the price-to-rent ratio? How to calculate price-to-rent ratio What is a good price-to-rent ratio? Example of price-to-rent ratio How to use PTR ratio for investments 10 best cities by price-to-rent ratio The price-to-rent ratio (PTR ratio) is a simple valuation metric with several valuable applications. In its simplest form, the PTR... View Article

The post Price-To-Rent Ratio: What It Is & How To Calculate It appeared first on FortuneBuilders.

The National Association of Realtors recently studied how its members used social media to drive sales and close deals. Among other things, the study found the following:

The National Association of Realtors recently studied how its members used social media to drive sales and close deals. Among other things, the study found the following:

No matter how you cut it, social media is essential to growing your real estate career. Having a real estate social network to leverage is critical, but with so many different platforms, it can be tough to decide where to promote your business.

If you want to execute a successful social media strategy, step one is knowing which platforms to use. Beyond that, it’s important to know the strengths and weaknesses of each platform. That way, you can maintain a consistent, disciplined social media presence that brings in business. Let’s talk about the top 10 social media platforms for promoting your real estate business.

What Is The Best Social Media For Real Estate?

So, what’s the best social media platform for real estate? This isn’t a trivial question. You’re busy running your business, and you don’t need a bunch of distractions. Perhaps the best way to get a short answer is to look at what other realtors are using. According to the NAR study we already mentioned:

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10 Best Platforms For Real Estate Social Networks

In order to get the best results, you need to share the right content on the right platforms. In other words, establishing a good social media presence is about where you share your content just as much as it’s about the content you’re sharing. Here are the 10 best platforms for real estate in particular:

1. Facebook

Unless you’ve been living under a rock for the past 18 years, you’ve heard of Facebook. It’s one of the oldest social media platforms unless you count all-but-defunct sites like MySpace. For many people, getting excited about a platform that’s been around this long can be tough.

But there are some advantages to being this established. For one thing, you get incredible market penetration. 72% of U.S. adults log into Facebook at least once a day. And despite a much-publicized slip in popularity among Generation Z users, Facebook still accounts for over 50% of all U.S. social media activity.

Better yet, Facebook’s demographics fit well with the real estate market. 68% of the site’s users are between the ages of 25 and 65. The demographic also skews more educated; 82% of American college graduates have Facebook accounts, and the more than three quarters of users earn more than $75,000 per year.

Another great thing about Facebook is the ability to hyper-target your ads. Facebook has access to an incredible amount of data on its users, so you can focus on precisely the people you want to advertise to. In addition, Facebook’s review feature lets you garner reviews from satisfied clients, which can help grow your business organically.

2. Instagram

Instagram, which Facebook owns, might seem like an odd platform for a real estate agent. But as a matter of fact, it’s one of the more powerful platforms out there. To begin with, because of its connection with Facebook, it has the same advanced advertising tool and insight into its user base. And as a bonus, if you’re already on Facebook, you can run both accounts from the same place.

Another great reason to use Instagram is the visual nature of the site. If you’re looking for a great place to promote listings, why not turn to a site that’s purpose-built for posting photographs.

Instagram’s user base skews young. The largest user cohort is between the ages of 25 and 34, encompassing 32% of the platform’s users. This makes it great for selling to a younger audience. Engagement is also high, with 59% of the site’s users logging in daily, and 80% using the platform at least once a week.

On the downside, a lot of Instagram’s users are too young to be in the market for real estate; 37% of users are either 13 to 18 or 18 to 25 years old. As for U.S. adults as a whole, only 40% use Instagram at all.

3. LinkedIn

LinkedIn is a less-than-ideal platform for advertising. However, as a professional networking site, it’s a perfect platform for connecting with other agents in your area. You can build a personal network to swap leads, and share your listings with agents you know who might be interested.

Networking doesn’t have to be limited to other agents. Broaden your horizon, and connect with real estate professionals like mortgage brokers, home inspectors, and appraisers. It can even be helpful to network with moving companies, so you’ll have someone to refer your clients to.

Another good way to use LinkedIn is if you work in commercial real estate or if you often partner with real estate investors. In those cases, LinkedIn is ideal for connecting with your clients.

4. TikTok

TikTok is one of the newer social media platforms. It’s gotten a lot of attention, mostly for short viral videos filled with quick cuts and filters. The user base skews young – very young. But as it grows in popularity, it’s slowly but surely gaining more professional users.

This isn’t a great place to share listings. But it’s a great place to show off projects and share tricks of the trade. For example, if you’re a house flipper, you can show off before and after videos of your properties. Keep it short and sweet, and you never know; it might just go viral.

5. Twitter

At first glance, Twitter looks like a promising platform for promoting your real estate business. The user base is certainly the right age, with more than 50% of Twitter users falling between the ages of 25 and 49.

The problem with Twitter is that it’s all but impossible to run an effective ad campaign or build any kind of network. This site is all about the latest news and trending hashtags. It’s not a bad place to see what people are talking about in the market, but that’s about it.

6. Pinterest

Pinterest is similar to Instagram in that it’s a visual platform. This makes it a great place to share photographs of your listing. And while it might not have the same panache as Facebook, it has a surprisingly high number of users. Not only that, but they fall into just the right demographic for real estate. Here are some basic facts:

That last number is a big deal, and it should be a big, flashing neon sign to any real estate professional. Pinterest might not catch as many eyeballs as some other sites, but it’s catching the right eyeballs.

7. Trulia

First and foremost, Trulia isn’t a social media platform; it’s an MLS listing website. However, it has a page called Trulia Voices, where members can interact with each other.

A lot of this interaction comes in the form of questions and answers. Newer agents often come to Trulia Voices for advice, making it a great place for more experienced agents to build a reputation for expertise.

8. Zillow

Zillow is another listing website, so it’s not a social media platform per se. But much like Trulia, it has a user forum where people can ask and answer questions. So if you’re trying to build a reputation, it makes sense to be active on both sites.

