Capital Expenditures


An expense line item that includes expenses for anticipated capital expenditures required to maintain a building and future capital improvements of major building systems (e.g. HVAC, parking lot, carpets, roof, etc.). Replacement reserves are typically calculated on a per unit basis (e.g. multifamily - per unit; office, retail, industrial - per square foot; etc.).

Real Estate Investment Property - Getting The Best Capital Growth

If you are looking at real estate investment and want to get the best capital growth then you need to keep 2 main points in mind.

If you do you will maximize your return and limit your risk so, here are your two important tips for maximizing your returns on real estate investment property.

Property Price to Reward

When buying investment real estate property we all want a cheap deal, but keep in mind you need to balance the risk reward and this means buying property with the best risk to reward.

For example, you can take a risk and buy a property cheaply in an area that may do well in the future but you are better off buying in a position where you KNOW its going to do well. For example buy near:

  1. Existing popular locations
  2. Changes in the infrastructure coming such as roads, marinas, entertainment etc

You know the chances of popular area spreading out are high and you also know that changes in the infrastructure will see values rise. So buy on facts, not on what you hope might happen or what you think will happen

Act and buy real estate investment properties on SOLID facts not whims or opinions!

Buy Into a solid uptrend

When buying a market, buy one that has and is still producing good gains for the amount you spend.

For example buying investment real estate in the US has shown solid gains but the market overall is slowing down.

On the other hand there are new property hot spots overseas that realtors try and sell you that may take off. But will they? Sure but big variable here is the word "may" You can make more if the market does but most don’t.

Look for a market with a track record of gains, rising investment and property prices that are fair value.

Costa Rica is a good example. A good solid up trend for years, rising investment and beach front property up to 70% less than in the US and only 3 hours away.

Will this trend continue? The answer is probably yes, as baby boomers look for new homes there are plenty of Americans in Costa Rica already and the demand Looks set to continue.

Many people when buying investment real estate property think that once a market has taken off they have missed the boat but this is not true.

Property trends can last for 20 or 30 years in some areas.

Get local help

If you are buying overseas real estate investment property, make sure you get a decent attorney so everything is done correctly and you are not caught out.

Remember laws in other countries are different and you should not assume their the same as in the US or your country of residence.

When you are buying investment real estate property follow the above three points and you will maximize the risk reward on your investment and enjoy some solid capital gains in the years ahead.

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Article Source: Sacha Tarkovsky