Investing in Real Estate is a great Addition to any portfolio, but what is the best way to do it? There are a number of different options, and we will go through some of them here.
The first one, and the one that seems to get the most attention these days is the "Flip". With the emergence of shows like "The Big Flip", and "Flip This House", this Buy, Renovate and Resell strategy is the 'sexy' option for most real estate investors right now. However, there are a few things to consider before you go about this. The first thing to think about, of course, is where are you going to find the property that is priced well for the flip. There are a few options for investors - the first of which is to contact a good Real Estate Agent and have them scan all listings for you for any that are undervalued, priced as is, owned by the bank or foreclosure company, or any other good opportunities that might be on the market. Your Real Estate Agent is your best friend in this respect, as they will be very motivated to find you the best property, and will be very vigilant, if for no other reason than they know you will be reselling the property at some point pretty soon! When looking for Properties to Flip in your area, remember that the same rules apply as to your own home - the first three things you should look for is Location, Location, Location! Properties that are in Downtown Areas are often the easiest to resell, however, they are often more expensive than more suburban properties, so that will eat into profit margins. Look for houses on popular streets, in good neighbourhoods. If you are buying into a worse neighbourhood, make sure you are factoring that into your price of purchase, and projected resale. The other Key factor to the Flip, is that you must ensure that you don't price yourself out of the neighbourhood. For Example, no matter how nice you make your small bungalow in an area of starter homes, Don't expect to resell it for 50% more than anything else in the area! Ensure that your renovations don't bring the price too high. Finally, Understand that the higher price bracket you try to flip, the longer it is going to take to resell, and the higher your materials costs will be. You need to consider all of this and much more before considering the flip.
The other main strategy that you can use to add to your investment portfolio in the real estate world is the rental property. Rental Properties offer two different qualities to your portfolio - income and capital gain. Your rental property can offer you a monthly income over and above your monthly outlay of expenses (mortgage, utilities and taxes). Even if your rental property doesn't offer you a huge (or any) monthly income, remember, you are also earning a capital gain on the property, as it is very likely to increase in value... just like your personal home is. All of this should be taken into consideration when deciding on a property. However, with Rental property, the most important consideration is always the Tenants that you have. A great looking, well maintained and located property can still be a nightmare if you get a bad set of tenants in their. It is important to do stringent interviews, check references and draft a strong lease agreement. You should also familiarize yourself with the Nova Scotia Tenancy Act. Finally, you need to decide what kind of rental property you are going to run. Do you want to rent to students? Young Professionals? High or Low Income? Students offer payment by room, which is often higher than you could command for entire flats, but you have to consider that they will likely not care for the building very well, and might not have the rent each month. Additionally, you have the concern of them bailing out on you once school ends for the year. Young Professionals will often be very easy to deal with, will pay their rent on time, but will also be very astute about how much they will pay, and are likely to be there for only a short period of time. Your Rental portfolio must always account for at least a 5% vacancy rate (in the good times), and must still generate money for you with that in the equation.
Like I say, in both of these cases, your real estate agent can be your best friend, and you should seek out one that you feel can be an informative and trusted advisor. They will work in conjuction with your financial planner as well, to determine what the best course of action for you is. As always, you should feel comfortable with whatever investment you make!
About The Author
Matt Honsberger is a Licensed Real Estate Agent in the heart of maritime Canada - Halifax, Nova Scotia, and the designer of http://www.homesinhrm.com.
Showing posts with label property. Show all posts
Showing posts with label property. Show all posts
Wednesday, March 14, 2007
Tuesday, January 16, 2007
Key Factors To Consider When Buying Investment Property
Buying investment property with discretion is perhaps a foolproof way of accruing long-term wealth. With the stock markets being overly volatile the investor is anxious and often seeks haven in real estate, which unequivocally involves less uncertainty than other investment options. While real estate has drooped a bit from its zenith during the late 1980s, astute real estate investments can still deliver significant gains. In general, buying investment property gives you access to three benefits: yield, capital growth, and tax advantage through negative gearing.
