Investment Support

We humans are as creative on the “Dark Side” of commercial activity as we are in developing beneficial new products and services. In the face of huge financial benefits, however, some corporate executives can’t resist taking an extra dessert even before their shareholders have finished dinner. Some scandals have more of an impact on investors than others, and most produce unwarranted layers of government regulation and control that stifle honest creativity.

Plain vanilla fraud and theft are less worrisome to me than situations where the general acceptance of misinformation or “business as usual” practices allows inherently bad product ideas and blatant mismanagement to become accepted by regulatory authorities, financial professionals, and myopically gullible consumers. Here are some candidates for future “Blockbuster Scandal Awards” (B S Awards, if you will): Variable Life Insurance & Annuities, Wrap Fee Managed Investment Accounts, Portfolio Window Dressing, Asset Allocation Mutual Funds, and Obscene Executive Compensation.

1) Variable Insurance and Annuities: Variable products are a relatively new thing in the insurance industry, circa 1980 or so. Before that, the conventional wisdom labeled the Shock Market much too risky for Life Insurance Policy and Annuity Contract guaranteed benefits. In fact, these benefits had been “guaranteed” for so long that it became a generic expectation of anyone in the market for either. So why did the State Insurance departments cave in to the Variable Product lobby? And what is not emphasized as these products are marketed to potential insureds and annuitants?

As if the 8% sales commission on Straight Life Annuities wasn’t enough, the addition of Mutual Fund bonuses made the Variable Annuity irresistible… to financial professionals. Similarly, this product is so lucrative for the companies that they manipulate their rates to become more competitive. Since the introduction of variable benefits, there have been more insurance company failures and scandals, and not just a few disappointed recipients of reduced annuity payments. What’s in your retirement plan?

2)Wrap Fee Investment Accounts: From the very beginnings of wealth, the very wealthy employed Investment Managers to protect and to grow their portfolios. Most Investment Managers had just a few huge clients that they tended to while the rest of the fledging financial industry focused on property protection and estate creation through life insurance. Most of today’s (salaried) Investment Managers are employed by Financial Institutions to supervise thousands of Mutual Funds for millions of investors of all financial shapes and sizes. There are more Equity Mutual Funds than there are individual Equities on the New York Stock Exchange. Most investors today will employ many Investment Managers and never actually speak to any of them.

Enter the personally managed investment portfolio product offered by most major Financial Institutions. For a single fee, you receive the personal services of a professional Investment Manager, and a portfolio specifically designed for you. Except, of course, that you get neither. You get precisely the same portfolio as everybody else, and all at once regardless of price… a Mutual Fund with individual statements. But of course, you can speak to the manager any time you like, change your asset allocation, set aside a reserve for an upcoming expenditure, etc. Yeah, sure you can!

Note that “Flat Fee” managed accounts are quite different and may actually be separately and personally managed.

3)Portfolio Window Dressing: Every quarter, every year, we hear about the adjustments that portfolio managers are making as they attempt to look smart to their largest clients. Now in a discipline (Investing) that they all officially recognize as a long-term commitment to some specific strategy or plan, why do the Masters of the Universe spend so much time manipulating their short-term performance numbers? And why is this considered business as usual instead of common fraud?

4)Asset Allocation Mutual Funds: I look at Asset Allocation a bit differently than most professionals seem to and I regulate and monitor a portfolio’s structure using the cost basis of securities rather than their Market Value. But how, logically, can a one-size-fits-all Mutual Fund be the right mix for all investors? Here’s a definition found on the Internet: “A mutual fund that rotates among stocks, bonds, and money market securities to maximize return on investment and minimize risk”. And a definition of Asset Allocation from a similar source: “The practice of distributing a certain percentage of a portfolio between different types of investment assets, such as stocks, bonds, mutual funds, cash, real estate, options, etc. By diversifying an individual’s asset base, one hopes to create a favorable risk/reward ratio for a portfolio”.

