ust because real estate prices rising, are prices falling
prices seem to have hit a or have they reached a peak. You
temporary ceiling in many need to know where the curve of
countries around the world, that the property market cycle is at
doesn't mean that profits from in your preferred investment
property investments are hard to area.
come by.
2) Get ahead of the curve - as a
Even during a real estate market basic rule of thumb, professional
slowdown, stagnation or real estate property investors
depression profits can be made seek to buy ahead of the curve.
locally and overseas. This If a market is rising they will
article shows you the top ten try and target up and coming
tips that real estate investors areas, areas that are close to
apply to their property portfolio locations that have peaked, areas
building strategy to ensure close to locations experiencing
success from their investments. redevelopment or investment.
These areas will most likely
1) Research the curve - the become ‘the next big thing' and
concept of a property market those who by in before the trend
cycle existing is not myth it's a will stand to make the most
fact and is generally accepted to gains. As a market is stagnating
be based on a price-income or falling many successful
relationship. Check the recent investors target areas that
historical price data for enjoyed the best levels of
properties in the area of the growth, yields and profits very
country you're considering early on in the previous cycle
purchasing in and try to because these areas will most
determine the overall feel in the likely be the first areas to
market for prices currently. Are become profitable as the cycle
begins turning towards positive property investment and diversify
once more. that real estate portfolio for
maximum success.
3) Know your market - who are you
buying property for? Are you 5) Purchase price - set yourself
buying to let to young a budget that will realistically
executives, purchasing for allow you to purchase what you're
renovation to resell to a family looking for and profit from that
market or purchasing jet to let purchase either through capital
real estate for short term rental gains or rental yield.
to holiday makers? Think about
your market before you make a 6) Entry costs - research fees,
purchase. Know what they look for charges and all expenses you will
in a property and ensure that is incur when you buy your property
what you are going to be offering - they differ from country to
them country and sometimes even from
state to state. In Turkey for
4) Think further afield - there example you should add on an
are emerging real estate property additional 5% of the purchase
markets around the world where price for all fees, in Spain you
countries' economies are going will need to factor in an average
from strength to strength, where of 10% and in Germany fees and
a growing tourism sector is charges can be in excess of 20%.
pushing up demand or where Know how much you will have to
constitutional legislation has incur and factor this amount into
been or is about to be changed to your budget to avoid any nasty
allow for foreign freehold surprises and to ensure your
ownership of property for investment can become profitable.
example. Look further afield than
your own back yard for your next
7) Capital growth potential -
what factors point to the 9) Profit margins - what levels
potential profitability of your of capital growth can you
real estate property investment? realistically gain on your
If you're looking overseas at an property investment or how much
emerging market, which economic rental income can you generate?
or social indicators exist to Work out these facts and then
suggest that property prices will work backwards towards your
increase? If you're buying to let initial budget to work out your
out are there any indications to potential profit margins. At all
suggest that demand for rental times you have to keep the bigger
accommodation will remain strong, picture in mind to ensure that
increase or even decline? Think your real estate investment has
about what you want to achieve good potential for profit.
from your investment and then
research and find out whether 10) Think long term - unless
your expectations are realistic. you're buying property off plan
and intending to flip it for
8) Exit costs - if you will incur resale and profit before
substantial capital gains completion you should view real
taxation liability if you sell estate investment as a long term
your property investment for investment. Real estate is a slow
profit, will that render the to liquidate asset, cash tied up
investment profitless? In Spain a in property is not simple to free
foreign buyer can incur up to 35% up. Take a long term approach to
capital gains tax, in Turkey on your property portfolio and give
the other hand property sales are your assets time to increase in
capital gains tax free if the value before cashing them in for
underlying real estate has been profit.
owned for four or more years.
About the Author:
Rhiannon Williamson is a freelance writer whose articles about property investing and emerging real estate markets have appeared in publications around the world. She is currently working on a brand new property investment resource http://www.amberlamb.com/
Source: www.isnare.com
