Tomorrow - Small Vacation Rentals

When we build an Internet business, we naturally wish to become a large-scale, global company. But, do you feel more comfortable in an overcrowded mall as one of hundreds of faceless customers-- or as a valued guest in a cozy shop? Do you like your specific needs to be as important to a salesperson as his own?

The less business you have, the better are your chances of success. Sound unrealistic? Well, here are the facts:

The smaller your region, the better your customer service.

You probably remember surfing the net, looking at hundreds of vacation rental sites. Was destination important to you or, did it make no difference? Personally, I can't imagine that someone would search for just some kind of property somewhere in the world.

I see a difference between Sydney and Rome and prefer sites dedicated to specific destinations. Why? That's easy. It's because I like the individual attention I get. If I have questions all of my questions (even about the color of the walls in the bathroom) will be answered with care and in detail. Plus, I can get information about which banks have the best exchange rates, where the best eats are and, well, about anything and everything a traveler wants to know about really.

The network does not replace live interaction.

Even the most informative web pages can not replace live interaction, when you get specific replies to your specific questions. You should read the web page to find the info you need. We all value our time and prefer to talk to a live person and get an immediate reply. Multi-user portals are simply unable to achieve that close interaction between a web site owner and web site visitors, whereas small web sites can.

As a web-site owner, you will gain negotiating skills. These will show you are trustworthy, and help you to succeed in the rental business.

Tenant details are invaluable.

If you have been in the business of leasing or renting real property for several years, you’ll have quite a database of tenant and owner contacts. Storing every detail about them can help you regain them as clients. Before the high season begins, send them a newsletter about a new option, discount or benefit for your website visitors and include a brief reference to their family. For instance, tell them how cute those twins, John and Jack, were, who ‘decorated’ your wallpaper with their creative paintings last year, or, ask about their little dog Sparky, who misused your flowerbeds and lawn.

Your tenants will appreciate your attentions and will make early reservations. You could hardly expect that at large vacation rental portals.

'Closer' money.

If you charge property owners for listing their properties on your small vacation rental website, it’s easier for you to collect payments from them. Local transactions are easier, faster and more secure than payments from all over the World at international vacation rental web portals.

Document your financial relationships.

Operators of large vacation rental websites have owners from different countries with different local laws, so it is hard to control all the agreements and negotiations between property owners and tenants, but a small vacation rental website dedicated to one specific country or region shows more professionalism and generates more trust if it offers rental agreements prepared on behalf of property owners and guests.

If you operate a website dedicated to one region, you can compose legal documents valid for your region and appropriate for your owners and guests. Such rental agreements should describe the most likely disputes that can arise between owner and guest: furniture and fixture damage, insurance, guest and owner responsibilities, abandonment, payment schedule, etc. People feel more comfortable when their financial arrangements are backed up by legal documentation.

The smaller your region, the more income opportunities you have.

Would you like having more happy clients, who naturally turn to positive testimonials and word-of-mouth advertising? The owners of small rental websites can cooperate with local service providers and get good commission from this cooperation. For instance, they can agree on discounts with souvenir shops and hand out discount coupons to their guests. Discount coupons issued specially for a specific villa or house work best. The same can be done with restaurants, car hire and yacht rental services, etc. This will no doubt contribute to generating interest and building trust on your vacation rental website.

VIP attitude is more important than VIP house.

Even if the house for rent is not the essence of luxury, you may win your client’s favor with your professional demeanor and attentive attitude. I have seen dozens of examples in which good attitude has compensated for the shortcomings of a property. Remember: you lease impressions, not properties.

Be Sincere.

Last but not least, the guiding principle for the owner of a vacation rental website is to really want to make people happy. Your main and sincere wish should be to make a guest’s stay as good as possible. Making a profit depends on this. You need to listen hard to what your guests are saying. Remember that when a guest rents house for his vacation, he wants a break from work and day-to-day worries. He does not want his vacation to be clouded by trivial inconveniences. Love your owners! Love your guests! Love properties!

