Real Estate Investing - An Alternative To Traditional Stock Market Investment

From a historical perspective, investing in real estate is almost as old as the construction of property itself. Indeed many business owners who created their wealth through companies then went on to diversify into real estate investments. In fact, over the years real estate investments have produced similar returns to those found in the stock market. Let’s take a look at some of the reasons:

First of all, and most obviously, the supply of building land around the world is limited, even when taking into account landfill opportunities. Since the world’s population is growing and the demand for housing ever increasing, then there would seem to be a never-ending and increasing requirement for real estate of all types.

Now let’s take a look at the mechanics of buying property. Here it can be seen that investing in real estate is quite different from most other traditional investments such as stocks. With real estate you can often borrow up to around 80 percent of the value of a property, sometimes even the full value and beyond under special circumstances. Thus a more modest investment of say 20 percent of the value can be used to buy and control the full value of the larger investment. Naturally, if the value of your investment increases, I.e. property prices rise, then the value of your real estate investment also increases. If so, then you are into profit, including that on the money you originally borrowed.

Naturally, there will be costs associated with real estate investing (such as legal fees and property maintenance, taxes, etc), but these are usually small in comparison with the potential gains.

Borrowing in order to invest in real estate makes real estate a type of leveraged investment. But if you know anything about leverage, you will realize that leveraged investments can also go against you. What, for example, if the property you purchased for $300,000 decreased in value to $240,000? Even though the value only dropped by 20 percent, you actually lose 100 percent of the original $60,000 investment. And if you have a mortgage on this property making up its full purchase price, you will actually need to pay money to the mortgage provider in order to cover the costs of selling the property. That’s in addition to the loss of the whole of your initial investment.

So, as you see, investing in real estate is something to be taken very seriously and should not be done with money which you might need for other things in the near future. Investment in property is more secure as a long-term investment. In the above example, if you could have held onto the property and not sold it, the loss would purely have been ‘on paper’. In all likelihood, over time the value of the property, unless grossly overpriced when you originally bought it, will rise and you will likely not only recover the full value of the initial investment, but also possibly make a nice profit when you do come to sell.

Another reason that real estate is a popular investment is that there are profits to be made from it whilst you are the owner. In addition to the tax-saving benefits (in that any tax due on the property’s increase in value doesn’t become due until it is eventually sold), you can also make additional money from renting out the property. This can often cover all your running costs of the property, plus providing a profit on top.

Unless you make a large down payment, early on during your ownership the monthly operating profit from your property business is likely to be small or non-existent. But over time this profit will increase as the amount of rent you can charge increases at a higher rate than the running costs. Naturally these profits will be subject to normal income tax rules.

A further benefit of investing in property is that you might be able to purchase cheaply a run-down or ‘distressed’ property and fix it up or develop it further. Properties like this can still be found if you look around carefully. Naturally, investing in this type of real estate can still produce large gains. This is something you certainly can’t do with traditional stock market investments.

However, returning to the initial question about whether real estate investing is still a viable option when current prices seem to be nearing their peak: yes, it can still be so, but you might need to be more creative and prepare to be in for the long haul. Property ‘flipping’ methods that worked extremely successfully yesterday, might not work at all well tomorrow.

You might also consider diversifying into overseas real estate markets. Whilst this will require greater study and analysis, and there are many more legal issues to consider, seeking out what appear to be undervalued international real estate opportunities has the potential to be highly profitable if handled correctly.

Naturally, you should always seek the advice of professionals, both financial and legal, before investing in properties of any description, particularly when considering investing overseas. There might be major implications to your overall taxation. Risks can also be substantially higher when you are not there to oversee your investment in person.

About the Author

You can learn more about real estate investing and Bianca Tavares’ guide to Florida property at Florida Real Estate.

Real Estate Investing - Is Now A Good Time?

The timing is always right for investing in real estate. As with any investment, you need to be careful of certain things ? it is never a question of timing, but a question of location, mortgage affordability and maintenance.

Location - the number of like properties in the area, economy of the area, one huge employer or many small employers.

