Every homebuyer has been told to avoid PMI. But what is PMI, and why is it so terrible? PMI stands for Private Mortgage Insurance. Lenders used to expect a buyer to prove that he (they didn’t loan to women) had the self-discipline necessary to save up a 20 percent down payment.

Eventually, lenders decided this wasn’t necessary, although they were still wary of borrowers who put down less. Private Mortgage Insurance was created to ease their minds. PMI is insurance that pays out to the lender in case of default. It’s a bit like purchasing a co-signer. Unfortunately, PMI is expensive. Luckily, it can be avoided.

Putting down 20 percent is the best and simplest way to avoid PMI. You will sidestep PMI altogether, your monthly payments will be dramatically lower and your interest rate might be, too. You will also have built-in home equity.

If 20 percent down is not desirable or possible, “piggyback” loans are one alternative. The first mortgage will be for 80 percent of the home’s value, and a second mortgage or Home Equity Line of Credit (HELOC) for 10 to 20 percent of the home’s value will be arranged. Drawbacks include a higher interest rate or even an adjustable rate (ARM) on the second loan. Also, beware of balloon payments that require you to pay off a loan all at once.

If you find an extremely good deal that won’t last or if you are paying high rent that you will never get back, anyway, then paying more for either PMI or a higher interest rate may be cheaper in the long run than waiting to buy. Speak frankly with your mortgage broker or financial planner and have him or her run the numbers so you can determine the best deal for you.

Learn more about area real estate and homes for sale.

While it is true that mortgage interest rates are very low, there are many advantages to purchasing investment properties in Myrtle Beach for cash. Recent statistics released by RealtyTrac, Inc. for first quarter real estate sales show that 49% of all property sales in the first quarter of 2011 nationwide were cash sales, confirming the growing trend.

So what makes purchasing a beachside condo for cash so appealing? There are several reasons you should consider this option.

• Myrtle Beach condominium prices are the lowest they have ever been, making it much easier to purchase an investment condo for cash.
• While condo prices may be low, the demand for vacation rentals in the Myrtle Beach area is at an all time high.
• Using cash to make a real estate purchase provides you leverage during negotiations.
• When you are not burdened with a mortgage all the income you collect is profit, providing you with an almost instant return on your investment.

Myrtle Beach investments are perhaps one of the closest things to a guarantee for successful real estate investing. The popularity of the area as a tourist destination creates a need for vacation rentals, while reduced condominium prices make this area a real estate investors dream.

Myrtle Beach has beautiful weather throughout the year, creating the perfect vacation spot. A beautiful beach, warm ocean breezes and countless tourist attractions in the area make it attractive to everyone. Golfers love Myrtle Beach because of the many fabulous courses in the area and the near perfect weather year round.

Vacation rentals have become quite popular in recent years as an alternative to high-end hotels. Families wishing to remain on a budget, but still go on vacation, have found that a condo rental allows them to enjoy beach side accommodations at affordable rates. The many amenities found in these condo rentals, such as full kitchens and washers and dryers, help reduce costs and allow many people to extend their vacation time.

Condo rentals vary in price depending on the season and the size of the condominium. During the peak of Summer some rentals bring in more than during the off-season. Furthermore, 3 bedroom condos rake in more cash than a 1 bedroom. (Of course, these cost a bit more to purchase as well.)

A group of people that investors may not have considered is the “snow bird.” Many people from northern states like to travel south for the winter rentals. Generally retiree’s, these guests will rent condo space between October and March while they wait out the cold winter. This is terrific news for the real estate investor because these months are usually slower tourisim months.

Real estate investing using cash has one final benefit that you may not have considered. When the housing market bounces back, and it will, you will own your property outright, allowing you to cash in on the full resale value of the condo without having to pay off a mortgage.

———————

Learn more about investing by speaking with one of our Condolux Sales agents at 800-624-6418.

———————-

Read other real estate news in Myrtle Beach on our ActiveRain blog.

Well if there is ever a good time to invest in Myrtle Beach Real Estate within the last three years, now is definitely the time. Anderson Ocean Club builders have announced that they are offering a 60% discount off of their original pricing. The current floorplans available are Studios, 1, 2, and 3 bedroom units, ranging in size from 475 -1400 sq ft.

Artist Rendering of Boardwalk

Looking for an exciting oceanfront condo to rent?  Try Bay View’s oceanfront two and three bedroom units.  With the edition of the newly completed Myrtle Beach Boardwalk and Promenade, Bay View has another landmark to enjoy while taking in those ocean breezes.

