What is the secret of property investments?
There are many different strategies and ‘secrets' of real estate, however none of them make any bit of difference unless you already have the real secret of property investment, which is having a goal in mind and the right strategy to match.
The biggest mistake people make in real estate is buying and hoping based on a feeling. To succeed you need to treat your portfolio like a business and take emotion out of the picture.
While there are many ways to make money from real estate there are a few golden rules which can help make sure you make money from any kind of property investment.
1. Buy Below Market Value – that way you are making money from day one and have a safety buffer built in in case the market recedes. You may also be able to withdraw the difference as cash to help buy more properties.
2. Buy With A Good Cash Flow – What a good cash flow is depends upon everyone's individual strategy, the property class and its intended function within your portfolio. They key is to make sure that you have enough cash flow to sustain the holding costs of your portfolio and enable you to continue buying more properties.
3. Buy With An Upside For Growth – There is a belief that investing in real estate is as ‘safe as houses' because the value will always go up. While over long periods of time this is true, it's not much good to an investor if they need to wait 10 years or more to see any growth. Buying in an area which is primed for growth is a huge advantage to speeding your portfolio growth.
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