Cash flow - will more money be going out than coming in?

Managed professionally ? maintenance headaches belong to someone trained to handle them - not to you.

The economy of an area makes a big difference in whether the area is a ?hot market? or not. When the jobs are there, new ones opening up, and the population is growing, that makes a market hot? plenty of renters. When an area depends on one huge employer, this can make an area not as attractive for an investor because anything can happen to that employer.

One must make sure of facts, however. There is a company in Shreveport, Louisiana which shuts its doors for three weeks every year and lays off over 2000 employees when they do so. This kind of activity can skew area statistics making it seem to be a poor place to invest when that isn?t the true picture. When Boeing shut down, the real estate around Boeing bottomed out, but Canadians swooped in buying up everything in sight and made millions on their investments. That is because the market corrected itself.

Mortgage interest rates are rising at the moment. This does not mean that real estate is unaffordable. It does not mean that the real estate market is going to crash. Far from those dire predictions is the fact that real estate markets correct themselves over time.

Buying and holding is good strategy. Buying and holding and not being able to eat or not being able to buy clothes for your kids is not good strategy. There is a wonderful balance that can be reached. Utilizing hot market areas, where the rent will cover the mortgage and any other expenses involved with being a landlord makes real estate investment a low risk opportunity.

Professional management is the crowning touch for investing in real estate. It is mainly common sense strategy. Who wants to get up in the middle of the night to fix a stopped up toilet or to fix a broken heater? Not even the guy that gets paid for doing it likes that part of the job.

A management company does more than just maintenance. A management company will make sure you get your rent, by not only collecting it but will also make sure you have a tenant. Managing property is what they do and the only way they get more business is if they are good at what they do. You can rest easy with a professional management company because the usual landlord problems are solved by them instead of becoming a worry for you.

Real Estate Investing at Daytona Beach

Daytona Beach is commonly known as “the spot” for spring breakers. What many people don’t realize is that it is a good place for real estate investors as well. Located on the eastern coast of Florida, Daytona Beach has recently become a profitable market, as the average home price is approximately $212,000, and has grown over 25% since last year. This growth is expected to continue for at least the next 12 months.

One of the things that sets Daytona Beach apart from cities typically popular for real estate investing is the fact that it does not have the statistics for hurricane hits as many other cities, such as Miami and Key West. This is a tremendous benefit. If a rental property happens to get hit by a hurricane, the cost of repairing the property could greatly offset any profits that would have been made during that time. If a property is badly damaged, it will most likely need to be completely rebuilt, which is a huge expense, especially when you consider what the cost of labor will skyrocket to, since there will be ocnsiderable demand. For this reason, Daytona Beach is perfect for investors.

Daytona Beach is a prime market for investors that would also like to invest in beachfront property, since there is an opportunity to make a sizeable amount of money. All year long, because of the sunny weather, people from all over the country visit Daytona Beach to visit family, to take a vacation, or both. Beachfront property rents anywhere from $500 to $5000 per week. If your property was rented out everyday of the week for a full year, this would yield between $26,000 and $260,000 per year, depending on the rent that is charged. Investors that have a fair amount of money to spend should consider beachfront property in Daytona Beach, since its an investment property that can be rented out 12 months out of the year.

The population of Daytona Beach has been steadily increasing over the fast few years as well. Because of this, there is an increased demand for homes. However, it’s important to keep in mind that the sales cycle, at thirty to sixty days, is a little longer than other Florida cities. In order for investors to avoid being affected by this lag time in turnaround, it is important that properties are priced comparable to that of properties that have recently sold in the area. If the house is on the market too long, due to the price being inflated, people will lose interest in it rather quickly, thinking that there is something wrong with it.

All in all, people interested in the real estate market at Daytona Beach stand to gain a sizeable profit if they are in the right place at the right time. Research and patience will prove to be your greatest virtue.

