The benefit of home price recognition requires more money from the sale of property to be paid and no benefits, moving expenses, fees, and a large difference between the cost of ownership and rental costs for the period of ownership. Buying and selling residential real estate, causing substantial transaction costs that are not included in the price. This is true for real estate for sale, more than the purchase price and the loss for the seller. But even if the seller loses money, the property receives the commission. Six per cent of the homes price index is valued by the owner to pay the real estate.
Part of investment value through the recognition can be assessed only on the accurate assessment of the value of the property at the time. The public is totally exaggerated picture of home price appreciation. Historically, homes appreciate at 0.7% in the long-term inflation. From 1983 to 1998, during a period of low inflation and reduced rates on mortgage loans up to a big real estate bubble, the share of appreciation in house prices was 4,5% in the national average of 1 4% inflation. Recognition of income and rents, as this is a fundamental value of residential real estate.
When people buy property for the payment of expenses, including the closing of title insurance, registration fees, document stamps and taxes, mortgage application fees, examination fees, inspection fees, appraisal fees, and so on. In general, the frequency range from 2% to 4% of the purchase price without a down payment on the mortgage interest.
When people go on the sale of residential property, usually real estate broker who charged commission of 6%. A growing popularity of the use of intermediaries, while the National Association of Realtors has done excellent work in the commissions of 6%, despite market pressures to decrease. These costs are part of any real estate transaction, and a significant share of the profits in the properties for a short time, and if the holding period is not long enough, the amount of transactions to create losses.
Due to high transaction costs, property, not the threshold, up to two years of ownership. In the discounted cash flows, property rights are not violated, even after 4 years of full ownership. These high transaction costs that bind many of the short-term housing needs of rent, rather than their own.
Real estate flippers and people, often because they have the opportunity to 6% of the large transaction. The higher the turnover, the more money you make. If this is not to assess the price of the house, he is likely to be a national rebellion against the high commissions, but also at home generally appreciate more than the typical duration of assets to cover the fees, the people only those outrageous fees and acceptable. Maybe a big real estate bubble is going to change that.Lawrence Roberts is the author of the major real estate bubble: Why home prices fall?
Home Price understanding and operating costs - Only Real Estate Get Rich
Labels: Investment, Property