9. Active Rain

Active Rain is a professional networking site that’s similar to LinkedIn but built specifically for real estate professionals. This is a perfect platform for networking with agents, appraisers, mortgage brokers, and other people who are active in your local real estate market. The site also includes a referral system, so you can leverage your networking to grow your real-world business.

10. NextDoor

NextDoor is a unique social media platform that’s meant to build connections within individual neighborhoods. If you’re running a local neighborhood agency, this is a great place to grow relationships with your neighbors.

New Real Estate Social Media Network Platforms

Before we wrap up, there are a couple of up-and-coming social media platforms that are worth mentioning:

How To Choose Platforms For Your Real Estate Social Network

Maintaining a presence on as many social media platforms as possible might be tempting. Don’t. There are too many platforms, and you’ll spend so much time on social media that it takes time away from your core business. Not only that, but by spreading out your efforts, it’s harder to grow your audience.

Instead, focus on building two or three strong social media accounts, and using them to promote each-other. When choosing your platform, consider the following factors:

Whatever you do, remember that social media engagement itself won’t increase your revenue. Instead, focus on generating leads and attracting new business. This isn’t about getting as many likes as possible. It’s about doing more business.

Summary

As you can see, all 10 of these social media platforms can be useful to an enterprising real estate agent. The important thing is to develop a coherent strategy. Are you trying to reach younger buyers with video content? Think about doing some TikTok videos. Want to network with other professionals? Turn to LinkedIn.

By sharing the right content on the right platforms, you’ll get more than just engagement on your posts and build your real estate social network. You’ll get real-world results that translate into leads, sales, and more business.

Ready to start taking advantage of the current opportunities in the real estate market?

Whether you’re brand new to investing or have closed a few deals, our new online real estate class will cover everything you need to know to help you get started with real estate investing. Expert investor Than Merrill explains the best real estate strategies to help get you on the path towards a better financial future.

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If you are one of many Americans struggling to save up for a house, there are numerous homeownership assistance programs that may be able to assist you. Perhaps you’ve put off buying a home because you haven’t been able to save up for a down payment or because you don’t have a great credit score. However, achieving the dream of homeownership might be much closer than you think if you know where to look. If you have been looking for homeownership assistance programs or grants for home buyers to

If you are one of many Americans struggling to save up for a house, there are numerous homeownership assistance programs that may be able to assist you. Perhaps you’ve put off buying a home because you haven’t been able to save up for a down payment or because you don’t have a great credit score. However, achieving the dream of homeownership might be much closer than you think if you know where to look. If you have been looking for homeownership assistance programs or grants for home buyers to help you afford a house and provide big cost savings, you’ve come to the right place.

Types of Homeownership Programs

According to The Mortgage Reports, over 2,000 homeownership assistance programs are available nationwide. These programs can be categorized into a few different types of assistance for aspiring homeowners. It can be helpful to understand these distinctions so you know where to start your search for a loan. First, the most common type of assistance is grants for homeownership. These can come from various sources, but all act as gifts that are not repaid. Down payment grants are typically regulated on a local and state level.

The other main type of homeownership help available to first-time buyers is loans — but not those from traditional financial institutions. Numerous loan programs offer benefits such as varied approval requirements, deferred payments, or even loan forgiveness over time. Each of these loan types aims to make homeownership more attainable for a variety of Americans. One well-known example is the VA loan, which provides Veterans the opportunity to purchase a home without a down payment.

It should be said that the specific requirements associated with each program type will vary from loan to loan. Avoid ruling anything out until you are sure of the options available to you. Even if you do not meet the requirements of a grant in your area, for example, you may still be eligible for federal assistance when purchasing your first home.

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Qualifying For Homeownership Programs

Most homeownership programs are specifically designed for first-time buyers, but this term may not mean what you think. First-time homebuyers include people who have never purchase real estate and people who have not owned a home in the last three years. There are also income caps as well as purchase price caps for almost all of the programs listed here. Typically, eligible buyers have low to moderate incomes. The exact criteria per program varies, so don’t count yourself out before you know for sure!

Aspiring homebuyers should also be prepared to enroll in home education or financial literacy courses. Many homeownership programs have some form of educational component to qualify. Luckily, this requirement can be helpful throughout the home buying process. Other potential requirements to qualify include working with an approved mortgage lender and purchasing the property as a primary residence.

Benefits Of Homeownership Programs

Homeownership programs were created to help making buying real estate more accessible. And that’s exactly what they do. Homeownership programs can help aspiring homeowners purchase real estate on a much faster timeline than they would otherwise be able to. Not only do many programs make offers more competitive, but they can also save buyers money over time.

Many times the most difficult obstacle when buying a house is saving for a down payment. It can take years to save up the standard 20 percent. However, many homeownership programs require a reduced down payment. This can help aspiring homebuyers achieve ownership on a much sooner timeline.

13 Homeownership Assistance Programs

Both public and private entities are offering home buying programs and grants in a concerted effort to encourage homeownership in the U.S. These programs mostly target first-time homebuyers, as well as low to moderate-income households. There are 13 different homeownership assistance programs to choose from; some are sponsored by federal agencies, while non-profit and private entities offer others. Each section below provides an overview of a program or grant, along with a breakdown of who the program is meant to help and its eligibility requirements. If you’d like more information, visit the official website provided for each respective program.

Investment properties are not eligible for most homeownership assistance programs, which are primarily intended for owner-occupants. For those interested in investment properties, visit this resource on how to invest in real estate with little to no money of your own.

FHA Loan

The FHA loan is a go-to program for many Americans, especially first-time homebuyers. According to Jim Pendergast, Senior Vice President of altLINE, “FHA loans are the most common because they’re funded by the federal government.” The Federal Housing Administration (FHA) offers insurance to mortgage lenders so that they are not exposed to loss in the case of borrower default. This protection allows lenders to lower their eligibility requirements and extend mortgages to a larger pool of applicants. All FHA borrowers are required to pay mortgage insurance.

