Friday, October 29, 2010

Smart Guide to Investment Property

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Smart Guide to Investment Property

Buying a small apartment to rent out can be a good way to accumulate funds so you can eventually buy your own place, in an area where you want to live.
What you'll learn in this step: Sensible investments in property residential or non-residential have many benefits, including capital growth.
Property has been a popular route to wealth for many Australians for many years.
Buying their own home is often the first investment many people make; purchasing another property may well be the second even before shares and other assets.
But your first investment in property neednt be your home.
Indeed, buying a small apartment to rent out can be a good way to accumulate funds so you can eventually buy your own place, in an area where you want to live.
Increasing numbers of young Australians are choosing this route, buying in one suburb while renting in a more desirable and expensive area or living at home for a while longer.
Still others are diversifying into non-residential property via property trusts and syndicates.
Sensible investments in property have many attractions.
Property can be less volatile than shares though not always and it tends to be regarded as a safe haven when other assets are declining in value.
It has the potential to generate capital growth (an increase in the value of your asset) as well as rental income.
Then theres the tax advantages associated with negative gearing (more about that later).
However, as with any investment, there are no guarantees.
Property prices go down, as well as up, and sometimes tenants are hard to find especially good ones who pay on time and take care of your investment.
Investors need to have a keen awareness of the interest rate environment how higher rates might affect their expected net return and the market for their property should they wish to sell.
They also need to make sure the return or yield from their property stands up against the return they might have achieved had they invested in shares, for example.
Of course, you dont have to make a direct investment in property.
Pooling your funds with other investors in managed funds with a property focus, listed property trusts or property syndicates provides exposure to a broader range of property including commercial, industrial and retail as well as residential often with a smaller investment required.
Many financial advisers would argue that too many Australians let direct investment in residential property dominate their portfolios.
In theory and this is far from reality for most people property should account for perhaps 10 per cent of an investment portfolio.

Concepts: investment, Smart Guide, loans, buying, funds, shares, font, savings, FINANCE, assets, Australians, property trusts, syndicates, rent, portfolios.

Tuesday, June 1, 2010

Real Estate Investors Discover Forex to be a Better Deal During Bubble

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Real Estate Investors Discover Forex to be a Better Deal During Bubble

By Scott Shubert

Every day we read more news about the real estate "bubble" and how prices are leveling off or even dropping around the country. Naturally this news makes many real estate investors more cautious about buying. Flippers are no longer able to rely on rapid appreciation in order to make their profits. Investors who buy and hold or lease option properties are wondering if their deals will earn any profit in the next 2 to 3 years and many wonder how long they will have to hold a property to realize any profit. Many investors have discovered that they may be stuck with a property they cannot sell for a profit and cannot rent with a positive or break even cash flow now that real estate is just not selling the way it was in the recent boom cycle. Some investors are considering other alternatives and either holding off on further buying or getting out of the business altogether until there are signals that the market has reached the bottom of its current correction.

Accelerated Wealth Through Forex Trading

While it is currently uncertain as to whether real estate prices will see any rise over the next few years some investors have chosen to postpone any further buying activity and look at other alternatives. One of these alternatives that has become quite appealing to some is Forex trading. Investors who have been taught the power of leverage through "no money down" buying strategies quickly understand the power of leverage in the Forex market. Forex trading is one of the few businesses in which one can start with a relatively small amount of capital and within a short period of time begin multiplying that capital into a larger and larger numbers. Some traders who have mastered this business have taken accounts from $1000 to over a million in one year. Not only would that be extremely difficult to achieve in real estate, in most cases the equity that is achieved in real estate is not necessarily liquid.

No "Down" or "Bear" Market in Forex

"Forex" is short for Foreign Exchange or the currency market. Because currencies are traded in pairs such as the Euro vs. the U.S. Dollar traders are never stuck with a downward trending market. If the Euro's value is falling relative to the U.S. Dollar the dollar is rising relative to the Euro and vice versa. A trader may buy or sell the currency pair at any time and profit is earned by trading in the direction of the movement whether it be up or down. If a Forex trader believes the Euro vs. the U.S. Dollar pair will rise she will enter a trade position of buying the pair. In this case Euros are being bought and dollars are being sold. If the trader believes the pair will fall he will simply enter a trade position of selling the pair. For trading purposes it makes no difference whether the pair is rising or falling. Buying and selling are both executed the same with the click of a button and profits can be seen immediately as the pair moves in the direction of your trade.

