Archive for September, 2008

High Tech Hits the Home Market

Tuesday, September 23rd, 2008


Today technology is becoming an important part of homes. Recently we have seen arise in the home automation industry, and homes that are either automated partially or fully have a better value on the real estate market. Consumers are looking for these products in the homes they purchase!

 

For many years home automation equipment that controlled lights, access, heating and air conditioning were either custom installed systems or  very low end do it yourself products that couldn’t be relied on very well. Now new technology has allowed a growth of automation products that can be installed by normal consumers. These systems are more economical and work better than their predecessors.

 

Because these new automation products have become easier to install and less expensive, builders and contractors can now include them in new home packages. Dean Graziosi, a leading real estate investor, agrees that homes equipped with home automation and security products have a better market value and sell more easily than homes that do not have these products. It is also true that many of these products are not that expensive and can be installed quite easily.

 

There are several different products of this type currently on the market and some of the most popular and interesting are:

 

The WL3 Program or Other Similar Products

A software product called WL3 which will operate form any device that has a web browser including the iPhone, the iPod Touch, the BlackBerry, Smartpone, PDA and computer.  The WL3 monitors a home and informs the owner when something like an alarm system is being disarmed or activated, a car is entering the driveway, or even when a pool or basement door is opened.  This program lets an owner change home temperature, lights, and security settings from anywhere they may be. It also allows an owner to view video feed from the home security cameras from any PC or mobile PC.

 

Custom Home Cinemas

These have also become very popular in some of the newer homes and the contemporary look of some of these home cinemas add a nice touch to many middle end priced homes.

 

The new trend is high tech and homes that are outfitted with some of this highly automated technology both are bought and sold very well. This is not just a trend that will go away. The consumer electronics industry will top revenues of $173 billion in the U.S. this year, and is expected to top $183 billion by 2009. Adding new and innovative technology to a home is an investment one that will pay off when you sell the property.

 

Bonds versus Real Estate as Investments

Wednesday, September 10th, 2008


There are a great number of bond investors out there who are experiencing reduced returns due to economic factors.  Interest rates are very low, thus bond yields, though steady and safer than holding stocks, are quite small as well.  Hundreds of billions of dollars in retirement assets are invested in government and corporate bonds in this country.

 

·         Government bonds, frequently backed by the “full faith and security” of the U.S. or state government, are considered quite safe.  After all, they can just raise taxes to generate revenue.

·         Corporate bonds are a bit more risky, but they almost always pay higher yields for that reason alone.  You’re betting on the continued operation and financial health of a corporation.

 

Perhaps you’re a bond investor with substantial holdings in either or both of these bond types.  After all, most financial planners will advise you to diversify.  They’ll also point out that bonds are safer investments, and that makes their lower yields acceptable if you are near or in retirement.  All of this is very true, and we wouldn’t advise anyone to liquidate bond holdings to re-allocate money to real estate investing…unless they do their homework at least.

 

If you have considered moving money from bonds to direct real estate investment, here are some characteristics of these investment types that may help to you make a decision.  Remember, we’re talking about active investing, though you may hire others to manage your properties.

 

·         Historically, real estate has provided appreciation and rental yields at multiples of the yield rates of bonds.

·         The history of real estate in this country has proven the safety of the investment if done properly with due diligence and intelligent purchasing.

·         While bond yields suffer with inflation, the rental property investor usually profits from it.  The cost to build goes up, so their properties appreciate, and usually rents increase with inflation as well.  All the while, your fixed mortgage payments stay the same.

·         Bonds have a fixed value, with the only return on investment coming from the interest or dividend yield.  Real estate will often produce an equal or higher rental yield, while appreciating in value as well.

·         When home buying becomes unaffordable for many, or mortgage avenues dry up, there are more tenants because they cannot afford to buy a home.

·         Our population continues to grow, with the normal first home for younger people being a rental of some kind.

 

Examine your life goals and your investment objectives.  If you have the time and ability to invest in real estate, particularly rental property, then you may find that a partial re-allocation of your investments from bonds to real estate is for you.