10 Tips for Successful Real Estate Property Investment Part 1
Real estate prices seem to have hit a temporary ceiling in many areas around the country, that does not mean that profits from property investments are hard to come by.
Even during a real estate market slowdown, stagnation or depression profits can be made. This two part article shows you the top ten tips that real estate investors apply to their property portfolio building strategy to ensure success from their investments.
1) Research the curve – the concept of a property market cycle existing is not myth it’s a fact and is generally accepted to be based on a price-income relationship. Check the recent historical price data for properties in the area of the city you’re considering purchasing in and try to determine the overall feel in the market for prices currently. Are prices rising, are prices falling or have they reached a peak. You need to know where the curve of the property market cycle is at in your preferred investment area.
2) Get ahead of the curve, as a basic rule of thumb, professional real estate property investors seek to buy ahead of the curve. If a market is rising they will try and target up and coming areas, areas that are close to locations that have peaked, areas close to locations experiencing redevelopment or investment. These areas will most likely become the next big thing and those who by in before the trend will stand to make the most gains. As a market is stagnating or falling many successful investors target areas that enjoyed the best levels of growth, yields and profits very early on in the previous cycle because these areas will most likely be the first areas to become profitable as the cycle begins turning towards positive once more.
3) Know your market and who are you buying property for? Think about your market before you make a purchase. Know what they look for in a property and ensure that is what you are going to be offering them
4) Think further ahead and find the emerging real estate property markets outside of your comfort zone. Economies are going from strength to strength, where a growing tourism sector is pushing up demand or where constitutional legislation has been or is about to be changed to allow for foreign freehold ownership of property for example. Look further ahead than your own back yard for your next property investment and diversify that real estate portfolio for maximum success.
5) Purchase price and set yourself a budget that will realistically allow you to purchase what you’re looking for and profit from that purchase either through capital gains or rental yield.