Real Estate Investing Blog

When you are looking into real estate investing, one of the things that you’re going to want to focus on is evaluating deals. Simply put, evaluating deals is essential for a number of reasons, however one of the biggest reasons is summed up below:

This sector has reached a level of typical saturation, ala FMCG. The prices will not see much growth, unless they are differentiated products – like a “Healthy Living” township or “Build Tomorrows leaders” township. Smaller players will have to go niche, and larger players will have to go volume. If you are invested in a vanilla small player, please exit the counter. The home prices will remain more or less stable in tier 1 cities, may be 5-10% drop in suburbs. Tier 2 and tier 3 cities will crumble up to 20%, esp since the developers here are typically local builders, who can undercut larger players with their cost efficiencies.

The above is talking about the real estate investment market as just that - an investment market - and it offers up a few great points:

1. Real estate investors are going to want to look into different sorts of communities. When you look into niche communities - or even into buying homes that are more energy efficient - you’ll find that you’re in a better position to be able to turn around and sell the properties.
2. Real estate investors are going to need to evaluate deals based on the location of the property.
3. Real estate investors are going to want to be sure that they are aware, if they are looking into new constructions of the nature of the company.

Evaluating deals is about knowing what your goals are and about what you can do to reach them. Evaluating deals is also about whether or not you are going to be in a position to buy properties that are going to be effective for helping you to reach those goals - as is often said about real estate, it’s all about location.

In other words, focus on your goals, learn more about real estate markets and learn to more effectively evaluate deals and you will be on your way to reaching your goals.

This entry was posted on Sunday, July 20th, 2008 at 6:46 pm and is filed under Evaluating Deals. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.