The Aruba Connections blog celebrates its 10 years existence and this we would like to celebrate with you.

**Win a restaurant gift certificate**

Send your best and most special Aruba story or picture to blogger Miriam Engeln, latest on December 6, 2014 and the winner will receive a restaurant gift certificate of US$100,- of one of the nice restaurant in Aruba.

By joining this competition, you agree to have your name and story/ picture published on this blog. You can email your stories and/ or pictures to: mdengeln@yahoo.com

Miriam Engeln started blogging in the year 2004 and last year was approached by the editor of the Aruba newspaper Aruba Daily, to publish her stories weekly. The Aruba Connections blog has been published weekly since June of 2013 on each Saturday, and informs the readers about; real estate in Aruba. Each week you’ll find a different subject, such as investing in Aruba, house renovations, renting, and so on.

Miriam Engeln is working for Century 21 Aruba and has worked in real estate previously in Spain and Belize.

This week’s question and answer:

Angela Herder: How to invest for Cash Flow in Aruba?

Miriam Engeln Investing for Cash Flow;

There are a lot of reasons why one wants to increase his/ her cash flow, and most of it has to do with financial flexibility. The more cash you have coming in, the more options you have, in terms of lifestyle, in case of emergency, and to build up towards future investments and/or business opportunities.

Real estate investing is not risk free, but the current market offers many opportunities. Rental prices have gone up steadily in many locations, mainly because many people either can’t afford to buy a home, or can’t qualify for a mortgage.

If you wish to own an investment property; it takes work, but it can be a great way to build wealth. I know of many people owning rental properties to either partially or fully fund their retirement.

For the following example, I'll use a fourplex (a building that contains four separate apartments), with all four units being destined for full-time rental. This is a simple cash flow calculation to illustrate the potential of real estate as an investment. Critical to this, as with most investments, is an intelligent and well-researched purchase on the front end, and I will inform you about that concerning your investment in Aruba. Here are the purchase and rental particulars:

1. Purchase price of the fourplex is $325,000.
2. Buyer pays 20% down ($65,000), financing $260,000.
3. 30 year loan is at 6.5%, with Principle/Interest payment of $1643 per month.
4. Taxes and insurance at purchase are $3600/year, for total payment of $1943 per month.

The buyer did their research and sees a steady rental demand for these units, all of which stay occupied most of the time. However a 6% vacancy and non-payment risk will be calculated to anticipate real cash flow. The units are all identical and rent for $900 per month each. Let's see how the calculation breaks down:

1. Gross rental income is $900 X 4 X 12 months, or $43,200 per year.
2. Payments are $1943 X 12 = $23,316 per year.
3. Previous owner's repair expense has averaged $1700 per year.
4. Vacancy and credit loss is estimated at 6% of rents or $2592 per year.
5. Owner spends about $400 each year in miscellaneous and advertising costs, and manages the property on their own.

Those are the basic operational items that go into our cash flow calculation. Let's take our calculation to the profits:

Rent income - Vacancy Loss - Payments - Expenses = Cash Flow
$43,200 - $2592 - $23,316 - $2100 = $15,192 / 12 = $1266 per month in positive cash flow.

Real estate question of the week

Andrew Sawyer: Do you have any recommendations on real estate books?

Miriam Engeln: Sure I do. I would recommend the following books; Rich dad, poor dad by Robert Kiyosaki. The little red book of selling by Jeffrey Gitomer. Real Estate Investing For Dummies by Tyson and Griswold. The 4 hour workweek by Timothy Ferriss and last but not least; Rich women by Kim Kiyosaki.

Enjoy reading and remember; knowledge is power! Think green, read Kindle.

Real Estate Miriam answers all.

Ask Real Estate expert Miriam Engeln anything about properties in ARUBA, such as how to invest in real estate, how to maximize occupancy in vacation properties, rental income tips, constructing a house, home exchange, house flipping, retire-/ moving to ARUBA and so on.

This week’s question and answer:

Dora Onyulati: Are there any guidelines or suggestions you can give me as a First Time Homebuyer?

