News Alerts, Aug. 29, 2013, Evening Edition, 3 New Articles, Real Estate +, Don’t Miss Them

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  1. Emerging market rout threatens wider global economy – Telegraph News Alerts, Aug. 29, 2013, Evening Edition, 3 New Articles, Real Estate +, Don't Miss Them

    Here’s a reason it matters what the Fed does vis-a-vis the East Asian and other emerging economies.

    It was Fed tightening and a rising dollar that set off Latin America’s crisis in the early 1980s and East Asia’s crisis in the mid-1990s. Both episodes were contained, though not easily.

    Emerging markets have stronger shock absorbers today and largely borrow in their own currencies, making them less vulnerable to a dollar squeeze. However, they now make up half the world economy and are big enough to set off a crisis in the West.

    Hans Redeker from Morgan Stanley said a “negative feedback loop” is taking hold as emerging markets are forced to impose austerity and sell reserves to shore up their currencies, the exact opposite of what happened over the past decade as they built up a vast war chest of US and European bonds.

    The effect of the reserve build-up by China and others was to compress global bond yields, leading to property bubbles and equity booms in the West. The reversal of this process could be painful.

    “China sold $20bn of US Treasuries in June and others are doing the same thing. We think this is driving up US yields, and German yields are rising even faster,” said Mr Redeker. “This has major implications for the world. The US may be strong to enough to withstand higher rates [including mortgage], but we are not sure about Europe. Our worry is that a sell-off in reserves may push rates to levels that are unjustified for the global economy as a whole, if it has not happened already.”

    We saw what just talking about tapering did. It’s calmed down a bit since then, but people could be very nervous if even very gradual tapering starts any kind of slide that is mistaken for a time for all to run as quickly as possible. The Fed may be easy, but the investors may react in a herky-jerky way at best. A great deal of how things will turn out will have to do with how well the Fed educates people before and during the tapering.

    Read the source article …

  2. Cashed-up Chinese buyers swooping on Australian property to cash in on next housing boom

    The Chinese are desperate to put their money to work anywhere. They take huge risks because if their system collapses, they’ll lose it anyway or at least large parts of it, its value, its buying power.

    So great is the international demand – fuelled by a falling Aussie dollar and Beijing’s ban on buying more than one property – that some developers are now marketing new units exclusively to offshore buyers.

    “We’re hearing that a lot of developers now aren’t even marketing in Australia,” NAB senior economist Robert De Iure said yesterday.

    Read the source article …

  3. How to Rent a Home to Great Tenants Quickly | Invest Four More News Alerts, Aug. 29, 2013, Evening Edition, 3 New Articles, Real Estate +, Don't Miss Them

    One man’s methods:

    One of the most important parts of investing in long-term rentals, is finding a great renter. There are many different ways to rent a home, I will break down exactly how I advertise and pick a tenant as well as how we write our lease. I will also go over how I determine market rent, which is another very important piece of investing in long-term rentals.

    It’s a good start in our view. He mentioned a pet deposit. There are many other types of deposits, but state and local laws should be consulted. Laws vary as to how much and for what reasons money can be required up front and whether and how much is nonrefundable and under what conditions, etc.

    Calling the deposit “a month’s rent” rather than a deposit, per se, might cause arguments when it comes time to apply some of it to damage. We recommend always calling a deposit a “deposit” and not the “last month’s rent” or what have you.

    We don’t recommend not doing the credit and other checks.

    Also, be sure to do a walk-through before; and document any damage in writing (and perhaps via photos; though digital images are so easy to doctor) as part of the rental agreement.

    Have your agreement executed in triplicate. Keep your copies in two separate locations in case of fire, etc.

    You can also try requiring renters insurance, though we are not versed as to all the laws in the 50 states that might preclude such a requirement. Check first.

    Read the source article …