Why Invest In Real Estate?

There are many advantages to buying real estate as an investment. Before deciding to become a real estate investor, it’s good to know what you want from your investments by setting your expectations and defining your goals. Defining your goals will help determine the types of real estate investments you should buy. The follow are some reasons to invest in real estate:

• Capital Growth
  Rising inflation and population
  growth continue to drive the value of property upwards.
  
• Security
  The real estate market is stable and moves slowly, keeping your investment secure as it appreciates.
  
• Leverage
  You can use a small amount of money to purchase a property. Equity that builds up can be leveraged to buy other properties.
  
• Forced Appreciation
  You can build or improve or, in come cases, rezone to increase the value of property.
  
• Passive Income
  The property earns income from tenants paying rent, paying you regularly with no work on your part. Rental rates are also indexed to inflation.
  

RENG Launches!

On September 16th I attended the first full-day RENG workshop. It was exciting to meet so many individuals that shared the same passion for real estate and had chosen the RENG network as part of their journey for success. And it would be hard to dismiss the feeling that good things will happen to all the members of the network with the enthusiasm and camaraderie that permeated the room. I look forward to learn and grow with such a fun and passionate group.

Fast Track to Cashflow with Ken McElroy

On September 30th, Darren Weeks introduced Rich Dad Advisor Ken McElroy to speak at a full-day full day Fast Track to Cashflow event in Vancouver. Ken McElroy is a personal advisor and business partner of Robert Kiyosaki. Over 500 attendees filled the room to hear Ken share his wisdom in the business of real estate investing.

He advised that the market is always more important than the property when seeking a good investment, and always be considerate of the “uncontrollables” that drive the economy such as population, employment and interest rates.

His experience with property management is second to none, and he offered valuable insight as to what to look for when seeking a property management company.

Profit Center #1: Equity Profit

This section will reveal the 7 profit centers that is presented in RENG and Fast Track to Real Estate, an educational course introduced by July Ono and Darren Weeks. Each profit center will be presented in a monthly newsletter, and in this issue I’m going to talk about the first profit center found when negotiating a deal on a property: Equity Profit.

In mortgage terms, equity is the value of a property minus the debt charged against it. If a property is worth $100,000, for example, and the mortgage owed is 75% then the equity is simply $25,000.

When purchasing a property, the price is often negotiated and the price that is agreed between the buyer and seller (fair market value) can be lower than the price that is determined by the market (appraised market value). This difference is known as equity profit and it is value that is added to the buyer’s net worth statement.

Base Your Buying Decision on Facts, Not Emotions

When looking for investment properties, it’s always important to keep the numbers real and your buying decision free of emotions. You may be tempted to make an offer on a property that presents itself well or has nice features, but it would simply work against you. It’s better to follow your instincts, and support them with facts.

Upon deciding on a location, I look for properties that appear “less-than-presentable” because it gives me room to negotiate the price, and keeps it free from competing offers. Sometimes, improving the appearance of a property may only require new carpeting and a fresh coat of paint. These small improvements can dramatically improve the appearance of a property and help increase its value.