Making The Best Of Your Real Estate Investment

Real estate investment is as old as man itself. There is virtually no activity that does not involve the use of land or any other thing that has to do with it, except in some very few exceptions. From corporate organizations, to a small shop owner who sells rice and beans in a corner shop, real estate is involved. RE comprises of three basic things. They are Land, Buildings and its appurtenances. In other words, Real Estate = Land + Building + Appurtenances.

Land: All types of organisms including man are born, flourish, mature and at last meet their end on land. It produces all the necessities of life-food, clothing and shelter. Without land, nothing existing on earth can survive, even thier existence cannot be dreamt without land. Hence, land is a very useful resource in investment decisions. Understanding the impact of your real estate investment can significantly influence your locatonal decision. In real estate, location location location is everything. From the myriad of factors that determine an investment property's value, location-and specifically proximity to other services seems to hold firm the perennial key to the investor's future capital growth. So before embarking on such investment decisions, a thorough feasibility and viability studies of such land in relation to the locaton and the type of investment should be done. The feasibility studies will look at the practicality of such investment vis-a-vis the land and the location involved, while the viability looks at the profitability aspect.

Building: Buying homes for sale to use as rental properties is a significant financial decision, and as it is so, it means that one must choose a property that will prove a wise investment. Buildings serves several needs of society-primarily as shelter from weather, security, living space; privacy to store belongings and to comfortably live and work. Atimes, buildings come in a variety of shapes, sizes and functions. The level of return the property will bring should be one of the most significant factor influencing your decision, as it determines how much profit you will make from the investment decision. It is not all buildings that are investment friendly. A building may be beautiful outwardly but internally, it may not be functional, and this may affect the yields of such investment.

An understanding of the country's policies concerning real estate investment is another thing that must be thoroughly investigated before embarking on such real estate investment decision. The tax policy must be such that encourages property owners from making the best out of their real estate investment. Whatever the policy/policies of that region must be the one that promote and encourage positive, innovative environment as well as drive further economic growth. The region must be the type that is aware of global environmental trends towards sustainable development, and the demand for eco-friendly homes.

Some properties just require way too much time and management to make them smart investments. Examples include vacation rentals, low quality properties in bad areas, college rentals, etc. Nice boring properties rented for as long as possible to decent credit profile tenants seem to take the least time to manage. In addition, treating your tenants fairly and with respect goes a long way towards keeping good relations with them; and reducing your hassles when there is an issue you need to address. And believe me — there will be issues! It’s the nice, boring, wholly owned, in good shape, cash flow-positive properties that are the best investments. They are out there for your picking, but it’s not as simple as finding a property on the property magazines and buying it. You need to do some hard work, research, read up, and make smart, educated decisions to acquire the best real estate investments!

All real estate is extremely high risk. Development of real estate, land, Tenant-In-Common (TIC) investments, private real estate funds, fixer uppers, etc., all have much higher risk profiles than just simply buying a nice established cash flow investment property. In many of those investments, you will never see a dime of your money again because there are just so many things that can go wrong! So if you want to own real estate, consider simply taking fee simple title in your own name – or an entity you wholly own – to the properties you purchase. In addition, you must do the proper due diligence, analyze, test, review reports, etc., to make a lower risk real estate decision. In order to accomplish this, you need to make some smart choices upfront when buying investment property. Your goal should be to strive to get as close as possible on as many of these optimal scenarios as possible.