Over the past 20 or 30 years, the number of homes bought and sold as investment property has continued to rise. In a recent year, one home of every four was sold as an investment property rather than only as a family home. The main reason for the interest in real estate as an investment – increase in prices have made investment a profitable business.

In this same period of two or three decades, the number of real estate investment programs and systems has made buying property possible for anyone willing to spend a little time studying the steps. One of the most popular methods used continues to be “flipping.” When most people think of flipping as an action, they think of it being quick. That is at the heart of the method.

Those who focus on flipping homes or other property buy the property and sell it as soon as they can, for a profit. Some have found this to be an excellent way to generate cash flow, and eventually they use the capital for larger investments that may take a bit more time to resell. One of the keys to successful flipping, of course, is the ability to buy a property with a buyer in mind. This can be risky for a couple of reasons. If the investor does not have sufficient capital and the property doesn’t sell right away, further investment can be difficult or impossible. Even with strong working capital, an investor can be caught holding a property if the prospective buyer or buyers change their minds.

Any real estate investment plan must be carried out with attention to detail. With flipping or with long term investing, all prices should account for tax costs, insurance, service charges, maintenance and repairs. A quick turn of property by flipping, that might otherwise include a solid profit, can go sour if unseen costs or buyer demands add to the expenses.

Some folks combine the overall increase in real estate value with a rental program that can take care of most, or all, of the costs of owning property. However, this method of investment does have added factors. While a profit can be made in the future with the sale of the property, the months or years as a rental property will include time and money for finding renters, overseeing maintenance and so on. Successful rental property managers urge a great deal of patience and preparation when entering the rental property industry.

Foreclosure property is another avenue traveled by some in the real estate industry. This method can generate excellent profits, but may require significant capital and the ability to tolerate risk. If an owner cannot make payments for a period of time, the bank or other lender may foreclose, giving the customer a period of time to come up with a solution. If an investor comes along with an offer that will solve the original owner’s problem, a sale can often be arranged. But this type of investment method should never be undertaken without solid planning and attention to detail. Whether the investment system involves flipping, renting, foreclosure or “paper” investing with several others, patience and planning are absolutely necessary.

Peter Mason’s web pages can be found on plenty of websites linked to Cheap Flight to Malaga Spain and La Manga. His articles on alicante property for sale can be discovered on http://www.alicante-spain.com

Investors are quickly having to learn to diversify their real estate portfolios and get smart about the purchase and sale of properties. Unfortunately, dealing in real estate is no longer as “cut and dried” as it once was. It used to be quite simple, the market was incredibly strong, you bought low and sold high. No problem. But then, the market changed and lost some of the momentum that it once had, there was no longer competition for every available home! So what was the answer? Go after the homes that aren’t built yet!

Pre-construction has developed into one of the best place to put your real estate dollars. With the amazing number of buildings going up in just about any city, developers are anxious to get their developments sold before the construction phase is complete. To facilitate this need, they are typically offering great incentive packages to entice buyers to pre-buy units. This kind of sale usually applies to high-rise condo complexes as with many units to sell, buyers can cover their costs quickly and buyers get a great deal on a new home or rental property. But aside from the incentives, what are the good reasons to invest in something that is not yet completed? Appreciation.

The numbers show that once a complex is complete and ready to be inhabited, the value of units appreciates rapidly. It is this appreciation that is so attractive to investors and across the country many are seeing as much as 40-50% increases in the value of their properties. This makes an attractive offer to those who want to buy low and sell high. Usually when purchasing pre-construction one can find units for less than market value and with some time to breathe as most payments are not due until completion. Once completed if an investor can resell the unit for 40% over what they paid then the whole process and wait has been entirely worthwhile.

Adam Coyle is a representative of Smith Bowden Real Estate serving the Madison, Wisconsin real estate community. Smith Bowden specializes in helping buyers invest in properties and expand their real estate portfolios. For more info check out http://www.smithbowden.com

Part of the reason for the shift away from package holidays towards independent travelling is down to the ease of booking on the internet. But another important reason is that the standard of finishing and decor at holiday homes tends to be far superior to those in hotels in the same price range, meaning that families get more from their money by arranging their own holidays.

