Is Real Estate Investment Still Profitable?



Emaar Properties -  Panorama at The ViewsCompared to a decade ago, the real estate market today is quite different. Ten years ago it was easier to make quick money by investing in properties. In addition, the profits were sky high. So naturally a question appears – Is real estate investment worth it now?

In the current weak global economy it is hard to give a simple and straightforward answer. The truth is that real estate investment in 2013 is both a good and a bad idea. Those who are fortunate enough to have some capital can make big profits. However, those who are only just starting from scratch should better think again.

If you have some extra cash waiting for you in the bank don’t be afraid to invest it in properties. For example, you can purchase a house in many parts of the world for $30,000 and then refresh it for another $10,000. When you decide to sell it you can easy get extra few tens of thousand. The catch here is that you will have to wait. In the next couple of years selling a property will be a difficult thing to do. Not because you won’t find any buyers, but because you won’t find buyers who are willing or able to pay the price with added profit for the house. Persisting global uncertainty is forcing people to play it safe. So if you don’t mind the wait, do invest. However, if you don’t have the money and you take loans or mortgages, then this is not the best time for real estate investing. Presently, cash is you best option.

If you have cash, then you probably wonder where and in what to invest it. Prognosis show that Europe’s markets will finally revive in the next few months or maybe years. So, you may start from there. Berlin is predicted to have the highest growth rate on the continent. If that turns out to be true, the housing demand in the city will rapidly increase. In addition, currently the rental prices, not only in Germany, but on the entire continent are also jumping. Turkey and Italy are also predicted to be profitable real estate markets and cities like London, Paris, and Brussels are now slowly starting to recuperate from the financial shock from the last few years. As a matter of fact, properties in the hearths of the world’s metropolises not only did not decline in value, but kept rising during the past 4 years.

Brazil, Hong Kong and Russia are also expected to become hubs for foreign property investors. The ROI in these countries marked a growth over in 2011 and especially in 2012. This trend is not only going to continue in 2013, but analysts predict ROI rates to even double.

The best assets to invest in the following months or maybe even years are luxury homes and single family houses. However, if you are not a big player on the real estate market, it would be better if you avoid luxury homes. That is due to the fact that they are a risky investment. The luxury market is one of the quickest changing. It is hard to keep up with it. In addition, it requires a huge financing and if you fail to find a buyer you will lose a great deal of money.

Single family homes on the other hand are a good choice for real estate investment. They were popular last year and they still enjoy plenty of attention. But try to stick to the middle-priced homes. Such properties usually attract many buyers. Also, unlike cheaper older houses, they don’t need much refreshing.

The bottom line is that real estate investing today is only profitable for those who have some experience and cash. Those of you who are trying to make money from dust will not succeed. Others, who have money to spend, will do better waiting a while before they find a good buyer.

Simply said, these are not the best times for property investors so “patience” and “luck” will be key factors in the sector over the next few years.


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