Thursday, October 11, 2012

Uncovering the Risks in Real Estate Investment

Real estate has the reputation of being a good investment, no matter what's going on with the global economy. Through upturns and downturns, investment in real estate can often slide through on an even keel and eventually come out a winner for the wise investor. As with all investments, the purchaser must understand all of the terms and conditions of the sale and know how to ask the right questions to get honest answers.

Although you can't be 100% positive and invest without a slimmer of a doubt, there are certain points you must be clear on. The deal must be transparent enough that you can be satisfied of achieving your investment requirements. Before handing over hard earned cash on any investment, be sure to understand the risks involved so you can avoid obvious or hidden pitfalls.

Seasoned Developers

With the real estate market always appealing, many new developers pop up every day. Be careful. You need to know what you're getting and the best way of doing that is by checking the developer's track record. Also be wary of small developers who are advertising cheap properties in outlying towns. Do your own homework and do not blindly trust anyone. As a beginning investor, it's usually safer to avoid companies that do not already carry a good and reputable name. Go for a trustworthy company that you can research and find past history and data.

Location, Location, Location

I know you've heard those words over and again relating to property investment, but they still hold true. There is no doubt about it - any property's value is driven by its location. But since this is common knowledge, those properties come with a hefty price tag. If you can't afford a centrally located piece of real estate with close by amenities, go for the next best thing. Find an out of the way location with future plans in place for an infrastructure. Just keep in mind while this investment could be a long term dream come true, take the time to verify all plans for improvements with the district's town planner.

Word to the Wise

At the end of the day, after you have checked the title, valuated the property and done your homework well, the decision is yours to make that investment plunge or back off. Even with all of the positive details at hand, you must trust the seller. Here is where instinct comes to play. If your gut feeling does not jive with the facts at hand, this could be a sign that the buyer is not being totally transparent. Trust your instincts!