Business

Investing the Profits from Your Home Business

Comments Off on Investing the Profits from Your Home Business 29 September 2011

Having made the bold and glorious call to fire the boss and go it alone in your own work from home business you are one of the few who have what is required to succeed. You have an entrepreneurial spirit and a powerful will and these aren’t common and valuable features which will steer you all though your professional and private life.

Now that your business is successfully running and you are gaining profits from your activities, it is time to turn your attentions to investing the profits from your home business cleverly and for optimum gain.

One of the most consistently returning asset classes over the long term and the one which the great majority of us can profit from is real estate.

Understanding market cycles

Now, you're most likely aware of the fact that property markets are cyclical – this is because of the fact that there is a direct connection between the fundamental price of property re individual buying power. Simply explained: when property prices rise above what first time buyers can afford to pay the market slows stagnates and sometimes readjusts – but as fast as purchasing power increases again, either with a drop in rates or a rise in GDP, so property costs begin rising again.

And there are even ways to earn money from real-estate in a market recession!

Making an investment in real-estate for income

Dependent on the nature of your home based business your monthly income might be slightly erratic – some months being better than others! If you invest in property assets in a BTL or jet-to-let capacity you can secure yourself a consistent monthly revenue that might afford you an additional degree of monetary security.

Buy-to-let is when you get property for rental purposes – this make be a residence you corporate let, it might be a house you student let or even a family home you lease out long term.

Jet-to-let is analogous nonetheless it involves purchasing foreign property for short term weekly or fortnightly rental to tourists. This kind of letting is mostly very rewarding indeed during top holiday periods but might mean you have got a property that's empty for one or two months out of season.

Both sorts of property investment return you a steady income and at the same time the physical real-estate asset will grow in price over the long term and if ever you want to release the profits from your investment you can sell on the property and take the gains you have accrued.

Investing in real-estate for profit

The choice to building up a property portfolio for revenue generation purposes is purchasing property and selling it on comparatively quickly to realise the gains the asset has accumulated.

You can do this in numerous ways…firstly you can purchase run down property short of renovation, clean up the property and turn it into a home before selling it on at a bigger price and reaping the profits gained.

Otherwise you could attempt to beat the curve by taking a position in hot areas, waiting for prices to boom and then selling on for profit. This is quite a dangerous technique for a first time financier as timing the market is hard!

An alternative to this is looking overseas for the newest emerging property markets worldwide and purchasing properties to renovate or properties off plan and then flipping them on for optimum gains in the short term.

Financing your investment

As a self-employed individual it can be tough to get a mortgage unless you have checked accounts, bank references etc, etc. If you do not have all these requisite documents there are other options open to you.

The main options are re-mortgaging your primary residence and releasing the equity that you have accumulated already for reinvestment in another property project or taking out a self-certification mortgage where you make a giant down payment and fundamentally tell the lender how much you can afford to borrow!

A winner's attitude

You have already proved you have what's needed to be successful against the percentages by creating a moneymaking home business, now apply the same steely grit to your property investments and you'll succeed in making the maximum gains. Start tiny, begin delicately, test the market and your appreciation of it and slowly build up a worthwhile property portfolio from the profits of your home business for maximum finance gain.

Good luck in reaching your goals.

Shirley Allan is actively involved in the work from home industry. While the technology used to conduct this type of business has changed enormously in that time, the beliefs behind creating and operating a successful small business remain the same. You can learn more by visiting the Work From Home Australia Opportunities business catalog.

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