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How-To Guide – Is Real Estate Investing Right For You?

Five Ways to Know if Real Estate Investing is Right for You.

    1. Are you a good manager of your personal resources or do you have significant amounts of short term debt? If the answers are no and yes, in that order, do not invest in real estate until you address these issues. Real estate is liquid. Once purchased, the hold time on your new property may be significantly longer than you anticipate. This means that your potential exposure to unplanned expenses on your property may be longer than anticipated. Significant amounts of short term debt or the inability to plan your finances in anticipation of expenses may turn your real estate investment into a financial nightmare.

    2. Are you a team player and can you captain that team? Investing in real estate means partnering with others to ensure your success and recognizing that your partners may know more than you. You will encounter brokers, property managers, attorneys, handy men, plumbers, electricians, contractors, roofers, inspectors, mortgage brokers and appraisers. If you are a control freak, prefer to work alone or cannot be direct in your communication when working with people, real estate investing may not be right for you.

    3. Do you understand the kind of investing you will be doing? Will you be investing for cashflow or speculating for appreciation? Do you have the analytical tools necessary to help you work up a pro-forma for the property you will be buying?

    4. Do you truly understand that wealth-building in real estate occurs over many years and that you have to “survive” your first couple of properties to build wealth? Over 20 years ago I started baking bread. The guide book I bought featured a “loaf for learning”, a basic loaf that I could practice kneading, mixing and still turn out an edible product. Your first properties will be “buildings for learning”. As you move beyond the initial learning curve, you will move on to create wealth. In certain markets, real-estate can produce appreciation returns beyond expectations and create the illusion that real estate produces instant cash. In my life I have seen two such markets. Frankly I would not want my future financial well-being to rest on my ability to time markets. Sophisticated investors have as their core investments, cashflow properties, properties that perform during hot or cold markets.

    5. How do you react to unpleasant business news? Is your overall reaction anger that dissipates into a sense of helplessness or do you become a problem solver? Being able to solve problems is the key to having a successful business and investing in real-estate is a business. Real-estate is also a people business, by this I mean your tenants are people and the service personnel who will work on and market your properties are people. If the failings of others afflicts you with moral indignation and heartache, real estate investing is not for you. Tenants will fail to pay the rent and you will have to evict them, your property manager will charge you market or above market for repairs and will fail to market your properties properly in order to keep them full.
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Real Estate Investment-A Quick Tour

What is real estate investment? The real estate investment is the investment of funds in financial assets or property rights in order to obtain the return or financial statements. Some of the ways that this can have is the return of financial return, asset appreciation, or the recovery side (for example, to buy the land around a luxury development assures the view of the surrounding green spaces and “holds” the high price for lack of a competing bid), among others What are the possible forms of real estate investment? As with any investment, real estate investment-profit. However, in real estate investing there are many ways to achieve profit: 1. Buy and sell buy, merge and re-sell value, thereby obtaining a financial asset, which can add up valueof the following ways:Works By performing restoration work or remodeling can add to property value much higher than the cost of the same Projects through the design approval of construction / expansion / change of use (eg move from industry to housing)extends the value of the property Growing market- When the market is growing, you can simply buy themselves, continued for a period prescribed and re-sell Buy well

When you buy below the market price, can go back to sell at market price thereby obtaining an asset Assignment of position- may give up rights, such as giving up a position in a preliminary contract of sale, since the buyer is willing to pay a premium to the initial investor Highlight properties- in some cases it is possible to make a highlight of a property eg a house with a large field where you can highlight a piece that will serve to build another house. In these cases the profit can be generated by sales of shares resulting from, or sale of a party, leaving the rest far below the actual cost or no cost Buy and sell property-income buys these cases umimóvel, recovered and rents up. Then the property is sold to an investor interested in fixed income and valuation is done by comparison with other possible applications of money, such as bank deposits or investment in bonds and shares.Buy-buy for performance, prepare for sale and lease, and the profit to net rents, plus the valuation of the property Housing can buy yourself a fraction, a building or a set of units and rents to market prices.Before you rent will have to recover (if still used), equip (optionally appliances and furniture) and set the rules, such as the target customer, the kind of asking for guarantees (guarantor bank guarantees, etc.)

The type contract and the contract term.Trade, services and industry- in this case the target customer is a company and therefore may not be necessary to remodel the space and equipment. However, it is important to define the type of companies that do not want to allow the space in question (eg a bar night in a residential building), the type of collateral, the type of contract and its duration. It is also important to the negotiation of works to be carried out and state in which the tenant agrees to leave the property.Other- there are alternative forms of investment income, such as fractions of the cases included in holiday resorts, hotels operated by major international networks, etc.Other ways to profit from real estate, there are many other ways to profit from real estate investment:Investment funds, participation in investment funds, obtaining dividends and appreciation of heritage Participation in consortia, participating as an investor in real estate development projects such as large housing developments, and other aparthotels, getting management on behalf of a professional team Others, in addition to the forms described here, there are other forms of investment, lack of deep knowledge on the part of the author and are not highly relevant to the vast majority of investorsArticle Search, not discussed here.

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