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Tags: Agreement Contract, Banks, Condos, Construction Value, Developer, Good Understanding, Handsome Profit, Home Buyers, Investment Strategy, Magnitude, Money, Naked Eyes, Nbsp, Pre Construction, Profitable Investing, Purchase Agreement, Real Estate Investing, Real Estate Investors, Risk And Reward, Unit Condominium Development
Commercial real estate investing can be very rewarding for those who take the time and effort to approach it wisely, but it can be a trap for those who rush in without doing their homework properly.
Too often, investors rush into buying a property for all the wrong reasons ? “it’s a good deal,” a “bargain opportunity” and the list goes on. Then they wonder what happened when the investment either goes pear shaped or becomes a full time job.
If you are serious about building significant wealth from commercial property investment, you must have a proper investment strategy. This is a get rich slow business that requires patience, planning and persistence.
The key elements to any property investment strategy are:
* Get your personal financial affairs in order and make sure they are geared towards building wealth, not paying off consumer debt. Also, check your credit rating to make sure it is in order.
* Draw up a list of your criteria for property type, size and location. Be aware that each type of property requires a different set of skills to manage and offers varying rates of return. It is much easier to fit the property to your strengths rather than you try and change to fit the property.
* Study your local market so you can quickly identify opportunities that are within your capacity to act on. It’s no use looking to invest in an area where you don’t have on the ground knowledge.
* Be prepared to study and learn. Once you’ve spotted a possible deal, you need to be able to accurately value a property based on its condition, your return expectation, and your borrowing power. You need to understand why “what is it worth” is the wrong question to ask, and how to answer the right question “what is it worth to me?”
* Last, you need to learn how to structure deals and make offers too good to refuse.
When you have done this homework properly, you will be in a position to act decisively, reap the profits and keep them. Of course, you will need to consult regularly with your accountant on tax planning and asset protection, which are cornerstones of any wealth building plan.
You also need to consider what your overall portfolio will look like. Don’t fall into the trap of buying all sorts of different properties and then end up with it being a full time job as you juggle dealing with evictions, skips, delinquencies, maintenance and bills.
Once your overall planning is done, the next step is to select your real estate team. You will need a good real estate agent, loan officer, tax advisor, and lawyer. These people are critical to your success because the investor with the best knowledge can quickly identify the properties to ignore and those worth considering.
Remember the old adage, “the quick and the dead” ? the speed at which you can close a deal will give you the edge in any type of market. In addition, your advisors can point you in the right direction regarding finance, tax and legal issues.
Also, there is a good reason behind the catch cry, “location, location, value”. You want a return on your dollar so you are looking for a property that requires some attention so you can add value.
One strategy is to buy real estate in up-and-coming area with new developments or renovated properties. This makes it easy to attract and keep good tenants and leads to greater returns.
Another tactic to add value is to buy properties in solid locations but require some maintenance or upgrading, such as improving the aesthetic appeal of the building, thus instantly improving its value with little outlay.
In regard to financing, banks are the most obvious first lender, but commercial loans are not quite as simple as the more commonly known residential loans and you should always seek professional advice from your accountant and legal advisor.
You should also understand the various methods of financing, such as double closing, lease options, and contract for deed.
Double closing has attracted negative publicity lately, but only because it is misunderstood. This is a perfectly legal, moral and ethical method of trading that has been around for 100 years or more.
A double closing is simply two back-to-back closings wherein the proceeds from the second closing are used to fund the first closing. Both closings are done in escrow, so the “middleman” can buy and resell a property for profit without putting up their own cash.
The main downside you have to be careful of is that the closing rarely goes to plan and there are delays of up to a few weeks, which can cause the plan to unravel. Make sure any contract allows for this and you should be covered.
Contract for deed is an agreement whereby the buyer makes installment payments on an arrangement similar to car financing. That is, the seller holds the title to the property while the buyer has the equitable title.
Lease options consist of two elements, the first of which is the lease. This is a contract for use and possession of the property, thus creating a lessor/lessee relationship.
The second element provides a purchase option, which is a unilateral agreement where the seller agrees to give the buyer the exclusive right to the leased property. This is NOT a sale.
Make the effort to prepare your own income and expenses pro formas from the beginning, or get your accountant to do it. Don’t rely on operating results or projections presented by the agent or the seller ? chances are the seller will overstate income and understate expenses, then claim ignorance if challenged.
