A guide to real estate investing

As real estate prices have reached an all-time low, there is renewed interest in real estate investing. This real estate investing guide can help you understand the basics.

Real estate investing is when investors put their money in immovable property. As most investors will tell you, this is a formidable investment since initial investments are high and many people just cannot afford to buy a house even if they want to. However, if you are fortunate enough to have a good credit score and some amount of money to put away, this guide to real estate investing can help you.

There are several ways to invest in real estate. One way is to buy a home and live in it yourself. The price of your home will increase as a natural rise in demand (more people, longer lives, greater demand). There will be slumps on the way, but if you hold on to your property long enough and maintain it nicely, you can make a 10-40% profit, depending on market factors.

Flipping a home is another alternative. The buyer buys a home that may need some renovation. He fixes it and flips it for a profit. In some parts of the world, property prices are rising so steadily that people can buy a home a flip it in three months, without undertaking any repair!

The third option is to buy property you can rent out and it works well as long as you are willing to bear the expense of maintenance and rent collection. Owning property and renting it out is a great way to multiply your income stream and generate continuous, expanding income.

A huge number of people play the real estate investment game. Some of them make huge profits while many get by and a few lose their money. Those who win are invariably people who have taken the time to study market trends and possess useful insider information about the market, sales and rates. These people do not invest in a home accidentally. Instead, they study every potential buy very closely and take an informed decision.

This is why many people prefer to have a guide to help them through the maze of real estate investing.

For example, most people living in Canada may not know that can become homeowners without coming up with an initial down payment or applying for a mortgage with a bank. A small option deposit will get things rolling. Insider tips like these will help people who are serious about investing in real estate as these are options that help them maximize their investments and returns.

What to do With an Empty Property

There are likely to be occasions when any property - particularly residential lets - remains unoccupied. While having your property unoccupied impacts on rental income, and is therefore something landlords will naturally wish to minimise, there are additional considerations that apply in respect of security and insurance.

Clearly, you will wish to protect your property - especially with so many cannabis farms being put in houses by criminals, doing untold physical damage, which the landlord has to pay to repair. This means that you need to ensure that the premises are secure; including both doors and all accessible windows.

It is also important to consider who still has keys to the property, once tenants have left. If they gave keys to friends, it could well be worth replacing the door locks - this is far less expensive than dealing with squatters!

It is important to remember that most insurance policies will exclude damage resulting from the activities of malicious persons while property is left unoccupied for a period of more than 90 days. This will also apply to theft and accidental damage. In fact, it is important to let your insurance company know when the premises are likely to be left unoccupied for any sustained period of time, because they may wish to impose terms. While this could restrict your cover, failure to notify the insurance company might invalidate your insurance altogether in certain circumstances.

Furthermore, buildings occupied partly or in whole for commercial purposes, are likely to exclude cover while the premises are unoccupied unless the insurance company has been notified in writing.

If your property is likely to be unoccupied for any period, it is good practice to take a few simple steps to minimise the risk. These will not just save the insurance company money, but will also serve to keep your premiums down – not to mention helping you avoid considerable inconvenience:

• Inspect the buildings internally and externally as frequently as practicable, but at least every seven days – or arrange for someone to do this on your behalf
• Take all reasonable security measures for the safety of the property, including that all doors, windows and other means of entry are secured with good quality locks. Your insurance broker will be able to advise you on this.
• Where possible, you should remove combustible materials (that are not fixed to the building) from the site.
• You should also turn off all sources of power, fuel or water (except those required to operate an approved sprinkler, alarm system or central heating system)

Reviewing your landlords insurance is always a good idea, but this should be done in the light of ensuring that adequate cover exists, at the right - but not necessarily the cheapest - cost.

Investing In Real Estate

Investing in real estate

is a great option in the world of today. Property is a commodity that will always be in demand no matter what. What this means is that while the real estate market may be vulnerable to certain ebbs and flows just like any other industry, you can be certain that it will always stabilise and be a positive investment in the long run. This sense of security is very important for many people, as it allows them to have at least some piece of mind as far as their investments are concerned.

As such, once you have made the decision to invest in the real estate market and acquired a property, you also need to add value to it in such a way that it represents a lot more than an empty shell or space. The best way to do this is to equip your property with display furniture so that anyone who walks in will be able to readily imagine what it would be like to live in the given space.

Looking Good is an Australian firm that specialises in display furniture for real estate. The professionals at Looking Good have had decades of experience in the field of making a given space look as attractive as it possibly can be, regardless of the size and condition of the space. Regardless of whether you want to sell, lease or rent out the property in question, the experts at Looking Good can help you drastically improve the manner in which it will be perceived by anyone who walks through your door. Looking Good offers complete display furniture solutions that start from helping you decide what kind of furniture will look best in your property right up to the placement and installation of all the furniture items. So capitalise on your real estate and get the best deal possible by dressing up your property to look as good as it can be. For more information, please visit www.looking-good.com.au

Distressed Real Estate Investing 101

As someone with a Masters Degree in Real Estate from Columbia University who also has first-hand knowledge investing in distressed real estate, I'm frequently asked by people how to make their fortune in today's difficult real estate environment. Due to the economic crisis there are once in a lifetime opportunities to be had. For those that really know what they are doing, a financial killing can be made in foreclosure, REO and Short Sale properties. But where do you start? Read this article and you'll be on your way.

Foreclosure Properties

The most commonly heard of distressed property type is the foreclosure. A foreclosure is a property in which the bank has initiated a process of taking back ownership of a property from a private party. This usually occurs when a home's owner has fallen behind on his mortgage and can no longer afford to make payments yet has a balance left on his note.

The purpose of foreclosure is for the bank to be able to recover the money it has lent to the owner by selling the property. This is done through an auction process which is overseen by a court with the starting price of the property equal to the amount still owed on the property. While sometimes this is much less than the actual value of the property, usually bidding ends up raising the eventual sale price to at or above the 'market' value and thus it can be tricky to get a great deal.

REO Properties

If a property fails to sell during the foreclosure auction process the property reverts to ownership by the bank or lender on the property. The property is then called a REO or 'Real Estate Owned' property. Typically the property fails to sell at auction because the value of the asset (property) does not cover the liabilities (amount owed the bank) and no one was willing to pay enough to cover the debt. This can happen for a variety of reasons such as the property being in poor physical condition, a bad location or if the real estate market has gone down since the purchase of the property.

After a property becomes an REO, it is typically put back up for sale by a realtor just as if it were for sale by a private party. First, however, the bank goes through the work of clearing existing liens and other obligations to make a 'clean title'. REO properties can be an opportunity to get a great value because often they can be purchased for less than if someone were to bid on the foreclosure auction.

Short Sale Properties

Finally, there is another kind of distressed situation called a Short Sale Property. In a Short Sale situation the value of a property won't cover the loan that is on the property yet the property has not yet entered foreclosure. The seller is under financial distress and usually in a situation where they need to be 'bailed out'.

In a Short Sale, sometimes a highly qualified buyer can convince a lender or bank to agree to take less than the full amount to satisfy the debt on the property in order to avoid the original owner from defaulting and having to go through the entire foreclosure and REO process.

This is sometimes possible because it is quite an expensive and time consuming ordeal to go through foreclosure and all the ensuing complications and management of the property. A bank's job is not property management and they would prefer not to tie up valuable staff and financial resources if they can get out quickly, take a manageable loss and get back to their business of lending money.

The REO and Short Sale situations are the ways to get the best deal in distressed real estate for a variety of reasons. I discuss why, give much more detail about each, and show specific strategies I've used to get amazing deals on these kinds of properties at www.PropertyWorkouts.com.