Property Investment Can Seriously Improve Wealth


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Property Investment Can Seriously Improve Wealth

  1. 1. ==== ====For more tips on Safe Mortgage Investing go ====When you are looking to make money, the old adage holds true: "Buy low, Sell high". In otherwords, "You make your money when you buy, not when you sell".This is a fundamental concept that you must grasp in order to be a successful property investor.You must always buy your real estate for a low price, never for the full market value. Never forgetthis simple yet crucial rule and youll always make money. You may think that is all well and goodbut wonder how to go about doing it.Well the great thing about real estate is that it has no absolute, set price. No one can say fordefinite what a piece of real estate is worth because valuation is an art not a science. Contrary to apopular misconception, estate agents dont dictate the price of real estate. When you arrange avaluation with an agent, theyre just giving their best guess as to what they think people will beprepared to pay for it. The true value is whatever someone is actually willing to pay for it. Forexample, someone with an emotional attachment to a property might be willing to pay lots more forit than everybody else. In contrast, an investor might only be willing to pay less than other peoplewould pay for it. Do you see what Im getting at? The value of any given piece of real estate is verymuch an unknown quantity until the point of purchase. Different groups of people, for their ownindividual reasons, will value any given property differently.So the emotionally driven buyer might pay, for example, £50,000 more than the majority ofpeople are prepared to pay, in order to secure it for himself. Consider an analogy with an art loverat an art auction.Fortunately for us, its not only vendors who can benefit from the fact that property values are notabsolute. Indeed, vendors are human and can be emotional too. Therefore they might sell theirproperty for less than it is generally considered to be worth. There are many reasons for this whichI will discuss in other articles. Wouldnt you like to be the lucky buyer who snaps up that cheapproperty? I certainly would.You should never buy property from anyone who is not motivated to sell to you at a discount. Ifyou ignore this advice and buy at full market value you will run out of money very quickly and findit difficult to make a profit. If you dont know how to find these emotional vendors and their greatdeals you should use the web to get some free property investment education.So, when you find a great deal, how are you going to finance it? If you were buying equities, youwould have to use your own money. No bank will lend you mortgage money to buy equitiesbecause they know how volatile the market can be. No. They are happy for you to take that riskalone. In contrast, when you want to buy land, houses or apartments, you can do so using thepower of a mortgage. You borrow and use "other peoples money" i.e. the banks, to buy an asset
  2. 2. that will make you money forever more! Amazing!You see, they know that real estate is a safe, reliable investment and that as time goes by theirinvestment grows ever safer. From their point of view, if things go sour they can sell your asset fora lot more money and get their mortgage money back. Banks arent stupid. They demonstratetheir faith in the property market to the public every day by lending on property purchases. Weveall heard the expression "as safe as house", right? If the banks class property as a safeinvestment, shouldnt that tell you something? Now dont get talking about the credit crunch and allthe trouble that banks are in. That is nothing to do with them lending money to responsible peoplelike you and I to buy safe, solid investment properties. They made mistakes in other areas of theirbusiness but were not going to get into a discussion about the credit crunch and overpaidbankers. Lets get back to the magic of real estate.Compare buying real estate with equities (shares, bonds etc). There is a fixed market price forthose assets and if you want them you must pay full price just like everyone else. There arebrokers fees to pay and tax on any profits with no breaks available from the tax man. Your valuesof your equities are probably volatile and could rapidly decrease in value. You can probably onlyhope to hold a very small percentage of the total number of shares on the market. With such asmall voice you have no realistic, practical say on the running of the company that you haveinvested in so you cant influence the value of your investment. Compare this to propertyinvestment, with the ability to buy below market value, add value and the many generous taxbreaks available. Surely the evidence is weighing up in favour of property investment vs stocksand shares.So I hope that you understand why real estate is such a good investment in comparison to someof the other choices out there. You probably want to learn how to use mortgages like the pros tofinance your next investment. You probably want to learn how you can become rich in real estate.If so, I recommend that you look at the next article in this series and hope that you find it useful.Now visit The Six Figure Mentors to learn more about the industry experts who helped to educateme about the world of property investing.Learn more about the world of property investing by claiming your choice of free courses at TheSix Figure MentorsArticle Source:
  3. 3. ==== ====For more tips on Safe Mortgage Investing go ====