There are an increasing number of real estate investors in recent times. Given the never ending demand for housing whether commercial or residential is what is keeping these investors in business. So for those who might be thinking of plunging onto the real estate market or those who have just started out, it is best to have the right information to be able to compete effectively for in the world of real estate.
More emphasis should be put in the areas of financing and marketing. These are the areas that are considered to influence the success and growth in this business.
Plan your finance well
In order to understand real estate financing, it is important that you understand the time value of money, du an dai phu the existence of leverage and how to make it work best under your condition.
There are many options of financing real estate property. The widely known and used are cash or credit. What you should aim at is to apply necessary leverage.
Using your own money to finance property is not always the best option. You could better reap a lot if you could split the sum into small amounts for down payments for several properties.
Though using credit has its own shortfall, it gives you ample time to apply leverage. Apart from enjoying tax deduction against your interest on loan, it also allows you to acquire a lot of properties, generate good return on investment. For instance, if you purchase a property worth $ 1,000,000.00 by paying a down payment of $ 100,000.00 (that is 10%) and settling the rest with a loan. After one year that property appreciates to $ 1,100,000.00 so your equity on the property is now worth $ 200,000.00. Since there is interest on the loan you can rent the property to generate cash flow to offset the expenses.
Financing through credit doesn’t necessary mean you have to raise the down payment. In some instances you can even go with nothing down, however you have to pay higher interest rate that means you need sufficient cash flow to fund those charges.
Other option available to you is to use peer-to-peer financing. This is a new trend in real estate financing. Private lenders in this situation have taken the role of the banks.
So before you can choose the right financing for your real estate it is good to do your math and evaluate your goals.
Many at times do you find many investors using the same marketing strategies that have there for years and we are all familiar with. It is not because these strategies are not working but what they do is fail to use other more innovative and better methods. Just placing posters in your neighborhood or the well known classifieds ads is not enough.
Just like any other business, you used a marketing plan for your real estate business. This will help you to actually put into action your strategies and have control of two overall marketing. You should consider looking for more ways to generate more leads e.g. using web marketing, identify your unique competitive advantage, building your network and test the response rates from each marketing technique you use.
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