Cutting Edge Real Estate. Is There Anything New? Part 1 Cutting Edge Real Estate Is There Anything New? Part 1 By Tim Phelan The world of real estate has pretty much stayed the same for decades. It's no different todaythan it was 50 years ago. The basic principles will never change. Is this true? Only part of ... Investment Real Estate - Time to Unload 1.Tenants - Good and bad can cause problems for a seller. Tenants like to talk whether or not they have any idea of what they are talking about. Tenants have killed deals and have misled buyers to wrong conclusions. Your tenants are afraid of change, they ... Why is China's Real Estate Sector so Popular? The Chinese real estate sector has rapidly grown in popularity with international property investors who seek maximum diversification within their portfolios because the real estate market in China is in demand locally and internationally and demand spans ...
3 Pitfalls to Avoid When Playing in the Real Estate Game
Pitfall Number 1: Don't Overpay!
The whole point in investing is to find properties that are undervalued. How does one find out what is undervalued versus overvalued? Without getting into technical details, the bottom line is you need experience. Yes much like shopping for anything else, real estate is essentially one of the highest ticket items in the shopping center of life. It's advisable to stick with one market, perhaps the one closest to you in proximity as a starting off point. Through your experience and asking the right questions, you will eventually have a feel for the pulse of the market you are looking after, and of course identify what is considered a good buy.
Pitfall Number 2: Know the Market
Yes, you are actually going to have to do more work! This part is really common sense though, but executing it where the beauty and the payoff comes in. How do you make money in real estate? The most basic way is to buy low and sell high. So from the first step, you have identified general trends in the value of homes, and are pretty good at spotting undervalued homes. Assuming you acquire that home, you may want to profit from it by selling it off to someone else for a higher price. How can you do this? Well there are many ways. For one, most markets appreciate in value over time so if you want a longer term approach that will work. Making upgrades to the property will automatically raise the price of the home as well. Think in terms of what the market wants, not what you personally want. You aren't the one buying it; you are trying to sell it to someone else for a higher price than you bought it.
Pitfall Number 3: Know Your Budget
It may be a fine philosophy to go through life on a whim, but real estate is serious business, and thus diligent financial planning and budgeting is critical to your success. Don't worry you don't need to be a finance geek, however you need to be disciplined and know your budget from the onset, or you may be finding you are learning that you need to make certain renovations or upgrades, and didn't anticipate it going over to a certain cost. Think ahead as to what is needed before actually going forth with investing in real estate.
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