Latest News

Section 8, A Buyers Guide

History of Section 8 Public housing dates back to the Great Depression era when the U.S. government started building multiple unit facilities to house poor and needy families. By the 1960s, the federal government had amended the original public housing plan to allow low-income families to live outside of the public housing system in privately owned rental properties. Under the Section 23 program, the government negotiated the rent between the landlord and the tenant. In the 1970s, the government dropped the Section 23 program and adopted the Section 8 Housing Choice Voucher program, giving both landlords and tenants more freedom. What Is Section 8? The Section 8 program helps low-income, elderly, and disabled tenants afford decent and safe housing outside of the public housing system. With traditional housing assistance, many of these renters had to live in public housing facilities often located in rougher neighbourhoods, with very few other housing options. Using the Section 8 Housing Choice Voucher Program, tenants receive a housing voucher they can use for any privately owned apartment, townhouse, or house that has qualified for the Section 8 program. To start working with the Section 8 program, landlords and tenants must receive approval from the local housing authority. Requirements to become a Section 8 housing landlord and qualifications for renters vary by area. Approved applicants are put on a waiting list, unless housing is immediately available. Public housing agencies can give some preference to families that are homeless, living in substandard housing, involuntarily displaced, or paying more than half of their income on rent. Landlords, tenants, and the public housing agency then enter into a contract that outlines the roles and responsibilities for each of the parties involved. How Section 8 Works Each year, every state receives a block grant from the federal government to cover housing assistance costs. The states use a portion of this funding to cover the cost of the Section 8 program and to pay for a portion of the tenant’s rent and utility costs. Usually, the housing authority will pay around 70% of the tenant’s costs but in many cases can pay 100% of the tenant’s costs. As an example, consider a Section 8 tenant who has a monthly rent of $700 and averages $150 a month in utility expenses. Based on the 70% calculation, the housing authority would pay $630 of the tenant’s living expenses each month, divided between the landlord and the utility company. The tenant will then pay the remaining 30%. Investors misconception regarding Section 8 tenants The Section 8 program can benefit both landlords and tenants. Many investors have the misconception that Section 8 tenants are of lower quality than private renters and that they mistreat the properties. The reality is there are many benefits to an investor having a Section 8 tenant and this simply is not the case. Firstly with a Housing Choice Voucher, tenants can rent houses and apartments in safe areas they would not have been able to afford without assistance, and use their remaining income to pay for other necessities. Section 8 tenants like any private tenant are looking for an affordable property in a good location. Secondly, regardless of your property agent doing all the necessary due diligence on a private tenant there can still be the possibility that they become a bad tenant. If a private tenant is evicted from the property they will just move on to the next one. If a Section 8 tenant becomes a bad tenant they can and almost certainly will lose their Section 8 voucher. If you are removed from the Section 8 program, the federal government will not help pay your rent and you will be responsible for paying the full amount of the rent and you will still be evicted from the property. Most common reasons for losing your Section 8 voucher are: … Not paying rent on time. Not keeping utilities like gas, electric, or water on in the unit or you have been convicted of certain violent crimes, certain types of fraud, drug trafficking. Global Investments advice & Honest assessment The simple fact is a Section 8 tenant has a lot more to lose than a private tenant if they abuse the property or generally become a bad tenant. The majority of our investors have very little problems with Section 8 tenants, however it is fair to point one very important factor, cost, your property will need to be maintained to a “ Section 8 standard “ One of the main reasons Global Investments are the number 1 overseas agent for investment properties in the USA, and the reason why we are still in business after 7 years and over 4000 sales is our strict company model. Each and every property our clients reserve are all subject to a full independent inspection. Our inspection will highlight any major issues or repairs we feel needed to be up to rental ready standard regardless if there is a tenant already in place or not. However a rent ready standard and a Section 8 approved standard are two separate things. If you wish for the property to be up to Section 8 standards then buyers may wish or decide to spend a small amount more on the property to comply with the City’s regulations and this is good advice. In the long run with any buy to let property the peace of mind that you should minimise any repairs bills means a more stable ROI and a more stress free hand off investment. Purchasing renovated or updated properties may cost a few thousand dollars more but worth every penny in the long run. Do not be tempted by cheap alternative properties online that do not have warranty deeds and may need a huge amount of repair work. As the old saying goes and is very true, you get what you pay for. If you would like receive a selection of our Section 8 listings in the US please email: invest@globalinvestmentsincorporated.com