Investment properties are also known as Non-Owner Occupied properties. Since every investor looks for high capital growth, buying investment property in a developing area does make sense. Experienced investors state that suburbs located within a 10 km radius of a city’s hub can be regarded as developing areas. It is recommended that you explore the area prior to buying investment property. Ensure that the basic amenities and emergency provisions are easily accessible to potential tenants. This would result in healthy rental returns and minimal vacancy periods, if any.
While buying investment property, you must consider that renting an apartment unit is much easier than renting a separate house. Moreover, the expense of rectifying problems, such as replacing the heating ducts, is shared among the several owners in the apartment.
The locale also plays a crucial role in determining which property to purchase. Properties with a panoramic view are often more desirable than others. Undoubtedly, the rental income from such a property would be huge. But there is no point going overboard and purchasing an expensive property, prior to ensuring that potential tenants can afford renting such a property.
If capital growth is what you look for in an investment property, then seek a property that can be sold quickly. Augmented properties, such as a unit with a balcony, garage or laundry, are rather alluring and can be sold with ease.
While buying investment property with the key intent of renting it, you must bear in mind that there might be periods when the property is unoccupied, either because of repairs or lack of tenants. Therefore, you must have a contingency plan for such vacancy periods.
Property investment might not seem all hunky-dory during the initial few years. But after a few years of holding a property, you might hopefully see yourself from being negatively geared to being either neutrally geared or positively geared. That is, your returns would be higher than your operating expenses. This is because the rental income would increase on a gradual basis, keeping pace with the market sentiments. Over time, you would also generate extra capital in your investment property.
On the whole, buying investment property can be a profitable venture if it’s done astutely.
Copyright © 2006 Joel Teo. All rights reserved.
About The Author
Joel Teo writes on various financial topics relating to Ahwatukee Real Estate Investment. Signup for his free online Real Estate Investing newsletter today and gain access to the “Six Day Real Estate Investment Profits Course” now at http://www.realestateinvestment101.info/Ahwatukee.html.
Investment properties are also known as Non-Owner Occupied properties. Since every investor looks for high capital growth, buying investment property in a developing area does make sense. Experienced investors state that suburbs located within a 10 km radius of a city’s hub can be regarded as developing areas. It is recommended that you explore the area prior to buying investment property. Ensure that the basic amenities and emergency provisions are easily accessible to potential tenants. This would result in healthy rental returns and minimal vacancy periods, if any.
While buying investment property, you must consider that renting an apartment unit is much easier than renting a separate house. Moreover, the expense of rectifying problems, such as replacing the heating ducts, is shared among the several owners in the apartment.
The locale also plays a crucial role in determining which property to purchase. Properties with a panoramic view are often more desirable than others. Undoubtedly, the rental income from such a property would be huge. But there is no point going overboard and purchasing an expensive property, prior to ensuring that potential tenants can afford renting such a property.
If capital growth is what you look for in an investment property, then seek a property that can be sold quickly. Augmented properties, such as a unit with a balcony, garage or laundry, are rather alluring and can be sold with ease.
While buying investment property with the key intent of renting it, you must bear in mind that there might be periods when the property is unoccupied, either because of repairs or lack of tenants. Therefore, you must have a contingency plan for such vacancy periods.
Property investment might not seem all hunky-dory during the initial few years. But after a few years of holding a property, you might hopefully see yourself from being negatively geared to being either neutrally geared or positively geared. That is, your returns would be higher than your operating expenses. This is because the rental income would increase on a gradual basis, keeping pace with the market sentiments. Over time, you would also generate extra capital in your investment property.
On the whole, buying investment property can be a profitable venture if it’s done astutely.
Copyright © 2006 Joel Teo. All rights reserved.
About The Author
Joel Teo writes on various financial topics relating to Ahwatukee Real Estate Investment. Signup for his free online Real Estate Investing newsletter today and gain access to the “Six Day Real Estate Investment Profits Course” now at http://www.realestateinvestment101.info/Ahwatukee.html.
