Take the risk. Take every amazing chance that comes into your life. and probably, you will taste some of the sweet goodness gracious of being an Alles über den Forex Broker. The term refers to you who want to be a successful broker. The foreign exchange, shortened as Forex, is a kind of job that relates the foreign exchange as its main thing to do. As a broker, it is then very normal for you to learn more about the job itself. But remember, practice makes perfect. You might want to have a look on some of the tips below to guide you to be a successful broker.

Read a Lot, Be Open

When you want to be a broker, it is impossible for you to be so if your mind is still prisoned and rejecting for something newer and wider. You have got to read a lot and learn a lot. It is not only about you reading some of the theory or the theory about the practice, but it is also about seeing other new broker sharing their experience. Later did you know, you have acknowledged yourself with oh-so-many interesting and challenging stories. Those are the weapons and the drugs you can use to deal with your sanity.

Use Trusted Software

Being a broker also means being awaken from technology. You have to be well aware and demanding yourself that the technology here plays an important role. As important as it is, you will be helped by the software specially designed for forex broker to help you out during the job time. Thus, the software choosing and buying is crucial for you. Do survey and do review some of the best and trusted software. It will help you monitor the run of the other broker and the updates of forex.

Check the Websites

In choosing the software, you have to be well aware of some things related to the Forex updates. The trusted software will give you a brief explanation and the vivid example. You will be guided to the useful tips and trick on how to be a successful broker. If you have found the software yet, don’t forget to keep yourself updated. Normally, there will be some new updates and technology for Ein Bericht über den Anbieter  that can even help you out more going through the process of forex.

The process might sound complicated, but if one job is done by heart, you will find no well to cry. Please yourself and be a successful broker

Talking about the successful business means we need to be smart on making a decision, including for warehousing and distribution business location. It can be really tricky and challenging on dealing with that but actually it will help us on getting a lot of good things in the future. Of course, a business requires us to work harder on dealing with anything including for being more careful on making a decision. It would not be that difficult if we know much more about what we have to deal with in order to deal with the business. We need to know first what we have to deal with there. One of the essential things is about the area or location which we choose for dealing with the business. For the distribution and warehousing, that becomes really essential for us to get a lot of simplicity on dealing with the business.

One of the ideas is about having the right choice of the location which is really suitable to your need. For the distribution and warehousing, the location needs to be able reaching any other regions so that it would not take much time and also cost. Then, dealing with the labour factor is also important. That is essential since labour play a great role in any business. Other factor to notice is about the economy condition, facility, cost of the warehousing facility and also real estate, and some other else. Sure, those need to be noticed when we are going to decide the location for dealing with the distribution and warehousing. Then, if you are going to find the best place in North America, why don’t you consider the location of St. Louis Missouri? That offers the wide ranges of benefits for the distribution and warehousing of business to business.

There are so many reasons why St. Louis becomes a suitable and even the best one for the location of the warehousing and distribution in North America. That is including that this place is really strategic especially with the four interstate which are the major ones. Then, the condition of economic there is totally stable with a good labour factor there. We also can find the cost effectives for the facilities and also the real estate there. Perhaps you are thinking about Indianapolis or Chicago. Both of them are not strategic for its geographic factor. They are too far to reach other regions, for example Chicago which is too far north and will be too far to reach the regions of southwest and southeast. Then, if you think about Memphis, the labour problems there become the worse thing to deal with. Thus, the warehousing and distribution in St Louis of business to business will be the best solution.

How do Landlords calculate their returns on their property investments?

Buying a residential investment property is very different to buying a home. For a start what landlords are really buying is a property investment and letting business. Therefore a key part of a landlord’s decision making process of whether to invest or not in a buy-to-let property will partly be made on the basis of what their likely investment returns will be.

What is involved in calculating property investment returns?

The process of calculating investment returns can be very complicated indeed. On commercial property investors will go to great lengths to use techniques which discount future cash-flows (DCF) from individual investments to work out the potential returns and in turn their value.

Luckily for residential landlords life doesn’t get anywhere near this complicated. The essence of calculating an investment return on property is to understand that there are two factors influencing what investment return is generated. Firstly; through income in the form of rent and secondly in the form of the capital appreciation resulting from rising house prices. Total returns to an investor are the sum of both.

