Real estate investment is a smart action to increase your earning because value of land and property keep increasing year to year. In real estate business you have to be aware about market trends and tax implications so that you can make opportunities for making big gains. But trading and investing in real estate is not as simple as in other business because you need a big amount to own any land or property. And if you baying a property for resale you have to hold that property till you don’t get a good profit on its resale. But to give big amount to buy a property is not easy for those people who wish to start real estate business but don’t have a sound background but they have multiple solutions for that let’s start with
REIT (Real Estate Investment Trust): Receives special tax contemplation and you can sell this security as a stock and can directly invests it in real estate business, by properties and mortgages and offers investors high earning, it is most convenient way to start in real estate business. You also have other options for investment as you can borrow money from your friend and family and by adding any partner in your business and pay amount in sharing by putting a written contract in which rules for profit sharing and roles of both partners are clearly defined.
In Real estate business an agent play very important role because he is a link between buyer and seller he is responsible for marketing of real estate on behalf of his client. Agent’s goal is to sell property to client on a best price and in best terms. Before hiring an agent you must check his license and make a proper written contract between seller and agent. You need to be very careful when you are hiring an agent because he will represent you his conduct with costumer will decide your success. Make all the information about property are transparent with agent so he can communicate it with the clients. The agent’s job is not just to get the “best deal” but also to get the best price and conditions for the seller. Make one thing clear with your agent that it is not required to tell client why the seller put the property for sale. There are many reasons which define the importance of hiring an agent in real estate business, first one is that agents have special ways to convince peoples to buy property second one is investor have no worries about finding buyer for his property because agent do this on investor behalf and also arrange meetings of seller and buyer by communicating with both parties. No doubt an agent plays a very important role in real estate business.
Proper documentation is really important in real estate business all transactions must be in written form because oral promises are not considered as legal proof. A written agreement is required between seller and owner while exchanging the property. All information about property is clearly defined in written form and all the description about security renting etc. Transfer of lease from one to another is clearly described in legal contracts. Every state’s real estate law governing home sales requires purchase contracts and other real estate contract forms.
Risk in real estate: As every business Real estate also have risk factor and mange risks efficiently make every business successful. Risks take place always in different ways. As Failure in building component or system which require regular maintenance.
Profit and loss: Investment in commercial property deals is more profitable than residential ones. Because market for commercial properties is a very large one and find buyers and sellers is easy and margin also high then residential property deals. Also, commercial leases ensure a regular cash flow. However, you can only benefit from the transaction if you know how to evaluate properties correctly. Disadvantage is the liquidity in real estate business. Property generally has very low liquidity. This means it does not make a good short term investment. Investors only want to put their money in places where they can easily obtain it in case of emergency.