Thursday, 10 May 2012

Three Steps To Be Profitable In This Real Estate Bubble

In order to make money you must recognise almost all the market trends such as stocks, commodities, real estate, etc and you need to have the market trends in motion as the prices or value may be changing substantially, either up or down, for you to make money.

Nobody can predict consistently about the turning point of the rapidly moving market. Persons who pay attention to their value can tell you when things are out of whack with the market. In contrast, many traders had became multiple millionaires and then rapidly adapted to the market downturn.

There are number of ways for an overvalued market to correct. For example, many people are claiming that P/E ratio is out-of-balance (i.e) the price you collect for rents in a year is relative to the purchase price. This should be around a ratio of 100 to 150 for a good cashflow investment. Imbalance can be corrected by the price dropping & rents escalating.

The secret to successful investing is that to learn to control your risk . For investors that participate in real estate investments on a continuous basis, they always try to educate themselves on the risk potential first followed by the potential for gain.

For more information about property investing, visit real estate investments.  

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