For a Caribbean property to be tailored for investment, there are two important principles which must be followed.

- Firstly, setup costs must be minimized to allow investment opportunities to be a viable option to most investors. Also, the less your setup costs are in comparison to profit, the higher your return on investment will be.
- Secondly, profit must be maximized. To maximize profit on your Caribbean property, there are several factors which must be given due care and consideration.

For example, many investors would require that their Caribbean property be fully managed to provide a healthy rental income. Therefore a management agency or company would ideally be setup to maximize rental occupancy, room rate charged and to fully manage the day-to-day running of the Caribbean property and surrounding land/site.

A favorable way for this to be setup is to buy a Caribbean property within a hotel or resort which is run by a well known and respected operator. This added brand name can greatly benefit the rental potential of your Caribbean property from day one.

Capital growth is also an important aspect to consider. Investors ideally need to conduct research to ensure that they are buying a Caribbean property which will experience sufficient demand for rental and for re-sale. This ongoing demand will ensure that property values will continue to increase and generate a substantial capital profit if and when the investor wishes to sell their Caribbean property.

There are many tax breaks to benefit from on your chosen Caribbean property. On some islands, there are no capital gains or inheritance tax to pay, making buying a Caribbean property a very attractive proposition compared to buying in other countries.

With due care and consideration, investors will be able to buy a Caribbean property which should adhere to all the above aspects and prove to be a profitable long term investment.

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Think back, or read a history book, about how families in the ’40s and ’50s used to buy homes. Young couples lived with Mom and Dad during the “courtship” prior to getting married, until they had saved 20% to put down on their “dream home”. They made an investment in America, (i.e. the American dream). In the years that followed we have devalued that investment in lieu of credit and the easy access to it. Property values rose artificially and our nation became addicted to credit.

The value of the dollar has been demolished due to the same principle. When we place value in assets based on their ability to be easily bought and sold versus the value that has been invested in the asset, we devalue its worth. For example, two years ago I could have bought an $800,000 house (and I assure you that I cannot afford a house that expensive). The owner of that asset (the $800k house) placed value on his asset based on the availability of buyers like me who could buy the home. The problem is, this homeowner probably had less than 5% invested in the home. Where do you think that homeowner is today?

Had he put 20% down on his home, he would then own a valuable asset in which he has a real investment. This outlay of cash forces him to buy and sell his home in the same manner he would move an $800k investment around in the stock market – very carefully. Thus, the home has REAL value. However, having bought the home with little or no money down, the asset became disposable and so follows the real estate market.

So, as I said earlier, I cannot predict when the real estate market will bounce back, but I can tell you what needs to happen before it does. America needs to reinvest in herself by getting back to solid buying and selling principles. This strengthens home values, which encourages investors who employ builders who employ carpenters, painters, real estate agents, loan officers and so on. America was built on the “American Dream” which has turned into the “American Nightmare”; she can only be rebuilt by hard working Americans, not by Wall Street.

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Fortunately, with real estate investing experience your guesses get better. But then there are the tricks and outright lies that some sellers will throw in your way. Bad information makes good guesses difficult to make. How do you protect yourself? Watch for the following dirty tricks that some sellers have been known to use.

The most common tricks involve simply hiding facts about a property. This may be illegal, but only if the seller knows about a problem. How do you prove that a seller knew there were foundation cracks behind the paneling in the basement? You probably can’t. Unless you know a lot about the building trades, you should normally pay for a home inspection – preferably by someone with some building experience.

However, not all sellers are so careful about what they say. If you sense there is a problem with water in the basement, for example, ask about it. If the seller denies there has ever been flooding in the basement, get him to write “There was no standing water in the basement during the time I owned the property.” The point here is that if you later find water, and the carpet cleaner who sucks it out for you mentions doing the same job there a year before, you have evidence that the seller was lying.

Income And Expense Tricks

With rental real estate, the more dangerous tricks are the ones involving the reported income and expenses. You can have a property inspected, after all, for physical problems, and a rotten roof is hard to hide. On the other hand, it is more difficult to prove that a seller paid cash for snow-plowing to keep the expense off the books prior to selling, or didn’t really collect as much in rent as he said.

Why is it so important to watch for this in real estate investing? Naturally, you would be upset if the expenses are higher than they should be on your rental, or the income lower. But this goes beyond your cash-flow problem. Rental real estate is valued according to net income, so if this was reported incorrectly, you may have paid much more than you should have for a property – and much more than you can sell it for.