Article Source: http://EzineArticles.com/?expert=Stacey_Daniels

Top 5 Benefits of Debt Settlement

If you have the finances to accomplish debt settlement, you can get out of debt quickly and permanently. As the name implies, debt settlement refers to an amicable agreement reached between yourself and a creditor for either one lump sum, or a structured payment plan, in order to achieve a discounted payoff on an account. Below are five reasons to consider this option for getting back on the road to financial freedom.

Say goodbye to your bills. With debt settlement, your bills are gone for good. In most instances, a settlement will result in the creditor closing your account. While this may seem difficult, especially if you have become reliant on your credit card(s), it will prevent you from using them again in the future and rebuilding a mountain of debt. Debt settlement you to wipe the debt away permanently.

have you ever been late with one or more bills, then you already know that creditors begin calling at 8 a.m. and are not legally required to stop calling until after 9 p.m. at night. Your phone will stop ringingDepending on how many bills you are behind with, your telephone may be ringing at all hours. This is not only unnerving to you and your family, but it gets even worse when the collections department makes you feel terrible about your situation. With debt settlement, the phone will stop ringing because you will no longer owe anything on a settled account.

Avoid legal action & bankruptcy. Depending on the amount of debt that you owe to a particular creditor and the severity of the delinquency, they may pursue a civil judgement against you in order to recover payment. Once a judgement is entered, the creditor can petition the court for permission to garnish your wages, attach to your bank account or other legal methods used to collect a debt. A debt settlement will prevent this from happening and will ease your mind about ever getting served with lawsuit papers. In addition, settling your debts will enable you to prevent the filing of bankruptcy, which is a stressful process and the worst blemish that you could have on your credit report. While a bankruptcy will remain on your credit file for up to 10 years, a debt settlement will expire after 7 years.

Improve your credit score. How can debt settlement improve your credit score? At first, it may not help that much. But compared to the alternative of continued late or missed payments, mounting debt related to late fees and penalty interest, a settlement will be much better for both you and your credit report. At the very least, debt settlement will show that you have attempted to repay your debt(s) and, at best, your credit score will improve as you slowly begin to rebuild your credit.

Eliminate your debt at a fraction of the balance. With debt settlement, you agree to pay the creditor one lump sum, or structured payments, to eliminate the debt altogether. In exchange, the creditor agrees to accept a fraction of the balance as full payment. Quite often, you can settle a debt for as little as 20% on the dollar, which means a $10,000.00 debt could potentially be settled for $2,000.00. If you were to continue making payments on that same account, combined with interest rates, you would likely end up spending $20,000-30,000 before finally reaching a zero balance. With debt settlement, you are not only saving the obvious difference between the balance and the settlement amount, but you may also be saving a considerable amount of money in interest.

