| |
| |
|
Real Estate Information |
|
|
|
How Professional Property Investors Interpret and Use Capital Growth Statistics
Understanding and using yearly price growth statistics in an area of interest is critical to making successful property investments decisions. Property price growth is usually expressed in terms of a percentage i.e., 10% to 25% or more over a period of a year. But, what does this really mean. Some property agents would have you believe that you will achieve great capital gains in an area with high capital growth. The problem with this is that capital growth figures are often skewed by new developments in the area of interest. An area that experiences a lot of new development will have a high capital growth because the cost to build a new property increases over time but it doesn't mean that older properties will have the same capital growth. Example; In Sydney, Australia, a suburb close to the city and on the harbour, Darling Point, experienced apartment capital growth of 68.7% in one year, 2003, but the average the trend has been 9.9% since 1991. Taking those figures literally means that the average price of apartments in the area has gone up 68.7% i.e., a unit that was $400,000 in 2002 has gone to $675,000 in 2003. This article may be used provided the resource box below is included. Does this mean that a unit that I purchased in 2002 in an older building went up by $274,800 in one year? The answer is no. It only went up 9.9% or about $40,000. Why? The reported average price growth, expressed as a percentage, takes into account new apartment sales and re-sales of existing apartments. These figures will not accurately represent what is actually happening in the area and can be misleading. Building costs have rising substantially over the past few years in Australia and USA as a result of the real estate boom. In Darling Point, Sydney, several new, luxury apartment blocks had been built and sold during this period and they represented a high than normal percentage of apartments sales. As a result the figures for capital growth in the area were skewed upwards. Older apartment blocks experienced a modest increase in capital growth, consistent with average capital growth figures of 9.9%. However, this does present other opportunities! Advertising and marketing of the new, luxury apartment blocks brought potential buyers into the area. The opportunity for the investor was to purchase an older apartment, to be re-furbished to the same standard as the new ones creating value and benefiting from higher new apartment prices. This created a similar apartment but at a lower cost. Buyers looking for the same quality internally could obtain this but at a lower price. The buyer has set expectations of value for price and sees the renovated apartment as great value compared with the new ones. Thus, advantage has been taken of the marketing and building of the new luxury apartment blocks to create good profit for the investor. This article may be repoduced provided the resource box at the below is included. John Moore is President of the Property Investors Association of Australia (PIAA) and a Property Consultant. He has helped many people create wealth through property and is dedicated to providing property investors with the knowledge to assist in make prudent property investment decisions. Find out more about Property Investment Strategies and Information from the PIAA web site. http://www.piaa.asn.au
MORE RESOURCES:
Real-Estate - Google News |
|
|
|
RELATED ARTICLES
Purchase Online Tenancy Agreements Buy an on-line Tenancy Agreement now. As a landlord and also as a tenant it is important that there is a comprehensive tenancy agreement in place to protect both parties. How To Get The Best Rental Accommodation In The Area By Using Your Capital My report is for you to use your power to negotiate, not only a reduced weekly cost of accommodation, but also to get the best accommodation available in the area in which you wish to live.Hello Colm Dillon here . Real Estate Investment - One Simple Formula I saw the ads in our small-town newspaper for years before I realized exactly what was going on. They were always the same: A house for sale with 5% down and payments of 1% of the purchase price. Things To Consider Before Buying a Condo Hotel or Resort Residence Resort home ownership, such as condo hotels and fractional shares is different from typical home ownership. So it is important to ask certain questions before signing the purchase agreement on a resort property. Your Home Equity Can Work for You "Use your home's equity to pay off your debt. It's easy and simple, no closing costs!" Every time I turn on the television, commercials bombard me telling me to take out a home equity line of credit. Selling by Owner Tips Do strangers scare or intimidate you? If you're planning to try to sell your home yourself, you'll have to get used to it. You'll also be opening yourself up to potentially dangerous situations and legal liabilities. Kings Bay Georgia Real Estate - An Amusing Tale About a Real Estate Agent This story is true and not meant to hurt anyone, but the more that I think about what happened, the more it makes me laugh. I hope that you not only get a chuckle from it as I did, but take your time and look for a professional real estate agent. Should You Sell Before the Housing Bubble Pops For the past several years housing prices have risen dramatically. With interest rates continuously moving up, and more and more people being priced out of the market, all signs point to an imminent housing market correction. Water, Water Everywhere on the Waterfront Waterfront living is among the most desirable of locations in our area (Florida). The views and vistas are fantastic, not to mention the ability to walk out one's door to drop a line to fish or untie a line to enjoy boating. 