Best Place To Buy Real Estate

The recent collapse of the American real estate bubble is symptomatic of the problems that most property investors have with identifying risk. However as the investors shuffle to recover from losses in the sub prime mortgage market news ways are being investigated on how to buy real estate without risk and where is the best place to buy real estate. By examining risk will tell an investor exactly where the best place to buy real estate in the USA is. Primarily the first aspect looked on is the values of residential and or commercial properties and the rate they appreciate or increase in value over time. This is dependent on every real estate investor’s appetite for risk. The fact is most homeowners don’t view them selves as investors and hence fall into the trap of not doing their homework and having not enough equity in a property to cover the risk taken in purchase. This is the difference between a brief squeeze in cash flow versus bankruptcy in a few hours. There are five ways in determining the best place to buy real estate.

A.) ASSESS YOUR FINANCIAL SITUATION – As an investor you must first assess your financial situation, meaning how much cash you have at your disposal. This should include other current assets such as stocks and bonds and the how quickly you can liquidate these assets. Once this is ascertained then you will not only know the best place to buy real estate but where you can buy real estate. Some cities, counties, communities or towns may be well beyond your reach while some might be just within your affordability while other real estate you can buy cash.

B.) DO RESEARCH – Many investors will tell you they do research, but research on what aspect of real estate. Every property investor must research statistics. They must ensure that crime statistics, foreclosures rates, outward migration rates are very low while property value rate, standard of living and new purchases are either high or increasing. However possibly the best indicator is new housing and commercial developments. If these are basically non existent in any area then there is a likelihood of decreasing property values in the short term.

C.) THE ABILITY BUY LOW – Being able to buy real estate at a low cost that seems as rock bottom will also determine the best place to buy real estate. However the concept of buy low does not necessarily mean that you are buying the property at the lowest cost on the market, it can also mean that you purchase property before construction at a low cost and then sell at a higher cost. Some mortgage companies will finance pre construction and this means that the real estate value will increase once construction is completed increasing your equity and providing more hedge against a fall in real estate value.

D.) ACCESS TO MORTGAGE LOANS – This is very important in determining the best places to buy real estate. If there are very few mortgage companies then the rates might vary for each location based on risk to the bank. However if there is great interest then banks will lower there interest rates seeking the best creditors to come on board and take one of their mortgage loans. This provides a perfect opportunity for real estate investors to choose the best loan package available.

E.) DEMOGRAPHICS – Undoubtedly the most important of the five steps in discovering the best place to buy real estate. The study of the living standards and average income per household will determine whether or not the community is under developed, developing, developed or over developed. Under developed is not an ideal place to buy properties, developing signals increase in real estate prices and increased inward migration of middle class workers, developed is more stable and steady with lower migration inward, fixed real estate prices and more middle to upper class communities. Over developed means steady outward migration due over population, steadily decreasing property values and a fluctuating crime rate.

Using these five steps will assist even the most basic real estate investor to determine the best place to buy real estate.

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