Despite the current economic climate, property remains an excellent form of investment over the long-term. It is important however, that you do not just dive in, because there are potential risks involved which you should be aware of.
To avoid these you must learn effective strategies from people with experience in this type of investment, and use these experts as your property mentors. They will show you how you can purchase BMV property (Below Market Value) and earn a positive monthly cash flow. But where should a novice investor start?
First things first. You must make some plans and put targets in place. Work out how much income you would need and a date by which you'd like to achieve that goal. You won't become a property millionaire overnight so be realistic and you'll also avoid any possible pitfalls that could get in your way by over stretching yourself.
After you've set your targets, you need to educate yourself about property investment. Seminars are a great source of education, not to mention an opportunity to network with like-minded people. If you cannot attend in person, buy DVDs of property mentors speaking at these events. They will guide you on sensible strategies to help you achieve your goal.
As the name suggests, buying BMV property (Below Market Value) is obviously what you should be looking for. But how exactly do you go about finding such a deal? Having friends who work as estate agents can help, although the best deals are not always the ones you find on the general market. The main factor is you need to find someone who is keen to sell quickly, for whatever reason. They cannot wait the months and months it takes to sell in the normal way, and more often than not also want to avoid the fees. They may have recently inherited the property, they may be moving overseas, relocating with their job, getting divorced or unfortunately got into financial difficulties. Any of these reasons could mean a vendor would be keen to cash in on their property as quickly as possible.
There are plenty of resources available to help you find and assess below market value deals. Sometimes you find a property that the vendors have been trying to sell for a long time, so are willing to negotiate significantly on the price. You can work out an estimation of a property's value by finding similar properties that are on the market in the same area. But as mentioned, the biggest discounts are to be had with property that isn't being advertised in the estate agents' windows.
If you know how to find BMV property deals, you will be well on the way to becoming a property millionaire. They are the best way to ensure a positive cash flow from month to month, and over the long term you will benefit from capital growth, in other words an increase in equity, as the property market rises. This is something that historically has always happened but to avoid short-term market fluctuations, you must look at property investment as a long-term wealth building strategy, not a get rich quick scheme.