How to determine and keep track the real estate bubble in an area
Last week, I wrote an article about real estate bubble and some tips to protect you from it. If you read the article you will find out that the first tip I give is Learn how to determine if there is real estate bubble in an area.
I did not provide much more information about this first tip in that article. I know it will be a long explanation on the theories and skills that needed for this tip. So I decided to write another article specially targeted on the topic on how to determine and keep track the real estate bubble in an area.
Without further ado, below are the tips that I want to share with you:
- Keep tracks the real estate news. Real estate news such as real estate sales, house prices, mortgages lending, foreclosure rate, homebuilders and housing stocks, REITs and other relevant global news are very important for real estate investors. All of this will let you know what really happens in the real estate market and hence know the trend of real estate. Local newspaper and internet will be the good sources for you on this.
- Calculate the price to income ratio. This is the most basic calculation that many economic experts use to calculate the local affordability to own a house. If the ratio is too high, meaning that local people cannot afford a house and this is a phenomenon that real estate bubble might happen in that area. In this case, you must pay attention on that market before you put any money in it.
- Build a investment team. Real estate agent is the man who always keeps in touch with the market. So he/she might provide some valuable insights into the market condition. Besides that, your accountants, bankers and financial planners might also be able to help you on this. This is why you need a team to assists you become a good investor.
- Learn and use the following formulas. I collect the following formulas from Wikipedia. This is some of the formula that we can use to measure the housing market for an area.
PS: Expenses here are including the maintenance and also property taxes. This is a common metrics used to analyze other uses of the money tied up in a home.
PS: This formula is used to measure how much the buyer is paying for each dollar of received rent income. If you found that there is a rapid increase of home prices combined with a flat renting market, real estate bubble might happen in the area.
So far, there don’t have any accurate facts that real estate bubble is really happening. This is why there are always some arguments between financial experts about real estate bubble. Anyway, it is good for us to learn how to detect a market. This will be a skill that going to help us to make money and at the same time prevent us to loss any money in real estate bubble. Kill 2 birds with one stone.
A review on Starting a Drop Shipping Business, Part 1
This is an article series about drop shipping. This series consist of many information about drop shipping. So far the topics that I covered are :
Part 1 : What is drop shipping and the advantages of drop shipping.
Part 2 : The Disadvantages of drop shipping business and should you start it?
I hope you can enjoy this series and please feel free to give your opinions on… whatever you think about. I really appreciate it. 
What is drop shipping?
You might hear about the words drop shipping before. This is a dream for many internet entrepreneurs to make money from internet or from their own house.
In drop shipping, you are a middleman. Your jobs are market and sell a product over the internet. After someone purchases your product and you receive the payment, you place an order of the product to your drop shipper. Then the drop shipper will ship the products to your customers. They usually charge you the wholesale price of the product plus shipping cost. So you make money from the difference between the selling price and your costs (product wholesale price and shipping cost).
Sound great, right? This is why Ebay business becomes so popular because its business model was developed base on the theory of drop shipping. Actually there are several advantages of this online business that make it become one of the hot discussed topics.
Advantages of Drop Shipping
Ok, there are a lot of advantages that making drop shipping becomes a so attractive online business that many people want to start. Here is some of the main one that I think you should know and understand:
- No Inventory to hold. Drop shipping doesn’t like the old traditional small business where you have to hold a certain amount of stocks to run the business. In drop shipping, all you have to care is promotion to attract customers to buy and payment collection. After that your drop shipper will look after the order fulfillment. So you don’t have to hold any inventory as drop shipper will handle it for you.
- No Shipping Hassles. Drop shipper will handle this for you. You should be thankful for this.
- Low Modal Business. To start a traditional small business, you have to dump a certain amount of money in it. But in drop shipping, the story is different. All you have to do is buy a domain name and get a web hosting which is in a very low price. (around $20). Maybe you can hire someone to design a web page for you. This may cost you some money, but it definitely worth it to free up your time for marketing. After that your first online business is ready and you can start promoting your products to the internet world.
- Your risks are low. Since you are not holding any stocks, your risk in this business is quite low. You don’t have to worry about sales. But of course if you want to make money, you must try your best to boost the sales volume. But if you sales are low, especially in starting, you don’t have to worry because you have no burden in this business.
- Work at home business. In a nutshell, drop Shipping allow you to work in your house!
There are many advantages that I can think about. However I will not list them all here instead I just listed down some of the most beneficial advantages above. Now you know how attractive a drop shipping business is. But please wait a minute before you start jumping into this online business. There are several disadvantages of drop shipping that you must care about. I will discuss this in next part which will come out not so soon….
Spend 4 hours a day to make $20,000 per month
My Blog Master Mind mentor, Yaro Starak, just updated a video clip in his blog that talk about how he works in the day and make $20,000 per month.
First of all, I am pretty impressed and motivated by the video and this going to give me some motivation to make money from internet. If you want to make money from internet too, then you must watch the video below and get motivated by Yaro.
I talked about the potential blogging and also the tips to make money from it in my post: How to make money from blogging and achieve financial freedom. There really a huge potential to make money online through blogging. However, it is not that easy to do so if you don’t find the right key to do the right thing. This is why I joined Yaro’s Blog Master Mind mentoring program because I need his guideline in order to succeed faster.
You see, Yaro is a successful, business-minded and intelligent online entrepreneur. He is famous with the theory on making money from blogging in the business way. Besides that he also proved that with only 4 hours per day, he can make $20,000 per month in the video.
So I joined the mentoring program the time Yaro launched it. I know Yaro definitely can help me with his experience and know-how.
If you want to make money from blogging, I definitely will recommend you to download Yaro’s free ebook, Blog Profit Blueprint and read it. I can guarantee this is an eye-opening ebook that give the information that you never think about before. You can read my review on this free ebook here for more details.