2020 Guide to St. Louis Real Estate

Nestled on the banks of the Mighty Mississippi River sits the vibrant gateway to the West, St. Louis. Known for beer, barbecue, and the Blues, this town boasts the kind of appeal that makes it an ideal real estate investment market. With a growing population working in the tech and creative sectors, and anchored by established brands like Anheuser-Busch, Boeing, and Emerson Electric, St. Louis seamlessly blends the new economy with powerhouse Fortune 500 entities. All of those companies translate into a highly skilled and educated workforce with money to spend. We’ve put together your guide to the St. Louis real estate market, including both the current investment scene and future potential over the next year. You may just find that St. Louis is exactly the growth opportunity you’ve been looking for. Global Investments have noticed many similarities in St. Louis that has made the Cleveland market in the last few years extremely strong for Real Estate investment. An influx of creative and tech workers fleeing the more expensive coastal cities will translate into steady growth for the Saint Louis metro area over the next several years. This increase, along with new corporate campuses in the city centre, is expected to result in a significant rental market and increasing property appreciation. With high home prices keeping investors out of markets all over the US, the St. Louis housing market remains one of the more affordable cities in the country. Like Cleveland Ohio, here you can get a single family or multi family home for well under the national average, translating into solid ROI Obviously price is important however one of the main reasons Global Investments are recommending St Louis as the next “ Cleveland” is the strong rental market. Again we have noticed many similarities in these two cities that result in a good rental stability. There is a changing nature of Millennials when it comes to renting rather than owning which is increasing the rental demand in the city, we covered this in a previous Cleveland blog last year : Rental market in Cleveland and Baltimore gets even stronger Cleveland has the University Circle but St Louis also has a reputation as one of the country’s best markets for recent college graduates. St. Louis promises to be a winner with young, educated professionals with high income potential. The growth of the tech and biotech industries here, alongside the already-established corporate infrastructure, offers an appealing place for these Millennial and Gen-Z graduates to put down roots. As development continues to expand throughout the city’s central corridor, many of these young professionals will delay home buying in order to decide which part of the city they want to settle in. Along with their natural tendency to delay marriage, home purchases, and other major life changes, this means a growing group of potential tenants and the rental market in general. The large university population here is another large market predominantly made up of renters. With almost 20 colleges and universities located in and around the city, there is a perpetual need for quality rental housing. Future projects and investment in the City There are also many projects in the pipeline for the city of St Louis that will certainly increase its popularity and increase the house prices which is great for investors looking for capital appreciation. Here is just a few to mention : St. Louis Aquarium The much-anticipated aquarium, slated to open inside Union Station next month, will be home to more than 13,000 aquatic animals, including 60 sharks and rays. The $187 million project also includes the new 200-foot St. Louis Wheel, a carousel, an 18-hole mini-golf course, a mirror maze, a ropes course, a train park, and several restaurants. The project created 500 construction jobs and is expected to bring more than 100 permanent positions. NGA West The $1.7 billion project is the largest federal investment project in St. Louis history. Managed by the National Geospatial-Intelligence Agency, the U.S. Army Corps of Engineers, and the U.S. Air Force, the 97-acre campus in North St. Louis is being called a game-changer for the intelligence community. Slated to be operational in 2025, it will feature a 712,000-square-foot office building with a garage, visitor centre, and inspection facility. Square The company, founded by St. Louis natives Jack Dorsey and Jim McKelvey, will relocate its St. Louis offices from Cortex to the former 235,000-square-foot St. Louis Post-Dispatch headquarters downtown. The move will allow the tech company to expand its workforce from 500 people to as many as 1,400. City Foundry Set to open next summer across from IKEA in Midtown, the $220 million project is transforming the former Century Electric Company site into an entertainment destination, including a food hall featuring 20 kitchens, a bar, and 500 seats. Fresh Thyme grocery plans to open its seventh local store on site, and Alamo Drafthouse Cinema will offer a unique theatre experience. Major League Soccer Stadium Located just west of Union Station, the proposed modern stadium will house St. Louis’ forthcoming MLS team. The partially covered sports facility will seat 22,500–25,500 visitors, with entrances on all four sides and an angular canopy—constructed of translucent material that’ll allow light to pass through—to protect fans from the elements. Armory District The historic Armory building was once home to the 138th Infantry of the Missouri National Guard, years before hosting tennis championships and legendary concerts. Soon, the space will find new life, thanks to a $47.1 million overhaul yielding 250,000 square feet of creative office space, a restaurant, and a greenway path connection. Ballpark Village Phase 2 The slogan for the downtown development’s $260 million second phase: “We’re bringing the village to Ballpark Village.” The project includes the Live! by Loews hotel, a Class A office building, retail, restaurant, and entertainment space, and a 29-story high-rise luxury residential tower, One Cardinal Way, scheduled for completion in 2020. The project is expected to create 1,500 construction jobs and 1,000 permanent jobs. So if you are interested in learning

