Should You Get Into the Real Estate Market?

Do you have the extra capital to spare and are looking for a great way to make easy profit? Perhaps you should consider investing in real estate.

Prospects in the real estate industry are generally positive. Although real property has received quite a beating in the past two years or so, many people are confident that it is on its way to recovery. When the economy started to decline, best manifested by the foreclosure of several homes, residential properties and other properties, many thought it was the end of the world. Still, many believed they could still make something great of the otherwise unfortunate situation and continue with their current investments. Many people question why a lot of investors seem to purchase a property when its values are all going down. Why invest in a property when many lending and financial corporations are imposing stricter measures, with not so attractive interest rates and foreclosures are happening in many states? Is this not a good time or is it the best time to get into real estate and property markets?

This is where the basic sales rule of buying low and selling high comes in. When residential properties and homes, as well as commercial properties, are at an all time low, isn’t this a good time to buy them? Many will argue that it will require a while before you can sell at high rates as property valuations have reached rock bottom. In such cases, you will just find yourself burdened with real estate tax payments while waiting for property values to go up. Yet, many are positive in the outlook that this recession should not take long and the real estate industry will soon recover, thus investing in real estate can still be considered as a good way to spend your money. Experts say that capitalizing on a property will always be a good investment. This is why real estate has been in existence for such a long time.

The downturn that the industry is experiencing right now can be taken advantaged of through bargain hunting. Foreclosed homes and those on short sales are being eyed by real estate agents who are waiting to make the most out of what the market has to offer. This is because these properties can be acquired at very low costs and can be sold for more than twice the original price after proper rehabilitation. You may also choose to rent out the property for a while, keeping profits to a minimum while waiting for the real estate markets to boom once more before putting your newly rehabilitated property up for resale.

You must learn how to properly assess the market trends, for you to carefully find out for yourself whether or not it is already a good time to buy or sell a property. All in all, agents and experts will agree that just like any other business, investing in real property is all just a matter of great timing. Knowing the ins and outs of the business, mastering the rules and having the right connections will make your investments worthwhile in the real estate market.

Real Estate Investing – Is it For You? 6 Questions You Should First Ask

Real estate investment may sound easy – buy a property, fix it up and either sell it for a profit or rent it out and sit on the income. However, the practice is not for the faint of heart. Unfortunately, this complex business isn’t always as simple as it seems and may not be for everyone. For a list of questions you should ask yourself before you break into the real estate market, keep reading.

Do I have free cash?

Don’t let late night TV property gurus fool you; you need some cash to get into real estate investment. It is possible to obtain 100% financing for a property, but that kind of financing can be prohibitively expensive and come with a lot of service charges and closing costs.

Having enough for at least a 10 to 20 percent down payment will also increase your returns and reduce your overall debt load.

Am I okay locking in my money?

Property is not a quick investment and your money is no longer a liquid asset that can be pulled out and used in case of an emergency. So, if you’re hesitant to give up your nest egg, you may want to lower your initial investment to leave your family with some kind of emergency funds.

Am I patient?

Real estate is something of a waiting game. Most homes will appreciate at an average of eight to ten percent annually, but that is certainly no guarantee. If it does work out that way, it may still take time to see that overall return on your investment – particularly if the market is down or slow.

Remember, overall real estate typically is a steady and reliable investment, but it can take time. If you’re looking for quick cash, you may want to look elsewhere.

Do I have the time?

Investing in property eats up a lot more shoe leather than picking up the phone and buying a few mutual funds. With real estate investing you need to look at properties, attend inspections, oversee sales and be a real, hands-on investor. If your investment approach is limited to making transactions on your laptop and phone, purchasing an investment home is probably not your cup of tea.

Do I have the energy?

Whether it’s dealing with tenants and property maintenance or putting in the sweat equity needed to improve a property and get it ready for a profitable sale, that all takes energy. Before you jump on the real estate investment bandwagon, ask yourself if you have the time and energy to take on the job.

Is real estate exciting?

Do you get excited about property? Does nearby competition make you want to attend their open house? Do you see real estate as a market with ups and downs or does the process bore you? To succeed at real estate investing, it should to excite you – or at least stir the motivational juices.