Investment returns from a rental business

The other complication for a landlord is that buying a residential investment property is not just like buying a straight forward investment. It is actually running a business. Therefore what a landlord needs to include in their calculation are the associated costs of running that business.

The main revenue source for a landlords business is obviously the rental income.

The complication for landlords is that in calculating their net returns they need to include net income (after expenses) and add this to capital appreciation. This needs to be done for the entire investment period. A landlord will typically hold a residential investment property for approximately 15 years according to on going surveys from the Association of Residential Letting Agents (ARLA).

The final complication is that rent and other costs are likely to change over the investment period and this needs to be factored into the calculation of a landlords investment returns.

Set up & exit costs

Setting up a residential investment will mean that a landlord incurs certain set up or one off costs of bringing the investment into being. These costs include the initial costs involved in the purchase of the investment property such as the legal fees and stamp duty if it is payable. Other capital costs frequently incurred are where any appliances are purchased or if the residential investment property is improved. Finally, there is the cost of exiting the investment when it is sold. All these need to be factored into the overall calculation of a property investors returns.

Accounting for the long-term

One further complication to a landlord trying to calculate their likely returns from a potential residential investment is trying to account for the effect of inflation and the likely growth rate in house prices generally. The Halifax figure reveal that over the last 40 years house prices have been rising at an average rate of 10.3%. However the Barker Report produced by the Government on housing supply concludes that the real rate of growth (after inflation) over the last 30 years has only been 2.4%. Therefore in calculating a residential investment’s long-term returns a landlord will need to be able to predict both of these.

The return on capital

These calculations of returns all relate to the asset value of the investment property and the rental profit after expenses. However, this is not a true measure of the real returns made by a property investor. This is because unlike an investment in a building society a landlord is likely to have borrowed a significant proportion of their investment capital in the form of a mortgage. This means that they are likely to only have put in a proportion of the total capital into the investment.

For example on a £200,000 property they may have put down a 20% deposit or £40,000 into the investment. What this means is that any investment calculations needs to measure what the returns are on that £40,000 and any other additional capital costs not just the £200,000 in order to enable a potential property investor to measure whether the returns are good and likely to be better than investing that money in alternatives such as putting it in the building society.

What returns should Landlords be aiming for?

To some extent the investment returns required will depend on each landlord’s circumstances. For some landlords anything above that available on a building society deposit account would be OK. The real rate of interest from a building society account i.e. the gross rate (before tax) minus inflation is about 3% in real terms. This is pretty low as it reflects the fact that it is a risk free return. Property investment is not risk free and given that a landlord is investing a considerable amount of time, effort and capital it is reasonable to expect a return above this.

A property developer would look to receive a return of about 20% on capital invested. However, carrying out a development is far more risky than an investment. In addition, a development particularly a large one is likely to take place over several years; in which case the annualised returns could easily be halved to say 10%.

If we use these figures as a guide I would say that a long term real return of between 5-10% is OK although not stunning. A landlord has to appreciate that buying a property investment is not passive in the same way as holding a building society account is and running a rental business does involve small amounts of work to keep it on track. Therefore the returns that a landlord should expect from their investment should reflect this. A landlord should be aiming for at least a high single figure and preferably a double figure return on their capital. Anything above 20% is excellent.

Difficulty with predicting long-term returns

Off course, long-term predictions are notoriously difficult. Predicting things like the interest rate, the levels of inflation further out than a couple of years into the future was impossible up until recently. The independence granted to the Bank of England in the late 90’s has had a huge stabilising influence. Hopefully, the UK and the housing market will continue to benefit from this stable investment environment and enable all our property investments to continue to prosper.

Property investment has always been one of the most common methods of investing capital. Many know that property investment can be a lucrative business option and hence many investors consider it an integral part of their diversified portfolio.

Investing capital in a specific industry like property is a long-term way for individuals or families to obtain financial security for their present as well as future. As property values are rising in many countries, investors can achieve good capital growth.

Here are important points to consider about property investment:

1) The bottom line of property investment is to find an affordable property that can prove to be highly lucrative for the future. Anyone can invest in property and use any number of the many books and guides packed with helpful information that are available on the internet and at local bookstores and libraries.

2) Sometimes this huge amount of information can seem to be complicated and confusing. The best advice is to start from a primary level and then learn some tricks of the trade. If you are a beginner, you must look for a profitable property investment…so seek articles and tips on this.

