If you are looking at going into the world of real estate investment, make sure your expectations are realistic. You need to be patient for the good deals to come and not jump on just anything that could lead to regrets later.
Know first and foremost, you will have to spend money. When buying real estate, there will be cost of borrowing, closing fees, attorney payments, agent commissions or down payments; unless you join a network of investors who rely on a middle man type service that eliminates the extra costs associated with buying investment properties on the traditional market. Any promise that you can make money from real estate investing without spending money is one you should walk away from, it’s absolutely not true.
Make sure you choose a good location, buying the cheapest house is not the only factor.
Know the market, find and learn the location that will be profitable. If you still have that cheap deal in 2 years, you obviously don’t have the location of interest for buyers.
The claims that you can make hundreds of thousands of dollars in real estate investing probably came from someone who forgot about the month of April. This is when capital gains tax is due on the profits of your investments and that can be a sizable amount of money. Yes, you’ll make money in real estate investments, but don’t forget that you have to pay taxes on that money.
There are tons of instructional DVDS and eBooks on the market as well as expensive seminars that are advertised as professional and certified services. Your best bet is to find a quality real estate agent that is familiar with the area you are purchasing property. They will know the foreclosure and short sale market. Spending money on a real estate attorney is worthwhile, they will know the laws on state foreclosure and redemption laws. Have a relationship with a good house inspector who will give you advice on properties and help you to make you sound investments.
A home appreciates over time, the longer you let it appreciate, the more money you will make on your investment. During this time, find quality tenants that are reliable and pay rent, making you a little cash while you wait on the appreciation. While you will make money in real estate investments, it will take time. Patience will be your best tool.
Showing posts with label real estate investment. Show all posts
Showing posts with label real estate investment. Show all posts
Monday, January 25, 2010
Tuesday, November 17, 2009
Mistakes New Investors Are Making in Real Estate
Many people with retirement funds to invest are headed to the world of real estate and they are making mistakes along the way. If you are looking at entering the world of real estate investing, here are some key things to keep you from making big mistakes:
Don’t get greedy! You want to generate cash reserves and a good way is flipping properties, but you need to be aware of how much profit you’ll be making.
If a $20,000 profit from a rehab project is possible, don’t expect to make $10,000 flipping the property to a rehabber. That rehabber is going to want a profit that makes it worth his risk. If you’re only clearing $2,500 on a deal, be happy and move on to the next project.
Keep a reserve of cash on hand! That is just basic business sense in any industry. If you want real estate investing to be a lasting endeavor, you need to learn to keep a cash reserve on hand. You are going to be out cash for repairs and multitudes of other expenses.
When you don’t have the cash reserves, the pressure of doing repairs grows panic. You get desperate and take tenants that may not be qualified to keep from a vacancy. With cash reserves, you have more balls in your court:
• Getting that more qualified tenant or a higher sales price
• No rush getting vacant properties filled
• And most important, getting repairs and improvements done right
Keep your eyes and mind open! Many of those people who lost trillions of dollars in the stock market recently are making the same mistakes again, buying stock blind. Buying real estate just on the word of someone is like buying stock without checking the portfolio.
Educate yourself before buying a property. The more you can learn about financing, negotiating, acquiring and the market you’re looking at the better you will be able to invest.
Get a real estate mentality! In a group of ten new investors nine of them will say they were going into real estate because somebody they know made a fast and large return on their investment.
Short-term real estate can be a gamble. Plan on six to twelve month as the market may raise and fall slow. Should the real estate market sink, don’t fret, it always comes back.
Remember real estate is a business! Because it can be a fast dollar, doesn’t mean it will be a fast dollar. “Overnight success” actually averages about 5 years to obtain.
Many new real estate investors drop out quickly. Their expectations are unreal and they don’t take the actions needed to be successful. Investing in real estate should be as serious a business as any other business path you may choose. It may be six months to a year before you make your first purchase. Keep your ears, eyes and mind open.
Don’t get greedy! You want to generate cash reserves and a good way is flipping properties, but you need to be aware of how much profit you’ll be making.