The Myrtle Beach Boardwalk and Promenade will stretch roughly 1.2 miles along the beach beginning at the 2nd avenue north pier and ending at 14th avenue north.  Visitors and locals alike, are excited to have a safer stretch of walking paths that will keep more people away from the crowded streets of Myrtle Beach in the summer.

While roughly a quarter of the Boardwalk is still receiving finishing touches, officials opened to the public the completed portion on April 3rd.  This is well ahead of the proposed timeline of May 15.  Citing great Myrtle Beach weather, construction crews were able to finish a portion in time for Easter.

Real estate is looking up! CondoLux has reported excellent numbers for sales and rentals for the beginning of 2010. View the Myrtle Beach real estate press release here.

One of the long-time favorite Myrtle Beach condos resorts, the Holiday Sands South is located at 2411 S. Ocean Blvd, towards the far south end of Myrtle Beach. A former hotel, the property was converted to condominiums around 2006.

On Saturday, August 22nd, 58 of these condos will be in a real estate auction managed by J.P. King Auction company. The Auction will be held at 1pm in the Myrtle Beach Marriott at Grande Dunes.

Business Wire reports there will be one and two-bedroom units, both oceanfront and ocean view offered. The one bedrooms with an ocean view were originally priced at $189,900 and will have an opening bid of $69,900, while the 2 bedrooms will open at $199,900 – down from the original price of $369,900.

Each unit is fully furnished with recently updated interiors and offer one of the best investment opportunities to come up lately in Myrtle Beach.

The Holiday Sands’ amenities include two outdoor and indoor pools, indoor hot tubs, exercise rooms, and an indoor kiddie activity pool area with a lazy river. The resort also has a 100-seat restaurant, conference room, high-speed elevators, on-site parking and 24-hour customer service.

Our Condolux Myrtle Beach office manages several rentals in Holiday Sands, and our sales staff can help you with a purchase of one of these units as well as your trouble-free rental program. To see our rental information, visit Holiday Sands Resort.

Sales rep Richard Brooks will be happy to help you plan for this event. Contact him at 843-333-0470 or email NMBRealtor@Gmail.com.

The local Allstate agent Scott Todd is available to furnish H06 insurance and offers all types of Myrtle Beach Homeowners Insurance to make your purchase even easier.

Contact us soon for more information about the Holiday Sands Resort auction. Again, the auction for these Myrtle Beach condos takes place on the 22nd of this month.

Myrtle Beach Real Estate
Myrtle Beach Kids

If you haven’t surfed the net for Myrtle Beach lately, you may not have noticed some of the newer sites we’ve created for our various tourism interests.

Our parent company, Condolux Vacations, was originally servicing the resorts in North Myrtle Beach primarily. Indeed, we feel like North Myrtle is the preferred place to live and visit. There is less traffic, less crime, (not that either city has much) the beaches are wider, and the people friendlier. We are biased, of course, because most of us live here!

But many people still love to stay in downtown Myrtle Beach instead. So this year, Condolux has expanded to almost all of the best resorts in Myrtle as well. Our new website for Myrtle Beach condo rentals is called “Myrtle Beach Luxury Rentals”. Give it a visit and see what you think! We still offer the best deals and only the very best upgraded condos through our rental program. But now you can stay at the great resorts like Ocean Forest, The Breakers, The Boardwalk Resort, and many more.

Even though the Pavilion is now gone, you will still find Myrtle Beach amusement parks like Family Kingdom. Our new website for Myrtle Beach Kids Attractions will help those with families and kids to find all the activities in Myrtle Beach for children. You will never have to think about what to do with your kids again! We’ve reviewed the Myrtle Beach water parks, mini-golf and putt-putt in Myrtle Beach, Ripleys Aquarium, Imax Theatre, and all the other places to go in Myrtle Beach with kids! We hope this new site will help you plan your days with the kids to their fullest.

We’ve always offered some of the best deals on Myrtle Beach golf packages around. We have a new blog now that is managed by our golf director, Craig Chinn. Craig will keep you informed about any tournaments, specials, and other Myrtle Beach Golf News here. Subscribe to our feed and keep up with all your favorite golf happenings in the area!

If you’re looking to buy your own Myrtle Beach condo, be sure and check out our newly updated website that will eventually list every resort in the area with the MLS listings available. Sign up to get the new listings for your favorite resorts privately in your email. When you find the one you want, fill out the contact form, and we’ll be there pronto to help you with questions and more details.

We want to be the place you go for your Myrtle Beach vacation plans, and we’ll be adding more websites all the time to help you plan the best beach vacation you’ll ever have!

Myrtle Beach Real Estate

According to Donald Trump’s Trump University, there have been nine cycles in the real estate market in the last 150 years.

