I’m sure you are most likely to be familiar with real estate. Even it you are not in real estate business, you might in on one way or customers have a friend or you know someone who is a real estate investor. What about those many classified adverts we see everyday in our newspapers or bandit signs showing us that there is a property being sold.To bring you closer to the topic; real estate business involves buying and selling of property. The market is growing so as the property value. There is never ending demand for housing across the world-whether it is residential or commercial.In the virtual world there exists also virtual real estate and as the name suggest the business is virtual in nature, no physical property as in real estate. While the two nearly have the same concept and leverage, virtual real estate involves creation of and building of online businesses-it involves product creation and selling. Your website is your virtual office or store. To clearly understand, compare, differentiate or make choices between the two, let us look at the following factors.Financing and capitalBoth real estate and virtual real estate you have nearly equal leverage on finances but real estate has a slight lead. Although real estate requires huge capital to start and operate, you can readily access the funding. Thanks to financial lending institutions and other private lenders. It is possible to start your real estate business with nothing down. This however comes with high interest rates. For instance, you can purchase a property worth $100,000.00, with only $10,000.00 as your down payment with&$ 90,000.00 is financed through a mortgage. Start-up capital for a virtual real estate is negligible if you can compare with real estate. It is not uncommon to find someone who which to start up his/her virtual real estate business with $500.00.Income and valueGiven the fact that, real estate business requires large sum of money to operate, so does the profit. It is only that sometimes it hardly comes. It is possible to make few deals per month and end up profiting heavily. In addition to that you can rent you property to tenants who will generate your monthly cash flow. The downside of it is that you will have to pay interest on loans, insurance and of course tax which will decimate your balance.Virtual real estate operate on a different platform, most of the income is generated through selling of products. You can generate few dollars from each sale but if you consider those huge sales volume and lower operational cost it is possible to outdo real estate business in terms of cashflow. Moreover you can even sell your website at exorbitantly high price generating huge profits.The value of a real estate property appreciates in a more sure and slow rate compare to virtual real estate. Virtual real estate can go either way but when it appreciates you can reap a lot. Imagine developing a web business which you cash in $ 500,000.00 from sale in just one year.
The current U.S. real estate bear market comes with different perceptions. On one side are those – the majority – claiming the market is depressed and it’s “too risky” to invest in real estate today. On the other side are the few taking a bullish approach because of the great bargains, low prices and excellent monthly returns. Competition is minimal because most people wouldn’t endeavor to make real estate part of their investment. A good number of owner-occupant buyers, the largest segment of real estate activity has been eliminated. These folks won’t turn their credit, income, and savings over night. Banks will continue to “proceed with caution” thus keeping many Americans renting – instead of owning their own homes – while the concept of easy credit standards will soon be history.To get clarity on the Boom and Bust aspects of real estate it’s essential to revisit last decade’s events from an economic standpoint. Back during the early 2000′s the real estate boom started as a result of the credit expansion policy of the Federal Reserve. Add to that the government’s intervention in the lending sector and the deregulation of Wall Street’s paper derivatives and you have the recipe for an “artificial” booming economy. I refer to it as artificial because it had no ingredient of a free market growth.A bust was inevitable yet it was only foreseen by a few while everyone else was gambling on continued rising values. The first sign expressed itself in the form of sub-prime loans default, the catalyst for the banking chaos that eventually erupted. This event was followed by a chain of defaults in the prime sector causing the stocks of the many financial institutions react in a free fall. When Wall Street bailout was approved by Congress and used in response, the conventional wisdom was that it saved the entire economy from collapsing. That wisdom can definitely be debated. Whether it’s right or wrong to transfer the losses of Wall Street institutions onto the shoulders of the taxpayer is a topic I will leave for another article. For now I’ll just focus on whether real estate may be a potential investment to park your money.Real estate activity along with market prices reached their peak in 2006 only to collapse in 2007. 2009 suffered a serious decline in activity while prices continued to decline. Relative to 2006 peak prices homes have dropped a stunning 45% but they have not reached pre-2000 levels. If you’re wondering what the future holds for real estate it’s possible that a healthy activity – resulting from an increased number of qualified buyers – may return within six to ten years but no inflationary boom for a very long time. I know it doesn’t sound very encouraging but keep in mind that buying low and selling high is only the speculative side of investing. If, for example, you’re currently invested in mutual funds or stocks enjoying dividend returns your real estate portfolio can generate – in many cases – better monthly cash-flow returns. Ten, twelve, or fifteen percent annual returns are quite feasible but chances are your financial adviser will not want you divested from Wall Street’s paper assets.While Americans’ retirement portfolios will remain heavily invested in the volatile U.S. stock market, Australians, Canadians, British, and Asians are finding the American real estate to be appealing for their own retirement. Rather than looking at it as an inconvenient investment they are taking advantage of qualified professionals who handle everything for them including the eviction of undesirable tenants, making repairs, or whatever else is associated with the maintenance of the investment. These