Tips for First Time Property Investors

Tips for First Time Property Investors

Are you interested in real estate investments? This article can help you get started! Read the tips below and discover what you need to know about real estate investing.

-Cash Flow is King

Before you start investing in a project, you need to make sure you will be able to generate cash flow when you finish the job. Purchasing the property is only the first step, because you will also incur ongoing costs, including taxes.

-Set Financial Goals

In order to make a property investment successful, you need to set yourself some clear financial goals in advance. Ask yourself if property investment will help you reach the goal you have in mind.

-Research the Market

Market research is also vital to property investment. Find out more about the particular area you are investing in, find out the value of surrounding properties and talk to local selling agents who can provide you with additional information.

-Find the Right Property

The right property is the key to a successful investment. Buying the wrong property may lead to you incurring more costs than profit, so ask yourself what buyers are looking for. Try to see the property through the eyes of the buyer and decide if the property is a worthy investment.

-Check Age and Condition of Property and Facilities

Find out the age of the property and the state that it is in. Some types of repairs ask for more time and funds than others, so determining these things in advance can make a huge difference. It is true that you can get a huge profit from buying a fixer-upper, but some fixer-uppers are simply not worth the money you will put in it. So evaluate carefully before continuing.

-Take Long-Term View and Manage Risks

Do not look at the property from a short-term point-of-view, but try to see it from a long-term point-of-view. It is also a good idea to think about possible risks you could be encountering down the line (for example huge trees on the property).

Real estate is a great market to be involved in right now. However, investors need to do a considerable amount of research before they decide to buy a specific property. By doing so, property investors are better prepared to navigate risks and produce profit.

The SMART plan for real estate investment: How to get to where you want to be.

The SMART Plan for Real Estate Investment: How to Get to Where You Want to Be.

If you’re going to succeed in the world of property investment, you need to have a plan. Whatever your goals, you’ll be committing significant time and money to them, so treat them with the respect they deserve.

  1. Be specific.

What’s your real estate dream? Whether you want a single investment in a REIT or a portfolio of apartment complexes, write down your end goal and then work backwards, detailing each step you need to take in order to get there.

  1. Create measurable goals.

You need to make sure you know exactly when you hit each goal – if you can’t measure it, you can’t manage it. Is it when your savings account hits $15,000? Or that moment when you’re handed the keys to your first property?

  1. Are your goals attainable?

If a goal is too far out of reach, it’s really hard to stay committed. If a goal seems too much, break it down into smaller steps so you can keep feeling good about the progress you’re making.

  1. Be realistic.

Investing is a time for rational thinking – don’t let emotions influence your decisions. It also helps to seek professional advice, so get to know your local agents and vendors. You’ll learn about current market conditions, the types of property that are a good investment – and which areas to steer clear of.

  1. Set time limits.

Finally, set a timeframe for each step. Deadlines give your project momentum – and real estate investments are one of the biggest projects you’ll undertake.

Investing in property can produce much higher returns than banks currently offer – and by using a SMART plan you’re way more likely to reach your real estate goal.

Four Important Tips For First Time Property Investors

Four Important Tips For First Time Property Investors

Every investor wants to know how to invest well. But, as we know, investing is a learning experience, especially for those investing in real estate for the first time. Here are a few tips to keep in mind as you begin your experience as a real estate investor.

Be practical: When under the trend of buying properties in order to rent them out, please consider the current market climate. The investor should try and have a clear understanding on the purchase price, loan amount, and the rent that would be generated on a monthly basis from the property.

Minimum expenses: After assessing loans and rents, the next thing the investor needs to get into is the spectrum of insurance, property maintenance charges, rehab costs, and in the event of either having a property manager, or taking on the role themselves.

Background check: Beyond attending property fairs and seminars, the investor has to be thorough in the background and history of the property. All kinds of details pertaining to the property can be acquired by talking to the local real estate agents, neighbors, and property managers. Due diligence is key, and should be thorough.

The right finance options: Comparing multiple mortgage plans and the right finance options is vital before signing up for a plan.

First time investors should be very careful in every step of their property investing process. Being their first time, they are prone to being duped or scammed with the wrong kind of property/finance/documentation.

