Real Estate Investing

In the United States, we’re living through the fallout of the apocalypse popped housing-bubble.  Across the country, people are upside down in their home mortgages – that is they owe far more on their home loan than the house is actually worth. Plus, jingle mail, short sales, and foreclosures have decimated not only neighborhoods, but entire cities.  For example, Stockton, California has earned the nickname Foreclosureville and the tag “The Most Miserable City in the Country” because 1 in 10 houses have been foreclosed according to MSNBC.com,

At the height of it, about 1 in 10 houses fell to foreclosure. Houses that sold for more than $500,000 before the crash now go for $200,000. In some neighborhoods, fixer-uppers cost less than a new Honda Fit — under $20,000.

We should have known the housing bubble was coming.  We were warned about it.  And now in China, officials are fearful of the same thing happening there.  The signs are there:

• Property prices soaring
• Easy access to home loans
• Low down payments
• Declared income loans

However, some economists disagree that China will have the same problems as the U.S. or Japan.  For example, in China people don’t carry as much debt as in the U.S.  According to a Washington Post article published on MSNBC.com,

The bigger real estate problem in China now is access to housing. For many people — especially the young or people moving to the cities from rural areas — the dream of owning a home is more and more difficult to attain. The Xinhua news agency quoted Goldman Sachs as saying that housing price increases had outpaced wage hikes by 30 percent in Shanghai and 80 percent in Beijing in recent years.

My thoughts are isn’t this exactly the same thing?  When housing prices rapidly increased in 2003-2007, it was the start of the housing crash.  I’m hoping China will heed that this could be a warning sign and hold the feet of appraisers – whatever form they take – to the fire so they don’t disproportionately build values.

Photo by Andrew ?’s photostream via Flickr Creative Commons.

I just read on a Wesabe message about a guy who bought a half acre of land 1000 yards from the Caribbean Sea using a credit card.  I’m only linking here to the Wesabe site because it says (and emphasis is mine to respect privacy rules), 

Wesabe is unique because it combines easy-to-use budgeting tools with a thriving community of smart, supportive people, anonymously sharing ideas and advice with each other to help everyone get more value for their money. And, your information stays private and completely secure, so you can take advantage of Wesabe’s many benefits without worry.

The commenters were very insightful urging the buyer caution in dealing with local customs, laws, and regulations, along with the challenges of local builders and codes.  However if the buyer did purchase in the Dominican Republic, it’s a place I’ve heard is FANTASTIC for people considering investing or retiring.

Homes are incredibly affordable according to this article which sourced Realtor Juan Perdomo of Century 21/Juan Perdomo Real Estate Company,

… along the north shore, prices of well-built residences are highest in Sosúa (approximately $15 per square foot), up to two-thirds less in Cabarete ($4 to $5 per square foot), and much less the further away you get ($2 to $2.50 per square foot). 

You can buy a magnificent ocean-view house in Sosua measuring 3,766 square feet, with three bedrooms and four bathrooms for $340,000. The property sits on 1.7 acres of land with a swimming pool. Or, how about this—a seven bedroom/six bathroom home with 5,380 square feet, on 1.11 acres of land with a swimming pool, waterfall, and Jacuzzi for $330,000—it was originally listed for $550,000. That’s on the high end of the property scale. $179,000 will buy you a two-bed/two-bath house in a good location, with a swimming pool. Or an apartment in a secure complex with swimming pool for $43,500.

The article went on to explain that foreigners have the same right to buy and own homes as natives to the Dominican Republic, as long as the Title Registry Offices have a record of all purchases made by foreigners.  In the DR, buyers must first come to a purchase agreement verbally and then the verbal agreement is written.  In dealing with any foreign purchase (or domestic, for that matter), hiring a good honest attorney is key to having a successful transaction.  In Tennessee, for example, our escrow offices – or title companies – must have an attorney on staff to oversee all transactions.

This article offers a huge amount of great information if you’re considering purchasing a home in the Dominican Republic.  At the end, it also names reliable builders, attorneys, real estate agents, schools, and more.

This home is listed at $286,000 and has an in-ground pool, 5 bedrooms, 3 baths and over 2300 square feet.

Here’s one for $168,000 and a few minutes walk to the beach.  It has 1600 square feet, 3 bedrooms, and 2 baths.

There is a huge disparity between the wealthy and the poor on the island.  I don’t know how this would affect a purchase and living in the area, but it’s something to note.  I could see myself living in the sunshine of this beautiful island.

Photos from here.

The Web Urbanist brings us a collection of amazing houses from around the world.  For example,

I know, right?

And speaking of the unusual, take a look at the Burj Dubai Skyscraper going up.  Here’s a link to the photo where you can zoom in and see fantastic detail.

You can watch the progress here.  To get a real idea of just how tall the building will be, here’s what the skyscraper would’ve looked like in New York City prior to September 11th, 2001.

Soon to be the tallest building in the world, luxury apartments will be available once it opens – estimated completion date in 2009 (or 2008 depending on what you read).  According to the site,

Burj Dubai will feature residential, commercial and retail components including the world’s first Armani Hotel & Residences, exclusive corporate suites, a business centre, four luxurious pools and spas, an observation platform on Level 124 and 150,000 sq ft of fitness facilities. 

Even in the absence of vertigo, I’d have to think long and hard before agreeing to sign a lease there.  Maybe it is the memory of September 11th that gives me pause.