Unlike any other investments like stocks, mutual funds and other commodities the positivr thing about real estate is that, even in a bad economy, it is still better.
Basic accounting tells you that do not depreciate land and its valuation will just be a matter of supply and demand.
However, venturing into real estate properties requires more background study since you will be transferring your liquid assets into a very illiquid asset. In the real estate marketing business, we identify two types of clients: the end-user and the investor.
A real-estate investment may be different from your primary home so factors other than personal preferences might come into play. For an investor, it is a question of what are his investment goals—is it buying to hold, sell, or lease the property?
In this article we will give you a set of tips and guidelines on how to be profitable in the real estate industry.
Consider a foreclosed property
Forfeiture is the last thing on anyone’s mind, however, it is sometimes unavoidable and another person’s loss can be your gain. But since the property has been acquired by the bank, you are assured that the property is legitimate. Since the bank’s objective is disposal of these acquired assets, prices can be lower than fair market value and terms are most likely negotiable.
These are usually released through classified ads and bank newsletters. Banks also have accredited brokers to handle these properties for them.
Identify growth areas
We’ve all heard the famous adage that, when it comes to real estate, it’s all about location, location, location.
However, real estate prices in ideal locations like Metro Manila have become very steep that owning a piece of land has become prohibitive.
Fortunately, real estate development in the country has flourished in the past two decades. Developers have changed the former rural landscape and have made centers for urban growth beyond the capital. The influx of commercial developments in provinces created a new wave of migration to areas outside Metro Manila.
If you are currently located in the metro area in the provinces, you might encounter information that there is a new mall to rise or a highway connection is being planned. These indicators will definitely mean land appreciation.
Be on the lookout for reputable developers who will be conducting pre-selling of previously raw lands because you will definitely have the first-mover advantage and prices are relatively lower.
Investment in these types of property can either be a commercial or residential lot that you would want to hold on to until it is ripe to put up for sale.
With the current thrust of the Duterte administration of “Build, Build, Build”, the pieces of property that will be traversed by these proposed infrastructure projects will gain spotlight and will be worthy of consideration
Personally go to open houses and site trippings
A real estate investment is a high-ticket purchase and you would not want to make a mistake.
You should identify your desired town and neighborhood, property size and budget. Your real estate broker should be able to discuss with you how to manage your investment and what is the estimated return on investment.
Look into the quality of property management
The proliferation of high-rise developments has brought into the spotlight one important consideration in purchasing a condominium unit which is the quality of property management. Since buildings depreciate, property managers should ensure the quality of facilities and amenities.
This will also guarantee a high re-sale value of the property thus giving you good returns. Property managers also offer leasing services helping you get tenants for your units.