Real Estate Investing In These Tough Times

Today Is The Best Possible Day For You To Get Out There And Buy A Residential Investment Property - Whether It's Your First Property Or Your Tenth.

Find Out Why By Reading On!

Is It Time To Make That Giant Leap - From Renting To Owning Your Own Home?

Maybe You Have One Property, And Are Looking At Real Estate Investing - But Don't Know Where To Start?

If You Are Planning To Buy A Property Purely As Investment, Do You Have A Clue?

Whether you're planning on living in your residential investment property or not, no doubt you want it to be a solid real estate investment. You need to learn how to invest - read on to learn the tips that will ensure a successful investment - and when it comes to real estate, the sky is the limit! You can become a property mogul if you are wise with your decisions.

Right now, the property market has hit a slump. Of course you already know this - newspapers have been full of stories about property prices dropping up to 20 per cent in some areas. That means a property that would have cost you $500,000 a year ago is now just $400,000! Or a million dollar property can be yours for just $800,000. What a huge difference.

And not only have the prices of residential properties have dropped, so have interest rates - so right now, you can buy a property for less and pay it back faster. Then you will be perfectly placed to purchase your next residential investment property.

So in short, this global financial crisis has a silver lining - and you are the one who can profit from it. But you need to get moving before a million other bright young things (or bright not so young things) just like you get in first.

What to buy

The worst house on the best street - yep, the best strategies are the ones that real estate agents and investment advisors have been harping on about for years. By buying a property that may look a little shabby but is in a great location, you are virtually guaranteed a massive increase in property value. The house might need a coat of paint, or it might need a bit more than that (always get a building inspection done before signing on the dotted line, so you do know what you are in for). By doing some of the work yourself or enlisting the help of friends, you can save money making some improvements.

Then choose to sell, or rent out your investment property while waiting for the market to pick up.
A flash condominium - condos or apartments can make great investments. You might have to pay strata or body corporate fees, but you have a whole lot less upkeep to consider - no leaking roof, no garden to maintain, and no outdoor painting.

In addition, inner city or beach side condos in particular will always be popular with renters, so you have a great chance of yielding a high rental return and minimum vacancy times.
A knock-down job on a big block - okay, this isn't for everyone, and certainly isn't for the faint hearted. But, if you have a substantial amount of money to invest, why not look out for a big block that you can subdivide. Right now, builders and other laborers and contractors are willing to work practically for peanuts, because there is so little work to go around. Local councils are pretty keen to get building projects going, so you have a good chance of getting your plans approved pretty quickly.
Repossession: at the risk of s0ounding callous, you can make money out of people who are struggling right now. This is a secret: someone's going to do it! Why not you? You can pick up fabulous investment properties at low prices when they have been repossessed by lenders. See what is available in your city or surrounding suburbs.

Tips on how to invest

Do not over commit. Consider your budget carefully. Include a bit of leeway for yourself, to go on a holiday this year or next, to buy a new car if you think you might need to.

If you are taking out a twenty or thirty year mortgage, the chances are that you plan to pay off your residential investment property a lot more quickly than that. But right now, it is almost certain that you will see a rise in interest rates as the economy begins to pick up again over the next couple of years, and you do not want to be in a position where you are forced to sell early, or compromise your lifestyle in order to meet your increased monthly payments. You may expect a pay rise or promotion in the next year or two, but you probably can't guarantee this happening!

Take advantage of the free home loan calculators and budget tools available on the websites of most banks and financial institutions. Do some sums. Do a lot of sums! Work out how much monthly repayments will rise on a given loan amount if interest rates rise half a per cent, or a whole per cent. Look at your budget including rent, bills, medical expenses, food, pets, and unexpected events like a car breaking down or child getting sick.

Then remember that the faster you get out and buy something, the better position you will be in! So think carefully, make plans - but don't over analyse. At some point, you have to get and do it. Make it soon.
Research your lender. Unless you are one of a very lucky few, you will be having your real estate investment property partly financed by your bank, credit union, or another financial institution.

Do not simply stay with the financial institution you bank with; look at a few options. If numbers make your head spin, talk to a mortgage broker. They will do all the hard yards for you, and won't charge you a cent! They make their money from the lenders they work for, not property buyers like you.
Remember, the more money you can keep sitting in your home loan account, the less interest you are paying. Look for a loan with options that will help you pay off your property faster. Would it be useful to have your salary or wages payed directly into your mortgage account, then redraw money only as you need it? Does the home loan product you are looking at allow you to redraw without fees? Does it allow you to make extra payments if you have any extra cash to spare - such as tax returns?
Investigate the likely rental return you will get from your residential investment property. Right now, it is likely to be pretty substantial. There are a lot of renters out there, and rent in comparison to property value is on the rise. This is great news for you.
Keep records and receipts of every single cent you spend on your property - they all represent tax deductions at the end of the financial year. This includes advertising for tenants, interest payed on your loan, repairs, maintenance or improvements, council and water rates and much more.
Detach yourself from any emotional responses you have to properties you view. Whether you are planning on living in your real estate investment or not, you are purchasing an investment. Not a home.

It is what's known as a buyer's market right now. Everything is working in the favour of the buyer - there are many properties on the market, and most of the sellers are in a position where they can't hang around waiting for the price they want; they need to sell now.

Real estate investing really can be like the hen that lays the golden egg - but you have to buy the right hen in the first place. A good way to look at it is that right now, there are more gold laying hens on the market than there have been in your lifetime.

There has never been a better time to get out there and buy. A lot of people have lost a lot of money during the last year - and a few stand to profit from the difficult times we face. Make one of them you.