Real property business is one of the most profitable businesses that one may venture into. For one, real properties rarely suffer devaluation and most likely, as time passes, their value increases. For this reason alone, it is no wonder that many people are investing in this kind of business. Undeniably though, you need to start out with a big capital. Knowing when, where and how to manage your money will make sure that return of capital and profit will be a cinch.
If you would want to start out in the real estate business, you may want to consider renting out houses. There is a steady demand for rentable houses since not all people could afford to buy their own houses. Building and constructing a house also proved to be financially unpractical. Renting a home is likewise a good option to those who are still saving up money to buy their own properties. These are just few of the many reasons which could persuade you to undertake this kind of business.
As I have mentioned earlier, you need to have a big starting capital. You will use it to buy properties and/or houses which you may later rent out to other people. You need to be on a lookout for properties on sale. The newspaper may be a good source of information as well as real property brokers. But one good source and probably an unchartered territory for buying real properties are auction sales in banks and financial institutions. Almost every month, the bank schedules auction sales for foreclosed property. These properties are sometimes sold at a price lower than their market value as the banks do not really care about profiting on these sales; if there is, it is only minimal. They are more concerned with the return of their investment.
However, before buying these properties, you need to consider their location. Of course, people who rent houses would choose properties which are accessible to, say, place of work or school. So in buying, always ask for its location first and give preference to locations near business areas or schools.
After purchasing a good property, you are now ready to rent it out. Post ads in newspapers or conspicuous areas to advertise. If there is someone interested, lay down your conditions for your rent like how much is your monthly rental, who pays for the utilities, etc. Have your client visit the property so that he may have a good look of it. Likewise, be open for negotiations. When you have already made a deal, have everything drafted in a contract. Have a lawyer to assist you in this.
The return of your investment may take long time. It may take a few years depending on how much is your rental fee. However, once you have already recovered your capital, the succeeding rentals would now be your profit. You just have to maintain the "marketability" of your property by preserving it properly. It may cost you a few and minor renovations once in a while.
If you think the business is good, then you may want to use the profits from your first property to buy another property. But after trying it out and you feel that the business is not for you, then no worries; you may sell the property anytime.
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