3) Though the whole scenario of investments is always changing, property investment is still a viable means to enhance your financial portfolio. As time moves on, for example with newer media options of television and internet, new trends in property investment are appearing.

4) In the last decade, a common way to buy and sell property was to buy a house and / or to fix the existing problems. Prepare your property for resale and then sell the house quickly.

5) Residential property investment is the investment that can carry low risk and is not like investing in commercial property where investors have to worry about the conditions of businesses. Property investment loans are not as difficult to get as other types of loans and investing in residential properties can give investors a substantial financial boost.

Investors must consider the surrounding environment. For example, if you are buying residential properties then check whether there are sufficient numbers of schools, hospitals, main roads etc. to support our day-to-day existence.

Also check out the history of capital growth rate in the area in last at least 15 years. Make sure that property investment is worth the capital benefit. You must also consider the population growth rate of the locality.

Investors can also get property investment loans and attain about 106% of the purchase price. However, to qualify for such loans, your financial conditions must be able to sustain your current liabilities as well as the investment home loans. Lenders usually assess your assets, income and credit profile before financing your investments.

Investing in property extensive financial planning, but it also gives you some great tax benefits. Even though the market shifts all the time in the property sector, buying and selling property is always a good industry to be involved in.

If you are planning to invest in property, you need to take advice from experts or you can conduct research on the internet, attend seminars, interact with social groups and then read as much as possible regarding this matter to clear up all your investment doubts. The more you know about market, the better you will become at finding good property investments.

Hey there,

Thanks for releasing me from the confines of this page. You see, unless I am being read by someone like you who understands me, I am no more than a collection of shapes (called letters) that make no sense on their own. But once read in my entirety, I have the power to impart knowledge and experience on you.

And just like the ‘Genie’ rewarded ‘ Aladdin’ for releasing him from the confines of the lamp, for every sentence that you release from this page, I am going to reward you with a piece of priceless information that is sure to help you achieve your investment goals.

Before I continue, it would be safe to assume that you are someone who is very serious about your financial future, right?

Thought so – I recognised that quality in you the moment you read to this point. In my time I have come across 3 main types of reader:

i. Those that just read the main title and subtitles for each section and then think they know what the contents they have not read are.

These guys always tend to come back to me at a later date – usually after they have made all 10 of the most common property investing mistakes and lost themselves a fair bit of money in the process.

ii. Those that read me a bit at a time and because of this, I never get a chance to share with them all the treasures that lie within me.

These guys tend to make about 5 of the 10 most common property investing mistakes and therefore, are always one step away from financial disaster.

iii. And finally, those who take the short time required to read me in my entirety. These are the smart ones who receive the knowledge I posses and use it to create treasures and the type of life that most people only ever dream of!!

These are the guys who retire early, have fun and exciting lives, have great relationships with your family & friends, be loved & admired by everyone you meet!! This is the future I foresee for you!!

OK – as much as I sincerely enjoy your attention, I know that ‘time is money’. And it would be selfish of me to keep you here longer than I need to.

So it’s time I shared with you ‘The 7 Most Common Property Investment Mistakes’ and showed you ‘How To Avoid Them’!

Mistake #1 – Failing to Create An Investment Plan

Surprisingly, there are many property investors out there investing with no plan. Those guys fail to recognise the importance of having goals to work towards – and some even go as far as dismissing this concept outright.

Take it from me – investing without a plan is a sure route to financial disaster. I am confident you have heard the saying:

‘If you fail to plan, you plan to fail!’

On the other hand, setting clear goals is the first step towards becoming a successful property investor. You see, successful investors have the following 3 things in common;

i. They set their own specific goals

ii. They develop a plan for achieving those goals

iii. They remain focused and take action on implementing their plan

With clearly defined goals you can easily devise a plan to realise them. But before setting goals, it is important to have an end result in mind – a dream to work towards.

This dream must be your dream and not someone else’s because when it belongs to you, it will keep you focused and motivated at all times. Especially at times when things may not appear to be going to plan.

However, in order to turn your dreams into reality, action is required. And a plan will enable you to take consistent action towards achieving your goal.

So how do you avoid this common mistake?