This shift towards independent travelling has not gone unnoticed by those wishing to invest in property overseas. In the past many purchasers quoted capital growth as the main reason for buying a holiday home. However, more people are taking notice of the fact that there is a real business opportunity in owning property abroad from rental income too. Overseas estate agents Savills questioned 12,000 owners of property abroad and found that capital growth was the primary reason for purchasing their holiday home. However, many were aware of the business potential of offering holiday lets at their properties but for whatever reason had not turned that awareness into reality.

Indeed, a recent survey by YouGov highlighted that almost 30% of all people who own second homes abroad choose to stay there only twice during the year, leaving the property empty for most of the year. That amounts to a significant lost opportunity as a reasonable amount of income could be generated via holiday rentals. Obviously, capital growth and the freedom to be able to visit their holiday home whenever the mood takes them is what is most important to that type of investor, but they are aware that they be missing out on the opportunity to have most of the costs on the property paid for by holiday rentals.

As almost 49% of people buying second homes abroad do so using a mortgage, they would obviously be more at risk from any currency fluctuations and a downturn in occupancy rates if they were reliant upon high occupancy funding their loan repayments. However, for others in a more fortunate financial situation, income from holiday rentals would represent a real opportunity to add additional funds to their capital investment pot – a fact that a lot more investors have caught onto lately.

One of the keys to successful property investment is gathering information before committing money to any potential “deal.” Of course, the home or building should be carefully inspected for physical problems beforehand. Tip: Don’t rely on memory when inspecting property. Hand-written notes on a small notepad is much better than making no notes at all. The more detail included in your survey notes the better.

If there are problems with plumbing that you see as a non-professional, make sure to write this down and consult with a plumber or contractor. If the roof looks well worn and you suspect leaks may be present, make note of this and have the roof inspected thoroughly. In fact, after a good walk through with family members, hiring a professional home inspector might be wise. This person can use experienced eyes to locate potential problems before bringing in a plumber, electrician or other construction pro. Part of the inspection service could be an estimate of how much work needs to be completed and how much it might cost. But remember this is just an estimate. The plumber or other service person may have a different cost figure!

Location is a primary factor in the success of any real estate investment program. In general, investors should purchase in the best location affordable, with an eye toward highway access, schools, stores and other amenities. It may even be a good idea to talk with someone at the community police department, to get an idea about crime and other problems.

Most experienced real estate investors will urge those new to the business to avoid making decisions with their heart. Being sentimental about a property is not a good reason to make a purchase. This is far from true investment. Investment decisions are made based on numbers, costs, location and so on. Study the market to get an idea what houses and buildings cost in particular locations. In addition, this research will give you some basis for establishing a price when it comes time to sell.

Many investors who do not last in the real estate business fail because they don’t plan well, don’t research well and/or because they started their venture without sufficient capital available. Having just enough to buy a fixer-upper, without additional funds for repair, advertising etc., is a recipe for trouble. It may be very difficult to sell a home that is in need of repair, unless the seller is willing to settle for little or no profit!

When calculating the cost of buying, maintaining and reselling a home, always include loan costs, interest, repair costs, taxes and so forth. Many a profit has been trimmed to little or nothing by expenses that were not figured in from the start. Be extremely careful with that first Torrevieja real estate venture and the profits can send you toward a successful business.

Being really interested in Torrevieja and Altea, Ken Morris edited a lot of articles in this particular field. Through his publications such as http://www.alicante-spain.com/torrevieja_property.html, the author established his expertise on ideas associated to property in torrevieja.

Another thing you should know that can make a property not worth investing in is if the property is infested with termites. If a termite infestation is bad enough it can take a lot of money to repair the property. Sometimes it can be more than the property is worth. It is recommended that you get a professional exterminator to look at the property before investing in it. The exterminator will let you know if there is a termite infestation and how bad the infestation is.

