Property Investment Tips

As is the case with all investments, doing your research is of the utmost importance before you decide to jump into the world of property investment. Even with today's uncertain property market, forward planning and a good strategy can pay off. With the current world recession showing glimpses of improvement, it means that a good investor is in prime position to make buys on properties that can be bought now at a good price.

If you are shrewd and keep track of your investment, then there is always a chance to make money from it. Being patient and knowing when to push and when to pull is paramount in the world of investment.

How to Pick a Great

Beachfront Property to Invest

In

A Long Term Strategy

When investing in the property market, it is important to remember that this is going to be a long-term investment. You must be sure that you have a plan set out for 5 - 7 years, as this in the kind of time you will be looking at to receive substantial returns on your investment. Also, be prepared for the bad times as well as the good.

There will be stages when you do not have any tenants in your properties, leaving you to pick up the mortgage bills while you wait for new ones. You must have a sound bank balance before entering into this market.

How to Buy Cheap Investment Property

Take into Account

You have to be ready for the many expenses that can arise while renting out properties and the more you rent the more problems that you will have. Property maintenance and repairs can become quite an expensive, so you need to offset the positive with the negative gearing. Be sure that you will turn a profit or you will be in deep water. There are many expenses that you will need to research and take in account.

Financial Information

Getting an experienced person on board to help you can be absolutely vital when it comes to making financial decisions. People who have had experience in this market will know what to look for with regards to how best to manage your budget and what suits you the best, making sure you don't overstretch yourself and get bogged down.

The internet can help you by providing you with solid information on improving your business no matter what it is. With over a decade of experience behind us, we are well versed in all forms of property investment.

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Property Invest

Where do you go to learn how to get started in Property Investment, this is the most difficult question newbie investors face when you're getting started in creating your wealth through property or real estate. The facts are that most wealthy people have lots of their wealth tied up in real estate, and that because of their investment in assets that grow in value, their wealth continues to grow and get larger year by year. Property Investment is by far the simplest way to grow wealth, providing you have the education and knowledge to make the right investment choices.

New investors in real estate often make big mistakes because they didn't seek out any education before taking the plunge and sinking their money into what looked like a good deal at the time. So rather than their investment beginning to create growth and wealth, quite often it becomes a burden on their finances, taking money out of their pocket rather than putting money in.
This type of investment has been promoted by many as a tax benefit, but is quite often a slave master rather than a servant, and I highly recommend against any property investment which is taking money out of your pocket each week.

In my opinion the only way to invest in property is to make sure that the net result of cashflow each week is positive. By this I mean that once you have paid the mortgage payment, the rates, insurance, allow for vacancies and repairs and any other costs, the income on the property (rent)is able to cover everything and leave a surplus.

Now sometimes this is very difficult to achieve, depending on where you are investing. However there are strategies that I use even on properties which at first appear to have a huge negative cashflow, to turn the equation around into being positive cashflow. It's all to do with the strategy and structuring of the investment. Here is an example, let's say that on initial analysis, after buying a $250,000 property with a 20% deposit (down payment) and say 3% to cover the purchase costs, you have a loan on the property for $208,000.

Repayments on this loan interest only would be $280 per week at 7% interest. The rates, insurance and other costs are going to be about $100 a week, so this house would be costing you $380 per week and a normal rent would most likely be around $250 per week. In this example you would be losing $130 every week out of your pocket, now I would not call that a great investment.

So how could we change the strategy and structure of the deal to make it far more attractive? Quite simply I would offer to sell the house on a lease option, with option expiry in 2 years, with agreed sale at say $290,000 and weekly rent of $490. I would make weekly cashflow of about $110 a week and have a lump sum cashout in 2 years of about $40,000. There are of course lots of other details to take into account, but this is a very rough outline of how to turn a negative deal positive.

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