#יםמהשבוי post number 2 Real estate investment - means or goal? Hello friends, many people...
# Initiated week Post number 2
Real estate investing - a means or an end?
Hello friends, many people who come to me for advice on where and what to invest. Begin to recite numbers, percentages, amounts and positions and when I ask "What is your purpose in investing?" Begin to stutter. When I hear such a thing, it reminds me as if a person would turn to a tool shop and ask the seller "What hammer is worth buying?" Rubber? iron? Half a kilogram? kilo? Maybe two pounds? It is clear that the question to be asked by the seller is "For what purpose do you need the hammer?" Well, real estate investing is no different in this sense ..
An early 25 investor looking for where to invest the military deposit he had just received is different in almost every young couple who's just married and looking for where to invest their wedding gifts, and of course different from an older investor, who is looking for where to spend his money to secure his pension.
So far theory. And now a little practice so we can still learn something ..
In general, a real estate investment has 3 profit channels:
Rental income - monthly income or based on pre-determined periods, usually the income is known in advance, it can be expected, statistics can be made on its stability over the years in each area, etc.
Income from market price increase - income that can be met with either the sale of the property or refinancing. This income is the kind of attempt to see the future. Looking back, months or years, examine what the increase in value in the neighborhood. The more sophisticated, also consider investing in infrastructure, trends, significant trade and employment events and more. This income, is usually seen after a number of years.
3. Value Creation Income - One-time income that is rewarded for the value we created. Some also call it entrepreneurial profit. Here you can see the renovation and sale deals, new construction deals, and all kinds of auction deals included here.
So why did we look at the profit channels? In the beginning, when an investor is interested in investing in real estate, he should say what his goals are. Sometimes, take a professional to define what his needs are.
Take a practical example of an investor I recently accompanied. The investor, aged 25-28, has accumulated about NIS 100,000. So far, he has invested in PKM in the bank. Of course, he enjoys margins of fractional percentages. The investor came to me and I started asking. "What is his honor about?" Happy? "," Does his honor think of institutionalizing his relationship with the happy? "," Where does his honor reside? "," Does his honor intend to purchase a permanent residence? "And a number of other questions on the face of it, have nothing to do with real estate investing. But from the answers, I understood what his needs were, what his expectations were and what he wanted and from there it was already very easy to set goals and weave the way.
His first investment, was in a group in the construction of new homes, when in a little less than half a year, he met his investment back by an additional 20%. After two such cycles, in which he made a profit on the profit (some would call interest-de-interest) the 100,000 NIS became a little more than 140,000 NIS hence we decided to enter with half the amount into a partnership in a rental deal that yields a meager amount but still meets the definition "passive income" And half of the amount continues to roll in new construction.
Two years from now, the guy is expected to have an equivalent portfolio of about 350-400 thousand new shekels. And what was the purpose? Increase its capital along with other savings and investment channels so that it can purchase an apartment worth NISX million.
The success of a real estate investment will only be if it meets expectations, needs and desires and achieves its goals. To the horizon.See where you want to go and what the way is there.After that, choosing the right deal will be easy and clear.
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