How To Boost Your Investment Real Estate Returns
Numerous factors contribute to achieving above average capital growth when investing in real estate.
For starters, when deciding upon a location to invest, you should select an area with ongoing population growth. This will heighten the likelihood of demand for rental real estate in that locality, and hence put future pressure on both rental and price growth.
To heighten the likelihood of further demand for your rental home, it is wise to ensure that you don’t invest in something at either the top or the bottom end of the market. Essentially, your best bet is to select a middle-range rental home that will be affordable to most people, or more specifically, the middle-classes.
Property investor Hans Jakobi adheres to this philosophy. Top end properties are too susceptible to recessions. During the good times, top end real estate can do very well, but boom times don’t last forever, and top end properties are the first to take a hit at the outset of a recession.
Similarly, low-end real estate can under perform the market in terms of capital growth because the areas in which they are situated tend to be less desirable. Further, the type of tenant you are likely to attract with a low-end rental home may turn out to be a more high maintenance type of tenant, with a higher chance of defaulting on their rent and a higher likelihood of taking less good care of your rental home compared to an average renter.
The following linked article on selecting high performing investment property covers many other elements that form the recipe of successful property selection. There are also numerous Real Estate investment training courses in the Success University member’s area from renowed experts such as Loral Langemeier, Claude Diamond, Robert Allen, and William Bronchick. You can obtain a 14 Trial access to Success University for only $2 to check them out.
It is also essential to analyze the numbers pertaining to your prospective real estate investments just as you would do with stocks. You need to compare price-earnings ratios; internal rate of return; gross versus net yields; compounding interest, and before and after tax cashflow.
There are many software programs that can perform this function. One of the leading Australian programs is called the Posh Property Program. It allows you to analyse and contrast multiple prospective purchases against one another and produce a comprehensive Inspection Check List which you can print out and take with you when viewing prospective purchases.
In conclusion, it is not only important but also extremely worthwhile to take the time to educate oneself about real estate investing before diving in to your first, or next, investment. It is worthwhile to understand the elements that will contribute to a high level of capital growth, and then to locate and number-crunch a number of properties that meet these criteria to be sure that you are stacking all of the chips in your favor.
Posted on: Tuesday, May 13, 2008 at 4:26 am 
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