Investing Trends

Ken McElroy, author of "The ABCs of Real Estate Investing," has a method he uses to find prospective investment real estate. He's been at it for a long time but, he says, no matter how much experience he gains, he always uses the same method.

Research, research, research. "I have never purchased a single property without going through this process," he says.

His process is one that allows him to quickly narrow the scope of his search, and he describes it in terms of levels. Level I research, he says, is something you don't even have to leave your house to do. He calls it "the very preliminary stuff."

You may go online and research the major markets in a given area of the U.S. to discover the best cities in which to invest. You want to look at quality of life, economy, industry and population. Look at the newspapers and business journals in every city that interests you. Follow the links. Discover everything you can.

Now you're ready for Level II—choose a city and make contact.

What you want to do now is begin setting up your team. This is not something you want to skimp on. These are the professionals you are going to have to employ to get things going, experts whose opinions you will want to use. Your team will be able to see things that you cannot, because of its areas of expertise and because of its familiarity with the city. Your team members will be people in the industry and who have contact with the industry—such as lawyers, accountants and brokers.

Not all of your meetings at this phase are about setting up your team. In fact, you are simply attempting to gather information about the city at this point. But the knowledge that your contacts demonstrate at this point will clue you in on whether you want them on your team when it is time to make that step.

Level III happens when you return home. This is when you fill in any gaps that are left in your knowledge. Sign up for newsletters, have your contacts set you up with lawmakers and other business people who can give you accurate projections of the sub markets in the area, crime statistics, construction plans—anything that may influence how good an investment a piece of property is.

When it is time to make a decision about which area in which to look for property, start in the place you would most like to invest. Start there even if you don't think you can afford to buy there. You never know what you will find. According to McElroy, there are deals everywhere, even in the most desirable locations. Something that needs a lot of cosmetic work may actually be in fine structural condition. A place like that can be a real "diamond in the rough," according to McElroy.

He advises that you take a skeptical approach, and says he never actually expects deals to go through. This isn't negativity, he says. It simply allows him to retain the option of walking away, keeps him from putting too much effort into making the deal happen. If you have to try too hard for it, then it isn't a good deal. You have to be willing to walk away from any piece of property.

Office buildings can be very profitable, and long-term leases mean less management than with residential income properties.The downside? Nothing seems to go up and down as much as office rents and office occupancy rates.

Investing in office buildings can be very profitable. A friend of mine bought the office building that his law firm was renting, and rented it to his company. It generated cash flow from the start. Now that the original mortgage is paid off, the net income is a sufficient retirement plan by itself.

There are risks with office buildings. The biggest one is simply that the rental rates can go up and down with the economy. In the worst of times, the same number of people need housing, but there may be a major drop in the number of businesses, or at least the number that are looking for an office to rent. After the dot-com crash, for example the rent for many buildings in the silicon valley area dropped by 30% or more.

A drop of that much means losing the property for many investors. Suddenly having a large negative cash flow for years isn't an easy problem to overcome. But even worse is the fact that during these rough times, many office buildings are empty for a year or two, with no income coming in at all. I have seen office space and even whole buildings sit empty for several years.

You might think that long-term leases reduce this risk. They may to some extent. And the long lease periods that are common are one of the attractions of this kind of investment. However, lease or no lease, if the company in your building goes bankrupt during a recession, they will not be paying the rent. Suing them probably won't help at that point either.

Does this mean you shouldn't invest in office buildings? Not necessarily. If there is a low vacancy rate in the area, and the economy is doing well, you can have good cash flow from office space. However, because of the inherent unpredictability of future vacancy rates and rent levels, you should always plan to have a good chunk of cash set aside to cover the rough times.

You also want to get a higher rate of return than with something like residential rentals. Higher risk doesn't make sense if you don't make more for it. You might do okay breaking even on your rental houses while the renters pay down those mortgages, but you better have a good positive cash flow if you invest in office buildings.

Ideally, you want to buy a building that already has a the tenant or tenants in place, and with leases that have a couple years to run. There is not necessarily a line of tenants waiting to take their place, like there can be with residential rentals. Office buildings, and the tenants in them, are unique, and fitting the two together will almost always take a little time.

If you risk buying an empty building (probably a bad idea), start advertising before you close on the deal. You should also plan on a year without income. You should also be getting the building at a price that assures you of really good cash flow when you do get it rented - to make up for that vacant time period that will be eating up your money.

Talk to other owners of office buildings in the area, to see what their biggest problems are. Find out what the usual arrangements are, like who pays for landscaping, and how much the tenants are allowed to modify a building. Find the buildings most similar to the one you are considering, and see if you can find out what they are renting for. In other words, if you do invest in office buildings, you should do your research.

