If you intend to go into real estate investing, you might want to pause for a while since the venture is one of the most complex and complicated commercial enterprises in the world today.
The business is primarily concerned with the purchase, ownership, management, and eventual resale of the real estate property. The goal is of course to make a profit.
Investing in real estate is one of the most profitable commercial ventures today. Only individuals or companies with substantial financial portfolios can go into this investing. Besides, only those who have sufficient experience in this kind of business can attain success.
If you are a newcomer in real estate investing, it may not be advisable for you to go right into any project that might suit your likes or taste, even if you have the funds available. Investing in real estate needs millions of dollars to start with as a profitable business.
Some savvy individuals go into real estate development which is a form of investing. An example is purchasing a hinterland property that quite distant from a major urban area and developing the property into an attractive residential area.
The project involves a lot of planning, architectural design, engineering, and construction work. If you are developing a 1,000-acre area into a high-end residential enclave, you would need a lot of investment funds. Usually, hinterland areas are cheaper in their purchase terms of price on a per acre basis.
Once you complete the project and finish, say, 100 high-end residential units, you can open the completed project to the public for sale. If your residential units are elegantly made and the prices attractive to middle-class people, you can recover all your costs and make a full margin of profit.
In some areas, investing takes the form of purchasing a building or commercial property that has already been developed and re-opening the improved property for rent to retail stores, shops, and other business facilities, similar to shopping malls.
When searching for a property based on your business plan, you will need to get in touch with persons or institutions that deal with real estate. These include the commercial exchange centers where you can take a look at the market listings, real estate agents, banks, and government agencies.
You should be aware that the valuation of land and other real estate property differ from one country to another. Tokyo, for example, has one of the most expensive properties for sale in the world compared to Vietnam due to the limited availability of flat land area.
In some countries like the Philippines, investing in real estate means spending in the purchase and sale of condominium units. Foreigners cannot purchase and own land. One of the ways by which foreigners can do successful business in real estate investing is by joining existing real estate companies on a partnership basis.
As an investor, you can take advantage of the incentives available in every country who wants to go into real estate investing. This tax shelters, equity build-up and joint capitalization between the private investor and the government. Governments always have the money available for real estate development.