In reality, Asset Allocation is a structure-planning tool that determines what percentage of an Investment Portfolio is to be invested for Growth in Equity securities and what percentage is to be invested for income production. The proper allocation is a function of the investor’s age, marital status, financial position, employment status, retirement plans, expenditure needs, risk tolerance, family responsibilities, etc. Diversification occurs within the two (just two) asset classes. One size fits all… who’s kidding whom?

5) Corporate Executive Compensation: I strongly believe that everyone has the right to become filthy rich, legally of course. I respect anyone who gets there honestly because their success creates jobs, opportunities, wealth, and a higher standard of living for everyone. But, once they sell shares of their successful enterprises to the public, they have a responsibility to share future profits and growth. Obscene executive suite compensation (right down to the chauffeured limousines) is simply stealing from shareholders.

With every new Scandal, a voracious Media and a hypocritical Congress exacerbate the fear of shocked investors and call for more regulation of the very entities whose success, freedom, viability, and competitiveness they should be nurturing. Ironically, politicians are always the most outspoken critics… probably because of their familiarity with cover-ups and improprieties. But no one ever questions the integrity of the Financial Institutions that invent, produce, price, and promote products and services that do far more long-term harm than the few (albeit serious and sensational) incidents of corporate wrong doing.

Four of the five candidates for this year’s Blockbuster Scandal (B S) Award were created on Wall Street. The fifth is ignored by it. Which one bothers you most?

There are very few points that everybody in this world agrees upon. And the stock market unpredictability is undoubtedly one of them. Even people with several years of experience are not always able to track the stock market dynamics, thus falling prey to faulty decisions. Watertight stock market investing strategy is something that people consider to be elusive. It is something that can be chased, but probably can never be achieved.

But is it a correct notion? Are things like fate, luck, chance, etc., are the only deciding factors in the stock market investments? Or is there any way to approach the stock market in a speculative manner?

The answer to the above question probably lies in the Systematic Investment Plan or SIP (a.k.a. “Periodic Payment Plan” or “Contractual Plan”).

Systematic Investment Plan (SIP) Unlike the one-time investment plans, SIP entails regular payments for a fixed period. It allows investors to garner shares of a mutual fund by contributing a fixed (which is often small) amount of money on a regular basis. And it offers the following advantages readily attractive to any investor.

Reduced pressure on your purse Through SIP you can enter the stock market even with a paltry investment. Your inability to invest a more-or-less fat amount might have kept you away from investing in the stock market. SIP is an ideal solution for your problem.

Building for the future We have certain needs that can be addressed only through long-term investments. Such needs include childrens education, buying a house of your own, post-retirement emergencies, etc. And SIP offers precious help in this regard. It helps you to save a small amount on a regular basis. And in due time it turns into a substantial amount.

Compounds returns SIP not only helps you reach a substantial amount after a certain period of time. Rather it helps you to reach that amount at an early age, depending when you start investing. You can amass a notable amount at 70 if you start investing at 35. An earlier start at 25 can enable you achieve the same amount by 60.

Lowering the average cost In SIP you experience low average cost, courtesy dollar-cost average. You invest the same fixed dollar amount in the same investment at regular intervals over an extended period of time. You are buying more shares of an investment when the share price is low. And you are buying fewer shares when the share price is high. And it may result in you paying a lower average price per share.

The dollar-cost averaging strategy does not try to time the market. Rather it reduces the risk of investing a larger amount in an investment at a wrong time. And it does the same by spreading your investments out over a period of months, years, or even decades.

Market timing irrelevance The previous two paragraphs tell you that SIP makes the market timing irrelevant for you. The stock market unpredictability and volatility often play a deterrent for wannabe investors like you. In SIP, you are completely free from this problem of wrong timing.

The SIPs mode of function

A typical SIP entails monthly investments over a period of 10, 15 or 25 years. You are generally allowed to start your investment with a modest sum.

You do not have direct ownership of the funds. Rather you own an interest in the plan trust. The plan trust invests the investor’s regular payments, after deducting applicable fees, in shares of a mutual fund.

