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Benefits and Dangers of Real Estate Investing

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Benefits and Dangers of Real Estate Investing

There are many investment opportunities that you can consider getting involved with today, and one of which is real estate. Many people still have their apprehensions in real estate investing, since many would think that it requires a lot of technical knowledge.

Aside from that, people also are thinking about the costs of getting started with it, as well as the risks involved. Although all of the things mentioned are true, many people are still interested in investing in real estate. This is because there are a lot of benefits in real estate investing, and if you are able to become more familiar with them, then you may also find yourself joining the real estate bandwagon soon.

To get more familiar with the benefits of investing in real estate, some of them are found below.

1. One of the more obvious benefits in real estate investing is the appreciation of the value of the property. There are actually two kinds of appreciation when it comes to this, which are called external and internal appreciation.

External appreciation of a real estate property refers to the external factors that can make the value of your property go up. Some of which would be the present economic conditions, scarcity of land, developments, and such. Keep in mind that these factors can also cause the value of a property to depreciate. Thus, it is important for you to properly assess the present condition of the place you are going to acquire a property from. Invest on properties that are located in spots that are predicted to be hot in the next few years.

Internal appreciation of the value of your property would refer to the actual value of the house. For example, if you made repairs and renovations to it after being purchased, then it will definitely appreciate in value.

2. Real estate investing offers a high degree of leverage to you, due to the fact that you can borrow a certain portion of its value in order to buy it. Keep in mind that there are actually real estate investors who have purchased a house through a 100 per cent financing deals. This is actually a very nice investment technique, especially if you can sell the property in just a short period of time. If you are able to do that, the part of the proceeds would be used to repay the loan, and you will be depositing the entire difference into your own bank account.

3. Keep in mind that in purchasing a real estate property, you can also come up with certain ways to avoid paying certain taxes legitimately or legally. However, this should not be the main reason for getting involved in it.

These are just some of the benefits you can enjoy with real estate investment. As you go along the way, you will realize that there are more benefits that you will get to derive from it. However, it is best that you gather more facts about it, especially about the risks, so that you will be able to take the necessary steps to succeed.

Dangers of Real Estate Investing

If you have decided to get involved with real estate investing soon, then you may have already realized that there are tons of benefits that you can enjoy from it. However, in order for you to derive those benefits that you have been made aware of, you should also become more familiar of the risks involved in real estate investment, so that you will be able to make the proper preparations in order to increase your chance of success. Aside from that, becoming aware of the dangers of real estate investing would also provide you a better way of deciding whether you are indeed ready to take the plunge into the real estate market or not.

One of the most common risks in investing in real estate is the fact that there are times when certain things happen, even without warning. Such things that can occur and affect your real estate investment would include the sudden downturn of the local real estate market, companies going out of business, natural disasters, and so on.

These events can happen, and in most cases, they are usually beyond your control. If certain economic conditions make the value of your property go down, then you will have to hold on to it until the real estate market recovers. However, if you need to sell the property as soon as possible, then you will have to suffer a certain loss from it.

When certain companies go out of business, such an event can have an impact on the number of potential buyers you will have for your real estate property. Thus, the lesser number of possible clients you will have, the lesser the demand for your property becomes, and you may have to lower down its price eventually.

Another danger that you may have to face in real estate investing is in buying a house that is not in top condition. Keep in mind that one of the more attractive types of properties that people want to invest in are those that have been foreclosed or abandoned. This is because they are usually sold at bargain prices. If you decide to invest in these types of properties, you may put yourself at risk in paying a price for the house that is over its actual market value. In other words, you may end up spending more in repairing it, than you have anticipated. Thus, it is best that you have someone inspect the house properly so that you are assured that it is really worth the money you are going to spend on it.

These are some of the dangers of real estate investing that you need to be aware of. Keep these things in mind, and research about the best ways to get started with real estate investing, so that you will be able to come up with ways to avoid them.

Tips To Get Started With Real Estate Investing

Real estate investing continues to attract a lot of people, because of the fact that many have already gained substantial amounts of money from it. However, it should be noted that some people also did not see their real estate careers off the ground because they were not able to take the proper steps in getting started with it. It is very important for a person to start his real estate investing career the right way in order to gain success with it; and, below are some tips that will provide guidance to people regarding it.

If you want to succeed in your real estate investment, you should be aware that apart from the benefits that you can enjoy from it, there are also risks or dangers involved. If you do your research, you will realize that many people who failed to derive the benefits from their chosen business careers are those who did not gather enough information about the business before they get started with it. Many people are actually tempted to dive into their chosen business career as soon as possible, especially after reading success stories about it. Although such stories are truly inspiring, you should not let it get you overly excited about real estate investing, since it can lead you to get started with it the wrong way.

Research is actually one of the most important things that you can do in order to start your real estate investing career at the right path. Researching can be done in a lot of ways such as through the internet, through books, and even by getting associated with people who are experts in the business. Learning is one of the keys in gaining success in any kind of business endeavor. When you have already started your real estate investing though, you should always see to it that you continue learning, so that you will eventually reach the top of it.

There are actually a lot of eBooks today that have been written by experts in the business. You can actually gain access to them by simply searching for them through the internet. Many experts in the field of real estate have actually written down their knowledge about the business through eBooks, and some of them are even offered for free, while some come with their owns price tags. Just make sure to select the digital book properly, so that you won’t be wasting your time on those that are written in sub par quality.

Keep on learning on a day to day basis, until you are prepared to make your very first real estate investment. Motivate yourself by setting goals so that you will be able to monitor your progress soon, and make a profit on your first real estate property purchase.

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