Ask Yourself If You Are Ready

Typically springtime has been the most productive time in real estate and the most popular time to buy or sell property. This does not mean that you need to wait for Spring to bloom before you make a move. Sometimes, for whatever reason, Spring may be an inconvenient time to buy or sell. That is why it is best to use your own personal needs and individual timeline when you are deciding on buying or selling real estate. Sometimes a really good deal can be found in the middle of the winter from someone who really has to sell their home. Or, likewise, if you are a seller and need to get out as soon as possible, you may find that you have less competition by listing in the winter time.

You will also need to factor in your own ability to finance a new real estate purchase and make the monthly repayment fees as well as consider the cost of additional taxes and insurance.

It All Evens Out In The End

Regardless of whether you buy or sell when the market is experiencing a high time or stuck in a low trend the end result could be the same. If you sell your home during a downward trend in the real estate market it is true that you will probably not get as much as you hoped for from the sale. But if you will be buying a new property you can expect to get a really great deal. Likewise if you sell while the prices are up you could make quite a tidy sum for your home, but you will also need to shell out more money for your new home as well.

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The real estate market can be a very delicate field to navigate. Prices tend to fluctuate and what was hot two years ago may not be moving at all in the current market. People may pay a certain amount of money for a home one day, only to find that six months later the value of their home has dropped dramatically and they now are belly up. Or the value of a certain property could rise significantly in a short period of time giving the new home owner a lot of instant equity. In a tough market knowing when to sell, when to buy and when to hold out and wait could save you thousands of dollars

So How Do You Know When The Time Is Right To Sell?

The real estate market will generally follow the ebb and flow of the economy which it is a part of. There fore it can fluctuate between highs and lows, just like the economy does. The best case scenario in real estate sales is to buy a house when the market is experiencing a downward trend and to sell when the market is up.

Buying And Selling Real Estate Is Not Always Convenient

Unfortunately we do not always have the benefit of buying and selling real estate when the market is right for it. People buy or sell real estate when they transfer jobs, downsize the size of their family, increase the size of their family, or just want to live in a different neighborhood. Buyers and sellers do not always have the liberty to make their transactions when the market is at it’s best.

In our next installment we will continue to discuss more about buying and selling property and how to determine when the time is right for making this big decision.

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Too often, real estate investors put their money into a property based on what someone has told them, such as the value will rise or a discount is offered. All too often, investors make a purchase without first establishing a clear strategy, or they purchase the wrong type of investment property to meet their specific goals.

In addition, there are times when an investor will have a strategy they are working with that is reasonable, but then they are distracted by a fresh deal that does not suit their overall goal, or purchasing a property in need of restoration without the means to complete the work.

It is critical that you plan your investment strategy before you purchase your first investment property. When drawing up your plan, you must take into consideration the amount of time, money and expertise that you are willing to put into each property.

Create A Strategy That Works For You

Too often investors try to create a strategy for investment that is too broad. For example, there are investors who will buy individual pieces of real estate in a number of different countries. Although they may be getting good deals, managing finance, legal and tax issues can be difficult.

Instead, it may be better for you to aim for two or three investments at a time, making it easier to watch the overall market. It is best to be an expert in a couple of markets, than to be spread too thinly over a large number of investments.

Be sure to include an efficient exit in your investment strategy. It is extremely important to know how long you plan to hold each property, as well as what it will take for you to sell. Your strategy plan should detail how soon you plan to sell in order to effectively estimate your overall profits.

To sum it up, your investment strategy is very important right from the start - you
must consider:

• How will you invest your money, such as commercial, multi-unit, etc.?
• What are your goals, such as profit and timescale?
• How much time do you want to put into your investment for renovations, etc?
• What is your exit strategy?

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Many people often wonder why they should put their money toward investing in the real estate market when there are so many additional options available. The conclusion that they all soon come to is that real estate investment has always been the strongest form of investment for successfully building an empire.

Leverage

As you may have heard, the majority of millionaires in the world made their fortunes by investing in the real estate market. The main reason that the property market is such a powerful place to build your wealth is leverage. Once you realize this key concept, you will never look back to your life before real estate investment.

If you are experienced in the ways of the property investment world, you know exactly to what I am referring. However, if you are new to the market, you may need a little more of an explanation.

Leverage is the capability to amplify your returns, using someone else’s money. Typically, a bank or some other lending organization will provide the necessary funds to get you started investing in the real estate market.

Investment Options

Once you have the funds to begin your career as a property investor, your next step is to determine the best way to invest your money.

Some people choose to just hide the money away in their local bank. This is because this is considered a safe option. However, with a return of only about 4% or so, in ten years you will have made virtually no progress toward your investment goals.

Another common route of investment is the stock market. The stock market poses as a positive alternative to bank investments with a return of at least 12% possible each year. Although it is more profitable than hiding your money in the bank, the stock market carries no guarantee for success.

The Best Option

One of the biggest benefits to investing in the real estate market is that you are able to leverage a small amount and borrow the remaining cost of the property. Even if the market slows to an average return of only around 6%, you will make an increase on the entire purchase amount of the house, and not just the money out of your own pocket.

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When You Are Ready To Seal The Deal

When you find a property that you want to buy there are some important things to remember:

• If you have a real estate agent that you are working with you must conduct all of your negotiations through that agent. Do not go to the homeowner separately and try to strike a deal.

• If you attend an auction be aware that all purchases are final. You will not be allowed to negotiate the contractual terms or have building inspections done after your bid is accepted. You must have everything done before you place your bid. Once your bid is accepted it is too late to do these things.

• Always get a building inspection and pest inspection done before you buy a new property. It may seem like just another added expense to pay but you will find that it is well worth the time and money to have these done. Knowing what you are getting into before you make a deal by having these inspections done can save you thousands of dollar and a lot of headaches in the future. If you know that the house that you are interested in purchasing has problems you may not want to buy it after all. Or you may be able to negotiate a much lower purchase price as a result.

• Get pre-approved for your loan before you start looking at houses. This will save you a lot of time and energy in the long run and will help you to determine how much house you can afford. That way you will not be looking at homes that are not within your reach financially and you will know how much money you need to have saved for a down payment.

• Decide what type of financing you want to get, whether fixed, variable or a combination of both.

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