Diversity
is always a good idea when it comes to investment, states Dean Graziosi. But
most people have a narrow definition of what it means to diversify, because the
natural tendency is to buy property nearby. Holding down the street may, for
example, help to avoid long distance relationships with tenants. But investors
who are limited to a geographical area may, however, lose the ripe
opportunities elsewhere. Focusing solely on one city can be rewarding and
convenient, but extends to other locations may be as easy if you rely on help
from others, such as real estate agents and property
managers. Buying property in a particular part of the country limits the
options an investor, and is similar to investing in a mutual fund itself,
rather than more.
Sometimes,
for example, markets in Texas, California & Florida and can be played
facing a crisis. Meanwhile, those in Ohio, New York, Arizona
and can go gangbusters. It is important to realize that real estate is somewhat mutual, and
markets often act like a rocking chair. While some regions may bend, others
might spike. This type of pulse up and down simply does not happen all the
properties in the United
States at once, in other words, but will be
going on simultaneously - somewhere or other - at one time or during any
overall cycle.
We
are in a buyer's market in 2008, for example, but some pockets of the market
faced bull markets and prices are rising. During the red-hot run-up in prices
back in 2004-2005, the media focused on increasing house prices. But in those
years some parts of the country offer great bargains in foreclosures. Money can
be made in both directions, at any time, if you know how to ferret the markets
up and down and use them for the benefit of the investment.
Buy
and rent to double your money
Another
example of market dynamics, which is seen alive in 2008 is that when the market
drops seller, buyer market profits - and so the rental market. Buying a
foreclosure at a bargain price and not only get a great deal on a house, but do
so at a time when markets seesaw effect puts upward pressure on prices of
rental sector. Because so many people are losing their homes to foreclosure and
moving into rental units, the rental inventory decreases in direct proportion
to the increase in foreclosures. Because rents are becoming increasingly rare
good, the owners are able to raise their prices monthly rental and make money.
Buy a
house and get a house locked at a deep discount. Turn around and rent it in a
growing market rental and tenants will pay rent sufficient to cover mortgage
extra income left over. Reinvest these additional funds to buy another
foreclosure and turn it into a rental property second and soon you have
accumulated a large and diversified portfolio, not only pay for itself but
finance their own expansion. Get rich quick schemes cannot exist in the real
world, but in a rare market as a United States faces in the United States, who
are intelligent can definitely get rich in a relatively short time, with only a
minimal initial investment.
Buying
in one market and then turning on the other hand, at the same time offers a
double opportunity for investor equity - and profit potential twice as much.
Market performance, such as much balance law of physics, which explains that
for every action, there is an equal and opposite reaction. And while it is true
that in the real estate business "location is everything",
real estate investors have the freedom to operate in geographically dispersed
markets to take advantage of all the ups and downs and play against each other
for largest and most profitable margins.
To
answer all the influences and opportunities in a timely and successfully may
require the help of others, such as real estate agents who are familiar
with their local areas. Investors can easily become attached to their neck of
the woods and to develop a distorted view of the market. But branching out, the
possibilities are endless.
Just
because you like a particular location does not mean that particular market is
the best place to focus your efforts believes Dean Graziosi. What is more
important is to identify what the market wants and what people buy, and then
invest in this type of property - whether in your yard or on the other side of
the continent.
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