About the Author

Tabitha Naylor is an experienced mortgage broker/consultant with Apex Financial Mortgage. For more information, or additional resources on home loans, visit Apex Financial Mortgage

Real Estate Investing at Daytona Beach

Daytona Beach is commonly known as “the spot” for spring breakers. What many people don’t realize is that it is a good place for real estate investors as well. Located on the eastern coast of Florida, Daytona Beach has recently become a profitable market, as the average home price is approximately $212,000, and has grown over 25% since last year. This growth is expected to continue for at least the next 12 months.

One of the things that sets Daytona Beach apart from cities typically popular for real estate investing is the fact that it does not have the statistics for hurricane hits as many other cities, such as Miami and Key West. This is a tremendous benefit. If a rental property happens to get hit by a hurricane, the cost of repairing the property could greatly offset any profits that would have been made during that time. If a property is badly damaged, it will most likely need to be completely rebuilt, which is a huge expense, especially when you consider what the cost of labor will skyrocket to, since there will be ocnsiderable demand. For this reason, Daytona Beach is perfect for investors.

Daytona Beach is a prime market for investors that would also like to invest in beachfront property, since there is an opportunity to make a sizeable amount of money. All year long, because of the sunny weather, people from all over the country visit Daytona Beach to visit family, to take a vacation, or both. Beachfront property rents anywhere from $500 to $5000 per week. If your property was rented out everyday of the week for a full year, this would yield between $26,000 and $260,000 per year, depending on the rent that is charged. Investors that have a fair amount of money to spend should consider beachfront property in Daytona Beach, since its an investment property that can be rented out 12 months out of the year.

The population of Daytona Beach has been steadily increasing over the fast few years as well. Because of this, there is an increased demand for homes. However, it’s important to keep in mind that the sales cycle, at thirty to sixty days, is a little longer than other Florida cities. In order for investors to avoid being affected by this lag time in turnaround, it is important that properties are priced comparable to that of properties that have recently sold in the area. If the house is on the market too long, due to the price being inflated, people will lose interest in it rather quickly, thinking that there is something wrong with it.

All in all, people interested in the real estate market at Daytona Beach stand to gain a sizeable profit if they are in the right place at the right time. Research and patience will prove to be your greatest virtue.

About the Author

Tabitha Naylor is an experienced mortgage broker/consultant with Apex Financial Mortgage. For more information, or additional resources on home loans, visit Apex Financial Mortgage

Real Estate Investing - An Alternative To Traditional Stock Market Investment

From a historical perspective, investing in real estate is almost as old as the construction of property itself. Indeed many business owners who created their wealth through companies then went on to diversify into real estate investments. In fact, over the years real estate investments have produced similar returns to those found in the stock market. Let’s take a look at some of the reasons:

First of all, and most obviously, the supply of building land around the world is limited, even when taking into account landfill opportunities. Since the world’s population is growing and the demand for housing ever increasing, then there would seem to be a never-ending and increasing requirement for real estate of all types.

Now let’s take a look at the mechanics of buying property. Here it can be seen that investing in real estate is quite different from most other traditional investments such as stocks. With real estate you can often borrow up to around 80 percent of the value of a property, sometimes even the full value and beyond under special circumstances. Thus a more modest investment of say 20 percent of the value can be used to buy and control the full value of the larger investment. Naturally, if the value of your investment increases, I.e. property prices rise, then the value of your real estate investment also increases. If so, then you are into profit, including that on the money you originally borrowed.

Naturally, there will be costs associated with real estate investing (such as legal fees and property maintenance, taxes, etc), but these are usually small in comparison with the potential gains.

Borrowing in order to invest in real estate makes real estate a type of leveraged investment. But if you know anything about leverage, you will realize that leveraged investments can also go against you. What, for example, if the property you purchased for $300,000 decreased in value to $240,000? Even though the value only dropped by 20 percent, you actually lose 100 percent of the original $60,000 investment. And if you have a mortgage on this property making up its full purchase price, you will actually need to pay money to the mortgage provider in order to cover the costs of selling the property. That’s in addition to the loss of the whole of your initial investment.