FHA 203(k) Loan

The FHA 203(k) rehabilitation loan can be a great solution for buyers who want to purchase a fixer-upper home. Factoring in the property’s after-repair value, the loan bundles the costs of purchasing and renovating the property. Borrowers requiring extensive renovations above $35,000 are required to hire an approved consultant, who will also serve as the contractor and project manager. Find out more about whether or not a FHA 203(k) loan is right for you.

VA Loan

Veterans and active service members of the military are eligible to obtain mortgage assistance from the U.S. Department of Veterans Affairs (VA). The VA loan does not require a down payment or private mortgage insurance and offers competitive mortgage rates. The agency also sponsors grants for veterans who need to adapt homes for service-related disabilities.

USDA Loan

Designed to promote economic development, the U.S. Department of Agriculture (USDA) mortgage program assists low- to moderate-income households with the purchase of homes in rural areas. The loan can also be used to repair and renovate a property, make a property more energy efficient, or even install essential household appliances.

Good Neighbor Next Door HUD Loan

Public service workers who qualify for the Good Neighbor Next Door program have the opportunity to purchase homes at half the list price. The Department of Housing and Urban Development (HUD) implemented this program to revitalize areas, make communities safer, and promote homeownership. Eligible properties are sold exclusively through the Good Neighbor Next Door sales program.

Native American Direct Loan

Starting in 1992, the Native American Direct Loan (NADL) program has made home loans available to Native American veterans who want to buy property on federal trust lands. The U.S. Department of Veterans Affairs serves as the lender, and borrowers enjoy not having to make a down payment or pay private mortgage insurance.

Energy Efficient Mortgage

Insured through both the FHA and VA, the Energy Efficient Mortgage (EEM) is a loan program that incentivizes homebuyers to purchase energy-efficient homes or buy homes that they will make energy-efficient through improvements. The EEM is added to an existing mortgage and does not affect the down payment amount or require a new appraisal. Existing homeowners can also apply for the EEM benefit to save on energy costs and increase the resale of their properties.

Local Homeowner Assistance Programs

Homebuyers can also look to their city or state governments for assistance. These homeownership assistance programs are typically designed for first-time and low to moderate-income buyers. They offer competitive mortgage programs, down payment and closing cost assistance, and home buying education. Check your local or state housing authority to determine what types of programs are available and the eligibility requirements for each.

National Homebuyers Fund

The National Homebuyers Fund is a non-profit organization that offers financial assistance programs for homeowners and homebuyers. Perhaps their most prominent is their down payment assistance grant, which can provide up to five percent of the mortgage loan. The organization also manages down payment assistance, mortgage credit certificate (MCC), and energy efficiency programs for California residents, in partnership with the Golden State Finance Authority. The National Homebuyers Fund can provide up to a $10,000 down payment for any homebuyer with low to moderate income. The National Homebuyers Fund requires:

Money for the National Homebuyers Fund is from penalties certain lenders had to pay for not following the Global Financial Crisis guidelines. You can find similar programs in other states that are tax dollar funded. However, these programs can change in accordance with fluctuations in funding.

First Home Club

Sponsored by the Federal Home Loan Bank of New York, the First Home Club is designed to assist first-time homebuyers with low-to-moderate incomes. The program will match funds saved in a dedicated savings account $4 to $1, and up to $7,500.

HomePath Ready Buyer

The HomePath Ready Buyer program is administered by Fannie Mae, a government-sponsored entity that offers mortgage options that benefit low- to moderate-income households. The homeownership assistance program targets first-time buyers, who are required to complete an online educational course. Upon completing the course, buyers are eligible to receive three percent toward closing costs when purchasing a foreclosure home owned by Fannie Mae. Buyers can also make a down payment that is as low as three percent.

Freddie Mac’s Home Possible

Home Possible is funded by Freddie Mac, a government-funded entity often referred to as the counterpart to Fannie Mae. There are numerous similarities between the HomePath Ready Buyer program and Home Possible, including that they are both geared towards low-income applicants. The program is available to current and first-time homebuyers, who will be required to attend a homeownership education program. Home Possible requires a three percent down payment, and generally has lower fees when compared to other conventional loan providers.

Dollar Homes

If anything could be dubbed the eBay of homes for sale, the HUD’s Dollar Home portal would be it. When a homeowner defaults on an FHA-insured mortgage, it is foreclosed upon and repossessed by the federal government. These homes are then re-sold to the public and nonprofit entities at affordable prices, along with low down payment requirements and allowances that can be used to pay for closing costs or repairs. Interested buyers can bid on properties through the HUD Home Store, although their licensed broker or agent must submit bids. If you are interested in purchasing a dollar home as an investment property, be sure to visit this HUD Homes 101 resource for investors.

Summary

You may have noticed that most of these programs offer low down payment requirements. However, it is important to note that down payments under 20 percent of the home value will typically result in mortgage insurance fees. If you prefer to put down a large down payment to avoid these fees, here is a resource on how to save for a house.

These homeownership assistance programs offer solutions to many Americans who would otherwise be unable to attain their dream of homeownership. Not taking advantage of these programs due to a lack of awareness is equivalent to leaving money on the table. Explore your options and find out if you might qualify for homeownership much sooner than you had imagined.

Ready to start taking advantage of the current opportunities in the real estate market?

Maybe you have plenty of capital, an extensive real estate network or great construction skills— but you still aren't sure how to find opportunistic deals. Our new online real estate class, hosted by expert investor Than Merrill, can help you learn how to acquire the best properties and find success in real estate.

Register for our FREE 1-Day Real Estate Webinar and get started learning how to invest in today's real estate market!

The information presented is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing provided shall constitute financial, tax, legal, or accounting advice or individually tailored investment advice. This information is for educational purposes only.