Article Source: http://www.abcarticledirectory.com/

Self-build - finance your dream home

Having your very own, custom-built dream home is a lot easier and cheaper than you might think. Although building your own property involves a great deal of planning and hard work, it's within the reach of most people, especially now that many mortgage lenders will lend on self-build properties.
much cheaper to build your own house It's generally than it is to buy one pre-built. The average cost of a self-build home is approximately £150,000. The return on investment can be much greater too - as soon as it's built you can expect an increase in value of 25-30% on what you paid to built it.
One of the major hurdles to overcome when considering a self-build project is obtaining the necessary finance. Some people opt to release equity from their existing mortgage, although this may not raise enough to fund the entire project - it depends on the value of the property against the current mortgage on it.
If this isn't a feasible option, another possibility is to take out his isn't a feasible optio a second mortgage. Many lenders offer specially tailored self-build mortgage products. If you go down this route, you'll need to decide what to do with your existing property. Work out whether you can afford to have two mortgages on the go during the build, to enable you to live in your current house until the new one is ready - or indeed whether there are any mortgage providers prepared to lend you a second mortgage. This can be a convenient way to finance the project, as it means you only have one house move, and mortgage repayments are often cheaper than renting.
If you can't afford two mortgages, the other options are to sell your current house and move into rented accommodation, stay with family or friends or even buy a mobile home or caravan to live on the building site. The latter may not be a suitable arrangement if you have a young family.
Self-build mortgages tend to have similar terms and conditions to conventional mortgages. You could have either repayment or interest only, and the interest rates available (fixed, capped, variable, etc) tend to be the same. self-build mortgages and conventional mortgages - The two main differences are that the maximum loan-to-value that will The two main differences between be provided is normally no more than 75% for self-build, as opposed to up to 95% or even 100% for a conventional domestic mortgage, and the funds are released in stages instead of all at once.
The way in which the funds are released depends on the provider. It's normally at key stages of the construction for example the laying of the foundations, when the building is wind and watertight, when the roof is complete, but some lenders release the funds upon completion of the stage, and others in advance. The issue with the former, arrears stage payments, is that the money is not available to fund the construction in advance, so it can cause cash flow problems. Some lenders offer advance stage payments, though, which makes it much easier to keep the cash flowing as the project progresses. Whichever way the lender operates, they will almost certainly want to send a surveyor or valuer to check on the progress of the build before they release each payment.
Sometimes up to a third of the cost of a self-build property is the purchase of the land. There isn't much spare land in the UK so prices are at a premium, particularly in popular built-up areas. Some lenders will be prepared to lend for land purchase, others won't, or will provide it as a separate loan, so be sure to check this out when doing your research.
Most lenders will want to see the architect's drawings and planning permission before agreeing to lend you any money, as well as a schedule of works - some lenders will put a time limit on the build, often one year.
As well as being a cheaper way to buy a house, self-build has other financial advantages. The cost of building a new home is zero-rated for VAT purposes. You also won't be subject to capital gains tax on the capital you make from selling the property, and there's tax relief for financing the new build while remaining in the existing home. Many self-build projects are also exempt from stamp duty as this applies only to the purchase of the land - unless the land price is over £60,000.
If you're able to arrange funding to build your own home and are confident that you have the management skills to keep on top of the building work as it progresses, then self-build could be the ideal way for you to get the home of your dreams without it costing an arm and a leg.

Source: articlestree

Planning and Procedures for Business Start-Ups

Starting a business is a process that requires much planning. A business plan should be made mapping the future business.

Starting a business includes many steps that will be explained. The first step in a business plan is deciding the nature of the business. A detailed description of products and services is the first part of a business plan. For a fishing shop, for instance, the products would be all the fishing rods and accessories.

In addition to a detailed description of products, a detailed description of services must also be made. The owners must decide where or not there will be a service department with the fishing shop.

The next part in figuring the nature of the business is to decide the estimated risk. The risk of the business is based on the analysis of the industry. To analyze the industry one should take several considerations into thought. For example, how much demand for the business there will be in the area, as well as, how other businesses of the same nature have done in the area.

Size and location of the business are also required to figure the nature of the business. The size of the business can be based on the capital available, the demand in the location, as well as any other factor that might affect the business. Location is based on many of the same factors.

The second step of a business plan is to plan the goals and objectives of the business. This step requires thinking about what the short-term and long-term goals will be. In addition to the short-term and long-term goals, the owners must express the expected results in sales volume and profits.

These goals and objectives should be based on the amount of capital invested and the amount of the loan. The business must plan to make a profit, however, the profit does not have to be immediate. It may take a little while for the business to become established in order to make a profit.

The long-term plan of the business might take all this into account. A marketing plan is the next step of a business plan. A marketing plan takes into account customers and their demand for the fishing rods, accessories, and services. A marketing plan should also include prices for the products and services, and a comparison of products and services with competitors in the area.

The prices should be figured based on the supply and demand theory. If there is a large demand and no other competitors in the area your prices can be much higher than if there is little demand for you products or services, or if there are several other competitors in the area.

The business plan is essential in the formation of any business. In addition to the business plan a list financial institutions which to apply for a loan should be assembled, as well as, hiring a lawyer to help in the formation of the business. Proper planning might take a long time but in the end it will make the process of starting a business much easier.

More resources on business startups
Business start up Starting business in the USA

Positive Cashflow!

