The recent global financial crisis has caused massive turbulence in real estate markets around the world. So much so that many people start to get away from the property as investment. However, with a tiny returns expected from stocks and bonds in the coming years due to slow growth, investors are back with a decline in the real estate market. Let’s look at the most important factors that a real estate investor should take into account when looking for potential investment opportunities.
Positive and negative gear
Before looking for a particular good, the Sage Investor must know:
how much they can afford to spend.
How much they should borrow, as separate from how much you can afford to borrow.
The cost before and after the tax.
the potential for capital growth.
rent request.
The property is an asset and should therefore create an income. The properties that earn money are positive cash and called positively oriented. The investor wise hunt for properties that create money from the first day. The reckless real estate investor buys Marketing Slick companies that promote properties that lose you money and create a negative cash flow. This is called negatively oriented. Would you buy actions knowing that you will lose your money? So, why should buy a property be different?
How much can you pass
It depends on your current fairness and income. The first thing the investor wise goes to the mortgage broker and their request to obtain a pre-approval of the bank. Mortgage brokers can shop and get you the best offer of various banks they are associated. This is a loan offer from the bank that says they will lend you some money if you want to buy a property. This basically has 2 powerful effects. One, you know how much you can use and so focus on affordable properties. I have seen cases of unwise real estate investors spend more than they could afford, because the pointed sales representative and money lenders more concerned about the commissions stretched them at their limits.
The second effect of pre-approval is that you are almost able to make cash offering on properties because the money has only to draw. Species really speak and such offers can often reduce the purchase price of the wise investor.
How many cashflow is the property.
Investors should strive to make positive cashflow property investments from the first day. In order to qualify a property as a wise investment, rental income should ideally be more than the expenses you pay to maintain the property.
Another aspect of real estate investment is the tax discount you receive. This is one of the biggest attractions for which people prefer the property that something else in New Zealand. This is developed by adding less revenue all expenses, particularly on the amortization of paper. This loss can then be offset against your income. For example, a loss of $ 10,000 on paper can be offset against your income. So, if your tax rate is 33%, you will pay $ 3,300 less tax. This discount can make the cash flow from your property from your property a positive form day. The wise investor always makes his sums before going further!
The potential for capital gain
This is the most neglected aspect of the imprudent investor. Areas that create high capital gains are often places with high population growth, a high labor market and are close to the city. Check the statistics and determine which types of gains have been manufactured in the past, and then derive your own conclusions about the future. Some areas of New Zealand have become a constant decline in value. If you live in areas like these by looking at the main centers in New Zealand, a better answer.
Rent request
The request for your property should always be high if you choose the right place. Buy with your tenant in mind and identify their potential needs. The investor wise is looking for properties that are suitable for their