Having made the bold and glorious decision to sack the boss and
go it alone you are one of the few who have what it takes to
succeed. You have an entrepreneurial spirit and a strong will
and these are rare and valuable attributes that will guide you
throughout your professional and personal life.
Now that your business is up and running and you're profiting
from your efforts, it's time to turn your attentions to
investing the profits from your home based business wisely and
for maximum gain.
One of the most consistently returning asset classes over the
long term and the one that the majority of us can profit from is
real estate.
Understanding market cycles
Now, you're most likely aware that property markets are cyclical
- this is because there is a direct correlation between the
underlying price of real estate in relation to individual buying
power. Simply explained: when property prices rise above what
first time buyers can afford to pay the market slows down,
stagnates and sometimes readjusts - but as soon as purchasing
power increases again, either with a drop in interest rates or
an increase in GDP, so property prices begin rising again.
And there are even ways to make money from real estate during a
market downturn!
Investing in real estate for income
Depending on the nature of your home based business your monthly
income may be slightly erratic - some months being better than
others! If you invest in property assets in a buy-to-let or even
jet-to-let capacity you can secure yourself a consistent monthly
income which may afford you an added degree of financial
security.
Buy-to-let is when you purchase property for rental purposes -
this make be an apartment you corporate let, it could be a house
you student let or even a family home you rent out long term.
Jet-to-let is similar but it involves purchasing overseas
property for short term weekly or fortnightly rental to
tourists. This type of letting is usually very lucrative indeed
during peak holiday periods but may mean you have a property
that is empty for a few months out of season.
Both types of property investment return you a regular income
and at the same time the physical real estate asset will grow in
value over the long term and if ever you wish to release the
profits from your investment you can sell on the property and
take the gains you have accrued.
Investing in real estate for profit
The alternative to building up a property portfolio for income
generation purposes is purchasing property and selling it on
relatively quickly to realize the gains the asset has accrued.
You can do this in a number of ways...firstly you can purchase
run down property in need of renovation, tidy up the property
and turn it into a home before selling it on at a higher price
and reaping the profits gained.
Alternatively you could seek to beat the curve by buying into up
and coming areas, waiting for prices to boom and then selling on
for profit. This is quite a risky strategy for a first time
investor as timing the market is hard!
An alternative to this is looking overseas for the latest
emerging property markets worldwide and buying properties to
renovate or properties off plan and then flipping them on for
maximum gains in the short term.
Financing your investment
As a self-employed individual it can be tricky to get a mortgage
unless you have audited accounts, bank references etc., etc. If
you don't have all of these requisite documents there are other
options available to you.
The main options are re-mortgaging your primary residence and
releasing the equity that you have accrued already for
reinvestment in another property project or taking out a
self-certification mortgage where you make a large down payment
and basically tell the lender how much you can afford to borrow!
A winning attitude
You've already proved you have what it takes to succeed against
the odds by establishing a profitable home based business, now
apply the same steely determination to your real estate
investments and you will succeed in making the maximum gains.
Start small, begin gently, test the market and your
understanding of it and slowly build up a profitable real estate
portfolio from the profits of your home based business for
maximum financial gain.
Good luck in achieving your goals.
About the author:
Rhiannon Williamson is a freelance writer whose articles about
property investing and emerging real estate markets have
appeared in publications around the world. She is currently
working on a brand new property investment resource http://www.amberlamb.com/
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