Things that you should make clear before investing in an SIP

You should make certain things clear to yourself before going for an SIP investment. They include the following
a.You should be confident about continuing to make payments for the term of the plan. Withdrawal in the mid way will almost certainly make you lose your money unless you are eligible for a full refund.

b.Check the fees charged by the plan. Also check the circumstances under which the plan waives or reduces certain fees.
c.Study the plans investment objectives. Take a note of the risks of investing in the plan. And check whether you are comfortable with them.
d.Check your statutory rights to a refund in case you cancel your plan.

Heavy construction equipment requires a lot of capital investments. When the companies opt to buy these types of heavy construction equipments then they look out for the used equipments that may be on sale in the local market. This helps them in various manners. Companies sometime get used heavy construction equipment which are as good as new but the cost is much lesser than that offered in the showroom. Moreover, buying heavy construction equipment from the local market reduces the transportation cost as well. These overheads not look good in the balance sheet as they lead to increase in the project costs.

Financing is a major concern while buying heavy construction equipment. Most of the companies look out for times when the interest rates are low and they can strike a good bargain. In developing countries the rate of economic growth determines the external investments. A healthy growing economy attracts heavy foreign investments. Thus since the financial inflows are more the interest rates are much low. Thus buying heavy construction equipments or taking them as rentals is much more economical.

After the opening up to the markets and signing of the GATT agreement by most of the countries there has been increase in the competition and reduction in cost of equipments. Moreover, the heavy construction equipments have been manufactured at more locations than before. This trend has been on increase to serve the global market and cross-country support for infrastructure development. Moreover, there has also been increase in the duty-free import structure in the economies. But in case of the growing economies, increase in exports and development of local markets is still required to support the imports in the countries.

Demand for heavy construction equipment is more region-specific. In US markets and Western Europe, requirement for up-gradation of the locations is more required rather than developing new projects. These countries require maintenance and upgrading of the existing projects, which is more crucial for the existing infrastructure for long time sustenance.

In case of developing countries, building up of rail, roads, flyovers, high-rise, airports, and urban development is more crucial. All this requires lot of construction work, which requires use of heavy construction equipment. The largest producers of heavy construction equipment are located in the U.S., Japan, Germany, the U.K. and France, followed by Italy, South Korea, Canada, Sweden and Belgium. There are manufacturing units located at other locations also like China, Russia and Latin America. More manufacturing units for heavy construction equipments are expected to crop up at locations, which offer low material costs and cheap labor.

Heavy construction equipment is also available on rent. These can be leased out easily from the domestic market. It is much more beneficial to take the heavy construction equipment on rent or on least for a day or few days rather than purchase them and then sell them at lower cost or carry overheads like transportation, maintenance, etc. Buying heavy construction equipment is not much preferred option. Mostly in the US, long-term leasing is much more preferred over purchasing due to tax structure.

How to make a million dollars in real estate investment

I remember starting out as a real estate investor I had learned a very simple, yet mind-blowing strategy to make a million dollars in real estate. The concept was taught by Marshall Reddick, who is an avid real estate investor, and to date, he has over 200+ real estate rental properties in his portfolio.

It could not have been said better than Marshall himself. To make a million dollars in real estate, you must:

1. Borrower a million dollars
2. Have someone else pay it back for you

Simple as that. How does it apply to real estate investing, you may ask? Well, all you need to do is purchase enough investment properties worth a million dollars total, and have them rented out. That essentially is borrowing a million dollars in mortgage debt, and have your renters pay back the debt for you.

For many people, borrowing a million dollars may seem out of reach, but just as you would eat an elephant one bite at a time, so is buying real estate properties – you buy one house at a time. Unless you live in California, there are still many states that you can purchase a home for around $100k. Even if you are residing in California, you will need to stretch your vision and reach out-of-state.

Many people fear owning a property, let alone owning an investment property out of state. However, as a true real estate investor, you must put yourself in the mode of a business owner. Real estate investment is a business, and like any business, it may come necessary for you to hire people to work for you. That’s what realtors and property managers are there for. In order to really expand your real estate investing business, you must get comfortable with hiring property managers to manage your properties.

