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Condo Buying Lessons

By: Jeff Hammerberg

Entering into a real estate transaction can be a rather intimidating proposition for anyone who is doing it for the first time. But even those who have owned, bought, and sold homes many times and are seasoned veterans when it comes to real estate can be baffled or uneducated when it comes to the purchase of their first condo. That?s because condominium ownership is different from ?ordinary? home ownership in ways that are significant and can affect your rights as an owner, as well as the resell value and long term outlook for your condo development or building.

Condos are Shared Ownership Properties

The major difference between condo ownership and that of conventional single family homes is that ? unlike ordinary home ownership ? you share part of the condo community with the other residents, and each of you has a portion of the ownership rights over those shared areas or assets. You might, for example, have full ownership of your two-bedroom condo ? but you only own a percentage of the roof above it and the plumbing system that services it because these items are also owned in part by other homeowners in your condo complex.

Shared Ownership Has Specific Limitations and Guidelines

What becomes particularly important is that partial ownership conveys only partial rights and control. If you don?t own the landscaping outright ? but instead share its ownership with other residents ? then you don?t have to assume full responsibility for taking care of cutting the grass and trimming the hedges. The responsibility is shared. At the same time, you don?t have the right to go and put in a cactus garden or cut down a tree without getting permission from a majority of the other owners, because the landscape doesn?t belong to you, it belongs to everyone who shares in the condo community.

Inspections

Because of shared ownership, any inspectors you hire prior to purchase should check your unit but also give you a written report on the condition of assets that are outside of your unit. These include any shared amenities or mechanical components like the building?s heating, plumbing, and electrical system; roof, foundation, parking lot, or basement.

Review the Association Bylaws and Deed Restrictions

The rules and regulations that govern such things as landscape maintenance, painting the outside of the building, sharing the swimming pool, and whether or not you can rent out your condo are all covered by covenants or condominium association bylaws. Before you buy, you should review all of these with a real estate attorney, to ensure that you know exactly what your rights and responsibilities entail.

For instance, you may want to buy a condo so that you can use it as a vacation rental for extra income. But the other residents may have already voted to make their condo development an owners-only project, with no rental units. Or you may have monthly condo maintenance fees of $150 to cover things like repairs, but the city requires that your building upgrade its sprinkler system and fire escapes, and those renovations will cost $150,000. In order to pay for everything, the individual owners need to divide the costs or take them from reserves. But if your condo association is well managed and professionally organized, it may have a large reserve fund for such capital expenditures. If that is the case, then you?ll get the benefit of those assets that have been set aside over the years to take care of unexpected expenses.

Condo Associations and Management

In other words, by buying into a good condo community you can automatically inherit some extremely valuable perks or assets. In fact, the covenants and management of a condo association may be the best selling feature because they add value to the quality of life for each owner. There might be rules against changing the valuable historical architectural features of the building you?re in, or the maintenance fees might entitle you to have full access to an exclusive club house and golf course. The point is that condo ownership is governed in part by regulations that should be understood before you sign on the dotted line, to avoid any unexpected surprises.

Condo Association Fees

Assessments or maintenance fees are usually mandatory and collected monthly, quarterly or annually. Failing to pay them could result in a lien being placed against your property. Find out what your fees cover and don’t cover, and then compare them to the fees for similar condo associations in the vicinity. Then talk to current owners to find out how satisfied they are with their condo management and quality of life at the particular project.

A condo can be a dream come true, because it allows you to eliminate all the routine headaches normally associated with home ownership. But at the same time it may let you enjoy luxurious or unique amenities you could not afford if you were to buy a conventional, traditional single family house.

For expert help with condo buying and selling, contact www.GayRealEstate.com and www.GayMortgageLoans.com, or call toll free 1-888-420-MOVE (6683). These professionals are devoted to serving the GLBT community.

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_8915.shtml

History Of Gold With Relation To Currencies And Its Outlook

By: Mike Estrey

Much has been written about the current bull market in gold and how it compares to previous moves, in particular during the 1970s when the metal soared to at the time unimaginable heights.

On this basis it is worth looking at the background to the value story on gold, and this may shed some light on why its bull market may have significantly further to go for CFD traders in coming years.

The gold standard

The UK, which at the time was the world?s dominant economic powerhouse, adopted a gold standard in the early 19th century. Other currencies then looked to have gold backing, and towards the end of the century, various European countries joined the standard, though some chose for a time use a joint gold and silver standard.

