The business of buying and selling of properties is said to be a safer business even in times of economic crisis.

The reason this is so is explained by supply and demand issue. It is assumed that the land where houses are built or buildings, is a finite that does not increase, but the population continues to increase.

Consequently, barring some global catastrophe, or rates of population growth will be reversed, we are always in a process where land becomes scarce as the population increases.


This seems so obvious in general terms, it is not practical and concrete terms. Today might buy a property to $ 100,000 and that in a couple of years worth only $ 70,000 thus having committed a very bad investment.

What happens is that the correlation between population and property and houses still not so close that the general rule explained earlier in this article applies to all properties. Also happens that there are factors such as purchasing power or the amount of money people are willing to pay for a house which will determine the price.

Exactly the second factor will be the key element in deciding the purchase of a property as a business and not just supply and demand. It must determine how much money is that people are willing to pay for a house or apartment in one area or another.
Here is an example below.

If an island be equivalent to the coin are the handles and across the island there are 100 mangos, never a house may be worth more than the 100 handles well a person can collect all the handles of the island in his possession. That person must also pay for food, for education, for fun and for other needs and must find out which of those goods or services interest you most to this person.

So supply and demand factor is not the only to consider but should see other factors when determining the value of a property especially if as has been said the correlation between supply and demand for property is still not as close as to affect all properties equally.
So when questioned about this title to Investing When Buying Properties? the answer will always be able to make real estate investments, but as long as she can determine that the purchase of this or that property is a good investment.

The way to know when is a good investment using financial ratios is widely used among people engaged in the business of buying and selling properties, as the ratio of the Cap Rate on Cash or Cash are two of the ratios over simple to use.

If you want to know what they are I recommend you read the article How to know the price of his office or his house? of our legal blog affiliated with Your Virtual Advisor.
These ratios can be used anywhere in the world and basically measure the profitability of a property to measure and to determine its price and whether the purchase is a good deal or not will be.

To put it simply, in the case of a house for example, I want to sell to 100,000 dollars I owe to predetermine how much money will I get the same if for example the rent. To do this compare the price of renting a similar house and to establish a profitability ratio that will determine whether the property is $ 100.000 a good price or it is not as I explain in the article cited above.

These ratios, measuring a static subject at one time opportunity but also as any market, should be to evaluate dynamic factors to measure market trends and know which geographic areas the properties are on rise by factors such as location of schools, proximity of roads, workplace location and other factors.

In real estate investment, like any other business, financial ratios are important but the mathematics are not everything. Envision and anticipate these dynamic factors will be what it may often become a millionaire in this business like any other.

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