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A Guide to Real Estate Market Investing

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When it comes to the real estate market one thing is certain: Investors are in heaven!

With the abundance of foreclosure properties-and other distressed properties-on the market, investors are able to snatch up discounted properties for well below market value. Plus, with home prices rising throughout much of the country, the real estate market outlook is perfect for investing.

Understanding Real Estate Market Investing

When it comes to real estate market investing, there are essentially two types of investments.

First and foremost, you can purchase properties and turn them into rentals or complete minor to moderate renovations and then sell the home for a profit.

Second, you can invest in REITs-aka you can invest in real estate through the stock market.

In both arenas real estate market investing has experienced some changes lately.

Over the last few years many investors have been purchasing foreclosure properties and turning them into rentals (due to high rental demand and low home prices). However, with home prices rising, many investors are moving back toward flipping houses-buying homes, making repairs, and putting them back on the market with an elevated price.

When it comes to REITs, many investors are looking to new home construction companies, showing their confidence in real estate market progress and the proven growth of new home construction over the last few months.

Although both options are incredibly popular right now, we will focus on real estate property investing when offering investment tips (leaving the REIT investment strategies to the experts).

Tips for Real Estate Property Investing

If you are a beginner looking to invest in distressed properties, then utilize the following tips:

Tip #1: Do Your Research: Regardless of whether you are looking to purchase a distressed property for flipping houses or if you want to turn the property into rentals, it is pertinent that you do your research on the local real estate market before making the purchase.

Take into consideration the following:

  • Local real estate market stability (Are home prices rising? Falling? Etc.)
  • Demand (Is there a demand for rentals? Is there a demand for housing?)
  • Nearby attractions (What is the school district like? What "fun" things are nearby?)
  • Etc.

Tip #2: Determine Expenses: When your purchase a distressed property, you will more than likely have to make minor to moderate repairs and renovations before you sell the home or turn it into a rental property. Therefore, make sure you do a thorough investigation of the condition of the property and determine an accurate estimate of essential repairs before making a final offer on the house.

Tip #3: Learn to Negotiate: Believe it or not, you can still negotiate the price of discounted properties such as foreclosures and short sales. However, when you are negotiating it is pertinent that you are polite, professional, and reasonable with your offers.

Real estate market investing is definitely on the upswing with proof of real estate market recovery, including rising home prices. If you are an investor then act now-find the perfect property for your next investment project!

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