Real Estate in Chile – 5 Tips for Investors

With the traditional economies of the west seeing more and more uncertainty each year, some investors have been starting to look more closely at emerging economies. Apart from Asia, South America seems nowadays one of the most interesting spots to invest. The usual candidates all have their pros and cons. While Argentina suffers from legal uncertainty and Brazil from still widespread corruption and crime. Still they are by far the best known and biggest countries.

However, Chile has gained on them over the last 10 years or so. Chile offers a very balanced place: There´s high literacy and education, the highest average income (although still not evenly distributed), very good infrastructure, and well-working institutions. Also to be mentioned, the low levels of corruption on the institutional level.

On the other hand, Chile offers both for the institutional and private investor a wide range of interesting objects. For the institutional investor, or the investor who is primarily looking for rentability, Chile has Tourism projects, and more important, agricultural land and mines.

For the private investor who may be looking for a second home or a piece of land, there are some great deals out there, be it a lakeshore land in the south´s lakes region, prime agricultural land at less than 5.000 USD per hectar or just a beachhome in Vina del Mar or further North.

The five things you should know when investing:

1. Can anyone purchase land in Chile?

Yes. But what you need to purchase land in Chile, is a so called RUT, similar to a social security number. It´s emitted by the Chilean tax authority and it is easy to get. You will get it without any problems but you have to apply for it personally in Chile at the tax office (Servicios Impuestos Internos).

2. How can I make sure the property I buy is legally all right and the seller is the owner?

When you have found the property you were looking for, you should contact a lawyer to check the property´s legal limitations and ownership. The lawyer will ask for the information at the Conservador de Bienes Raices, the Chilean Institution that keeps all records for all properties. You can also ask for the record there yourself. What you need is the ROL-number, the property´s ID number.

3. Looking for farmland

If you are thinking about investing in farmland (because food prices ARE going to rise), it all depends if you intend to farm it yourself or would like to rent it out to other farmers. In the first case, probably you will want land that can produce exportable fruits, such as grapes, nuts or apples. Then, look in the Regions close to the Metropolitan Region: V. and VI. Region. If you would like to rent the land out, we recommend to look further south, where you will find land that is cheap and favours crops that do not require a long investment period such as maize or corn.

4. Have the Mapuches in mind

The major tribe of Chilean Indians are the Mapuche. They have been granted some land after it all had been taken from them earlier by the colonial rulers. Now the problem is that the Mapuche believe that land can not belong to nobody and they are legally not entitled to sell the land to people who are not Mapuche. If they sell it anyway, the contract may be illegal. If you buy in the south (VIII-X Region), have your lawyer check this point. In other regions it is usually not a problem.

5. How to know when is a good time to invest in Chile

After the Chilean central bank has announced to buy 50 millions of USD every day until the end of the year, the dollar has gained about 5% against the Chilean Peso. It looks probable though, that the peso in the medium term will make good its loss, and even rise to higher levels than ever before. The reason is Chile´s copper. It´s the major export of the country and its price has risen. The other major export, fruits, also have seen higher prices over time. If these trends continue, the Peso will rise further. This could make it more expensive for you in the future. Although – nobody can foresee exchange rates.

For more information on all these topics, visit the site http://www.property-in-chile.com.

Real Estate Tips For Beginning Investors

REAL ESTATE Investors behavior modification leads to a massive 800% increase in rate on investment!! The majority of residential real estate investors invest with their hearts instead of looking at their investment as a business, a business that needs to provide cash flow to cover the operation, these investors are content with a return often in the 2% range or even worse in negative territory. When asked the investor will say that they are looking for capital gain and tax benefits so are comfortable with an investment that is showing a negative return.

This form of investment strategy is endemic in residential real estate investment, and investors are conditioned to believe that this is good. To maximize your profit take note of and avoid the following pitfalls this will require a major adjustment to your thinking and investment behavior.

Behavior pitfalls to modify:

1.Do not fall in love with your investment property: Many property investors make an unnecessary mistake when they start their career in property investment.They look at their investment property in the same manner and with the same feelings as they do when purchasing their own home to live in and this is a critical mistake as emotion rather than business acumen takes control,and the principles of investment fly out of the window. Investing should encompass the principles of a sound investment and investors should look at the investment as a vehicle that will deliver the results that they are seeking seamlessly. Let me explain again, when purchasing an investment property it should be all about the numbers and nothing about the emotions, look for the properties financial statement. Certainly let emotions dictate the purchase of the home you intend to live in where, you would ask yourself emotion charged questions such as I “like” the house, will I “enjoy” living in this neighborhood, and numbers will if at all figure last, liking and enjoying are all emotionally charged issues.

