Home Decoration & Real Estate

Posts Tagged ‘Investment’

Successful investors rely on real estate investment articles to help them make informed decisions. It is crucial to stay abreast of financial and market changes. Through observation of real estate trends, investors can identify properties which yield good returns on investment.

The Internet is a great source for locating real estate investment articles. Investors can learn about different types of realty and financing options, and locate resources for any type of transaction.

It is important to use caution when obtaining investment advice online. With today’s advanced technology, anyone can establish a website and claim to be a real estate investing expert. If not careful, investors could find themselves turning over hard earned cash to a teenage computer hacker.

On the flip side, the Internet provides nearly immediate transparency on individuals and organizations engaging in unethical behavior. Always conduct research to see what others have to say. Narrow your search by adding the word ‘complaints’; i.e. John Doe+real estate investor+complaints.

It’s best to stick with established financial advisors, investment groups, lending institutions, government agencies, and publishers such as Forbes and Kiplinger. Some of the most trusted investing resources include CREOnline.com, REIClub.com, John Burley and Donald Trump.

Real estate investing requires the ability to change gears when necessary. When I started out, house flipping was the trend of the day. When we fell into recession and subprime lending practices exploded, foreclosure homes became the hot investment trend. Then it changed to short sales. Now, it’s heading back toward foreclosures.

Point being, you never know what will happen in the market. Flexibility is the only way to achieve success in this ever-changing game. The easiest way to stay ahead of other players is to frequently read real estate investment articles.

Knowledge is the key to real estate success. There are plenty of places to obtain credible investing information. Visit local libraries and take home real estate investment books, home study courses, audio books, or periodicals. Listen to podcasts offered by successful investors.

Join professional real estate investor networking groups. Attend in person or join online groups. Participate in real estate investing forums. Connect with other investors and real estate professionals through social networks. Develop a network of professionals including brokers, realtors, mortgage lenders, lawyers, architects, general contractors, appraisers, surveyors, and other investors.

Today’s real estate market is challenging and requires strategy, tenacity, and a bit of luck. As with any investment, risks are involved. If you surround yourself with ethical, honest professionals who under promise and over deliver, you can succeed in this roller-coaster market.

From a historical perspective, investing in real estate is almost as old as the construction of property itself. Indeed many business owners who created their wealth through companies then went on to diversify into real estate investments. In fact, over the years real estate investments have produced similar returns to those found in the stock market. Let’s take a look at some of the reasons:

First of all, and most obviously, the supply of building land around the world is limited, even when taking into account landfill opportunities. Since the world’s population is growing and the demand for housing ever increasing, then there would seem to be a never-ending and increasing requirement for real estate of all types.

Now let’s take a look at the mechanics of buying property. Here it can be seen that investing in real estate is quite different from most other traditional investments such as stocks. With real estate you can often borrow up to around 80 percent of the value of a property, sometimes even the full value and beyond under special circumstances. Thus a more modest investment of say 20 percent of the value can be used to buy and control the full value of the larger investment. Naturally, if the value of your investment increases, I.e. property prices rise, then the value of your real estate investment also increases. If so, then you are into profit, including that on the money you originally borrowed.

Naturally, there will be costs associated with real estate investing (such as legal fees and property maintenance, taxes, etc), but these are usually small in comparison with the potential gains.

Borrowing in order to invest in real estate makes real estate a type of leveraged investment. But if you know anything about leverage, you will realize that leveraged investments can also go against you. What, for example, if the property you purchased for $300,000 decreased in value to $240,000? Even though the value only dropped by 20 percent, you actually lose 100 percent of the original $60,000 investment. And if you have a mortgage on this property making up its full purchase price, you will actually need to pay money to the mortgage provider in order to cover the costs of selling the property. That’s in addition to the loss of the whole of your initial investment.

So, as you see, investing in real estate is something to be taken very seriously and should not be done with money which you might need for other things in the near future. Investment in property is more secure as a long-term investment. In the above example, if you could have held onto the property and not sold it, the loss would purely have been ‘on paper’. In all likelihood, over time the value of the property, unless grossly overpriced when you originally bought it, will rise and you will likely not only recover the full value of the initial investment, but also possibly make a nice profit when you do come to sell.