Miriam Engeln; absolutely, here you go - Taking the step into homeownership is a big deal. But before you buy, here are some things to do;

1.    Assess your need.  You don’t want to be buying a home just because you turned 30 or because your friends have started doing it.  Determine whether it’s better for you to buy or rent at this time in your life. Factor in your job and if it’s stable, whether you plan to stay long-term or if you are itching to try something new.  Make sure you are buying a home because you want to and you are ready at this time.

2.    Do the math.  Many people focus on the down payment when they think about buying a home. Yes, the down payment is usually a large chunk of money.  But there are other upfront costs you need to think about – taxes, property insurance, and closing costs for example.  Insurance rates and property taxes will vary per island so you’ll want to check on what they would be.  Closing costs encompass many fees including originations, underwriting, appraisal, title insurance, recording, and closing fees.  It can add up to a surprisingly large number, so it’s good to know it ahead of time.

3.    Be ready.  You’ll want to have all your documents ready to make the process go smoothly.  In most cases you will need an ID, paystubs, and bank and asset statements.  Some of these documents would also have helped you to figure out how financially ready you are to buy a home.  For example, you want to make sure your credit is in great shape before you try to get a mortgage.

4.    Check out the inventory.  A house is likely the largest purchase you’ll ever make, so treat it like other large purchases.  That means you want to shop around as you would for a car, TV, or couch.  It may be time consuming but it’s important to look at comparable homes in the area.  Check out a variety of options to not only find the right one for you but to get a feel for pricing in the area.  Working with a knowledgeable real estate agent can make this part of the process much more enjoyable.

Email your real estate questions to email address; mdengeln@yahoo.com and a selection of your questions will be answered each Saturday in the newspaper Aruba Daily.

 

 

 

Home exchange

Owning a second home in Aruba means you can enjoy your vacation time in the sunshine whenever you wish.

Also you can travel the world and use your second house (in Aruba) for home exchange. Home exchange is to swap a house/ apartment with like-minded travelers all over the world without paying for it. Other than getting to the location of your choice, a home swap doesn't have to cost you more than staying at home.

How home exchange works;

Browse on-line listings for homes, apartments and locations you love, and use a messaging system to get in touch with those property owners. Check out inquiries sent to you from members of such an on-line home exchange site, and when you are ready, simply arrange your exchange. You will find the home exchange websites via google.com or bing.com

Rather than staying in hotels and being treated like a tourist, you can enjoy staying in comfortable homes, and living the life of a local. 

9 things before moving abroad

With the joy of the internet allowing us to explore the world from the comfort of our own home and dreaming about visiting far tropical sunny places; it seems that more and more of us are actually planning on moving abroad at least for a few years in a bid to broaden our horizons and experience different cultures and ways of life.

If you're currently considering relocation overseas to for example ARUBA, and thinking about whether you could survive a move abroad and personally benefit from expatriation, then this 9 things article could help you get some planning in place to make your decision that much easier.

1) Location, Location, Location

Where in the world would you most like to go? What is it about moving abroad that appeals to you? Where in the world are you allowed to live and work and which countries can fulfill the dreams and aspirations that you have for a new life abroad? By asking yourself questions such as these you can do your location research accordingly and ensure that wherever in the world you decide to move to you will get access to the facilities and amenities you want and live the kind of lifestyle that you're dreaming of.

2) Learn the Language

You will get far more out of stay overseas if you make the effort to speak the local lingo. Consider taking language lessons before you go and then continue your training among native speakers once you relocate. You'll find it seriously rewarding and by having a second language under your belt, chances are even more countries will begin to appeal to you where you can go and live and practice your new foreign language skills.

3) Finding a Home

Getting accommodation sorted out will be a priority when you move abroad. Even if you're expatriating for good, consider renting real estate before committing to purchasing could be a wise idea. That being said; rental rates in Aruba are high and it is currently still a buyer’s market, so there are great deals to be found buying a property now. See www.arubahouses.com for some great listings.

4) Keeping a Home

If you already own real estate in your original home country what are your plans for it while you're away? Will you leave it empty, rent it out or even sell it. Your decisions may depend on whether your plans for a move abroad are temporary or permanent of course - but remember real estate is usually a great asset to hold on to but that your decision relating to what to do with your home will have a certain taxation implication, from income tax due on rent earned to capital gains tax due on a house sold.

