Successful Real Estate Investor Tips
How to become a successful real estate investor in Singapore?
To be a successful real estate investor in Singapore, which requires being able to find good real estate investment deals and put them together. Your job is not to become an closing attorney, a management expert, or a repair person. Use professionals!
This article shows you the top tips that real estate investors apply to their property portfolio building strategy to ensure success from their investments. You must learn how to appraise and find the true value of real estate this information will help you make better investment decisions. Realtors, appraisers, and banks determine what a property is worth by looking at comparable sales usually three to five sales of similar property that has recently sold in the same neighbourhood. You must be able to do the same.
Getting a list of comparable prices of properties bought or sold (and when it sold) for the neighbourhood you need information about, and asking active real estate investors in your area what the market is like will be helpful and making a better investment decision.
What is the ideal market for investing?
There is no such thing as an ideal real estate market for investing. It tends to be more difficult to find bargains in rising markets if the market keeps rising the probability of selling the property quickly for a large profit increases. In contrast but when property values are falling more bargains become available.
You need to be able to assess the true value of properties based on when you expect to sell. Your purchase must be made at a good enough discount to allow for a profitable sale at a later date.
Speak to both the locals in the area and the other ex-pats before you commit to anything, you can learn a lot from other people’s experiences. Also seek professional advice along the way from a reliable company which specialises in buying properties abroad.
In every part of the buying process, make sure that you shop around for everything; finding the house, finding the estate agent, seeking international mortgage advice, the local taxes, the solicitor etc. Always make sure that similar sized houses within the local market are being sold for around the same price range. Take your time and ensure you’ve covered every part of the buying process.
Leverage is very important for investors because the less cash you put down on each property the more properties you can buy. If the properties go up in value your rate of return goes up. However if the properties go down in value and you have a lot of debt on the property this can result in negative cash flow.
Since real estate is generally cyclical negative cash flow is only a short-term problem and can be handled if you have other income or a cash reserves. This makes “Nothing down” investing very helpful to protect against negative cash flow for high leverage investor.
If you are a long term real estate investor leverage will work in your favor if the markets in which you invest appreciate in the long run and your income from the properties can pay for most of your monthly debt.
Strategies to limit risk
To limit risk become educated in your local real estate market first by understanding the large scale trends from global down to national regional and specific neighbourhoods. Learn about target neighbourhoods with the help of successful real estate investors in your area along the way.
Real estate investors can help you interpret market indicators such as the average length of time houses have been on the market this month versus last month or last year. With this information it will help you make better investment decisions.
It is important not to guess the future of a local real estate market you need to have a clear plan in mind when purchasing property. As a real estate investor you must know exactly how you will exit the property before you buy. And have a backup plan or two in case the first course of action doesn’t work. You must know your market and your plan before you begin to invest.
What levels of capital growth can you realistically gain on your property investment or how much rental income can you generate? Work out these facts and then work backwards towards your initial budget to work out your potential profit margins. At all times you have to keep the bigger picture in mind to ensure that your real estate investment has good potential for profit.
Think long term
Unless you’re buying property off plan and intending to flip it for resale and profit before completion you should view real estate investment as a long term investment. Real estate is a slow to liquidate asset, cash tied up in property is not simple to free up. Take a long term approach to your property portfolio and give your assets time to increase in value before cashing them in for profit.