The Finance Advocate » Property Investments http://www.finance-advocate.com Wed, 17 Aug 2011 06:32:00 +0000 en hourly 1 http://wordpress.org/?v=3.2.1 The Property Investor’s Guide http://www.finance-advocate.com/the-property-investors-guide/ http://www.finance-advocate.com/the-property-investors-guide/#comments Mon, 12 Oct 2009 07:42:19 +0000 Admin http://www.finance-advocate.com/?p=175 property-investmentPeople (and companies as well) are looking for ways to investment their money in a secure way that will give big returns on a constant level. Property investment is one of the only areas that has seen consistent growth through the years; it even survived our economic crisis. While home buyers suffered through some hard times, and home sales were at a low, residential rental property kept at its steady growth. In the last decade, the investment in residential property has become very popular. More and more investors are seeing this as the money maker that it is. If this seems like an avenue you would like to invest in, then read on for some tips on making this investment make money and the things you need to consider before jumping in with both feet.

As with any investment, residential property can be a bad investment if it is not done in a smart manner. To earn money on your residential property you have to choose the right property. You need to be sure that the property you invest in will make the money that you need it to. A must is that the price you pay for the property is equal with the rent that you can charge for it. The income from your residential property investment should cover the mortgage on the property as well as any maintenance. It needs to be self-sufficient. Once the mortgage is paid off, you can continue renting and enjoy this income or sell the property and re-invest the profits.

To use a few property investors terms, your property can generate income in two categories; capital gains and yield. Your yield is simply the sum of the rent that you will collect in a year on your property. You then express your return as a percentage of this in regard to the amount you paid for the property to begin with. Capital gains, the other source of income on your property investment, is the appreciation value on your property. This number is also shown as a percentage and will move as property values move up or down.  Knowing these numbers will ensure that your property is actually accomplishing what you need it to. A good investment is one that balances the two sources of income, your yield and your capital gains.

Any investment is only as good as what you invest in. Be smart when you are researching the residential property you are considering. Be realistic with what you can afford to pay that will be covered by the rental income that you ask. If your investment is self-sufficient, then it should make you money for years to come.

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