We have all heard good debt and bad debt, so don’t let the concept of owing money scare you off – especially when you can have someone else pay it back for you! As an added bonus, real estate value on average has never gone down in value in history. You hear people losing money in real estate because they could not hold on to their properties and they let them go at unfortunate times. Even if real estate value do go down, you should never fear because you have someone else paying your mortgage – your renters. As good as the concept of making a million dollar in real estate may sound, fear not and take the first step in your real estate investing.

Retirement planning: Plan your retirement for income through mutual fund investment.

Most of the people I have met have not planned for their retirement as they say future is unpredictable and we need to live in present but my dear friends future is the outcome of present, our present will decide our future. When we think of retirement we generally think of old age, a period when you have to give up the job and sit at home doing nothing. Contrary to the fact, most of the retiree lives a very active life. We need to seriously consider out planning towards retirement because once we retiree our income stops coming but our expenses remain as it is and in some cases it rises with the rising inflation.
In this regard mutual fund has turned out to be the right answer for making retirement planning easier and safer. Mutual fund being managed by professionals is a key to effective retirement planning.

Some people like it. Some people dont but the fact is that retirement is a reality for every working person. Most young people today think cannot think of retirement as reality as they believe in living at present. However, it is important to plan for your post-retirement life if you wish to retain your financial independence and maintain a comfortable standard of living even when you are no longer earning. This is extremely important, because, unlike developed nations, India does not have a social security net. In India people still depend upon bank savings and fixed deposits for retirement purpose, which is unfortunately inadequate.

Retirement Planning acquires added importance because of the fact that though longevity has increased the number of working years havent, so you end up spending the last phase of your life without earning.
In simple words, retirement planning means making sure you will have enough money to live on after retiring from work. Retirement should be the best period of your life, when you can literally sit back and relax or enjoy your life by reaping benefits of what you earn in so many years of hard work. But it is easier said than done. To achieve a hassle-free retired life, you need to make prudent investment decisions during your working life, thus putting your hard-earned money to work for you in future.
With the special features of mutual funds like Systematic Investment Plan, Systematic withdrawal plan, systematic transfer plan in addition to other unique features of different funds, the investor can easily plan for its post retirement requirements and ways to achieve it.

Unlike many other countries of west, in India we do not have state-sponsored social security for the retired people. While you may be entitled to a pension or income during retirement, but will it be sufficient post retirement.
Although the compulsory savings in provident fund through both employee and employer contributions should offer some cushion, it may not be enough to support you throughout your retirement. That is why retirement planning is extremely important for every one. More over with mutual funds the investors can actually plan for themselves and also achieve their planned objectives. As compared to direct equities this option of mutual fund is much safer for planning your retirement corpus.

There are many reasons for the working individuals to secure their future emergence of separate families and its attendant insecurity, increasing uncertainties in personal and professional life, the growing trends of seeking early retirement and rising health risks are among few important risks. Besides falling interest rates, also the sustained increase in the cost of living make it a compelling case for individuals to plan their finances to fund their retired life.

Planning for retirement is as important as planning your career and marriage. We need to take conscious and careful decisions to prepare for our retirement. Life takes its own course and from the poorest to the wealthiest, every one gets older with time. We get older every day, without realizing. With our coming old age we tend to become more understanding to the facts of life and realize the importance and impact of retirement. The future depends to a great extent on the choices you make today. Right decisions with the help of proper planning, taken at the right time will assure smile and success at the time of retirement.

In my words, retirement planning means making sure you will have enough money to live on after leaving your work. Retirement should be that period of your life, when you can sit back and relax. Retirement should bring more of enjoyment in your life by reaping benefits of what you earn in so many years of hard work. But it is easier said than done. Most of the people live their worst life during retirement. To achieve a hassle-free retired life, you need to make right investment decisions during your working life, thus putting your hard-earned money to work for you in future. If you are not very aware of the investment that you need to undertake then you can easily take help of online advisers to help you with your retirement plan through mutual funds. The earlier you start the better it is for you.

