- June 19, 2022
- Posted by: Dennis
- Category: Real Estate investing
Real Estate is not only a business but a way of life for many. If you turn on the television, you’ll find a ton of fix and flip shows. You get excited at watching different homeowners buy, fix and flip their properties for profit. But the only thing is that you are on the opposite side of the tube! This should be you! There are a ton of reasons to invest in Real Estate but maintaining financial wealth and prosperity is definitely a great reason that comes to mind. Unfortunately, the foreclosure crisis has been hurtful to many but it has been a gold mine for Real Estate investors everywhere. A few other reasons to invest. Appreciation – Rental properties normally appreciate in value with inflation. Increased value can mean sale and reinvestment in higher-value properties, or provide an equity line of credit to use for other investments. This is the second, and a historically proven value component of real estate investment return. Inflation can Rent-Friendly – Rents usually increase with inflation, while mortgage payments on the property remain stable. This increases cash flow, with more rent income without increased expense for holding the property. When inflation is up, it can also mean more renters, as the affordability of homes can be negatively impacted by inflation. More renters increase demand, so rents can escalate. Leverage – Using leverage, while being careful to buy properties with good rental yields, provides greater returns. Using $100,000 to purchase three properties with down payments, instead of one for $100,000 cash will greatly increase returns. And much more! If you have access to a computer or read the newspaper, you can see that Real Estate properties are all over and they are going fast!
Real Estate is one of the best ways to invest your hard-earned funds since land is a limited resource and as long as the world’s population keeps rising, the land will continue to appreciate in value. Karen was selling at KES 3.5 million. KES 18 to 20 million. An acre in Runda was selling at KES 4.5 Million in 2003. Currently, the same acre now sells at around KES 20 million. Real Estate investment is also flexible in that it accommodates every size of budget. The amount of money that you can raise will play a big role in determining the scope of investment. You can start on a very small scale and continue up the ladder. For small-scale investors, ideas such as buying a small piece of land far away from the main city and holding it for a while which can be anything from several months to a few years can assist in this. One of the quickest ways to gain profit in Real Estate is through speculation. Land away from major towns is usually lower priced.
Florida real estate investment opportunities are plentiful, but succeeding in this market today requires careful consideration of location. Investors often buy houses within the Sunshine State for use as vacation rentals, but offering long-term rental homes might be a better option for now. Those considering Florida real estate investing may find it beneficial to work with realtors familiar with the state. Many realtors specialize in selling bank short sales and foreclosure homes and can assist investors with locating discounted properties. Due to the fact that many Florida residents have lost their homes to foreclosure, there is ample opportunity for investors to generate income by offering long-term rentals. Once homeowners lose property to foreclosure they are usually forced to become tenants until they can qualify for another mortgage loan. Although Florida has been hit hard by foreclosure there are still plenty of opportunities to generate cash flow with investment property. Since Florida is one of the world’s most popular vacation destinations many investors seek out beachfront homes. However, it can be beneficial to scout out homes in Orlando and Daytona as these areas are home to tourist attractions such as theme parks and motorsports racing.
With ownership of only 2, 3 or 4 properties the investor’s capital can be easily damaged or wiped out by an isolated problem at only one of his properties. The passive investor would likely own a small share of a large diversified portfolio of properties, thereby lowering risk significantly through diversification. With portfolios of 20, 30 or more properties, the problems of any one or two will not significantly hurt the performance of the portfolio as a whole. Real Estate Investment Trusts are companies that own, manage and operate income-producing real estate. They are organized so that the income produced is taxed only once, at the investor level. By law, REITs must pay at least 90% of their net income as dividends to their shareholders. Hence REITs are high-yield vehicles that also offer a chance for capital appreciation. There are currently about 180 publicly-traded REITs whose shares are listed on the NYSE, ASE or NASDAQ.
Collect a large down payment when using this method. Financing is readily available to anyone who has cash for a down payment. Below are the major ways you can finance your Real Estate Investments. All Cash – Property with no mortgage attached is very stable and a safe return. Self-Directed IRA – If you have a 401(k), throw it out, it’s time to put that money in a self-directed IRA and make that money finally work for you than expecting some money manager who is just trying not to lose your money than make you any. You can use your money in your SD-IRA to do all the strategies in buying, selling, and renting. 20%-25% Down Conventional Investment Mortgage – buy a real estate investment through a bank. 10% HomePath Investment Mortgage- These loan types are only available on Fannie-Mae-backed bank REOs, but can allow an investor to purchase the home for just a 10% down payment with other benefits. Home Equity Line of Credit (HELOC) – With significant equity in real estate, M&T can borrow a line of credit off M&T Real Estate equity. If you have the mind for real estate or want to hire someone who does. Then you should forego a large portion of your portfolio to invest in real estate. It easily has one of the highest returns of any other investment in the world, the only caveat, like anything else, is that you need to do it right to be successful.
In the event the lender has to take over the property, he or she then has the title insurance. Banks require this and it really puts the lender at ease. 8. Contact an Insurance company for your fire/hazard policy. The loss payee will be your lender’s information. This way, if the place burns down or the Earth swallows it up, the lender gets paid off first. Again, this really puts the lender at ease and more comfortable with the deal. When you mention the Loss Payee status and the Lender’s Policy on Title Insurance, you will seem very knowledgeable and professional. 9. Lender will approve all documents and then the Closing Date is set. 10. Go to closing and sign the paperwork. The lender need not be at closing, but make sure the money is there ahead of time. Congratulations! You are a real estate investor and you’ve used private funding! Naturally, there are entire books and seminars on this subject. Make sure to do your own due diligence. If you are not sure, ask a professional.