Real Estate Investing Locations and Tips
With its vast land area, great outdoor lifestyle and robust economy, Australia is a dream location of property investors and home buyers, making real estate investing a great income opportunity.
Australia has been the choice destination of immigrants who want to enjoy the relaxed Australian lifestyle with its hot climate, outdoor living and beautiful beaches. Investors and home buyers are currently looking at areas with a bustling local economy and strong job market as these tend to attract large numbers of immigrants who create a growing demand for rentals and home purchases.
In Australia, property prices are generally high in relation to income levels, resulting in a demand for more rental properties that current supply can't cope with. With increasing population and growing incomes, property prices are expected to grow even further.
Short term investment strategy
More investors are turning to off-plan units in key cities such as Melbourne and Sydney as well as in coastal towns where demand for new properties is high. Investors of off-plan units follow a "flip" strategy where they buy the units at the earliest time when prices are at their lowest by shelling out the minimum "money down" payment. They then turn around and sell the unit at substantially higher prices before completion to make the most of their minimal cash outlay.
This strategy works well in areas with high demands for rental properties, where there are investors who are looking for properties to lease out.
Depending on the location of the off-plan unit you are buying, you can take advantage of attractive financing offers which allow you to pay only around 10% of the purchase price as down-payment, with the balance payable upon completion. In the meantime, you can sell this property for more than its full price, even before completion.
Of course, as in all investment strategies, there are risks associated with flipping off-plan units. Careful selection of a project and the particular unit and having an exit strategy in place go a long way in reducing your risks.
Factors such as the projected final outcome of a project, predicted demand and competition must be considered when choosing an off-plan unit. A good exit strategy entails knowing who will take care of marketing the unit and how much commission will be given for it, as well as the possibility of assuming payment if the unit is not yet sold upon its completion.
All these and more require the solid real estate investing experience of an expert from whom you can learn the ins and outs of property investment.
Some Sources of Real Estate Investing
One is often stuck for leads when looking for buyers or sellers in a down market. But it is easy to overlook some of the most obvious sources, simply because we do not keep our eyes, ears and mind open. Consequently a number of opportunities can be lost. If you had not previously considered joining the local real estate investor's association in your area, now would be a good time to do so. At least you will get a good sense of where the market is heading.
This can alternatively also prove to be a useful outlet for networking with other investors. However the most overlooked source for getting property information is from other people, including former clients. So make it a point to contact them once in a while and find out how they are doing. Hopefully they will keep you in mind if they hear about anyone wanting to buy or sell their property.
Sometimes changes take place in people's lives that create a need to sell real estate assets. Quite often other people have exactly what you are looking for and have a need to sell just when you have a need to buy.
Maybe they have too many properties in their inventory, or need to liquidate properties to free up funds for another business. It could also be that expected financing did not come through as planned. There could be a need to relocate to another part of the country, or they didn't do their homework prior to purchasing and are in over their heads in mortgage debt or some legal crisis.
Sometimes the reason for relocating could be very personal, such as a marriage breakup or failing health issues. Some of our best leads came from satisfied clients, and we did not even have to get involved in a bidding war like an auction.
The hardest part about buying properties from people you know is the price negotiations. Your first reaction is to be more than fair, but as a businessman your only concern should be about earning a profit. The investor is a grown person who is responsible for his own actions. You did not put them into their current situation- however you could assist them in correcting it, as long as it is profitable and makes sense to you. This relates to some investors in UAE property today.
If they state that they want to sell the property only to pay off the outstanding loan balances, ask them for the amount of the outstanding balances. If the numbers make sense for the intended use of the property, you can move forward with other the parts of the deal. However, if the payoff balances seem to be abnormally high, tell them that it is their problem that so much is owed against the property, not yours.
Some people will make it a practice to borrow out all of the equity in a property, and then try to sell the property for just what is owed against it, leaving the next owner with a property with no equity, because it was purchased at full value. In this case you should find out the facts and then only paying what makes sense according to your intended use. This has happened to some investors of property in Dubai.
People who use methods to purchase property under the pretext that they'll buy the property at your price, but their terms often find themselves in a fix when later they want, or need, to sell but usually can't without taking a major loss.
They get all caught up in the excitement that they discovered a way to purchase a property with no money down, and perhaps even pulled money out up front, but neglected to realize that if everything did not go as planned, or ever considered reselling before sufficient equity was gained in the property, they owe every bit of what the property is worth, and perhaps even more. You should consider buying from them when they need to dump their inventory.
Coldwell Banker, UAE is one of the oldest and most experienced real estate firms in the region. The company's origins date from 1906. Under the umbrella of Realogy Corporation, NJ the firm's diversified but related business interests cover everything from real estate brokerage to relocation, feasibility studies, evaluation and market analysis to concierge and title services.
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