Profitable Investment Properties
// September 25th, 2009 // Real Estate
At one time, investment properties were the secret to creating a sound retirement foundation and creating a steady stream of supplemental income. Many Americans paid off their mortgages and invested in rental complexes or began flipping houses as a way to bring in extra capital. For years, this worked beautifully… until the housing market crashed. Yet, do not be fooled by the doom and gloom, for an opportunist sees even greater possibilities. The large inventory awards potential investors deep discounts and, with many markets poised on rebounding, it’s never been a better time to invest in real estate, so long as you do it wisely.
One type of profitable investment property is the vacation home market. Many investors look into overseas property where conditions are favorable to American investors. According to the Association of Foreign Investors in Real Estate, a non-profit trade group, some of the best foreign places to invest are safe bets like London, England; Paris, France; Shanghai, China; Tokyo, Japan; Singapore; Munich, Germany; Sydney, Australia; and Hong Kong. The idea with buying investment property overseas is that you must look for location, location, location! Choosing a safe, industrialized city, which sees a good deal of tourism each year is a smart bet. Many investors also like coastal beach properties to rent out as well. According to the editors of Live and Invest Overseas Magazine, the top coastlines to check out are: Veraguas (Panama), the Samana Peninsula (Dominican Republic), the Rocha province (Uruguay), Salinas (Ecuador) and Boracay (Philippines).
There are also many buildings for sale in commercial real estate investing. Matt Pitcher, an independent financial adviser at Towry Law in the UK explains: “Investing in commercial property has long been an exclusive tool to diversify larger portfolios, but now there’s the opportunity for everyone to take a slice of the action.” Since most space is rented out to established businesses on 10-25 year leases, the income from commercial property is more stable than residential. Also, the residential market depends upon an individual consumer’s access to credit, which can quickly dry up, whereas businesses typically have more avenues to corporate capital. The goal is to choose commercial investment properties that hold several different types of business (known as “mixed-use”) to weather any storm. Many of the newer buildings going up have space for offices, apartment or hotel units, restaurants, boutiques and entertainment.
Before you purchase investment properties, you may want to take a real estate course to gain all the necessary information to run a successful business venture. Many people jump into investing in real estate head-first, assuming that a steady stream of cash will come pouring in and their obligations are finished once they sign the deal. They later find that they are responsible for repairs to the building, sub-contracting to modernize the structure, securing new tenants, enforcing rent agreements and paying property taxes/business taxes. Taking a real estate specific business course at your local community college or small business association can help prepare you for the challenges that lie ahead.
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