Key Takeaways What is a 401(k)? Using a 401(k) for home purchase How to use a 401(k) to buy a house Should you use a 401(k) to buy a house? Alternatives to withdrawing your 401(k) How to rollover your 401(k) 401(k) Withdrawal FAQs Few retirement vehicles have awarded account holders a greater peace of mind... View Article

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Key Takeaways What is a 401(k)? Using a 401(k) for home purchase How to use a 401(k) to buy a house Should you use a 401(k) to buy a house? Alternatives to withdrawing your 401(k) How to rollover your 401(k) 401(k) Withdrawal FAQs Few retirement vehicles have awarded account holders a greater peace of mind... View Article

The post How To Do A 401k Withdrawal For Home Purchase appeared first on FortuneBuilders.

Key Takeaways What is the sales comparison approach? How the sales comparision apprach works Characteristics used in an SCA Sales comparison approach in 3 steps Selling a home involves many things. Some of these are fairly obvious, for example, keeping your house tidy when you have an open house. But other things are a little... View Article

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Key Takeaways What is the sales comparison approach? How the sales comparision apprach works Characteristics used in an SCA Sales comparison approach in 3 steps Selling a home involves many things. Some of these are fairly obvious, for example, keeping your house tidy when you have an open house. But other things are a little... View Article

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The real estate industry is a rapidly-growing sector with lots of demand for new jobs. But when most people think of real estate jobs, they think about becoming a real estate agent. This is certainly a common job, and it’s a highly-visible one; anyone who’s ever bought or sold a home has dealt with a realtor at one time or another.

But many other careers are just as rewarding. A good example of this is the job of a real estate appraiser. Appraisers have many of the same perks as realtors. You earn

The real estate industry is a rapidly-growing sector with lots of demand for new jobs. But when most people think of real estate jobs, they think about becoming a real estate agent. This is certainly a common job, and it’s a highly-visible one; anyone who’s ever bought or sold a home has dealt with a realtor at one time or another.

But many other careers are just as rewarding. A good example of this is the job of a real estate appraiser. Appraisers have many of the same perks as realtors. You earn a steady income, go out and meet new people every day, and your job doesn’t tie you to a desk.

Like anything else worth doing, becoming a real estate appraiser takes some time and effort. You can’t just order some custom business cards and start signing up clients. You must take several hours of classes, pass an exam, and register with your state. You’ll also need good networking chops to build your book of business.

That said, all of this effort can be well worth the payoff. Becoming an appraiser frees you to be your own boss and run your own business within a lucrative industry. Keep reading to learn how to become a real estate appraiser and why they are so important.

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What Does A Real Estate Appraiser Do?

A real estate appraiser’s job is to evaluate properties and determine a fair market value. This is necessary before a property can be bought or sold. It’s also necessary for insurance and tax purposes, as well as before an empty lot can be developed.

A real estate appraiser needs to consider several factors when determining a property’s value. These include the features, location, and the value of similar properties in the current market.

Appraisers can be self-employed or work for a government agency or real estate company. Similarly, appraisers can specialize in all kinds of properties, from commercial to industrial to residential. It’s all about where your interests lie, and where you can build the strongest network.

Real Estate Appraiser Salary

Let’s talk about what everyone wants to know about a potential career line; how much can you actually earn as a real estate appraiser? As with most jobs, a lot depends on the local labor cost. Across the U.S., the lowest-paid appraisers earn around $39,000 per year, while those in the best-paying markets average $104,000 per year. The national average is $60,949 per year. Keep in mind that there are additional that can impact your salary. These include the number of states you’re licensed in and how long you’ve been in the field.

Real estate appraisal can be an exciting career, with relatively high earnings compared to the qualification requirements. That said, it still has its drawbacks. For one thing, there’s a lot of competition in most parts of the country. Precisely because this is such an exciting opportunity, many other people are also going into the business.

For another thing, if you’re working for yourself, you’re also taking on a bunch of extra responsibilities. You have to spend time finding new clients and taking care of your business taxes. This means you can expect to work 50 hours a week or more.

How To Become A Real Estate Appraiser In 6 Steps

Becoming a real estate appraiser requires two things: classroom education and on-the-job training. Different states have different requirements, so make sure to check your local regulations. That said, the general steps will be more or less the same:

Let’s take a closer look at each part of the process!

1. Review Your State’s Requirements

There are two sets of requirements for real estate appraisers. The first are federal, which are set by the Appraiser Qualifications Board (AQB). These requirements, listed in the Real Property Appraiser Qualification Criteria, must be met by every state. That said, the exact training and licensing process varies from state to state.

Every state requires that real estate appraisers hold a professional license, but they all have their own unique licensing requirements. Depending on where you live, you may have to meet the bare minimum national qualifications, or there may be additional hoops that you’re required to jump through.

A good example of this is California. To meet California state standards, you need to take many hours of classroom instruction. The portion of this instruction dedicated to federal requirements consists of only four hours. The rest is dedicated to additional state requirements, over and above the federal ones. Your mileage will vary considerably depending on where you’re getting your license.

Beyond that, you can obtain different kinds of licenses, including Certified Residential Appraiser, Certified General Appraiser, and Licensed Residential Appraiser. All of these have their own requirements for coursework, on-the-job training, and exams.

So before you do anything else, do some research and find out what the requirements are. Your state’s real estate licensing board website is a good place to start.

2. Become A Trainee Appraiser

Before you can become an appraiser, you first need to become an appraiser trainee. An appraiser trainee works under the direct supervision of a fully-licensed appraiser, who helps them learn the basic process. During this period, the appraiser trainee is required to take a few courses:

In total, this amounts to 75 hours of coursework, and your state may require additional courses. Thankfully, these three courses are available online throughout the United States. You can work at your own pace, so you don’t have to quit your current job just yet.

