Traditionally, one of the best high return investment
options has been investment of money in real estate. While the property prices
may go up and down in the short term, over the long term, they have always
appreciated substantially. The ownership of a piece of land is an investment
you can eventually bank upon, as it acquires value through development of the
areas in its vicinity. With the falling of property prices, many people will
advise you to stay away from investing in real estate. However, if you look at
it from a different perspective, you will see opportunity in this situation.
Properties which were once beyond your budget reach are
suddenly within your range. For those of you who have been smart enough to save
money throughout the past bearish decade, now is the time to invest and take
advantage of the opportunity, which has presented itself. In this Buzzle
article, I shall share some tips on real estate investment for those of you,
who are smart enough to recognize the opportunity this recessionary background
has presented.
Tips for Property
Investment
Any investment comes with its share of risks, which cannot
be entirely eliminated but lessened through research and planning. Same goes
with real estate investment. You have to do your homework and get your research
right to end up on the winning side. Here are some tips for beginners.
Know about the Range
of Real Estate Investment Options
Firstly, you need to begin with a study of the varied range
of investment options in real estate, which you may consider. You may invest in
buying residential houses, commercial properties, condos, apartments or purely
specialize in land investment. There are a lot of options out there and you
need to consider the entire range, to decide which would ideally suit your
investment budget and align with your future plans.
Invest to Sell or
Invest to Rent out Properties
There is the important decision of deciding whether you buy
to rent or buy to sell again for a profit. The former option is open, if you
buy residential properties. You can create a regular income source for yourself
by investing in rental property.
Otherwise, you also have the option of entering the house
flipping business, which is buying old houses, renovating them and selling them
back again for profit. You may buy a piece of commercial property, hold it till
the prices rise and sell it to make a substantial profit.
It's All About
Location
Remember when it comes to property investment, it's all
about location. The price of any real estate property is largely a function of
location. The localities decide the price range and therefore you need to
research the price trends according to location, before you make a purchase.
Research & Do the
Math
Once you have decided on what kind of property you plan to
buy, what purpose you intend to buy it for and are clear about the amount of
money you are willing to spend, start researching real estate listings to find
properties that fit the bill. Calculate the returns you plan to gain from the
investment and the amount of mortgage loans you can afford to apply for.
Networking With Real
Estate Agents
A real estate agent can make your job easier in finding
properties that are exactly what you are looking for. Creating a good network
of real estate agents who can point you towards good investment properties is
essential. Real estate brokers can handle the legal affairs associated with
purchase and sale of property for you. They can make an offer to owners on your
behalf and negotiate on your behalf.
Making Financial
Arrangements for the Investment
Once you have decided on the property and made an offer, you
need to arrange for the money you plan to invest. A pooling up of your own
savings and a mortgage loan if needed can cover the total investment amount.
Talk to financial institutions and mortgage brokers for financing options.
The key to making good investment decisions in real estate
lies in research. For a property, the location is the most important aspect of
consideration and all other points come later. Good location, with access to
resources in its vicinity, creates an opportunity for eventual growth of
property value. With a pooling in of your own savings and a mortgage loan, you
can buy strategically located properties and rent them to generate revenue, or
sell them as the prices appreciate substantially. You can't eliminate risk, but
minimize it by putting your money into properties with high potential of price
appreciation. Get a good real estate agent to advise you and a mortgage broker
to assist you in the arrangement of finance.
