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Anyone Can Profit from Property

May 11, 2009 in Property Investment by Kez

Most of the people who hit the rich lists usually have one thing in common; they have used property investment to increase their wealth to greater heights. Property investment is used by the elite as a vehicle for making money and you would think to do the same you have to be ultra smart to reach these heights. But the question is do you need to be ultra smart? The answer is no! The great thing about property investment is that you don’t need to be super intelligent to make big profits; it is all about having the right knowledge and the drive to succeed. The idea behind successful property investing is pretty simple; do your research and just go out and buy.

If you look at the property price trends of the previous 10, 15 or 20 years in any area, you can see the significant price rises. If you had bought a property say 10 years ago, you would now be sitting on a handsome profit. You didn’t need to be a great negotiator, or a super intelligent to realize massive profits. We are not talking below market value property, we are talking big profits from property that you could have bought at FULL price! Buying virtually any property 10 years ago and realizing a profit now would make you seem like genius, but did you really have to be a genius to make the profit? Not quite!

In the current market we are being presented with a huge opportunity to capitalize on buying low priced property for profiting in the coming years. This is an opportunity that doesn’t require a genius to work that there is huge potential for profit. History shows that the property prices will rise on the long term and the normal thinking person in you will tell you that prices will be much higher a few years from now. Whether we reach the bottom of the declines this year, next year or whenever, a normal thinking person will know that the prices will eventually rise. So researching deals today and buying below market value property based on today’s valuations presents an excellent opportunity for massive long term profits. There are huge opportunities for an informed investor to go out into the market place and present sellers offers based on today’s prices. Do you think the rich people out there are sitting back scared of the current market declines or buying? The answer is that the richer who want to get richer are buying and buying regularly. They are making the most of the buy to let opportunities. You wouldn’t call them geniuses as this is a pretty obvious course of action to take; BUY LOW SELL HIGH!

To match the rich thinker, just do what they do, buy low and sell high! Do this a multiple number of times and as long as you don’t use your properties as a way to fund your lifestyle, you can also be sitting pretty in a few years time. Isn’t that simple or do you think there is more to it than that? Obviously you need to have knowledge to find and purchase the deals correctly but isn’t the principle easy enough? Keep it simple!

This is not something everyone will do. Why not? Because the average person will always have a reason not to work hard to find the deals and take action to go out there and grab the opportunities that are there to be taken.

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Why buy investment property locally

May 10, 2009 in Property Investment by Kez

If you have been dealing in property investment, or even starting out then you will know that having knowledge is power. But just having knowledge is not enough; the actual implementation of knowledge is what matters. You need to know as much as you can about your deals, especially in the property market when there are hundreds of pounds involved in each deal. You need to be sure of what property deal you are looking at and all the facts and figures to be able to make an informed decision to go ahead on an investment deal.

One way to ensure that you have as much knowledge as possible about the investment deals you do is to focus on buying property in your local area, or in an area that you know really well. If you deal in a wider geographical area then you will admit that it is impossible to fully know the investment potential of a property deal in every area. However, if you concentrate on a specific area, the chances of you having more knowledge and facts about the property are much greater.

Choosing to invest in a specific area allows you to become an expert about the values in that area and helps spotting property bargains much easier. Studying the local market trends and regularly conducting property due diligence on investment deals will eventually make you an expert in your area and becoming an expert will give you a big competitive advantage to ensure that you end up buying the best buy to let deals available. If you do regular studying and research about an area, you will eventually find that you will eventually get a good feel for the local market and ultimately help you make good informed decisions.

The key is to study and research in your chosen area to determine the regular trends and the sales values.  Regular analysis will help you become an expert valuer in your local market and it will help you spot a bargain instantly and help you negotiate the best prices.  You will develop an expertise of the local niche and being an expert of an area of even up to 200,000 people can help you pick up enough good deals to help you profit well and build a solid buy to let property portfolio.

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Understanding Property Values - Before Investing

May 1, 2009 in Property Investment by Kez

Knowing the kind of returns property investment can be tempting enough for anyone to put a significant amount of savings into the property market. This hasty approach can quickly cause the erosion of your hard earned money instead of compounding it if the investment is not made correctly.

Although the property market has the potential to give a good return on your investment, it can be risky if you do not understand the basics of this volatile market. So before you dip in your pocket, remember that the most important thing to succeed in property investment is to understand the value of the property being purchased. It takes a decent amount of well informed research and some experience to be skillful enough to associate a fair value to the property. Taking note of the following basic information will assist you in taking an informed decision.

