A 5-Point Plan to Successful Real Estate Investing

By: Alexandria Anderson

People enjoy being mystified. Works of art them, so they ooh and ahh and congratulate the writer or the artist on his natural talent. The sciences are mystifying to them, and so they don't even wonder about what researchers are actually doing. Investment in real estate is mystifying to them, and so they make the assumption that it's just a odds game and that some people are either lucky, or that they possess an inborn talent.

They refuse to accept that succeeding in all three disciplines is simply a matter of breaking it down into steps and following through. Anyone who reads the Rich Dad, Poor Dad series by Robert Kiyosaki will realize that, in real estate investing, there are five important steps necessary to succeed. Investor must:

1.Learn how to speak in the language of real estate investment. This means that you should take in the basics of {accounting and finance and know how to read financial statements. These skills will help determine whether a property is assets and potential drains. Also, it's vital to know the basics of real estate and tax law so that you do not make expensive mistakes, but in addition to know where the great tax deductions for real estate are. Understanding the basics of these subjects will also make it possible for the investor to know what to ask his lawyers and accountants when he hires them, and to understand the significance of what they tell him.

2.Keep experts close by. This is all about networking and studying the people who may wind up on the real estate investing team of experts who will help him find and evaluate properties. He should familiarize himself with the community of experts in the city in which he is looking to invest his money, thereby familiarizing himself with the city itself.

3.Study the market consistently and closely. He should read up on various cities and see what the experts say about them, but he should also take a look at them himself. He should do this double-time in his own city, if that is the he is planning on investing there. He should familiarize himself with economic factors and learn which areas are good news, and which are bad news. He should study what the rents in his marker and determine if a property located in that part of town would help him reach his financial goals. He should also and walk through as many pieces of property as possible with his team of experts, even if he is not ready to buy.
4.He should know the right and wrong way to negotiate with a seller. Many have the wrong idea regarding negotiation. They are under the impression the purpose of every negotiation is reach a closing regardless of the circumstances, and to strongarm the seller into ceding to his demands. If the investor can work the relevant numbers to his advantage, and the seller will agree to his terms of sale, that is the point at which the investor ought to proceed and purchase the property. If not, the {buyer should refrain from closing on the deal. “The ABCs of Real Estate Investing,” by Ken McElroy states that the investor should go into every negotiation assuming he will walk away in the end.

5. Take care of your property. This comprises just what you would expect. Make the necessary repairs and improvements to the property and get the empty units filled. Make sure the tenants' wants and needs are addressed.

This description represents a streamlined version of the long road to real estate investment success, however these five simple steps show that investing in real estate is a process which can be learned by anyone. Nothing about it is really magical or mystical about it.

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Alex Anderson Uses The Minnesota MLS Real Estate Listings To Locate Quality Homes For Sale In Minneapolis. Download A Free Copy Of "The Investors' Rental Guide" At www.GreatInvestmentProperty.com

YOUR FIRST HOME IS STILL WITHIN REACH

By: Alex Dalley

YOUR FIRST HOME IS STILL WITHIN REACH!

With the average property now costing £150,000, more joint first time buyers have opted to take the plunge and move in together for their first home. Single first-time buyers up to now had normally accounted for more of the purchases than joint first-time buyers partly due to affordability and lifestyle choice. Since last year we have began to see a shift in favour of more couples choosing to move in with their nearest and dearest.

Statistics from the Council of Mortgage Lenders (CML) shows that affordability has continued to get worse for first-time buyers in recent years. The CML is the trade association for the mortgage lending industry, with members accounting for around 98 per cent of UK residential mortgage lending. Research found that buyers contributed an average of 20.7 per cent of their income towards their mortgage last year, compared with 17.9 per cent in 2006. Although even more disposable monthly incomes are set to be consumed by mortgages in 2008, figures released so far this year suggests first-time buyers do not appear to be dissuaded from entering the property market at present. This, in-turn, is bringing back much needed confidence to the sector.

According to Connells Survey & Valuation, the number of mortgages approved to first-time buyers for house purchasers grew by three per cent in January 2008. There were 75,300 approvals for house purchases last month up from 73,000 in December 2007. Ross Bowen, Managing Director of Connells said “The mortgage market may finally be finding a floor after months of decline overall, caused by higher interest rates, the reduced supply of credit from mortgage lenders and consumer confidence.”

Results from the Spicerhaart Financial Services monthly survey into mortgage transactions has found that there were two per cent more first-time buyers in January 2008 than in December 2007. The survey also found that first-time buyers were responsible for a third of all property purchases made during January 2008. Steve Cox, Operations Director for Spicerhaart Financial Services, said, “individuals just starting on the property ladder have been encouraged by the drop in the base rate, but have not been discouraged by the need to put down a larger deposit and stamp duty.”

Many experts are predicting that during 2008, single first-time buyers will have a difficult year. Property values have increased by 18% in the last two years, but incomes have basically stayed the same. In 2006 interest rates were very low at 4.5%, compared to now. Buying alone was affordable and not too risky. With interest rates at 5.75% at the end of 2007, mortgages have become too expensive for individuals to take on alone. Presently, base rates are on the way down, but the confirmed bachelors and bachelorettes will have to wait a few months to get any real benefit.

Katie Tucker, Technical Manager for Charcol.CO.UK, said , “Joint buyers made up 45% of first-time purchases in 2006 and increased to 50% during 2007. Men buying alone fell by a corresponding amount, but interestingly, the amount of women buying their first property alone, hardly changed at all. It follows that, not only are more women buying, they are doing so jointly. More men are taking the decision to settle down with a partner for their first home. Buying together is a very sensible choice in terms of affordability. Not only for splitting the mortgage and the bills, but more cuddling up enables individuals to get out of the rental trap and investing in their future. Financially, sharing costs through joint ownership can also work out cheaper than renting.”

Joint mortgages are fast becoming more popular with lenders, increasingly offering products designed specifically with joint owners in mind. Individuals joining forces financially can now conquer high property prices and begin climbing up the ladder. However, it must be stated that joint ownership is not without its risks, therefore independent financial advice is recommended.

Editor: Simon Weston www.myfirsthomeltd.co.uk
Email: Simon.Weston@myfirsthomeltd.com

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