One last thing you should know that can make a property not worth investing in is the state of the foundation. If the foundation of the property is cracked or sinking this can mean a big problem. When a property foundation is cracked or sinking it could mean that this property is unstable and over time if left uncheck the property can collapse. It is also recommended that you get a professional to inspect the foundation of the property. Investing in real estate to repair and sell can be profitable if done right and you know what things to avoid.

A good web site where you can see more information on topics like this is Real Estate Facts which is highly recommended. Another article witch is also recommended is Using A Good Faith Estimate Thank you and enjoy.

Article Source : Things You Should Know That Can Make A Property Not Worth Investing In

A lot of our clients have opted to buy homes pre-construction because they need time to sell their current home. Building a new home in Charleston usually takes anywhere from four to nine months. We have found that new construction is the best way for people to go ahead and buy a home (reserving a price in the market) but also postpone their closing date (giving them time to sell their house). Along the same lines, most builders only require you to put down a small amount (anywhere from $1,000-15,000 depending on price of house) upfront. After you make this payment, you don’t usually pay any more until the house is built and you close on it. So, if you are still making mortgage payments on your current home, you don’t have to worry about making double mortgage payments until the time that your house sells. Also, if you are an investor, it would be beneficial for you to try to not close for a while so that you can capture the appreciation of the home.

Another benefit of buying homes pre-construction is that you know your home will be low maintenance. Builders are required by law to give specific minimum warranties to ensure that you don’t face any major problems during the first few years of living in your new home. One of the warranties is a minimum of 1-year “bumper to bumper” warranty which ensures that everything in the home is covered by the builder. There is also a 2-year warranty that covers all systems (electrical, plumbing, heating and air conditioning, etc.) in the home. Another warranty is the 10-year structural warranty which covers foundation and other structural problems.

An obvious benefit of buying pre-construction homes is that you get to choose many features in your home. Depending on the progress of construction, you can often choose flooring, cabinetry, light and plumbing fixtures, etc. You can either go with the upgrades, or you can keep the standard features in order to keep costs down. If you are buying a home during the early phases of development, you can usually choose which floor plan you want to use and even which lot you want to build on.

Although there are plenty of benefits of buying new homes, there are also some drawbacks. New construction homes sometimes sit on smaller-sized lots compared to older homes. Older lot sizes in Charleston are typically about 1/3 of an acre, while newer lots are generally ¼ of an acre. These averages vary according to area, and you’ll find larger lots in general in areas that are farther out in Charleston. Another drawback of pre-construction homes is that you don’t have a definite closing date. Due to weather and building permits, the builders don’t always close on time. A third drawback is that people can’t always walk through the house and see how it looks before you buy. New construction neighborhoods almost always have a model home to show you examples of finishings and upgrades. Although these homes have different layouts and features, they can still give you an idea of the quality of work you can expect from the builder.

Lee Keadle is a full-time real estate agent in Charleston, SC. He works with a team of three agents to give buyers and sellers the best services possible. You can search for homes and vacant land on our website at http://www.SearchForCharlestonRealEstate.com

The following are the main types of real estate investment properties that are suitable for beginner investors:

• Preconstruction Investment Property: These types of investment properties are acquired directly from a developer before the construction or renovation is completed. In return for commitment to buy even before the construction is completed the developer will give you a price discount and/or other financial incentives.

• Fixer Upper Investment Property: These types of investment properties are the ones which are in ugly condition and need renovation. These properties are acquired by real estate investors to flip them after fixing-up. In majority of the cases these properties are in foreclosure, or are bank owned properties (called REO which stands for Real Estate Owned). Some beginner investors also wholesale distressed properties to other investors without fixing them up. Real Estate Investors who wholesale make a smaller profit but are able to exit the deal fast and with low risk.

• Foreclosure Investment Property: These types of investment properties are the ones which you buy from sellers who are behind in their payments and may lose their property to the bank via foreclosure.

