Property Investing in The 21st Century

Property is almost invariably a good investment, because land is all but guaranteed to go up in value. Even the USA’s housing crisis last year has not disproved this. Yet, smart property investment will earn you hundreds of thousands more annually than buying property thoughtlessly. When you buy and own property, you must constantly think about how you can maximize its wealth creation–i.e. how you can maximize the money it generates for you.

Tip: Land, not what’s built on it, goes up in value

When you’re buying property, remember that while land often goes up in value without you doing anything and what you build on it generally depreciates. Buildings do not go up in value; indeed, they depreciate as they get older and more run-down, and require maintenance from you to prevent this (or at least slow it down).

Buildings do, of course, create wealth for you when you rent them out. Yet, only land will reliably increase the total value of the property over time.

Consider Location for Optimal Wealth Creation

The quickest way to start earning money from your property right away is by renting it out. There is a market for rental houses and duplexes just about anywhere and location is key. You can get great results on rental houses, especially ones that are located close to busy areas filled with jobs. Thus, when buying property, research cities and neighbourhoods where jobs and populations appear to be going up and that will mean you’re more likely to get more renters.

A great location equates to your property being on the way to becoming a source of automatic wealth creation.

Tip: Don’t invest in property that’s so expensive that you won’t be able to charge affordable rent for the average person living in the neighbourhood your property is in.

People usually renovate homes to make them more pleasant to live in. However, did you know that systematic home purchase and renovation are actually very effective ways to make money? Many property investors seek out properties that need improvement. They renovate them, and selling them at great profits. If you do it right, renovating an old home that is in disrepair is very profitable. Yet, you have to do it right–otherwise, you won’t make enough money for it to have been worth the bother.

Good Homes for Renovation

The first step for successful home renovation is picking out the right property to buy.

Green Light Investment:

Look for investment properties that are in need of TLC but in good neighbourhoods. That way, once you renovate the house its price will go up fast.

Red Light Investment:

By contrast, avoid houses in poor neighbourhoods, no matter how low they’re selling for. Usually, in such neighbourhoods, the problem is the neighbourhood itself, not the condition of the house.

Unless you’re a very experienced renovator, or are willing to spend a lot of time learning, look for houses with problems that look bad to most buyers, yet are relatively inexpensive to repair. Such problems include extremely unkempt, untended yards and lawns; damaged paint jobs; broken doors and windows; and old or broken-down garage doors. You can repair these without too many problems.

If you personally know some housing contractors willing to give you a discount (or maybe are thinking about working as a contractor yourself), you can try tackling a house with bigger, costlier problems: non-working bathrooms, a roof that leaks, a kitchen that needs to be completely renovated, or broken electrical circuits. But a lot of consideration needs to be taken into account when dealing with heavy repairs instead of minor ones.

Bad Renovation Property Choices

When buying a home to fix and resell, avoid the ones that have permanent problems that can’t be fixed without dismantling the whole house: termite-ridden wood, asbestos insulation, basements that are prone to flooding, or problems of any kind with the foundation.

Need help learning more about investing in the 21st century? A 21st Century Academy Homestudy course could help you poise yourself for financial growth and security.

Property Prices

When you’re investing in property, it’s very important to know whether its price is going to go up or down in the foreseeable future. This much is clear. Yet, what if you’re no real estate expert? What if you’re simply an investor wanting to put money in something that has a very high chance of going up in value? You know that real estate tends to go up in value, but the question of, “By how much” depends on the individual neighbourhood, and on the individual property.

How do you ascertain how likely an individual piece of property is going to go up in value? Do you visit the neighbourhood and rely on your own, inexpert subjective opinion? What if the property you’re buying is in another country?

Property Gurus Inform You of Property Values

When trying to get a sense of a property’s value, don’t ask the owner; don’t ask your lender; instead, ask a property investment specialist such as an estate agent that deals with properties in that neighbourhood. Better yet, ask several agents working in that same neighbourhood.

This is not hyperbole: real estate agents have been known to determine the fates of entire neighbourhoods. The real estate agents, not lenders, or property owners, are the ones telling home buyers what to believe about homes and neighbourhoods. They are the ones to whom the writers of newspaper “real estate” sections turn, when researching new articles.

In short, if most of the real estate agents working in the same neighbourhood agree that the value of a given property in that neighbourhood is likely to go up, it will almost certainly go up. If they say that neighbourhood or property is doomed, don’t expect a good return on your investment.

Get A Property Investment Mentor

And, talk to other property investors who are having success. Someone who’s a property investment success such as Jamie McIntyre could provide you with a wealth of information and mentoring.