If you are considering getting into real estate investment, one of the most important things you can do is to learn what exactly makes a good real estate investment return. Your return is actually what money you will make on the investment or your profit. In order to maximize your real estate investment return, there are several things you should do.

One of the first things you will need to do is learn how to figure out whether the property will give you a good real estate investment return. If you are looking at rental property to invest in, you will want to make certain the property will give you a positive cash flow. The cash flow is the amount of money left over after you have paid the expenses on the property. Expenses will include taxes, operating costs, and maintenance costs.

For example, if you have the opportunity to purchase a three-unit rental for $150,000, the rents are $750 a month, you will have $2,250 coming in. However, after you deduct the taxes, operating costs, and maintenance fees on the property, assuming those amounts add up to $500 a month, you are left with a positive cash flow of $1,750 a month or $21,000 per year. This would give you a good real estate investment return.

If you, however, can purchase the three-unit rental for $150,000 and it needs repairs, such as a new septic disposal system, a new heating system, and a new roof, you may find the property will not give a good return on the money you’ve invested. It is simple a matter of factoring in every detail possible that will have an effect on the money you will receive for the property rentals.

If you are looking to get a good real estate investment return on a property by flipping it, meaning you buy, fix, and sell quickly, you will want to verify several things before committing yourself to such an endeavor. The first thing you’ll want to do is consider the price of the property and what it could be sold for after it was fixed-up properly. You’ll do this by researching properties that have been sold over the past year. You’ll want to look into things such as the price it was listed for, the price it sold for, how long the property was on the market before it sold, and analyze the information received. If you find the property to be priced below the fair market value, the property does not need much work to make it saleable, and the properties are selling well in that particular location, you may be able to get a good real estate investment return on this property. In order to get the best and most up-to-date information in a certain area, you may want to work with a real estate agent in the area.

If you are hoping to maximize your real estate investment return, the fact is you have to do your research thoroughly and effectively. Depending upon whether the property is for you to rent out or to sell after being fixed-up, you’ll want to make certain the figures you get are accurate. Without accurate figures, such as a cash flow statement from the current owner of a rental you are interested in, you have no way of knowing exactly what your return will be.

Casey Yew
http://www.articlesbase.com/investing-articles/get-a-good-real-estate-investment-return-82779.html

Investment fund is the investment of money for profit. An investment fund is a financial investment vehicle, which is aimed at private investors – little or large-or institutional investors-insurance companies, banks – and offers the following five key advantages over direct investment in shares, bonds and property:

1. Risk is spread and hence reduced.

2. Funds allow you to tap into professional, expert and full time investment management expertise.

3. Funds are cost effective.

4. Funds offer access to markets that may otherwise be closed or too technical for retail/individual investors.

5. Funds benefit from institutional safety, which means they are heavily regulated and supervised.

The benefits of investment funds, where individuals from all walks of life pool their savings together, can be summed up as offering everybody – from professional or institutional investors to people with limited time, or limited investment skills or modest means – access to investment returns otherwise only available to more sophisticated investors, who are able to buy their own professional portfolio management advice.

Investment funds generally entail less risk than direct holdings of securities, and offer economies of scale. It is a firm that invests the pooled funds of retail investors for a fee.

Information on the product you, as an investor, are contemplating buying is crucial.

Usually, all vital information must be included in an investment fund’s prospectus. However, prospectuses have become increasingly complex and difficult to understand, thus discouraging investors from reading them.

Investment funds are suitable for anyone who:

1. Is planning to invest in the capital markets but does not want the risks or costs associated with direct investment in equities or bonds.

2. Already has enough money to cover their everyday spending needs and has some spare cash.

3. Can accept possible temporary falls in the value of their investment.

Investment funds should be considered as a long-term savings product. Investments should be held for at least three to five years, preferably longer. In fact, the longer the time scale, the greater the potential to make money grow.

Investment funds can be classified according to their investment objectives.

1. Money Market Funds

Money market funds invest a sizeable portion of the fund’s portfolio in short-term bonds and/or money market instruments (such as certificates of deposit, commercial paper, treasury bills,).

2. Bond Funds

Bond funds invest in fixed interest rate securities as a sizeable portion of the fund’s portfolio. These funds generally have a global average maturity of more than one year and its investments can consist of different instruments with very different quality ratings.

3. Equity Funds

Equity funds invest in the stock market at a significant portion of the fund’s portfolio. These funds are frequently also called stock funds.

4. Balanced Funds

Balanced funds spread their portfolio over the three main classes described above.

For more details please visit www.wealthcapfund.com

Mark Plummer
http://www.articlesbase.com/investing-articles/different-kind-of-investment-funds-explained-135383.html

Kicking off the evaluation process is the toughest for us. Question after question kept popping up “Is the property market low enough?”, “Is this property worth considering?”, “Are the numbers the only criteria for investment?” What are we really looking for in real estate investing?? Quick bucks $$ or Regular income…

Bottom-line = Money!!!