In the beginning, it is recommended that the first time property investors gain an investing education that leaves them well rounded and well equipped as they proceed to make their mark on the real estate community.

Why You Should Hire a Property Management Company

Why You Should Hire a Property Management Company

It is wise and even recommended to make a career out of real estate investing, as the potential to make a good amount of money is always there. While it is true that the housing market can experience bubbles and crisis at times, it would still spring back into shape and with proper strategies, you can actually weather such crisis.

It is true however, that managing rental properties is not always an easy task. It is something that is filled to the brim with tasks and responsibilities. If you want your investments to be really managed in the best way, you ought to hire a property management company.

Expertise

The first and most important reason as to why you should hire such is the fact that they have the necessary knowledge and expertise when it comes to these matters. These businesses are composed of different professionals, each with their own areas of expertise, and combined, they would make one awesome team that can manage your investment in the ideal way. Not only do they know how to run the properties, but they may also know a good bit about real estate trends and legalities.

Consistent response to matters

These experts would be able to evaluate things in the right way. They can formulate good plans and strategies in managing your investment. When they know the needs and details of the place, they can respond and act accordingly. You would be able to rest knowing that they would not be neglecting any aspect of the real estate.

Maintenance taken care of

You could also relax concerning the maintenance of the place. Any maintenance work would be dealt with by these professionals and you will be billed for the work. Not having to contend with matters yourself can save you a lot of headaches.

Screening of prospective tenants

It is also nice to have them since they can screen your prospective tenants, as showing the property and doing the necessary paperwork is quite time consuming. A property management company would ensure that only reliable and trustworthy tenants would be staying at the property. This will ensure continuity and safety in the operations of the investment.

Investors that have multiple rental properties quite enjoy handing off the maintenance part of their investments off to a property management company. Sure, you have to pay them a certain percentage each month, but for the most part it is worth it.

The vitality of investment goal setting

The Vitality of Investment Goal Setting

An investment is aimed at enabling the investor to generate cashflow from one’s resources. The resources can be in the form of capital, or assets. In as far as business is concerned, an investment is generally money that is spent for purposes of generating a profit. Every investment plan has its own goals. The goals are what drive an investor to go along with the plan to invest one’s capital into a certain asset or financial activity. Setting investment goals is not always easy, but it is an important aspect of investing that can never be overlooked. Here are some important reasons behind the importance of setting investment goals.

Vision or direction is only realized when there is a proper investment goal in place. When you are investing in something, you need to have a proper direction to guide you throughout your investment experience. That direction determines the decisions you make and also determines the minimum amount of profit that you will be able to generate within a specific time frame, depending on the business strategies being used.

When you have a good investment goal in place, you will feel motivated to work hard to realize that goal. It will be the main focus of all your investment activities, even if you may be taking certain steps for the first time.

There is a sense of fulfillment after you’ve reached your investment goals. Without these goals in place, you could very well miss out on that sense of fulfillment. Goals allow you to measure your progress day-by-day, month-by-month, and year-by-year. With investing goals, you can determine your potential and go for it!

What to know when investing for the first time

What to Know When Investing for the First Time

If you’re interested in investing in real estate, it’s a good idea to learn as much as you can about the ins and outs of investing. You certainly don’t want to go in without doing your homework. Many investors do not understand the complex nuances of investing in real estate or beginning the process. They fail to understand that real estate investment is different from investing in stock or bonds, so some guidance is necessary.

Here are a few tips that will help first time real estate property investors successfully launch their career.

-Determine How Much Capital You Have

Visit your bank or mortgage broker to determine how much you can afford to borrow responsibly for the investment before you go far down the path of exploring investment options. Look for property that will generate a positive cash flow in that the rent you receive should be enough to pay your mortgage payment, utilities, insurance, and property taxes. Be sure to maintain a healthy cash balance to cater for the unpredictable repairs and maintenance of the property.

-Know Your Property Options

Most first time real estate investors do not fully appreciate all types of investment options available. It’s always important to consult an expert while you explore various options, such as restoring run down properties, renting out family homes, or commercial properties like a small apartment building.

-Location, Location, Location

The most important element in the valuation of real estate is always the location. Highly populated areas with a rising job market are great for real estate. Look for property that is located in safe neighborhoods with good schools and nearby amenities, such as shopping malls and public transportation. You can also find property near large educational institutions, such as colleges and universities in order to attract students.

