Sunday, January 13, 2013

Motivations Of Real Estate Investors And Shrewd Home Buyers

Seasoned real estate investors always operate under the assumption that real estate players have a full grasp of the current market conditions. These street smart stakeholders can easily detect whether they are dealing with a person whose knowledge of the goings on and understanding of the real estate market is adequate or not. The name of the game, in as far as real estate investor is concerned, is PROFIT. All actions and decisions are influenced by this main motivation. As such, other intangibles take the backseat for as long as the prospect of substantial earning is a strong possibility.

You don't have to be a battle scarred real estate investor to be on the same league as these shrewd marquee players in the real estate arena. What is most critical for a newbie in real estate investing is to take the right first step. Before you even get your feet wet and explore your investment options, it is crucial that your end goals are already in place.

Off hand, you can refer to the lure of BIG MONEY as the main reason. However, the task goes beyond this general qualification of your motivation. It is critical that you have a clear understanding on your specific preference in as far as the KIND of money is concerned.

When deciding on the kind of money that you can earn as a real estate investor, we have to look at the three income types. These are lump sum or upfront cash, passive income and long term or potential income. This critical element of real estate investing will have a major bearing on the path you are going to take and the decisions you are going to make while considering various investment opportunities.

If you are more inclined to earn upfront or lump sum income, then your best option will be to take the path of wholesale and flips investment opportunities. If you are looking to include passive income in your portfolio, then one of your possible investment strategies is the lease option.

Further, if you plan to focus your efforts on investment opportunities that are generally passive income generator, then you will have develop and sharpen your skills in the assessment of opportunities in the multi-family and other cash flow asset segments. You may also consider as your investment options commercial real estate properties once you are able to achieve a high level of proficiency as a real estate investor.

An investor who intends to take the long term income route must be able to establish a strong financial capacity as these investment strategy will require you to buy in and hold on to your investment over a long period of time. Once you opt for long term or potential income, you eliminate the risks that are related to short term investment options. As you are looking for options that will tie you down on the long haul, you will appreciate and assess business prospects that are influenced by long term economic prospects.

Transient dips and contraction in the real estate market as well as the economy as whole will not have that significant impact as your gains are assessed on the general trends in the market on the long term. That being said, investors usually go for real estate investments as these are seen as the best options especially when there is a downtrend in the market and economic recession.

We can define the real estate investment landscape by looking how shrewd real investors and buyers see a home as a money earning opportunity. This will have a major impact on your choice of preferred locations and sites as you weigh the economic growth and earning potential in each of these real estate markets being considered. At the end of the day, real estate investors will go for a particular investment option based on their assessment of three critical variables location, location and location.

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