Now retirement planning can be done with a single click and with the advice of a registered mutual fund advisor by Association of mutual funds in India (AMFI). Fill this retirement questionnaire to know your current financial situation and your investor profile which will help you plan for a worry-free retirement.
This is a no obligation free mutual fund advisory; investors can make informed mutual fund investment decisions with the expertise of our advisors.

I think one of the most neglected tools in investing is newsgroup. Why? Some people may believe that there are more gossips than useful news. However, this is not always the case. Newsgroup is an online group of people who intend to share their common interest and opinions on the internet. You can post all sorts of questions, crazy ideas, rebuttals, theories, rumours, and others that are related to a particular topic and let the others to respond to your posting or questions. Lets say if you have a question about a recent stock movement of Apples shares, you may find dozens of second opinions on whether this is a good time to get into the market or throw off what you have in hands.

I know that many people love to join big established investment databases or to subscribe to investment newsletters such as the Wall Street Journal and the Investors Business Daily. However, those services are paid (ranging from $20 to $30 per month). Given the fact that most newsgroups are free to join, I think newsgroup can be a valuable supplement to the main dish. Investors in newsgroup may come from all over the world. Indeed, this is a huge community containing a rich amount of info and opinions. I do not deny that the quality of information can range from zero to ten. This is because some of them are investor geeks, whereas some of them are just average Joes. Please bear in mind that most of the newsgroups are free to join. You dont need to pay a single dime!

I think the most significant factor why an investor should join an investment newsgroup is to get some info that you may have overlooked. For example, you may get a piece of info about insider trading from the Securities and Exchange Commission (SEC), but you may not know how to interpret what the implication is upon a particular stock, not to mention how much data you have to sort through the SEC database. At times, you may just throw a question or a comment to a newsgroup about what you have found from the SEC, and you may get a lot of surprises from what other investors say.

Next, where to you find some of the best newsgroups for your investment info? I will give a brief review of some of the most common newsgroups as below:-

Google Groups (Beta)
This is another good place you can pop in to hear some good voices. Since this is a beta program of Google product, the numbers of newsgroups are much lesser than those of Yahoo. There are about 970 newsgroups about investing at the time of this writing. However, I find that the way Google categorizes the investing groups are unsatisfactory. This is because at times you may find some unrelated groups within the broad topic, investment. Again, this is a free service. No fees. No cost. Nada.

Yahoo! Groups
At the time of this writing, there are 17,400 groups specifically about investment ranging from currency, futures, options, short selling, retirement planning, day trading, mutual fund, IPO, online investing, stock pick to value investing. You can create your own group as well. The best thing is that the registration is free!. After signing in, you may locate a specific group to join. On the front page of Yahoo! Groups, you can browse the Groups directory or search for a group by topic. Then click on the “Join This Group” button on front page of any group. That’s simple!

Giganews
This is one of the top paid services that provides a number of cool features in newsgroup service. They claim themselves as having the world’s longest newsgroup binary retention of 70 days and text retention of 1020 days. Of course, for a paid service they provide 24/7 email support on all accounts. At times good retention does not mean that you will not lose an article or message. However, in terms of speed and completion, they claim that they can offer more than 99% completion in terms of avoiding missing articles. You have to bear in mind that uploads are unlimited but downloads are limited to the package you choose. In terms of pricing, they offer different options ranging from $7.99 for 2GB downloads per month to $24.99 for unlimited downloads.

