Hi Friends,
The latest January 2009 issue of “The Business Issues” featuring Ivanka Marie Trump shares her secrets how she trump her way to success. Ivanka is an American businesswoman, socialite, heiress, and fashion model. The daughter of Ivana and Donald Trump, she is Executive Vice President of Development & Acquisitions at the The Trump Organization. Before joining the family business, she worked for Forest City Enterprises, and joined forces with Dynamic Diamond Corp., a diamond trading company sightholder, to design and introduce a line of jewelry at the brand's first flagship retail store called 'Ivanka Trump' on Madison Avenue.
To read more about her interview with “The Business Issues”, Click this link and go to page 60 to read more about her success!
As this issue is all about Real Estate Investment, I share with readers and investors in the same issue as Ivanka Trump in “The Business Issues” on page 30 about understanding the Real Estate Cycle. Below is the actual content of the published article in “The Business Issues”.
You can click this link and turn to page 30 to read the actual publication on my latest financial education that I will share with you about the Real Estate Investment Cycle.
Understanding The Real Estate Cycle Or Lose Your Investment Dollars To Educated Investors!
Is the Real Estate Bubble Coming or will it burst soon? Before you invest your money in real estate, equipping yourself with some simple financial education in the real estate cycle will save you and help you manage your investment risks before you invest in real estate. Or else you choose to lose your investment dollars to the experienced investors!
What Is A Real Estate Cycle?
The real estate cycle, like the business cycle, refers to the activity of the real estate market as it reacts to the forces of supply and demand.
And What Is Supply And Demand?
When demand for housing, exceeds the supply, the price for the property tends to increase. In real estate, this period is often called seller's market. Higher prices encourage the suppliers, in this case homebuilders to increase production. As production increased, more of the demand is satisfied until a point is reached where production outperforms demand. At that point, prices begin to fall and production will diminish until demand catches up with supply, and the cycle begins again. This period is called a buyer’s market. The supply & demand affects the Ups & Downs in a real estate cycle.
What Are Some Of The Factors Influencing The Real Estate Cycles?
Mortgage Funds - The availability of mortgage funding affects both supply and demand for properties. In most cases, the investor does not have sufficient assets to purchase a property outright. Most property is either built & purchased with money borrowed. The availability and cost of this money directly affects both the supply and demand for properties. If a local area is experiencing prosperity, there should be funds available to finance the construction and purchase of properties. Hence, if you are borrowing to finance your investment, it will definitely be easier during good times!
Population - Demographics refer to a study and description of the population of an area. Demographics included such factor as education, gross income, disposable income, number of family members, and savings and spending patterns. Also studied are patterns of migration and establishment of employment centers. A young population with growing economy in a nation will create demands to trend toward an upswing in the real estate cycle in the long run.
Social Attitudes - Herd behaviour is one important subject of scrutiny in Behavioral Economics. Herd behaviour refers to situations wherein a group of individuals react coherently without there being any co-ordination between them. Such a group is called a herd. The impact of herd behavior can have very long and sometimes devastating consequences. For instance, the fear of a real estate bubble – although economically unfounded – can have a very real impact if a large enough group of market participants believe in it in the same or similar lapse of time. In such a circumstance, demand for housing would be affected clearly to the point of causing a marginal or absolute price depression.
Political Activity & Location - Any property which is in the centre of politically active area or at the center of core governmental area or at the centre of a town or city always attracts a premium price tag. Even though the property is not well designed; the environment will push up the price of the property. On the other hand, a well structured or well designed property with an expensive fittings and all the stuff, but is located in the remote or poor area, due to environment, the property will not attract a good price as it is supposed. Seeing the potential capital appreciation and monthly cashflow return from your investment property by understanding the political activity around it is definitely a key factor to consider when locating your property.
Regulation - As real estate investment continues to dominate in the financial world, there are incidents of frauds in the market. With the growing number of real estate agencies, the Government has woken up to the need of laws to regulate the real estate transactions. Before going into a real estate transaction, it is better to get familiar with the rules and regulations pertaining to real estate. Investors should know his or her rights to avoid sellers taking undue advantage. A well-informed investor is able to get a fair deal from the real estate agents, and may even go to the court in case the agent strays from the law.
Losing your money to educated investors can be avoided simply by some simple education in the real estate cycle when you are thinking of investing your money in real estate. Once, you understand it well, you could minimize your investment risks and help you see the potential growth opportunities for your investment property.
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Yours Sincerely
Sean Toh &
Credit Plus Health's Team
