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Real Estate: It Takes Two to Tango

By Charles Hopkins Published 04/21/2006 | Real Estate
Two people, so a saying goes, can look at one thing and see two different things.

In the world of real estate, there are only two people involved in the process, the buyer and the seller. Whoever gets the most benefits, nobody can tell. But whether it's the buyer or the seller's game, getting involved in real estate business can be a very rewarding feat.

Real estate, in a general sense, refers to anything that is permanently set on a piece of land such as buildings. The concept of real estate lies on the fact that because of property ownership, real estate has turned out to be the most important theme in the business. And when there is a business, there is money.

Nowadays, there are people who buy houses not just because they want to own a home but for financial reasons.

Generally, these moneymakers would get a home equity loan from their real estate and then use it as a deposit for another property. Thereafter, he or she will sell the other property at a higher value. This is better known as "flipping".

This is the reason why most mortgage lenders and builders would rather sell their real estate to customers whose purpose to buy a house is purely residential. Lenders and construction builders see these so-called "flippers' as a treat to their business.

For this reason, many builders include some anti-speculation writing clauses within the sales contract. It is stipulated in the contract that the owner will be reprimanded if he or she will sell the real estate within one year. It may also include a clause stating the defensive privilege of the builder to buy back the real estate at the selling price. This is applicable if the owner will resell the real estate within a year after the date of purchase.

But nevertheless, there are still people who try speculating in real estate especially if they have loads of perspective buyers who can compensate the higher rate of the property plus the cost it brings.

In a basic sense, property owners can do most anything with their real estate. The only drawback is that speculating on real estate fads can be really risky because nobody knows if and when the real estate "bubble" will burst.

But then, most business experts contend that what you invest in depends on your capacity to take risk. So, if you want more income, you have to take more riskrisks that you're confident enough to face.
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