Top Reasons to Invest in Real Estate

Although we live in a time when many people are shying away from owning real estate, it is actually an excellent time for you to get into the game. Here are the top reasons to invest in real estate and why now is the perfect time to do so.

Value – As property values continue to drop, this gives you the opportunity to pick up an investment property at its lowest cost. Even if they dip a little bit further, they are sure to turn around in the near future whenever property values begin to rise again.

Leverage – The banks will still loan money for investment property, provided you have everything prepared in advance. It will also give you leverage in the future, whenever banking regulations loosen and you find that you own property with quite a bit of value over what you paid.

Taxes – With the right tax attorney, investment property is still an excellent way for you to be able to hang onto all of the money that you possibly can. Although you may not have liquid funds, the properties that you own are really going to add to your bottom line.

Investment – Real estate has always been an excellent investment, and that has not changed. Yes, property values have dropped in recent years but they have dropped in the past as well. When you buy at the low point, you are sure to receive the benefits whenever the market turns around.

Long-Term – Some investments will come and go, but an investment in real estate is something that will last you and benefit you for many years to come.

loancalculator made a real revolution in the industry.

Investing in Real Estate – Has the Traditional Advice Been Turned Upside Down?

With people losing their homes and jobs at record numbers, choosing to invest in real estate may not be the best choice at present.

Only five years ago, the American public were in to the ‘ownership society’. It almost seemed that everyone and anyone was obliged to purchase that dream home. The value was certainly there and there was a lender on every corner, ready to make your American dream come true. At the time, investment advice was kind of skewed towards home ownership at any cost.

Even though the mortgage brokers, who knew a particular client was not qualified to assume such a large debt, gave the client real estate investing advice designed not so much towards the borrower’s benefit, as towards making a deal. When home values were rising and interest rates were relatively low, it wasn’t hard to convince a buyer that his or her best move was to buy a home, no matter what. Today, we are all reaping the results of such misinformation.

Even while the $700 billion bailout funds remain in limbo as to how the money will be distributed, and to whom and under what conditions, there are a lot of properties on the market, and as many homeowners facing foreclosure, and possibly, homelessness.

There is no doubt that it’s a buyer’s market. Given the current credit crunch, qualified buyers must either have an almost perfect credit score or tons of cash. If you’re prepared to pay cash for a property, the only real estate investing advice you need or, that matters, is to buy at the bottom. However, the buyer who applies for a mortgage based on his excellent credit, still runs the risk of buying a property that loses value in the near future. The few remaining people who can afford to take such a risk, are not relying on investment advice to guide them. It’s a bottom line proposition.

Bank foreclosure properties are ripe territory for the cash-rich buyer’s objectives. Purchasing a home at bottom dollar affords many opportunities in a rental market. If you have the cash, there are many auctions where you can bid on a bank foreclosure property. Buy cheaply and rent for a fortune. The cash rich buyer, is indeed, in the catbird seat. There isn’t much need for any advice.

The ordinary home buyer, going through conventional channels, must now put at least 20% down and have excellent credit if that borrower hopes to secure the loan. These guidelines would have been sound investment advice, five years ago. However, in these uncertain times, what if this borrower is laid off and cannot make his mortgage payments for three months? Based on a home value of $100,000, he will lose his down of $20,000. What happens if the value of his home declines further? What happens if circumstance forces him to relocate and he’s unable to sell the home?

To wrap it up in a nutshell, unless you can pay cash, the current market is fraught with risk, to the degree that the only sound real estate investing advice is to just stay out of this market until prices stabilize.

But then again, on the other hand, if no one is buying, how will home prices ever become stable enough for qualified buyers to take the plunge? Clearly, there must be a better plan.

Investing in Real Estate For Quick Profit

Investing in real estate has always been known as a business for those who can wait. After all, real estate can sometimes take decades to appreciate. So before you make significant income from a property, you will have to let it sit for years. Unknown to many, there are actually forms of investing in real estate that allow you to earn profit fast. These are the investments that are thriving despite the economic slowdown: Wholesaling, rehabbing, and rentals.

Wholesaling is basically putting a property under contract and then assigning that contract to another wholesaler or to an end-buyer. It’s like promising the owner that you will buy the property within a period of time. You get your paycheck when the buyer purchases the property.

Another hot form real estate investment is rehabbing. This is buying a cheap property and repairing it to raise its value. You then sell it for a much higher price. TV shows “Flip This House” and “Flip That House” featured this kind of investing as fixing and flipping houses.