5) Jobs Abroad

Are you planning on moving abroad to work - if so are you allowed to work in the country you're planning to move to? Will you need permission to take employment, will your skills and experience be valued or even recognized abroad. How realistic is it that you will find a well paid job abroad? You have to look into the realities of all these questions and ensure that you can work abroad and afford to live the lifestyle you want to live. Before moving to Aruba you’ll contact Dimas for Residency and Work permit requests. Website: http://www.dimasaruba.aw

6) Taxes

All countries have different tax systems and some countries like America seem to own their citizens in taxation terms no matter where in the world they live. Check out what rates of tax you will be paying overseas, make sure you won't have to pay tax back home as well and ensure you're not about to move to a country where tax is even higher than you pay currently - because where would the fun be in that!

7) Visas and Permissions

Will you require a visa to move to your chosen country before you even arrive or can you sort out residency and employment visas once on the ground? Ensure you know your legal obligations in terms of getting permission to enter and reside in a given country before you even set out, because if you fall foul of the rules and regulations you could be fined, imprisoned or sent back home.

8) Stay Healthy

Getting healthcare treatment abroad isn't always as easy as you might think. Some countries have a poorly funded healthcare system and other nations don't even treat those without insurance in place. Consider having a good international health insurance policy in place to cover you in all eventualities and which will ensure you receive the best standard of care available. Don't mess with your health.

9) Financial Planning

And finally - before you even consider packing up and shipping out make sure you have some money behind you to tide you over once you arrive and also a financial lifeline in case you ever need to get back home in a hurry! Financial planning might be the most boring but most essential part of planning a move abroad. Get it right and you'll have nothing to worry about and you can enjoy your new life - get it wrong and your new life abroad will be over before its begun as you're forced to take a dead end job or even return back home and take up where you left off having left your dreams for a brand new life far behind you.
 

 

 

Saving that Real Estate Commission!!!!!!

Everyone likes to save money. So, how can you save money in a real estate transaction? Find that new "e-Realtor" with a discounted commission? Or, better yet, don't even use a Realtor at all? A FSBO (For Sale by Owner) is bound to save you a bundle. Right?

The correct answers are No, No and No. Sorry, the old adage "There is no free lunch" is alive and well in real estate. Let's take a look at discounts and FSBO's and find out a few of the reasons why you might want to steer clear.

Discounts: "E-Realtors" who will rebate you something at closing seem to be the latest rage. You can even use their search engines and e-mail updates to find the home you want. It sounds good but did you know: It might be a problem seeing more than a few homes. It might be hard to schedule appointments. It might be difficult to get answers, advice and counsel. And, your agent might be new and inexperienced. Why all these problems? The "e-Realtors" are all on a modest salary, not commission. They have little incentive to "go the extra mile" to get the job done for you. In order to make money (after paying the rebates) they need to deal in large volumes of customers, not in quality service, assistance and details. So, is a small rebate worth the chance of less than adequate representation? Probably not.

FSBO's: The biggest problem with a For Sale by Owner is that both buyer and seller think that they will be saving money by avoiding a Realtor's guidance, expertise and cost. Unfortunately, somebody usually gets burned. Lack of knowledge and information combined with greed leads sellers of most FSBO homes to overprice them. Worse, buyers tend to be uninformed, unprepared and unqualified. For the seller this can result in the home not selling at all or an unqualified buyer trying to buy it (unsuccessfully) and wasting the seller's time. For the buyer it can lead to paying too much or buying a home with one or more unrecognized problems. In either case someone loses. Do you want to be that someone in the hope of "saving" a few dollars? Probably not.

So, if discounts and FSBO's don't work how do you save money in real estate? The best way is to find an honest, experienced Realtor and follow his/ her sage advice and guidance. You will save in the long run because that Realtor will earn his commission the old fashion way: by working long and hard for it.

 

 

 

I have listed my house, now how can I help sell it?

So I have de-cluttered, cleaned the place and listed it. What can I do to help selling it?

Answer: stay out of the way. Make it as easy as possible for the Realtor to do his/her job. Not only should you hand a key copy to the house, you should make the showing as painless as possible. That may mean that you must take on a lot of inconvenience.