international buyers have learned that they can’t get similar rates of returns by investing in their own countries’ real estate. Whether leased-out single family homes or apartment buildings all the way to investing in bigger commercial projects via private real estate syndicate funds, they mean business and are unstoppable.So, how does one assess the investment potential for real estate? First, ask yourself if it generates substantial revenues not only during good times but during hard times, as well. Today’s economic environment is not one that makes people cheer and if you choose carefully you’ll find that a ten to fifteen percent on your money is feasible. The next question to ask yourself is if it’s a real or a paper asset. Can it vanish and will it be there ten, twenty, thirty yeas down the road? Differentiate between owning the physical asset and the paper secured by a physical asset.Does real estate lose its earnings potential with time? It could since there is no guarantee in life. But with a proper maintenance, the right team, and the fact that it’s an asset satisfying a human need (housing) the chances are diminished. Does it keep up with inflation? Its price may not go up soon but its value most likely will, and with time prices will follow values.Finally, one of the well known rhetoric is that real estate is not liquid. That is very true. At the same time, unless you’re a short term Wall Street trader, how often have you liquidated your securities portfolio for a generous profit? My point is that if you have to sell your stocks, bonds, or mutual funds it usually is because you’re in a desperate situation and that translates, most likely, in a loss. Take this thought and apply it to a real estate investment that you hold free and clear. Its liquidation could be much faster when and if you’d be willing to take a loss. Reality is that there is no such thing as an absolute perfect investment. There are pro’s and con’s attached to each one of them. Your homework is to weigh them to determine the best fit for your investment needs. In his book “A Gift to my Children” Jim Rogers – who is one of today’s most successful investors in the world – advises us to “Never ignore the bear market!” The one with an eye for profitable opportunities already knows it. The bear market comes with depressed values but the depression that prevails in most people’s minds represents the hidden treasure of opportunities for only a few.
Real estate leads are everything to a real estate professional. Without leads, you don’t get clients, without clients, you don’t get paid. When it comes down to it, a real estate agent’s base job is to gather and work his or her real estate leads. These real estate leads go into what professionals call a pipeline or sphere of influence. Your pipeline should NEVER be empty, because if it is, it means you have no way of getting a steady income. An agent spends their time converting these real estate leads into buyers and sellers in order to make their paycheck. For every client that buys or sells a home, you get a commission. If you’ve got no clients, you’ve got no income. It’s a very basic fact.So the questions remains, where do you get real estate leads from? Well, to be honest, a successful agent is ALWAYS gathering leads. You gather real estate leads from referrals of past clients, from sending out newsletters, postcards, emails, etc. You hold open houses for your listings, you talk to anyone and everyone you can wherever you are: at a party, at dinner, shopping. The average person moves every 5-7 years, so the odds are pretty good that someone you meet today will be selling their home within five years. Seems an awful long time to wait for a listing, but not if you’ve got plenty of prospects to work in the meantime and you continue to follow up with said lead until they ARE moving and need a real estate agent. The bottom line is, a successful agent will getting real estate leads for themselves everywhere they go.Then of course there are the various services out there that SELL real estate leads, most of them generated online. Companies such as GetMyHomesValue, HouseValues, and even RE/MAX will sell prospective real estate leads to agents for a fee. These companies are a great source of prospects, but are often called into question for the “quality” of their leads. Often agents will sign up for a company that generates real estate leads and then be infuriated that they did not get a listing the first month. What should really be called into question is what exactly constitutes a real estate lead?Many agents will say “someone who is looking to buy or sell within the next six months to a year.” That seems like a very narrow definition of the term, and to be honest, agents who use that definition are probably not getting tons of commission checks a month. Successful agents understand that a real estate lead is just about anyone who may be able to use their service anytime in the next 5 years. It’s easy to get the listing of someone who just has to sell their home within the next 3 months – they’re desperate and will usually use the first agent they come across- the true test of skill comes when trying to convert a client to your service when they may not be looking to go anywhere for another year or two. If you can convert a client that way, you are likely to have success with your real estate leads and real estate in general for years to come.The sad fact is that 20% of the real estate professionals out there are doing 80% of the business and the other 80% of agents out there are failing miserably and getting out of the business within a few years. They are not willing to build up a pipeline of real estate leads, no matter how far along the selling/buying process they may be, and they’re not willing to do what it takes to convert these leads to clients.Real estate is a sales and service industry. If you’re not willing to help your real estate leads even before they become clients, they’re not likely to become clients at all. Why should they? There’s always another real estate professional who is more than willing to go the extra mile to get their business.To be successful in real estate, you’ve got to see potential real estate leads in everything you do and everywhere you go. And then you’ve got to be willing to do everything in your power to show those leads that you’re the best agent for the job, or else they’ll be moving on to the next one. Really, you should just treat your real estate leads like they’re already a client of yours, because with confidence and some extra work, they certainly will be.