The great thing about real estate is that even in the worst economy, it is usually better than stocks and bonds. Land, after all, is one of the best investments that will never change. People need a place to live, work, shop and play — so real estate is really just a matter of supply and demand, especially if you know how to invest in it correctly.
THE TOP 5 MOST PROFITABLE REAL ESTATE TIPS IF DONE CORRECTLY:
1.) Look At Plenty Of Properties –
Don’t just grab the first property you look at. Too many investors buy properties because its something that they will live in and they think it looks nice. Its’ not about you! Its about the location, market time and profitability. Remember, you won’t be living there, so don’t make your investment decision based on your personal preferences. Give yourself a wide range of options, then narrow them down based on the criteria (goals) you have set for yourself. Don’t take to much time, or else you can loose out on a good (ROI) Return of Investment.
2.) Know The What Is A Real Estate Business and Real Estate Investing –
As an entrepreneur, you already have a business, and real estate investing is best used to support that business, not replace it — unless that’s your intention. Unless your business is real estate, or you’re looking to get into the real estate business full-time as an investor, always remember that pursuing these deals can be risky if you do not have the proper knowledge, training and resources. So, if you’re interested in staying ahead of taxes and inflation while building security for the future, real estate investing may be for you.
3.) Be Able To Analysis Your Profit Margin And Understand What You Are Analyzing –
Be realistic. Look at different alternatives to determine which makes the most financial sense for your investment. And never buy property at a higher price or on less attractive terms than your analysis says makes sense to your pockets. Be wary of sellers that try to over-estimate the value of the property through pro-forma (estimated) data. While you can certainly use a pro-forma to start the conversation, make sure you know the real numbers before closing. Look at previous years’ tax returns, property-tax bills, YTD Profit & Loss, Income and Expenses, etc….
The most important figures you should know are:
- Net income (income/expenses)
- Cash flow (net income/debt financing payments)
- Return on investment (cash flow/investment)
- Cap rate (net income/property price)
- Cash-on-cash return (cash flow/investment)
- Total ROI (total return/investment)
For More Information on understanding how to purchase a property and analyzing your future real estate investment. Please visit http://www.RealEstateInvestmentTraining.Education