The only way to know the investment value of what the property is worth to you, is to develop an accurate projection of income and expenses, which can only be obtained by researching the market and determining in advance what the cash flow will be once your investment and management plan is in place.
Also, you need at least a 20-25 % down payment to get access to the best financing terms. You can still get finance on a payment down to 10% but you will pay more interest, loan fees and private mortgage insurance.
Remember, borrowing to cover the majority of your acquisition costs can boost your rates of return, but too much debt expense can be dangerous if the market takes a downturn.
About the Author:
Specializing in commercial and investment real estate, Tony Seruga, Yolanda Seruga and Yolanda Bishop are always searching for new and profitable commercial properties across the U.S. Visit http://www.maverickrei.com for more great information
Tags: Borrowing Power, Building Wealth, Buying A Property, Commercial Property Investment, Commercial Real Estate, Commercial Real Estate Investing, Consumer Debt, Credit Rating, Full Time Job, Homework, Investment Strategy, Local Market, Patience, Pear, Persistence, Personal Financial Affairs, Real Estate Investing, Return Expectation, Right Question, Slow Business
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What Is Pre-construction Real Estate Investing?
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| Submitted By: Karen Kusumakar |
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Investing in pre-construction real estate is one of the most profitable investing opportunities available in the market today. Even though it?s a fairly old strategy, very few investors have a good understanding of it. Preconstruction real estate investing can be best explained with an example:
A developer is planning to build a 100 unit condominium development in a very popular location. The developer has already worked out the numbers and thinks that the project will make a handsome profit. Since he doesn?t have the required amount of capital to complete a project of such magnitude, he approaches banks to request financing.
But before banks lend out millions of dollars to the developer, they want to know that the project has the potential to sell after completion. Since there is no way to know the future and banks like to reduce risk as much as possible, they require the developer to pre-sell a certain number of the units (usually 25%-50%) before they will lend money. In this example a bank agrees to finance the developer if 40% of the units are sold before construction begins.
There are very few home buyers who are going to commit to buying something without actually seeing it with their naked eyes. So the developer has no choice but to approach real estate investors who understand the risk and reward of such ventures. In order to reward these investors for their risk, the developer gives them a 10% discount off the appraised value (after construction value) of the condos if they sign a purchase agreement (contract).
This creates a win-win situation where the developer is able to secure financing and the investors are able to get built-in equity by getting the property below appraised value. The investors who buy these condos before the construction is completed are called pre-construction investors, and this investment strategy is called preconstruction investing.
In this example it was a development from the ground up, but the term ?pre-construction investing? can be used for any purchase made before the actual completion of a real estate development. The development may be from ground up or just a renovation project i.e. A condo conversion project where preconstruction investors buy before the renovation is complete is also an example of pre construction investing.
In general, pre construction pricing is 5% - 15% lower than the market value of the finished property. Sometimes the developer may offer other financial incentives instead of a price discount. Some examples include cash back after closing, closing cost credit, free upgrades, rental guarantee or lease back, paid property taxes, waive assessments waived, management fees waived, etc. However, in most cases the developer will offer a combination of a price discount and other financial incentives in order make the deal sweeter for preconstruction investors.
After the construction or renovation is complete, pre construction investors? have two options to exit. Either they sell their property and make a quick profit, or they can hold the property as a long term investment and build equity. Sometimes investors can also profit by assigning the contract to a fellow investor for a small profit even before assuming title to the property.
Below is summary of the process of preconstruction investing:
The pre construction investor buys a house, condo or townhouse from a reputed developer in the preconstruction phase at a price discount and/or other financial incentives.
The pre-construction investor waits for the construction or renovations to be completed.
After completion of the construction or renovation, the preconstruction investor sells the property immediately for a profit. Or the pre construction investor holds the property to build additional equity due to appreciation and by paying off principal using the rental income. In some cases, exit by assignments is also possible.
