Property under 20k team, Author at listproperty4free.com

Real Estate Meaning

For everybody who is not a native speaker hearing the first time the wording “real estate” might seem odd. What is the meaning of real estate?

“Real” means “existing, true” as per the Latin origin from the root “res” meaning “thing”. Some also believe it comes from another root (rex) that means royal as in the past only the royals were landowners. However, as the British don´t use the words real estate, they would rather say “property”, I find it unlikely. But who can know for sure?

According to https://www.lexico.com/en/definition/estate Estate has its origin in Middle English (in the sense ‘state or condition’) and that comes from Old French “estat” which came from Latin root “stare” meaning ‘to stand’.

Thinking of the origins of the words real estate makes total sense to describe a property.

Real Estate Meaning – what do we usually understand?

Or better, many words relate to pictures in our head. For me, if I hear real estate, I think of and nice land with green grass and a fancy house.

Many would define it as land and anything immovable on it, such as buildings. Often, it would include air rights above the land and underground rights below the land.

In the past real estate meant a lot to people. It was their livelihood. That´s where they would live and grow their food, raise livestock etc. In todays modern live things have change a bit. A family no longer need to have a big estate to support themselves. Nevertheless, real estate is still very important for us. Naturally, everybody needs a place to live.

In addition, many people work in the property sector. The real estate industry is estimated to give jobs to at least 4 million people worldwide. However, his is just an estimate as many countries have no real estate license laws.

Above all, the biggest question can only be answered by yourself.

What does real estate mean for you?

Are you thinking to buy or sell, then visit www.all-real-estate.com

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The best time of the year to buy real estate

Of course, nobody can predict the future and tell you exactly when is the best time of the year to buy real estate. But there are few indicators we can analyse from past years.

Naturally, prospective buyers would see more properties for sale when the weather is nicer, and this leads to more deals during the summer months. In fact, the weather has a huge impact on the real estate market in countries all over the world.

That´s why statistically you would get better prices on real estate in the winter month as there is less demand.

But make no mistake, that´s just the statistic.

If you ask a real estate agent when is the best time of the year to buy real estate, he will tell you “NOW”. And it makes sense. If the perfect home comes up on the market, you will just go for it, right? Nobody will wait till the winter month to try to get a better deal. And that shows another thing that should be considered.

The “Where” and “What” in the real estate you like to buy.

If the “Where” is in a popular location with high demand or the “What” is a house where usually only apartments are available… then there is no time to waste to ask for the “When”.

Make sure you have your financing in order. Like this you can tell the seller that you are ready to go. Some homeowners would give a small discount for a quick sale.

This of course might be a different story if you are an investor and you don´t look for something specific. You may simply look for good real estate deals, then yes, probably the winter months will be a good time to look.

Why not have a look today on www.all-real-estate.com

Can a real estate agent have tattoos?

If you are self-employed as a real estate agent, sure you can have tattoos, you can have or dress whatever you like. The question is if it is beneficial in your business or may even draw away some possible buyers.

Although having a tattoo might be a good way to strike up a conversation and meet new prospects, keep in mind that you will deal with all sorts of clients – maybe even some who don´t like tattoos (yes, they still exist).

Having your appearance as neutral as possible will help your customers to focus on the property you are showing them.

When it comes to an agent who works for a real estate company or represents a certain brand this might be a different story.

What kind of tattoo real estate companies allow or not depends on each individual case. They may require employees who deal with customers to reflect the character of the company in their outward appearance. Important are the policies of the real estate brand, as well as the expectations of the clientele.

The company may specify what its employees should wear and how they wear it. For example, they may forbid to wear jeans, sneakers, or to go without tie or jacket when meeting customers. They may also instruct employees to always remove piercings or cover tattoos when in contact with possible buyers.

One thing is certain: Large and visible tattoos are a no-go

Having a monster tattooed in your face might not be a good idea when you are trying to sell a luxury villa to some conservative clients.

As a real estate agent, you should draw attention to the property you are selling. That´s why your appearance in general – having a tattoo or not – should not be too intrusive.

5 reasons for less technology in real estate

New buildings nowadays seem like technical centres. It makes all sense as it serves both, protecting our environment and comfortable living, right?

Well… Let´s consider a few things here.

All these technical equipment didn´t pop out of nowhere. It was produced in factories. If you are concerned with the environment, make some research to see how much energy was needed or how much CO2 was produced in the making process.

With our effort to reduce energy consumption by using sophisticated technology in real estate, we have increased the cost of our construction.

Not only that. The additional costs for maintenance and service for those technologies will need to be paid for as long as the building is in use. Unfortunately, in many cases those maintenance costs exceed the amount you saved in your electricity bill.

Technology in real estate – here are five reasons to consider why less can be more

1 – High construction costs
Today, building technology is one of the biggest costs in a new construction.

