How to Jump Over The Most Common Real Estate Pitfalls

Is it really smart to invest in real estate? Who can know for sure? Like any forms of investment, there are risks to consider. When the good outweighs the bad, then perhaps, putting money in real estate is a good way to start building up your investment portfolio.

How can we know which way to go? Real estate experts have identified major pitfalls to avoid if investing in real estate is what appeals to you:

Do not bank on intuition.

Intuition is defined as “hindsight”, or an inherent “inner warning”, that oftentimes does not veer towards the positive but leans on the unexplainable feeling of doom. Most people would sell their homes based on a pessimistic feeling that the real estate market will soon crash, or the long-perceived real estate bubble is beginning to burst, hence the sooner they sell their properties at prices they can still command, the better.

Most likely, the worse case scenario never happens. Panic paralyzes the mind from thinking logically through a situation, thus, past experiences are forgotten. When real estate prices do slide, they don’t happen overnight. Unlike stock market positioning where prices can nose-dive drastically, real estate values may only suffer a decline, but not a total burn-out. Those who sell their homes with the prospect of making a profit on it while they still can, and purchase another, when real estate prices slide are heading towards being homeless, or into rental homes themselves.

Look at the odds: selling your home will displace your family for a while, it will cost you your agent’s commission, new mortgage rates may even be higher than the previous ones you were paying, the inconvenience of moving and leaving a familiar neighborhood, including other attendant costs. In the end, your calculator will register a deficit rather than profit!

Keep a discerning mind; do not believe everything you read.

That value of real estate properties will always go up is more of an illusion, rather than fact. This line of thought is dangerous as it wafts “speculative” investing – a financial stratagem that can be potentially profitable but very risky. This can imperil your good investment approaches. Real estate agents are moved by the prospect of earning commissions, naturally, they will outsell one another by sales pitches that can close the deal.

Quandary with Rentals.

Purchasing properties with the prospect of renting them out is sound, however when this is done during an economic slump, this may jeopardize your investment.

When real estate foreclosures are high, some investors take it as a good sign for renting out properties. Some may experience demand, but oftentimes people move away when they lose jobs. By the law of supply and demand, when there are few renters, rents will plunge.

Avoid risky loans like a plague!

Mortgage loans come in many options, can be all attractive, but caution should be exercised. As in all things, not everything that sparkles is gold.

Interest-Only Mortgages don’t demand payment of the principal while other mortgage options may require regular payment of the principal, or no payment at all during the early years. But interest rates can increase monthly and the increase can cut deeper on your mortgage. If sufficient payment is not made, your total mortgage loan will cost you more than what you home originally costs.

Keep your investment straight and you have more to keep.

Funding your other investment portfolios with the equity on your home is risky. Same is true with financing second or third mortgages on a property. In the event of payment defaults, equity on such property shall satisfy the loan taken from the first mortgage lender; and any remaining amount, shall be used to satisfy obligations with the subsequent lenders. This, however, rarely happens.

Study. Probe. Evaluate. Do not speculate.

Real Estate Investment is flourishing – a sign that it is a profitable venture. No wonder, real estate industry remains a formidable choice among those who want to get a crack on the fortune pie. Having identified the common pitfalls in real estate investing will narrow down the margin of those who ventured but lost, and jumpstart the prospects of those who want to make it big.

Helen L. Erickson

Sarasota Real Estate

Online Real Estate Career Preparation Program Availability

Preparing for a career in real estate can be done through various forms of educational training. For those who don’t have the option of changing their current employment or lifestyle to accommodate traditional classes, there are online programs available. Accredited online real estate schools and colleges can allow students to gain various skills in order to seek employment as real estate professionals. Training can be completed at numerous levels and allows students to choose a specialized area of study.

Online career study options for those looking to enter into this field are available at the certificate and degree level. Training can be completed in a number of specialized areas, allowing students to seek out the career they desire.

  • Certificate – typically takes anywhere from six months to one year to obtain.
  • Associate Degree – can require two years of accredited study.
  • Bachelor Degree – allows students to train for four years.
  • Master Degree – will require an additional two years of online study.

By choosing to obtain an education at any of these levels, students will be ready to seek employment and enter the workforce prepared for the career of their dreams.

Specific areas of study for those looking to obtain a real estate education will depend on the level of education earned. Students have the option of entering education in order to become real estate brokers, appraisers, agents, managers, and much more. Career options will vary based on the level of education, and students can choose more than one area to study. Accredited online schools and colleges area available to give students the quality education they need to have a successful future career in this exciting field. Specific areas of study will be based on the individuals desired level of education and career.

Coursework will vary depending on the online educational training program and the student’s desires. Various levels of education will also help to determine the subjects to be studied. Learning programs may consist of course in finance, law, advertising, computer science, business administration, leasing, economics, appraisal and many other relevant topics. By gaining an education in real estate from the students own home, they can choose to study at their own leisure. Training in areas such as these will help to prepare for a successful career.

Continuing education can also be completed for those who wish to enhance their current skills, or for professionals who are looking to offer their clients more services. Continuing education certificate programs can take anywhere from several weeks to six months time to complete. Accredited educational programs are available to give students the chance to pursue the career they long for. Agencies like the Distance Education and Training Council (http://www.detc.org/) are approved to offer full accreditation to the schools that supply a quality online education in real estate. Students can learn more about the field to prepare for enrollment in an accredited program, by requesting information from the school of their choice.

DISCLAIMER: Above is a GENERIC OUTLINE and may or may not depict precise methods, courses and/or focuses related to ANY ONE specific school(s) that may or may not be advertised at PETAP.org.

Copyright 2010 – All rights reserved by PETAP.org.

Real Estate Institutes in India

Indian real estate sector witnessed dynamic growth since the beginning of the millennium. Developers started launching projects after projects, which used to be supported by innovative financial tools offered by private equity & venture capital funds in addition to traditional financial institutions. Government equally supported the growth with its growth oriented policies. Housing Finance Institutions contributed its share in the development by offering loans liberally to prospective home buyers. On the other hand, developers started formulating innovative marketing, sales and customer service strategies. They suddenly moved from direct and local level marketing to national and international level marketing. World Wide Web became one of the most common medium of promotion.

These developments resulted in massive requirements of trained, competent and specialist human resources for the property sector. Unfortunately, since the time realty business started growing, neither the players of this sector nor the Government ever thought of any long term strategy to develop manpower for this important economic sector, except occasional airing of concern. The result is the acute manpower crisis in the Indian property sector.

However, it is worth to mention here that there have been few initiatives to offer real estate education in India, most noticeable NICMAR and NIREM.

NICMAR, National Institute of Construction Management & Research, offers full-time programs in various areas of realty and construction management through its different campuses. The courses are of two-year, one-year and six-month duration. The institute also offers courses through distance learning mode. But there is no realty related courses offered through distance mode. Moreover, almost all of the courses of NICMAR are focussed towards construction and development.

IDS NIREM, National Institute of Real Estate Management, on the other hand, offers one year PG Diploma and six months Diploma programs in various areas of property business through distance education mode. These areas include real estate management, property marketing, sales & brokerage, realty finance, property investment, appraisal, facilities management etc. A key feature of NIREM is its affordable tuition fee which is less compared to most of the other professional institutes.

To conclude, I must say that the above initiatives towards real estate education are definitely praiseworthy but are insufficient compared to the human resource needs of the Indian real estate sector. Unless there is an integrated planning towards introduction of the system of real estate education in India, this sector will continue to face manpower crisis.