What is swing investing? If you are learning about financial investment, especially real estate investment, you cannot ignore this concept. In the article below, AHS will explain in detail the concept of swing investing, what is swing investing in real estate and the invincible rules in the swing investing process in the real estate market.
What is real estate "surfing" investment?
It seems that the investment term "surfing" is very familiar to real estate experts, but this is a completely new term for many people when they first approach the real estate field. In simple terms, surfing investment is a form of profitable investment, you only need to spend a certain amount of money, worth 15% of the actual value of the apartment/land to temporarily hold a place. Then, when the market starts to heat up, many people are interested in the apartment/land that you are holding, and they accept to buy them back at a price difference of several tens, even several hundreds of millions of the amount you initially spent. → Thus, in just a short time you can own a large sum of money. Compared to depositing money in the bank to earn interest, "surfing" investment is more effective.
Choose a reputable investor
The investor’s reputation is a prerequisite in choosing to buy real estate products, whether for short-term or long-term. Investors need to carefully research the capacity, implemented projects as well as market assessments of this investor.
Choosing an investor is the first and most basic step in researching to buy an apartment in general. The theory is very long, but you just need to pay attention to the following: the investor’s capacity, the projects they have completed and whether they have any “scandals”. If you want to know anything, you can search on the Internet, ask your friends who have experience in the real estate field.
To ensure a safe investment process, you should carefully research the project investor. You should choose projects with reputable, trustworthy investors with solid financial resources. You can refer to the history of projects that have been completed. Evaluate their progress and the comments of customers and real estate experts about those projects.
Number and type of apartments
The larger the number of products (apartments) entering the market in the future, the higher the liquidity and growth risks. Simply put, if the urban areas you plan to buy are constantly being built with new buildings, when you resell, your main competitor will be the Investor. Of course, the selling price is decided by them, not you, and will usually be lower than expected. Therefore, your purpose is to "buy and resell", so it is best to choose apartments that are easy to sell.
Use financial leverage
This is the method that many professional real estate investors use. In the real estate sector, this is to extend the loan period as long as possible or the interest rate in the first year is more preferential. For example, when buying an apartment in the early stages of payment, the value of the apartment is 30%. You borrow an additional 40% of the apartment value and then sell it with a profit of 100% of the entire apartment. Thus, you only need to spend 30% of capital and borrow 40%, then sell it and pay off the loan. The rest is the profit earned.
Analyze current trends
Next, you need to analyze the “trend” or “fashion” that is popular at the moment. This will help you see which industry groups are attracting the attention of investors.
Compare selling prices of properties in the same area
This note is only for investors in apartments built according to progress. Based on the difference in value between the time of construction and the selling price after completion of the project in the same segment within a radius of 1km to predict the level of profitability. Investors need to determine which areas will have "waves" or the potential for real estate price increases. The basis for creating real estate waves is planning information or the formation of projects that are about to be planned.
Quantity and type of products
The larger the number of products in the product line you invest in, the higher the liquidity and growth risks. For example, if the urban areas you plan to invest in are constantly being built with new buildings, your competitors at this time are the investors. Because the selling price is decided by them and will often be lower than expected. Therefore, if your purpose is to "buy and resell", you should choose products that are easy to sell. Normally, easy-to-sell apartments today have an area of 60 to 90m2 and have from 2 to 2+1 bedrooms. In addition, apartments facing East, Southeast or South are also more interested, located from the 6th to the 20th floor. However, you should avoid apartments on the 13th floor because 13 is considered an unlucky number.
Why is real estate swing trading a choice for many people? This is an investment method that contains many challenges, but many people still choose it because: High profits: In a short period of time, there can be many "waves" so investors can earn a significant income if they grasp it well. The thrill and excitement: The risk of swing trading can make investors excited and interested. Monitoring market fluctuations and seizing the right opportunity is attractive to many investors.
Real estate surfing investment is a risky business but is chosen by many people. With many advantages, real estate surfing investment brings high profits to investors. However, investors should also be careful and apply the 7 experiences AHS has just shared to avoid risks and losses!
