Thursday, September 1, 2011

Why Real Estate Is A Good Investment?

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When friends and colleagues asked me of where they should invest their money, I would immediately answer, real estate!   Of course, they would always ask for my justifications for saying so.

Well...real estate, for me, is a good investment because it's value can go up overtime and it can generate an ongoing source of income when rented out.  It is the only investment that never depreciates in value.  it's a kind of business and investment that doesn't require much physical work and requires less supervision.  The only thing that you have to look into is paying your taxes regularly and spare some amount from the monthly rentals to cover the house maintenance.  If you're earning enough from it, then you may also consider getting a home insurance.

A basic know-how in real estate will also guide you in protecting your investment.  If you are planning to purchase a land and sell it on a later date for a higher price, then you may first consider visiting government agencies who are handling records of the properties on sale.  You may want to visit Bureau of Lands, Register of Deeds, Assesor's and City Planning offices in your city or home town to check on the authenticity of the documents provided for by the sellers.  Documents such as Certificate of Titles and Tax Declarations must be thoroughly checked and verified to check if these properties are free from any encumbrances and that real estate taxes are being paid on a regular basis.  You will also get to know if these properties were already mortgaged to private individuals and/or institutions while the City Planning office can give you an idea whether the location of the property is included in the future government projects such as road widening. This is an important step before you enter into any sales contract.  

If you opted to buy a house and lot, the same procedures shall be followed with just the addition of conducting an ocular inspection of the house to check it's actual condition.  Ask yourself the following questions:

""Does this house needs a minor or a major repair?"

"Can it be rented out and derive income immediately or do I need to wait for few more months until everything in the house is fixed before looking for possible tenants."

"Is the location of this property a secured area?  Is it a flood prone area or does water supply not available in this location?"

Well....the above questions are self explanatory.

Lastly, ask yourself, "Am I going to buy in cash or credit?"

It is normally wise to buy the property in cash, if you can afford to do so.  This will lessen your worries of paying up for the monthly amortization and interest in case the property is vacant for quite sometime.  If you have an extra fund for this, then it wouldn't be a problem, otherwise, you will end up getting a "burden" rather than an "investment".

These are the most important considerations in investing for a real estate. When followed properly, I don't see any reason for you to fail in this investment. 

5 comments:

  1. very informative post krizz... i am hoping to venture in real estate someday....

    by the way, thank you for being one of my top commentators for August... Really appreciate it...

    Anyway, I'll be adding your blog in my blogroll later... thanks again!

    ReplyDelete
  2. Thanks Rovie! You're welcome! Thanks for including me in your blogroll and for visiting here!

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  3. Can it be rented out? is a good question to ask. My husband and I are thinking of buying a property which can be rented out so that we could have a source of income instead of just having an expense when buying a real estate property.

    Thanks for the other things I learned from this post, Krizza.

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  4. Hi Chin! Yeah, that's precisely the point of investing in real estate, you are hitting two birds in one stone. You can rent it out and generate income monthly while having your investment grow in value over the years in case you want to re sell it!

    Thanks for the visit.

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  5. hi krizza... please check out my main blog; My Journey, i left you an award there.

    hope you can also check out and follow my other blogs;

    http://anythingaboutbella.blogspot.com/
    http://christianroll.blogspot.com/
    http://foodandfoodtrips.blogspot.com/

    thanks dear!

    ReplyDelete

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