-Consult With Experts

Make good use of your lawyers and accountants on matters such as legal issues and how to use your money wisely. Ask them the best type of business unit to register your business as. Limited companies are the best as the name protects you against personal liability in case anyone is hurt on the property or for other tax planning purposes. You can also hire experienced real estate agents to help you in finding the best property.

-Learn From the Best

Model your investing decisions after what other successful investors within and outside your area have done. Search for real estate clubs both locally and internationally. You can also spare some time and read books about real estate investing. Look for the books written by successful real estate investors, such as practical guides to buying, renting, and selling properties.

-Be Patient

Be patient and do not be afraid to walk away if the deal goes against your wishes, no matter how much time you have invested in the property.

Take these tips into consideration as you begin your career in real estate investing. It can be quite the lucrative career.

Is Land Banking an Effective Investment Strategy?

Is Land Banking an Effective Investment Strategy?

The process of land banking is simple and it involves securing property development sites for the future by purchasing them at current price. You will come across several land development companies that buy large tracts of land and make them a part of their ‘land bank’. After some time, these lands are rezoned after the necessary infrastructure and roads are put in and then sold as individual lots instead. However, the million-dollar question is whether land banking is an effective investment strategy or not. Let’s go over the factors which affect the answer:

-Land Appreciation

The value of the land you have purchased will appreciate regardless of the developments being made. However, it would be a good idea to make sure you invest in a property close to its land value. Not only is it a smart strategy but it also offers numerous benefits in the long run.

-Property Cycle

If you are part of a ‘soft’ market, you should consider securing your potential real investment properties. During these times, completing a project may not be as profitable which is why investing in multiple properties is better, as long as you get them at a good price. Eventually, the market will move on and the combination of owning a block of land, located in a prime location and a stronger market will allow you to enjoy substantial profits.

-Value Addition

If you acquire property development approvals, you can work towards enhancing the value of the property. Whether it is an approval for apartments, townhouses or multiple dwellings, by overcoming the council approval process, you can eliminate one of the property development risk factors, making them more attractive for buyers.

So, as long as you play your cards right and make smart decisions, you will achieve success with land banking, making it an effective investment strategy.

Can A Self-Directed IRA Benefit You In The Long Run

Can A Self-Directed IRA Benefit You In The Long Run

From a technical standpoint, a self-directed IRA is similar to any other type of IRA with the exception of there being different options for investment. For instance, most custodians of IRAs can only allow approved stocks, bonds, CDs, and mutual funds. In self-directed IRAs, those same types of investments are allowed, as well as private placements, notes, real estate, and tax lien certificates, among others.

Although many investors have never heard of self-directed IRAs, they were first created decades ago. Of course, the Internal Revenue Service (IRS) has always allowed investing in things like stocks, bonds, and mutual funds.

Dating back to 1983, Equity Trust has been a custodian of alternative investments, including real estate. As an increasing number of investors wanted more control over their finances and futures, the popularity of self-directed IRAs grew. Today, self-directing your IRA is a viable option with many benefits that are worth researching.

Key Benefits

In addition to having more investment options by self-directing your IRA, there are other benefits. For example, you will enjoy asset protection, tax-free profits, estate planning, tax deductions, and more. You will also have the opportunity to invest in tax-free investments that you understand and are familiar with to create long-term wealth.

Under the IRA rules, self-directed IRAs are allowed as long as all relevant rules are followed. As expected, there are very specific rules associated with IRAs, in particular those that are self-directed. Therefore, it is important that you conduct extensive research or work closely with a qualified CPA or other financial advisor.

Simple Steps

When self-directing your IRA, there are only three steps. With those, you will soon enjoy tax-deferred profits.

  • Identify the Investment
  • Process the Investment
  • Manage and Sell the Investment

Disclaimer: The Company introduces general information and education concepts about self-directed retirement accounts (such as 401(k) and IRA accounts). Like any investment, there is risk in using retirement funds for investing in real estate assets. It is possible to lose a portion or all of an investment in real estate – including those purchased with retirement funds. Please review IRS Publication 3125 regarding the use of retirement funds for alternative investments. The document can be found at: http://www.irs.gov/pub/irs-pdf/p3125.pdf. Every individual is different, with unique circumstances. We do not offer tax, accounting, financial or legal advice. Prior to acting upon this information, you may consult your own accounting, legal and financial advisors to evaluate the risks, consequences and suitability of that transaction. The Company is not a retirement account custodian, trustee, or securities dealer.