2. Change your behavior and start becoming a successful investor by evaluating the property investment by it’s numbers it’s financial statement. Start asking your self questions like “Can I purchase this property at a discount,or at a whole sale price”, “Is there enough room for a healthy spread if I use this property as a cash flow tool”,” How much of a spread can I get over and above the cost of money to purchase this investment”. TIP: Keep emotions out and the numbers in, you will be glad you did.

3. Do not be Greedy: A major pitfall especially for quick cash investors, is the danger of becoming greedy, very greedy.They get a great wholesale deal on their property investment and then try and flick it for well above retail, instead of at or slightly below retail.This stymies the sale and the hapless greedy investor has to hold on to the property for a greater length of time and invariably will end up taking less than they could have, if they had sold at or just below retail.Greed costs you more than the gain so quit being greedy. Listen being greedy especially on quick cash deals will come back to bite you.

4. Remember the beauty of quick cash is the quick part. Price your quick deals to move quickly, you will end up making more money than if you were being greedy.

5. Why are some investors susceptible to being greedy? It’s because they subconsciously fear that this deal will be their last. I call this the scarcity mindset. Don’t fall prey to that. There are plenty of deals out there and this one deal will definitely not be your last, unless of course you want it to be. Start cultivating an abundance mindset, instead of a scarcity mindset move forward by pricing your deals to make you money and sell quickly.

6. Thinking you know it all: No one likes a know it all…. do you? This is an awful pitfall that many investors fall into and is particularly prevalent when it comes to investing in real estate,and gets worse after you have been investing for a while. They believe that they know all there is to know about real estate investing.

7. Listen, the market is always changing just because something worked yesterday does not in itself mean that it will work as well today, not only is the market changing but so are the rules and the laws governing real estate.

8. Real Estate is always in a state of flux.There is always something new to learn in the realm of active real estate investment for profit. Perhaps the learning curve has diminished for those that have learned the basics of real estate investing, maybe there is not as much to learn, rest assured you will never stop learning and there will always be surprises in store for the know it all.

9. Instant Gratification: Remember there is no free lunch and definitely no easy way to wealth.It takes time,effort and hard work, sorry you can’t sit on your butt and wish or expect someone else to make you wealthy, it is just not going to happen. Unfortunately far to many people from all walks of life and sadly those that should know better,all want the “instant fix”, the “silver bullet”, “The secret”, to making millions. They all have one thing in common they crave for the “secret” and even if there was a secret, they would want some one else to do it for them.

10. Sorry to disappoint there are no secrets, just common sense, effort and following the principles of sound investing,now this is where the vast majority fail they do not follow the principles of sound investment and if they did start following these principles, after a few successess they look at taking short cuts which invariably cause them hardship, you often hear these people wail why me… If you seriously want to be financially free and wealthy treat your investment as a business and ensure it creates cash flow.

11. These four major psychological pit falls plague potentially successful investors, to overcome them you need to modify your behavior starting with the way you think.

Not convinced? Want to know some secrets that the wealthy use constantly?

Secrets revealed below…..

1. Harness your positive thoughts and make them a reality. What you think so it shall be

2. Prepare to go beyond your present circumstances.

3. Nurture the ability to believe in your self

4. Set and achieve goals

5. Learn how to have a go

6. Take responsibility for all your actions, stop blaming others when things fail or do not happen as planned

7. The willingness to do what it takes

8. Buy property as a business and not tolerate loss

9. Buy property correctly and never pay to much

10. An aversion to debt, borrow only what can be comfortably repaid and still make a profit

11. Run your investments like successful businesses

12. Speak to and follow successful people

13. Have a positive mental attitude.

14. Take responsibility for your actions, if it going to be it is up to me.

As you can see there is not much that separates the wealthy from the poor, no it is not the amount of money. I could give a poor person a million dollars and by months end they would be poor again, because they have not developed the fourteen points above. Being wealthy is all about you, your thoughts, your beliefs, your attitudes towards wealth, riches money and your self. Your mind is the secret to you being wealthy or poor.