The emerging strength of the US saw it adopt the standard in 1879, by making “greenbacks” that had been issued during the Civil War period convertible into gold, and the gold standard was formalised by legislation in 1900. On the outbreak of World War One, it was accepted by the whole of the developed world. This called for fixed exchange rates, with parities set for participating currencies in terms of gold, and it provided that any paper currency could on demand be exchanged for gold by its central bank

The system worked well having been designed to make each country adjust in terms of external deficits or surpluses in transactions between countries. Any deficit country would then have to surrender gold to cover its deficit, with the result that the volume of its money would be reduced, leading to lower prices, while the influx of that gold into the surplus economy would expand the volume of that country?s money and lead to higher prices.

This meant that there were effective pegs in the foreign exchange market, so that exchange rates would fluctuate only within very narrow limits determined by the costs of shipping and insuring gold.

US and UK comparisons in terms of gold

Up until 1914, the parity between the U.S. dollar and sterling was approximately $4.87, based on a U.S. official gold price of $20.67 per ounce and a U.K. official gold price of £ 4.24 per ounce, and the exchange rate would not fluctuate beyond about three cents above and below the mint parity, which represented the cost of shipping and insuring gold, since otherwise there would be arbitrage potential.

Although there were some gold transfers under the system, it was easier to adjust monetary policy to attract currencies, which might offset the financial impact of any import excess. Higher interest rates would usually have a deflationary effect in the deficit country aswell.

Under this system, participating countries needed to give an absolute priority to external adjustment over domestic objectives, so if there was a conflict between domestic and external objectives, policy tools might not be available to be used for domestic problems of recession, unemployment, or inflation. This reflected the prevailing economic philosophy that economies would tend naturally toward reasonably high levels of employment and reasonable price stability without such government policy actions.

The effect of the First World War

The four great economic powers, the US, UK, Germany, and France saw unchanged currency values up until the war. There were few barriers to gold shipments or capital controls in the major countries, and capital flows appeared to play a stabilising role.

After the outbreak of the First World War, each country needed to raise cash for the war effort, and at this stage they began to issue more and more bonds, some of which still exist today. These were domestically issued at the time and not backed by gold, but the promise to repay came from the central bank and was seen as rock solid. This was the beginning of what is known as fiat monetary policy, and which is widespread today.

The result of this was that as more and more paper was not backed by the common value of gold, floating exchange rates began. The US, which entered the war later than the others, had maintained gold convertibility, and soon the dollar floated against the other currencies, which were no longer convertible into dollars.

Dollar strength and weakness

Once the war ended there were significant economic problems in Europe, and exchange rates began to change rapidly, with many major currencies devaluing against the dollar.

This helped cement the US dominance of world trade, as the dollar had greatly improved its competitive strength over European currencies during the war.

In a reverse of what is happening today, within much of Europe and certainly in the UK there was a widespread desire to return to the stability of the gold standard, and growing concern over the attractiveness of the dollar, which was still convertible into gold, and of dollar-denominated assets. The pound thus went back on the gold standard, but this coincided with the Wall Street Crash and the beginning of the great depression, which highlighted the weaknesses in existing economic policy.

Following a disastrous five years back on the gold standard, the UK abandoned it in 1931, and others followed over the next few years. There were also problems in the US, and in 1933, President Franklin Roosevelt imposed a ban on US citizens buying, selling, or owning gold in order to kickstart the depressed economy. This was the birth of Keynesian policies which shaped much of economic policy in coming decades.

At the same rime, the Federal Reserve continued to sell gold to foreign central banks and government institutions, but the ban prevented hoarders from profiting after Congress devalued the dollar against gold in 1934.

This action raised the official price of gold by more than 65% to $35 per ounce. Only gold coins and certificates considered collectors? items were exempt from this prohibition, and artistic and industrial users were allowed to deal in gold under a special Treasury license. Once the price rose, there was a mining boom, which saw major growth in gold output.

The 1970s

The licence to print money had been conveniently forgotten, despite the widely remembered problems in Germany?s Weimar republic in the 1920s, and just fifty years later, in 1971, President Nixon ended US dollar convertibility to gold. On the 31st December of that year, gold stood at $43.8 per ounce.

This finally ended the central role of gold in world currency systems and it then began a spectacular bull market as inflation raged and the value of paper currencies fell. Gold enjoyed a nine year bull market, with the price hitting a record of $850 per ounce against a background of an international crisis arising from the Soviet invasion of Afghanistan and the Islamic Revolution in Iran. If this was rebased to today, the all time high would be equivalent to $2,100 per ounce.

Why gold could go a lot, lot higher

Gold?s current bull market has lasted six years, during which it has risen around 200%. In the 1970s, gold peaked with a 2000% rise in just nine years, so this gives some food for thought.

Admittedly inflation art present is not the problem it was at the beginning of that decade, but don?t bet against major changes in the value of gold against paper currencies in the years to come. For long and short term CFD traders this creates a major opportunity to profit from a potential further major revaluation.

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_8931.shtml