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It's often been claimed that Real Estate investing is one of the easiest ways to make money. In one way, that's true. With a modest financial investment and a fair amount of sweat equity, a property can be bought and sold for a healthy profit and the future still looks pretty good.
Since the exponential expansion of products in the 1980s, investments now come in a bewildering variety. Sorting through the technical details and balancing the risks against potential gain of any given mix is a job for professionals. But short of gaining an advanced degree, the educated investor can still improve the odds by following some simple guidelines.
According to one study 23 percent of all homes sold in 2004 were purchased as investments. Considering the historical returns, and the high percentage increase in prices over the last few years, this shouldn't be surprising. But there are several ways to profit from an investment in property.
In the world of property investment, there are various points along the 'just looking' to 'ready to sell' spectrum. Protecting your investment takes on different hues at different points.
Buy low, sell high. Anyone in any market aims for that, but few succeed. The only reasonable conclusion is it's easier said than done. So, to be part of that group of 'we happy few', consider some of these ways to maximize your return.
No doubt, negotiating an agreement you'll later be happy about is the toughest part of any investment. It's a rare investor who consistently says afterwards that they got everything they wanted at the price they wanted to pay. But like any skill, negotiating can be learned.
Real Estate is a complicated business. Every facet is controlled, in most countries, by numerous legal restrictions and requirements and there are many people involved in any deal, some with vested and competing interests. But you can also make a lot of money and, in some ways, a lot easier than in many other businesses.
Buying property is expensive under the best conditions. Even if you don't outlay a huge wad of cash initially, you're signing up for a substantial financial commitment. For those intending to occupy the property, at least for a while, there are additional expenses — moving, storage possibly, and often tax consequences.
No one profits from their own ignorance. Thinking ahead is your best guarantee when considering whether to rent a property into the future or to sell for a fixed profit today.
There is no more Byzantine human invention than the complex tax codes, and among the most complicated are the laws surrounding real estate investing. So, what follows is NOT to be considered legal advice — consult your attorney or tax accountant before making any decisions.
Buying and selling real estate is similar to timing other investments — stocks, bonds, mutual funds. But there are two important differences.
In a market that has seen double-digit price increases for two years or more, selling a home was easy. Offer the property for sale at or slightly above market value and watch the bids roll in — sometimes within days.
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