Easy – just set up a plan using the following simple steps:

a. Set your property goals & write them down

b. Set a time-frame for your goals

c. Identify the things you need to do to achieve your goals and put these into an easy to follow step-by-step plan

d. Take immediate action & remember to review your plan on a regular basis to make sure you are on track

So now you know how to avoid making No. 1 of the 7 most common property investment mistakes, let’s move straight on to No. 2!

Mistake #2 – Taking Investment Advice From Friends & Family

Please believe me when I sincerely state that my intention is not – in any shape or form – insult your family and friends.

What I am simply trying to remind you is of what you know already – and that is; although you may have a lot in common with friends & family, what works for one person may not be right for another. Especially when it comes to financial decisions and investment planning.

Where I’m from, we have a saying that sums up this wisdom and it goes:

‘One persons meat is another persons poison!’

I mean think about it – do you and your friends & family;

• Like exactly the same colour, football team, food, film, book, career, choice of partner, etc?

Exactly!

So although our friends and family may have our best intentions at heart – we hope – we know that the advice they give us is not always the best for achieving our personal goals and realising our dreams.

So how do you avoid this common mistake?

i. Remain fully aware of your personal and financial position and how it relates to the advice giver. You might want to think twice about taking advice from someone who has a history of making bad financial decisions. Also, never take investment advice from someone who has never invested in property.

ii. Be aware of the advice givers area of expertise and see how that relates to the advice they are giving. For example, a friend may be great at giving you relationship advice – but that does not automatically qualify them as a property investment expert.

iii.Only ever take advice from people who have already achieved the goals that you are aiming for, as these are the people with the experience to help you navigate the inevitable obstacles you will face.

iv. Make sure that you have current knowledge of the property market at all times. That will help you identify whether the advice you are being given is relevant to today’s market.

v. Refer back to your investment plan that you created to avoid mistake No. 1 – this will help you establish whether the advice you have been will take you closer too or further away from your goals.

vi. Find yourself an experienced property investor to act as your guide and mentor. OK – now you know how to avoid mistake No. 2 – let’s move on to mistake No. 3!

Mistake #3 – Not Buying Property Significantly Below Market Value

This mistake is very common among other investors because although they see why it would be ‘nice’ to have, they rarely see why it is ‘important’ to have.

Getting a property at £5,000 pounds below the original asking price is ‘nice to have’. But it is important to secure a large enough discount that will cover all your major purchase costs (e.g. deposit and stamp duty). This approach will greatly lower the amount of personal capital you need to invest in any one opportunity.

Another important reason to always buy property significantly below market value is because: Profit is made at the time of buying, and realised at the point of selling!

You still with me? Good. Because I know that the last statement may not be an easy one to digest. When I was first exposed to this concept in Robert Kiyosakis’ bestselling book ‘Rich Dad, Poor Dad’, I was ‘more than confused’. So if you are confused at this stage, let me congratulate you because ‘confusion’ is a sign from your brain that you’re about to expand your cognitive awareness and learn something new!!

Let me now use the following example to help you through your confusion:

Let’s say a property is worth £100,000 and you buy it for £100,000. You would have £0.00 equity/profit in the property.

I see a similar property for £100,000 but buy it for £80,000. I would have £20,000 instant equity/profit in the property from day one.

Let’s assume a few years have gone by, the market has fallen and both our properties are now only worth £90,000. When you sell, you are down £10,000. When I sell I am still up £10,000, because I bought with a £20,000 profit.

So you see: Profit is made at the time of buying, and realised at the point of selling! You may be wondering why I have chosen to use an example where the property drops in value. The reason for this is that you need to be fully aware that the housing market can go up as well as down.

And to be successful in property you have to make sure that you have sufficient downside protection so that you never lose money – even when the market is on a downward trend. Typically, buying property at least 10% below market value will give you a sufficient ‘buffer’ to protect your investment in the unlikely case the market drops in value. So, from here on, you might want to make it one of your investment rules to never invest in property unless you are getting at least 10% discount of its real – not speculative or inflated – market value.

So how do you avoid this common mistake?

i. First – adopt the 10% BMV rule. ii. Next – sharpen up your negotiating skills. A good place to start is by reading Donald Trumps’ bestseller ‘The Art of The Deal’. iii. Finally – find the ideal property and close the deal!!

I’m often asked by newbie landlords do I have any basic tips about investing in residential property. I respond by highlighting 3 essential aspects to making a landlord’s residential investment a success.

