Sep 05

INVESTING IN PROPERTY

Investing in property is still the main choice most people, because people assume that it is one of the best ways to grow your money. In general, property investment is considered safer than other types of investments. Why you own or manage their own investments, so you can control almost everything. But it is not the only advantage Investing in the property, because the most interesting fact of Investing in this property allows you to use other people’s money to start investing.

Most other investment products is heavily influenced by external factors. For example, prices in the stock market can go up and down quickly because even significant issues or gossip about politics, public policy, national security, the economy, or as bond prices fall when inflation and interest rates rise. Compared to property which, although also affected by external factors, but the changes are not too fast, for example, house prices certainly can not be changed just like that in a day but it took years.

Advantages Investing in Property
By investing into the property, you have the opportunity to get the return of investment. If you see Donald Trump pengusuha property of American or Ir. Ciputra from Indonesia, they are rich from property business. The Bank also has property, if we look at high-rise headquarters building is magnificent, not to mention dozens of branch number

Many ways to invest in property. You can start by buying houses, shophouses, built rental houses, commercial buildings or vacant land. Of all the options, buying and selling a home rented better selected for those just starting to invest in the property, then a little save from the lease to be reinvested .. If you notice a lot of people are interested in making a rented house, because by being landlady lets you have property that you can control yourself, then sell it later. The good news is you do not need much money to start your investment in property.

It is important to understand why the property is often the first choice of people to develop their wealth, why not because the property is not at risk. As with other investments in property also has constraints such as the tenants are late paying rent, moved without telling, damaged buildings, whatever difficulties may occur. Bottom line if you are willing to bother with the affairs of this kind, the investment in the property is for you.

Using Other People’s Money “Other People’s Money”
One of the most interesting of the investment in the property is that the system is made in such a way that allows you to use other people’s money to finance your investment. This is one of the most important concepts that membuata rproperty can make you be more affluent than other investments.

In other types of investments that the large amount of investment is determined by how much you are willing and able to pay with cash. So to buy another investment you pay cash on the assumption balls using your own money. We take the example of investment in the capital market. To buy shares then you have to pay cash entirely from kesuluruhan transaction, unless you do the actual margin trading is very risky. Likewise, investments in bonds, mutual funds, deposits and bank savings, gold and collectibles bahka artistic merit, all require cash payment in full.

Investing in property is not the case, you can just pay for the house down payment of 10% to 30% of the price of his house in order to have the goods then the rest can be financed from the loan to the bank. Never mind the banks, even the developer itself was willing to provide mortgage payment relief for payment of advance purchase goods.

The opportunity to use other people’s money materialized in the form of financing is referred to as leverage, or the ability to multiply something. For example, on the first day you manage to get a home loan with an advance payment of USD 30 million, then on the day it is also your direct cash assets increased to USD 100 million. By using the financing of the investment could be doubled in two ways. First, the more money invested, the greater the money of others or financing you can get, for example, with Rp 30 million, then you can only buy shares up to Rp 30 million. But with the same amount of money if invested in property, then you can buy a house worth USD 100 million. Where you pay down the sebasar USD 30 million, then the bank finance the remaining Rp 70 million, then you become the owner of a building for USD 100 million. Is not that number more than 3 time or 300% double? Incredible.

Why Real Estate Profitable
Using other people’s money or using financing is only one of convenience that can be used dakam invest into property. But apart from that there are many benefits of investment in the property which makes it very attractive in comparison to other investments.

Cash Flows, “Cash Flow”,
Cash flow is the money you receive on a regular basis on the money you keep in an investment. eg interest on savings and deposits are cash flow because it provides an income for you. In property, the rent can be income or cash flow for you. The more buildings you can rent the greater your cash flow.

