Common Risks Involved in Real Estate Investments

Though most of the real estate investors will say that the business has rewarded them with very high returns, there are some potential investors who will admit their failures in real estate investing. This means that the business is a risky one and not each and every deal will prove to be successful. There are so many risks involved in real investing which you need to be aware of before getting into it so that you can prepare a safeguard against them before they result in a loss.

Discussed below are some of the most common types of risks that are involved in real estate investments. Let us have a brief look at each one of them in detail as follows.

Falsified Sale

This is one of the most common types of risk that is faced by many real estate investors. There are many people who fool investors by offering them with such a property which is either not owned by them or they do not have the rights to sale that property. If this is the case and as an investor you seal the deal without verifying the ownership of the broker it will put you in a great trouble. Besides this, you will also have to lose the money that you may have invested in it resulting in a great loss.

But, this risk is manageable if and only if you take time and research well about the broker or the client who has come with the offer. Once it is confirmed that the ownership of the property is entitled to the client then you can go ahead. However, if you find that the client is faulty then it would be wise to take legal against that person.

Improper Construction or Building Component

There is a possibility that the building materials such as cement and bricks used by the builder or the construction company would be of low and poor quality. This will not only damage the property very soon but it can also prove to be fatal in its worst case. This might put you in great trouble and also build up a negative remark in the real estate market.

To overcome this type of risk in real estate investment, you must inspect the property very well. You can also ask the builder to provide you with a copy stating the quality of building material used for the construction of that particular project. In addition to this, performing regular maintenance checks will also save you from such risks.

Risky Tenants

Investors who rent their property often come across this type of risk in the real estate market. Not all the tenants will take good care of your property and keep it well maintained. For instance, they will handle the furnishings and other accessories carelessly and damage them thereby increasing
the cost of maintenance.

But, you can avoid this kind of real estate investment risk by scrutinizing potential tenants. Make sure that you verify the background of the tenants before handling the property.

Underestimation of Value of the Property

This type of risk results in a great loss when the investor underestimates the value of its property. To become a good real estate investor, it is very essential that you estimate the property’s value right. Features like geographic location, proximity with the market and places of work and entertainment, number of rooms, and total area are some of the most important points you must take into consideration while deciding the value of your property, be it for selling or for renting. However, if you fail to take a note of all these factors and tag the wrong value, it will be you who will have to suffer its consequences. Therefore, it is very important to ensure that the property generates enough of cash so that it can not only provide you with good returns but also supports itself very well.

These are some of the most common risks involved in real estate investing but none of them are unmanageable. By taking precautionary measures and following the mitigation strategies mentioned above you can easily eliminate them and make your real estate investments very cost-effective and satisfying.

Source: http://www.homeloanassociates.com/common-risks-involved-in-real-estate-investments/

A Short Introduction to Property Investment

Real Estate News

The real estate news plays a major role in contributing to the state of the U.S. economy. New home building stocks and the stock market as well are affected by the same. Many analysts are deeply interested in analyzing the real estate news so that they can glean information about how the housing market will perform. On the basis of this, the right time for investing in real estate; knowledge of which way the property prices may go and more such related information is obtained.

Property Investment Tips

The following points cover the basic information that one needs to know in order to proceed in the right path of careful property investing:

Firstly, if you are a beginner in this field, it would be better to go for such investments that are associated with comparatively lower risks. For the same, due research and learning about the basic facts of real estate is recommended. For starts, investing a small amount of money would be safe.

Take the help of experts in the field and search for those properties that have good cash flow and possible capital gains so that you can be on the right path to wealth creation by such value-investments. Always remember that this involves buying properties on the basis of their present value as well as their value in future. Avoid speculation

as it involves buying the property with an expectation that the property-price will be enhanced. Such speculations in investments may not yield the expected results and hence are risky.

Look out for properties that are in known and familiar areas. In addition, it would help if these locales are readily and regularly accessible to you by way of walking, driving or even cycling. On account of the same, you can closely study the movement of the sales and rentals of the property; whether the trend is that of decline or growth. You can take the help of property agents to understand the property better along with the area in which it is situated so that if there are any homes coming up on the market, you will be informed without delay and you can better avail the opportunity to take a quick decision about it. This is important because when a property comes on the market, you can know quickly if it is a good deal or not and you’ll be able to act fast.

It is always likely that you could err while making investments in real estate, but you should accept that such mistakes are experiences which teach you why certain steps that you took should not have been taken. Similarly they give you a better understanding of the correct approach that ought to have been taken.

An important part of the real estate learning process is to work out the cost for getting a return on investment for your desired cash flow. You must accept the fact that there is always the possibility that your home may not be immediately rented and that you may have to pay for the maintenance of your home till such a time when renters come in.