Having a positive cash flow is an essential step in gaining financial freedom. I did not realize it at first. It was only after I have read the Rich Dad's series by Robert Kiyosaki that I have realized the importance of maintaining a regular cash flow and expenses that does not exceed it. I have to ensure that this positive cash flow not only comes consistently, it should be increasing.

Basically, there is two ways to increase the positive cash flow. The first way is to earn more and maintain the existing expenditure. The second way is to reduce wastage. Usually, a combination of both methods can be used to achieve a better positive cash flow.

For example, I am currently earning $3000 per month. My monthly expenditure is $2500. Since my income is more than my expenditure, I am deemed to have a positive cash flow of $500. If I want to increase my cash using the first method, I can take up another part time job or assignment to earn an extra $500 per month. As a result, my positive cash flow has increase from $500 to $1000.

If I am using the second method, then I will be examine my existing list of expenses to identify which ones are unnecessary or redundant and do away with them. In other words, I am reducing wastage in my existing expenditure.

For example, I am currently subscribing to a particular magazine. I wanted to read the magazine but I never seem to have time to read it. So the weekly issues of the magazine just keep piling up untouched. That is I am wasting my subscription fee altogether. When it is time for renewal of subscription, I should simply stop the subscription altogether and save the money. However if I am not aware of my wastage, I will simply renew the subscription thinking that I will find time to read the magazine.

My expenses can be classified into fixed and variable. As its name implies, fixed expenses are those that I have to consistently pay every month like my loans and mortgages. My variable expenses are expenses that are not consistent, like entertainment, food, vacation, clothes and such. Wastage is usually found in the variable expenses.

Reducing wastage is quite different from bad spending habit. Bad spending habit is a habit of spending on unnecessary things even though I am aware of it.

For example, when I see a shop that is on sale, I will go and spend money simply because there is a sale. I know that these products or services are not necessary but I do not care because I cannot control my urge to spend. I simply have a habit of spending on seeing a sale sign.

By reducing wastage or increase income, I will be able to gain more positive cash flow. Yes, I can invest my excessive cash due to positive cash flow in assets that generate passive income as learned from the Rich Dad's series by Robert Kiyosaki. But before I do any investment, it is important that a few fundamental things are handled first.

Firstly, I will save the excess cash as emergency funds. Based on my understanding of personal financial planning, I should have an emergency fund equivalent to 3 to 6 months of my monthly expenditure. In case of any emergency that cause me to lose my income, I can still survive based on my emergency cash for 3 to 6 months. In the meantime, I can look for an alternative source of income.

Secondly, I will use the money to insure myself again risks. Insurances such as life insurance, personal accident insurance, medical insurance and so on should be used to manage the risk of great financial losses due to unforeseen circumstances.

For examples, if I have an accident and I do not have any personal accidental insurance, then I may end up paying a heavy sum of medical fees due to injuries. If I become sick and I do not have any medical insurance to cover me, I will end up paying a large amount of medical fees.

When the above two things are done, then I will consider investment provided that I do not have any existing liability. If there is any existing liability, then I will need to judge whether it is wiser to pay off my liability first or use the money for investment. As a thumb of rule, if I cannot guarantee the rate of return for my investments is more than the loan repayment interest amount, then I will be better off by paying for my debts.

Max Ng helps people who desire success to learn from his mistakes and realizations by sharing his personal struggle for success at www.richdadsecrets4me.com. He is the author of "Your Greatest Gift! Why Waste It?" at www.yourgreatestgift.com

Sarasota Real Estate - Home Buying Tips

Buying a home is the greatest investment you can make in your life.

Other people are willing to take out mortgage that will take enormous portion of their lives to pay off, in turn to buy a home. Now, if one is really decided to buy a first home in Sarasota real estate, there are some things that should be taken into consideration in order to make sure to purchase the right home. There are some tips that you can follow in buying a home for you and your family.

The first tip in buying a home in Sarasota real estate is to give some time to research. You can do a research or hire a real estate agent to do the work for you. It is better to research and gather all the important information you need to know before you purchase a home, in this way you can search for the great home with reasonable price. Just give some time, don't be in a rush, the time spent in making research will soon pay off if you find the right home.

