Whether you are an investor in real estate or a Rent to Own client, these will help you decide where you should buy and why.
There is money to be made in Real Estate only with proper knowledge of the ups and downs of the market trends. The investment cannot be guaranteed in any way, however historically real estate investing has proven to be one of the best and safest investment one can ever make! So where do you start? What do you look for? How to do make it happen?
Here are some very important things to keep in mind for Real Estate Investors. Some points are very talked about but rarely researched by individuals before buying real estate. My attempt is to give you the tool that will help making your investment decision a wiser one.
1) Research the real estate prices curve – the concept of a property market cycle existing is not myth its a fact and is generally accepted to be based on a price-income relationship. Check the recent historical price data for properties in the area of that you are considering purchasing in and try to determine the overall feel in the market for prices currently. Are prices rising, are prices falling or have they reached a peak. You need to know where the curve of the property market cycle is at in your preferred investment area. We also look at the reason why the property prices have done that and will they continue to do so based on the economic status of that location. There are several websites that give you a details breakdown of how the markets are doing in various areas/cities. We provide all that background check before we buy properties for our investors and for your rent to Own clients.
2) The real trick is to get ahead of the curve as a basic rule of thumb; professional real estate property investors seek to buy ahead of the curve. If a market is rising they will try and target up and coming areas, areas that are close to locations that have peaked, areas close to locations experiencing redevelopment or investment. These areas will most likely become the next big thing and those who by in before the trend will stand to make the most gains. The important thing is to know about these areas and the economic factors affecting the growth of the area or its fall. As a market is stagnating or falling many successful investors target areas that enjoyed the best levels of growth, yields and profits very early on in the previous cycle because these areas will most likely be the first areas to become profitable as the cycle begins turning towards positive once more.
3) Know your market and who are you buying property for? Are you buying to let to young executives, purchasing for renovation to resell to a family market or purchasing jet to let real estate for short term rental to holiday makers? Think about your market before you make a purchase. Know what they look for in a property and ensure that is what you are going to be offering them.
4) Think further as there are emerging real estate property markets around the world where countries economies are going from strength to strength, where a growing tourism sector is pushing up demand or where constitutional legislation has been or is about to be changed to allow for foreign freehold ownership of property for example. Look further afield than your own back yard for your next property investment and diversify that real estate portfolio for maximum success. This is really something that the investor has to focus on as to how far or how close do you want to be and whether the market supports your goals for the same, whether the strategy you want to use is supported in the market of your choice.
5) The buying price of property has be set by yourself with the help of your budget that will realistically allow you to purchase what you are looking for and profit from that purchase either through capital gains or rental yield.
6) Entry costs and research fees, charges and all expenses you will incur when you buy your property as they differ from country to country and sometimes even from province to province. Know how much you will have to incur and factor this amount into your budget to avoid any nasty surprises and to ensure your investment can become profitable.
7) The other important factor is capital growth potential and what factors point to the potential profitability of your real estate property investment? If you are looking overseas at an emerging market, which economic or social indicators exist to suggest that property prices will increase? If you are buying to let out are there any indications to suggest that demand for rental accommodation will remain strong, increase or even decline? Think about what you want to achieve from your investment and then research and find out whether your expectations are realistic.
8) Exit costs if you will incur substantial capital gains taxation liability if you sell your property investment for profit, will that render the investment profitless? Best thing for this is to have an experienced tax consultant to help you guide so that you maximize on the benefit from real estate investing.
9) Profit margins and what levels of capital growth can you realistically gain on your property investment or how much rental income can you generate? Work out these facts and then work backwards towards your initial budget to work out your potential profit margins. At all times you have to keep the bigger picture in mind to ensure that your real estate investment has good potential for profit. Property Management fees, Maintainence fees, Condo fees, Property taxes and insurance are just some of the expenses you will incur.
10) Think long-term unless you’re buying property off plan and intending to flip it for resale and profit before completion you should view real estate investment as a long-term investment. Real estate is a slow to liquidate asset, cash tied up in property is not simple to free up. Take a long-term approach to your property portfolio and give your assets time to increase in value before cashing them in for profit.
Real Estate investing is a very detail subject and of course cannot be covered as a simple checklist or tips. Our team of experts, specialize in buying and negotiating best deals for you and hence we encourage you to consult us if you are interested in entering this field of Real Estate Investing. Our professionals have helped thousands make good decisions and have shown them how to gather real wealth.
If you are looking for creating wealth and not just earning money through real estate, contact us and we will share with you our proven system through our win-win strategies.