How does a real estate investor in today’s marketplace make a solid profit AND preserve existing capital and financial wealth?
Real Estate investing was, and still is, considered by many as an efficient way to build and increase personal wealth.
Due to current economic crisis and the steep fall in real estate prices, many of traditional real estate investment techniques previously viewed as “safe” are now often viewed as “risky”, making real estate investors to look for new investment markets, products and opportunities in the real estate industry.
Traditional real estate investment techniques depend on many factors, most of which are outside of an investor’s control.
These investment variables hard to predict, making estimated returns on investment very difficult to anticipate or control. Therefore, these estimated returns on investment are certainly “guesstimates” prepared to the best of investor’s ability to analyze past and current market conditions and trends. Generally, investors do not have any significant ways to influence the market, to predict future market conditions in the future, or specifically control future anticipated returns.
We now observe many real estate developers and investors losing their anticipated profits and even losing part or their entire investment principal – a result of the unforeseen market conditions.
Factors such as market supply and demand, excess in real estate inventory, lack of financing, falling property prices, loss of employment and tenants, inflation or deflation etc. are making traditional real estate investing a very risky business.
Nonetheless, the real estate industry remains full of opportunities to make a lot of money.
Any real estate property is a tangible asset, which always has a value. This value can be explored and exploited in various ways.
In addition to the value of the property by itself there are many products in real estate industry, which are also backed by the underlying property’s value.
Such products are tax lien certificates, mortgages, promissory notes, options, leases, and other products attached to the real property title and involved almost in each and every real estate transaction.