Making the right decision
Why invest in real estate?
Even as the world faces a global
meltdown, of which the worst hit has been the real estate sector, no time was
better for real estate investment than now. The reason – unimaginably low real
estate prices! Even as we talk about real estate investment, however, it deems
of high importance to understand the process of real estate investment – be it
buying house or securing a loan for the investment.
Understanding Real estate investment
Before we proceed, however, what
exactly is it that we call as real estate? Real estate is property that is
fixed or immovable such as land and buildings or more attached to the land. When
a person acquires a real estate property, the person is granted with the right
to possession, disposal, transfer and other such rights regarding that
property. When you decide to make a real estate investment, it means that you
are ready to commit certain amount of fund (corresponding to the price of that
property) towards the property. The aims for the commitment may be any – buying
house for family, aiming at appreciation of the price before reselling the
property or simply for investment purposes and renting the property later on. Whichever
be the aim, it is quite important for you to understand the few basics involved
with the real estate investing, for the markets can be volatile.
Basics involved in successful real estate investing
Now whichever your aim for your real
estate investment on your part, everybody looks for a certain amount of
appreciation or profits through their investment. For the same, following a few
steps before making the final investment will ensure that you make a safe killing.
The first and foremost to successful real estate investing is that you know the
numbers involved. This includes making yourself aware of certain parameters
regarding the property such as present value, interest rate you will be paying,
future value of the property and the installments (periods and amounts to be
paid). Once these parameters are taken care of, other factors come into work: location
of the property, value associated, closing costs, percent finance, term of
loan, number of installments, refurbishing costs, repair costs, managements
costs, vacancy rate in that area, rent expected and so on. Once you have
determined these factors, know that if the property recovers a percent of all
the costs involved within a certain time frame, the real estate investment will
be a good one.
Know that making rash decisions
do not work in real estate investing. Careful examination is required for any
real estate investment deal that you get into. While, for one time investors
the speculation bit holds of prime importance, even those trying to become
seasoned real estate investors, the understanding of the figures involved in
the deal makes for an important aspect.
Make use of your Real Estate Agent
estate agent can guide you through the entire process of examination and
investment. However, several beginners prefer to do it all by themselves, one
of the major reason being the costs involved. However, know that the initial
costs will be highly rewarding in future when your investment property ushers
gains. It is better to give little and take more in return than giving nothing
and gaining negative!
For more Real Estate Information and FREE Webinars go to:
Nancy Geils/ Owner/Founder Investing with the Stars