Construction and development in downtown Cleveland drives the rental market up.

If you drive through downtown Cleveland today you will see cranes dotted across the skyline . Warehouses, derelict buildings and even car lots are being turned into urban chic apartments which are attracting a hefty price tag. ABC News ran an article in August this year covering this topic, they called the article “Vibrant downtown Cleveland neighbourhoods draw new development and rising rents, pricing many people out” The article highlighted the fact the worst-kept secret in Cleveland is that downtown Cleveland is back with a bang. New restaurants , boutique hotels and designer shops have made downtown Cleveland a very attractive place to live but now a very expensive one. Even with new apartment projects popping up all over downtown Cleveland, many of them are being advertised as “luxury living,” but they come with luxury prices. The article also looked at rent comparables for the last seven years, if we look at a one bed/one bath in Downtown Cleveland in 2011 the rent was $820 a month, if we look at the rental market today we can see that this has risen on average to $1,252 per month (this is more than a fifty per cent increase in a number of years) The situation is no better for two bedroom apartments, in 2011 a two bedroom apartment would have rented $1,252 per month but now they are renting for $1,890 per month. The rent levels in Cleveland are starting to come on par like other large US cities like Washington and Seattle. Apart from the all of the new developments taking place another distinguishing factor is the occupancy levels in downtown Cleveland, it is currently running at over 95%. Even with all of these new apartments even when an apartment does become vacant it is snapped up within a number of days. Another interesting point in the article is how Cleveland has marketed itself in the last few years, it has become a beacon of the Mid West for developers and investment by continually pushing its location, people and local enterprises. Large scale developers have used promotional material to sell a lifestyle not just a property, one they believe Cleveland can deliver. But all of this development is great for a nice night out or a busy shopping day but it is not so nice for some people who can not afford the high rent levels anymore. The Downtown Cleveland Residents Association have stated this very fact, they said all of the development is great for the city but no so great if some people can not afford to live there anymore, we don’t want it to be an enclave just for the wealthy. The rising rents in downtown are having a rippling effect in other areas in close proximity to the city, many people who would have lived in the city are now looking further a field to find more reasonable rent levels. Areas like Hough, St Clair Superior, Fairfax, Ashbury Towers, North Broadway are now on the investors radar as these are all a short distance to downtown Cleveland, these areas are seeing increased rental demands and increased rents. Global Investments have exclusive agreements with many US Brokers and Agents with properties in these areas, if you would like to find out more please contact: invest@globalinvestmentsincorporated.com

