Investing in real estate

Real estate investments, Real estate investors, real estate Investor websites, real estate investing tips, real Estate Investment Steps

Investing in property is simply another form of investment. You can invest:

* directly by buying property yourself or
* indirectly by investing in a managed fund, includes timeshares.

Although real estate agents may understand the property market, you should still seek some independent advice, because property investment might not be for you.

Licensing of real estate agents

We do not licence real estate agents who give advice only about property investments; they are licensed by state and territory agencies.

We do licence real estate agents who give you advice about financial products, for example insurance products or negatively geared investment packages. These agents must hold a licence from us or be an employee or authorised representative of a licence holder. You can check ASIC's databases to see if a real estate agent is licensed or is an authorised representative of a licensed adviser. If you think the real estate agent might be providing financial product advice to you and you cannot find their name on our registers.

Before you buy real estate as an investment asset
Most of our advice about investing also applies to investing in property. Here's some general advice.

1 Be wary of pressure selling techniques and high pressure seminars
Some sales people can be extremely persuasive and persistent. They often use gimmicks like offering you a "once in a lifetime opportunity".

2 What are your overall financial plans?

Before investing in any asset make sure your decision fits into your overall investment strategy. If you don't have an overall investment strategy then now is the time to develop one:

* Think about what you want to achieve financially and how soon do you want to achieve it.
* Set yourself goals.

3 Understand the risks involved

Make sure you are comfortable with the risks associated with a particular investment. All investments carry risks. Generally the higher the risk the higher the returns.

* Do you know what the risks are in real estate? Can you sleep at night knowing this? If you can't then perhaps you should invest in an asset with less risk.
* All good financial plans will split your money up against a range of assets in order to spread the risk. Think about this as you think about investing in real estate. Will you have all your eggs in one basket if you buy a particular piece of real estate?
* Remember that all types of investments have cycles of profitability and cycles of losses. These cycles can last for years. Will real estate cycles fit your financial plans?

4 Getting advice

Decide whether you need professional advice. If you're dealing with a financial adviser then make sure they're licensed by ASIC.

5 Investing directly or indirectly

You can invest directly or indirectly in many assets, including real estate, through a managed fund. Timeshares are a type of managed investment scheme.

6 Do your homework

Find out as much as possible about any investment you are making. Make sure you really understand the pros and cons of the choosing a particular investment asset. Weigh the advantages and disadvantages against your financial goals.