Wednesday 31 March 2010

Six Rules When Buying an Investment Property

Investing in properties is a good way to make money and build up your net worth. It is a very safe option of getting rich over the long term, as real estate values generally increase over time. However, returns are not very fast and you have to wait for considerable time before you make substantial money from real estate. To make the most of your investment into real estate, follow the six simple rules below.

1. Use Your Expertise and Knowledge

When purchasing investment property, look into your areas expertise and knowledge. Do you know about vacation homes, single-family homes, multi-family buildings, or commercial properties? You should know how and when to sell the property to earn the highest returns. If you are unaware of all rules and regulations relating to that property type, you may not be able to sell the property at a high profit.

2. Study Your Options

It is not essential to sell an investment property immediately after purchase. You can hold on to your investment until real estate values increase and then sell the property. Sometimes, it is best to bide your time and wait for real estate booms to sell and earn good profits on your investment. Another opportunity is to make suitable renovations and sell the property at an escalated price to earn very good returns. Property values increase over time and net worth of your investment increases. You can invest in real estate to receive a regular income from rent while you are waiting for property values to rise.

3. Consider the Benefits of the Location

Purchase your investment property in an area experiencing higher growth than other local areas. Inspect properties in different areas and choose those that satisfy necessary requirements. If you plan to invest in the property for several years, look into how the area will develop in the next few years and whether you can receive desired returns. You should have sufficient foresight and knowledge of the area.

Visit local councils and research what developments are happening in the vicinity in the near future. Drive around and scout for development and other area investments. Check the property is located near essential amenities like schools, hospitals, banks, transport, and supermarkets.

4. Reflect on Rental Demand

Your investment property yields good returns if there is sufficient rental demand for the property. Renters should be interested in renting the property. Normally, rental demand is high in densely populated areas like cities. Countryside locations do not have high demand and rental income could be substantially less.

5. Buy Property for Less than the Current Value

If you want to make money from real estate investing, choose properties that are being sold for less than the current market value. These properties may not be in the best shape and condition, so plan to incur repair and renovation costs. Before buying, hire a renovation consultant or home inspector to evaluate the cost of all repairs and renovations. Decide on the purchase price after deducting all additional costs. Ensure you can make a good profit when you sell the property after the renovation is complete.

6. Gather Financial Support

Investment property purchase requires strong financing. You may not be able to pool the entire cost, so consider the options for property loans. Assess all your mortgage options, so that you do not have excessive burden of repayments. If you are renting the property, apply the rent directly to the mortgage. Select a mortgage that can be repaid from the sale of property without additional fees or penalties for early repayment, especially if you plan to resell the property quickly.

Real estate investing for profit is a good option to earn money if you are an educated real estate investor. Investing in real estate is wise and can give even conservative investors high returns in the long-term. Renting the property while waiting for the best time to sell will increase your current income and cover the mortgage repayment costs.

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Article Source: http://EzineArticles.com/?expert=Mark_A_Walker

Thursday 11 March 2010

How to Make Money in Real Estate - 5 Facts That Investors Should Know

It is no doubt that there are more people who want to make money in real estate now as compared to the previous years despite the economic downturn. One big reason behind it is the increasing number of low-priced properties in the market right now. Despite the great opportunities in the market right now, there are some facts that people must remember when investing in real estate.

Here are some of the points to remember:

· Location is not just about a great view. While it is true that location is a key factor to consider when investing in real estate, a nice looking home with an overlooking view is the only thing that matters. A great location for an investment property depends on things such as its accessibility to establishments such as hospitals, schools and malls. Other considerations worth pondering on are the community's surrounding infrastructures, as well as the security levels in the neighborhood.

· Sometimes it is better to hold on to a property than to flip it. There are cases that a property is better for purposes other than wholesaling or rehabbing. Some real estate properties are better off with other investing options such as leasing, renting, and just waiting for the prices to appreciate.

· There are financing options that allow investors to do repairs on a property. Investors who want to venture in rehabbing need not to rely on their own pockets in order to finance a home's repairs. Financing options such as bank and hard money loans are available for people who want to make money in real estate through this method.

· Finding motivated sellers is a secret to closing great deals. The best way for an investor to get the best real estate deals in town is to scour neighborhoods with people who are will to sell homes fast. This is the great thing about the current market, since there are many homeowners now who are motivated to sell their properties as soon as possible.

· Do not buy the best house on the block. A savvy investor is smart enough to realize that he or she does not have to purchase the nicest looking house in the neighborhood in order to earn big profits. The other homes that surround a property are enough to make the property's price skyrocket.

These facts are only a sample of the things that aspiring real estate investors must learn in order to succeed in the business.

For more help on how to make money in real estate, visit websites such as REIWired.com for more information.

Article Source: http://EzineArticles.com/?expert=Tom_Mc_Adam