Many experts advise that profits can be achieved from real estate investments through properties that are not saleable on account of certain problems associated with them. If you can manage to put such problems right, you can also increase the property value.

Analysis of the profitability of the real estate purchased can be done by calculations of your paid money, the interest on mortgage, the rental income and the maintenance cost, etc. Investments in real estate can thus be profitable ventures.

Source: http://www.1realestateinvesting.com/a-short-introduction-to-property-investment/

Property Strategy & Investment Opportunity in Real Estate

Property Strategy

A strategy that involves a series of rational approaches that can be used to logically comprehend your property needs so that you can appropriately plan and develop a method to acquire a property and invest according to your business needs and capacity is referred to as Property Strategy.

For the same, it is necessary to take into consideration the way in which you can handle your property assets for the management of the business strategy of your company. For a number of such properties, you need to recognize what could be the crucial concerns and the trade off decisions that people could face and make. Taking all such factors into consideration, you should decide on the top prospects that could aid in delivering the best profits in this business.

Investment opportunity

When the business in which investment has been done is in its infant stages of development, an asset management usually presents the opportunity to make an excellent return. These returns are enhanced when the management team of the company is experienced and committed and the operations are well-planned and the company manages to withstand any competition it faces against its peers in the industry. Such companies can give you more returns when you discover their potential earlier than the herd because such young companies are known to lack in trading liquidity and only a few buy orders could be sufficient to send the share price spiraling high enough. This point of time can enable you to enjoy an excellent return on your investments.

When companies are relatively young, they require capital for growth and expansion of their businesses. For the same, they search for investors in their company. Sometimes the capital amount needed is sufficiently large. Here, individual investors cannot provide them that high amount of money and so they take the help of accredited investors like banks, insurance companies, brokers, employee benefit plans and partnerships, etc.

There is need for the planning and operation of the property within the business plan that has been chalked out. Firstly, it is necessary to co-ordinate the business aims with the property goals and the policies therein, keeping in mind the facilities required for the same, their type, location and size. As for the location, they must conform to the results of the Location Analysis tool, which ensures that the areas are right for the business. This is the strategic plan adopted and updating of the same is done after a few years. 

Next, you must understand that the attainment of the property goals is largely dependent upon the achievement of the series of projects and activities. After this you need to develop a management plan to suit the specific property.

The best investment opportunities can be availed when the knowledge of the exact amount to invest, how and when it is to be done is known. Time and availability of capital are major factors that determine the investment strategy. The latter can either be for a short term or for a longer period. As an investor, you must consider the return on your investments. This is nothing but the profits that your investments yield you. Suppose you have invested in stocks. History has seen the value of stocks rise and dip within short spans of time and hence the return on investment can be received very fast, not at all or it can be attained in short spells. Where the returns are steady, the opportunities are considered better ones. 

As an investor, often the question arises: “Is my investment safe?” It is quite natural to feel insecure in this uncertain stock market and you can protect your investment in a couple of ways; either by compounding or by diversification. The fundamentals of compounding are that interest accrued in the first quarter adds to the principal and the combined value serves as principal for the second quarter and interest for the second quarter is again added to the principal and interest of the first quarter to form the principal of the third quarter and so on. Whereas Diversification involves the selection of a variety of investment products from different industries as a precaution in case one or more investments are affected by the marketplace. Your investments can be placed in agencies that offer protection like the FDIC, the SIPC, the FINRA, etc.

Those investments that give tax advantage, like student loans, retirement accounts, annuities, etc. can be preferred as they provide for tax advantages through deductions of taxes and/or tax deferments.

Visit More: http://www.investmentguidance.us/critical-warning-number-six/

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"A Golden Opportunity for Real Estate Investors"

How to Get Started in Real Estate Investing

As a beginner, real estate investment seems risky for you without much industrial knowledge and learning exposure. Careful buying and management of property investment involve extensive industry research and market analysis. As a beginners guide to real estate investing, get initial investment guidance that help you comprehend present market scenario to arrive at effective decision making. However, the steps to first time real estate investing help you get started with the business of property investment.

Before you start investing in real estate market, do basic research and homework about the industry. It will help you identify potential property investment options. Formulating business strategies becomes simple, when you have fundamental understanding of the area.

Get started with real estate investing:

Never go with the media harping on about anything

Develop research aptitude and habit of analysis. Expert opinions alone are not sufficient, if you fail to judge the scenario.

Avoid too risky investments

Take your time to learn things through experiences. Be away from highly risky investments. Understand the logic behind cash flows and mathematical calculations involved. Be cautious about your selection of properties. Aim for good returns than future capital appreciation.