How to Find Prime Residential Real Estate to Purchase

How to Find Prime Residential Real Estate to Purchase

If you are looking for prime residential real estate to purchase, it’s a good idea to acquire the knowledge on how you can get the best. This can be a daunting task, especially if you are doing this for the first time. However, there are different avenues you can use to find the best property for you to purchase.

Here are some effective ways to do so:

Search online

The advent of technology has made it easy for people who want to purchase properties, as you can now search online for prime residential property. The greatest benefit of searching online is that you have wide range of properties to select and make comparisons. Even though there are many properties to compare, you can certainly find the perfect one that meets your specific needs within a short time. This is a great avenue because you end up saving a lot of time and money because you do not have to travel from one place to another as you search.

Real estate agents

With the increased demand for prime residential real estate these days, there has been an influx in the number of real estate agents. You can hire a highly qualified and experienced real estate agent to help you get the real estate that you want. The good thing about using the services of a real estate agent is that they have ample knowledge on the prime real estate that are listed in the specific area that you want to purchase. They also help you along the buying process, which can save you a lot of headaches.

Look for residential listings in the media

You can use the online listings or listings found in other media like the newspapers or magazines, to get prime real estate of your own. Here you get a lot of information that will help you make an informed choice depending on size, price and other factors.

The Importance Goal Setting When Investing

The Importance Goal Setting When Investing

Investing in real estate is an exciting and potentially lucrative investment option. Even when investing part time, this is an excellent way to supplement your income. However, to avoid common mistakes so you can achieve great success, it is important to learn about proper goal setting.

Real estate investing is hard work, but when done right, it can lead to great things. Unfortunately, many investors dive in without first establishing goals. The outcome is a long list of challenges that are hard, if not impossible, to overcome.

The Value of Setting Goals

Goals create direction and focus. For investing, goal setting allows you to maintain control over the direction of your career and identify benchmarks to determine if you are on track.

  • Motivation – Whatever goals you set need to be motivators. In other words, goals need to be things of real importance and value to you, which in turn increases the chance of achieving them. For investing, set goals that are of high priority. This will help with focus and drive you to succeed.
  • Make SMART Choices – SMART is the acronym for Specific, Measurable, Attainable, Relevant, and Time bound. By following this philosophy for goal setting, the direction will be clear and defined. Rather than set goals that are vague, you want to be precise. Goals also need to be measurable so you know if you are heading toward success or not. In addition, for investing, goals must be attainable. Otherwise, you will work and never make significant progress.
  • Put It in Writing – Always put goals in writing, which helps remember them and makes them more real.
  • Action Plans – One final aspect of goal setting specific to investing is that you need to make a viable action plan. Putting goals in actionable steps allows you to see progress along the way. With this, you can make appropriate adjustments while experiencing ongoing motivation.

Goal Setting Principles When Investing

Goal Setting Principles When Investing

Are you thinking of making a serious investment? When doing so, setting proper goals can help ensure your investment gets you what you want. But, what makes a goal one that is likely to be achieved? Here are a few principles to help you along the way.

Be Specific

Before you make an investment, you need to be sure of what you want to invest in. You need a clear picture of the investment that is written down. Specific goals are easier to maintain and have a higher success ratio.

Measurable

A good goal is also measurable. Investors need to be sure that they can calculate progress, risks and even estimated profit margins. When you are able to gauge how you are advancing toward your goal, it helps to keep you on track.

Time-Sensitive

Goals should also time-sensitive, because all great opportunities have deadlines. The time period, in which the investment occurs, should also be tracked and laid out.

Challenging

Anything worth having is going to be some work. The goals you lay out should be somewhat challenging, to push you to achieve more.

Congruent with Beliefs and Values

Ensure that the goal you want to make aligns with your current beliefs and values. For example, if you are a health freak, it is a bad idea to invest in a junk food factory. Investing in something you stand behind is more satisfying and also closer to your own expertise.