The best way to arrive at the ballpark figure of the value of the property is to compare it with the recent and current sale price of similar properties in the area. The word which is used in the world of property for sale prices is ‘Comp’ (short for comparable). Once you zero in on the property that you want to buy, compare its price with comp of similar properties (both currently on sale and previously sold). If the listed price is near the comp then you can be practically sure that you are getting the right deal. But before you go celebrating, make sure that the property you are buying is similar in characteristics to that of the comparable properties. In other words the properties you compare against have similar internal characteristics such as the number of rooms and size, similar external characteristics such as garage, garden and parking and the actual condition of the property is similar too. For example, if the property being sold to you is at the higher price than the comparable property and has some extras like a swimming pool, a landscape or extra parking spaces/ garage then the asking may be reasonable.

If the listed price is a significant departure from the comp then you should brace yourself to do some micro comparison. Other factors can also influence the price difference. For example if you do not have the luxury of finding similar properties on the same road for comparison then you may have to look at the next closest road and those properties can quite well vary in price due to factors such as amenities and the local surroundings. You should look more closely at the amenities local to the subject property you are looking to purchase.  Check if the property you are buying has extra amenities features and assess the cost of these extra amenities which are being provided to you. Pick up two properties from the recently sold and current on sale properties which are similar in all aspects and see if the price varies between them due to the local amenities to gauge the way the properties are priced. 

You will also need to take account of current market trends and whether the property market trend is lending itself to lower o higher property prices compared to similar properties in the past. Market trend is a very important factor influencing property prices. The same property that was sold a year ago may well be priced higher if the property market has appreciated in value since then. Conversely the market may be in a correction phase and the same property could be worth less in the current market, so make sure you take the market trend into account.

The process of property valuation may sound simple in theory but to apply it you must have as much information as you can about the homes recently sold or listed for sale in the market. A serious property investor should continuously research the market for the trends in the price by visiting the properties, following property advertisements in news papers or online.

Once you have done enough research into the property market and once you learn how to associate a fair value with a property, you are ready to take a plunge into the world or property investment.

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Buying Investment Property - Basics

May 1, 2009 in Property Investment by John

Repossessed and distressed properties give you the most promising opportunities in property investing. Buying a resale property gives you an opportunity to save some money and then invest this surplus to refurbish it or if refurbishment is not required, invest in a new investment to maximize your investment. However you should exercise caution when you choose any such properties. The important point while making the selection is not to end up buying a house which cannot be repaired. The following principles will guide you in making an informed and wise decision when buying investment properties.

For any commodity the most important factor is to look at the price. Mind you a cheap deal is not always the best deal unless you are able to justify why it is being sold at the price it is. You should do a thorough research to find the seller’s intent for selling it exceptionally cheap. Unless the reasons are obvious you need to investigate thoroughly. A lot of the times the reason for the sale can be genuine which can include the seller is in financial problems or he needs to move out of the place quickly to relocate, has to sell quickly for personal reasons and so on.

The next but equally important factor is to understand the nitty-gritty of the property deal often termed as payment terms and the conditions of the property market. If you are very much sure about the price and the property you are buying then you can go ahead and negotiate an offer below the current market value price. Most sellers are interested in getting a payment in full than being paid on a term basis.

Competition and price trends in the local market are other factors which you should be watching very closely before settling for a deal. If you have a proper understanding of the price trends then you are always in a better position to “bag a bargain”. The surrounding of the property is another aspect which goes into deciding the price of a property. The presence of amenities like parks, security facilities, shopping areas, hospitals etc in the vicinity can drive up the price of the property.

As mentioned above that distressed and repossessed property is the avenue many property investors start with. Most often these houses will require some amount of repairs and you should discount the cost of repairs such that you end up being profitable.

The properties that require minor repairs like repainting basic flooring, landscaping may end up giving you some profits but significant profits come from the properties that are in utter mess but can still be repaired. The reason for this is that such properties are far cheaper in the market and are available at even 40%-50% price of the properties which are in a good shape. Even after investing a decent amount in the repairs such properties leave you with a handsome margin if you go to resell them.

Investing in property can prove to be a great way to earn huge profits provided you are thorough in your research and selection of property.

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