No one can guarantee you when the market will rise or when it will fall. This leaves you with a question about whether to sale or whether to rent? The best solution in such situations is to compare the market value of your property with the amount you invested in it. If you are unsatisfied with the current market price of your property then renting it will be a better option over selling. This will provide you with a fixed income at regular intervals. Besides this, you can revise the rent after a certain period of time, say 1 or 2 years and earn more.
Adversely, if the market is offering you more than your purchase amount then go ahead and sale it, because you never know when the market will go down. Hence, it would be wise if you compare the price of your property with the current market rates to arrive at a wise decision.
Look after the maintenance of the property
Whether you are a long term or a short term real estate investor, it is very much essential to keep the property well maintained if you really want to earn good returns. Additionally, if you deal with rental properties then it’s a must for you to look after its maintenance to get good deals. This is advised because, not all tenants will handle your property with care. For instance, they may either damage the paint on the walls or break the taps and showers. These damages need to be repaired each time you rent the property. Hence, make sure that you take this point into account while deciding on the rent so that you do not have to pay these expenses from your pocket.
Diversify your investments
Allocation of assets plays a vital role when it comes time to investment. In addition to this, diversification of assets also proves to very useful in making extensive profits. For instance, if you invest all your assets in one property and the market goes down, then you will be left with no choice but to wait for building up of the market. On the other hand, if you diversify your money and invest in more than one business then you can gain profits from other options when one goes down. This will protect you from going bankrupt as well. Besides this, you can reinvest in real estate when the market recovers. Hence, it is often recommended that you invest in other businesses as well while investing in real estate.
It is very important to educate yourself about the dos and don’ts of real estate investments if you really want to make your real estate career highly rewarding. Referring the above property investment tips and guidelines will also help you earn more money. Have in mind the fact that this kind of business is not as easy as many think – you need a lot of will and dedication to pull out the best results.
Investing in real estate is considered to be one of most easiest and convenient ways of making huge amount of money within less time. Most of us have a notion that the business requires little expertise and is less complicated compared to other types of investments. Above all, there are some individuals who find real estate investment so lucrative that they quit their current jobs and throw themselves completely into selling, buying and renting of real estate properties to earn more. But, the reality is very different. With little or no understanding of real estate investments, the experience could turn out to be extremely destructive.
The good news is that, after so many years of downfall in real estate market, the sector has currently shown some signs of improvement. After being low for six long years it has now moved on to the track of recovery. This has spread happiness amongst investors, whether old or new. But, need not be in a hurry to jump into this field without doing any homework and preparations in order to avoid great losses.
Here are some tips and guidelines from real estate experts which will prove to be of great assistance while investing in real estate:
Follow the guidance of experts
Investing in real estate market is not a one man show. It requires very strong network and very fine communication skills so that you come to know about the best deals cropping up in the market each new day. In addition to this, if you succeed in searching a good mentor who is completely familiar with all the basic as well as advanced concepts of real estate investments, no one will ever be to pull you down in any way.
Moreover, it is very important to build fine relationships with all types of real estate investors, be it big or small, to keep updated with the current trends of the market. This will also keep you informed about the rates of different types of properties in different geographic locations.
Do complete research before investing
The golden rule for making great profits in real estate market is holistic research. This will turn out to very useful in cracking the best deals which will bring you great rewards in terms of both money and status and soon you will leave all your peers’ way behind. Conversely, if you seal the deal without doing a complete homework about the property you might have to bear huge monetary losses. Moreover, in case you have invested all your assets for that property and unfortunately it turns out to be a fraud, you will be left with nothing. Therefore, to avoid such downfalls make sure that you develop a habit of researching about each and every property which you are looking forward to invest in.
It is very clear that banks and agents don’t value homes the same. Their prices always differ or have variances. Have you ever wondered why this discrepancy? How can a house be valued at several prices? How do you determine the right price? These variations exist for a number of reasons.
The value of the bank
If your home is to be mortgaged, then most certainly your lender will have to value it.This satisfies the lender and gives him confidence that your asset provides ample security against the amount of money borrowed. The asset acts as a collateral. Such that if you are unable to repay back the amount borrowed plus the interests the lender which is the bank can sell the property so to recover back its cash. Therefore most of the valuations of the bank are slightly lower conservative as compared to the agents. Some of the times the valuations are approximately 10%-20% less than the selling prices of other comparable and similar homes.
Price Appraisal of the selling agent
Most of the agents in real estate are most of the times asked to assess and determine the market value of the property one wants to sell. In order to fix a price tag on the house or property, an agent first critically analyzes the market and researches on sales which are comparable.
However most of the agents tend to overprice property in order for them to reap benefits on top of their paid commissions. Hence most of the agents’ valuations are slightly higher than the market values. However, it is important to note that, not all agents overprice property.
The sale price
Despite the price valuations available, the price which the successful buyer is willing to pay and the one which the seller is willing to sell on the day of the contract is being sealed is the binding price of the property by law. Therefore despite the bank and agents both valuing the home or property with their own interests at hand, the seller and buyer also have their own interests.
The Valuation of the Local Council
Each year the local councils, water and fire departments determine the amount of money the home owners owe them. So the pricing and valuations of homes is also based on this prices. This is because the deductions have to be included in the sale price. If the amount of charges by these authorities is high, then the prices of homes will be slightly high and vice versa.
The Price of the seller/home owner
Every seller of a property always has a price in mind in which he would like to sell his property or home. However, at the end the seller will adjust his or her price according to the demand of his property or home. Keep in mind that small luxury improvements do not add up the total price of the house. If the house has a great automated smart system in your house controlled by the best thermostat, the owner can’t count on a significant price increase for example. If the demand is low, he or she will accept the price of the highest willing buyer, if it very high, he will accept the price of the highest bidder.
Therefore in the valuation of the price of a home, a number of prices may appear. Also there may arise a lot of differences between the price valued by the bank and that valued by the agent.