So, as you see, investing in real estate is something to be taken very seriously and should not be done with money which you might need for other things in the near future. Investment in property is more secure as a long-term investment. In the above example, if you could have held onto the property and not sold it, the loss would purely have been ‘on paper’. In all likelihood, over time the value of the property, unless grossly overpriced when you originally bought it, will rise and you will likely not only recover the full value of the initial investment, but also possibly make a nice profit when you do come to sell.

Another reason that real estate is a popular investment is that there are profits to be made from it whilst you are the owner. In addition to the tax-saving benefits (in that any tax due on the property’s increase in value doesn’t become due until it is eventually sold), you can also make additional money from renting out the property. This can often cover all your running costs of the property, plus providing a profit on top.

Unless you make a large down payment, early on during your ownership the monthly operating profit from your property business is likely to be small or non-existent. But over time this profit will increase as the amount of rent you can charge increases at a higher rate than the running costs. Naturally these profits will be subject to normal income tax rules.

A further benefit of investing in property is that you might be able to purchase cheaply a run-down or ‘distressed’ property and fix it up or develop it further. Properties like this can still be found if you look around carefully. Naturally, investing in this type of real estate can still produce large gains. This is something you certainly can’t do with traditional stock market investments.

However, returning to the initial question about whether real estate investing is still a viable option when current prices seem to be nearing their peak: yes, it can still be so, but you might need to be more creative and prepare to be in for the long haul. Property ‘flipping’ methods that worked extremely successfully yesterday, might not work at all well tomorrow.

You might also consider diversifying into overseas real estate markets. Whilst this will require greater study and analysis, and there are many more legal issues to consider, seeking out what appear to be undervalued international real estate opportunities has the potential to be highly profitable if handled correctly.

Naturally, you should always seek the advice of professionals, both financial and legal, before investing in properties of any description, particularly when considering investing overseas. There might be major implications to your overall taxation. Risks can also be substantially higher when you are not there to oversee your investment in person.

About the Author

You can learn more about real estate investing and Bianca Tavares’ guide to Florida property at Florida Real Estate.

Real Estate Investing - An Alternative To Traditional Stock Market Investment

From a historical perspective, investing in real estate is almost as old as the construction of property itself. Indeed many business owners who created their wealth through companies then went on to diversify into real estate investments. In fact, over the years real estate investments have produced similar returns to those found in the stock market. Let’s take a look at some of the reasons:

First of all, and most obviously, the supply of building land around the world is limited, even when taking into account landfill opportunities. Since the world’s population is growing and the demand for housing ever increasing, then there would seem to be a never-ending and increasing requirement for real estate of all types.

Now let’s take a look at the mechanics of buying property. Here it can be seen that investing in real estate is quite different from most other traditional investments such as stocks. With real estate you can often borrow up to around 80 percent of the value of a property, sometimes even the full value and beyond under special circumstances. Thus a more modest investment of say 20 percent of the value can be used to buy and control the full value of the larger investment. Naturally, if the value of your investment increases, I.e. property prices rise, then the value of your real estate investment also increases. If so, then you are into profit, including that on the money you originally borrowed.

Naturally, there will be costs associated with real estate investing (such as legal fees and property maintenance, taxes, etc), but these are usually small in comparison with the potential gains.

Borrowing in order to invest in real estate makes real estate a type of leveraged investment. But if you know anything about leverage, you will realize that leveraged investments can also go against you. What, for example, if the property you purchased for $300,000 decreased in value to $240,000? Even though the value only dropped by 20 percent, you actually lose 100 percent of the original $60,000 investment. And if you have a mortgage on this property making up its full purchase price, you will actually need to pay money to the mortgage provider in order to cover the costs of selling the property. That’s in addition to the loss of the whole of your initial investment.

So, as you see, investing in real estate is something to be taken very seriously and should not be done with money which you might need for other things in the near future. Investment in property is more secure as a long-term investment. In the above example, if you could have held onto the property and not sold it, the loss would purely have been ‘on paper’. In all likelihood, over time the value of the property, unless grossly overpriced when you originally bought it, will rise and you will likely not only recover the full value of the initial investment, but also possibly make a nice profit when you do come to sell.

