Investing in Real Estate has become urban legend the myths abound about how much you can increase your wealth by investing in real estate and in particular residential real estate, so much so that the average Joe believes that making money and creating wealth when it comes to real estate is a given and in alienable right so to speak.
Average mums and dads are jumping onto the real estate bandwagon with no knowledge or training in the fundamentals of investing. These folks are fed the myth that using their equity from their family home will miraculously make them into real estate tycoons, all to often these poor misguided souls end up losing the home and everything else in their pursuit of real estate’s Eldorado.
To perpetuate the myth these naive investors are advised to hold on to their real estate investments for ten years or longer, this is great in theory if you are in your twenties and do not need the profits in the immediate sh rt term to help fund a decent retirement, unfortunately when you look at the demographics of these investors they are in their fifties with plenty of equity in their family homes most usually own their family home and have neglected doing any thing for their retirement till now and in horror discover that they will not be able to have their current lifestyle on the pension.
Little wonder real estate investment seminars are packed with these late bloomers all hoping to make a fortune by investing in residential real estate, the seminar presenters ensure that is all these folks here, after all this is a valuable gravy train.
Try this little trick next time a telemarketer calls and asks you to attend a real estate investment seminar, and the telemarketer asks you if you own your own home and how much equity you have in it, reply by saying that you have none, I will guarantee that before the word none leaves your mouth they have hung up on you, interesting isn’t it?
Tragically no one is told when a real estate investment has gone bad or failed to perform as happens on a daily basis with the stock market, why is this so? One of the major reasons are the volumes of money that Governments, Banks and marketers make from selling the residential investment myth, that is also the reason why Governments have been loathe to legislate that investors under go an investment training program before they can invest, as once the myth is busted the gravy train will not be as plentiful and the flow on effect into allied industries would be catastrophic.
This myth is well and truly busted as you can loose everything from a failed real estate investment and there are no such things as guaranteed growth with out doing some work for it.
Here are 7 simple ways to maximize your money from real estate investment
1. Know your profit before you buy
Do your due diligence and find out if the price you are paying is below market value, a simple rule is can you resell this property today for a profit and if so how much.
2. Type of Neighborhood?
The community surrounding the property can change in a variety of ways that can adversely affect your real estate income property. Increasing vacancy, for instance, can lead to reduced rents, which in turn means reduced maintenance causing building deterioration, This can cause a roll on effect if more properties start to decline in the whole neighborhood,compounding the problem.
The nearby construction of facilities such as prisons, sewer treatment plants, and airports will also likely have an adverse effect on the area. Also, perhaps more subtle and slower in coming, is a decline due to increased crime, perhaps resulting from an adjoining neighborhood spill over. If you still want to invest here find out what it is that makes it special that everyone else has over seen, often gems are discovered with a little digging,