Discerning investors have long been aware of the lucrative gains to be made from purchasing property abroad. A prime property in an excellent location, purchased at the best price, can offer the investor a secure return, whether the property is for personal or commercial use or is to be enjoyed solely for its high rental returns. Purchasing property abroad has never been so popular, with significant numbers of people favouring investing abroad over the traditional pension scheme. According to recent figures, some 254,000 Britons now own homes overseas. Indeed, the returns to be enjoyed from investing even nominal amounts in overseas bricks and mortar can be substantial, leaving more traditional savings options quite literally in the shade.

It goes without saying that the potential investor must be well informed, with trends moving quickly. The press and media are bursting with advice on the latest emerging hotspot and fad buying can be a costly mistake. Whether you are looking to cash in on brisk capital gains, aiming to profit from rising rental yields and capital appreciation, or looking for a second home, it makes sense to examine all the options and not expect the latest 'Top Ten' or stylish television presenter to provide clear and objective advice. Strong traditional markets such as Spain and France are quietly but confidently being challenged by more lucrative emerging markets, where potential for growth is higher, the markets nowhere yet near saturation point. Cheap air travel and flexible financing can often make a potential property hotspot appear (and be) too good to be true.

Each year, it seems as though a pin is taken out by the top property PR firms and stuck randomly into a huge world map. The place it marks then designates that year's property hotspot, such is the seemingly imprecise nature of overseas property trends. Purchasers duly flock to the newly favoured country, saturate it and leave the market stagnant, with no room for growth. These purchasers are left berating their haste, realising too late that the buzz around a new market often fails to take into account certain fundamentals, crucial for maximising capital growth. Is there a secure local infrastructure? Is the market tourism-driven or tourism-hopeful? Would you want to live there? Nonetheless, it is reassuring to know that the savvy investor can still emerge victorious by making sensible investment decisions depending on clear and well-researched criteria. While the madness of trend investment is here to stay, it remains vital to pay attention to the quietly emerging markets. An important factor of successful property investment is to get to a hotspot before it becomes a hotspot, to identify a dark horse and place your bet on it.

Morocco is one such dark horse. Only three and a half hours flight time away from the UK, Morocco is currently one of the world's top emerging markets, offering investors a real value for money experience. An exotic atmosphere, combined with excellent amenities and progressive governmental policies has made the country a firm favourite with tourists, with recent reports confirming that flight bookings to Marrakech alone rose last summer by 295% on the previous year. With homeowners enjoying capital gains of 20% year on year, Morocco is the perfect market for those wanting to cast their net further afield.

If camels and bazaars are not your thing, you could do far worse than take a look at north Cyprus: the beautiful climate, stunning natural beauty and excellent amenities have attracted increasing numbers of curious tourists over the past few years, many of them returning year on year to enjoy the uniquely Turkish Cypriot hospitality. Property construction and purchasing is brisk and yet 90% of the country remains untouched. Savvy political thinking plans on keeping it this way. With prices on average a third of those in the south of the island, this last piece of untouched Mediterranean is a well-kept investment secret indeed.

The book, 31 Days to Profits in Probate Real Estate, is the definitive guide to leveraging probate property purchases into true real estate profits. The author, Ron Mead, lays out a step by step plan of action. The book is not full of fluff and junk you don't need. He gets right down to the business of showing you exactly how to make money buying probate properties. You don't need any money or credit to make this work. No kidding! He covers all of the details of how to accomplish this. You should know this is a method of acquiring real estate that is widely accepted among investors and is all very legal. You can be very successful with this program even if you have bad credit. The system works beautifully for all who have put it into action. This is a system that will work for everyone! All you have to do is read the book, follow the steps as outlined and get ready to make some nice big deposits to your bank account.

Let Ron show you how to provide a valuable service to families in need and how to profit from it. This is the same system used by some of the gurus out there who insist on charging $3,000, $5,000 and in some cases much, much more. Ron has compiled the key components of his system so that you can get down to business; fast! He takes pride in sharing the information and seeing his readers change their lives; virtually overnight! The best part about Ron's system is that you can read the materials in one or two sittings and start implementing the business immediately. The other programs often require you to take time off of work, fly to another city, spend hours wading through fluff; not to mention spend thousands of dollars in the process! There is no need to do this the hard way. Just buy the book, read it; and you are on your way.

Oh! And the best part is – Ron is available via email to answer any questions you may have; an unbelievable benefit in any real estate investing venture. Everyone could use a little hand holding in the beginning and he is there for you!