3. Find A Mentor

When your basic coursework is complete, you’ll be ready to start on-the-job training. If you haven’t found a certified appraiser to train under yet, now is the time. You’ll have to do field work with them for at least six months. In some states, the required training period is as long as two years.

During the training period, supervisors are responsible for ensuring that the trainee completes all necessary training to meet the AQB standards. This includes accompanying the trainee on appraisals and ensuring that they complete their work to an acceptable standard.

Once again, different states will have different requirements. Some simply require that a certified appraiser sign off on logs for the trainee’s work, and that the trainee meets federal standards. Others have more specific requirements, such as requiring trainees to complete a minimum number of appraisals.

4. Complete Required Coursework

At this point, you’ll have met all the federal requirements to sit for the exam. However, there may be additional state-required coursework that you need to complete. Sometimes, this is AQB-approved training on state-specific standards. In other cases, licensing requires the completion of certain college-level classes.

To be clear, it’s not normally necessary for a licensed appraiser to have a four-year college degree. But many states require you to take courses related to contract law, property management, and real estate evaluation. These are the kinds of courses you can take at a community college, or even at an accredited online university. You won’t have to stop working and enroll in college full-time.

Then again, there are exceptions to the rule; once again, California is a good example. The Bureau of Real Estate Appraisers in California requires a four-year degree for a Certified General Appraiser license. On the other hand, you can obtain a Certified Residential Appraiser’s license with only a few classes.

This is yet another reason why it’s so important to learn your state’s requirements before you start the process.

5. Register For The Licensed Residential Exam

Once you’ve completed all your on-the-job training and coursework, you’re finally ready to sit for the exam. Research with your state’s real estate bureau to find out how to register for the Licensed Residential Exam. You’ll normally have to pay a small fee, but there should be somewhere to take the exam in your county.

The exam itself contains 110 questions, which must be answered within a four-hour time limit. Don’t get discouraged if you don’t pass the first time! In 2021, only 61% of people passed the exam on their first attempt. It’s a lot like taking the driver’s exam when you were a teenager; if you don’t pass the first time, study a bit and try again.

6. Submit Your Application To Become A Real Estate Appraiser

After you pass the exam, it’s time to apply to the state licensing board. At this point, this is just a formality. Provided that you’ve met all the requirements, all you need to do is pay a licensing fee.

From here on out, you’ll have to renew your license every two years. This requires working a minimum number of hours as an appraiser during that period, and many states require a minimum number of hours in continuing education classes.

Consider Becoming A Certified Residential Appraiser

Once you’ve become a licensed appraiser, you’re free to start doing business. But if you want to kick your career into high gear, you can get a special AQB certification. These certifications are not required to work as an appraiser, and you can build a perfectly successful career without them.

That said, a Certified Residential Appraiser or Certified General Appraiser certification can open the door to working on higher-value properties. This creates new opportunities and allows you to work with a wider array of clients. Let’s talk about both types of certification.

Benefits Of Becoming A Certified Residential Appraiser

Certified Residential Appraisers are permitted to work on properties valued at more than $1 million, which is not the case with a license alone. They’re also permitted to work on multi-unit buildings, with up to four separate units, and even on vacant lots.

To obtain this certification, you’ll first have to work as an appraiser for at least 12 months, and spend at least 1,500 hours on the job. You’ll also have to complete 200 hours of AQB-required coursework.

So, why would you want to do this? There are a few good reasons to get your certification:

Benefits Of Becoming A Certified General Appraiser

A Certified General Appraiser has even more job opportunities than a Certified Residential Appraiser. With this certification, you can work on commercial properties, not just residential ones. You can also work on residential properties with more than four units.

Becoming a Certified General Appraiser requires 300 hours of coursework and 2 ½ years of appraisal experience with at least 3,000 hours worked. If you want to work in the highest-paying jobs on the highest-value properties, this is the certification you’ll need.

Summary

Whether or not you go on to obtain a certification, becoming a real estate appraiser is the first step to a promising new career. With all the opportunities in the current real estate market, it’s easy to understand why so many people are looking into getting their license and learning how to become a real estate appraiser.

So, what are you waiting for? Take the first step, learn your state’s requirements, and move forward from there!

Ready to start taking advantage of the current opportunities in the real estate market?

Whether you’re brand new to investing or have closed a few deals, our new online real estate class will cover everything you need to know to help you get started with real estate investing. Expert investor Than Merrill explains the best real estate strategies to help get you on the path towards a better financial future.

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The fastest growing cities in the US this year are merely lucky enough to be in the right place at the right time. It’s their proximity to primary cities that has allowed today’s booming cities to capitalize on prohibitively expensive housing conditions and remote-work trends. If for nothing else, large cities are falling out of favor. Most buyers are ready and willing to trade their more expensive cities for close and affordable alternatives. As a result, the fastest growing cities in the

The fastest growing cities in the US this year are merely lucky enough to be in the right place at the right time. It’s their proximity to primary cities that has allowed today’s booming cities to capitalize on prohibitively expensive housing conditions and remote-work trends. If for nothing else, large cities are falling out of favor. Most buyers are ready and willing to trade their more expensive cities for close and affordable alternatives. As a result, the fastest growing cities in the US are all located next to some of the country’s largest metropolitan areas.

Fastest Growing Cities In America: Main Factors

Each of the fastest growing cities in the US shares several things in common, but one indicator stands out above the rest in 2021: location, location, location. The most critical factor influencing today’s booming cities is their proximity to flourishing primary cities. If for nothing else, the new marketplace created in the wake of the pandemic has made the majority of today’s biggest cities prohibitively expensive, so much so that people are looking to move to more affordable areas. Additionally, the work-from-home trend that has emerged during the pandemic has permitted even more people to pack up and leave in search of the following:

What Are The Fastest Growing Cities In The US In 2022?