If a $20,000 profit from a rehab project is possible, don’t expect to make $10,000 flipping the property to a rehabber. That rehabber is going to want a profit that makes it worth his risk. If you’re only clearing $2,500 on a deal, be happy and move on to the next project.
Keep a reserve of cash on hand! That is just basic business sense in any industry. If you want real estate investing to be a lasting endeavor, you need to learn to keep a cash reserve on hand. You are going to be out cash for repairs and multitudes of other expenses.
When you don’t have the cash reserves, the pressure of doing repairs grows panic. You get desperate and take tenants that may not be qualified to keep from a vacancy. With cash reserves, you have more balls in your court:
• Getting that more qualified tenant or a higher sales price
• No rush getting vacant properties filled
• And most important, getting repairs and improvements done right
Keep your eyes and mind open! Many of those people who lost trillions of dollars in the stock market recently are making the same mistakes again, buying stock blind. Buying real estate just on the word of someone is like buying stock without checking the portfolio.
Educate yourself before buying a property. The more you can learn about financing, negotiating, acquiring and the market you’re looking at the better you will be able to invest.
Get a real estate mentality! In a group of ten new investors nine of them will say they were going into real estate because somebody they know made a fast and large return on their investment.
Short-term real estate can be a gamble. Plan on six to twelve month as the market may raise and fall slow. Should the real estate market sink, don’t fret, it always comes back.
Remember real estate is a business! Because it can be a fast dollar, doesn’t mean it will be a fast dollar. “Overnight success” actually averages about 5 years to obtain.
Many new real estate investors drop out quickly. Their expectations are unreal and they don’t take the actions needed to be successful. Investing in real estate should be as serious a business as any other business path you may choose. It may be six months to a year before you make your first purchase. Keep your ears, eyes and mind open.
Sunday, October 25, 2009
A Good Rental Property
Investing in real estate is always an excellent option, especially with today’s unimpressive stock market performance. Whether this will be your first rental property or your tenth, the process of finding a good rental property can be quite a daunting task.
When shopping for income properties, there are some basic features to consider with each and every option.
• Property taxes exist in every state and need to be planned for accordingly. To generate income from a rental property, you must be aware of your property tax requirements. The town office will have tax history information on a property.
• Future developments for the area are going to directly affect the success of your long term rental property plans. Check with your municipal planning department to determine future development plans for the area. A solid growth area will yield excellent rental property investment returns.
• If there are a high number of rental listings in the area and most are vacant, you may be looking at a rental investment property dead zone. If vacancies seem to fluctuate or are seasonal, then you will want to be sure that you can cover the costs of maintaining the property during the off-season.
• Check the monthly rent amount of other rental properties in the area. Even if your property is nicer, it is unlikely to rent if it is drastically more than other rentals in the area. Minimally, the amount you charge for rent will need to cover your mortgage payment, taxes and other expenses. You will also need to consider if the area has planned growth that property taxes will increase in the future and the amount you charge for rent will as well.
• It is of the greatest importance to understand your target tenants and choose your neighborhood and style of rental investment property accordingly. If you want to attract tenants with children you will want a property with a nice yard and in the good school district. Use the available amenities to determine who you want to rent to and if it is the right investment property to buy for renting.
• Two other rates to consider when reviewing the potential of your rental investment property are the employment rate and the crime rate. Your future tenants are going to consider both before calling you and you should do the same before you invest your money in a property where jobs are scarce or crime is a problem.
• Talk to other renters in the area. No one will give you more of the truth about the area than other renters living there. Homeowners are generally more “in love” with where they live.
• Single family homes will generally attract more long-term renters. Often times these renters are more financially stable and therefore pay their rent on time and keep their utilities up to date.
Finding the best rental properties in any city can take a lot of footwork. You may be tempted to work with a real estate agent, especially if you are new to rental property investing, but often time’s agents make buyers feel pressured to make a purchase and when you are getting into real estate investment, it is important to take your time and consider your purchase thoroughly. A better option is to work with a network of real estate investors or join a cash home buyer list. These networks allow their members complete discretion over their purchases, no commissions are involved and the properties are generally available at well below market value.
When shopping for income properties, there are some basic features to consider with each and every option.
• Property taxes exist in every state and need to be planned for accordingly. To generate income from a rental property, you must be aware of your property tax requirements. The town office will have tax history information on a property.