• Income or Cashflow Investment Property: These types of investment properties are the ones which generate rental income for the real estate investor. These are mainly apartments buildings and rental houses. This type of investment property is sometimes also called Income property, Rental Investment property or Cash Flow Property.

• Investment Property with Flexible Terms: These types of investment properties are the ones which can be bought with no money down or with very little money down. Seller of such properties are very flexible with their contract terms and are willing to make the sale easy for the buyer. Land Contract (also called Contract for Deed), Owner Financing, Lease Option (also called Rent to Own, Lease Purchase, Lease to Own, Lease to Buy etc) and other similar strategies fall under this category.

Most other types of real estate investment property deals are not suited for beginner investors. They are too risky or too complicated for beginners. My recommendation is to choose the type of deals beginners want to do and become very good at it. Master all the steps from finding the deal to exiting it, and become the best. If starters can follow this simple principle I definitely see them more likely to be successful in real estate investing.

For more information on real estate investment properties & real estate investing please visit http://www.locatere.com

Your Capital Growth on the property would look as follows:

Year 1: 100 000 + 10 000 (10% growth) = 110 000
Year 2: 110 000 + 11 000 (10% growth) = 121 000
Year 3: 121 000 + 12 100 (10% growth) = 133 100
Year 4: 133 100 + 13 310 (10% growth) = 146 410
Year 5: 146 410 + 14 641 (10% growth) = 161 051

Case 01: You use your own personal savings to finance your acquisition

In this case you would have made no more than the average rate of property inflation. In other words, you would have made a return of 10% per year plus of course any rental income that you may have received less any property related expenses that you may have incurred.

Your initial investment of 100 000 would have yielded a return of 61 051. This is a rather poor return on investment of only 61% over the 5 year period.

Alternatively you look at the advantages of leverage or as it is also commonly referred to as gearing.

Case 02: You put down a 20% deposit and use the banks money to finance the balance

In this case your investment would have cost you 20 000 of your own money and 80 000 of the banks money. The trick of course is to try and find property that will yield a rental return that will cover your bond repayment as well as any costs that the property may incur.

Having used the leverage of the banks money, your initial investment of only 20 000 would still have given you the 61 051 return. This gives you an excellent return on investment of 300% over the same 5 year period.

My Conclusion:

Although these are overly simplified figures, they do show the general underlying advantage of using the banks money as apposed to your own. In case 2 you could theoretically have applied your 100 000 to purchase 5 properties and then made 61 000 on each of them.

What is however important to remember is not to over do it. Don’t leverage or gear your properties to such an extent that it creates a cash flow problem for you. Try balancing your investments so that the rent you receive can cover your bond repayments as well as any additional monthly costs that the property incurs. You may have to suffer a slight shortfall for the first couple of years, but as the rental escalations start to come through you will soon be breaking even and after a while you will begin to make a monthly profit. At this stage, rather than starting to declare a taxable income, it may well make more sense to refinance the property and use the proceeds to expand on your portfolio. After all the real money is to be made in the capital growth and not the monthly rental income that you will receive.

This article was compiled by:
Bradley Hancock – Founding member of PPI

Portfolio Property Investments (PPI) is a web based property investment company that offers its clients expert advice on property market trends and specializes in putting together offshore property investment packages on behalf of their client database. It is also possible to subscribe to their monthly newsletter that is aimed at keeping their clients up to date and ahead of any developments in the global property markets. You will also find that they offer a number of useful property investment tools as well as an email notification system that one can register for and be the first to receive the latest property investment opportunities as and when they get listed.

Bradley can be contacted on the following:
Email: bradley@portfolio-property.com
Tel: ++27 72 0196192

Or visit their unique property investment website at:

http://www.portfolio-property.com/

The first rule of thumb when it comes to becoming a professional real estate investor is buy low and sell high. Wow what a break through concept! Lets take a look at what the reality is. Right now as the real estate market is tanking, according to some people, the professional are starting to come in and buy everything up. What are the hobby investors doing? They are panicking and dumping their high priced investments that they bought right before the market tanked.