Increasing home prices across the country are inspiring many families to relocate and settle down. It often makes sense to find cities that are up-and-coming and offer relatively affordable housing prices. People continue flocking to the South and West, which offer great climates and attract families and retirees alike. Growing job and housing markets coupled with affordable cost of living are factors that make up a rapidly growing city.

Here are the fastest-growing cities in the U.S. in 2022:

What Are The Fastest Growing Cities In The US In 2021?

The impact of COVID-19 on the real estate market has changed what buyers look for in their next home. Today, buyers are looking for more affordable living arrangements away from COVID-19 hot spots. As a result, many secondary cities are starting to grow at a rapid rate. Specifically, these are the fastest growing cities in the US:

1. The Woodlands, TX

Sales Price: $402,500 (+7.3% year over year)

Sale $/Sq. Ft.: $168 (+15.9% year over year)

Over List Price: 1.0%

Down Payment: N/A

Homes Sold: 235

Days On Market: 12

By the end of the third quarter, median home prices in The Woodlands were up 7.3% year over year and are now somewhere in the neighborhood of $402,500. At this time last year, homes were selling in an average of 26 days; however, the competition onset by the pandemic has more than cut that time in half. Today, the average home sale is taking as little as 12 days. The shorter amount of time on the market is directly correlated to The Woodland’s insufficient inventory levels. As recently as September, the city only saw 235 homes sell—down from 279 at the same time last year.

2. Temecula, CA

Sales Price: $675,000 (+27.4% year over year)

Sale $/Sq. Ft.: $304 (+27.2% year over year)

Over List Price: 3.0%

Down Payment: 25.7%

Homes Sold: 218

Days On Market: 18

The median home value in the Temecula real estate market is approximately $675,000, or about 27.4% more than the same time last year. The increase directly results from competition and being one of the fastest growing cities in the US. If for nothing else, most homes receive at least seven offers and sell in as little as 18 days. Temecula has so much competition that most buyers are willing to waive protective contingencies to close deals. Most notably, however, Temecula is only about an hour north of the San Diego real estate market. As a result, Temecula has become the beneficiary of many buyers trading the expensive confines of San Diego for more affordable living accommodations.

3. Frisco, TX

Sales Price: $539,500 (+27.4% year over year)

Sale $/Sq. Ft.: $196 (+28.9% year over year)

Over List Price: 5.0%

Down Payment: N/A

Homes Sold: 303

Days On Market: 19

Heading into the fourth quarter of 2021, the median home value in Frisco was about $539,500. In one year, the city’s median home value increased as much as 27.4% because of several indicators caused by the pandemic. Despite the higher prices, however, homes in Frisco are selling at a record pace. On average, homes sell in 19 days; one year ago they were selling in 36 days. While homes may be selling faster, only 303 homes sold in September 2021, compared to last year when 369 homes sold. It should be noted that the decline in home sales wasn’t due to demand. Located just outside the Dallas real estate market, Frisco saw increased demand as people sought more affordable options.

4. Buckeye, AZ

Sales Price: $400,000 (+34.2% year over year)

Sale $/Sq. Ft.: $206 (+34.6% year over year)

Over List Price: 2.0%

Down Payment: N/A

Homes Sold: 281

Days On Market: 28

Located within proximity to the Phoenix real estate market, Buckeye has become the beneficiary of a migration towards affordability. If for nothing else, the pandemic enabled many people to work from home without being tied to an office. As a result, many primary cities saw people leave for cheaper alternatives like Buckeye. The influx of interest in Buckeye has not only helped it become one of the fastest growing cities in the US, but local home prices have increased almost exponentially. Buckeye’s median sales price has increased 34.2% in the last year and now sits somewhere around $400,000. In addition to higher prices, homes are selling faster and more listings are starting to hit the market.

5. New Braunfels, TX

Sales Price:$365,600 (+23.3% year over year)

Sale $/Sq. Ft.: $183 (+25.3% year over year)

Over List Price: 1.0%

Down Payment: N/A

Homes Sold: 222

Days On Market: 15

Situated outside San Antonio, New Braunfels is yet another metropolitan area benefiting from its proximity to a primary city. With more people willing and able to migrate away from San Antonio, New Braunfels’ natural spaces like parks and the Guadalupe River have provided an escape for those looking to “get away.” As more people looked to avoid heavily populated areas, New Braunfels became the logical choice for many new homeowners, and prices reflected as much. As one of the fastest growing cities in the US, the median home value in New Braunfels has increased 23.3% over the last year. Most listings are receiving multiple offers, and the most desired homes are selling for as much as 5.0% over asking prices in about five days.

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6. McKinney, TX

Sales Price: $458,500 (+26.3% year over year)

Sale $/Sq. Ft.: $189 (+29.5% year over year)

Over List Price: 5.0%

Down Payment: N/A

Homes Sold: 352

Days On Market: 19

Another suburb of the Dallas–Fort Worth metropolitan area to make the list of the fastest growing cities in the US, McKinney is firing on all cylinders. Not unlike the other cities on this list, Mckinney is attracting those who are no longer tied to an office throughout the pandemic. The influx of interest has increased home values by 26.3% in the last 12 months, and there’s nothing to suggest the pace will slow down anytime soon. As one of the hottest markets in one of the county’s most active states, McKinney is expected to grow for quite some time. Those who move in now may benefit from decades of expansion.

7. South Jordan, UT

Sales Price: $595,450 (+31.8% year over year)

Sale $/Sq. Ft.: $206 (+35.9% year over year)

Over List Price: 2.0%

Down Payment: N/A

Homes Sold: 112

Days On Market: 16

Located on the outskirts of Salt Lake City, South Jordan is no more than 20 miles from one of the country’s hottest markets. However, since residents are looking to move away from primary cities, buyers have turned to South Jordan. Evidence of the growth can be found in several indicators, not the least of which is how long homes are lasting on the market. Many homes get multiple offers, some with waived contingencies. On average, real estate in South Jordan is selling in 16 days, which is 38.5% lower than this time last year. Some of the most desired properties are selling for as much as 5.0% over tasing price and in as little as six days.