• Future developments for the area are going to directly affect the success of your long term rental property plans. Check with your municipal planning department to determine future development plans for the area. A solid growth area will yield excellent rental property investment returns.
• If there are a high number of rental listings in the area and most are vacant, you may be looking at a rental investment property dead zone. If vacancies seem to fluctuate or are seasonal, then you will want to be sure that you can cover the costs of maintaining the property during the off-season.
• Check the monthly rent amount of other rental properties in the area. Even if your property is nicer, it is unlikely to rent if it is drastically more than other rentals in the area. Minimally, the amount you charge for rent will need to cover your mortgage payment, taxes and other expenses. You will also need to consider if the area has planned growth that property taxes will increase in the future and the amount you charge for rent will as well.
• It is of the greatest importance to understand your target tenants and choose your neighborhood and style of rental investment property accordingly. If you want to attract tenants with children you will want a property with a nice yard and in the good school district. Use the available amenities to determine who you want to rent to and if it is the right investment property to buy for renting.
• Two other rates to consider when reviewing the potential of your rental investment property are the employment rate and the crime rate. Your future tenants are going to consider both before calling you and you should do the same before you invest your money in a property where jobs are scarce or crime is a problem.
• Talk to other renters in the area. No one will give you more of the truth about the area than other renters living there. Homeowners are generally more “in love” with where they live.
• Single family homes will generally attract more long-term renters. Often times these renters are more financially stable and therefore pay their rent on time and keep their utilities up to date.
Finding the best rental properties in any city can take a lot of footwork. You may be tempted to work with a real estate agent, especially if you are new to rental property investing, but often time’s agents make buyers feel pressured to make a purchase and when you are getting into real estate investment, it is important to take your time and consider your purchase thoroughly. A better option is to work with a network of real estate investors or join a cash home buyer list. These networks allow their members complete discretion over their purchases, no commissions are involved and the properties are generally available at well below market value.
Thursday, September 17, 2009
Property Tips for Real Estate Investing
There is no doubt that real estate investing is one of the better investment options available in today’s economy. With the large number of foreclosures, distressed properties and homeowners that need to sell, the cost of real estate has dropped and investment opportunities have grown. The trouble for many is determining how to pick the best property to invest?
Although there is no question that making a profit through real estate investing is possible, it must be understood that the process does take some time, know-how and, of course, money. Your evaluation process on potential investment properties can make or break your profit strategy. Here are a few tips on the proper know-how for picking the best property for your real estate investment dollars.
You can start by identifying what types of properties you are going to be dealing with. Both commercial and residential properties are available for investors and both offer different rental and turn around opportunities. If you are considering residential properties, you should know in advance if you plan to live in the property, rehab the property for resale or renting. With commercial real estate, the choices are much the same, but one thing that reigns true for both types of properties is their location.
The location of your property is going to be vital. It is important to identify the market that you will be able to resale to with considerations of school districts, the condition of the neighborhood and simple things like buying ranchers to rent to the elderly. Whether you are looking for properties in Northern Virginia or downtown Richmond, you need to know to have a plan when you look at a property and see its long term potential.
Once you have a potential real estate investment property in mind, take the time to visit the property at different times during the day. What may seem like a quiet street may turn into the Mardi Gras after dark. Getting a building inspection and appraisal of the property completed are two other great ways to ensure that you know what you are investing your hard earned dollars into.
Buying properties at wholesale can make your real estate investing dollars go a lot further. Once you start your real estate investment investigation you may decide that becoming a real estate investor is more work than you were ready for. There is still another option that allows you to reap the great rewards of high earnings from real estate investments, without all the work and that is to become a private cash investor with another real estate investor. No matter which road you choose, the returns seen by individuals investing in real estate are greater than those being seen on today’s stock market.
Although there is no question that making a profit through real estate investing is possible, it must be understood that the process does take some time, know-how and, of course, money. Your evaluation process on potential investment properties can make or break your profit strategy. Here are a few tips on the proper know-how for picking the best property for your real estate investment dollars.