Bulgaria is a country blessed with great geographical atmosphere. Three mountain ranges run through the country (Stara Planina-The Balkans, The Pirin and the Rhodopes) offering wonderful conditions for skiing in the winter season. The Bulgarian Black sea coast offers a lot of picturesque spots for traveling and spending a nice holiday. You can also practice many outdoor activities like trekking and hiking, horse back riding, bird watching, swimming, skiing, climbing, hunting, fishing… Thinking of relaxing – amazing nature, sunny beaches, healing spas, monasteries and churches, hospitable towns and villages…

The Republic of Bulgaria covers an area of 110,910 square miles with a population of over 7 million. It boasts 354km of dramatic coastline along the non-tidal Black Sea. Its tourist industry is flourishing as people flock to the clear waters of the Black Sea and temperatures that beat the Mediterranean in the summer months.

Interest in beautiful Bulgaria has been growing rapidly as investors look this for the next big thing. The country is on course to enter the EU – European Union in 2007 and is predicted to see steady & fairly large increases in property prices over the coming years as a result money to develop its banks, telecommunications and transport is being splashed around. New Embassies, offices, conference centres, hotels and motorways are being built and international firms are moving to the Sofia, capital of Bulgaria. In short, these days Bulgaria offers an almost unrivalled quality of life and investment opportunity.
There are four international airports in Bulgaria – Sofia, Plovdiv, Varna and Bourgas and as such is ready for the tourism explosion which is expected here.
The city of Varna is the biggest city at the Bulgarian Black sea coast, situated at the Bay of Varna and offers unlimited number of accommodation facilities, for rent and for sale. The city is surrounded by lots of gardens, vineyards and deciduous groves. museums, the Cathedral of the Holly Mother, the Dolphin show, the Aquarium deserve a very special attention.

People always say that investment is a money game with the playing rule of "high risk with high return and low risk with low risk". You may want to invest in an investment portfolio that is able to give a good return and stock market is always the best choice in term of high return. But you aware that investment in the stock market will cause you to lose all your money as well, because the game rule said "high risk is high return and low risk comes with low return". Hence, stock game might not suit your risk profile; you may want to look for an alternative that can give comparatively good reward but with much lower risk than stock. If you are categorized in this group, then mutual fund can be your game.

Mutual Fund Is A Risk Sharing Game

A mutual fund is simply a financial medium that allow a group of investors to pool their money together with a predetermined investment objective. The pooled money will manage by a fund manager. The fund manager is a person who is widely expert in stock and bond markets. He/she is responsible to invest the pooled money into specific securities, usually stocks and bonds. When you are buying shares of mutual fund, you will become one of the fund's shareholders. All the gains and losses will be shared among the fund's shareholders. Hence, mutual fund is a risk sharing game.

Compare to stocks and bonds, mutual funds are one of the cost effective and an easy playing game. You do not need to really expert in stock and bond market because the fund manager will take care of it; and you do not need to crack your head to figure out which stocks or bonds to buy, because you have the expert, the fund manager to make the decision for you.

You do not need a lot of money to get your start the game; you decide the amount of money you plan to invest into the mutual fund. Some mutual funds may even let you start with just $100. The best part is the cost effectiveness. By pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading cost. The biggest advantage of mutual funds as compare to stocks or bonds is "diversification".

Diversification Will Lower The Risk

Investment experts always advise that if you want to invest you money, "Don't put all your eggs into the same basket; else if the basket fall, all you eggs will break", some will happen on your money, if you invest in one stock, if the stock perform negative, you loss all you money. Diversify your investment to spread out your money into many different types of investments. When one investment is down, another might perform in up trend.

Hence, with the diversification of your investment, you will reduce your risk tremendously.

You can diversify your investment by purchasing different kinds of stocks and bonds instead of one. But it may take weeks to buy all these investments. In contrary, you can get these done by purchasing a few mutual funds and mutual funds automatically diversify your investment across many stocks and bonds.

In Summary

Mutual fund is a risk sharing investment portfolio, it's provides you a medium of investing your money into a high earning stock & bond market while automatically diversify your investment to reduce your risk. Hence mutual fund can be your alternative of investment portfolio that will give you higher reward and lower risk.

