Investment Property Basic Facts
Investment property is an acquired asset, usually a piece of land with a building, which is not currently used or occupied by the owner. The main purpose of its acquisition is to earn significant amount of profits in the future by selling it at a higher price, while at the same time earning through rentals or lease while waiting for the value of the property to appreciate. Investment properties are, therefore, usually considered long-term investments geared toward profit generation through capital appreciation.
To achieve success in a property investment venture, you should possess the necessary competence to decide when to buy the right investment properties, as well as when to sell them. The best investors are devoid of emotions because they are not carried away by fears. Fear, due to the falling local and international economy and real estate market, can provoke many owners of investment properties into panic selling in order to get back their money or equity. This is the ideal time to buy because everybody is selling, further reducing the values of properties. On the other hand, the best time to sell investment properties are during times when no one else or only a few are selling.
There are still many other external and internal factors to consider if you want to achieve significant gains from this business. This can be made possible by acquiring some skills on property investing. Skills can be obtained by attending seminars and courses on how to invest in properties. You can also read guide books for added insights, and to learn more strategies. Another option is to join forums that allow you to interact with other forum members and let them give you some useful advice and guides on real estate investing.
When attending a course or seminar, make sure that important topics are covered such as properties and mortgages management, sales trends and analysis, computing for tax deduction using the investment calculator, various deductions involved, creating a checklist, software to use, refinancing requirements, refinance options, proper methods of managing properties and assets, second (2nd) investment mortgage properties, insurance requirements and insurance premium calculators, types of investment loans, different financing schemes like the 100% mortgage finance, target earning setting, how to build your own network of prospect buyers, long-term and short term goal setting, analyzing different quotes, how to obtain the current market values of properties, finance management, and some property investment basics for beginners.
On top of getting the necessary education, it is also best to get professional help from expert property investors and managers of well-respected investment companies like the Valley I Investment Properties, Noble Investment, LNR Property LLC, and the Harsch Investment Properties. Advice from such reputable companies and competent managers are priceless. You can learn valuable strategies like how to earn when everybody else is losing in the real estate business, property modification required to increase the value of the property, and so much more.
Property Investment: Ideal Types of Investment Properties to Buy
To attain ultimate success in property investing, it is imperative to choose only the best properties with strategic locations. Selecting the right place to invest is crucial. You must have a keen sense of detecting areas with a very promising future; as well as projecting up trends in values of properties in developing places. Property investors are required to research first, prior to investing on any property to avoid possible losses.
The most ideal properties to invest are those situated near commercial and business establishments. Properties within the central business areas are sure to appreciate in value after just a few years compared to residential properties in the suburbs and out of town areas.
Aside from that, properties near prominent universities and schools are excellent for investments because of the potential business opportunities. You can set-up dormitories, condos for rent to the students, apartment rental, and home rentals that allow you to earn residual income.
Likewise, real estate properties within the financial districts of the city are excellent for property investment. Employees of different financial institutions will surely rent nearby condos, apartments, and home rentals to avoid traffic and minimize the transportation expenses. This provides an excellent opportunity to earn income from rentals. Other ideal properties to invest are those situated near the malls and shopping centers, night clubs, bars and restaurants, company offices, and in the downtown areas.
Property Investing Options: Other Choices for Buying Investment Properties
When searching for the ideal investment properties, it is best to keep in mind that your options are abundant. Don’t limit your choices by selecting local properties only. You can go big time by expanding your property investing options abroad or overseas where there are abundant choices of properties to invest in. The global financial crisis in the previous years until 2010 has resulted in a downtrend in the prices of real estate properties around the world. This creates opportunities to achieve tremendous gains in shorter time.
Some of the oversea places that experienced decreases in the values of properties that made them ideal for investment are Spain, Mexico, London, some parts of the Caribbean, and the West Midlands of UK. In the US, several states and counties also suffered the same fate like Las Vegas, Memphis, Orlando, San Diego, Jacksonville, New York, Huntsville, Eugene of Oregon, Denver, Cleveland, Chicago, Atlanta, and Arizona, among many others.
Investment Property Loans and Financing: Ideal Type of Loan and Mortgage Rates
The cost of acquiring properties can be enormous. The high amount of the required investment funds have compelled many big-time investors to group together and pool their resources in order to come up with the required capital. Although, if you want to do it on your own as your personal business, you can still venture into property investing even if you have limited initial funds. Thanks to available loans and financing plans of lenders and several financial institutions like banks and the Federal Housing Association (FHA).
When opting for this method of acquiring properties, finding the ideal investment property loan is crucial. There are various types of loans to choose from. You can either opt for a secured loan with collateral, or choose the financing plan of several financing institutions and lender.
Loans are also classified based on the type of mortgage rate used. These types of loans are fixed-rate loan, flexible-rate loan, split-loan, and interest only home loan. As to which of these types of loan to choose from, that depends on you. Fixed-rate loan is the ideal option if your main concern is certainty of your cash flow. This is also good if the interest rates are projected to go up in the next couple of years. But, if the rate of interest plunges, you will end up paying a higher interest rate when all other loans are enjoying low interest rates.
In a flexible-rate loan, on the other hand, the interest rate is changing. The rate may increase or decrease, depending on the economic condition. A split-loan is a combination of both fixed-rate loan and flexible-rate loan. Interest only loans are extended to those who want to regularly pay the interest only, while the payment of loan capital is scheduled. This is done with the thought in mind that the loan interest is tax deductible.
Nevertheless, the ideal type of loan to choose is largely affected by the desired payment options, preferred type of mortgage rate, and the amount of equity.
Buying an investment property is one of the best investment options today because of the promising and lucrative earnings that you can get from this venture. Significant profits can only be obtained if you have the right skills, competence, and positive attitude on property investment.