2 – Short lifespan of the system
Unfortunately, many built-in technologies are less and less durable. In complex technical systems, there are many things that can break.

3 – High power consumption for unnecessary comfort
Whether timer-controlled lighting, sensors that measure the presence, automatic irrigation systems or the simple operation of complex technology chains – the “modern living” costs more electricity than some people think.

4 – Lack of workforce
At the first maintenance of the installed system, you might face a problem. No expert is available. Or maybe no one who is familiar with the complex system in your real estate. This not only leads to long waiting times for maintenance and repair, but also to increased prices for services requested.

5 – Increased electrosmog
Whether electrosmog can make you sick has not yet been scientifically clarified. Although, if a certain level of electrosmog can make you sick is still in question all agree that it is probably healthier to live with as little electrosmog as possible.

There are so many good reasons to pause and consider our approach to modern construction. We should ask ourselves how much technology we really need for comfortable living.

Keep in mind: maintenance-free systems will always save you time and money, in the construction process and beyond.

Are real estate agents paid on commission only?

The answer is: It depends.

If real estate agents are paid on commission only depends if the real estate agent is self-employed or not. If not, he would get a monthly wage from his employer plus his share in a deal when he sold something.

Being employed

Any real estate agent who does not own a business is usually an employee at a bank or at a real estate office.

This can be lucrative. Although in this case the commission is not particularly large, he receives a fixed salary each month.

The commission varies greatly with the performance of the broker. In most real estate offices the performance-related salary would be between 20 to 50 percent of the commission.

Being self-employed

An alternative to an employment with a monthly salary is being self-employment as a real estate agent.

There is no fixed income, but the commission per sale or rental is higher.

Real estate commissions are based on the price of the property. The commission for a real estate transaction is negotiable. It tends to range anywhere from 1% all the way up to 10%.

But don´t forget, as a freelance real estate agent you also have more expenses, such as costs forrunning your office and possibly paying staff. These costs will lessen your profits. In addition, self-employed need to look after their health insurance and Pay taxes (income tax, trade tax, etc.).

Real estate agents carry a high economic risk, because they are responsible for the accuracy of their statements. Basically, they work for free until they sell something. Some properties may not be sold because of unrealistic price expectations of the seller. Also, some may sell only after many months and countless viewing appointments. In addition, buyers who contact the seller directly to bypass the commission pose a commercial risk to the real estate agent.

Real Estate Investment and the Rate of Return

Once upon a time there was a gingerbread house. It was lovely decorated with lots and lots of candy…

How often we have heard it. “If something looks too good to be true, it probably is”. Unfortunately, a real estate investment is no fairy tale with a happy ever after. Especially when it comes to profit, we must be careful with promises of an unrealistic high rate of return.

But to know if something looks too good to be true, we first need to know what is a realistic rate of return for a real estate investment? And how is it calculated?

The rate of return shows how much profit in percent is made per year in relation to the money spend. Like this it is possible to compare one real estate investment to another or even compare it to other types of investments.

When a percentage value is mentioned as a return on real estate, a serious investor should first ask what return is meant. A distinction is made between gross and net return (or some also call it “cap rate” meaning Capitalization rate).

The gross return covers purchase costs and additional purchase costs, but not ongoing expenses such as administration and maintenance costs or taxes.

It is calculated like this
annual income divided by purchase price x 100 = gross return in %

The net Return includes the current expenses except taxes, so the net return is always lower than the gross return.

It is calculated like this
annual income minus all expenses divided by purchase price x 100 = Net return in %

These are just the very basic types of return – of course there are others, more complex (price return, money-weighted return, time-weighted return…).

Let´s see an example.

You bought a house for 150,000 EUR and you rent it out for 700 EUR a month. Your expenses for the house are 2,000 EUR per year.

This means that your gross return is 5,6 %.
(700 EUR x 12 month) / 150,000 EUR x 100 = 5,6 %

Your net return on the other hand is only 4,26 %.
[(700 EUR x 12 month) – 2,000 EUR] / 150,000 EUR x 100 = 4,26 %

As a result, to get a good idea of your profit it is always better to look at the net return.

What is an average rate of return?

Depending on your country and the type of real estate (residential or commercial) your average rate of return would probably be something between 4% and 10%. Of course, the bigger the rate the better. But again, if the rate of return is very high in a real estate investment you must be cautious. Also look out for the wording “possible” or “potential” yield of …. Meaning you will need to do something to achieve that – maybe even investing more money.

So, if the rate of return in a real estate investment looks too good to be true maybe take a closer look at the tenant of this nice “gingerbread house” or bite marks on the walls….

Real Estate Investment through renovation

It sounds simple: You take the plunge and buy a reasonably priced real estate with small “faults” that are easy to fix and without much effort.