Limit your monetary investments 

Don’t let the market changes ruin your confidence of property investment. Aggressive investment is not the job of a beginner. Set your maximum investment limit, since you are not settled in the industry. Initially, start investing with a small amount of money. Start building professional relationships and networks to get better and quick access to the clients.

Know the pitfalls of the game

Don’t be excessive optimistic; buying property with little or no down payment can ruin your future dreams. Be aware of the risks involved in such sales. Learn the retail industry business opportunities to formulate business strategies and plans. Assessing your own temperament assist you in identification of challenges; note them down to deal with them methodologically.

Realize factors critical to the investment

Know the types of mortgages with their merits and demerits. This information is crucial to determine your success in property investment. Increase your mathematical and statistical capabilities to compare different projects and manage your portfolio investments. Analyze the expenses involved in repairs of the commercial venture, if you decide to purchase and modify the existing property. Calculate the cost involved and valuation to have effective decision making with regards to repairs and maintenance.

Hope these strategies and tips make it easy for you to get started with your real estate investment. As a beginner, you may face some difficulties; don’t lose confidence, try to overcome them.....Read more

Simple Property Investment Tips And Guidelines For Troubled Investors

Many of you who practiced real estate investment in the past and faced disappointment might have wondered what could have possibly gone wrong in your real estate venture which initially took off with a great start but then collected nothing but dust. Well it might be hard for most of you to point out some of your mistakes but we can point out several mistakes investors do which ultimately leads to such heartbreaking consequences. Many apprentice property investors face failure in home investments as they are oblivious of some basic facts and guidelines which leads to successful real estate investment.

Additionally, the lack of knowledge in risk assessment and asset allocations acts as an icing on the top for the complete destruction of your property investment pursuits. It’s not late and you can still make a fresh start in property investment and make the most from the growing property sector in 2013. But rather than venturing into housing investment in a blindfolded fashion you might want to open your eyes towards certain important factors knowing which you can convert your property investment into a successful business. Given below are some effective tips and guidelines recommended by experts following which you will never go wrong with your property investment endeavors.

Choose the right location: When t comes to real estate investment, choosing the right location plays an important role. Some locations have the potential to attract customers and are hence in high demand in comparison to others. By choosing a location which is in high demand among customers your property will never run out of business and will have the potential to earn high returns. Such locations are not difficult to find and often close to economic zones, luxurious residential areas, schools, government buildings, etc. However such locations don’t come easy and you will have to spend a hefty amount in order to acquire property in such kind of locations.

Contact the appropriate broker: Brokers brings to you the best deals available as per your budget. But a majority of brokers will put forward the average stuff first and try to keep the good properties in their kitty unless you persist. You must also negotiate before making a final deal in order to save the extra amount which will otherwise be spent on brokerage.

Preliminary planning: Determine your expenses before you put your foot in property investment. Estimating on the expenses will help you in the proper management of your monetary assets that will be used in property investment. Without proper monetary planning you won’t be able to track down on your profit earnings later or won’t be aware when you are under loss.

Opt for rental property investment: Earning returns through rental property is a better option than property sales as rental rates are less erratic than price rates. In other words during economic downfall rent of a property may remain same whereas price of it may decline considerably. Therefore it is wise to avoid selling property and provide it on rent especially during recessional phases.

Reduce later property expenses: Hidden costs and maintenance can cause troubles later and reduce your profit earnings. Therefore make sure to pre plan all the possible post investment costs that will come along with the investment and set prices accordingly. Also make it a point to look after unnecessary expenses unless it is completely necessary.

Allocate assets: You can reduce a majority of investment risks by allocating your wealth and assets. By diversifying your wealth into various investment sectors you spread your vulnerability towards various kinds of risks and dangers. Try to adopt stock market investment or gold investment along with property investment in order to safeguard your assets.

Source: http://www.1realestateinvesting.com/simple-property-investment-tips-and-guidelines-for-troubled-investors/

Cyprus jitters keep euro, Asian stocks subdued

SYDNEY — Share markets across most of Asia and the euro struggled on Wednesday after a bail-out plan for Cyprus fell into disarray, but losses were limited as investors clung to hopes that a last-minute deal will be hammered out.

Cyprus’s parliament overwhelmingly rejected a proposed tax on bank deposits as a condition for aid, pushing the Mediterranean island a step closer to the brink of financial meltdown.

The European Central Bank (ECB) offered some comfort by saying it was committed to providing liquidity within certain limits, even after having threatened to end emergency lending assistance for teetering Cypriot banks.

“It is relatively calm for now, but headline risks remain acute,” said Sue Trinh, strategist at RBC in Hong Kong.