These I have called my three pillars of investment and they are:

1. Patience

2. Research

3. Timing

I always advise any prospective landlord that there is no magic wand to making a landlord’s residential investment a success. In recent years, the press have been full of stories about individual landlords who have made a fortune just by buying a few houses, and there are plenty of books and websites that feed on this kind of misguided ‘claptrap’.

We at Property Hawk have said all along that our message is all about how landlords won’t make a million in six months. What Property Hawk is about, however, is giving landlords and other property investors an insight into how to avoid the pitfalls that are out there and how, with a little skill and effort, landlords can invest in a residential property to improve their long-term financial prospects.

There is no one secret to successful property investing, but there are three core pillars of wisdom that offer landlord’s a foundation on which to build their property investment approach.

Patience

The problem for many novice property investors is also one of their biggest assets – their enthusiasm. Like children at Christmas, they have too much energy and are so excited that disaster is almost sure to follow. Similarly, the novice property investor, having made the decision to buy, wants to ‘dive in’ and buy a buy-to-let property straight away. A few years ago, when the house price boom was in full swing, there was the philosophy that if you didn’t buy straight away you would miss out altogether and never be able to secure an affordable buy-to-let property. This is no longer the case.

Experienced landlords always recommend playing a waiting game. While the UK is building approximately 40,000 too few houses annually, a prospective landlord cannot escape from the fact that there are still approximately 25 million existing residential units out there. If you as a potential landlord miss out on one purchase, there are always plenty more around the corner. Residential investors should, rather than embarking on a frenzy of activity, pace themselves for a potential ‘long-haul’ of identifying and then securing the right property. That is not to say that if the right residential investment property and a clear bargain presents itself a landlord should be slow to act, but landlords should be aware that there is a danger of buying a buy-to-let property purely to invest, and not because it represents a good investment.

By having patience, landlords can cultivate an approach where, having identified a suitable property, they make what would normally be considered a silly offer at, say, 10%-15% below the asking price. This should be based on the investment value to the landlord.

Having made their offer, landlords should continue to view and make other offers. Eventually, somebody will accept a landlords offer and they will have the basis of a ‘sound investment’ secured below its market value. Patience is not only a virtue for landlords, but, an essential element of, and pillar to, a sound residential investment. Remember – shrewd property investors make their profits when they buy investment property, not when they sell.

Research

Access to the internet provides us with a wealth of data and information that 10 years ago landlords would have paid a fortune for – or it simply wasn’t available.

– Helpful research sites.

My advice to prospective landlords is use it. If you are looking to buy an investment property for the first time, there will be a stream of questions to ask.

How should landlords value an investment, and what about buying at auction?

The basic area-specific research is something only the landlord can carry out – in other words it’s down to the landlord. This is all about potential landlords scoping the residential investment – finding out about prices in the area, and how the area has performed against other areas. Landlords should ask are there any local or national developments that could influence property values? What, if any, is the rental demand like in the area and what is the current and proposed rental property supply? By the end of the exercise prospective landlords should have figures for rents, values, yields, annual property price changes, the planning pipeline and property build costs per square feet.
All this information will mean that landlords obtain a thorough understanding of the local market and what have been (and could be) the returns in the future on their property investment.

By the end, a prospective landlord should be an expert on the area they intend to invest in, knowing at a glance how much a property is worth to buy and will rent for. This will allow a prospective landlord & property investor to watch the market and spot which properties are a bargain and which are overpriced property.

Many ‘novice’ landlords have not done this. Instead, they have put their trust in ‘advisors’ to invest their money, or have bought in areas they don’t know or do not understand, on the basis of glossy marketing spiel.
This has led to the problems that are now emerging in many towns and cities concerning novice landlords and ‘discounted’ investment schemes. Here, properties are sold at what the agent purports to be a bulk buy ‘discount’ of, say, 15%-20%, though the reality is that the discount is applied to a price that may be 35% inflated, which still means the investment properties are a rip off.

Careful research by any buyer would have revealed that it was possible to buy similar residential properties down the road at 80% of the cost and that a huge number of properties were being built at the same time, all largely aimed at buy-to-let investors, causing a glut in the rental market. Proper research means you as the landlord will be nobody’s fool, and you won’t be left with an investment ‘lemon’ having filled the pockets of the property developer and disingenuous scammers.