The professional investors are getting wholesale priced real estate at incredible terms. The hobby investors are giving away their properties at incredible terms, lease options, rent to own, no bank qualifying etc. This isn’t exclusive to real estate…the same thing happens with the stock market and the hobby investors always wonder why they are losing money. The hobby investor waits that the market is going up and looks like a safe risk before jumping in the game. The professional investor makes up the rules to the game and makes money on the follies of those that don’t understand what the rules are.

Buy low and sale high. Why is that concept so difficult to grasp?

To move from hobby investor to professional investor you first need to determine your own personal why. Why you are investing. Why you are willing to learn the game. Why are you willing to risk the little or lot that you have acquired over your life? Once you have determined your why then you need to solidify in your mind that you are going to do whatever it takes to reach your goals, but more importantly that you are going to do it right. Cutting corners is never a good idea especially when you don’t know where the corners are.

From there you need to assess what tools you already possess and what you need to learn and then be determined that you are going to get the investing education that you lack. You can do this in two ways. Trial and error or get some help. Trail and error is a very difficult road to take, trust me I know. It is only a mater of time before you will make a critical error that will end up costing you more than you want to pay. For some, trail and error has cost them everything (house, cars, family etc.).

For your sanity and your families well being work with a mentor or a coach. Start by looking in your local investment club for a mentor. Yes you will have to get off of the easy chair to become a professional investor. If you don’t have confidence in the mentors that may be available look for a real estate investment coach. Make sure that the coach that you get is working the program that they teach and is already successful. There are many programs out there and their focus may not be real estate investing so make sure that they are focused on real estate investing and that they will guarantee a return on investment.

The areas that are critical for a successful real estate investing career are first and foremost do your due diligence. Due diligence includes market analysis (learning what the market is doing, what areas are good for rentals, which are good for rehabs, etc.) and property analysis (learning to run the numbers on what the true costs are of buying a property and what the net will be at the end regardless if it is a rental or a rehab). Then you must understand negotiations (creating win/win agreements), creative financing (using other peoples money to make you money), contracts and offers, property management, and the tax benefits.

If there is one thing that I want you to take away from this article is to develop a team of professionals around you. That team will include real estate specific accountant and attorney. An experienced property manager, real estate agents/brokers and finance people (mortgage brokers, hard money lenders, etc.). Be the dumbest person on your team, meaning work with highly skilled and intelligent people that will increase your investing IQ. If you are the smartest person on your team then it is time that you change the team players because they won’t be able to help you.

If you are thinking to yourself right now that this sounds like too much work then do yourself a favor…stay away from real estate investing because you will lose money. Once you have master these areas then you will understand that professional investors can make money in any market. You will quickly move out of being a hobby investor into becoming a professional investor and allow yourself to reach your goals your reason why. That reason why is why you are doing this in the first place.

By Will Marsh

Will Marsh has been involved with helping sellers for the past 9 years sell their properties internationally. He has focused mainly on Argentina in South America and has a unique perspective of how different cultures interact differently. He has also been a real estate investor over the past 5 years, which gives him a bird’s eye view of both sides of the real estate sales model and enjoys sharing his knowledge with others

www.worldwide-propertysales.com

Recently I was asked by a reader of my Lease Purchase Times © newsletter where he could find good generic Lease Purchase contracts.To me that is like asking a neurological surgeon if he can recommend a do it yourself brain surgery kit and combination salad maker!

I advised the reader that there are generic contracts from several sources. One such source is your local real estate agent or office. They have the multi-purpose fill in the many blank type forms. The question remains, however, are they any good or even WORTH THE PAPER THEY ARE WRITTEN ON ?