100% Liquid Market

The Forex market is the largest market in the world and it is driven by banks and institutions as well as managed funds and individual investors. A currency represents and entire nation's economy and it is not possible to manipulate the value of a currency the way it sometimes happens in the stock market. Because banks throughout the world always have an exchange rate for currencies there is never a time when a Forex trade is not totally liquid. A Forex trader does not need to wait for a broker to locate a buyer because a trade is always immediately closed with the click of a mouse. Transactions are settled in cash that appears in the trading account immediately when the trade is closed.

What is the Risk?

Often we may hear that trading Forex is risky business. There are risks and expenses involved in any business. One of the benefits of starting a Forex trading business is that a trader can open a demo account and trade while learning the business without ever risking any real money. Only when the ability to trade profitably consistently over time has been demonstrated should a live account be opened. One of the most important aspects of learning to trade is using proper money management and risk management. Successful traders know how to identify trading opportunities and they know exactly how much to risk on a given trade. Win to loss ratios and risk to reward ratios are a part of trading just like knowing what products to stock are an important part of the retail business. If you hear of people who lost their trading capital while learning to trade you can be assured that they did not 1. learn to trade before opening a live account and 2. use proper money management and risk management.

How to Learn More about the Forex Trading Business

There are many sources of information on Forex trading available all over the internet. Unfortunately, very little of it is really effective in helping people to master the business of trading. Most of the information available is connected either directly or indirectly with the Forex Broker industry. And as many traders have discovered, the methods being promoted are often designed to benefit the brokers more than the trader. Is there any way to bypass the process of trial and error and really save time on the learning curve that is required in Forex trading? Entrepreneurs who have been successful in other businesses know the answer to this question.

Find people who are already successful in the business of what you intend to do and do what they do. Mentors and mastermind groups provide the key to the fastest route to success. Just be aware that many "mentors" and training companies are connected with the broker industry as Introducing Brokers and they have a vested interest in teaching trading strategies that may not be in your best interest. For more information you may want to discuss the credibility of training programs with other traders in a trading discussion forum or at a trading club in your local area.

Scott Shubert is the founder of www.TradingMasterMind.com , a community of traders who share insights and results to contribute to the success of the entire community.

Article Source: http://EzineArticles.com/?expert=Scott_Shubert

http://EzineArticles.com/?Real-Estate-Investors-Discover-Forex-to-be-a-Better-Deal-During-Bubble&id=368079

Thursday, April 15, 2010

Investment Property Jargon Explained - CAP Rates

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Investment Property Jargon Explained - CAP Rates

By Ian F. Campbell

If you are looking to buy some investment property you are sure to meet a barrage of jargon, from R.O.I. to A.P.R., to capitalization rates to net operating income.

Finding your way round the accountant-speak is essential if you are going to plan your property purchase thoroughly.

Doing a little research could make a big difference to the rental income you can achieve or the capital gain you can expect, two important factors for any investment property.

Of course, you could pay a financial adviser, lawyer or notary to do all the work for you, but it's actually not that complicated and this short investment property glossary series should help as a reference guide.

In each part we look at a different piece of investment property jargon. In this, the first in the series, we look at CAP or Capitalization Rates.

CAP or Capitalization Rates

CAP or Capitalization Rates are a way of calculating how fast an investment property will pay for itself. The higher it is, the quicker you make your money back.

The first step is to work out the sales price, if you have bought the property already you can just use the total price you paid for the investment property including closing costs and other fees.

If you haven't bought it yet, use the asking price and add your expected costs.

The next step is to calculate the property's Net Operating Income (N.O.I.). Take the monthly rent that you hope to charge and times it by 12 months, to work out the annual rental income.

Next, work out the monthly operating expenses per month and also multiply them by to find the yearly cost. Then, simply subtract the operating expenses from the rent total to find the Net Operating Income or N.O.I.

