雅思阅读第091套P3:Making a sound Investment Decision

READING PASSAGE 3

You should spend about 20minutes on Questions 27 - 40, which are based on Reading Passage 3below.

Making a sound Investment Decision

As investors tire of stockmarket instability, the idea of owning a piece of real estate is gaining inpopularity. Now, not everyone has what it takes to become a landlord, but ifyou can make a go of it, it certainly has the potential to become a goodmoney-earner. Here are some tips from successful real estate mogul, JanetAnderson, on how to start building up your property portfolio.

According to Janet, one of thebest ways to identify a bargain is to hunt for foreclosures. Foreclosures areproperties banks have repossessed because their owners were unable to meet themortgage repayments. Banks want a quick sell on these places, Janet says. Theywant to cut their losses and get their money back as quickly as possible.Developing a network - making connections with city clerks and bank employeeswho know which properties are about to be sold - can be an excellent way toidentify such bargains. And bargains they certainly can prove to be; in a recentfiresale auction ('firesale auction' is the phrase that has been coined todescribe auction-room events dedicated entirely to the disposal of repossessedassets) a house with a market value nearing $1,000,000, but with a low reserveprice designed to encourage bidders and secure a quick sale, went for $450,000;that's a whopping 55% discount.

It's also important to berealistic though and not stretch yourself too far financially. Janet says thebiggest mistake you can make is to borrow too much or over-borrow. Forfirst-time investors, lenders usually demand bigger down payments because youhaven't got a proven track record. That's more of your money on the table and,therefore, should anything go wrong, you're in for a big financial hit.

Her business partner, JamesNylles, is in complete agreement on this point. He also highlights the factthat the mortgage payments and deposits are only part of the long-term cost ofbuying a rental property. There is also the cost of repairs, administration andmaintenance, rental manager's fees, insurance and so on, all of which requireyou to hold a significant amount of money in reserve. Failure to factor this inwhen calculating how much you can afford to part with in mortgage repaymentscan lead to disaster.

One of the biggest traps forfirst-time investors, according to Nylles, is the temptation to pay over theodds to get the property you desire. Buyers often get carried away, especiallyin the auction-room setting, which can get quite competitive and even descend intoa racket of one-upmanship. They end up paying top-dollar and landing themselvesin a financial situation they can ill afford to be in. Remember, you are in theproperty game to make money, so the more money you have to pay upfront for aproperty, the less likely you are to recoup your investment in the long run.The good news, however, is that the housing market is not very hot at themoment, which means the danger of overpaying is not so great. Always setemotions to one side and think from a purely business perspective. The questionof your liking or disliking the property is irrelevant. As Nylles points out:"you will not be living there." Business decisions are made in thecold hard light of day; your objective is to minimise your outlay and maximise yourreturn. Whether you secure a huge home in pristine condition or a tiny flatwith barely room to stretch in is irrelevant - if the tiny flat gets you abetter return on your investment then the choice is a no-brainer.

And last of all, do yourhomework. You've got to get to know the location in which you are going toinvest. Look out for areas which are earmarked for government investment. Urbanrenewal areas are often very attractive since house and rental prices in suchplaces are low right now but can be expected to rise in the not too distantfuture. The range of local amenities, safety and the state of the local economyare all important factors to consider, too. As the old saying goes, 'location,location, location'. Invest in a good location and you will maximise yourrental income.

SECTION 3: QUESTIONS 27-40

Questions 27-33

Answer the questions belowusing NO MORE THAN THREE WORDS for each answer.

What are investors getting fedup with?

27 _________________

Janet Anderson is involved inthe sale of property. What is another phrase used in paragraph 1 to describethis type of business?

28 _________________

What is one of the best ways toidentify a bargain in the property market?

29 _________________

Failure to meet your what, cancause your home to be repossessed?

30 _________________

What do banks want to get backquickly on foreclosed properties?

31 _________________

Developing networks is anexcellent way to find what?

32 _________________

What is the biggest error ofjudgement first-time investors can make, according to Anderson?

33 _________________

Questions 34-40

Do the following statementsagree with the information given in Reading Passage 3?

In spaces 34- 40 below,write

YES

if the statement agrees with the views of the writer

NO

if the statement contradicts the views of the writer

NOT GIVEN

if it is impossible to say what the writer thinks about this

34 _________________ Banks demand larger deposits from first-time property investors.

35 _________________ By making a larger deposit, investors can limit their personalfinancial risk.

36 _________________ There are a lot of long-term costs to take into considerationbefore purchasing a rental property.

37 _________________ Banks require yon to hold a lot of money in reserve to meet yourlong-term property maintenance costs.

38 _________________ Many investors are tempted to pay more than they should for theirinvestment properties.

39 _________________ At the moment, house prices are extremely high in general.

40 _________________ There are a lot of urban renewal projects that have beenearmarked by the government.

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雅思阅读第090套P3-Bismarck: A Master of Political and Diplomatic Juggling?

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雅思阅读第091套P3:Making a sound Investment Decision