We got together last week with some of our Realtor friends in Sarasota, Las Vegas, Los Angeles, and Greenville, South Carolina to do a press release about the state of the real estate market in our respective areas.

Since we are having such a good spring as far as tourism, and Myrtle Beach real estate sales are also doing much better, I wasn’t surprised to hear things were similar in other resort areas. There were a few things I hadn’t thought of though.

Diann Tonnesen says that investors are watching the foreclosures and low-cost deals in Vegas and snatching them up quickly…sometimes to the annoyance of regular buyers! She says that many of the houses are half the price that they were in the boom, and multiple property offers are not unusual. She said that even some Trump Tower condos were going for 30 to 50 Cents on the dollar.

Lee Cunningham in Greenville, SC reports that they have seen an increase in sales, but their property values have actually increased slightly. Money Magazine predicts that Greenville will be one of the first areas to recover from the current housing crisis.

Fran in Los Angeles says they are number three in the nation for the highest foreclosure rates, and it’s bringing in the investors as it is in Las Vegas. I think California probably had the biggest increases in price, and have the most far to fall. However, with their perfect weather and the world’s technology headquartered in the state, it’s always going to be a preferred place to buy and live.

Beautiful Sarasota Florida is once again coming to life, according to Annette Smith. The luxury golf communities are continuing to prove the most popular in an area where the scenery is so eyepopping everywhere.

Myrtle Beach golf is always at a peak in the spring as well. Those living in the cold north are always anxious to see the sunshine and warmth of the south.

See the full press release about our Resort Real Estate Trends.

The most glorious time of the year is now here, and waking up in the morning to the bright sunshine on the beach couldn’t be nicer. The humidity is still low to none, the days are in the high 70′s, and the golf courses remind every golfer why they love the game. This is why Myrtle Beach golf is the best in the nation.

How to Calculate Cash Flow on Investment Rental Property

Because of government rules and regulations, no realtor or real estate agent will be allowed to forecast or give you any idea about cash flow or ROI when it comes to investment real estate or rental condos. This can leave you frustrated and wanting more information. We can, however, tell you the formula to use so you can get a general idea of your investment possibilities.

If you have not purchased the investment property and are trying to decide the potential returns, you can often find out the rental income from another unit of the same size (if it is a condo) or from neighboring properties. (If it is a home)

What is your taxable income or loss from the investment property?

Taxable Income or loss is the amount of your rental income, less operating expenses, depreciation on the property, and mortgage interest costs.

Depreciation can only be figured on the cost of the building. So with a house, you will need to separate the land cost from the building cost to do this. Depreciation is spread over 27.5 years, and not paid out in cash each year. Divide the cost of your building by 27.5 years, and that is your depreciation expense.

Figure your Interest Expense for the year on the mortgage and any borrowed funds used to purchase the property.

Operating expenses would include property taxes, condo insurance, repairs or losses from maintenance problems, and any charges from rental management companies and cleaning costs. One thing to think of- On site rental management usually charges around 50% or one-half of your rental income. Outside services for condo rentals in Myrtle Beach, such as Condolux, charge around 25-30%. Big difference!

Find your projected rental income if possible, or if you’ve already passed your first year, use the rental income figures. Subtract the Depreciation, Interest Expense, and Operating Expenses from this amount, and the result is your CASH FLOW for this real estate investment property.

If you have a LOSS, and if you’re not a real estate professional, here’s how your rental loss could affect your income tax, as of present 2005 tax laws.

If you actively manage the investment real estate and your adjusted gross income does not exceed $100,000, the rental loss (up to a maximum of $25,000) could be deducted from other income such as salary, interest, and dividends. Multiply the rental loss by your federal income tax rate. You will now have avoided a certain amount of income tax, and this can be figured into the cash flow.

New Cash Flow Calculating Process:

Rental Income
Plus: Tax savings
Less: Operating expense
Less: Mortgage payments
Equals= CASH FLOW

Assuming the investment real estate now just about “breaks even” on cash flow, your equity in the property increases each year as the mortgage loan is paid down. Any increase in the value of the property during the years of ownership will increase the owner’s ultimate return.

Calculating the cash flow on a real estate rental property investment you’re considering will help you decide whether the investment is a good one. You may want to avoid investments with a negative cash flow unless you can come up with additional money to cover operating costs and debt payments.

What is 1031 Tax Exchange, and how can it help me?

We want to help make your investment real estate transactions as economical and as efficient
as possible. That’s why we believe that the “tax deferred exchange” is an approach that should be considered by anyone who owns investment or business related property.

Learn how a 1031 Tax Exchange works, or contact us for more information.

The Myrtle Beach Condo Store
Myrtle Beach Real Estate