Another reason that real estate is a popular investment is that there are profits to be made from it whilst you are the owner. In addition to the tax-saving benefits (in that any tax due on the property’s increase in value doesn’t become due until it is eventually sold), you can also make additional money from renting out the property. This can often cover all your running costs of the property, plus providing a profit on top.

Unless you make a large down payment, early on during your ownership the monthly operating profit from your property business is likely to be small or non-existent. But over time this profit will increase as the amount of rent you can charge increases at a higher rate than the running costs. Naturally these profits will be subject to normal income tax rules.

A further benefit of investing in property is that you might be able to purchase cheaply a run-down or ‘distressed’ property and fix it up or develop it further. Properties like this can still be found if you look around carefully. Naturally, investing in this type of real estate can still produce large gains. This is something you certainly can’t do with traditional stock market investments.

However, returning to the initial question about whether real estate investing is still a viable option when current prices seem to be nearing their peak: yes, it can still be so, but you might need to be more creative and prepare to be in for the long haul. Property ‘flipping’ methods that worked extremely successfully yesterday, might not work at all well tomorrow.

You might also consider diversifying into overseas real estate markets. Whilst this will require greater study and analysis, and there are many more legal issues to consider, seeking out what appear to be undervalued international real estate opportunities has the potential to be highly profitable if handled correctly.

Naturally, you should always seek the advice of professionals, both financial and legal, before investing in properties of any description, particularly when considering investing overseas. There might be major implications to your overall taxation. Risks can also be substantially higher when you are not there to oversee your investment in person.

Jamaica Real Estate is a Solid Investment despite World Economic Crisis

“Uncertainty in global financial markets has created a surge for more solid investments” says Edwin Wint, President of the Realtors Association of Jamaica. Mr. Wint goes on to say in a recent press release that, “real estate is a stable and concrete investment, and the global economic fallout is increasing demand for property in Jamaica.” The Association recently staged its First Annual Expo under the theme, “Secure Your Future with Real Estate”. The publishers of the Jamaica Real Estate Guide were there providing their valuable resource for all homebuyers and investors of Jamaican Real Estate.

Over on the North Coast of the Island, developments are abound with Solis The Palmyra Resort & Spa offering 277 apartments and 11 villas at prices ranging from US$500,000 for a studio to US$3.5 million for a beachfront villa. There is also the Colony at Half Moon with plans for development of 30 private villas. Richmond Development in St. Ann offers a World Class Residential Community with units starting at US$195,000. These developments have been marketing heavily to overseas clients who are looking for a tropical getaway that is in close proximity to the U.S. There are more than 300 International flights coming into Sangster International Airport in Montego Bay weekly and there are no restrictions to foreign ownership of Real Estate in Jamaica. In addition to easier access to beachfront property in Jamaica than in the U.S., Jamaica Real Estate is quite an attractive investment.

On the financial side of things, latest numbers from the Planning Institute of Jamaica in their report of Mortgages issued in Jamaica from NHT, NHDC, Building Societies, Life Insurance Companies and Credit Unions indicate that the volume and value of mortgages disbursed declined.  The total number of mortgages disbursed fell by 8.2% to 8,553 during January –September 2008 compared with January – September 2007.  This is a turnaround compared with the continued annual increases recorded in volume and value of mortgages disbursed.  The number of mortgages disbursed went from 10, 556 year ending December 2006 to 12, 469 year ending December 2007 according to the report.   The value of disbursed mortgages amounted to $31,595 million for the year ending December 2007, this compared with the $25,563.9 million disbursed for the year ending December 2006.

INFORMATION, INFORMATION, INFORMATION

In order to make an educated decision when investing in any commodity, you need information. It is no different for Jamaica Real Estate. The Jamaica Real Estate Guide aims to be a friendly and informative partner for prospective homebuyers and investors. The latest issue which was featured at the Realtors Association Expo 2008 at the Hilton Kingston Hotel on November 23rd has an article about Mortgage basics, a handy mortgage worksheet and a checklist of items for a loan application. Additionally, readers will find the usual delivery of full colour listings by Real Estate brokers and developers who promote their listings actively in this handy resource guide.