Property Agents have tons of recommendations for YOU! How will you know whether they are good investment for you?

There are many factors that need to be considered in evaluating a real estate investment. For example, location, environment/neighborhood, facilities, financing options, rental income, etc. If all above works, it is time calling your agents and set up appointments. Happy Viewings!!!!

Actually it is not difficult and it does not need much of your time to know if a real estate investment is worth investing in the first place. All you need is crunching some numbers with your calculator, and Bingo! You can decide whether the property is worth investing.

Later in this article, we will show you how these numbers work in your prospective real estate investment by two real life cases in Johor Bahru, Malaysia.

Numbering GAME
Numbers, numbers and numbers.. How do you get them?

You may try calling a few property agents, check with banks on properties valuations and of course there is plenty of information on the Internet. Once you have these numbers you can determine if a real estate investment is worth spending your time for a viewing. “Seeing is Believing.” Check out the property to see the actual condition and the environment, whether it is to your liking once you get your numbers RIGHT! Once you get your numbers, you will see:

Incomes
One-time income – selling price
Regular income – rental price

Costs
One-time expenses (startup costs) – down payment, agent’s brokerage, legal fees, stamp duty, furnishing cost, etc.
Regular expenses (monthly costs) – monthly loan repayment, monthly maintenance fee, quit rent, property tax, etc.

See how they (numbers) work..
The basic requirement for a good real estate investment is that the income it generates must be more than its costs.

If the selling price of a real estate investment is more than its purchase price and startup costs, this investment generates capital gain.

If the rental income of a real estate investment is more than its monthly expenses, this investment generates cash flow.

If you are looking for capital gain, the gain or loss depends very much on the real estate market. Hoping to make money from capital gain on real estate is like buying a product and hoping the value of the product will go up with time. On a long term basis, real estate will be appreciating in value because of inflation, but the gain is not guaranteed.

On the other hand, a real estate investment that generates cash flow effectively put money into your pocket every month, while your equity in the real estate investment increases over time. This is the real estate investment that we are looking for – an investment worth investing.

Too good to be true?
With this recession time, you will ask yourself, “Is it the RIGHT time for me to start investing in real estate? Everything is so uncertain NOW.”

In Johor Bahru, you can find plenty of real estate investments worth investing at this juncture. We discovered most of these investments that generate substantial cash flow are mainly apartments or condominiums. You can read from our upcoming article to know why apartments or condominiums are better real estate investments in Johor Bahru. Here are two recent real life cases of real estate investments worth investing in Johor Bahru.

Case 1: We found a condominium in Larkin area of Johor Bahru in Octorber 2008 selling at $160,000 with existing tenant. Monthly rental income is $1400 while monthly maintenance cost is around $300 (maintenance fee plus sinking fund plus quit rent).

If we finance 90% of the purchase price to buy this condominium with interest rate 4.85% with a tenure of 30 years, monthly loan repayment is estimated to be $760. Thus, this condominium is generating a net cash flow of $340 every month, $4080 every year.

Total capital outlay for this investment is $24,000 for down payment including other startup costs like legal fee and brokerage.

Effectively this investment gives us a yearly cash-on-cash return of 18.5%. In other words, within 6 years we would be able to take back our capital $24,000! The best thing is we still own the condominium. It will keep putting money into our pocket every month. We also have the option to sell it away when the market is good.

Case 2: There is a 3-rooms apartment in Tampoi sold at $125,000 in Octorber 2008. Monthly maintenance cost is about $150. If we finance 90% of the purchase price with interest rate 4.85% with a tenure of 30 years, monthly loan repayment is estimated to be $600.

Expected rental income for a fully furnished apartment in the area is about $1200. With furnishing cost of $10,000, total capital required for this investment is around $27,000, while total monthly cost is $750.

The apartment is expected to generate a net cash flow of $450 every month, $5400 every year. Cash-on-cash return on this investment is 20% which we can expect to take back all the capital within 5 years.

Sound interesting right?
Of course, so far we are only talking about numbers. A good real estate investment does not rely on purely numbers. You still have to go and have a look at the building structures, study the location and neighborhood, and perform other checks before you make your decision. What we have discussed, however, can save you time and give you more ideas on the potential returns of a real estate investment before you tell your agent which real estate you want to view in the coming weekend.

Read more about real estate investment tips at http://reijb.com

We write regularly about real estate investment. Some of our featured articles include:

“How to estimate the value of a property?“

“Why apartment can be the best real estate investment?“

“How important is location to an investment real estate?“

OngKL
http://www.articlesbase.com/real-estate-articles/how-to-know-if-a-real-estate-investment-is-worth-investing-715553.html