Tips for Buying A Luxury Investment Home

Buying a luxury home is a little different from buying the average tract house. Obviously the expense itself is a large concern, but more and more luxury buyers are using the home as an additional asset in their overall investment portfolio.

In the 1950s the dream was to find a home and pay off the mortgage, now many financial advisors recommend using the mortgage as a way to not only offset income taxes but to leverage capital for other investments. For those just entering the luxury home market, it’s important to know what to look for so that the home not only provides a pleasant living environment, but also appreciates in value.

First and foremost… location. Cities, communities, neighborhoods are all very important factors in purchasing a luxury home. More than many home purchases, finding the right real estate agent can make a huge difference. Your agent should be able to direct you to homes in areas with appreciating value and know the reasons why.

Communities and neighborhoods are also very important. Many luxury buyers look for gated communities; security and privacy are important aspects to the home’s location. If you are looking in a location which offers views, such as a beach town or city, then you also want to have a nice view. Remember that if this is intended to be used as a part of your financial portfolio, then increasing value is a critical part of the home purchase.

There are common amenities seen in most luxury homes:

• Upgraded kitchens and bathrooms
• High ceilings
• Open floor plans
• Specialty rooms, such as library, media, gym, bonus or wine sellers
• Larger garages or parking for more than 3 cars
• Nice outdoor entertaining areas
• Reputation of neighborhood

Get a complete inspection done on the property. Spending a few hundred dollars on this expense you can save thousands in problems that you cannot see. By, getting a comprehensive full inspection you can rest assured that you know everything that is wrong with the luxury property. In the contact for the luxury house you need to make sure that you have provisions to have a complete inspection preformed, and if the inspection finds problems that are going to cost more money that you are willing to invest you can get out of the contract with no penalties. It’s commonplace to inspect suits, dresses, trousers or shoes before buying them. People instinctively know they need to try on clothing to be sure they fit, feel comfortable and are attractive on them. Isn’t it even more important to inspect a home investment before you purchase it?

Luxury homes in the United States have become a great investment tool. The United States luxury home market is still more affordable than most countries. As this trend continues, the value of these homes will rise accordingly. Foreign buyers are flooding our luxury home market with cash. Purchasing a home for yourself in this environment might not only provide you with a lovely home but could appreciate in value significantly over the next few years. A luxury home purchase is a great way to diversify your financial portfolio.

Goa: A Vacation Destination For Your Second Home Investments

You will find plenty written on Goa as a great place to visit for a holiday over the internet and if you ask someone who has visited the place, will have good things to say about it. Having said that, tourism is booming in the state and growing each year. Businesses in Goa rely heavily on tourism which is the highest revenue contributor to the revenue of the state.

Over the years, seeing this steady inflow of tourism pouring in each year has prompted many local businesses to set-up commercial as well as residential real estate properties to meet the demand of accommodation that is witnessed each year. There has also been a shift in the preferences of visitors holidaying in Goa looking for accommodation, while earlier many preferred to stay at a hotel but now a day’s the preference has shifted more towards the peace, quiet and private of vacation rentals that are mushrooming all over the state.

The types of accommodations are fully serviced, equipped with housekeeping, a fully functional kitchen, chefs on requests and much more. These types of accommodations are seen around the coastal belts of Calangute, Baga, Anjuna, Vagator, and Candolim, all of which in North Goa.

This trend has made many investors shopping for homes to invest in this part of India. Although foreign nationals cannot directly purchase real estate here, they can do so by setting up a business. Indian nationals living in India and abroad have also taken a keen interest in Goa as well.

Historically, prices in Goa’s real estate market have never dropped, for property prices as well as rentals. This has strengthened investor confidence to invest in Goa for steady appreciation in the value of the property that is more or less at around 15% per year and also quick rental income, renting out to vacationers on a weekly as well as a monthly basis. There are also companies that you will find that manage these rentals for you if you do not have time or are not in Goa. Rental for a period of a year and above can be completely customized with luxurious interiors all borne by the home-owner.

Prices of apartments Candolim begin at around $128,000 for non sea-facing apartments and in and around the Baga area is around $145,000 on-wards, the closer you get to the sea, or if the apartment that has a sea-view, it would be priced at an average of $180,000 onwards.

Investment Financing in Kenya Real Estate

Real-estate investments in Kenya have the potential to double and even triple in value per year-with the right property. So, how does an investor finance a property investment? There are at-least two main options available in Kenya: group investments and mortgages.

Other than being able to prevaricate against risks such as rising inflation, real-estate investors are able to enhance their net worth, generate high capital gains and potentially register quick rates of appreciation.

Property Investment Financing Options

1.Group Investments

This is the most efficient and commonly used financing option by lower-middle class and those in informal employment who cannot qualify for bank mortgages and loans owing to their irregular source of income.

Group investments, locally referred to as ‘Chamas’, hold more than Ksh80 billion of wealth in Kenya in terms of savings and investment, with one adult in every three being an active member of a group investment club. They have registered the greatest success among women, youths and self-employed people.

To function, members make daily, weekly or monthly contributions for a specified duration of time and with a specific financial target. Once targets are reached, they identify a potential property, buy it and either start saving towards developing it or splitting it into equal portions among group members.

Alternatively, banks develop investment groups and invite interested parties to make monthly contributions. If the group member wishes to buy a property, they simply borrow (with interest rates applying) from the group based on their contribution. Group members co-sign the loans and they bear the cost of repaying the loan if one of the group members defaults.
The success of group investment is powerfully driven by a cultural impetus to pool funds together to invest and to borrow.

Most banking institutions and building societies in Kenya have realized the potential the option has and have developed programs targeted to boost group investments – it is based on the idea of creating a savings and investment opportunities.
2.Property Loans & Mortgages

There is a thin line between loans and mortgages in Kenya, and people often use the two terms synonymously.

These are facilities offered by various financial and lending institutions, such as banks and building societies, to help you buy property:

Loans and mortgages are given to successful loan applicants who meet the minimum loan-qualification requirements.
Loans and mortgages can be fully or partly financed by you. The majority of lenders, however, finance the property up to 90%.
Various lenders have varying interest rates and income-generating loans being charged a 15% interest rate per year and estate development attracting 13% p.a.
Property for owner-occupation may receive 80% financing while for investment property, such as rental units or holiday homes, may receive up to 70% financing.
Repayment duration for loans and mortgages

Maximum of:

15 years for individual borrowers
10 years for limited companies
2 years per phase for real-estate development
Additional Costs

Most loan and mortgage applicants in Kenya are oblivious to the hidden charges that come with taking loans and mortgages.

Stamp duty
Currently at 4% of the cost of property.
Valuation fees
Fees vary depending on the valuation surveyor, and it is crucial you have your own prior to the property being valued.

Legal charges
Determined by mortgage amount. Higher loan amounts attract higher legal fees. Banks have their preferred law firms they deal with, so ensure you learn from the lender their preferred law firm.

Bank facility charges
Varies between banks and is meant to cover loan facilitation

Charges for clearing the mortgage before the agreed time; varies between

Property insurance
It is not mandatory and it is paid per year. It protects the property during loan repayment period.

Mortgage life policy
Varies between lenders and covers your outstanding balance in case you die.