A growing trend in real estate is becoming beneficial for the investor property community is for lenders to viciously go after investors for deficiency judgments and not attempt to do any type of workouts. These workouts include forbearance agreements, loan modifications with or without principal reductions. These lenders are focused short-term on taking the foreclosure path and taking the properties back. In a few cases, the lenders have accepted deeds in lieu of foreclosure but that changed as the market continued to decline. Our return on this investment will be driven by two primary factors: our rental income and the appreciation of the property value. Therefore, we should begin by forecasting rental income and the appreciation of the property in consideration.
Once we have built out that portion of the model, we can use the information we have calculated to figure out how we will finance the purchase of the property and what financial expenses we can expect to incur as a result.
The analysis of buying the properties:
- Several years back, property investing allowed investors to earn huge profits in a very short time. This is because the competition was less stringent in those times but since more and more investors are now involved in the real estate business, it can be hard to find the right properties to invest in.
- Such deals still exist today but the only way to find them is to have your own network of professionals. You see, network building is needed these days to remain competitive in the industry. Despite the economic downturn, properties have continued to increase in value. The only reason why investors were scared to invest during a recession is because of the uncertainty in the trends of the market. Most investors opted to stay on the safe side rather than take risks.
- Have you tried looking into the historical trends of the property market? Records show that the trend has always been upward although it was not very evident during the economic slump.
As compared to stocks or shares, investor property doesn’t crash. True enough, there have been minor crashes but it was not enough to cause a major problem among investors. Property investing is true, one of the safest ways to make money. There are two ways to make money in real estate. One is through rental income and the other one is through the sale of properties. This will basically involve investing on buy to lets and flipping properties.