My handy Law Dictionary defines Generic as follows: Something not specific or not referring to a specific thing. Generic contracts are just that generic. They are designed with the one size fits all concept. In reality, they are not designed to protect you or your interest in the particular Lease Purchase transaction with which you are currently involved. I have collected many of these so called generic Lease Purchase contracts for years; Not only have I received contracts from Realtors and stationary stores; others came from the get rich quick, while staying in bed all day, books and seminars. They all have one thing in common. They are garbage ! They are poorly written and lack the necessary clarity and/or specific verbiage inorder for the contract to be enforceable. I have designed and utilize 8 specific contracts for my own Lease Purchase deals. Which one I use is determined by the hat I am currently wearing at the time. Am I the Landlord/Seller, the Tenant/Buyer or the Assignor/Assignee? Will I be Subletting, Assigning, Sandwiching, Pure Optioning or just quick flipping , bird dogging, networking or consulting ?

TIP: I always carry a couple copies of my Lease Purchase Contracts in my cars trunk right next to my earthquake/Wildfire emergency kit* compartment. An investor is always prepared especially if you live in Southern California!

Here are a few suggestions for items that should be contained in any Lease Purchase Agreement. Some of these may seem like obvious inclusions. Having been involved in Lease Purchasing for many years now, I can tell you that the obvious is not always so!

1. Identify the principle parties: Who is the Tenant/Buyer and who is the Landlord/Seller? It might even be a good idea to do business as a corporation.

2. Location of the property: Use the parcel identification number (PIN) and the street address. There should be no mistake about which property you are dealing with.

3. Date and Signature: Make sure all the owners sign the contract. This includes spouses, partners or anyone who has ownership or an equitable interest in the property. Big problems can occur with a Lease Purchase if you don’t have all the owners sign. Better yet, check the title, loans, etc.

4. Terms: Be specific on the length of the contract. Strategy Tip: If you are negotiating with the owner make the contract for as long as possible. If you are the owner or are subletting the property, make the contract no longer than one year if you are the invest try to get your agreement from 3 to 5 years.

5. Be Specific: All the terms, including Price, Rent Credit, Closing Costs, Option Consideration, Financing and Escrow should be included. No term should be ambiguous. Be specific

6. Assignment Clause: This is the most powerful section that you can place in your agreement. It allows you to transfer-convey-sublet and recreate new hybrid deals.With this one clause you can have control of a property without transfering title, lawyers, downpayments and so much more.

7. Indemnification: This protects you from liability when one of the parties you are dealing with make errors intentional or otherwise.

8. Contract extensions: Sometimes you just need more time to get the deal closed and go to the bank; make sure you have that extra 30 days before the option expires in a special worded paragraph.

9. Rent Payment: Make sure the rent payment is tied into the rent credit and maintenance; you don’t want to be a repair man or a bill collector. Create incentives throughout your agreement.

10. Financial disclaimer: All great Lease Option Agreements have financial disclaimers specifically towards the financing when the option is exercised. This one paragraph alone can save you thousands of dollars in potential legal fee’s

11.Legal Fee’s: Speaking of legals fee’s make sure you have a clause that states who pays what and the jurisdiction of your choice. In the event there is a frivolous lawsuit involving your Lease Purchase you can then recover all fee’s.

12. Disclose: The best way to avoid problems is disclose all known negatives in writing. Make sure you have a addendum attached to your agreement that contains every silly thing you can think of; power lines, earthquake faults, traffic intersections, future construction etc. foresight is better than hindsight.

Generic Contracts, YUCH !!! I would recommend that you never use a generic contract! If, however, you choose to do so, have it reviewed by a competent (oh boy;-) attorney who is either a real estate investor or who specializes in real estate law. (Sorry, it’s the Perry Mason in me!) Better yet have him design an agreement that meets with your needs, expectations and of course, PROTECTS YOU.

Claude Diamond is know as the mentor. He has authored several books on Lease Option to Purchase real estate, GUTS Sales Training and creating wealth through Success Mentoring. He live in San Diego California, Winter Park, Colorado and Maui Hawaii at different times of the year. Claude believes that “we should takes vacations but live them”. For more information on the above subjects and free Newsletters-e-Books and CD set just go to our web pages below:

www.ClaudeDiamond.com

http://www.TheLeasePurchase.com

http://www.ChutzpahSalesTraining.com