8. Meridian, ID

Sales Price: $540,000 (+34.6% year over year)

Sale $/Sq. Ft.: $271 (+39.0% year over year)

Over List Price: 0.7%

Down Payment: 26.7%

Homes Sold: 297

Days On Market: 11

As perhaps the hottest market in the country, the median home value in Boise has increased 46.1% over the last year. The increase is directly correlated to the pandemic and people seeking out more affordable living situations with low populations and risk of infection. That said, the latest growth in the Boise real estate market has already reached a tipping point. Today, buyers are looking just outside of Boise and like what they see in Meridian. The new interest has made Meridian one of the fastest growing cities in the US, and home values are skyrocketing, to the tune of 34.6% growth in the last year.

9. Cedar Park, TX

Sales Price: $477,000 (+23.9% year over year)

Sale $/Sq. Ft.: $239 (+48.4% year over year)

Over List Price: 7.0%

Down Payment: N/A

Homes Sold: 116

Days On Market: 34

Another metro on the list of booming cities is Cedar Park in Texas. Instead of piggybacking off the recent success of Dallas, however, Cedar Park has become the beneficiary of its proximity to Austin. In particular, Austin’s growing tech sector has attracted many businesses and plenty of employment. The net migration into Austin has recently spilled over into Cedar Park, drastically increasing real estate activity. As of the fourth quarter of 2021, the most desirable homes are receiving several offers, many with no contingencies at all. The competition has also seen homes sell for upwards of 13.0% over asking in as little as 13 days.

10. Fort Myers, FL

Sales Price: $307,000 (+22.8% year over year)

Sale $/Sq. Ft.: $191 (+28.2% year over year)

Over List Price: 3.0%

Down Payment: N/A

Homes Sold: 657

Days On Market: 8

The last metro to make the “fastest growing cities in America” list is Fort Myers in Florida. Not unlike every other city on this list, migration patterns have favored Fort Myers as more people attempt to find affordable homes. As more buyers flock to Fort Myers, however, home prices continue to increase. In the last year, sales prices have increased by 22.8%. The homes receiving the most attention sell for about 3.0% over asking in as little as three days. The competition is so fierce that most buyers find themselves needing to waive contingencies to close a deal.

Summary

The fastest growing cities in the US are all the beneficiaries of the impact of COVID-19 on the real estate market. Most notably, today’s primary cities are too expensive and crowded. As a result, buyers have sought out more affordable living arrangements. The cities listed above benefited from being within proximity to larger cities, but they also boasted the most important factors buyers were looking for. The unique convergence of location and offerings have enabled these booming cities to thrive in 2021 and beyond.

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Sources4>

https://www.redfin.com/city/26049/TX/The-Woodlands/housing-market https://www.redfin.com/city/19701/CA/Temecula/housing-market https://www.redfin.com/city/30844/TX/Frisco/housing-market https://www.redfin.com/city/2047/AZ/Buckeye/housing-market https://www.redfin.com/city/13081/TX/New-Braunfels https://www.redfin.com/city/11666/TX/McKinney/housing-market https://www.redfin.com/city/18112/UT/South-Jordan/housing-market https://www.redfin.com/city/13444/ID/Meridian/housing-market https://www.redfin.com/city/30813/TX/Cedar-Park/housing-market https://www.redfin.com/city/6208/FL/Fort-Myers/housing-market

For many people, buying a house is the largest purchase they will ever make. It can take anywhere from a few months to several years to save up a down payment, and most mortgages are financed for 15 to 30 years. Even seasoned real estate investors have to spend time securing funding before buying a property. This begs the question: why are houses so expensive?

The average price of a house has changed dramatically over the last few decades. This trend is a result of changing economic factors,

For many people, buying a house is the largest purchase they will ever make. It can take anywhere from a few months to several years to save up a down payment, and most mortgages are financed for 15 to 30 years. Even seasoned real estate investors have to spend time securing funding before buying a property. This begs the question: why are houses so expensive?

The average price of a house has changed dramatically over the last few decades. This trend is a result of changing economic factors, rising construction costs, and many other elements. Below we will outline historical shifts in housing prices and what factors have contributed to these changes. Keep reading to learn more about why houses are so expensive and how this could impact your home buying experience.

History Of Housing Prices

The first U.S. housing census was in 1940 when the average price of a single-family home was around $30,600 (when adjusted for inflation). According to the U.S. Census Bureau, the average price of a single-family home was $346,000 as of January 2021. So, how did prices go from $30,600 to $346,000?

For the most part, the average cost of a home has experienced steady growth since 1940. However, there have been some spikes and falls caused by various economic factors. The most significant increase in home prices was recorded in the 1970s, with prices growing by 43 percent over the decade. This was followed by the slowest growth period over the 1980s when home prices increased by about 8 percent. There have also been short periods of decline; for example, during the Great Recession in the 2000s, home prices fell by almost 12 percent.

Unfortunately, average salaries and wages in the U.S. have not risen at the same rate as home prices. According to Pew Research Center, wages grow between two and three percent each year. This gap has left many Americans unable to purchase property, particularly in recent years. Although, there are many homeownership programs aimed at combating this reality.

It is also interesting to note how home prices have grown at different rates regionally. For example, the largest increase in the average price of a single-family home is in the Northeastern United States. According to Investopedia, the smallest increases have been seen in the South and Midwest regions. While housing prices fluctuate depending on the area, the U.S. has generally seen growth across the country.

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Why Are Homes So Expensive?

The historical price growth seen in the U.S. housing market is a result of several factors. Political, economic, and other societal changes have combined to result in consistent price increases. Below are the main factors when asking why are houses so expensive:

1. Lower Interest Rates

One of the main reasons home prices have increased over time, especially in recent years, is low interest rates. When interest rates decrease, the cost of financing a home goes down, and more aspiring homeowners are inclined to purchase property. This increase in demand almost always increases overall home prices.