This gets into the area of capitalization rates, or “cap rates.” A simple explanation: If investors in an area expect a return of 8% on a property before debt service, this is the expected cap rate. So if a property produces net income of $50,000 before debt service, it is worth about $625,000 ($50,000 divided by .08). Now, if expenses are hidden and income exaggerated, so the seller can show a net income of $60,000, you could pay $750,000 ($60,000 divided by .08) – a big mistake, right?

How then, does a seller exaggerate income and reduce the reported expenses? Expenses can be paid for in cash or with a personal check in order to keep them off the books. That’s fairly easy to do, but it does leave clues.

If the property is in a northern area and there is no expense listed for plowing, that is suspicious. Of course it may be that the owner of an apartment building shovels away the snow himself. But since most owners wouldn’t do this, you better add a reasonable expense for this and adjust your projected net income figures before putting a value on the property.

Look carefully at the books and note the expenses shown for maintenance, repairs, advertising, cleaning, management fees, supplies, taxes, insurance, utilities, commissions, legal fees and any other expenses. If any of them seem unusually low, ask about that, or better yet, just estimate a reasonable amount and use that to adjust your net income figures. Also compare the vacancy rates shown to the average for the area and ask questions if it seems too low.

Reported income is also easier to manipulate than you might think. Suppose an owner of a 30-unit apartment building plans to sell it. To show more income, he starts playing with the books a year before the sale. First, he reports income from non-paying and even evicted tenants (watch for those unusually high occupancy rates).

Then, several months prior to putting the property on the market, he raises the rents to $100 per month over the area rents. He knows that people take time to move, so the income spikes up temporarily, and by the time apartments start going vacant you have bought the building. Now you face an exodus of tenants.

Another common trick is to include items that are not part of the normal rental income. This might mean one time income, for example, like the sale of an extra lot or company vehicle. It can also be income from vending machines or laundry facilities. In the latter case, subtract out the income, figure the property value based on the new net income figures, and then add back the replacement cost of the machines. (There is some debate as to whether it is fair to include this type of income when figuring the value of an income property.)

You might think that an owner would hesitate to show extra income or lower expenses. He does have to pay more in taxes after all. But look again at the example above. Showing an extra $10,000 makes his property apparently worth $125,000 more. He might be willing to pay a few thousand in taxes to get that – and you might be stuck with a property that loses money and can’t be sold for anywhere near what you bought it for. Real estate investing can be tricky.

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#1Real estate investing tip

To invest in real estate you need to take help of experts and financial institutions for knowledge and wealth. The proper guidance is the first step towards sound investing. Therefore, the first tip is to build up a powerful team, members who can lend their good credit rating, money, expertise and professionalism.

#2 Real estate investing tip

Real estate investing tip is incomplete without proper planning. Before investing a large amount, there should be meticulous and detailed planning as how to set up the venture or choose the property, developing it, and which is the perfect area of real estate that can prove to be profitable.

#3 Real estate investing tip

While buying the house, it will be wise to go for a fixer-upper. This will basically increase the resale value of the house. Therefore, buying properties that need repairing for resale is a great way to add wealth. The only fact is that it requires significant amount of investment and time initially.

#4 Real estate investing tip

A great way to be successful in real estate investment is to rent out the property that is bought. This is a good method to make a steady income. But in this case there should be a legal agreement that no damage should be done to the property by the tenants. However, in case of any kind of repairs, the landlord should do it.

#5 Real estate investing tip

The fifth real estate investing tip focuses on the elements of running the business. The real estate investing entrepreneurs should take care of the factors like taxation, accounting, marketing, etc. These infect are the parts that have direct impact on the business.

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If you sell your house FSBO you will have out of pocket expenses. You will have to come up with money to get your home in good condition, money to marketing your home which includes, signs, flyers, placements in magazines, placement in news papers and so forth.

If you sell your house with a real estate agent you will obviously have to pay for their services, after all who can work for free. The typical real estate commission charged to home sellers is 6 percent. Depending on your homes current condition your real estate agent may want you to spend some money up front to fix up your house.

The one way to sell your house for free is to sell it to your local home buyer. Local home buyers are professional real estate investors who are always looking for ways to increase their real estate portfolio. They can buy your house quickly and with cash if needed.