To be successful in Real Estate Investment through renovation you make sure that the building is in a not-too-bad condition. It´s vital to make your research! The least you need to fix, the more you can save. Then it’s time to plan, what needs to be done to create a good layout, make it a charming, attractive property that you can rent and make money from?

You should pay particular attention to those things that attract potential tenants: Maybe a modern open plan kitchen, a gorgeous bathroom and a nice garden…

So far you have to invest money, otherwise you cannot earn anything.

After you finished the renovation of your real estate, you now have two options, depending on your financial needs.

If your goal is to raise a sum of money all at once, then look for a buyer for the house.

Coming up with the asking price is simple: your invested money and the targeted profit make up the purchase price at which you resell the property.

If you rather like to have a regular income from your real estate, then rent it out. Like this you have a guaranteed steady income over a longer period.

If you are experiencing financial difficulties, you always have your real estate and you can sell it anytime to make a larger amount of money.

The only question is: Is real estate investment through renovation not too risky?

The starting point is simple: the cheaper the renovation can be made, the higher the earning potential. Of course, handy people have an advantage here. If you can do a lot yourself, the costs are reduced.

Be balanced. You should not overestimate yourself and certainly not underestimate. With time and commitment, you can work out much yourself. In addition, the Internet is full of information and DIY tutorials.

Of course, you must invest time, but working on a house is fun and, above all, it’s a paid hobby.

Conclusion for Real Estate Investment through renovation

You must be aware that it will take a lot of patience and commitment.

Maybe you don´t find the right tenant straight away. But sooner or later that will be the case. Every entrepreneur, and one such is you if you want to make money, must take some risk. The chance that it will pay is high.

In summary, it can be said that investing money is never easy. However, investing in slightly older properties is a good way to invest your money.

Look around, if you have found the ideal house, go for it!

Here you can find some renovation projects from our site.

It sounds simple: You take the plunge and buy a reasonably priced real estate with small “faults” that are easy to fix and without much effort.

You should pay particular attention to those things that attract potential tenants: Maybe a modern open plan kitchen, a gorgeous bathroom and a nice garden…

So far you have to invest money, otherwise you cannot earn anything.

After you finished the renovation of your real estate, you now have two options, depending on your financial needs.

If your goal is to raise a sum of money all at once, then look for a buyer for the house.

Coming up with the asking price is simple: your invested money and the targeted profit make up the purchase price at which you resell the property.

If you rather like to have a regular income from your real estate, then rent it out. Like this you have a guaranteed steady income over a longer period.

If you are experiencing financial dificulties, you always have your real estate and you can sell it anytime to make a larger amount of money.

The only question is: Is real estate investment through renovation not too risky?

Of course, you must invest time, but working on a house is fun and, above all, it’s a paid hobby.

Conclusion for Real Estate Investment through renovation

You must be aware that it will take a lot of patience and commitment.

In summary, it can be said that investing money is never easy. However, investing in slightly older properties is a good way to invest your money.

Look around, if you have found the ideal house, go for it!

Find some renovation projects on our site.

New must-have to sell your property faster

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We wish you every success in selling or renting your property!

How to generate passive income with real estate

Many people feel trapped: Pressure and stress at work makes them sick. The good news is, there might be a way out. Anyone can generate a passive income through real estate.

All you need to start is some savings or a good friend who lends you some money. When asking for a mortgage at the bank – depending on the bank of course – they usually would like to see that you have at least 20% of house price yourself.

The advantage of passive income through real estate

Setting up a passive income requires some work at the start. It requires some good decisions and a clever management of your real estate investments. If you want to be free of any work, you will probably ask a firm to look after it for you. After that you are laughing! It regularly fills up your bank account without you moving a finger. Life becomes light and free at once. Finally, you have much more time for the things that really matter to you. Usually only a small financing is necessary to get you started.

Financial freedom through real estate

Of course, real estate is not the only way. There are many ways to generate passive income. Some people write a song, a book or create some other sort of art… or others invest in the stock market. Much of it, however, takes a lot of effort and might not lead to anything. Real estate, on the other hand, is very well suited as a passive income generator. Rental income will last for as long as you are a property owner. You can rent residential or commercial properties. Even if you are sick of it one day you can simply sell it again.

Real estate as passive income: what should I consider?

Anyone who rents out a property must pay tax on the income. Also, the owner has a high responsibility towards the tenants. But this burden pays off in cash. You can have it as simple or as complicated as you like… You are totally free to choose to which extend you like to do this. Some real estate owners bought a house one day and rent it permanently, that´s it. Others use the profits to finance the next house, increasing their real estate portfolio. They usually ask a specialized company to do the property management for them.

Once you generate a certain rental income, you can do things you really like. Now you can write a song, a book or create some other sort of art… and it will be more fun because you no longer have to earn an income from it.