Article Tags: investors, preconstruction, property
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Tags: Agreement Contract, Banks, Condos, Construction Value, Developer, Good Understanding, Handsome Profit, Home Buyers, Investment Strategy, Magnitude, Money, Naked Eyes, Nbsp, Pre Construction, Profitable Investing, Purchase Agreement, Real Estate Investing, Real Estate Investors, Risk And Reward, Unit Condominium Development
Real Estate Investing Strategies
Investing in Real Estate
Investing in Real Estate is definitely one of the most lucrative methods available. The reason why people tend to do so well with Real Estate is that it’s a commodoty that people will never be able to live without. Even if we someday manage to find another habitable planet, Travel and Real Estate industries will thrive more than ever! Apart from being an everlasting market, investors can leverage borrowed money to turn an even greater profit. Further - if you invest at the right time, in the right property, you can turn profit immediately.
Market Knowledge - A Caveat
Please don’t jump into the Real Estate market with your eyes closed. Like any high margin investment strategy, it’s easy to lose money as fast as you can earn it. If you must realize one thing before jumping in, it’s this: Turning large profits in Real Estate is a full time job (at least to begin) and requires you to acutely train your mind to know the product intimately and watch for market trends. Here’s a simple example. If you know anything about computers, you’ll know that it’s a competitive market. However, there are still people that are able to profit by selling used computers to people who can’t afford new systems. A person who is intimately familiar with building computers will source all the used parts very inexpensively and insert them into a new case ($30), and add a new keyboard ($20). Buying a new case and a new keyboard can make all the difference. You’ve made your computer look new by purchasing some inexpensive value building aesthetics. The salesman then lists the computer in the paper at a reasonable price and turns a 15% profit if he or she is lucky.
Real Estate Investing is about Market and Product Knowledge. Figure out what people want. Figure out how to buy the parts at discounts and put them together to satisfy, with some aesthetic enhancements.
For the rest of the Article, please visit http://www.debts-gone.com/realestate_income.html
Thanks, and Good luck!
Jason Greenberg
About the Author
Jason Greenberg is a financial advisor in London Ontario Canada
Tags: Aesthetics, Building Computers, Caveat, Competitive Market, Debts, Enhancements, Full Time Job, Habitable Planet, Investing In Real Estate, Investment Strategy, Keyboard, Market Investors, Market Knowledge, Market Trends, New Case, Planet Travel, Product Knowledge, Profits, Real Estate Investing, Right Time
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What Is Pre-construction Real Estate Investing?
|
| Submitted By: Karen Kusumakar |
| |
| |
|
Investing in pre-construction real estate is one of the most profitable investing opportunities available in the market today. Even though it?s a fairly old strategy, very few investors have a good understanding of it. Preconstruction real estate investing can be best explained with an example:
A developer is planning to build a 100 unit condominium development in a very popular location. The developer has already worked out the numbers and thinks that the project will make a handsome profit. Since he doesn?t have the required amount of capital to complete a project of such magnitude, he approaches banks to request financing.
But before banks lend out millions of dollars to the developer, they want to know that the project has the potential to sell after completion. Since there is no way to know the future and banks like to reduce risk as much as possible, they require the developer to pre-sell a certain number of the units (usually 25%-50%) before they will lend money. In this example a bank agrees to finance the developer if 40% of the units are sold before construction begins.
There are very few home buyers who are going to commit to buying something without actually seeing it with their naked eyes. So the developer has no choice but to approach real estate investors who understand the risk and reward of such ventures. In order to reward these investors for their risk, the developer gives them a 10% discount off the appraised value (after construction value) of the condos if they sign a purchase agreement (contract).
This creates a win-win situation where the developer is able to secure financing and the investors are able to get built-in equity by getting the property below appraised value. The investors who buy these condos before the construction is completed are called pre-construction investors, and this investment strategy is called preconstruction investing.
In this example it was a development from the ground up, but the term ?pre-construction investing? can be used for any purchase made before the actual completion of a real estate development. The development may be from ground up or just a renovation project i.e. A condo conversion project where preconstruction investors buy before the renovation is complete is also an example of pre construction investing.
In general, pre construction pricing is 5% - 15% lower than the market value of the finished property. Sometimes the developer may offer other financial incentives instead of a price discount. Some examples include cash back after closing, closing cost credit, free upgrades, rental guarantee or lease back, paid property taxes, waive assessments waived, management fees waived, etc. However, in most cases the developer will offer a combination of a price discount and other financial incentives in order make the deal sweeter for preconstruction investors.
After the construction or renovation is complete, pre construction investors? have two options to exit. Either they sell their property and make a quick profit, or they can hold the property as a long term investment and build equity. Sometimes investors can also profit by assigning the contract to a fellow investor for a small profit even before assuming title to the property.