You must be able to get out of the house on short notice and make it easy for the selling agent to schedule showings for others. The easiest house to show is one that is already vacant, although vacant houses are harder to sell, so make it easy to schedule an appointment to show your house. 

You do not want to be there during a showing. The Realtor doesn’t want you there and the buyers would feel awkward if you were there; so take a drive, go to a store - just go. Let the real estate professionals do their jobs. Believe me when I tell you that all of your helpful information about the house, as you trail the showing around, is not what these people came to hear. Do not hang around. Disappear. 

If you really want to help with this part of the process, here are some tips for things that you can do before you leave to make the showings go better.

 Turn on all the lights or leave all curtains opened. The showing agent will not know how your house is wired and may not be able to figure out how to get the lights on. A good agent will try to turn off lights as they go, but there will be lights left on. If there is a showing after the one that you left for, leave a note for the first agent telling him/her to leave the lights on for that showing.

 If you have freshly baked bread, popcorn or do other things in the kitchen to leave a nice odor in the air, I recommend it. We’ll let you be the judge of how much you want
to do. Try not to leave bad odors in the air;

however, lighting too many fragrant candles is just as bad and some people might think you are trying to hide something by masking a smell in the house.

Also remember to take your dog with you and your cat too if possible. Buyers don’t really want to be accosted by your pets and viewers may have allergies to pets so get them out of the house. Hopefully your house doesn’t smell like a full cat box or like your dog, but if it does, deodorize the place as you leave and put the litter box out in the garage.

If you must leave your pets in the house, please either cage them or place them in  small room that can be closed off and put a note on the door advising the showing agent that the pet is in that room. That room will be something that the buyers will wonder about after the showing, since they couldn’t see it.

Make sure that your agent has flyers or brochures available in the house for visitors and put them out in some easily spotted location, like a kitchen counter or table.

Normally showings only take 20-30 minutes, so you don’t have to be gone that long. Agents will normally ask for a one-hour window to allow themselves some leeway on travel or other showings. And remember to not let clutter creep back into the house. Keep it clean and clutter free!   
 

Your agent should get some feedback from every showing and most will share that with you. Don’t get offended by anything that you read; instead try to learn from the feedback and make any changes that are suggested in the feedback or by your agent.

Finally, now that you’ve mastered the three C’s of real estate – Clutter, Cleanliness and Condition; you must focus upon your role in the three P’s of real estate – Price, Patience and Persistence. Hopefully you and your agent have set the price correctly; so you need to be patient and persistent.

Real estate sales do not happen overnight, so patience is a real virtue here. As for persistence; you will need to get up every day and get the place ready to show before you leave for work or to do other things. Remember that showings can happen at any time. You’ve got to have the house ready at all times.

4 tips for living on a budget

(So soon you can afford to pay your bills on time and even save money to purchase property)

 

Living on a tight budget can be straining. Setting financial goals and creating a budget are great starting points to making things work on a tight budget, but just as important is developing healthy and smart financial habits. Overspending often adds more stress to your life; the key is to live below your means to give yourself more financial freedom. You can do a variety of things to live on a tight budget.

Create a Budget

• Creating a budget is not always the easiest thing to do, but it is an important step to keep finances in order. Provide as much detailed information as possible on the budget sheet in order to see where money is coming from and where it is going. Include all bank and investment statements, recent bills, and income statements, as well as any other paper containing income or expense information. If some numbers vary each month, use a monthly average. Keep records of income and bills. Break the expenses into two categories, fixed and variable, to give a clear idea of what is an essential expense, like mortgage, rent, car payments, bills and credit cards, and what will vary monthly, like groceries, eating out and entertainment. Your goal is to get the budget sheet to have more income than expenses. This will most likely take some budget adjustments over a few months/ years. If you have a surplus, you can put that money towards a down payment on a property.

Food

• Food is an essential part of life, bit it is often one of the first things people cut back on when having a tight budget. The key to smart food budget management is smart shopping. Coupons and sales are a great start to minimizing the budget, but do not waste food, either. Plan the menu and make the grocery list according to your weekly menu. Also, properly handle the food by freezing it or consuming it before it goes bad. Buying in bulk can also save a lot and mean fewer trips to the store.

