Real Estate Investing – Real Estate Investments Around the World

Real estate is a legal term that refers to any property along with the land on which that property stands on.

The legality of the term real estate heavily relies upon the jurisdiction which it falls under. The most notable jurisdictions are; U.S.A, U.K, Canada and Australia.

Financial muscles must be stretched so that a corporation can invest in real estate since this investment has become such a major area of business.

Real estate has with time undergone a metamorphosis into distinct classifications that has had investors to call in specialists to facilitate deals on their behalf or valuate the investment.

Listed below is a breakdown of the distinct fields of real estate investments:

1. Appraisals- This is where professionals offer their specialty to valuate the investments.
2. Property Management- In this category the owner leaves their property for other specialists to manage it on their behalf and a certain commission is chargeable.
3. Brokerages- In this field a mediator will facilitate a deal between two parties and in return they charge a fee for the deal.
4. Real Estate Investing: This is where a person or company manages a real estate investment.
5. Real Estate Marketing-The sales side of the investment is managed by a professional in this field.
6. Development- This is improving the investment by either adding or replacing buildings on that land.
7. Corporate Real Estate- Here a real estate is managed not for income purposes but to support its core business.
8. Relocation Services-This is relocating people or business to other countries for expansion of the business.

Basically almost all construction business has a connection to real estate

In the recent past economists have seen that lack of real estate laws can in a greater perspective affect or hinder real estate investment in developing countries. In that light a country like India is currently in the process of establishing definitive legislations that will see the smooth functioning of real estate investment.

In addition, Pakistan is in the process of implementing a regulatory framework that will help soften the ownership of real estate investments by foreign corporations. Pakistan is as at of now witnessing foreign real estate development mostly Dubai and Malaysia based companies.

In five years time Pakistan will have drawn three million dollars from foreign investors.

Real estate investment is finally a major case of capital budgeting this by using analysis that incorporates future streams of income that it will generate and the risks associated with it.

Should You Really Invest Your Hard Earned Money In Real Estate

Many people are scared to take chances but the ones who aren’t are the ones who emptied their savings and 401k’s and invested their money in real estate. Their now getting cash flow, hopefully taking advantage of the tax breaks that come with investing in real estate and best of all, they don’t have to worry about some corporation running their life savings into the ground.

Now it may sound easy, but there are steps to take to make sure that you invest your hard earned money right.

First off, I don’t suggest working with a real estate agent. They are great and they have a job to do but most of them are still stuck in the retail world of real estate. That world ceases to exist now. A huge percentage of real estate purchases are from cash buyers.

What you need do is hook up with an experienced real estate investor like myself that will take your hand and show you how the market works.

Some potential investors get in this business without anyone to guide them but end up getting way over their head because they simple don’t know what they’re doing. This is what causes many to say it’s a scam.

With companies closing down left and right, 401ks are no longer safe. This along with the shaky stock market can take away what you’ve worked all your life for.

As for saving, banks are closing down and yes your money is backed by the US, but truthfully, how long can they do this?

Investing in real estate is the safest way to invest because you don’t have to worry about some big corporation having control over your assets and you get plenty of tax breaks when done right.

If you own enough properties, you can get enough income to support your lifestyle and this is while you’re sitting at home. You can have property management firms control all aspects of you properties for a small percentage which physically removes you from the property.

Start small though. Buy a few while working with the right investor and see how it works for you. After seeing how profitable it is, you’ll be well on your way to building a massive real estate empire. How do you think Donald Trump started?

Different Types of Real Estate Investments

Real estate investments are of various types; you can single out any of them according to your requirements. Generally, you should consider following points when choosing one of them.

o How much capital do you have?
o Are you interested in short-term investment or long-term investment?
o A careful review of advantages and disadvantages

Coming back to our topic i.e. different types of real estate investments, following are some basic types of investment.

Rental Properties:
This is the most basic and probably the most commonly used method, you purchase a property, find some renter and rent it out after agreeing upon a fix amount of monthly rent. All expenses like maintenance, tax, mortgage payments lies on you (the landlord), while you secure a regular cash flow coming from the monthly rent payments. Not only that, but you can also benefit from property prices going up in the meantime. You can rent all types of properties, be it the residential, commercial or vacation rentals.

As mentioned earlier, you will be getting a regular stream of income while keeping the possession of property rights, therefore you can benefit from the increase in property value as well.

In case you are not able to get some reasonable tenants straight away, you are stuck with your investment, which is supposed to be a large one. Also, the irksome chores of maintenance or dealing with troublesome occupants can prove to be a little too much for some landlords.

Property Flipping:
Property flipping is most common in real estate markets going through significant growth. In these markets (where property prices are soaring), you can purchase a property and put it up for sale straight away, because the prices are rapidly increasing, you should be able to make profit instantaneously. More experienced investors also go through some renovations in the property (known as fix and flip) to secure maximum profits.

This type of property trade (buying and quickly selling) is not recommended for rookies, as it involves quite a number of complications. However, lots of experienced and shrewd investors have managed to make quick money, by just flipping the properties in booming markets.

An unsuccessful attempt at property flipping (where you fail to flip the property to another buyer or the price goes down instead of rising) can prove to be disastrous. Stay away from this type unless you are sure of your foreseeing skills.

Indirect Investment (Investing through REIT):
If you are short of capital (not enough to purchase a property on your own); you must be looking for an alternate that’s easy on your pocket. Investing in “Real Estate Investment Trusts” or real estate investment groups is one such alternative. Real Estate Investment Trusts (REIT) or groups are corporations, they invest in real estate and you can purchase the shares (quite similar to mutual funds).

This is easily the most liquid form of real estate investment as these securities can be sold anytime like stocks. You don’t require substantial funds to invest and the profits are often higher than normal stocks.

Just like mutual fund, you need to have a basic understanding of the market before you invest into REIT. Another negative aspect is that normally the growth rate in share values or dividend is minimal.