Rentals are also investments that pay you quickly, although only in parts. This is buying a cheap property, making repairs if necessary, and then marketing that house for rentals. This strategy is ideal for properties that are located in college towns. You can target students as tenants and rent the property per room. You get your money when tenants pay you rent. The return here is relatively smaller compared to wholesaling and rehabbing although this is a regular and steady source of cash flow because rent is paid monthly.

Much of the success of these three forms of investing in real estate has to do with the availability of cheap properties in the market today. REOs, short sales, and fixer upper homes are some of the kinds of properties you can buy today at bargain prices. REOs, or real estate owned properties, are houses repossessed by banks and other lenders from owners who failed to settle financial obligations. These have already undergone foreclosure so all liens and claims against them are eradicated. This is why their prices are low. Short sales, meanwhile, are houses facing possible foreclosure. Owners of houses for short sales would rather sell their properties for pennies on the dollar than face foreclosure.

Focusing on Safe Investing in Real Estate

There are a multitude of options out there for real estate investing, all of which have their own levels of risk exposure. If you are interested in safe investing, you will need to study the craft. You will need to discover what methods rarely result in losses and what methods often result in losses. Keep in mind that the high income investing strategies do not tend to be the safest investing strategies. However, that does not mean you have to let opportunities for profitable, safe investing in real estate pass by.

Determination Spells Success

It will be your determination to find success that will allow you to profit without as much risk as is typically required. It won’t take long for you to figure out how good you are in the business. The competition is fierce, but if you know your business well and build a strong client network, you will set yourself up for a greater probability of success. Even if you get a lot of negative responses to your sales attempts from a client, if you have built a good relationship and you appear to know what you are talking about, you can still close a sale.

Success Is No Accident

Successful investing in real estate is rarely an accident. You must continually learn from your mistakes in order to avoid them in the future. You also need to learn from your successes so you can repeat them in the future. Avoid complacency at all costs. Safe investing in real estate requires diligence to remain relevant to your network of clients. You must continually analyze where you have been and where you are headed.

At the beginning of your journey into real estate, you should start slowly and focus on safe investing. As you refine your practice, safe investing in real estate will become second nature and you will be able to focus more of your efforts on those things that work.

What Is Magic About Investing In Real Estate

In the U.S.A. nine in ten rich people used real estate as the main mean of investing. Why?

Because renting houses and apartments is a big service to society. The government cannot do it efficiently. So, it is giving us, the entrepreneurs, all the initiatives and advantages to do it, one tenant at a time and we do it as small or big business to get all advantages.

This is the action plan:

  • Buy real estate using leverage, to control the big mortgage with a small down payment, using other peoples’ money (OPM);
  • Buy residential or commercial real estate at a low price to get instant equity;
  • Make improvements to add more value/equity to your property;
  • Appreciation in time adds to equity in top of improvements;
  • Lease, collect rents and manage the cash flow wisely;
  • Use depreciation, create legally a paper loss on business, and offset earned income from job to lower your overall federal tax;
  • Refinance for cash out up to 70% of equity, these are not taxable money;
  • Reinvest the cash from refinancing to buy a bigger property using leverage (OPM) and keep going, making money.

Do improvements to optimize appreciation, refinance for cash and buy again a bigger investment!

This way you achieve the snow ball rolling effect.

With four or five transactions in nine years or sooner you may control over one million dollars in assets. This is the magic of investing in real estate.

I would have liked to have a plan outlined like this one, before I started in real estate investing and managing properties for profit nine years ago.

Residential real estate investments – well done – pay the mortgages, taxes, and utilities expenses with money coming from tenants’ rents.

You will learn how to use financial and legal tax advantages to keep that money, from resources shared with you at my website. Taxes and accounting for real estate have a special flavor because the legal advantages available. You can take advantage of them too. The big action plan is here.

Reason Why You Should Invest in Real Estate

Investing in real estate will always be a huge opportunity, Your level of success depends on the strategies you employ in the investment, do not allow Media hype to debar you from engaging in the investment opportunity, Your dream of becoming successful in the business should be a drive.

People will always need a shelter to keep their head and if you can provide one they will pay you forever, families need apartment and usually find normal homes that fit their budget and happily pay their monthly dues. The power of having rentals is that as long as they are occupied, you will have a check every month, This is residual income to your pulse without any worry to the economic performance.

