Why would you buy investment property without seeing it? It’s a numbers game. Whether or not you see the property before you make an offer isn’t nearly as important as making sure the numbers make sense.

A man in California used to just send out offers on a hundred MLS listings at a time, offering 25% less than the asking price on each one. Occasionally a few sellers would accept his offers. He never had to look at the homes beforehand. Including an “inspection and approval” clause in the offer meant he could always back out of the deal later when he saw the house. Meanwhile, he efficiently found the truly motivated sellers.

This true story demonstrates that with a good clause or two in the contract, you don’t have to worry about making an offer before you see a property. It’s true when you buy investment property or your next home. When it isn’t everything the seller says it is, you can reject the deal with little or no loss. So why wouldn’t you want to look at the property?

Buy Investment Property By Numbers

The main reason you might skip looking at a property before making an offer is time. This is certainly true if the property is far away. If you don’t get a price that makes sense, why spend your time traveling to look at real estate investments? A price and terms that make sense – this is what is important. Of course you’ll probably want to look at the actual property eventually, but looking at the numbers is how you invest.

Investors value income property according to current cash flow (or should if they want safe and viable investments), so start by verifying income. Get the actual income figures for the past 12 months. Always consider the potential income if rents are raised, vending machines are added, etc., but base your offer on the current income.

Verify all expenses with investment properties. If any expenses listed by the seller seem unusually low, they most likely are. Just substitute your own best guess in place of any suspicious numbers.

After you determine the net operating income, apply the appropriate capitalization rate to arrive at the value. If you’re not sure how to do this, get help. However, you really should understand the principle of how to figure a cap rate. This is a numbers game you’re playing.  
Calculate loan payments (talk to your banker), and see how much cash flow you’ll have. Then you can figure your cash-on-cash return based on how much of your own money you put into the deal. Just divide the cash flow by your investment.

When the numbers work, you can safely make an offer. Inspections will tell you if there are problems that will affect the cash flow. You can always renegotiate if there are such problems (assuming you made your approval of all inspections a contingency of the offer). Of course, you can even go take a look now that you are truly ready to buy that investment property.

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UK buy-to-let investors are being tempted by offers of guaranteed rents on property deals around the world, but how good are these deals in real terms and will there be any rental demand once the guaranteed period ends?

Worldwide opportunities

Investors are looking beyond the overcrowded UK market for untapped property hotspots in Eastern Europe, the Middle East and out to the Far East.

Deciding on the best foreign markets to invest in is a case of weighing up the potential for growth and rental income against the risks and costs.

For example prices of residential homes in Beijing rose by 20% in 2005 (according to the Beijing Municipal Construction Committee), however there are many issues regarding the transfer of funds out of China, a 5% tax on rental income and the possibility that the Chinese government could claim the land back.

Latvia on the other hand presents a lower risk to foreign investors, with membership of the EU and the ability to borrow up to 90% of the value of the property making it a more appealing choice.

However, this is not to say that an investor can simply buy any property in Latvia and expect to make easy rental returns. Like any foreign market, the risks are generally higher than buying in the home market.

Incentive to buy

To help encourage potential landlords to overseas markets, a number of investment companies are offering guaranteed rents for anything up to 5 years. Rental guarantees, it is argued, provide a reliable safety net for riskier markets, however many experts warn they are merely a marketing tool and advise investors to look very closely at the deal being offered.

Key issues

One of the biggest issues with guaranteed rentals is a lack of demand for the property once the period has finished. Guarantees are often used to market properties that otherwise would not sell and many investors are shocked by the resulting drop in income.

In addition to this, it is often the case that investors end up footing the rental bill themselves, when developers inflate the price of the property to cover the guaranteed rent. This can provide a further shock when the investor tries to sell the property and realizes that it is not worth as much as they originally paid for it.

If you do opt for a guaranteed rental deal, make sure that it is properly underwritten by a bank. Otherwise you would be at risk of losing the guarantee if the developer were to go out of business.

Poor regulation means that it is also worth checking the small print for any hidden clauses that enable the developer to avoid paying the guaranteed rent and it is always a good idea to seek expert advice.

When a person buys a home, he/she usually has to take a loan. The lenders, generally banks, keep the title to home collateral in this case. The ownership of the home is transferred to the lender when the person is unable to pay the dues and installments in time. This transfer of ownership to lender is called Foreclosure. Buying foreclosure has been compared to playing poker. As an investment, it has its own risks.

The lenders first determine if there are any junior liens as well. When they find any pending loans etc, they pay everything off so that they themselves have clear title to the property. Once this is done, the lender adds up all costs to the loan amount to be recovered, and then again resells the property so that they can recover the expenses and loan amount. This is an ideal time for investors to buy such property. Buying a property that has been foreclosed has many gains.

Benefits of acquiring foreclosed property from lenders:

The first and most prominent benefit is the fact that all properties bought from lenders will have clear titles and ownership rights, thereby saving you the trouble of doing any research.

Next is the fact that foreclosure is not for profit booking. When the lenders sell foreclosed property they want their money back, so they are ready to sell the property cheaper than what it could have fetched in open market under normal conditions.

How to buy foreclosed property:

The first step is to collect information. The best idea is to make a database specifically so that you will have separate data on all the properties and markets in clear sets. In addition, that way you will be aware of any specific laws that you may need to abide by while making an investment. The next step is to directly contact the foreclosure owners and start negotiating with them. If you have the address of property but not the name, online directories may help you find the relevant names.

As a beginner, buying foreclosure property on your own can be risky. Try to get help from an agent if you are trying to buy such property. They have all the required knowledge.

