The Most Important Real Estate Investment Lesson

Real estate investment can be a solid base on which to build wealth; it is a class of assets that can be passed on from generation to generation.  The most important thing to remember about the process and that determines you ultimate success is that you create the value when you buy more than at any other point. That is to say that you earn your profits when you buy.

As part of your plan, you must ensure that you have the proper planning permissions, a realistic potential for income and a plan to get it before you sign on the line.  If you are purchasing a high-quality core asset, it will be a matter of taking possession and installing tenants at the market rate.  If it is an older building in a lower income neighborhood, it may require development that adds value before it can attain a market rent.  You must consider all of this in your plan and then express it in the terms of your purchase agreement and in the price that you offer to the seller.

Almost any property can be good value if you buy it at the right price.

Location Determines The Market Rent

The often-repeated maxim about location remains true. It is the location of an asset that determines the full value and the rental income potential.  If you want the highest market incomes with the lowest risk, then you need to bid for the most well-located properties.  However, such prime real estate will always be the most expensive and value investors need to look elsewhere to find potential bargains.  Fortunately, any property has value, at the right price and it doesn’t have to be in a prime location to do so.

There may be higher risk such that you have to be vigilant to avoid any traps, arising from physical defects, title clouds or unfavorable contract clauses that could lead to a loss.  But if you begin with a plan and team of experienced advisors, and you only make offers that will produce the right outcomes for your investment you will ensure a profit on any investment.

Mastering The Property Paper Chase

When you invest in real estate, a good plan that adds value and develops a stream of revenue, based on market rents, will set up success from the start.  You build an effective plan around income and the capacity to create income, as determined by the market, which gives rise to a point that may require clarification.  You realize your gain when you sell an asset, with real estate investment that has performed based you your smart purchase and carefully executed plan of improvement and revenue creation.  The gain that you make will be as a result of the elements of the initial purchase terms and the market rate income.

Current talk in the business media decries “erased value” due to market changes, which is deceptive.  The fact is that, even with something as liquid as stocks, the value is not real until you sell.  Those stocks that declined dramatically in the last few days can bounce back with time.   You can disregard that loss of value because it is purely hypothetical.  Real estate is much less liquid; it tends to change value more slowly.  If you make your purchase based on the market rents that a given location can attain, the value of the property will be much more resilient in turbulent times.

Make sure that all of the elements are in place and any property investment can be a good one.

Your San Diego Real Estate Attorney At LOKK Legal

Do you want to lock in the profits by making your purchase at the right price?  Are you considering investing in real estate or studying a particular opportunity?  Speak with a professional at LOKK Legal and find out how we can help you seal the deal that takes your portfolio to the next level.  Talk with a member of our team today and decide for yourself why we should be your San Diego real estate attorneys.