Timing

Good investment is all about timing. Unfortunately, no landlord has the insight that gives them perfect timing – buying at the bottom and then selling precisely at the top of the market. It is not rocket science to figure out that if a landlord buys at the bottom of a cycle and sells at the top they will make more money than investors who buy and sell depending on personal circumstances.

The effect of timing on a landlord’s overall levels of return can be dramatic. For instance, anybody unfortunate to invest in property in 1973 saw a loss of their capital over the period 1973 to 1977 of 40%. In 1989, I invested in a property that took a full 10 years to recover to its original purchase price. But it did – and then proceeded to double in value in one 12-month period. If only I had had the foresight to buy just before it doubled.

However, the overall value of residential property is largely outside a landlord’s hands, being influenced by macro economic factors, such as interest rates or consumer confidence. It is as well not to get too hung up on these factors.

Residential investment is a ‘long-term’ game, which means that peaks and troughs, particularly in the short-term, will have less impact on your overall returns the longer the investment is held. This again is another reason for landlords to exhibit patience. By buying property at regular intervals over the long-term, a landlord will inevitably buy some cheaply and some when prices are higher, but, overall, landlords should see a steady and long-term rise in the value of their residential investment portfolio.

So you are new to buying investment property and you need to know about investment property loans. Borrowing money to invest in property can be a very tricky business and it is a good idea to research your field before committing yourself to a huge loan. One way of doing this is to get advice from the people who have already dealt with investment property loans and who are happy to advise new entrants into the property market.

That’s all very well, I hear you say, but I am looking at buying investment property and I have no idea where to look for advice. The only place that most people go for advice on investment property loans is their bank, who already have a vested interest in loaning the money. One way of getting independent advice on this subject is to check out a property investment forum. There are ones that really are worth a look. A lot of the people on there have been buying investment property for some time and are well aware of both the pitfalls and advantages surrounding investment property loans. The property investment forum, in fact, is worth a visit for anything to do with the property investment market. The way the market is at the moment there are people around who are dedicated to maximising the property investment market to attract new entrants.

This is a double edged sword, on the one hand it is great news for those who are well informed when it comes to buying investment property or dealing with investment property loans, but those who don’t do their homework stand to lose a great deal of money. This is in addition to all the heartache and hard work that is associated with investing in the property market.

Despite the sometimes problematic nature of the property market you are already a good way towards buying investment property. You’ve gone to the auctions, perhaps bid more than you should, and you are now beginning to wonder whether your finances will cover the mortgage and the work that needs to be done. Somebody has suggested to you that you get yourself a bridging loan or investment property loan and you are not really sure what they are or how to go about it. Not to worry you will find plenty of useful advice at the property investment forum. These people have experience in buying investment property and more than a few of them have had bridging loans or property investment loans so it’s worth having a look at what they have to say and taking their advice. You need to be aware of the different property types and their usage, although most beginners will start with a residential property.

There is a lot of advice out there in the form of articles like this and on the property investment forum, do your research well. Try to understand the market and if you have a property investment loan get the best rate that you can. This way you stand more chance of success in the property investment market.

When looking to invest in property it’s always important to take a structured approach to ensure you get only what you are looking for. Over the years I’ve developed the following structure and I’ll always stick to it so that I know I have done all the homework necessary to make a sound investment and reduce any potential risk to a level I’m comfortable with.

Step 1 – Research Research Research

This is possibly the most important aspect of any investment decision. When I talk about ‘researching’ a potential investment, what I mean is to do all the necessary homework to find out if the investment is right for you and if it will provide the return you’re looking for.

Sometimes it is tempting to overlook research and maybe follow a tip from a friend on a potential investment. Many people also don’t do research because they don’t know where to find the required information and so they may make a blind investment, hoping on good returns. Even worse, they may put off making the decision (to invest or not to invest) and stay stuck in procrastination while the asset starts to show strong growth.

So what needs to be researched before investing in property?

Location – such things as the population, main industry, main employers, future investment in infrastructure, tourism, local universities.

Property prices – average, median, recent sales, potential rental returns, previous and predicted growth.

Tax and ownership laws – country and state laws, occupier/investor tax rates.

There may be more areas you need to research depending on your situation but the main objective here is to carry out the research to a level you are comfortable with. You can never do too much research.

Thorough research will give you peace of mind to make confident investment decisions.