Balanced

Any one goal should not take over your entire life, so make sure you make an investment that will leave you time for your family, your physical health and your mental health.

By taking into account the guidelines, you can set tangible goals that will help you to invest in the right properties.

Buy and Hold – Reliable Real Estate Investment

Buy and Hold – Reliable Real Estate Investment

As the name suggests, buy and hold is the principle where the buyer buys a property and holds it for an extended amount of time, ideally until the property value increases and the buyer can sell it for more than it was purchased.

The investor needs to be sure and do their research of properties to best identify property types (single family/multi-unit homes) in areas that have been tested and trusted to generate high rents.

Once the property is purchased, the investor can rehab the property and then look for a qualified tenant.

Tenant selection is an important consideration in buying and holding, as having a good tenant will reduce the amount of damage to the property, and enables the investor to protract investments until the tenure lasts. A good tenant will bring forth the need of installing only the minimal updates. The investor also needs to make sure the property is in a stable rental market that is not saturated fully.

Proper buy and hold investments provide steady cash flow from rents and pay off loans in due time, making way for a monthly income.

The technique of buying and holding takes after the “slow and steady wins the race” approach by creating residual income for the investors, maturing equity exponentially through the tunnels of principle pay down, appreciation and the advantage of low-volatility.

Trust deeds – inflation-beating investments?

Trust deeds – Inflation-Beating Investments?

Low rates of inflation are meaning that savers aren’t seeing much return for their money. Investing in trust deeds can offer interest rates that often go into double digits. Use our guide to find out if trust deeds are the right financial venture for you.

What is trust deed investing?

Put simply, it’s investing in loans secured by real estate. Most investments are short-term loans made to professional real estate investors. These borrowers are planning to make a large return by flipping the property and so are willing to pay higher interest rates for a quick source of capital.

How can I go about it?

If you’re new to the game, find a professionally-managed fund with the expertise to carefully select loans with minimal risks. Fund managers are also able to make sure that your money is continually reinvested and source the best deals.

For the experienced and adventurous, individual trust deeds often give better rates of return – but don’t be swayed by those dollar signs. To go down this route you’ll need an expert understanding of the market and a lot of time on your hands to make sure your money is quickly reinvested when one loan ends.

What are the risks?

Certain conditions can affect your investments, such as the borrower going into bankruptcy or a sharp drop in real estate values. Small investments also carry more risk as should things go wrong, there’s a tighter margin of error to recover your costs than with larger sums.

If trust deed investments are going to work for you, then choose your fund manager carefully – heard of Bernie Madoff? You’re delegating a lot of financial decisions to them, so if you’re at all unsure now’s the time to back off. Remember, trust deeds are no different to other types of investments – sign in haste, repent at leisure.

Factors That Determine Land Banking Value

Factors That Determine Land Banking Value

Land banking is a common practice where pre-developed land is bought and held to be sold in the future in order to make a higher return. Purchased land is said to be banked until there is a substantial increase in value, as the demand for land increases or population increases. There are several things that determine the value of land banking. Some of the determinants include the following:

-Adequate water supply

The value of land will tend to be high if there is enough water. This is an indicator that the land has possible chances of appreciation in the near future. When the land appreciates, you will be in a position to sell it at a profit.

 

-Presence of residential and commercial development

This is an indication that in the near future more development will take place and businesses will expand. The land banking of such land will be high and you will be in a position to sell such the land in future at a higher price than you bought it.

 

-Presence of growing industries

The presence of growing industries is another important determinant of land banking value. You can buy such land at the current market value in hope that the price will increase in the future, since the presence of industries is an indication of development.

 

-Studies indicate a healthy growth in population

The land banking value will also be high as compared to other types of land where the population is decreasing. Holding such land will give you more profits when the land is sold in future since the demand will be high.

 

-Infrastructure

This is another determinant of land banking value. The value of acquiring such land may be high since it proves to be reachable by car, air or rail. After some time, many development projects will have taken place and the value of land will appreciate. When selling the land in the future, you will be in a position to make more profits after holding such land for some time.

