Buying home, condo or any other real estate in a market that is protected from a bursting bubble is every investor’s dream. Knowing where to look for these bubble-proof markets and how to identify them is crucial.

There are some important factors that investors should consider when searching for stable investments such as single-family homes, condos or any other type of real estate. Some of these factors include a fast growing population (which positively impacts the demand for housing), a solid and diverse economy (which impacts employment rates and subsequent demand for housing), rising incomes (which impacts buyers’ ability to purchase real estate), a developing infrastructure (which contributes to the appeal of a city or community), and restrictions on future real estate development (which limits future supply of real estate). Investing in real estate within communities that meet these criteria may prove to be more profitable than communities that are missing one or more of these factors.

A recent report by Business 2.0 Magazine identified U.S. cities that have consistently demonstrated price appreciation in the real estate market. The October 2006 issue of the Magazine identified the top 5 real estate markets that demonstrated an upward price trend over a long period time. The top-ranking cities were:

1. San Francisco, California

2. Los Angeles, California

3. Seattle, Washington

4. Boston, Massachusetts

5. New York City, New York

San Francisco topped the list with an average annual home price appreciation of 4.2% from 1949 to 2006. In contrast, the national average was 2.3%. Strong restrictions on real estate development and a limited geography helped push San Francisco to the top slot.

Los Angeles ranked second in the report. The average annual home price appreciation in Los Angeles was 3.7% from 1949 to 2006. Reductions in available land and increasing restrictions on further development helped pushed Los Angeles to the number 2 slot.

Home prices in Seattle, which was third on the list, demonstrated an average appreciation rate of 3.2% from 1949 to 2006. While Seattle made the top 5 list, recent easing of building restrictions may cause Seattle to fall out of the top 5 over the next few years.

Boston was fourth in the rankings. The city has seen annual home prices appreciate by 3% over the period from 1949 to 2006. A strong increase in per capita income contributed to Boston’s high ranking.

New York City follows close behind with an average annual home price appreciation of 3% from 1949 to 2006. A limited geography, large population, and finite number of properties contributed to New York’s high ranking.

While there is no guarantee that any of the real estate markets listed previously are truly “bubble proof,” the factors described above may help investors find the profitable markets and avoid “bubble” markets. Since the real estate market is constantly changing, be sure to seek out the services of a skillful real estate agent to help you navigate your next real estate purchase.

In Southern California, especially Orange County property management is an important aspect of investing in real estate.

The profitability of your property is dependent on hiring a qualified helpful and professional property management company. Hiring the wrong management company can mean losing thousand of dollars, or more. Property owners who hire the right OC property management company however, can enjoy the benefits of a lucrative property investment. Some of the most common, and often, detrimental mistakes a property owner makes is not doing enough research. The more research you do, the more you can avoid hiring a bad management company.

Property management companies that also sell properties, often nation wide corporations like Century 21, etc. are often a bad idea. They usually are primarily real estate agents, who also do property management because they want to manage when you choose the sell the property. A property management company like this is not a good idea because they make more money selling than managing. You would benefit more from a smaller, specialized company that deals only with property management in your area and nothing else.

For example, if your property is in Huntington Beach, you should try to find a local expert Orange County property management company that has a much experience in the local area only. Make sure you check the references of your management company’s other clients. Don’t be afraid to make a few phone calls, and get a good track record. You shouldn’t sign anything before you have a good idea that the company you’re hiring is the best at property management in Orange County and one that you can trust. On the other hand, as an owner, you shouldn’t be too demanding of references either. A good property management company will not release all of their clients’ information to you,

because it is private and confidential information. The management company won’t be making an obscene amount of money managing your property, so they can always tell you to take your business elsewhere if you are being too much of a pain. You will do well with around 3 references to talk to, and get an idea of how they work with their clients. Some other things to keep in mind: Is the company licensed in the state of California? Is the company insured? Do they have a fidelity bond to protect you in case an employee mishandles your money? Will they provide you with reports? Will they market your property? How do they deal with late charges? How do they handle tenant complaints? And so on. These are some tips for making sure you hire a good property management company that will professionally and efficiently manage your property, helping you turn your home/apartment/condo/commercial property into a steady investment.

The entry of real estate funds in the already over-heated realty market is bound to cause quite a stir. A slew of real estate funds, promoted by Indian and foreign financial institutions, are scouring the real estate market for properties with assured returns to invest in.

With the entry of real estate mutual funds, builders will be hard-pressed to develop quality projects and leeway for sub-standard construction practices will be considerably reduced. Real estate funds are expected to acquire real estate assets with quality blue chip tenants and focus on growing markets witnessing substantial urban development.

Investing in real estate mutual funds (REMFs) could soon become a reality. Almost 18 months after the Securities and Exchange Board of India (SEBI) allowed the launch of REMFs, the market regulator now hopes to put out the final guidelines for these funds within a month.

The launch of REMFs has been stalled due to the absence of a proper valuation mechanism for investments in unlisted real estate entities and accounting norms to be followed for such funds. The regulator has been working on the issue with the Institute of Chartered Accountants of India (ICAI) and the Association of Mutual Funds in India (AMFI). A SEBI official said: “We have decided to use professional realty valuers for valuing investments in unlisted entities. The idea is that if private equity funds can invest in unlisted realty entities and have proper valuations so can mutual funds. We are finalising the guidelines.”

REMFs, or mutual funds that pool public money to invest in real estate assets and companies, are allowed to park their money in mortgage-backed securities, equity, bonds and debentures of listed or unlisted real estate companies. There were also issues over the relevant accounting methods to be followed for such funds and confusion in the industry over the daily calculation of net asset value (NAV) of these funds.

Real estate being a more stable asset compared to equity, the mutual fund industry felt that the daily calculation of NAV was needless. It is understood that funds that invest only in real estate properties would not be required to calculate their NAV on a daily basis. However, funds that invest in shares and securities of real estate companies would need to calculate the NAV on a daily basis.

“All the necessary issues have been discussed and the ICAI has submitted the accounting norms as well,” said A.P. Kurian, chairman of AMFI. A number of fund houses like ICICI Prudential, Principal and HDFC have been awaiting regulatory approval of their real estate fund schemes.

HDFC Property Fund, DHFL Venture Capital Fund, Kotak Mahindra Realty Fund, Kshitij Venture Capital Fund (A group venture of Pantaloon Retail India Ltd) and India Advantage Fund (ICICI) are some of the prominent real estate funds in India.