Whatever you are trying to achieve, someone has already done it before and the information is out there. It may be in books, newspapers, special reports, published on the Internet or available from real estate agents. You can find the information you need to make a confident investment decision.

Step 2 – Know your Numbers

Note: This step primarily deals with rental returns and does not take a property’s annual appreciation or depreciation into account.

Before investing in property it’s important to do the numbers to know

What you can afford to purchase

Purchase and ongoing upkeep costs

Potential rental returns

Monthly cash surplus or deficit

Once you know all of these figures you can then decide how much you can afford to spend within your budget, what rental return you’re looking for and whether you will gain a monthly cash surplus or if you will need to contribute towards its monthly upkeep.

So what are the common numbers to know and calculate?

The Purchase Price

Purchasing Costs – items such as Stamp Duty, legal fees, real estate agents’ commission, legal fees.

Rental Income – If the property is rented to tenants, how much rent can you charge?

Ongoing Costs – Management Fees, mortgage repayments, repairs and maintenance, letting fees, Municipal or Council rates.

Net Return – this is the end result once you have accounted for all of the income and expenditure and it will show if you will have a cash surplus or deficit.

The more properties you calculate returns on, the better idea you will have of what is available in the market to suit your requirements. You’ll also protect yourself from any surprise costs. It’s wise to be conservative with your calculations and maybe add in a contingency amount.

Please remember, there may be more costs you need to factor into your calculations according to your situation

Step 3 – Create your Criteria

Before you go shopping for your investment property it’s important to know exactly what you’re looking for so that you buy a place that suits your requirements. The best way to do this is to create a list of certain criteria that a potential property must meet.

You may choose to be stringent on some of the criteria such as a set limit for the purchase price but then you may be a little more flexible on other criteria like accepting $10 less than the expected weekly rent.

So what would you include in your criteria? Here are a few suggestions:

Town population no lower than 10,000
Expected rent at least 7% of the purchase price
Brick house on land, no more than 10 years old
Initial repairs to cost no more than $1,000.

Whatever criteria you choose is up to you but it gives you control over what you buy and will certainly decrease the time you spend looking for a property. From carrying out your research and working out the numbers you should find it easy to create your criteria. Now you can go and buy the property that’s right for you.

Step 4 – Property Insurance and Management

Like any investment, we always look to minimise the risk of loss or damage and it’s no different when it comes to property. There are a number of ways to do this including taking out a suitable insurance policy and finding the right property manager.

Whether you buy a property to live in or rent, it is potentially at risk for various reasons and so you can insure the property against these risks. Insurance policies can cover you for loss in the case of structural damage, theft, flooding and many other instances.

Landlord insurance policies are also available for extra cover of instances such as malicious damage, legal fees, loss of rent etc. So shop around for the policy that’s right for you.

If you are buying a holiday home or a rental property you might consider employing the services of a Property Manager. The role of a Property Manager is wide and varied and a good one can save you a lot of time and money.

They can find new tenants, arrange to have your property cleaned, collect rent, keep an eye on your property, pay your bills out of incoming rent and much, much more. Finding the right Property Manager will pay off rather than choosing someone who won’t look after your property the way you want them to.

It’s important to shop around to seek out the best Property Manager and you can do this by asking the right questions. A good Property Manager will communicate regularly with you and be available to address any concerns you might have.

Additional measures to secure your investment include the local neighbourhood watch, security alarms, window locks and smoke alarms.

Step 5 – Tracking your Investment

Once you’ve invested your hard earned cash you’ll want to know how it’s performing and what sort of return you’re getting. Again, we’re only going to look at rental returns rather than growth as the growth is only speculative.

Every month you should keep all receipts of income and expenditure concerning the property. This includes:

Statements from the Property Manager
Bank mortgage statements
Receipts for repairs
Payment receipts for Municipality or Council rates
Any correspondence regarding the property

All we are doing here is tracking the income and expenditure so we can see what the return is. By tracking the figures regularly you can see how your investment is performing and this information can then be filed with your annual tax accounts.

Your accountant will be able to advise you on what extra records to keep ensuring you get the best annual deductions.

And that’s the final step to Successful Property Investment. All it takes is one step at a time to become familiar with the process and although there are many other ways and processes advocated by many other investors the end result is ultimately to leave you empowered to make the correct investment choices.