10 Home Purchase Abroad Tips For Success Are you seeking your little corner of sun drenched heaven on earth? If you are you're certainly not alone!Many Northern Europeans, Americans and Canadians are looking overseas for investment real estate or for a holiday bolt hole and if you're considering buying a second home in the sun, a home from home abroad or an investment property overseas and you're in a hurry to get started, these top 10 home purchase abroad tips for success should set you off in the right direction.1) Legal AdviceLegal systems differ from country to country so never assume that you understand how exactly the entire house purchase process is going to work, and never expect things to necessarily go exactly your way! To be assured of the fact that your personal interests are being looked after and that you, your money and your property are 100% secure, legal and legitimate it's essential to seek independent legal representation in the country you're considering buying property in. Real Estate Investing - The Dream House Effect Several years ago I developed a philosophy in renovating houses which resulted in a finished product that I call a "Dream House" or "Doll House."How many houses on the market today look very ordinary and less than perfect? How many look "Plain Jane?" What is the difference between these "average" houses and the house on the block that is strikingly different at even the distance of a windshield view?The pronounced difference in the outstanding property offered for sale might be brilliant new lawn grass. 7 Marketing Methods for Real Estate Coaches You shower, shampoo, dress your best, check to see if you have plenty of business cards, drive about an hour, introduce yourself by saying "Hi, I'm Mary and I'm a coach" and the other person says, "Hi, I'm Jack and I'm a coach, too!". You meet more coaches than you knew existed. How to Research and Purchase a Good Investment Property How much do you really know about investment property? Accurate research and professional expertise applied to the purchase of an investment property builds a solid foundation for financial success. You may want to work with a REALTOR who can help to identify the great opportunities in investment properties in the area of your choice. Secrets of Making Money from Real Estate - Part 2 Leverage: With real estate, people and companies will lend you money to invest. How much real estate can you buy with $20,000? Probably between $100,000-$300,000, depending on the lender. Why Canadian Real Estate is Such Good Value Real estate agents, Canadian citizens and foreign investors interested in the Canadian property market are all in agreement - as Canada becomes a more desirable place to live year on year so property investment in Canada becomes a more attractive prospect year on year.Furthermore, because property in Canada is high quality, plentiful, incredibly affordable and easy to purchase, real estate in Canada is good value across the board. What are the Top 11.5 Criteria for Selecting an Orlando Investment Property 1. Make sure units are larger than 1800 square feet. Moldy Homes are a Great Investment Have you seen this in your classifieds? -"Will pay $$$ for moldy homes. Call 555-555-5555"All you have to do is watch the news and you know about mold problems. Realities of Real Estate Investing If you are anything like me, you are always looking for a good way to work for yourself and make tons of money. Is this not the dream of millions of Americans? Of course it is, and I am willing to bet that you have considered getting into the real estate market at some point. Virtual Agent? Online Real Estate When preparing to sell a house, you should always consider the options of selling a home privately or listing with a real estate agent. Of course, the most cost effective option would be to sell your home privately, but what about the number of Home Buyers in the market who are not willing to consider a private sale listing?I am a firm believer that people should be able to sell a home privately but, like a lot of people, was not the kind of person who would be comfortable buying from a Private Home Seller. Greed Can Cost You Your Shirt! The proper action when things are going well is to pay off debt and consolidate your position. Then you will be financially strong and can go for further expansion without fear of loosing what gains you already have.
|
| home | site map |
| © 2006 |