Below is summary of the process of preconstruction investing:
The pre construction investor buys a house, condo or townhouse from a reputed developer in the preconstruction phase at a price discount and/or other financial incentives.
The pre-construction investor waits for the construction or renovations to be completed.
After completion of the construction or renovation, the preconstruction investor sells the property immediately for a profit. Or the pre construction investor holds the property to build additional equity due to appreciation and by paying off principal using the rental income. In some cases, exit by assignments is also possible.
Article Tags: investors, preconstruction, property
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Tags: Agreement Contract, Banks, Condos, Construction Value, Developer, Good Understanding, Handsome Profit, Home Buyers, Investment Strategy, Magnitude, Money, Naked Eyes, Nbsp, Pre Construction, Profitable Investing, Purchase Agreement, Real Estate Investing, Real Estate Investors, Risk And Reward, Unit Condominium Development
It’s no secret that real estate investing has become the “weapon of choice” for many investors. With the stock market growing more and more uncertain it’s not hard to understand why. While real estate investing can be very lucrative and when done right can present very little risk, it’s important to remember that timeless adage “knowledge is key”. As with any financial decision to be made, no one should jump into real estate investing without gaining as much knowledge as possible on the front end. While it is true that experience is the best teacher, having a good knowledge base to begin with might just make your experience a little less scary. With this in mind, following are five things to consider BEFORE doing your first deal.
1. Tend to your personal finances first Many prospective investors view real estate as a means to get out of financial trouble. Many real estate “gurus” will advocate this practice and even use it as a selling point to sell their latest and greatest real estate investing system. I am definitely not of this mindset. Real estate investing is a great way to secure your financial future but certainly not at the expense of your financial “present”. If you are having financial problems and are having trouble making ends meet, take steps to rectify the situation before risking any money in real estate. As I stated earlier real estate investing can carry less risk than many other forms of investing, but there are still risks and if you are not in a position to handle the setbacks than you are basically just gambling and that is a very dangerous investment strategy.
2. Choose a strategy. There are many ways to make money in real estate investing. You can buy a property and immediately flip it for profit. You can buy a property and hold it banking on an increase in value in the near future. You can buy a property for rental. You can buy a distressed property and make improvements. There are countless ways to make money. The important thing to remember is that each of these strategies carries its own set of “rules”, if you will, for making a profit. Some might say you should never limit yourself to one strategy and I whole-heartedly agree in the over all realm of your real estate portfolio. What I want to stress here is that indecision in regards to each individual real estate deal can cause you a lot of heartache, frustration and LOST PROFIT, which we could all do without. Decide up front which strategy is best for you and then proceed to find a property that meets your needs.
3. Do your research While this may sound elementary, it’s very easy to get caught up in the emotion of what seems like a good deal and in the process act hastily. Always, and I mean ALWAYS thoroughly investigate a property before you sign anything. Try to determine if the property has suffered any significant damage, find out if the property is in a flood plain, find out if there is more than 1 lien against a property, etc. Create a property inspection checklist up front and check every one off before you decide to do a deal. When doing a conventional deal with a mortgage lender the lender will likely take care of a lot of these steps (they want to protect their investment as well) however, it is always good practice to pay for a thorough inspection before you make the deal.
4. Stick to a budget Decide what you can afford and are willing to spend on a real estate deal and DO NOT deviate. Many real estate investing coaches will tell you not to let a good deal go just because you don’t have the money. “Get creative” they say. While I do not shun the idea of creative financing completely I certainly don’t recommend it for the beginning investor. “Zero Down” deals can be very appealing but they also can increase your risk factor tremendously. In a nutshell, if you can’t afford it, it’s not a good deal.
5. Be prepared to walk away Never get emotionally attached to a property. Emotions can cloud your judgment causing you to make unwise decisions. It’s almost a certainty that if you stick with real estate investing long enough you will come across a deal that seems irresistible. Do not get overly excited and sell yourself on the deal before due diligence is done. This mindset can cause you to overlook some warning signs that otherwise might be deal breakers. Go back and read number 3 again. Be objective and be skeptical. Reserve judgment for after your inspection checklist has been completed. Always be prepared to walk away; there’s likely another prospective deal just around the corner.
