Sunday, August 16, 2009
Real estate investing is a strange type of profession that has no accepted curriculum of formal training. The only way to learn the art of successful art of investing in real estate answer is for you to find a mentor who can teach you the secret formula. You must become an adept at appraising and finding out the true value of a property as this information is critical to make an informed investment decisions. Realtors, appraisers, and banks determine what a property is worth by studying recent comparable sales in the same neighborhood. You must be able to do the same.
Leveraging is key factor for investors in real estate because the less cash you part with on each transaction, the more properties you can buy with your total available money. If you are long-term real estate investor, leveraging will work in your favor if the markets in which you invest appreciate in the long run and your income from the properties can pay for most of your monthly debt.
Exit strategies are also equally crucial to successful real estate investing. As a real estate investor you must know exactly when to sell the property even as you buy. You must completely study the market and your work out your plan even before you invest. Real estate investors can help you interpret market indicators such as the average length of time houses have been on the market. This information it will help you make better investment decisions.
Successful investors make it a point to review their portfolios at least once a quarter and work aggressively to get rid of the losing properties before they can seriously erode the profits from their winners. Bestow enough attention to protect your properties from creditors, plaintiffs, and the taxman. It is no doubt complicated, and time consuming - but yet every successful real estate investor takes the time to do it, thus assuring that their hard-earned money is not imperiled.
To succeed in real estate investing, you must cultivate the art of moving with people as the real estate business is built around people - sellers, tenants, contractors, agents, financiers etc. Since there is no written code of ethics for real estate investors, it is up to each investor to decide how he will deal with customers, tenants, sellers, workers etc.
Do your market research thoroughly and look at houses that are priced lower than comparable properties in the neighborhood. Purchase the property with the lowest possible cash down-payment and get the seller to carry back a second mortgage or deed of trust for the property. If you can get a low enough price and generous terms you can make almost any property into a successful investment.
Finally, one last important rule for investing in real estate is - do not become sentimental about a property that you are purchasing for investment. Always look at the property from the viewpoint of a critical purchaser and a businesslike investor.
Tuesday, July 28, 2009
Real estate investing means purchase, ownership, management or rental/sale of real estate for profit. Many people find it difficult to invest in real estate. It requires a lot of cash. Are you interested in becoming a real estate investor? To become a successful real estate investor you should be determined and flexible. There are a few tips that will help the prospective buyer to become a successful real estate investor.
A real estate investor should decide whether his investment goals are long term or short term. As the investor keeps paying the mortgage amount, his dues becomes less and his equity in the property increases which adds to the overall net worth. If an investor does a real estate investments for short term he can earn a decent profit. For example: If you have purchased a property for nearly $50,000 which needs some repair work to be done which costs nearly $10,000 and the selling costs total $5,000. Then the total cost would be $65,000. You sell the property for $85,000 after 6 months of purchase. You may have gained a net profit of nearly $20,000.
Good location also plays an important part while investing in a property. When you plan to buy or rent a property, the first thing that comes to mind is this is a place where someone is going to live. You can improve the property but can’t move the location. Try to choose a property in busy towns or cities rather than choosing in a country. There are more people in towns so their will be more demand for your property.
If you find foreclosure property or HUD repossessions then you get a good amount of profit from the property. If you want to find good places for bargains, take a look at local newspapers, courthouses and real estate investor websites that will enlist all types of properties. Before selecting a property, check whether the surrounding areas are well maintained. If the neighborhood is run down or there are many boarded up houses, it may not be a good bargain after all.
Take time to study the property. Take your time to become familiar with the property. Do a thorough analysis of the real estate before telling "yes". If you find certain complications in the property then it would be better to say "no".
Sharpen your negotiation skills. Find out terms that are used by real estate agents and sellers. This will help you in knowing what the other person is telling and not get confused. An investor should have negotiation skills.
If you follow these real estate investment tips while looking for a property you will be able to achieve your goal of increase in net worth and generate a positive cash flow.