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.

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

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

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

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

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?

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

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

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.