10 Tips To Successful Real Estate Investment
Just because real estate prices seem to have hit a temporary ceiling in many countries
around the globe that does not mean that makes the most of property investments are complicated to come by.
Even in the course of a real estate market slowdown, stagnation or depression profits may be making locally and overseas. This article indicates you the top 10 tips that real estate investors apply to their property portfolio-building tactic to ensure success from their investments.
1 Analysis the curve
The concept of a property market cycle existing is not myth it is a fact and is normally accepted to be based on a price income relationship. Verify the recent historical price data for properties in the ground of the country you are considering buying in and try to decide the overall feel in the market for prices presently. Are prices rising, are prices falling or have they reached a peak. You require knowing where the curve of the property market cycle is at in your preferred investment ground.
2 Get ahead of the curve
As a simple rule of thumb, professional real estate property investors look to pay for ahead of the curve. If a market is rising they will try and target up and coming areas, areas that are close to locations that have peaked, close to locations experiencing redevelopment or investment. These areas will most possible become 'the next immense thing' and those who are in before the trend will stand to commit the most gains. As a market is stagnating or falling many successful investors target areas that enjoyed the best levels of growth, yields and profits extremely early on in the preceding cycle because these areas will most possible be the first areas to become remunerative as the cycle begins turning towards positive once more.
3 Know your market
Whom are you purchasing property? Are you purchasing to let to young executives, buying for renovation to resell to a family market or buying jet to let real estate for short-term rental to holiday makers? Think about your market before you come to a purchase. Know what they look for in a property and confirm that is what you are going to be selling them.
4 Think further afield
There are emerging real estate property markets around the globe where countries' economies are going from strength to strength, where a growing tourism sector is pushing up demand or where constitutional legislation has been or is getting ready to be altered to enable for foreign freehold ownership of property for example. Look further afield than your own back yard for your next property investment and diversify that real estate portfolio for maximum success.
5 Purchase price
Set yourself a budget that will realistically enable you to buy what you are looking for and make the most of that purchase by means of either capital gains or rental yield.
6. Entry costs
Research expenses, costs and all charges you will incur when you pay for your property, they differ from country to country and from time to time even from state to state. In Turkey for example you should add on an additional 5% of the buy price for all expenses, in Spain you will require to reason in an average of 10% and in Germany expenses and charges may be in excess of 20%. Know how much you will have to incur and factor this amount into your budget to stay away from any nasty surprises and to ensure your investment can become remunerative.
7. Capital growth potential
What factors point to the potential profitability of your real estate property investment? If you are looking overseas at a growing market, which economic or social indicators exist to recommend that property prices will increase? If you are purchasing to let out are there any indications to recommend that demand for rental accommodation will stay strong, expand or even decline? Think about what you want to accomplish from your investment and then analysis and figure out whether your expectations are convincing.
8. Exit costs
If you will incur substantial capital gains taxation liability if you sell your property investment for profit, will that render the investment profitless? In Spain a distant buyer can incur up to 35% capital gains tax, in Turkey on the other hand property sales are capital gains tax free if the underlying real estate has been owned for 4 or more years.
9. Profit margins
What levels of capital growth can you realistically gain on your property investment or how much rental revenue can you generate? Work out these facts and then work backwards towards your initial budget to work out your potential profit margins. At all times you have to keep the bigger image in mind to confirm that your real estate investment has good potential for profit.
10. Think long term
Unless you are purchasing property off blueprint and intending to flip it for resale and profit before completion you should view real estate investment as a long-term investment. Real estate is a slow to liquidate asset, money tied up in property is not easy to free. Take a long-term approach to your property portfolio and give your assets time to expand in value before cashing them in for profit.
by: Calvin Tan
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