Brian Ripp ~ Your Bay Area & Fremont Real Estate & Financial Agent

How important is property location? Very.  When considering a house purchase, it’s always wise to weigh how property values may rise – or fall – before making an investment.  Generally speaking, property values tend to rise in neighborhoods where there is a transit route that cuts commute time.  What’s more, houses located within the jurisdiction of a good school district have higher property values than those served by less desirable schools.  Despite this, a house’s value can be adversely affected if it is situated directly across the street from a school.

Location within a community can affect property value as well.  A house that is within walking distance of public transportation or a shopping area is oftentimes more valuable.  But if it’s too close to either, it may lower in value.  Similarly, a house near a busy freeway or heavily traveled road is generally lower in value.  Within subdivisions, cul-de-sacs tend to be quiet, private and more desirable locales.  Thus, corner lots often sell for less due to their increased exposure.

information from the CRS “Your Home” newsletter

Residential sales by foreign buyers totaled $82 billion for the year ending March 2011, up from $66 billion a year ago, according to the 2011 Profile of International Home Buying Activity released by the NATIONAL ASSOCIATION OF REALTORS®. The $16 billion increase is one of the largest in recent years.

The average price of a U.S. property purchased by an international buyer was $315,000 compared to the U.S. average of $218,000. But nearly half of international purchases were for properties worth less than $200,000. Nearly two-thirds of international purchases were reported as all-cash transactions.

More than half of all REALTORS® (55 percent) say they worked with at least one international client in the past year, while the bulk of international transactions were handled by a small percentage of REALTORS®.

International buyers represented 70 different countries, up from 53 countries in 2010. For the fourth consecutive year, Canada was the top country of origin with 23 percent of sales, followed by China, Mexico, the United Kingdom and India. Foreign buyers often find U.S. properties to be less expensive than comparable properties in other parts of the world, the report concludes. U.S. properties are also viewed as a secure investment, and they offer rental opportunities and long-term appreciation potential. One new trend the survey finds is the increased number of foreign families who are purchasing U.S. properties in college towns so their child has a place to live while they attend school.

from CRS Connect, on-line newsletter

Foreclosures and bank REOs are pulling a new wave of novice investors into the market, some of whom are just a little clueless.

They see the price and they say, wow! I can buy that house and turn it into a rental.  But they don’t understand the local market, they don’t understand landlording, and don’t even necessarily visit the property.

 What are some of the key rules for freshman class investors?

      Number one: Due diligence is never optional. You’ve got to understand the local market – and that includes not just where prices are headed, but specific market demand for rental real estate in this price segment, and even the local government’s plans for the area where you’re thinking of buying.

      Number two: Buy with a written plan – that’s right, just like the large professional investors use, with an entry strategy and an exit strategy. How long are you going to hold onto the property, how much will it earn you during your period of holding?

      And what’s the endgame – a sale to another investor? Conversion to condos? Tear it down and build something that’s closer to the underlying real estate’s highest and best use?

      Write it all down, that way you can analyze it better.

      Number three: Calculate the actual costs of the property in advance – not just the bargain basement price, but how much you’ll need to fix it and feed it – the management costs, rental commissions, vacancy costs, taxes, to name just a few.

If you don’t know these things up front you are flying blind. And there are few good surprises in real estate.

Brian Ripp, CRS, GRI, Broker – your Bay Area Realtor

www.BrianRipp.com  serving Fremont, Newark, Union City & surrounding communities. Real Estate & Property Management.

Real Estate Market Weekly Update Webcast: http://realtytimes.com/REUv/BrianRipp