Habits

• Developing healthy and smart financial habits is the key to making things work on a tight budget. Pay bills on time. Meeting deadlines will not only prevent service interruptions, it will also save money on late fees. Set up a standing order at the bank or pay bills online automatically to ensure bills are paid on time. For other expenses, set up an "envelope system" that will help keep you from overspending on various expenses each month or pay period. An envelope system is when you designate a letter envelope monthly expenses, like groceries or entertainment, and put a set amount of cash for each category into the envelopes. When the money is gone for a particular category, you have to wait until the next paycheck to replenish and spend in that category. That way, you spend only what your budget allows for in that category.

Basic Money Saving Tips

• Stop spending on fancy coffees, expensive lunches, smoking and drinking, entertainment, and all other items or services that are not a necessity. This might mean canceling the cable, cutting back on cellphone features, take your own drinks and chairs to the beach, and stop smoking. Instead borrow movies from friends, rent books from the library, and pack a lunch every day.

This article is presented to you by Miriam Engeln, working in sales at Century 21 Aruba, tel: (297) 5864242. For real estate inquiries please call or email: miriam@arubahouses.com

 

 

3 things that make a great Real Estate investment

If you’re looking into real estate investments, you likely want to earn wealth on real estate based on risk you are taking, while minimizing the amount of time you need to spend attending to the property. In order to accomplish this, you need to make some smart choices upfront when buying investment property. Your goal should be to strive to get as close as possible on as many of these optimal scenarios as possible:

Pays fair cash-on-cash return

When you buy property you are taking money out of your liquid financial assets – stocks, bonds, CDs and investing it into a very illiquid asset.real estate.

You were earning a rate of return on your financial assets, such as 4 percent or 6 percent, and you should strive to earn a fair cash-on-cash rate of return on your real estate. To do this, you need to pro forma your deals and buy cash flow-positive properties that earn you decent returns – not those prize properties that are negative

Isn’t too risky an investment

All real estate is extremely high risk. Development of real estate, land, private real estate funds, fixer uppers, etc., all have much higher risk profiles than just simply buying a nice established cash flow investment property. In many of those investments, you will never see a dime of your money again because there are just so many things that can go wrong! So if you want to own real estate, consider simply taking fee simple title in your own name – or an entity you wholly own – to the properties you purchase. In addition, you must do the proper due diligence, analyze, test, review reports, etc., to make a lower risk real estate decision.

Doesn’t Require a Lot of Time or Managing

Some properties just require way too much time and management to make them smart investments. Examples include vacation rentals, low quality properties in bad areas, college rentals, etc. Nice boring properties rented for as long as possible to decent credit profile tenants seem to take the least time to manage. In addition, treating your tenants fairly and with respect goes a long way towards keeping good relations with them; and reducing your hassles when there is an issue you need to address. And believe me — there will be issues!

It’s the nice, boring, wholly owned, in good shape, cash flow-positive properties that are the best investments. They are out there for your picking, but it’s not as simple as finding a property on the MLS and buying it.

You need to do some hard work, research, read up, and make smart, educated decisions to acquire the best real estate investments!

 

 

 

How is buying a condominium different than buying a house?