The next tip is that if you are really into buying a home in Sarasota real estate, better to make sure that you already have an approved financing. It is better to make all the paperwork in financing all done before entering into buying a home, in doing that, you will know the budget you can use in purchasing a home. It is really so frustrating, if you finally found the home you wanted, but only to find out that your financing is not approved, so before to settle the financing before entering into the buying process.

Before buying a home, it is wiser to make home inspection and pest inspection. Amidst of what the seller says, that there are no problem in the house, it would still be better if you make sure and find it out for yourself. And if in case, you found a problem in that house, and the seller insisted in fixing it, then just look for another house.

In purchasing a home, you can to make sure that everything is put into writing. If there are some problems found in the home and the seller make a promise to make some repairs, wiser to put that into writing. In doing so, you will have a record that the seller really made a promise in making some repairs. Making sure that everything is put into writing will save you from any problems and disagreements.

Now, in your buying process, these tips could help you find the right home for you with great price as well. And in purchasing a home in Sarasota real estate, you should make sure that you are working with a trustworthy real estate agent, in doing so, you are just protecting yourself. You can contact a real estate attorney, in case you have questions regarding legal issues, the attorney can help you.

Indeed, purchasing a home in Sarasota real estate is an enormous investment, so you definitely want to make sure that the buying process will run smoothly, so try to consider the tips and soon you will find the right home for you.

About the Author

Article Author Eliza Maledevic from http://www.Jump2top.com

The Mutual Fund review

“What should I look for in a fund? I recently rolled over a 401(k) into an IRA and right now sitting in a money market account (I’m peeved at my advisor about that). I’m looking for some good aggressive growth funds. One more thing: The IRA is about 6K. Should I put it in one mutual fund, or a couple, or a hundred? Thanks, Kelly.”

As I composed my response, I realized that these questions were reflective of hundreds of others I’ve received over the years. For that reason, I’m providing my reply for the many other Kellys who haven’t yet gotten around to asking them. Here’s what I said.

“Dear Kelly,

“You’ve posed a couple of questions that most aspiring investors should ask, but rarely do: What should you look for in a mutual fund and of equal significance, what belongs in an IRA? You then added that you’re peeved with your advisor that your assets are now sitting in a money market account where they’re no doubt earning next to nothing. Whether you realize it or not, you’ve touched at the very heart of investment and what is lacking in most persons’ understanding.

“I’ll start with your first query: ‘What should I look for in a fund?’ Let me make an admission. In case you think that I can recommend with uncanny accuracy just which funds will most prosper in the future, the blunt truth is that I cannot. I do not happen to know where the market is going. I cannot tell you whether the technology sector, the international arena, or the service industries will be higher or lower next month . . . or next year. But, understand that neither do the professionals who advise you. By and large they are as surprised as you by what happens. There’s not a one of them that can tell you with certainty whether the S&P 500 Average will be up or down tomorrow. And why should they really know? They all read the same periodicals, take the same seminars, digest the same reports, tout the same rumors, spew the same hyperbole, and regularly exchange identical views among themselves. Is it any wonder that what goes on in the world of investment is, for most persons employed there, unfathomable? You should note, though, that from their standpoint it really doesn’t matter, for their livelihood doesn’t depend on whether or not you prosper. Your advisor makes a living either by charging for advice—good or bad—or by payment of commission upon your purchase or sale of anything. Nor do the mutual fund personnel particularly care whether your assets shrink or grow, for their remuneration is the result of fees their firms take, normally based on a percentage of the total assets managed, which is why each mutual fund strives to increase its share of overall invested assets. Whether a particular client’s assets increase or decrease is without significance. Of course, the counselors’ lives are less burdensome if they’re not required to defend bad investment choices. For this reason, most prefer the index funds. In this way, they cannot be blamed when things go wrong. They’re off the hook since all losses can be attributed to mythical market forces.