10 QUESTIONS TO ASK WHEN BUYING USA BUY TO LET INVESTMENTS

Real Estate has produced many of the worlds wealthiest people and one of the most lucrative Buy to let markets at the moment is the USA. Investors all over the globe are taking advantage of the low priced homes and the high returns offered by different housing markets in certain States. But like any investment it is better to be well versed before diving in with all or even some of your savings. You need to arm yourself with as much information as possible so you can make an informed decision before making the plunge. Manchester Based firm Global Investments Incorporated have been selling these types of investments for coming up to 6 years and lead the market in sales to the overseas investor. We asked CEO Mike Moodie what his advice would be and what questions a first time buyer should ask before they get involved. Mike suggested the below 10 points investors should consider before investing. Which Company should I buy from? – In my opinion this is one of the most important choices and obviously this is the first decision you will make before even looking at the properties. This is very important as you will be looking to build a relationship with this company moving forward and taking their advice and guidance on many matters so its really important that you feel comfortable and confident in them. You should always look to speak with someone rather than just email communication. I would also look for a company that has a good track record in this given market and has at least a few years in this business. Which State should I buy in? – Well this is a hard one as its really a personal choice sometimes and depends on the individual. All of the areas we sell in offer excellent returns and also good capital appreciation, some more than others. I guess that the investor really needs to decide whats more important? The net return or growth or in some cases getting a balance of both. ( My advice would be to look at all the options before making a decision and see what each area offers you and your given budget ) Should I buy in my own name or a company? For the fist time investor I think its probably better to initially invest in their own name and later if we want we can always open an LLC and transfer the ownership over from them to the company. It is really only beneficial to own in an LLC if the investor is looking at purchasing multiple homes. So its very easy to make this decision after the first purchase has been completed. Obviously if the clients intention is to build a portfolio then we would advise the company set up and purchase in the name of the LLC from the start. Should I buy a vacant or tenanted property? I think that both of these options are good, again it is sometimes a personal choice. Buying a tenanted home is great as it gives an immediate income from day 1 but the buyer should ensure that all the correct due diligence has been done on the lease agreements and rent history of the current tenants. On the other hand I do speak with some investors that like to buy a vacant refurbished home that they can have an involvement in the tenant placement with the new management company. The downside is that maybe it may take a month or two before they find the right tenant but I do remind my investors that a few months on a 5-10 year investment is really small and not a big issue. So again really its down to the individual. Can I have an Inspection? This has to be the biggest question the buyer should be asking they should never close out on a property unless they can see a full independent inspection. They should also ensure that any fees or deposits are subject to this inspection and that should they not like the report these funds can be transferred to an alternative of their choice. Should I buy a Section 8 house or private? Again this comes down to personal choice. Both tenants can prove to be excellent but agin comes down to how well they have been vetted. Obviously a lot of investors like the idea of Section 8 as the rent is paid direct to the landlord but if a private tenant has been vetted correctly by the managing agent then the rent should be as good as guaranteed anyway. (Section 8 homes would also normally come with a premium due to the guaranteed factor ) Can I have a US account for my rent? This is one of the biggest questions that we get asked and its really simple. The bottom line is it doesn’t actually matter. The managing agents that we use will send your rent to which ever account that you nominate. Obviously it can save on wire fees etc. if you do have a US account. You can only open a personal account if you are present in the bank in the US however we can open company accounts for our clients without them being present. Who will manage my property when I am so far away? This is probably the most important of all of the questions and in my opinion the management company you use is as important as the property you choose to buy. Like I tell my investors you can buy the best located house in the world but if its managed badly it can turn into a bad investment. Ensure that the company has a lot of experience and years in their given filed and also that they provide full support and on line portals so you can manage your property from further a filed. Also from our experience most management companies only like to work with their clients via email. My advice