The condominium lifestyle is very attractive to many home buyers. The main difference between buying a condominium and a single-family home is the type of ownership you receive. With a condominium you get the exclusive right to the interior space of your dwelling unit, but the land, walls, grounds, fences and facilities are owned in common with the other owners in the complex. With a single-family home you are the sole owner of the building and the land it sets on. This is called "fee simple" ownership. A condominium is usually attached to other similar units by a common wall, while a house is detached. However, a recent trend is to develop detached condominiums, where the land and improvements are owned in common. There are also some attached houses where the land is individually owned. These neighborhoods are called Planned Unit Developments (PUD.) Condominium owners usually can't remodel at will, while single-family house owners are relatively free to make changes to suit their personal needs and tastes. Condominiums are governed by CC&Rs (Covenants, Conditions & Restrictions), which dictate owners' rights and restrictions on those rights. For example, the CC&Rs may prohibit you from changing the exterior color of your without approval. Many single-family housing neighborhoods also have CC&Rs, although they tend to be less restrictive. When buying a condominium you should include a contingency to review and approve the CC&Rs, the articles of incorporation, the bylaws and the rules and regulations of the condominium association. It's also a good idea to review the minutes of six to 12 months of board meetings to understand the current issues that are being discussed. Look over the financial documents such as the budget, reserve study and any assessments and find out how many of the units are non-owner occupied. This may affect your ability to get a loan. Finally, you'll want to know if the association is involved in any litigation. The seller, real estate agent or escrow company will order these documents from the management company for you to examine and approve. Condominium documents are long and complex, and buyers often complain that they don't understand them. If you can't make sense of the documents, contact a homeowner association board member for an explanation. Or, hire a real estate attorney who is knowledgeable in condominiums to review the documentation and give you an outline of the important points. Maintenance of the condominium complex is shared with the other owners. When you buy a condominium, you become a member of the homeowners' association. You pay a monthly fee, which covers management of the association, hazard insurance and routine maintenance. A portion of your fee goes into a reserve account for future maintenance and replacement of the improvements. Sometimes utilities, such as water, garbage and sewer are included in the monthly fee. Exactly what's covered by the homeowner fees varies from complex to complex. The responsibility for maintenance of a single-family house usually lies solely with the owner.MORE HINTS: No matter what kind of residence you are buying, single-family home or condominium, the property should be thoroughly inspected by a licensed contractor or professional home inspector as a contingency of the purchase. Also, insist on a complete termite inspection and be sure to carefully check out the neighborhood. Read and understand the CC&Rs and other documents before you buy a condominium. If you're a dog lover and the CC&Rs prohibit dogs, you'll want to know this before you buy, not after. Just as the value of any one house is dependent on property values in the neighborhood, the value of a condominium depends on the condition and desirability of the entire complex. The best way to get information about a condominium complex is the same as in a single-family house neighborhood. Take a walk and talk with the neighbors. Condominiums tend to be less expensive than single-family houses in the same area. They usually offer more amenities but have higher monthly fees. Condominiums are a good choice for busy professionals or retirees, who want to be in a good location, but do not want to pay the higher price for a single-family house. For more Real Estate information, email to: miriam@arubahouses.com

Plan and Prepare to Sell Your House

Million of existing homes are sold each year, and while each transaction is different, every owner wants the same thing; the best possible deal with the least amount of hassle. Unfortunately, home selling has become a more complex business than it used to be. The home-selling process has changed.

Are you ready?
The home-selling process typically starts several months before a property is made available for sale. It's necessary to look at a home through the eyes of a prospective buyer and determine what needs to be cleaned, painted, repaired and tossed out.

Ask yourself: If you were buying this home what would you want to see? The goal is to show a home which looks good, maximizes space and attracts as many buyers as possible.

While part of the "getting ready" phase relates to repairs, painting and other home improvements, this is also a good time to ask why you really want to sell.

Selling a home is an important matter and there should be a good reason to sell; perhaps a job change to a new community or the need for more space. Your reason for selling can impact the negotiating process so it's important to discuss your needs and wants in private with the realtor who lists your home.

How do you improve your home's value?
The general rule in real estate is that buyers seek the least expensive home in the best neighborhood they can afford. In terms of improvements, this means you want a home that fits in the neighborhood but is not over-improved. Improvements should be made so that the property shows well, is consistent with the neighborhood and does not involve capital investments, the cost of which cannot be recovered from the sale.

Cosmetic improvements - paint, wallpaper and landscaping - help a home "show" better and often are good investments. Mechanical repairs to ensure that all systems and appliances are in good working condition are required to get a good price.

Ideally, you want to be sure that your property is competitive with other homes available in the community.

For more Real Estate information, email to: miriam@arubahouses.com

7 ways to financially prepare to buy a home

7 ways to financially prepare to buy a home

Many home buyers have been haunted by the problem of being able to save up enough money in order to buy a house. Since buying a house is a financial commitment, various factors have to be considered and home buyers need the opportunity to step back and assess their strategies. However, before actually going out and looking for a home, you must first have the money to pay for the house, financially support it and still be financially comfortable. A house is a lifetime asset that provides happiness, satisfaction, shelter and security which only indicates the importance of being financially ready when investing in it.

