NewYork Coalition

Archive for July, 2008

Real estate as investment

Monday, July 21st, 2008

The term real estate usually refers to immovable property such as land and building or other permanent structures attached to it. It is a popular form of investment accounting for over half of all types of assets like stocks, bonds, commercial and home property worldwide. Investment in property has multiple uses; apart from generating rental income, it can be used as collateral for securing loans, save tax on interest rate losses or simply generate profit from resale.

Some of the characteristics of investing in real estate when compared to other form of investments are 1. durability i.e. the buildings last for centuries while the land is practically indestructible, 2. heterogeneity i.e. each real estate is unique in terms of location, financing, type of building etc. 3. high transaction costs 4. long time delays in creating new supply and financing 5. real estate can be both for own consumption or an investment.

Real estate transactions usually occur through an intermediary between the buyer and the seller called the property estate agents or brokers. They provide services such as appraisal, market analysis, preparing contract, property management etc for a fee and require a license to operate in most countries. With the advent of the internet, most of the real estate marketing and dissemination of information about buy / sell of properties nowadays takes place through websites that contain real estate for sale listing as well as lease property listing. Wholesale property listings are websites that list properties owned by other real estate investors.

They often provide opportunities for buying cheap and marking them up slightly after a little additional investment in terms of repair etc and selling them at a low price again. There a no. of websites that provide wholesale property listings available around the world. The listings can be home property listing or commercial real estate listing depending on end use. Further they can be new home listing or already existing houses listing. Since there are a no. of realtors involved in the business, directories that provide real estate agents listing are also available.

The capital required to buy a property is raised in many advanced economies through mortgage loans in which the realtor property is pledged in favour of the lender until the dues are paid off. The lender can foreclose the deal in case of non payment by getting a court order and auction the property in the market and get the loan back. Foreclosure property listings provide details about for sale properties that have been put up for auction by banks etc. Pre-foreclosure properties are properties that are headed for foreclosure but yet to be foreclosed. The home owner still owns the property house.

Many wholesale property listings focus on publishing bank foreclosure or distressed real estate listings to address the needs for a variety of investors. REOs or Real Estate Owned properties, foreclosures, pre-foreclosures and wholesale properties provide the best opportunities to make money in real estate investment.

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