2. Increase In Local Zoning Regulations

As you may already know, building and zoning regulations have come a long way since 1940. The changes in these laws have directly resulted in home price increases, particularly in urban areas. A few examples of zoning regulations are permit requirements, neighborhood restrictions, and population density laws. Together, these have pushed home prices to become more expensive — as they often decrease the potential supply of housing.

3. Higher Construction Costs

Not all construction materials are made in the U.S. and must often be imported from other countries. Political changes and trade agreements have caused the prices of these imports to change over time. When it comes to the housing market, this has contributed to an increase in construction costs. Many materials are more expensive than they once were as a result of tariffs.

4. Lower Builder Confidence

A more recent factor that contributes to the increase in housing prices is a decline in homebuilding. During the Great Recession, many home builders faced significant losses on new construction. Unfortunately, many construction companies and home builders are still wary after these losses, and prices reflect this.

5. Changing Demographics

Home prices have also risen as a result of the new generation of homebuyers: millennials. This group began buying property over the last several years, which resulted in an increased demand for houses. Most notably, millennial homebuyers are drawn to suburban or mixed-use areas. Cliff Auerswald, president of All Reverse Mortgage, suggests that “people are trying to find other sources for income after the pandemic, and the new interest in real estate investments has increased the prices of many homes. People are becoming smarter with their strategies of paying mortgages, but there are also many scammers inflating prices within the investment industry.

6. Increase In Land Prices

Over time, population increases have resulted in less available land throughout the country. There is no shortage, but land is generally more expensive to buy than it once was. The increase in land costs is directly related to the rise in average home prices.

7. Government Subsidies

As home prices have increased, the U.S. government has attempted to provide to ease the costs. While these homeownership programs have been extremely beneficial for some, they have also contributed to increased prices. The argument is that subsidies enable homebuyers to pay more for properties, thus pushing sellers to charge more.

8. Lower Supply

Steven Day Owner of SD Garage Doors, says that “despite the fact that various political and economic variables contribute to overpriced housing, the major effect of rising prices is that demand outnumbers supply. The housing market grew overcrowded with potential purchasers and an insufficient amount of houses to sell as a result of numerous banking institutions lending to people with terrible credit and allowing them to acquire property”.

Why Are Houses So Expensive Right Now?

The upward trend in home prices has continued in recent years. According to a study by the Federal Housing Finance Agency, home prices increased by almost 18.7 percent over the last year. Further, home prices increased 4.6 percent within the past two quarters alone.

The reason houses are so expensive right now is simply the result of a supply and demand problem. After the start of the COVID-19 pandemic, interest rates were lowered to help stimulate the economy. The decline in interest rates, coupled with the fact that many Americans wanted to leave apartments and cities in favor of larger living spaces and lower prices, caused an increase in demand. On the other hand, the political and economic uncertainty caused many sellers to retreat from the market. This has resulted in more buyers than sellers — and a dramatic increase in overall housing prices.

How Do Rising Housing Prices Affect Investors?

Rising housing prices affect investors in two main ways: increased acquisition costs and increased profit potential. Investors are not immune to rising housing costs and will need to raise more funding to secure their deals. It is crucial to have funding sources to be able to act fast when a new deal presents itself. Additionally, investors must accurately factor in high purchase prices when analyzing the potential returns on a property.

In some cases, the increase in housing prices directly results in higher profit potential for real estate investors. This is because in many areas houses are appreciating faster than ever before. If you are lucky enough to break into a popular market, you could benefit greatly from increases in housing prices. Remember that this is not always the case, and you should always evaluate deals on a case-by-case basis (even if the market appears to be performing well overall).

Advice For Buyers And Sellers

Buyers and sellers are eager to jump into today’s fast-moving real estate markets, but for different reasons. Buyers are interested in the low interest rates that make securing a mortgage seem like an attractive investment. After a year of dealing with the COVID-19 pandemic, many renters want the space to grow. Remember that while there are high incentives to buy right now, the market will eventually catch up with demand. Pay attention to your finances and your needs for a new home, in time you will find what you are looking for.

Sellers on the other hand should be careful in listing their properties without a back up plan. You may be looking at your overall appreciation thinking what a great time it is to sell. But, you will be entering the same market again as a buyer (unless you want to rent). The best piece of advice for sellers is to plan ahead, and remember that property appreciation will continue to grow even as demand shifts slightly over the next year. Real estate is a long-term investment and there will be time to take advantage of property appreciation, low interest rates, and more.

Will Housing Prices Go Down In 2022?

In the last year, markets all over the country experienced a dramatic increase in housing prices. However, this trend is not likely to continue in the year ahead — at least not at the same rates. The recent boom was largely associated with low interest rates. These are expected to gradually climb in the year ahead, causing the market to slow down. Further, many markets have seen an increase in real estate development as different areas attempt to keep up with the increase in demand. This can also slow the price increases witnessed in the last year.

This does not mean that average prices will reach pre-pandemic levels by any means. For instance, Fortune Magazine reports that U.S. home prices will still increase 14.9 percent over the next year. However, this rate was reduced from an originally-forecasted rate of 17.8 percent. Although prices are not expected to go down any time soon, the pace at which prices are going up is expected to gradually slow. Sharp increases in mortgage rates and a gradual recovery to the low inventory problem will help.

Summary

Homeownership is at the core of the American dream. For many, buying a house is a once-in-a-lifetime accomplishment, while others make their living buying and selling real estate. Either way, the steady increase in home prices has presented challenges for many individuals. Despite the government’s best efforts at subsidizing these costs, home prices have still risen significantly over the last few decades. When looking at the answer to “why are homes so expensive” remember that this problem results from several factors. Remember to plan accordingly if you are interested in owning real estate, and keep an eye out for all of the various financing methods available to you.

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