You can start by identifying what types of properties you are going to be dealing with. Both commercial and residential properties are available for investors and both offer different rental and turn around opportunities. If you are considering residential properties, you should know in advance if you plan to live in the property, rehab the property for resale or renting. With commercial real estate, the choices are much the same, but one thing that reigns true for both types of properties is their location.
The location of your property is going to be vital. It is important to identify the market that you will be able to resale to with considerations of school districts, the condition of the neighborhood and simple things like buying ranchers to rent to the elderly. Whether you are looking for properties in Northern Virginia or downtown Richmond, you need to know to have a plan when you look at a property and see its long term potential.
Once you have a potential real estate investment property in mind, take the time to visit the property at different times during the day. What may seem like a quiet street may turn into the Mardi Gras after dark. Getting a building inspection and appraisal of the property completed are two other great ways to ensure that you know what you are investing your hard earned dollars into.
Buying properties at wholesale can make your real estate investing dollars go a lot further. Once you start your real estate investment investigation you may decide that becoming a real estate investor is more work than you were ready for. There is still another option that allows you to reap the great rewards of high earnings from real estate investments, without all the work and that is to become a private cash investor with another real estate investor. No matter which road you choose, the returns seen by individuals investing in real estate are greater than those being seen on today’s stock market.
Friday, August 7, 2009
Is Real Estate A Good Investment?
You could play the stock market or invest in certificates of deposits or bank bonds, but with interest rates so low on these investment options, the return on your investment can take years to realize. Investing in real estate is the growing trend right now. With all the foreclosures and short sale properties, cash real estate investors are considered smart investors. No other investment will offer the benefits that are available to them.
A cash real estate investor has 5 different ways to make money:
· Appreciation – nobody’s making land anymore. So any land you buy is going to do nothing but appreciate over time. Even when there is inflation, land will appreciate in value.
· Leverage – when you are purchasing land, banks will loan you from 90% to 100% of the money for that purchase. This is because it’s not going to go anywhere, they can foreclose and repossess it. Giving them leverage to resell it higher than you owe on it.
· Equity Income – when you make a payment on your house or your car, you know a that part goes to interest you’re being charge and the rest goes to the principle of the note. While a real estate investor knows he won’t see that money every month, he does know that should he sell the property, he will see that money at closing.
· Control- as a cash real estate investor, you can control the performance of your investment. With real estate investment, regardless of other market conditions, you control your investment. If you become a landlord, you control the value. Raising the rent is obvious, but offering incentives and bringing in long term tenants is a theory for long term monthly cash flow.
· Cash Flow – a real estate investor will rent a property out in an amount that is higher than what he paid for the property. This produces a monthly cash flow. Unlike other investments, a cash real estate investor will benefit from a larger percentage of cash-on-cash return.
If you have some money that you’re looking to invest, invest in something that everybody wants and nobody is making more of! Learn how to become a cash real estate investor as part of our distress property solution for home owners that need to sell their house fast for cash.
A cash real estate investor has 5 different ways to make money:
· Appreciation – nobody’s making land anymore. So any land you buy is going to do nothing but appreciate over time. Even when there is inflation, land will appreciate in value.
· Leverage – when you are purchasing land, banks will loan you from 90% to 100% of the money for that purchase. This is because it’s not going to go anywhere, they can foreclose and repossess it. Giving them leverage to resell it higher than you owe on it.
· Equity Income – when you make a payment on your house or your car, you know a that part goes to interest you’re being charge and the rest goes to the principle of the note. While a real estate investor knows he won’t see that money every month, he does know that should he sell the property, he will see that money at closing.
· Control- as a cash real estate investor, you can control the performance of your investment. With real estate investment, regardless of other market conditions, you control your investment. If you become a landlord, you control the value. Raising the rent is obvious, but offering incentives and bringing in long term tenants is a theory for long term monthly cash flow.
· Cash Flow – a real estate investor will rent a property out in an amount that is higher than what he paid for the property. This produces a monthly cash flow. Unlike other investments, a cash real estate investor will benefit from a larger percentage of cash-on-cash return.
If you have some money that you’re looking to invest, invest in something that everybody wants and nobody is making more of! Learn how to become a cash real estate investor as part of our distress property solution for home owners that need to sell their house fast for cash.
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