The value of your ownership of the home is increased.
Value your rights of ownership or investment properties financed from the concept of using other people’s money was going to increase, far exceeding the debt or obligations. Person’s ownership rights in an investment is known as equity. For example, if you purchase an investment property amounting to USD 100 million, which was financed by the bank Rp 70 million, the remaining $ 30 million of your own money put. So your ownership rights to the investment of USD 100 million earlier amounted to USD 30 million or 30% of it. The ownership will increase in value due to debt repayments reduce liabilities. In addition it also increases your ownership rights as property values rise. Your property value will go up due to inflation makes the price of goods and services has increased, including property. This is not only due to inflation rising property values but also you have the opportunity to increase cash flow or your regular income by way of rent increase in line with inflation home earlier. The increase in property value could even increase your borrowing power. Banks usually be happy to provide additional loans based on collateral or property price increases. You can use this money to pay off the balance of the old debt, and the rest of the money from the loan can go in your pocket. Then to adjust to a new installment of rent income.

The opportunity to build a bigger building, once you managed to pay off debts, you’ll have more money to be allocated, for example, to make the property available as greater. Many property investment starts from a small building, but because there is rental income that could mencover monthly debt repayments, then make the property into a larger building became possible.

Is it hard to Get Loans For Investment Property?
The most difficult part of all businesses is to get the money to finance the business. The person is still very difficult to borrow from a bank business loan to start a business. Banks usually only willing to lend only to businesses that have been running 2 years. This does not apply when you want to borrow money from the bank to buy a house. No matter whether you buy a new home for the first time or for the umpteenth time, the credit can be given by the bank for the purchase of any home. Also from the mortgage bank is also considered a type of credit risk is low.

Because the amount of the home loan repayments tailored to your income, As such banks have assumed that the debtor has a steady income that can be used to pay the monthly installments. Then in terms of jaminanya the building itself, which we know constantly rising prices, it is no wonder that the guarantee is generally able to cover debts.

Step – Step Started Investing In Property
Although there is an opportunity to use the loan to finance your property investment, does not mean you become complacent. Investment in property still requires the use of money and time commitment. So do your research and determine a plan before investing in property is very important. Since the very first step and the most important once you decide to invest in property is to learn everything about the property as much as you can.

Continue to learn, there are many sources of information that can you can to learn about the investment property as of books – books, courses, seminars, the Internet, and others. To get to know your property business can take part-time work as a property broker. The advantage, besides you can practice what you’ve learned from various sources that information, you can also get commission on sales of the property you are selling. Not to mention the opportunity to build a network or a network that would be very useful to help your property business later. Doing research beforehand will make you “aware” of the risks or problems that may arise in regard to the ownership of such property could be a problem with the tenants, building maintenance costs.
Work with your realtor or broker property, once you equip yourself with adequate information about the property business we then look for a realtor or property broker who will help you understand more about the property business. Look for a dealer who had experienced at least 2 years, they usually have much more control of the business property. We encourage you to look for realtors who work fulltime instead partime, because they could not meet dikhatirkan
Research on interest rates, rising property prices, rents, if you want to use bank financing the bank lending rates compare with each other and find the most competitive prices. Then also on the assumption of rising property prices so you can determine approximately how much the selling price someday. Do not forget if you want to get out of lease ruamh pemdapatan, before determining rents look for information on house rents reasonable for the area are adapted to conditions of the building.

Your Action Plan
Once you are determined to invest in the property, so then you only set goals of the investment property you are specific and measurable. Suppose you want to earn money USD $ 100 million that you plant in property investment or purchase e property could be $ 1 M in 10 years. Once you set a goal then you can determine what kind of properties suitable to achieve that goal, whether housing, commercial buildings .. Calculate how much money is needed to nvestasi, property market conditions, then the amount of rent you can expect, as well as how many buildings you can buy. By doing research as suggested above, then you can estimate how much money you have to provide and how much return on investment can be expected to continue to grow. You can even estimate how long should you hold the property before selling it. By making its financial objectives will give you some sort of guidance to start a new business, taking the necessary actions, anticipating risk, then do the investment.

Happy investing!