Don't wait to buy this book. Remember! He offers a 100% money back guarantee. He has helped a whole lot of people who formerly had zero experience in real estate investing begin new, lucrative careers. For the cost of about 2 pizzas, you can look forward to changing your financial future. You will find further information here. http://www.ProbateProfitSecrets.com/

I proudly recommend this resource to my clients as a safe, effective and virtually risk free means of making nice sums of cash. So far, they love it. I get calls all the time from them telling me they just can't believe how easy the Probate Property Investing system is.

In his Rich Dad book series, Robert Kiyosaki trumpets the benefits of investing, especially those of real estate investing. Those include tax benefits, and the ability to have your money go to work for you without your lifting a finger. It sounds wonderful, doesn't it? The idea that you can turn a dollar into two just by placing it in what can seem like a magical realm can seem very enticing.

In order to actually turn a good idea into money in your bank account, however, you have to know a little something about how the magic works. It is a good idea, for instance, to take apart this term "real estate." Just what is real estate, and what are the types of real estate investing that are open to you?

"Real estate" is a term that refers to a piece of land and everything that sits on it, usually meaning structures. In terms of investment, its value is affected by local market conditions more than global conditions. There are several different ways to invest in real estate.

Real Estate Investment Trusts (REITs) allow you to make money by investing in real estate, either by owning the properties themselves or by owning the mortgages on them, or to do a combination of both. The benefits of this type of investing are high yields and tax considerations. This is also a highly liquid type of investing, which means that it is easily converted to cash.

In a real estate partnership, you are pairing with (who or what?) in order to make money from existing structures or to build new ones. You can even make money off the sheer appreciation of undeveloped land itself. This is a good bet because of high growth potential and tax benefits (shelter).

The rental of vacation property is pretty self-explanatory. Your vacation property is one that is used for recreational purposes and is not your primary residence. (Define primary residence.)

Rental property is another almost self-explanatory concept, as we have all done business with landlords at some point in our lives. However, there may be a difference between residential and business rental property.

You may also invest in raw, or undeveloped, land.

It is a good idea to learn about each type of real estate investment to determine which yields the greatest benefits, determined by your particular needs. Kiyosaki named tax benefits as a good reason to become a real estate investor. After all, money you keep in your pocket is just as good as money earned.

If you are particularly interested in pursuing real estate investment because of tax benefits, you may even wish to become a real estate professional, as the IRS allows people who spend at least 750 hours a year to have nearly unlimited tax deductions. If you are not considered a professional, and your salary is high, that can actually cost you deductions on your real estate. You must have the time to participate in your real estate activities yourself, even if you have hired another real estate professional, to qualify for all tax benefits.

Information on real estate, selling or renting of properties, can be found on magazines, books, newspapers, web pages and also on real estate firms like "Century 21". Even on some free magazines like "4 sale by owner" or "Inmobilia". Where you can be able to find spots on particular areas like Escazu, Santa Ana, Heredia, Guanacaste, etc. which vary on climate, scenery and prices as well. In fact, properties on a variety of places to suit the different tastes.

Since the country started becoming very popular among the foreigners, basically through word of mouth, a lot of people have arrived to Costa Rica and decided to retire or reallocate. The search for a more peaceful environment and a warmer weather, and affordable real estate has made Costa Rica one of the first destinations. This has caused an accelerated increase not only in real estate, but also in infrastructure as well as in other sort of investments.

A lot of people continue choosing Costa Rica, who already has developed and continues developing to match the tastes and make the foreigners feel more like home. Main restaurant franchises, like McDonalds, Kentucky, Dennis, and Outback Steak House, among others have been opened. Also some mayor stores like Price smart, Office Depot, Payless Shoe, etc. In reference to taxes, Costa Rica real estate tax is of 0.25%, which is a great benefit for real estate purchasing. Also there is no income tax on foreign earned income as well as no capital gain taxes, a mayor plus for living in Costa Rica. Another benefit is that Costa Rica is politically stable, meaning that it is well known for being a democratic country since its independence and also that it does not have an army, different from other Central American and South American countries like Brazil, Nicaragua, Guatemala, among others.

Among other mayor benefits, Costa Rica has very good medical services, hospitals and clinics are accessible and it has a comfortable price in relation to for example United States and Europe. Also it is considered to be half price of the cheapest city in Europe, which definitely means that there is a greater economic power of acquisition than many other European countries. All of these issues have impelled the real estate development in Costa Rica. The increase of demand on property purchase has caused the need to grow and expand in the construction of houses, apartments, office buildings, etc. to be able to have enough to offer.