There are several benefits that you will get from land banking. This is because holding the land for a short or long period of time gives opportunity for development to take place and this increases the value of land in future. When selling the land after holding it for a specified period of time, you will be in a position to sell it at a very high price and you will get more profits. It has proven to be a great investment all over the world.

5 questions that every first time investor should ask.

5 Questions That Every First Time Investor Should Ask.

You’re ready to make your first real estate investment – and property brochures are your new bedtime reading. How do you know when the place you’re viewing is a worthwhile investment? Here are 5 key questions to ask yourself before you start bidding.

  1. Can I stay for the long-term?

The real estate market is a very difference place these days and you can’t rely on making a fast buck anymore. When you buy a house you have to be prepared to hold onto it – and that generally means living there – or renting – for at least 3 years.

  1. Am I ready for a big financial commitment?

After purchase, maintenance and repairs can eat up a lot of your money and time. If you’re unsure, start small – maybe with a 50:50 share of a refurb. Once you’ve gained confidence you can move onward – and upwards – with a bigger project.

  1. How quickly have other houses in the neighborhood sold?

Days on the market can show how desirable the neighborhood is. Take a look at the local MLS (multiple listing service) to find out – and compare original list prices with final house prices.

  1. What are public and community facilities like?

If your property is in a catchment for good schools, houses tend to sell – or rent – quickly and for a good price. Even if you haven’t started a family yet, this is one feature that will appeal to just about everybody when you put your property on the market.

  1. Is the house designed and finished to your standards?

Don’t reject if the answer’s no! Just remember to include the cost of the renovations and improvements you need to do in your calculations. Houses that need work can be a great way of adding value to your property from the get-go.

The real estate market can seem daunting, but now you’re well on your way to taking your first step on the property ladder!

Real Estate Goal Setting – Factors that Determine Your Investment Goals

Real Estate Goal Setting – Factors that Determine Your Investment Goals

They saying, “If you fail to plan, plan to fail” can be applied to real estate, and the importance of setting goals as you invest. Being alert, guided, and guarded is foremost in real estate investing. Once you have decided to invest in real estate, you need to set strong and reasonable goals to have a successful real estate investment portfolio.

If you are a novice investor and wants to just test waters of the real estate investment world, then you would normally start off with a five year goal plan.

Investment goals are contingent on the objective of whether the investor is investing for maintaining a regular cash flow or to resale.

If you fall under the first category, that is to maintain regular cash flow, then the following should be considered in the draft of your goals.

Property Manager: Hiring a professional property manager a good way to start.

Self-sufficiency: A good investment will take care of itself. The right mortgage coupled with the long-term and credit-worthy tenant will pay for your investments and will even give you a regular income.

If the goals are for an investment made purely for the purposes of resale then:

Having a keen ear and sight is important: Since the transaction with resale involves buying properties at discounted prices, rehabbing and reselling at higher prices, the investor needs to understand the market climate, areas to invest in, places to target buyers inside out.

Maintaining reduced costs is the solution: Properties need to be well-maintained, as they are meant to be sold in a short span of time. So the investor here has to be adept in having the repairs done at low costs so as to increase his profits.

It is advisable to have a quality real estate professional to handle your portfolio in the beginning stages of your investment. Once you gather wind, you can be on your own and take care of your investment goals.

Residential Real Estate Investing

Residential Real Estate Investing

Given that real estate investing is better than most stock options, the investor has to be absolutely clear in what he is getting into.

Competitive Market: The real estate environment the investor chooses must be smart and active. The ever-rising interest rates make it difficult for investors who have purchased their properties with adjustable rate mortgages – where the investor needs to keep paying more and more to keep the property alive, eventually making the investment unaffordable for the investor.

Gross Domestic Product (GDP): The investor needs to check the temperature of the GDP in the area of his investing.

Smart Location: The location of the property can make or break the investment. Check for regions with good appreciation potential. Also a check on the housing price indexes and unemployment rates are key to determining the health of the market of investment.

The primary rule of investing in residential areas is to make a detailed inspection of the surroundings multiple times before conforming a property.

From a reliable and safe buy and hold strategy to flipping, real estate investors have a number of investing options in real estate to choose from.