These five principles are a good guideline for anyone starting out. While real estate investing can be a rollercoaster ride at times with many ups and downs, sticking to these basic principles will all but guarantee that you will come out on top. Happy Investing!
About the Author
Ryan Gibson is an avid real estate investor and webmaster for the popular investing site www.the-investment-place.com
Tags: Adage, Distressed Property, Experience Is The Best Teacher, Financial Decision, Financial Future, Financial Trouble, Greatest Real Estate, Improvements, Investment Strategy, Knowledge Base, Mindset, Money Investing, Personal Finances, Prospective Investors, Real Estate Gurus, Real Estate Investing, Setbacks, Stock Market, Ways To Make Money, Weapon Of Choice
Commercial real estate investing can be very rewarding for those who take the time and effort to approach it wisely, but it can be a trap for those who rush in without doing their homework properly.
Too often, investors rush into buying a property for all the wrong reasons ? “it’s a good deal,” a “bargain opportunity” and the list goes on. Then they wonder what happened when the investment either goes pear shaped or becomes a full time job.
If you are serious about building significant wealth from commercial property investment, you must have a proper investment strategy. This is a get rich slow business that requires patience, planning and persistence.
The key elements to any property investment strategy are:
* Get your personal financial affairs in order and make sure they are geared towards building wealth, not paying off consumer debt. Also, check your credit rating to make sure it is in order.
* Draw up a list of your criteria for property type, size and location. Be aware that each type of property requires a different set of skills to manage and offers varying rates of return. It is much easier to fit the property to your strengths rather than you try and change to fit the property.
* Study your local market so you can quickly identify opportunities that are within your capacity to act on. It’s no use looking to invest in an area where you don’t have on the ground knowledge.
* Be prepared to study and learn. Once you’ve spotted a possible deal, you need to be able to accurately value a property based on its condition, your return expectation, and your borrowing power. You need to understand why “what is it worth” is the wrong question to ask, and how to answer the right question “what is it worth to me?”
* Last, you need to learn how to structure deals and make offers too good to refuse.
When you have done this homework properly, you will be in a position to act decisively, reap the profits and keep them. Of course, you will need to consult regularly with your accountant on tax planning and asset protection, which are cornerstones of any wealth building plan.
You also need to consider what your overall portfolio will look like. Don’t fall into the trap of buying all sorts of different properties and then end up with it being a full time job as you juggle dealing with evictions, skips, delinquencies, maintenance and bills.
Once your overall planning is done, the next step is to select your real estate team. You will need a good real estate agent, loan officer, tax advisor, and lawyer. These people are critical to your success because the investor with the best knowledge can quickly identify the properties to ignore and those worth considering.
Remember the old adage, “the quick and the dead” ? the speed at which you can close a deal will give you the edge in any type of market. In addition, your advisors can point you in the right direction regarding finance, tax and legal issues.
Also, there is a good reason behind the catch cry, “location, location, value”. You want a return on your dollar so you are looking for a property that requires some attention so you can add value.
One strategy is to buy real estate in up-and-coming area with new developments or renovated properties. This makes it easy to attract and keep good tenants and leads to greater returns.
Another tactic to add value is to buy properties in solid locations but require some maintenance or upgrading, such as improving the aesthetic appeal of the building, thus instantly improving its value with little outlay.
In regard to financing, banks are the most obvious first lender, but commercial loans are not quite as simple as the more commonly known residential loans and you should always seek professional advice from your accountant and legal advisor.
You should also understand the various methods of financing, such as double closing, lease options, and contract for deed.
Double closing has attracted negative publicity lately, but only because it is misunderstood. This is a perfectly legal, moral and ethical method of trading that has been around for 100 years or more.
A double closing is simply two back-to-back closings wherein the proceeds from the second closing are used to fund the first closing. Both closings are done in escrow, so the “middleman” can buy and resell a property for profit without putting up their own cash.
The main downside you have to be careful of is that the closing rarely goes to plan and there are delays of up to a few weeks, which can cause the plan to unravel. Make sure any contract allows for this and you should be covered.
Contract for deed is an agreement whereby the buyer makes installment payments on an arrangement similar to car financing. That is, the seller holds the title to the property while the buyer has the equitable title.
Lease options consist of two elements, the first of which is the lease. This is a contract for use and possession of the property, thus creating a lessor/lessee relationship.