The great thing about selling your house to a professional home buyer is that you have no out of pocket expenses. You do not have to fix your property up or market your property. Another large benefit is that you can have your house sold in a matter of days, not months like you would have if selling your home another way.

So if you are need to sell your house quickly in this slow real estate market and do not have the money to market it yourself, get a free offer from your local home buyer. They have home selling options for people in all home selling situations. They can help you stop foreclosure, sell your house quickly because of divorce, pay cash for a house that needs work, or buy a home because you are moving out of the area.

You can get in touch with someone who wants to buy your house by completing an online home seller form. You should receive an offer with in 48 hours and have no obligation to accept it.

So, even if your home is over financed and you can no longer afford the payments you should contact your local home investor, you have nothing to loose.

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The purchasing process

I remember the elderly gentleman who was selling a small farm workers’ cottage, which was part of his large complex of farm buildings. He had marked out a sizeable part of land to go with the cottage. When I showed it to clients they wanted more land. Seeing so much land around and having read stories of how you can negotiate anything, everything being available at a price, they asked me to offer the owner some money for another field beyond the garden area he had offered for sale with the house.

I asked the vendor whether it would be possible to buy more land. He became upset. ‘Not everything is for sale’ he said abruptly and walked off. I walked after him to try to find out what I had said to upset him.’ Not everything has a price’, he said, ‘I planted those trees in that field with my grandfather and no one is going to buy the land and cut them down. They were important to my grandfather and they are important to me, they might not be important to a newcomer.’ We spent more time talking and I asked if I could discuss the matter with my clients. Finally, all was agreed, my clients got 7/8th of the field leaving the strip with the trees on it to the farmer. Everyone happy, but it needed a real understanding of the local culture to pull that one off.

With VEF, the trained negotiators will have worked hard before mandating (taking on) a property to ensure they have agreed the right price. All too often local people and their agents believe that a foreigner will pay more for a property than a local person. For nearly 20 years at VEF we have worked hard to train the negotiators of our partner offices to convince vendors that this is not the case. The advantage for a vendor of putting their house on the market with a VEF partner office is that if it is the right price, we will sell it quickly for them.

VEF trained negotiators will also know if there is any possibility of reducing the price. Occasionally the vendor may have intimated that they need to release funds quickly, or they may be in a hurry to move to another area. Making an offer, against advice, is never a good thing. It virtually always results in losing the property, either because the vendor refuses to sell at that price, or removes it off the market altogether, or because someone else buys it while you are negotiating.

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Taking Real Estate Classes

The first step to becoming a real estate agent is to take the proper classes. Often, you can take real estate classes at a local community college or other facility that provides continuing education classes. Before signing up for real estate classes, however, make sure the courses are approved by your state.

In order to become a real estate agent, you must first complete schooling through an approved real estate program. If the program is not approved by the state, you will not be allowed to complete the examination that is necessary for obtaining your real estate license.

Taking the Real Estate Exam

By completing your real estate coursework, you should be well prepared for the real estate examination. Nonetheless, it is essential to study for the examination before taking the test, as it can be a bit trickier than you might think. For example, some of the questions on the exam ask you to apply the concepts you have learned in your real estate classes, which means successfully passing the examination requires more than just memorizing information.

Some people do pass the test the first time they take it, but be prepared to take the test multiple times in order to finally pass it. Once you do pass the test, you will finally be able to work as a real estate agent.

Building a Reputation

Of course, launching a career in real estate requires more than just taking the proper courses and completing an examination. If you hope to build a client base and to be successful in the field, you need to establish a reputation and build up a base of contacts.

In order to get your foot in the door in the real estate world, you will need to lean the tricks of trade from other professional in the field. One great place to start is at your local real estate agents’ association, which can be found in most large cities. These groups and clubs meet on a regular basis in order to exchange information, which is very helpful for a real estate agent that is just getting started in the field.

Continuing Your Education

After you have completed the coursework and passed the real estate examination, you will have to take additional classes in order to maintain your licensing. Therefore, you will need to be prepared to continue taking real estate classes even after you have successfully launched your career.

By taking these continuing education classes, you will also stay up to date in the latest changes in the field. This will ensure that you are capable of serving your clients to the best of your abilities, which will further help with building your reputation and solidifying your career in real estate.

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