Are more individuals going it alone in real estate?
On the surface it does look as though the Internet has changed the dynamics and the make-up of the modern day real estate market. Information is now just the touch of a button away and many people seem to be more confident in their own decisions and their own research. However, is this renewed confidence healthy or is it a potential recipe for disaster for some real estate investors?
Research, research, research
Whether or not you arrange your own individual real estate investments or you go through a professional adviser the process is the same. Research, research and research again the properties, the area and the price you are willing to pay. Even if the eventual decision comes down to a joint effort between you and your adviser, the more informed you are the better for all involved.
In many ways a professional adviser is the gateman before the actual investment of your hard earned cash, someone whose opinion you value.
There are no shortcuts to big decisions
The big decisions as to whether to go ahead with the purchase or sale of real estate are still the same. There is no shortcut to making the actual decision, it comes down to cold hard facts, even if there are a number of ways to shortcut areas such as research and other elements of the background information required. Even if you were to find a property which looks potentially attractive on a long-term basis, does it fit with your financial profile? Does it fit with your timescale? Does it fit with your current portfolio of property assets?
Looking at the overall picture
Each individual real estate investor is different, with different goals, different financial situations and different timescales. Even if you were to find a potentially attractive property you may already have a balanced exposure to that particular area or type of property. There may well be a case of switching like-for-like property assets if there is value but this is something which will need careful consideration before the final decision is made.
Historically many people went for pooled assets and quoted investment trusts which offered a slice of a larger real estate portfolio pie and a ready-made exit route via the buying and selling of units. This is still a very popular area of the real estate sector with real estate investment trusts (REITs) extremely popular in countries such as India. There are also individual pooled assets which offer a secure income and the potential for long-term capital growth.
Keeping abreast of the news
If there is one area in which the Internet excels it is the publication of second by second news updates which were not historically available to the masses. While you would not necessarily make a decision on one particular news story, or trend, it does give you some background when you do review your assets and their perceived value going forward.
Even though real estate investment should be seen as a long-term project there are still times when short to medium term opportunities arise. This may give you the opportunity to sell an asset or an opportunity to buy an undervalued asset and it would be foolish not to at least consider these if everything looks right. The Internet basically allows you to gather more in-depth research and real-time data but at the end of the day the decision-making process is exactly the same, do the figures stack up and is there potential for growth in the longer term?