The second element provides a purchase option, which is a unilateral agreement where the seller agrees to give the buyer the exclusive right to the leased property. This is NOT a sale.
Make the effort to prepare your own income and expenses pro formas from the beginning, or get your accountant to do it. Don’t rely on operating results or projections presented by the agent or the seller ? chances are the seller will overstate income and understate expenses, then claim ignorance if challenged.
The only way to know the investment value of what the property is worth to you, is to develop an accurate projection of income and expenses, which can only be obtained by researching the market and determining in advance what the cash flow will be once your investment and management plan is in place.
Also, you need at least a 20-25 % down payment to get access to the best financing terms. You can still get finance on a payment down to 10% but you will pay more interest, loan fees and private mortgage insurance.
Remember, borrowing to cover the majority of your acquisition costs can boost your rates of return, but too much debt expense can be dangerous if the market takes a downturn.
About the Author:
Specializing in commercial and investment real estate, Tony Seruga, Yolanda Seruga and Yolanda Bishop are always searching for new and profitable commercial properties across the U.S. Visit http://www.maverickrei.com for more great information
Tags: Borrowing Power, Building Wealth, Buying A Property, Commercial Property Investment, Commercial Real Estate, Commercial Real Estate Investing, Consumer Debt, Credit Rating, Full Time Job, Homework, Investment Strategy, Local Market, Patience, Pear, Persistence, Personal Financial Affairs, Real Estate Investing, Return Expectation, Right Question, Slow Business
What is the first rule of real estate investing. Most real estate experts tell you “Leverage - Using Other People’s Money?.
Most real estate investors want 100% financing for a hand full of houses they intend to purchase or they request that the owner finance the property. The strategy is to buy and hold a handful of rental properties for a few years until the equity in the property has increased.
Then they either refinance all the properties or sell all the properties of take all the equity out and then retire rich with millions of dollars in equity or a healthy cash flow to sustain the lifestyle.
Within a thirty year period of time real estate market will have at least five downturns. The value of property in some areas can hit the bottom just as you decide to retire. The real estate investor of today does not want to wait thirty years to cash in and live the life.
Real estate investors diversifying their investment activities. Some are doing quick turn around transactions in addition to the long term buy and hold. If you are an investor. The theory of quick turn around transactions is finding distressed property get it under contract and sell it to another investor for a quick $5,000 - $15,000.
Some investors are doing short sales and pocketing more cash. Being house rich and cash poor can put many investors in a crunch if some crisis happens. Not having the money to close a good deal prevents some investors from cashing in on lucrative transactions. The first thing new investors need to understand is that lack of money should never be an issue when you plan.
Combine the buy and hold method with the quick-turn-around investment strategy to put cash in your pocket within a matter of weeks rather than years. If you find a good deal with lots of equity sitting in the property be sure you can re-finance within a short period of time to get the equity out and into another high yield interest investment fund that you can access when you find the next good deal.
Use ARMs with low start rates that give you 3 - 5 year before they reach their max. Refinance all your property with low start ARM?s and put the excess money in an account that builds your equity twice as fast. This financing alternative allows your tenant to make the full house payment while you pocketing Your money. No negative cash flow.
Set up lines of credit for your business. You may never need them but in case you do the money is sitting there waiting for you to use it to create more wealth. With a line of credit versus a loan, you only have to pay for the money you actually use.
To implement the strategies, you need to align yourself with as many funding sources that you can find. This strategy will insure that you can continue to add to your real estate empire or to maintain the empire that you have already built.
So, when you are building your real estate empire consider buy and hold strategies in addition to a quick turn-around transaction approach to investing. Build your funding sources so that you are ready to make the offer and close the deal.
Make more money in in real estate investing by learning how to properly find and evaluate property at http://www.successful-real-estate-investing-tips.info, a popular real estate investing website that offers advice, resources and tips to include information on flipping property, forclosures, rental property investing and commercial real estate investing.
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Tags: Cash Flow, Crunch, Distressed Property, Estate Experts, Handful, High Yield, Investing Money, Investment Activities, Investment Fund, Investment Strategy, Lifestyle, Lucrative Transactions, Money Investing, Owner Finance, Real Estate Investing, Real Estate Investor, Real Estate Investors, Rental Properties, Short Period, Thirty Years
If you are looking for good returns over time, and a lower risk investment strategy, then investment in real estate is a good path to follow. Worldwide real estate markets are following an upward trend, that are creating exceptional returns for investors which has led to more people getting involved in this sector, and pushing gains even higher.