“Clearly the ‘no’ vote was not an ideal situation. The government now has to scramble for last-minute options and it remains uncertain how exactly it will unfold.”

The finance minister of Cyprus is in Moscow to scout for support amid speculation Russia could step up, while newly elected President Nicos Anastasiades is due to meet party leaders on Wednesday to explore a way forward.

The MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2%, having earlier carved out a fresh 2013 trough. The index is now about 3% lower from this year’s peak, set a month ago.

Among the biggest losers, South Korea’s Kospi fell 1.0%, Australia’s S&P/ASX 200 index shed 0.4% and Taiwan’s Taiex lost 0.5%. India’s BSE index was down 0.4%.

Bucking the region’s weakness, Hong Kong stocks bounced off a three-month low thanks to a rally in Chinese shares as more clarity about recently announced property curbs at home eased investor uncertainty.

Japanese financial markets were shut for a holiday.

The lacklustre performance in Asia mirrored Wall Street, and was unlikely to inspire European bourses.

Jonathan Sudaria, a dealer at Capital Spreads in London, suspects European equity markets will open flat with traders preferring to sit on the sidelines for now.

“Markets are set to open in a state of stasis as traders wait for a raft of news releases to be announced before deciding on the next leg higher or lower,” he said in a note.

Commodity markets were also calmer with Brent crude recovering from a three-month low and copper off a seven-month trough. Spot gold, meanwhile, held near a three-week high.

Euro sulks

Uncertainty surrounding Cyprus kept the euro pinned near four-month lows against the dollar. The euro fetched $1.2876, having fallen as far as $1.2844 overnight.

The common currency lost ground against the yen as well, shedding 0.2% to ¥122.39, near a two-week low of ¥121.45 plumbed on Monday.

Yen bulls, however, will be wary of any comments from Haruhiko Kuroda, who becomes governor of the Bank of Japan on Wednesday.

Expectation that Mr Kuroda will quickly embark on a much more aggressive monetary policy to fight deflation have recently pushed the yen to multiyear lows versus the euro and dollar.

The dollar index, which tracks the greenback’s performance against a basket of currencies, was flat at 82.979 hovering not far from a seven-month peak of 83.166 set a few days ago.

Investors will also keep an eye on the outcome of the Federal Reserve’s two-day policy meeting due to end later on Wednesday.

Analysts expect the Fed to keep buying $85 billion a month in mortgage and Treasury bonds to encourage investment and bolster a weak economic recovery.

“Overall, we expect the Fed to maintain its stance on asset purchases and forward guidance. At the press conference, we expect the chairman to continue to downplay the costs of asset purchases while highlighting the benefits,” analysts at Barclays Capital wrote in a client note.

“With the Fed having shifted to unemployment rate-based guidance, the chairman’s views on the overall labour market conditions, which take into account a broader set of indicators, would be parsed.”…Read Article

Washington Real Estate Investment Trust Announces 1st Quarter 2013 Earnings Release Date and Conference Call Information

Washington Real Estate Investment Trust (WRIT) (WRE) will announce 1st Quarter 2013 earnings in a press release to be issued on Thursday, April 25, 2013, after the market close.

The Conference Call for 1st Quarter 2013 earnings is scheduled for Friday, April 26, 2013, at 11:00 A.M. Eastern time. Conference Call access information is as follows:

USA Toll Free Number:						1-877-407-9205
International Toll Number:						1-201-689-8054

Instant replay of the Conference Call will be available until May 10, 2013, at 11:59 P.M. Eastern time. Instant replay access information is as follows:

USA Toll Free Number:						1-877-660-6853
International Toll Number:						1-201-612-7415
Conference ID:						410787

The live on-demand webcast of the Conference Call will be available on the investor section of WRIT’s website at http://www.writ.com. On-line playback of the webcast will be available for two weeks following the Conference Call.

WRIT is a self-administered, self-managed, equity real estate investment trust investing in income-producing properties in the greater Washington metro region. WRIT owns a diversified portfolio of 70 properties totaling approximately 9 million square feet of commercial space and 2,540 residential units, and land held for development. These 70 properties consist of 26 office properties, 17 medical office properties, 16 retail centers and 11 multifamily properties. WRIT shares are publicly traded on the New York Stock Exchange (WRE).

Certain statements in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially. Such risks, uncertainties and other factors include, but are not limited to, the potential for federal government budget reductions, changes in general and local economic and real estate market conditions, the timing and pricing of lease transactions, the availability and cost of capital, fluctuations in interest rates, tenants’ financial conditions, levels of competition, the effect of government regulation, the impact of newly adopted accounting principles, and other risks and uncertainties detailed from time to time in our filings with the SEC, including our 2012 Form 10-K. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events....Read more