The real estate market has continued to go
down. The property prices continue to take a dive. It seems this trend will
continue for a while. This means most properties will be worth less tomorrow than
they are today. A question arises how to
identify a good deal in a depressed market? All kinds of properties like
houses, condos, villas are losing value every day. Same is the case with
commercial real estate properties. Everyone now buys property below market
value. To get a good deal for real estate investment is necessary for investors
and businessmen.
Learning to recognize a good deal takes
research, education and above all experience. A standard to determine the good
real estate purchase deal is to study different factors. First one is cash
flow. It means will the property provide income? It also depends on many
factors like strength of local rental market, the interest rate on financing. Second
is Leverage. It is important for investors because the less cash they put down
on each property, the more properties they can buy. If the properties go up in value, their rate
of return goes up exponentially. Third is appreciation. Buying
in the right neighborhoods in the right stage of a real estate cycle will
result in appreciation and profit. Fourth is equity. The properties in which
you are investing have equity or not? Equity has number of forms like
discounted price, a potential fixer upper and a rezoning opportunity. Last but
not the least factor is risk. This is the factor on which very few investors
consider. As an investor you should ask from yourself what can I do if my assumptions
are wrong? Or do I have a plan B? If my observations and considerations are
fail then what is alternative option I have to opt to save my investment.
These are some rules to judge a
good real estate deal even in a depressed market. Costa Rica real estate investors
and hard money lenders consider them before start investing in any project. It
will help them to recognize current market trends and property values.
At last I would suggest all
investor to check these standard factors in real estate business. Whether your deal is
a commercial
construction project, a high rise acquisition or a residential housing
development, it will help you in all situations. You can complete business
goals and requirements by considering them in your business.
For further information about Costa Rica Real Estate Investment check us at http://www.costa-rican-real-estate.com/
No comments:
Post a Comment