Investors Lounge Online

It seems like yesterday that Britney Spears was the hottest thing to hit the music scene & no one could have imagined that her stock a.k.a. her career could have dropped so quickly after riding so high and her oops so far has not been done again. The same falls true for property and the location you purchase it in as well as the potential of what you can do with it. An area can be highly desirable for five years running and just as you decide to zero in on it you notice it is like that slow leak in your tire that took a couple of weeks before it had you parked on the side of the road. It must be determined if the tire is just flat or totally shot as in what is the potential for a property in a location to rebound or will it remain in a lull for a long time to come.

It is very important to understand how critical location is in terms of how it can increase your ability to sell during what seems like an elevator that has a broken "up" button and keeps heading down floor after floor but you know eventually it is going to stop. The great news is that just like that battery that you assumed was dead but starts working like a charm after charging, the value of majority of locations will go up in time.

You don't want to end up like Evander Holyfield with the threat of losing his 54,000 square foot home expressing "I have money but I am not liquid" Whew, that is quite a statement because we know one of the bottom lines is liquidity so when you purchase that property please consider how soon you might see a return on investment, and what you can pull as profit if any when you decide to sell seeing as that your profits for a time will be held in equity. When your profits are tied up in equity, do your best to select property that can meet its forecast, produce ample returns, and provide easy liquidation, regardless of the market condition

The main motivator with establishing wealth in real estate is to try to accurately estimate that the property you are purchasing will result in the rate of return that you desire. It is far more involved than guessing which bowl the ball is under & by luck being right. Some purchased the initial release of the I-Phone & that was sufficient enough while others saw benefit in upgrading to the latest release with more features. For some selling now & getting a fair rate on return works for them while others use measures to estimate if holding on to property longer will yield in higher rate of return. By using some of the tips below as a guide you will arm yourself with information useful in helping you avoid getting your feet clinched in the teeth of the lower appreciation alligator swimming about.

Realistic investors understand that they can work towards achieving maximum results by forecasting, planning, and measuring financial results as related to the property they are interested in purchasing. It is critical that the investor knows how to calculate all wealth accumulators before signing the dotted line. Forecasting allows you the ability to calculate the main purpose for purchasing your property, appreciation. Below are wealth accumulators as critical as appreciation. These are elements in determining a good property for your money. The elements differ slightly when comparing residential income property (non owner occupied) to principal home ownership (owner occupied).

For Principle Residence (owner occupied):

• Appreciation return utilizing forecast prediction.
• Mortgage payments to lender shaving the principal therefore increasing equity.
• Government issued tax incentives for homeowners. Generally include mortgage interest and property taxes. Think of it as much better than that stimulating check you received.
• The difference in amount it would cost you to rent a property as opposed to owning a property.
• When negotiating the purchase of your property consider yielding favorable results from all of the above.

For Residential Income Property (non Owner Occupied):

• Appreciation return utilizing forecast prediction.
• Mortgage payments to lender shaving the principal therefore increasing equity.
• Tax incentives that the government provides to residential income investors. These include depreciation expense, mortgage interest, taxes, and operating expenses.
• Income generated from cash flow over the holding period (purchase date to sale date).
• When negotiating the purchase of your property consider yielding favorable results from items all of the above.