The Scardie Cat Guide To Investing In Property

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If one wants to successfully invest in the property market be it residential or commercial during an economic down turn, then this can be a difficult task. With property prices spiraling downwards and the few buyers that are out there in the market that does have the financial support or capital to buy simply will not pay competitive prices for property.

Due to this situation, it is essential if you are considering investing in property, to fully understand current market conditions to achieve the greatest returns on your property investment. Property investment has long been a popular type of investment which, in theory, simply involves a process of buying property to rent later out to tenants or customers and in the end sell on at for a profit.

Unfortunately, in an unstable economy as we find ourselves in currently, achieving this success with this type of investment can prove to more elusive and more difficult, then the simple purchasing and leasing / renting of properties. All new investors must fully understand that to achieve their success with this type of investment; success is dependent on their ability to wisely and carefully make their investment in real estate.

Investment in property involves the investing one’s money into the property with the aim of making a profit. In generally, these investments are concerned with the buying of properties, renting to consumers or tenants and at some future date selling them when prices are high to make a profit on the appreciated market value. Real estate can mean any brick and mortar building or property located on land which is bought and sold. It can range from an apartment/office building to smaller structures like storage units or garages.

To achieve success in real estate investment, there are several steps to follow. Let us go through the important key steps to follow:

1. You must choose your Market

As an investor, you will want to choose a market in which you hope to be the most successful. It will not matter if you are buying, selling, or renting, as business is more likely to be profitable for you when you are working in a market that best suits your personal needs.

2. Determining your Plan

It is essential for you to decide what it is that you hope to achieve with your investment in real estate. Without determining this it will be hard for you to progress with your plans. For some investors, they will decide to rent their investments out for long periods while for others they will prefer to renovate them and then sell them on when the market is high.

It does not matter which avenue you choose, as there is always room to profit in all markets. However, your plan must be in place before starting out, as it lets you make decisions about your property investment when the profitable opportunities appear.

3. Talk to the Professionals

Remember that when you are stating on in real estate investing, there is a lot to learn. A good place to start and get the best advice is a professional real estate investment course. These assist you in achieving the success you strive for with your entry into the property investment market. By studying and learning all the specialized techniques of the business, you are better prepared for what lies ahead.

These professional traders can combine their knowledge and practical experience and will share this with you so that you can integrate what you learn into your personal strategies.

4. Execution

When you have studied all that you can and feel ready to commence with your real estate investment plan, then you must execute the plan. You have already prepared yourself for success, so all that is needed is to execute your investment plan in line with the decision you have made and the and information you have learned.

5. Education

One should note that these investment courses are not only a source of professional strategies, but they also arm you with essential and beneficial information about the ins and outs of the real estate investment industry. For, if you truly plan on achieving success with your investments, you should be fully prepared like a soldier to war when setting out on your journey to success. Attending professional real estate investment courses achieve this for you and it is well worth considering in order to leverage your possibilities of success.

If you ask the most experienced investors where to park your money to realize better long term gains, their common answer will be real estate. Having sad that, let us explore the many ways we can invest on real estate.

You can put your money on publicly listed real estate investment trusts (REITs). REITs are investment vehicles that function much like a mutual fund. Its financial resources pooled from several investors are used to invest on commercial, industrial, or residential buildings, specifically buying, selling, developing, leasing or renting them out.

 

The REITs’ main source of revenue comes from the property leases, from the rent, and other fees collected from their various property holdings. They also earn interest from mortgage properties they own. Another source of revenue is the appreciation in real property value of the underlying assets they manage.

There are two ways you can invest on REITs. You can buy REIT shares directly in the spot market or you can invest your money on mutual funds whose focus is on public real estate.

Surprisingly, America’s young adults have shown an uncanny interest on real estate investing. These millennials know fully well that real investing can provide them with an additional source of monthly income aside from providing a hedge against inflation. But instead of buying actual real estate properties, they instead put their money on real estate investment trusts (REITs).

The reason why millennials are more interested on REITs is because it allows them to invest on real estate properties without the worries of real home ownership commitments tying them down. They enjoy the flexibility of being able to move around from one work place to another looking for greener pastures where they can establish their roots. At the same time, they are able to generate extra income monthly to help them pay off their student loan obligations.

If there are publicly listed REITs, there are also private REITs. Private REITs are also known as private placements. They provide much higher returns than the public REITs, but only a chosen group of investors are given the opportunity to invest in them. Some of the private REITs that give the best returns are exclusively offered to investors who meet the strict accreditation standards they set.

For example, to qualify for the private REITs giving the best returns, the investor must have a net worth of one million dollars or those primary home owners whose annual income for the past two years is $200,000.

The qualifying standards are so strict that only a few investors are able to get accreditation. Most of them invest with these private placements but also enjoy the benefit of investing on a financial instrument with sufficient safeguards that lower investing risks.

There are investors who have the means to purchase real estate properties outright and who prefer to own the actual asset than put their money on trusts. These investors ‘flip real estate properties’. They pour in their capital to purchase cheap real estate properties such as those on the auction block, then make the necessary improvements to up their values.

 

They then sell the properties or rent them out at a much higher price. The main consideration of the investors who ‘flip houses’ and other real estate properties is the projected cash flow the property can generate.

 

For some, a simple way of investing on real estate is to buy the property they choose to live in rather than continue renting one. This way, they are able to build their equity on the property through the monthly payments they make. They can then sell the property at a profit later on.

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