Another reason that real estate is a popular investment is that there are profits to be made from it whilst you are the owner. In addition to the tax-saving benefits (in that any tax due on the property’s increase in value doesn’t become due until it is eventually sold), you can also make additional money from renting out the property. This can often cover all your running costs of the property, plus providing a profit on top.

Unless you make a large down payment, early on during your ownership the monthly operating profit from your property business is likely to be small or non-existent. But over time this profit will increase as the amount of rent you can charge increases at a higher rate than the running costs. Naturally these profits will be subject to normal income tax rules.

A further benefit of investing in property is that you might be able to purchase cheaply a run-down or ‘distressed’ property and fix it up or develop it further. Properties like this can still be found if you look around carefully. Naturally, investing in this type of real estate can still produce large gains. This is something you certainly can’t do with traditional stock market investments.

However, returning to the initial question about whether real estate investing is still a viable option when current prices seem to be nearing their peak: yes, it can still be so, but you might need to be more creative and prepare to be in for the long haul. Property ‘flipping’ methods that worked extremely successfully yesterday, might not work at all well tomorrow.

You might also consider diversifying into overseas real estate markets. Whilst this will require greater study and analysis, and there are many more legal issues to consider, seeking out what appear to be undervalued international real estate opportunities has the potential to be highly profitable if handled correctly.

Naturally, you should always seek the advice of professionals, both financial and legal, before investing in properties of any description, particularly when considering investing overseas. There might be major implications to your overall taxation. Risks can also be substantially higher when you are not there to oversee your investment in person.

About the Author

You can learn more about real estate investing and Bianca Tavares’ guide to Florida property at Florida Real Estate.

Real Estate Investing at Daytona Beach

Daytona Beach is commonly known as “the spot” for spring breakers. What many people don’t realize is that it is a good place for real estate investors as well. Located on the eastern coast of Florida, Daytona Beach has recently become a profitable market, as the average home price is approximately $212,000, and has grown over 25% since last year. This growth is expected to continue for at least the next 12 months.

One of the things that sets Daytona Beach apart from cities typically popular for real estate investing is the fact that it does not have the statistics for hurricane hits as many other cities, such as Miami and Key West. This is a tremendous benefit. If a rental property happens to get hit by a hurricane, the cost of repairing the property could greatly offset any profits that would have been made during that time. If a property is badly damaged, it will most likely need to be completely rebuilt, which is a huge expense, especially when you consider what the cost of labor will skyrocket to, since there will be ocnsiderable demand. For this reason, Daytona Beach is perfect for investors.

Daytona Beach is a prime market for investors that would also like to invest in beachfront property, since there is an opportunity to make a sizeable amount of money. All year long, because of the sunny weather, people from all over the country visit Daytona Beach to visit family, to take a vacation, or both. Beachfront property rents anywhere from $500 to $5000 per week. If your property was rented out everyday of the week for a full year, this would yield between $26,000 and $260,000 per year, depending on the rent that is charged. Investors that have a fair amount of money to spend should consider beachfront property in Daytona Beach, since its an investment property that can be rented out 12 months out of the year.

The population of Daytona Beach has been steadily increasing over the fast few years as well. Because of this, there is an increased demand for homes. However, it’s important to keep in mind that the sales cycle, at thirty to sixty days, is a little longer than other Florida cities. In order for investors to avoid being affected by this lag time in turnaround, it is important that properties are priced comparable to that of properties that have recently sold in the area. If the house is on the market too long, due to the price being inflated, people will lose interest in it rather quickly, thinking that there is something wrong with it.

All in all, people interested in the real estate market at Daytona Beach stand to gain a sizeable profit if they are in the right place at the right time. Research and patience will prove to be your greatest virtue.

About the Author

Tabitha Naylor is an experienced mortgage broker/consultant with Apex Financial Mortgage. For more information, or additional resources on home loans, visit Apex Financial Mortgage