When listing expenses be sure to include everything, including maintenance, reserve fund, trusts fees (if applicable), association fees, reserve fund, management, property taxes, insurance, etc.

Finally, all you need to do is take the N.O.I., divide it by the investment property price and multiply by 100 to turn it into a percentage.

Let's take an example: if you think you can rent your property for $3,000 per month, then your annual income would be 12 x $3,000 = $36,000.

Then, if your expenses are $600 per month, that would be $7,200 per year and your N.O.I. would be $36,000 - $7,200 = $28,800.

Divide 28,800 by the purchase price, say $300,000, multiply it by 100 and you find your CAP rate is 9.6%.

This CAP rate is essential for comparing the profitability for your choices of investment property.

Article by Ian F. Campbell at Investment Properties Mexico, experts in Mexico real estate.

Visit their website to find out more about the what Mexico can offer you in terms of investment property.

Article Source: http://EzineArticles.com/?expert=Ian_F._Campbell

http://EzineArticles.com/?Investment-Property-Jargon-Explained---CAP-Rates&id=4076855

Sunday, February 14, 2010

Six Rules When Buying an Investment Property

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Six Rules When Buying an Investment Property

By Mark A Walker

Investing in properties is a good way to make money and build up your net worth. It is a very safe option of getting rich over the long term, as real estate values generally increase over time. However, returns are not very fast and you have to wait for considerable time before you make substantial money from real estate. To make the most of your investment into real estate, follow the six simple rules below.

: When purchasing investment property, look into your areas expertise and knowledge. Do you know about vacation homes, single-family homes, multi-family buildings, or commercial properties? You should know how and when to sell the property to earn the highest returns. If you are unaware of all rules and regulations relating to that property type, you may not be able to sell the property at a high profit.
: It is not essential to sell an investment property immediately after purchase. You can hold on to your investment until real estate values increase and then sell the property. Sometimes, it is best to bide your time and wait for real estate booms to sell and earn good profits on your investment. Another opportunity is to make suitable renovations and sell the property at an escalated price to earn very good returns. Property values increase over time and net worth of your investment increases. You can invest in real estate to receive a regular income from rent while you are waiting for property values to rise.
: Purchase your investment property in an area experiencing higher growth than other local areas. Inspect properties in different areas and choose those that satisfy necessary requirements. If you plan to invest in the property for several years, look into how the area will develop in the next few years and whether you can receive desired returns. You should have sufficient foresight and knowledge of the area.
Visit local councils and research what developments are happening in the vicinity in the near future. Drive around and scout for development and other area investments. Check the property is located near essential amenities like schools, hospitals, banks, transport, and supermarkets.
: Your investment property yields good returns if there is sufficient rental demand for the property. Renters should be interested in renting the property. Normally, rental demand is high in densely populated areas like cities. Countryside locations do not have high demand and rental income could be substantially less.
: If you want to make money from real estate investing, choose properties that are being sold for less than the current market value. These properties may not be in the best shape and condition, so plan to incur repair and renovation costs. Before buying, hire a renovation consultant or home inspector to evaluate the cost of all repairs and renovations. Decide on the purchase price after deducting all additional costs. Ensure you can make a good profit when you sell the property after the renovation is complete.
: Investment property purchase requires strong financing. You may not be able to pool the entire cost, so consider the options for property loans. Assess all your mortgage options, so that you do not have excessive burden of repayments. If you are renting the property, apply the rent directly to the mortgage. Select a mortgage that can be repaid from the sale of property without additional fees or penalties for early repayment, especially if you plan to resell the property quickly.

Real estate investing for profit is a good option to earn money if you are an educated real estate investor. Investing in real estate is wise and can give even conservative investors high returns in the long-term. Renting the property while waiting for the best time to sell will increase your current income and cover the mortgage repayment costs.

Real estate is a complicated market. Even more so thanks to economic slips and slides.

The best way to survive it is to save thousands buying a home. We've got the ultimate inside scoop on http://www.EdmontonHomesBlog.com.

Article Source: http://EzineArticles.com/?expert=Mark_A_Walker

http://EzineArticles.com/?Six-Rules-When-Buying-an-Investment-Property&id=3717013

Steps to Freedom

Friday, October 29, 2010