Wednesday, January 10, 2007
Rental Property Investment – A Quick Introduction
Rental property investment is emerging as an excellent option for investors as they are anxious about the sudden slumps and trifling gains of the stock market.
Are you looking for rental property investment? Before you set on your quest for a rental property, ensure that you really know what it’s like to be a landlord. Though it is a profitable venture, it is not a cinch by any means. You would have to maintain the property in order to reap the financial rewards throughout the period of your ownership.
To many, rental property investment is simply something that involves buying a house, giving it on rent, and then raking in bucks while relaxing in a couch. However, this is far from being realistic, especially, if you wish for a regular rental income for years to come. Bagging a rental property and accruing a healthy rental income for a year or two is nothing but a mundane task. However, maintaining a steady rental income until you sell the property is what counts as a great effort on your part.
Being an investor, there is nothing worse than having to keep a vacant rental property. This is because you would still need funds for the upkeep of the property, which isn’t providing you any returns as it’s vacant. Therefore, you should actively seek tenants, and do whatever is possible to keep them contented. This involves heeding to the needs of the tenants and making timely repairs. Though you might carry out some trivial repairs by yourself, other complex tasks (fixing pipe leaks and windowpanes) are best left to an expert.
In your quest for rental property investment, it is pivotal that you consider the locale. This entails taking into account the distance of the property from your residence, the availability of tenants, the average rent that you can collect, and the ability of tenants in the locality to pay you. Some locales may prove more beneficial than others. For instance, it is better to rent a house nearby a college, since an awful lot of students are likely to search for a dwelling in the vicinity of their college. This results in an ample supply of tenants all year round.
In a gist, rental property investment is all about analyzing the locale, doing whatever it takes to rent your property, keeping your tenants happy, and maintaining the property so it can be rented year after year thereby minimizing the vacancy period.
Copyright © 2006 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author's information with live links only.)
About The Author
Joel Teo writes on various financial topics relating to Ahwatukee Real Estate Investment. Signup for his free online Real Estate Investing newsletter today and gain access to the “Six Day Real Estate Investment Profits Course” now at http://www.realestateinvestment101.info/Ahwatukee.html
Are you looking for rental property investment? Before you set on your quest for a rental property, ensure that you really know what it’s like to be a landlord. Though it is a profitable venture, it is not a cinch by any means. You would have to maintain the property in order to reap the financial rewards throughout the period of your ownership.
To many, rental property investment is simply something that involves buying a house, giving it on rent, and then raking in bucks while relaxing in a couch. However, this is far from being realistic, especially, if you wish for a regular rental income for years to come. Bagging a rental property and accruing a healthy rental income for a year or two is nothing but a mundane task. However, maintaining a steady rental income until you sell the property is what counts as a great effort on your part.
Being an investor, there is nothing worse than having to keep a vacant rental property. This is because you would still need funds for the upkeep of the property, which isn’t providing you any returns as it’s vacant. Therefore, you should actively seek tenants, and do whatever is possible to keep them contented. This involves heeding to the needs of the tenants and making timely repairs. Though you might carry out some trivial repairs by yourself, other complex tasks (fixing pipe leaks and windowpanes) are best left to an expert.
In your quest for rental property investment, it is pivotal that you consider the locale. This entails taking into account the distance of the property from your residence, the availability of tenants, the average rent that you can collect, and the ability of tenants in the locality to pay you. Some locales may prove more beneficial than others. For instance, it is better to rent a house nearby a college, since an awful lot of students are likely to search for a dwelling in the vicinity of their college. This results in an ample supply of tenants all year round.
In a gist, rental property investment is all about analyzing the locale, doing whatever it takes to rent your property, keeping your tenants happy, and maintaining the property so it can be rented year after year thereby minimizing the vacancy period.
Copyright © 2006 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author's information with live links only.)
About The Author
Joel Teo writes on various financial topics relating to Ahwatukee Real Estate Investment. Signup for his free online Real Estate Investing newsletter today and gain access to the “Six Day Real Estate Investment Profits Course” now at http://www.realestateinvestment101.info/Ahwatukee.html
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