Real Estate Investing by Ebuka Ugboma
Real Estate Investing is a very broad term, which refers to the process of investing in commercial property such as offices, retail spaces, commercial buildings, land and lots. Real estate investment opportunities can be found throughout North America and Europe. There are many things you need to know before making a real estate investment decision on any type of property. This article will go over some factors that should be taken into consideration when doing so.
There is a saying that goes, "Location, location, location". This specific saying is commonly utilized in real estate to discuss the importance of the three aspects of a property's physical location. This includes how close the property is to transportation such as highways and railroads and how close the property is to schools, shopping centers and other conveniences. The next important aspect of a property's physical location is how close it sits to its neighbors. A building that sits next to other empty lots will not be desirable to someone looking for an investment opportunity. They will want a building that sits next to other buildings so it can attract customers as well as drive up the prices on both properties by increasing demand for that area. The third most important aspect of a property's location is how close the property is to business activity. This includes the number of businesses that are currently surrounding the property as well as those that have previously occupied the property. An investor will want to know this information so they can get a feel for what type of traffic the building may attract in relation to its location and size. An investor will also want to be aware that if there are a lot of buildings around them, it could attract crime and lower area standards so that would decrease the value of their investment in that area.
The condition of a commercial building is also very important for an investor. An investor will want to make sure the inside and outside of a property is in good condition before purchasing it. Things like broken windows and rusting buildings are not desirable to an investor so they must take in consideration those factors when analyzing a property.
The rest of this article will provide information on factors that should be taken into consideration concerning residential real estate.
There are many things that go into contemplating whether or not real estate is a good investment for one's portfolio. The market value of a home is determined by the current supply and demand for homes in the area it is being sold. If there are more buyers then sellers, prices will rise, likewise if there are more sellers than buyers, prices will fall. The current condition of the home, location and other factors will also play a role in the seller's decision as to what price they want to sell their home for. The market value will also determine if a home is a good investment. If people who would normally purchase that type of property are investing in a new house, then the home will not have much value. This can happen when there is an influx of new construction coming into an area which takes away older homes, leaving more inventory of those types of houses which are cheaper to build, which brings down prices on the remaining older properties.
The area in which the home sits plays an important role in determining its value if it has been built previously or it is being built anew. If the house is being built in an area that thrives off of new construction, it can be seen as a good investment. Even if the area is on the outskirts of town, new homes fetch a higher price than older homes. The reason for this is because the builder is trying to recoup the money they spent on building it.
If there are a lot of older homes in an area and few newer ones, then there could be some issues with flooding or other natural disasters that have happened in the past causing pricing to decrease and make those homes not very attractive to future buyers.
If the home is being built in an area that is not heavily populated then it can be viewed as a good investment. Because there are fewer homes being built, the value will also be less which will also result in a higher price for that type of home. The same goes for areas that are heavily populated. If there are a lot of homes on the market this could drive down the price of the newly built one making it more affordable and thus more attractive to potential buyers.
Location plays an important role when purchasing any type of property whether it is housing or real estate because location will determine if a property has any value at all in relation to what time period it was built. For example, if the home is being built in an area that is also becoming more populated, then it will have less value than homes that are being built in areas that are not popular. If the home was new construction, you could expect to pay a higher price for it because there will be more demand for it and a lower supply of older homes. The same goes with new construction of older maintenance-free homes. If they were in areas where there were lots of previous homes destroyed by natural disasters such as floods or fires then you could reasonably expect to pay a lower price for them because there would be little demand for them or no supply at all. It would be difficult to find a similar house nearby which could have been old and survived the same type of disasters.
The market value of a home will change over time. This is why an investor needs to make sure they are already in that market when looking for a new home or purchasing an older one. A new home will cost more when it first comes out of the building lot than it will in twelve months, especially if there are a lot of other new homes coming on the market at the same time as it is being built and released to the public. As more people buy into that area, they will begin to drive up prices on existing homes as well as newer ones being built which can also impact their value. If a new home is sitting on the market for too long without being sold, the builder may lower the price in order to get rid of it.
The value of an older home will increase or decrease depending on the condition of the home and how much work had to be done to restore it. An older home that has been recently restored or newly renovated will cost more than an older one that has not been restored because you cannot see any work was done which makes it hard to determine its value. If there are contractors in the area, they can check out that type of property before buying and get an idea what they would be able to renovate it for.
By keeping up with the market and knowing what certain types of homes are worth in an area, an investor will be able to make a good decision on whether or not that is the right type of property for them.
There are many factors to consider when buying a new home, so it is important to do your research before making that big commitment. There is no such thing as a perfect home, but there are certainly some real estate items that you may want to keep an eye out for before buying. When kids are involved, you want to make sure that the home you purchase is child friendly.
Most new homes will not be child friendly, but things can be changed to make them a little more convenient for you and your family. Some buyers buy homes that are “as is” meaning that they can't do anything to the home to make it suitable for their families. Because of this, it is important to make sure that a new home is already child friendly before purchasing it if you have children or plan on having them in the near future. If the home is not already child friendly, then you may want to reconsider your purchase just so you don't have to put in any extra work trying to change what it was made for.
The value of a home can also be affected by whether you are purchasing a newer home, an older home, or even the type of plan that it is. When the plans for the new house have already been created and the material has been ordered, then you want to take advantage of any discounts that may be available since they will already be able to get started on the construction process. If you are buying an older house that has not been updated in a while and it isn't in an area where there is a lot of competition or new construction on the market then you can save money doing it yourself rather than hiring some contractors and paying them.
Ebuka Ugboma has written extensively on Real Estate Investing. Get the book here
ABOUT THE AUTHOR
Gary Austine Ebuka Ugboma Esq FICMC, ACIArb UK, FMA, AGIS, PMP
LLB Hons, BA Hons, Dip Mus Ed, Pdip Bus Admin, PDip Estate Mgt, MBA, MSC Peace and conflict resolution.
Ebuka Ugboma has multiple degrees from different Universities across different fields; Arts, Law, Social Sciences and Humanities generally. He is a Chartered Arbitrator and Mediator, trained in the style and pattern of Chartered Institute Of Arbitrators UK.
Ebuka Ugboma has successfully published many books including Propensities And Habits For Success
Check out and buy his books on Amazon:
https://www.amazon.com/Ebuka-Ugboma/e/B0B6HHVVW6
Email: garyugboma@gmail.com Phone: 2348033924157
