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Tuesday, July 17, 2012

Making Your Investment Count: Real Estate Investment

Real estate investing engrosses the purchase, management, ownership, rental and sale of real-estates for profit. Upgrading of property as an element of a real estate investment plan is usually considered to be an area of real estate investing commonly known as real-estate development. Real estate is considered an asset form having narrow liquidity relative to other forms of investments; moreover, it is capital intensive and is very much cash flow reliant. If the investor fails to understand and mange these important factors well, real estate can be a risky investment. The chief cause of investment letdown for real estate is that the investor realizes negative cash flow - and not the ever sought positive cash flows - for an unsustainable period of time, often forcing them to dispose the property at a loss.
An analogous practice identified as flipping is one more reason for failure as the nature of the investment is habitually linked with short term profit with not as much of effort.
Primarily, prospective investors like you have three ways of making money from a real estate investment (property purchase). You may lease the property for a long period at rental income that exceeds the cost of holding the same asset. The second option is to buy the property with the intention of refurbishing it to considerably enhance its value and selling it quickly thereafter. The third one is to find properties whose owners need to liquidate hurriedly and at a generous sacrifice to equity. You can get your hands on these properties and straight away sell them for a significant profit.
For all intents and purposes, these three theories have made more millionaires and even billionaires than any other type of business enterprise in human history. However, more individuals still do real estate investment and end up losing against the fact that real estate a more secure investment than the stock-market.
So how can you make your real estate investment count?
The first step is to understand the process. Read books, journals, blogs and magazines about real estate investments to help you learn the fundamentals. You surely don't need to be an expert in real estate investment to succeed, but you must understand the process.
The next step is finding the properties. With some assistance from the real estate professionals, decide the type of property (apartments, office blocks, or mansion) which suits your financial position and risk profile.
When you are sure you got the best type of property to exploit your return, you can now search for your investment. Here, the internet may help you identify these properties. You may also check the property listings in your daily newspapers and property magazines.

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