1. Factors needed for saving strategies

Aside from making every effort to save up money to buy a house, there are a few factors that you will have to incorporate into your strategies to guide you into being able to save the right amount of money before you buy the house and for any other expenses after the house has been bought.

2. Find out the total amount of money needed upfront and other associated fees

Unfortunately, down payments are not the only cash requirements when you buy a house because there are also fees such as transfer tax, notary fees and insurances. When you find out the total amount of money involved beforehand, you can save yourself the stress when you are already in the process of buying the home.

3. Your credit score

If you have a good credit score, you can get better rates and an increase on the amount of money you can borrow. This is why you must pay off any debts you may have before you begin saving up for a house or you will have a hard time getting a bank to lend you a reasonable amount of money for mortgage.

4. A 15 year or a 30 year mortgage

When you have more money to pay for your house then you can expect a short term mortgage. However, if you are unable to produce a reasonably large amount, then you will have to opt for a longer mortgage term so that the monthly payments will be easier to pay. Longer mortgage terms are usually preferred even if there is money available due to the flexible terms and payments can often be made at your own pace. Shorter mortgage terms on the other hand can help you pay off your loans in half the time with less interest involved.

5. Determine the size of the house you intend to buy

The price tag of a house will be based on its size and location, so if you want a large house with upgrades in a desirable neighborhood, you can expect a higher price tag. Determine how much you can afford and then look for a house that meets your budget even if you must compromise on certain features.

6. Funds that you can set aside in cases of emergency

Never invest all your money into buying a house as you will need a security blanket in cases of emergency such as loss of income and other expenses. So you must always have other funds set aside even after you are able to buy a house and settle in.

7. A set timeline until you are able to buy the house

Buying a house cannot be done within a short period of time if you do not have the funds. You cannot rush the process of buying a house and you cannot rush yourself to save up fast either. When you do things in a rush, you will only find yourself making poor decisions.

For more Real Estate information, email to: miriam@arubahouses.com

5 Real Estate tips for home buyers

By Miriam Engeln, blogger since 2004. www.arubaconnections.blogspot.com

Buying a house is an exciting time for most people. A fresh start in a new home brings a lot of hope and promise for the future. There are few decisions in life that are more personal than choosing the place you will call home. And although we aren't usually in a business mindset when we make personal choices in our lives, it's important to remember that your home is a business venture. After all, it is probably your single largest investment. So go ahead and get your mind into business mode for a moment and think about these real estate tips when conducting your real estate transaction.

1. Hire a Qualified "Real Estate agent"

Purchasing a home is a lot of work. Eliminate a lot of stress by hiring a professional real estate agent to arrange showings, inspections, appraisals, contracts, and negotiations. Talk to the people you trust and get recommendation of. Keep searching until you find an agent who is right for you.

2. Get Pre approved with a lender

Without a preapproval letter you are nothing more than a "wannabe" buyer; and no seller will negotiate their best deal with a "wannabe" buyer. Plus, knowing how much you'll be able to borrow from the bank will help you stay realistic when it comes to the purchase price.

3. Know the Difference between your needs versus wants

We all like to dream about our perfect home, but for most of us, our dreams don't usually equal reality. Your budget will dictate how much of your dream you'll be able to achieve, so prioritize a home's features by their level of importance. Is a three-car garage non-negotiable? Or is it more important to have a private lot? Think about your priorities and be aware that you will most likely re-prioritize several times throughout the buying process.

4. Don't look at too many homes

Many home buyers find themselves feeling overwhelmed and confused after a long day of touring homes. Sometimes you're pressed for time, but be reasonable when scheduling home tours; too many in a short period of time and everything will run together in your mind. Refer to your list of needs and wants, as a way to narrow your search.

5. Get an Inspection

Unless you are home inspector by trade, your skills will only get you so far so hire a professional inspector. A good inspector will identify problems, explain the extent of the problems, and also recommend the appropriate repairs. They can run tests to determine the status of many systems. Certain things such as a roof or electrical wiring are considered major issues and may warrant a specialized inspector all their own. These inspections cost more upfront but they can save you thousands in the long run.