One of the reasons why investment in real estate is so attractive is the fact that as well as the appreciation in value of your asset, you can also take tangible benefits from it over the lifetime of your investment.
There are a number of different strategies that you can follow when investing in real estate. Most simply, you can just sit back and watch as the value of your own home increases over time, and then sell it at a profit when you are ready to move on. Downsizing is a popular option for seniors who no longer need a family home when they retire, and would rather take advantage of the value of their property.
A more aggressive way of taking an income from real estate ownership is to develop properties. By buying a run down home, and redecorating and improving the building, you can turn it around for a quick profit which you can then reinvest in more projects.
More ambitious investors will consider the possibility of full scale construction projects, and certainly taking a building from ground level through until completion is ultimately very satisfying both on a personal and financial level. Construction is not for the faint hearted through, as hands on project management will take up a lot of your time and requires very specific skills, so amateurs need not apply.
Although it requires greater investment of your time as well as money, building a portfolio of rental properties offers some of the best returns of any real estate investment strategy. Aside from the long term appreciation in the value of the properties that you own, you can also enjoy a consistent stream of rental income from your tenants that should easily cover any outstanding mortgage payments on the property.
Whatever method of real estate investment you choose to follow, it is important to realize from the start that profit is not guaranteed, nor is it ever easy money. If you are developing properties, you should take into account the cost of any work that you carry out, and maximize your margins by doing as much of the work as you can yourself.
With the easy availability of credit from a variety of sources, it has never been easier to get the seed money to use in order to get your real estate investment off to a start.
About the Author:
Mark Estates is a freelance writer who frequently writes for such sites as the real estate investment site sharkbaitsoftware.com and the California Online Housing Market.
Tags: Amateurs, Consistent Stream, Construction Projects, Downsizing, Home Increases, Investing In Real Estate, Investment Strategy, Level Construction, Maximum Profit, Project Management, Quick Profit, Real Estate Investment, Rental Properties, Risk Investment, Scale Construction, Seniors, Tangible Benefits, Term Appreciation, Upward Trend, Worldwide Real Estate
Real Estate Investing Strategies
Investing in Real Estate
Investing in Real Estate is definitely one of the most lucrative methods available. The reason why people tend to do so well with Real Estate is that it’s a commodoty that people will never be able to live without. Even if we someday manage to find another habitable planet, Travel and Real Estate industries will thrive more than ever! Apart from being an everlasting market, investors can leverage borrowed money to turn an even greater profit. Further - if you invest at the right time, in the right property, you can turn profit immediately.
Market Knowledge - A Caveat
Please don’t jump into the Real Estate market with your eyes closed. Like any high margin investment strategy, it’s easy to lose money as fast as you can earn it. If you must realize one thing before jumping in, it’s this: Turning large profits in Real Estate is a full time job (at least to begin) and requires you to acutely train your mind to know the product intimately and watch for market trends. Here’s a simple example. If you know anything about computers, you’ll know that it’s a competitive market. However, there are still people that are able to profit by selling used computers to people who can’t afford new systems. A person who is intimately familiar with building computers will source all the used parts very inexpensively and insert them into a new case ($30), and add a new keyboard ($20). Buying a new case and a new keyboard can make all the difference. You’ve made your computer look new by purchasing some inexpensive value building aesthetics. The salesman then lists the computer in the paper at a reasonable price and turns a 15% profit if he or she is lucky.
Real Estate Investing is about Market and Product Knowledge. Figure out what people want. Figure out how to buy the parts at discounts and put them together to satisfy, with some aesthetic enhancements.
For the rest of the Article, please visit http://www.debts-gone.com/realestate_income.html
Thanks, and Good luck!
Jason Greenberg
About the Author
Jason Greenberg is a financial advisor in London Ontario Canada
Tags: Aesthetics, Building Computers, Caveat, Competitive Market, Debts, Enhancements, Full Time Job, Habitable Planet, Investing In Real Estate, Investment Strategy, Keyboard, Market Investors, Market Knowledge, Market Trends, New Case, Planet Travel, Product Knowledge, Profits, Real Estate Investing, Right Time
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