Risks involved:

One risk is when buying foreclosed property at auction, sometimes they give just a week to deposit all the cash, and if you fail to do so, you may lose all your deposit. As you keep on investing and making money, you will gain experience about bad construction, poor soils, problems with septic systems etc. Background reading and relevant information is extremely important before you get into foreclosure investing. Foreclosure laws in your state, priority of liens, bidding at auctions, title insurance, and bankruptcy are some key areas where you should gain full knowledge. That way you will be able to make better and safer investments.

Property investment is not an easy game, and must be played only with caution and care. Some compassion for the person whose property is up for foreclosure is also essential.

There are many methods for building fortunes in the world today. One of the most accessible even for the common entrepreneur however is real estate investing. In fact, you will find many rags to riches stories are built by investing in the real estate marketing in one form or another if not many methods for investing in this lucrative but risky field.

real estate is a great strategy for the investor who is willing to make the time to learn about the options, risks, and potential rewards for this type of investment process. Some of the more common real estate investments are the following:

1) Rental property. property ordinarily gains value over time unlike many other investments that may rise and fall quickly and without warning. The problem is that far too few people can actually afford to hold and maintain multiple properties over an extended and indefinite period of time while waiting for the value to rise. Many property investors manage to overcome this by renting the properties to tenants during the time when the property values are rising. This allows the tenants to essentially cover the note on the property and makes the venture a little less risky though there are risks involved when dealing with tenants (such as property damage, failure to pay the rent, and possible legal woes-the good tenants generally outweigh the bad).

2) Pre-construction investment. This is a highly speculative and very risky sort of property investment that has booms and busts. Many investors recently discovered exactly how risky this endeavor actually is when the property ‘bubble’ went bust so to speak. The risks involved in this type of investment should not cover up the fact that many millionaires have been created through pre-construction investing and many more will be created in the future. Pre-construction investing, just as its name implies is a type of investment in which investors buy ‘options’ on the property before ground is broken. This is very popular in high demand areas that are known to experience housing shortages as prices often rise quickly and the units are often sold before they are completed and any ‘real’ money exchanges hands.

3) Flipping houses. This is a type of property investment that has made leaps and bounds in the last few years thanks to the popularity of many popular home improvement and house flipping shows on cable networks in the last few years. More and more people have decided to pursue this sort of investment in hopes of creating big profits in a short amount of time and with minimal investment. The problem, of course, is that it always looks much easier on television than it is in person. Couple this with the fact that many people have unrealistic expectations when it comes to costs and ability and there are plenty of risks involved with this type of investment as well. For those who are successful however, there is the potential for great profit in a relatively short amount of time as these televisions shows indicate.

4) Buy and hold. As mentioned above, real estate tends to gain value over time. Even if the buildings are in desperate need of TLC and repair the very land they are standing on is more often than not gaining value as the years pass by. Purchasing large lots of land or even several houses and holding on to them for as long as possible before selling can often fund college educations for children, pay for weddings, or greatly supplement retirement funds. The longer these properties are held the better in most cases as this provides the greatest opportunity for the value of the property to increase.

5) Lease options. There are few people in this world who never experience rough spots financially. Many of these people are denied traditional home loans because of their inability to cover debts properly in the past. For this reason they are often willing to pay for the privilege of rebuilding their credit while working towards a path of home ownership. For these people, a lease option presents a workable and often valued solution. Those investors who are willing to take the risks often find the rewards are well worth those risks.

These are only some of the investment opportunities that exist for those who are interested in real estate for an investment avenue. There are commercial real estate endeavors that have the potential to bring in big profits as well as the development and planning of housing communities as well. Needless to say real estate investing offers many opportunities to the savvy investor.

There are all types of investments in this day and age. One of the most often touted for creating millionaires around the world however is real estate investing. Even in the field of real estate there are several different investment styles. Each style involves varying degrees of risk on behalf of the investor. If careful consideration is taken there is a type of real estate investment that is best for most people though there are some that real estate will never be a good investment for.

Those who are simply not cut out for real estate investing are those who love to watch the ticker roll across the computer monitor or television screen indicating the worth of their portfolios on a daily basis. Those who need to see in print the wisdom of their investment practices rather than those who are content to sit on their investments as they take shape or those who are willing to actively work in order to make their investments pay off.

Buy and hold real estate involved purchasing property and holding on to it for a very long time while the value of the property appreciates in value. This requires someone that is very savvy when making purchases or extremely lucky for the most part. More importantly however, it involves someone who has the patience and tenacity to hold on to their investments for a long period of time. These investments can provide a nice retirement for the right investor as well as funds at the proper time for the weddings of children or to pay for college.

Rental properties are another excellent way to make money for those who are willing to deal with a long-term property investment. In this type of investment money is made each month to either pay or contribute to the mortgage and funds can be made once the property is paid for and sold later in life in order to receive a more complete and total profit from the endeavor. There is some degree of expense along the way that is involved in keeping properties up to date and in demand however the benefits of this particular type of investment are almost undeniable for the right investor.

Flipping is another type of real estate investment that is receiving a large amount of press these days. This process involves purchasing a property below its value, investing in repairing or rehabbing the property, and then reselling the property for a substantial profit. This is one of the few short-term sorts of investment that are widely profitable when it comes to real estate investing. There are others but those carry even greater risks than flipping.

Of course there are high-risk real estate ventures for those that need a little excitement in their lives. One of the more common high-risk investments would be pre-construction real estate investing. With this form of investment the investor is actually ‘betting’ that the future property will sell for a higher price than the investor paid once the building is complete.

Whether your investment needs are low-risk, high-risk, or somewhere in between there is quite likely a style of real estate investment that will be appropriate for your specific investment needs. If you do not find a real estate investment plan that is right for you then do not despair there is no style of investing that is right for everyone.