In a situation where the banks interest rates have reduced and the deposits are yielding minimal returns, the stock markets are volatile and equity is high risk profile with lower returns. In contrast, Property has been steady in delivering returns in terms of wealth management. Investing in the right property gives you the opportunity to double your investment in few years.

No doubt in the fact that your bought properties value appreciate yearly, and substantial income is a reality after deducting cost of maintenance and other charges like tax which is payable to the Government.

One area that you must not overlook is that fact that you need a motivated seller. You must find someone who wants to sell immediately. Many times they are in financial trouble, near bankruptcy, have a death in the family, getting a divorce or any number of other reasons.

Be aware of the fact that buying real estate for investment opportunities is not complicated but it does require risk and being able to adjust to the ever changing environment. In doing so you can to build yourself a fortune over time and laugh at all the media that told you not to go into real estate investing.

Don’t Invest in Real Estate Until You Get Educated!

They’re among the oldest infomercials on television: the “Nothing Down” seminars that promise riches beyond belief in an unbelievably short time. People who can barely string six words together come on and testify about how they took 39 cents and turned it into a million dollars in three weeks. (Or something just as fantastic.)

Why are those infomercials still running, in various forms, after more than thirty years? The answer is simple: people want a better life, more money, and will try anything if it sounds at least halfway plausible. It’s always been that way, and it always will.

But I’d like to encourage you not to toss away your own hard-earned money on those get-rich quick real estate schemes. Instead, invest in yourself by learning as much about the real estate world as possible. It’s a multi-faceted field, and there are many ways to make money, but they all have one thing in common. You have to KNOW what you’re doing BEFORE you commit to any real estate deal!

If you’re not committed to becoming a knowledgeable investor, you would be better suited toward putting your money into a well-managed mutual fund. There are risks there, too, of course, but they are generally must smaller than investing in real estate.

There are many reputable places to begin learning, and they don’t HAVE to cost a great deal of money. Starting with the Internet, you’ll find hundreds of excellent sites that can take you from the rankest beginner status to savvy investor at no cost. Most colleges have investment classes, many of them held at night or on the weekends, and a fair number of them can also be taken via the Internet. Just start searching–they’re everywhere, no matter where you may live.

Don’t let anyone tell you it’s better to learn as you go. That can be the most expensive way to learn, and can potentially cost you everything you own. You CAN make money, good money, in real estate investing, but don’t start until you’ve become a serious student of the field, and have gotten a great deal of expert knowledge under your belt.

How to Invest in Real Estate Using Your 401k

Any investment includes some risk, but with careful planning you will be on your way to utilizing the money that is sitting in a retirement account and profiting from a wise real estate investment.

Step 1: Assess the value and rules of your 401k. The amount of your loan will be based on the value in your retirement account, and while the 401k provides guaranteed funds, you will still be unable to borrow more than you can be expected to pay back. Additionally, your 401k might have rules that make borrowing against it difficult or subject to certain conditions. Be sure to check on this before beginning the process of acquiring a loan against the account.

Step 2: Research the different options available for investing in real estate using a 401k. One of the safest options is the real estate investment trust (REIT), which is composed of other companies that purchase and dispose of property. By investing in the REIT, the investor is allowing others to make the actual real estate investment, and while limits the investor to the decisions of others it also takes some of the load off the investor’s back.

Step 3: Research the option of the individual retirement account (IRA) for your investment. The IRA is not always a feasible option for some holders of a 401k, but it is something to consider when planning for a real estate investment with a 401k. Bear in mind that relocating money from the 401k to the IRA could impose a financial penalty, and this might or might not be worth the cost for your investment.

Step 4: If you are planning to use a loan for your investment, research and select a lender. With a conventional loan, you are essentially borrowing against yourself and ultimately pay yourself back with the loan. But this is considered a valid option for the 401k, so be sure to look into it closely. Each lender will have different rules for this type of investment, so ask around, and be sure to check on the specific requirements of the lender. Fees, interest rates, and so forth will vary, and these can have a significant impact on the value of the investment.

Step 5: Select the type of investment that you will use. Be sure that you have consulted a financial advisor, and particularly one that is familiar with real estate investments before you make your ultimate decision.

Tips and Warnings:

Many investment professionals will advise against taking out a loan against the 401k, due to the inevitable risk that ensues. As a result, the REIT might be the only option, because it is usually considered the safest.