Rehabbing a Property

Rehabbing a Property

Rehabbing is a term commonly used in real estate, which means to renovate or fix-up a home. Most every home that is purchased will need some kind of rehabbing, whether miniscule or large. The costs of rehab are an important factor in the profitability of a home, because you’ll ultimately want to make more in selling the home than you spent on your purchase and renovations. Otherwise, you’re going to be in the negative. Let us take a closer look at what rehabbing actually entails.

Rehab Overview

When rehabbing a property, whether your own home or an investment property, it is important to estimate the total costs involved. It is easy to end up over or under investing in rehabbing, so rehabbers will have to find the right balance.

It is important to consider what renovations will be most appealing to a wide audience of potential buyers, and how those renovations will affect the home’s value. When done properly, a house can be bought low, strategically rehabbed and sold to earn a profit.

Rehab Categories

Rehabbing is generally performed for one of the following situations:

  • Personal Use– In this scenario, you will be living in the home you are rehabbing, which creates less risk and fewer time restraints. You can make the renovations based on your personal tastes; keeping future resale value in mind of course.
  • Rentals- Investors typically will rehab rental properties in order to make them more appealing or valuable to renters, to in turn charge a higher rent.
  • Flipping- Many investors will buy properties for a low price, with renovations in mind that will increase the value, and complete them with the intention to resale and make a profit.

Rehabbing can include painting the interior or exterior of the home, re-shingling the roof, adding new appliances, replacing windows, and much more.

Tips

Before you start your rehab project, we have some additional tips for you.

  • Always have a cost estimate
  • Decide if you are going to need contractors
  • Ensure that you have the proper permits in your possession
  • Find a place to get your supplies

Rehabbing a property is a tactic that is often times necessary, and can also be very profitable for property owners.

Benefits to Look Forward to with Buy and Hold Real Estate

buy and hold real estate

The Benefits You Should Look Forward – with Buy and Hold Real Estate

A buy and hold real estate strategy is one of the most effective ways of quickly establishing regular cash flow. There is a number of ways you can go about dealing with real estate. It’s important for you as an investor to weigh your options.

Rest assured, you will come to realize that using the buy and hold strategy in real estate is a great option. If you still are not convinced, here are a few benefits:

Value Appreciation

Generally, the price of land only appreciates. This means that as an investor, your equity will increase exponentially over the time you hold the property.

Great Source of Income

You have to keep in mind that not all investments are going to work the same way. Some will offer the potential for equity appreciation or a consistent return, but in the case of real estate, it offers both.

The latest findings have shown that the average annuity pays out no more than 3% per year, but an investor who makes even a half decent buy and holds investment can beat these rates any day.

Depreciation Is Not Necessarily a Bad Thing

Most people are not aware that the IRS writes off any property that is more than 27.5 years old. Depreciation is not exactly an income and is referred to as a liability.

Depreciation is only an expense on paper. The costs of keeping a property in good condition can be paid out of the rent earned. This actually leads to the elimination of tax obligations due to ‘losses’ on the positive cash flow from the real estate property.

These are 3 of the benefits of buy and hold real estate.

Facts about real estate investing

Real Estate Investing EducationFacts About Real Estate Investing (Updated)

Real estate investing refers to the buying, ownership and manning of real estate for the purposes of generating profit. It’s a popular form of investment that requires proper management. Good management could yield the desired result but like all investments, it is not without its risks.

This is often the case when the investor doesn’t take into account the limited liquidity and the capital-intensive nature of the investment. Since the investment is actually capital intensive, it’s the form of investment that could require upfront capital.

Keeping in mind the risks of investing, and learning how to properly navigate them, is important if you are to successfully invest in Real estate market.

Like other investments, the successfulness could depend on whether or not cashflow is being generated by the actual investment. Investment failure in real estate is often as a result of the investor being plunged into a negative flow of cash for a prolonged period of time.

If you’re an investor and you decide to resell your property at a lower price, you may incur losses.

Most investors often fail because of this factor. Luckily, there are a variety of strategies and tactics designed to help you navigate the risks of the current markets.

Sometimes real estate investing involves taking chances as they arrive. A good example is buying real estate during a period when prices have dropped significantly. You can choose to hold on to your properties until the prices have risen.

This strategy, buying at the bottom, has the potential to yield great returns in the future as properties further appreciate and values increase.