“Now that you understand the complexities—and my limitations—we can approach the industry realistically. The concept of the open-end investment company, commonly known as a mutual fund, has been around and mutating since 1924. Over the past several decades it has become the ‘investment by default’ for most Americans, the majority of whom haven’t the slightest idea what they own, or why. Thanks to effective promotion by the industry, this vehicle has taken on a life of its own, where any suggestion that it’s not appropriate is met with derision. This is the environment in which you find yourself, and if you hope to prosper, you’d better educate yourself. The best way to start is by familiarizing yourself with the elements of the subject. There is a fundamental rule that says: ‘When you know the details, no one can lie to you.’ For this reason, I’ll suggest that you get your hands on a small and inexpensive book in the Barron’s Business Keys series: ‘Keys to Investing in Mutual Funds.’ It contains only 158 pages, can be purchased through Amazon for a few bucks, and is exceptionally easy but enlightening reading. Until you’ve read that, you should leave your IRA money right in the money market account where it is. Though you may not realize it, your advisor provided a most valuable service.

“Let me now inform you of a personal uneasiness I have concerning mutual funds in general that you’ll not read in the Barron’s book. My discomfiture is with the evolution of an industry in which the placing of investors’ money seems, at best, a secondary consideration. The fact that a substantial and growing percentage of the nation's assets is now committed to funds fuels a part of the concern. The rapid growth in the numbers and varieties of funds offered triggers more uneasiness. But it is the synergistic effect, coupled with basic human nature, that could result in unpredictable problems for the economy of the nation.

“I’ll run the risk of asking rhetorical questions. Who are the thousands of officers and directors of the funds? How did the investor’s interests advance when the average fund manager’s annual compensation increased to over $1,000,000 in 1996? What is the background and experience of the multitude of securities analysts employed? Who will benefit from the growing trend in fund mergers, and in what fashion? Is the investor really well served by a fund that merely places its monies in proportion to a specifically designed index or another that simply acquires shares of other funds? What does the scandal that rocked many of the prominent mutual funds in the autumn of 2003 portend for the future of the industry? And above all, who in God’s name is watching the store? Incidentally, in case you don’t recall those events in 2003, you might visit my Website www.onthemoneytrail.com, click onto Newsletter Archives, and read the December 2003 article ‘Investment Guidelines for the Year Ahead.’ I’ll repeat what I said then. What the future holds for the mutual fund industry is hard to say, but one thing is certain: The fortunes to be made, legally or otherwise, fuel an insidious attraction. The question we must ask is whether it is becoming a self-propelled labyrinth, with few realistic controls, in the hands of persons who will systematically loot the assets with no compunction. If so, the nation will surely experience a misfortune of momentous proportion.

“I’ll wrap this up with my views on what belongs in an IRA account. Contrary to the recommendations you’ll receive from most financial analysts and advisors, a traditional tax-deferred—or even more favorable tax-free Roth IRA—should not be stuffed with mutual funds, whether they be aggressive growth, balanced, sector, or index. My belief is that these accounts are better utilized when they contain interest-bearing investments. Once again there is not room here to get into details. Mutual Fund review, However, if you again visit the Newsletter Archives of my Website, you’ll find two articles there that spell it out pretty clearly. They are December 2002, Mutual Fund review‘Why Bonds Belong in a Retirement Account,’ and February 2003, ‘Junk Bonds Need Not Be a Crapshoot.’

Real estate bubble

The subject of real estate is seldom discussed today without mention of the omnipresent housing bubble. From all reports, it seems certain to burst, bringing with Real estate bubble a cornucopia of misfortune for millions of souls. Judging from the incessant flow of articles and commentary, it is a national obsession. Real estate bubble Publications of such stature as Reuters and Businessweek and persons as prominent as Federal Reserve Board Chairman Alan Greenspan are regularly addressing the problem. The questions that must be posed, of course, are exactly what is this bubble and how does it threaten America?

