Mortgage defaults are climbing

Kenneth Heebner, the manager of the top-performing real-estate mutual fund over the past 10 years, said the economic damage from high-risk mortgage defaults is going to get worse.

"We have a trillion dollars of subprime mortgages and we're going to have huge defaults," Heebner, 66, said in a telephone interview from his office in Boston. "If you're looking at the housing market, it's not the darkest before dawn, it's the darkest before pitch black," Heebner said.

Heebner, cofounder of Capital Growth Management LP, has been selling shares of real-estate investment trusts that buy apartments because they are no longer cheap. At the end of 2006, his CGM Realty Fund had 35 percent of its assets in REITs. He's made a "significant reduction," though he wouldn't be more specific.

Real estate investments likely to fall

Private equity players investing in the real estate market may not be a happy lot, with abundant commercial and residential supply likely to hit the market in 2007, as returns on real estate investments are likely to fall, reports CNBC-TV18.

The lucrative real estate market may not remain as profitable for private equity investors or developers as it has been in the past two years. The higher dividend distribution tax and the 12.36% service tax on commercial rents imposed by the Budget will eat into returns of investors. This comes on top of surging land prices, which have sharply reduced the margins of developers.

"There is too much liquidity foreign funds chasing the limited land supply so automatically the prices of land are very high and as a result of high land prices returns or margins of developers, investors, private equity players have fallen drastically" says Subodh Runwal, Managing Director, Runwal Group.

How To Avoid Rookie Real Estate Investing Mistakes

When Robert Kiyosaki, author of the Rich Dad book series, bought his first property he was, of course, ecstatic. Finally, he had done it. He had taken that first important step in truly building his wealth that the man he called his "rich dad" so often touted--investing. He knew it was very important to become an investor and make his money work for him.

The trouble was, the property he purchased was a losing deal for him. He didn't see this at first, thanks to a smooth-talking real estate agent. But when he took the contract to his rich dad, he learned what a mistake he had made. According to that deal, he would be losing money each month. He thought it would be all right because he had been told that lost money was an investment in the future appreciation of the property.

Investors eye rewards where risks are higher

The finding comes from the 2007 International Property Rights Index published by the Property Rights Alliance. Covering intellectual as well as physical property rights and the legal and political environment, the index is based on opinion surveys within 69 countries.

Norway is the country with the best perceived overall property protection in place, Bangladesh that with the worst.

Norway is also ranked first on physical property rights, with Bangladesh again last. The top five countries for physical property rights are: Norway; Sweden; Netherlands; UK; and Finland. The bottom ranked are: Egypt; Bolivia; Poland; Nicaragua; and Bangladesh.

By region, western Europe gets top ranking for physical property rights, followed by north America, Asia/Oceanis, the Middle East and north Africa, Latin America and the former Soviet Union states, and finally Africa.

Valuation among key factors in real estate investing

Real estate, in general, has traditionally remained a safe haven for investment dollars, and the southwest Missouri market is no exception. All classifications, from income-producing to residential properties, have seen steady appreciation throughout the past two decades.

For individuals who are contemplating investing in real estate, and

specifically investing in income-producing real estate, there are several important steps to consider.

The first step is to enlist help. Contact a real estate professional who specializes in the sale of income-producing properties.

The multiple categories of real estate make it difficult for a real estate professional to claim proficiency in all categories. By selecting a real estate professional who adheres to the Realtors Code of Ethics and specializes in a specific real estate category, a prudent real estate investor should be assured of a knowledgeable adviser.