Investment Capital – Putting Brand Capital And Human Capital Above Working Capital Or Physical Capital

When you start your own business, you commit to investing your time, talent and resources in the business to make it succeed. You authorize a spending plan; you ask the bank, your credit card company, friends, family, employees, to endow the business to follow your business plan and implement your marketing plan. There’s more to it. You need to determine where you can differentiate your company from the competition, so where should you invest the most resources? To garner the most flexibility, I suggest your investment priorities should be: Brand Capital, then Human Capital, followed by Working Capital with Physical Capital at the bottom of the list.

Brand Capital: Invest the most in your market and marketing to them. Up front this could simply be focusing on a small group of prospects. Do the economics to make them well satisfied customers. So much so, that they provide the testimonials or become the spokespersons for your future sales. Remember, the high value transfer of using relationships.

Human Capital: This is your team and their track record coming on board. Only hire stars, no matter what. Only employ experts in the key roles of your company. For other positions, look for great talent you can mold to your vision, and move around to meet the company’s needs.

In addition, build a stellar Board of Advisors or Board of Directors. A Board of Advisors usually will help you for free, whereas a Board of Directors is paid. The key is to engage thought leaders in your niche who become early adopters of your product or service and advocate for you to their significant networks.

Working Capital: Invest minimally here because there’s no added value to the company or the product. Tying up cash instead of using credit may actually slow your time to market. This could be a critical timing mistake if your competition is racing you to market.

Physical Capital: Invest minimally here because bricks and mortar don’t sell product. Yes, you need a roof and windows that don’t leak (I’ve worked with many startups in the old mills where workstation layout was based on the leaks and drips.). You don’t need to be a miser. And you need the equipment, technologies and conveniences that will make everyone highly productive. Cost- effectiveness should be weighed here too.

Whenever you are investing in your business, recognize that you cannot manage everything, but you can manage the value equation of each investment. Be sure the value to your business is outstanding, so you can win business with every sale.

Real estate may be all about location, location, location, but real estate investment is also about timing, timing, timing. Like the stock market, when you make your investment is just as important as the investment you choose. And, when it comes to real estate, a pre-construction investment can maximize your return.

The primary pre-construction investment advantage is that you can generally purchase a property at a lower price than if you were to wait until after the project breaks ground. Once construction is underway, popular locations and properties can trigger an influx of new investors who drive prices up. A pre-construction investment also allows you to choose among premium properties, whereas later investors can choose only from among the less desirable properties.

What to Buy in Today’s Climate

While the asking prices of single family dwellings are trending downward, there is still enough uncertainty in the market to cause concern. Lately, the attention of investors has turned to what are called condo hotels. These properties generally have both condominiums and luxury suites, and the communities typically have a number of attractive features, such as retail space, restaurants, and pools. Often, investors will buy a condo hotel unit and use it part of the year as a luxury vacation accommodation, while renting the property out for the rest of the year. The best condo hotels take care of the rental management and maintenance, leaving the investor to enjoy his or her property while reaping the financial rewards.

Where to Buy

Real estate is all about location, so when considering a pre-construction investment, it’s important to find a place where there is high demand for short-term housing. In the United States, Orlando, Florida, is one of the best places to invest. Analysts estimate that the real estate market in Orlando is undervalued by as much as 30 percent. And, with the tens of millions of tourists the area draws each year, thanks to Disney World, Sea World, and Universal Studios, the hotel occupancy rate hovers at around 80 percent.

With these kinds of numbers, Orlando is the perfect place for a pre-construction investment. As an example of what’s available, the Blue Rose is a condo hotel scheduled to break ground in late 2007 and scheduled for completion in 2009. The Blue Rose Resort is planning to offer over 250 condominiums along with over 1,200 condo hotel suites of up to 3,000 square feet. To complement the accommodations, the Blue Rose is planning to build the Swan Lake Promenade, which will house five themed restaurants, European cafes, private pool cabanas, and a Broadway-style theater that seats 1,000.

Pre-construction investments in top-rated short-term rental markets have a great potential return on investment. Plus, due to the desirable destination, savvy investors will be able to enjoy both appreciation of property values and great vacation accommodations.