Beginner’s guide to real estate investment Most people with some money to spare nowadays have taken to real estate investment because it has become the new frontier for anyone planning to make real money. Mortgage rates and home prices are at their lowest and there is also a sharp increase in the demand for properties in most areas of the world. With the property investment market being considered one of the most profitable ventures anyone can ever get into, it’s not a surprise that there is such a frenzied interest. Many other people who are interested in such investments are sometimes afraid of putting their feet due to the misinformation. Anyone who plans to do any investments related to the property market needs to learn a few important things so that they don’t operate in the dark. It may be important for you therefore to subscribe to relevant newsletters or become a member of investment forums online in order to gather information and tips apart from understanding the property investment lingua. As a beginner in the world of investment you may also need to know everything you can about the importance of leverage. Leverage is simply learning how to use borrowed funds in order to complete your transaction. In other words, the greater the proportion of funds that you will use in doing an investment transaction, the higher the leverage will be an in turn to lower the amount of equity you will require. Depending on your source of financing, most investment projects will require some 70% to 100% leverage, especially when you are dealing with a value added investment product. The importance of learning these and other related concepts is the fact that it makes it easy for any investor to determine the kind of property they will invest in because it meets their specific investment parameters and financial objectives. Once you have set down you criteria for the kind of property you will be interested in, you work hard to get it before you approach a financial institution or a mortgage broker to assist you in locating funds. If you qualify to receive the mortgage you are applying for, you can as well as them to provide you with a letter of intent where they provide terms and conditions under which they are ready to provide you with funding. The next thing you definitely want to know is a basic idea regarding the amount of money you will require as monthly mortgage payment; this helps you to determine the amount of cash you will need to invest and of course what your return is likely to be. This is basically what ultimately helps any real estate investor decide whether or not they are able to or even whether they should buy any particular property. The bottom line is that when all is said and done, real estate investment for beginners should not be such a difficult thing to deal with as long as you take your time to get answers in advance and you also do some careful planning.
About the author: This article has been written by Mohit Jain who has written various articles on real estate investment and real estate buying tips. He is currently writing for Ruchi Realty, a leading real estate company in India. The company has recently launched a new real estate Indore project - Ruchi Lifescapes which is Indore's biggest ever fully integrated township. The township has some of the better villas in Indore to offer to buyers.