Real Estate Investing As A Profitable Skill
December 14, 2008 by Susan
Filed under Blog, Real Estate
Real estate investing has always been considered a profitable skill or wealth building vehicle for many would be investors. Building up a profitable real estate port folio is attractive and compelling. There are of course advantages and disadvantages, and in today’s volatile market proceeding with any investment should be executed with care.
There have been times in the market when anyone could make a profit from buying and selling. Many people have profited at one time, only to lose at another. Unfortunately it could have been due to good luck rather than good management.
When the times have been favorable, the rents on rental properties and/or their ROI (Return On Investment) have been exceedingly higher than the repayments needed to be made. Governments gave preferential treatment to real estate investors through tax write-offs. There are many properties today, even with the exorbitant rent charges, that do not show as being a profitable option. Many do not meet the ROI.
If you are intending to invest today, (due to the many foreclosure listings and bankruptcies) and decide to ‘help’ those suffering from the economic crisis, then do so after you have analyzed all factors objectively. Investing is business and treating it as such and being objective, is the first step to a successful investment.
Property Investing
Property investing varies from country to country.
Property investing has been a consideration for most of us at some time. As new adults we all strive for the ownership of our own home. The wealthy investors would certainly give different lessons to that taught by most of our parents and teachers.
I listened to my parents, who were successful business people. They had purchased 9 properties by the time I had left high school. In my twenties my mother became a real estate saleswoman, so I thought she was certainly an expert.
They advised me to purchase and invest in my own home for security. They were just like Robert Kiyosaki’s story in ‘Rich Dad Poor Dad.’ (This is a book I would like to see promoted in schools, instead of some of the others I have seen my children study.)
Here in Australia, over the last few years, there has been a property market boom, and prices in the real estate sector have reached unbelievable highs. Many people have fallen victim to low deposit, low interest rate schemes and are now unable to meet their commitments.
Mortgagee in possession sales are increasing and the astute investor is able to cash in on these sales. Some look at this as unscrupulous, but the banks only need to recoup their money, and the investor is actually helping the home owner by buying it for more than the bank.
Purchasing rental properties gives you so many options while property investing. Not only do you free up your own money, by having your mortgage paid by someone else in the form of rent, but it gives you more leverage when it comes to investing in more properties.
“Education is what remains after one has forgotten what one has learned in school.”