The first of these two questions is the easier to answer. The bubble is a result of a real estate frenzy in which home prices rose rapidly. According to a recent government report, U.S. home values are 55 percent higher than five years ago, which reinforces a study by investment bank Credit Suisse First Boston indicating that home buying is increasingly driven by speculation. In light of current marketing practices that include zero down payments, adjustable mortgage loans with initial negative amortization, and unrealistically lenient loan qualification, the rapid escalation in values is understandable. Such speculative booms traditionally end as the speculators begin to cash in or when credit tightens. There is nothing unique about this scenario, last observed in the early 1990s.

It’s the second question, how America is threatened, that’s not so simply perceived. The reason is that this nation is remarkably diverse, with the factors that characterize one geographical area often entirely different from another. My locale, Orange County, California, with the county’s median priced home affordable by only 11 percent of prospective buyers, illustrates an overheated market. One striking example: On July 18, 2002, a 3-bedroom, 2½-bath, condominium in a 245-unit complex in the county’s largest city, Santa Ana, was purchased for $170,000. On June 14, 2005, that unit sold for $480,000 to a purchaser who, in my opinion, will be hopelessly unable to make the contracted mortgage loan payments in the event of the slightest misfortune. And to get a sense of the home-owning climate in this exceptionally prosperous county, multiply the situation just described by thousands more exactly like it. We can only speculate on what the future holds for a substantial portion of the populace here. But as precarious as it may seem in certain metropolitan areas, most notably New York, Boston, San Francisco, Los Angeles, and Washington, D.C., that recently experienced price explosion, other regions are unaffected. If you’d care to acquire a home in the delightful community of Inkster, North Dakota, just twenty-five miles west of the Minnesota border, you may purchase a particular 3-bedroom detached home on 6th Street for $17,731, which was about the cost for the same house ten years ago. There is no observable real estate bubble in Inkster. Similarly, there are communities across the nation that have observed little or no price appreciation over the past dozen years. Whatever economic problems the residents of these areas must deal with, inflated home values are not among them.

This now gets us to the basic intent of this article: to provide guidance for those concerned with the bubble and the possible misfortunes that may result. First and foremost, resolve not to be a victim. If you reside in an area that experienced rapid home price escalation, you’re aware of the prevailing pressures and influences. You’ve no doubt been deluged with solicitations from mortgage lenders eager to refinance your home with an easy qualifying adjustable rate mortgage that will put cash into your pocket. I suggest that you avoid any such overtures. With short term interest rates currently rising, the likelihood is that longer term mortgage rates will continue to follow suit. The only refinancing that makes sense is in switching from an adjustable rate to a fixed rate, and I recommend that you not increase its principal balance.

With the rudiments behind us, let’s now take a moment to concentrate on one other aspect of the bubble, which I’ll preface by quoting the first line of the first chapter of a recent book: “There is no disaster that is not someone else’s opportunity.” In simple terms, how might those of us in or near areas of unrestrained speculation profit from the coming cataclysm? Our best guide is to look back at a past real estate collapse, and compare the common elements. Perhaps a testimonial is in order.

In the 1980s America experienced a real estate boom not unlike what we’ve seen since the turn of this century. And as night follows day, during the period 1990-1993, home values declined throughout much of the nation as lenders foreclosed on massive numbers of homes, with no area more severely affected than Southern California. However, not until early 1995 did these unsold inventories begin to be dumped on the market. There appears to be a delay of two or three years after the bottom is reached before bargain properties become available. It was during the years 1995 through 1997 that I acquired dozens of vacant residences at clearly distress prices. I concentrated my efforts on real estate held either by government agencies such as the VA and FHA, or by commercial banks and mortgage insurance companies. Clearly these hapless owners wanted quick and unfettered disposal, and my bids accommodated them: purchase price all cash, property condition “as is,” no contingencies, and escrow to close in fifteen days. Thanks to a strong rental market, I enjoyed a nice cash flow until disposing of them one at a time. As you might guess, it turned out quite profitably.

Let me conclude with a prediction and an admonition. Prediction: Real estate bubble In areas where current home prices are clearly irrational, there will be a massive readjustment downward. Admonition: Don’t try to anticipate the market. Wait until the distress is clear to everyone before seeking bargains. Real estate bubble There will be plenty of opportunity when that time arrives.