During COVID-19 the global stock market saw millions of normal investors having their fingers badly burned by the market, the same story seems to be repeating now with the Omicron variant. Overnight life savings were gone, retirement funds went down and the economic forecast for all of us who had any money invested in stocks and shares was bad to say the very least.
As a true result investors in the hundreds of thousands turned their backs on the volatile Stock Markets and sought alternative asset classes in which to invest their hard earned money. This has led to a global boom in Real Estate Markets and property prices, and it has created a generation of savvy Real Estate Investors.
For those of you wondering whether it’s too late to venture into Real Estate Investing or considering how best to make the most significant returns from property investment, here are several great tips for successful real estate investment to set you on the path to potential profits.
1) Consider Investing Outside of the US
There are many relatively untapped real estate markets in countries around the world that offer the real estate investor greater return on investment in the form of rental yields or short to medium term capital growth, unlike Stocks and Crypto, these markets are no correlated.
While major markets in the USA, South America, Australia and Europe are slowing down, there are emerging property markets globally that are hungry for investment and are proving to be highly profitable.
In 2019 a number of countries were already aligned for accession into the European Union and as a result property markets in these countries are likely to benefit from greater numbers of visitors, more trade, increased investment into infrastructure and more stable economies.
2) Make Sure To Measure Risk
This sounds ridiculously simple right? Well, you’d be surprised how few people actually make sure their plans are actually sustainable and as profitable as they hope, specially when investing in other markets were you are less knowledgeable.
Examine any real estate market that you’re about to enter by first comparing property values across the city, state or region and making sure you know what your money will buy you. Then ensure that the rental yield you intend to obtain from your property is actually realistic or that the asking price you intend to set once you’ve renovated the property will be offered, be careful of those who raise their prices because you are an American buyer, if you are not experienced in such markets, hire a local broker.
3) Do the proper research before investing
This goes from assuming a house is structurally sound and verifying that tax laws won’t change, from believing your tenants when they tell you that they are house proud and honest to accepting the first builder’s quotation. Always get the property inspected before making your purchase.
Do your due diligence on every single aspect of the process from ensuring the asking price for a property is fair to checking your tax returns before your accountant submits them for you. This is your investment, your future, your potential profit and therefore it is ultimately your responsibility.
4) Hire local experts in Real Estate
Less people are a master of all trades therefore be prepared to acknowledge areas where you are far from being an expert and at least consider courting a second opinion. Again, this goes from checking out the structural soundness of a property to understanding the legal ramifications of letting out your property. If in doubt always double check – and if this means you have to call in an expert, make sure you call in an expert, no matter if there will be a cost, it will be worth it.
5) Understand the local market and budget
Whether you’re purchasing property to lend out or buying real estate to fix you need to sit down and add up every single area of projected expenditure to enable you to set a realistic budget with which to work, I usually increase my budget by 20% to account for unknown issues that will come up.
Make sure you add in everything from having searches and surveys conducted, legal fees, accountancy fees, insurance costs, likely interest payments on any finance required, taxation, connection of utilities, marketing for tenants or buyers, real estate agency fees, and of course don’t forget to add on the cost of the property and the price of any renovation and refurnishing and decorating work required.
Spend time considering every single area where a cost will be incurred and detail every likely payment that will have to be made and you will arm yourself with a bullet proof budget and do all you can to ensure you encounter no nasty surprises along the way.
As you might already know, we are mostly about investing in the Stock Market, REITS and Cryptocurrency, however Real Estate is always a great market if you are looking for an alternative asset that will provide cash flow, if you have any more questions or need more information on how to be successful in Real Estate feel free to contact us or leave a comment.