The Jamaica Real Estate Guide which was first published in 2006 started with the mandate of being a partner to the Jamaican Homebuyer, arming them with information about local real estate trends and the home buying process. With the demand increasing for Jamaica Real Estate from the local population and the Diaspora, so has the readership of the guide. The publishers of the Jamaica Real Estate Guide responded to demand by increasing the distribution of the magazine from 3,000 to 20,000 copies in print per issue. In addition, the website was redesigned to allow for free online viewing of the magazine. Response to the new website feature has been great with downloads coming from Countries like Australia, Bermuda, Canada, Denmark and of course the USA, Canada, our very own Jamaica and other neighbouring islands.

Miami and Florida in general were among the hardest-hit areas in the nation when the real estate bubble burst in 2008. This is nothing new to this area and Florida has recovered from many boom and bust cycles in its past. In fact, some of the more exclusive developments in this area have been subjected to many booms and busts over the past century that would have broken many other markets. Miami, particularly in the more well-heeled areas, tends to recover fairly quickly and, when the market is down, investors tend to move in.

According to recent reports, investors have begun to move into markets where the depression in the general prices of real estate have created opportunities for those willing to put out the money to get in on what will inevitably become a recovery. South Florida, including Miami Beach, South Beach and Sunny Isles Beach have all seen this type of investment since the crash of 2008. This is a fairly predictable cycle when one looks at real estate trends over the long term and when one takes an objective view of how the markets work in regard to any commodity, including real estate.

When the market turns down, it has the counterintuitive feature of creating opportunity. For investors looking to get in on markets where the costs are normally prohibitive, this means that the doors are open. In fact, this is why some economists refer to what’s normally called the real estate crash of 2008 as an “adjustment”. When a product becomes overvalued, it’s inevitable that market forces will eventually catch up and return its value to a more sensible level commensurate with the reality of the economy as a whole. Today, there are opportunities to invest in Florida real estate which haven’t been seen in years.

While the upscale areas of Miami Beach and Sunny Isles Beach have remained popular throughout the crash, there are still opportunities for investors to get in on the market before the ongoing recovery raises prices back up to normal levels. At the moment, well-heeled investors are moving into the area and are showing a particular interest in condominium investments, one of the most commonly-seen types of housing in the Miami-Dade County area. For those who are looking to get in on this always dynamic market, there have been few better opportunities than those present now.

Real estate investment has become a hot topic over the last decade or so. Would-be investors seem to be around every corner. They attend seminars, buy investment classes on DVD and study the real estate market religiously.

The world of real estate investing seems to be an exclusive and exciting realm where only a privileged few are successful. If you have always wanted to be a part of this world, you may feel that you are too late now that the real estate market has taken a sharp down turn.

However, it may still be possible to start a successful real estate investment career even in a slow real estate market. The most important point to remember is that real estate investing isn’t all about buying a house, improving it, and selling it right away. There are many facets to the world of real estate investment.

One of the most stable forms of real estate investment in a weak or unstable real estate market is rental properties. A poor real estate market means that fewer people are buying their homes and more people are renting. Being the owner of a rental property can put you in a position to be a successful real estate investor very quickly.

Renting out your property lets you build equity while your renter basically makes the mortgage payments for you. You will be stuck if you can’t find a renter for a period of time, but this isn’t very likely. In a slow market where buyers are too afraid to buy, you won’t be at a loss for people who want to live in a house without a mortgage.

If you are patient and don’t need to turn a profit right away, today’s slow real estate market opens up a variety of opportunities for you. Homes are being foreclosed every day, and many homeowners are desperate to get rid of their property before it is foreclosed. You can buy a foreclosed property as a real estate investment for far below its value. If you have great timing and a lot of money in savings, you can even snatch up one of these properties with a cash sale. You’ll have no need for a mortgage and can hold on to the property until the market starts to look up.

In the mean time, you can make improvements to the home that will make it more desirable to future buyers. You can then wait for a better time before putting it back on the market and enjoy a tidy profit on the improved property. This real estate investment tactic is not for beginners or the faint of heart, but it is effective.

In real estate investment, as in most other types of investments, the bigger risk yields the bigger reward. If you are willing to go out on a limb and invest in a property that will not immediately give you a profit, you’re likely to come out far ahead in the future. If you are looking for a lower-risk investment, renting out your property is a fantastic choice in a slow real estate market.

Real estate investment is not as complicated as some investors would like you to believe. It involves making sound choices and knowing the risks that you are taking. If you are willing to jump in and get started in real estate investment, don’t let today’s cold market scare you off. Just think of it as an opportunity to get your feet wet.