Monday, June 16, 2008

Cities Where Real Estate Prices are Expected to Significantly Drop

As a real estate investor, it is your duty and responsibility to direct your investment into assets that are strategically placed and located. You might need to check out your geography every now and then. That is because as an investor, you should always strive to take investments that you know would be sufficient and effective enough to bring about greater and more ideal returns.

When you invest in real estate on a global basis, it is natural for you to prefer several cities or countries than the rest. That is because the real estate in a country or city may not be as robust and enticing as counterpart real estate assets in other markets. As much as possible, you should stay away from markets where your investment could be at risk.

Investing also entails finding out which markets would have price increases and decreases. Real estate investment, just like any other form of investments, require investors to always strive and aim to buy at low prices and then sell at high prices. Thus, if you are considering buying homes or properties, look first at markets where there are currently lower prices. If you are already owning real estate assets, you should at the same time monitor whether the location of your property is in a place where prices are volatile and are highly risky.

Thus, it would be likely and ideal that you have ideas and knowledge about cities or countries where real estate assets are most likely to fall. If you are to buy properties, this could be a good guide as you gear your investments. If you already own assets in the involved markets, cautions and appropriate strategies should be implemented.

California in the United States is being tagged as posing the greatest threat to home prices. Experts, brokers and economists are positive that based on market trends and information, real estate prices in California are set to dip. Real estate owners could look at this as an unwelcome note, but they could still hold on and wait until the market rebounds. Buyers could start to look at the state for more real estate investment opportunities. California has enjoyed decades where properties have always been priced high. Now can be the time it balances out.

Moscow in Russia is currently the most expensive city globally. Costs of living and real estate prices are the most expensive in the Russian capital. That is why global property buyers and investors could hardly set their investments into Moscow. This is bad news for real estate investors who are already having assets there. Anything that is enjoying its position up must endure going down. For Moscow, a fall in the real estate industry is imminent and looming.

London in the UK and Seoul in South Korea are the second and third most expensive cities in the world. It follows that real estate prices are also high in these centers. Well, the downturns can be looming as well.

Wherever you set your eyes into for your real estate investment, always strive to set foot at markets where overall profitability and effectiveness could be apparent. The market would not cease to operate. It is just a matter of finding out when and how much the market is posing threats and opportunities to property investors like you.

Wednesday, June 11, 2008

Checklist for Real Estate Investments

Are you considering buying a real estate as a form of investment? You should be reminded that as an investment, there can risks and threats to real estate endeavors. While it is true that some real estate investors have really hit it high, there are also many of those who incurred losses because of inappropriate and unlikely property investments.

Real estate investments are surely providing steady flow of income and returns, only if they are appropriate, strategic and really sound. As a new investor, how could you guard yourself against unlikely real estate investments? It would be helpful if you would take a look at this simple checklist for real estate investments. If you would buy an investment property, better check out the following factors.

Location – Market valuation varies depending on the venue of the property. Of course, valuation of real estate in expensive markets is higher compared to similar properties located in cheaper and less lucrative markets. Globally, Moscow, London and Seoul are among the most expensive cities where valuations of real estates are at their highest. Properties in New York, California, Paris and Rome, among some, have always been on top of their ranges.

Tenant credit risk – You should know that the valuation of real estate can very much depend on the expected rental income of the property. If the real estate is not likely to generate significant rental income, then its valuation would surely decline.

Physical characteristics – When buying a property, check out the utility and type of building as these should affect valuation. Of course, condominiums are expensive compared to apartments because the formers are of course more secured, more developed and are provided with better amenities.

Tax implications – Real estate valuation is directly affected by tax implications. Take note that properties are imposed with stamp duties and property taxes, on top of the income tax, which could be computed from the capital gains and rental income.

Higher investment costs – Always remember that real estate investments are practically higher and more expensive than almost all other types of investments. For example, you can easily buy and own stocks. By just investing a few hundred or thousand dollars, you can already build up your own stock portfolio. That is not the case about real estate assets. Not too many people are able to invest in properties simply because they do not have appropriate resources to do so.

Legal issues – Most real estate investments are not as secured as stock investments. Stock exchanges secure and guarantee legitimacy and safety of investments. In real estate, such regulating body is not present, although a real estate regulator is exiting to rule about real estate practices and at times, prices.

Liquidity – Real estate assets are usually not easily and rapidly liquidated. Transactions cannot be completed overnight or within hours. Market conditions would have to be considered as they would influence and regulate the length and duration of the real estate transaction.