How To Get Private Money For Real Estate Investing - Step Two

If you spend much time online, you?ve most likely read or heard about the law of attraction. Essentially, this law states that you tend to attract into your life whatever you focus on. I personally think the philosophy that?s risen up surrounding this so-called ?law? is just so much drivel, but there is truth to the central idea. Which brings us to step two for getting private money for real estate investing.

As in most other areas of life, if you don?t know what you?re looking for, neither will anyone else. That?s why it?s important to think carefully about what you?ll be expecting from your lenders once you sign them up. Ask some pertinent questions, write down the answers, and develop a ?Lender Fact Sheet? to give to your prospective private money lenders. Here are some of the questions you should be asking.

1. What size loans will you be looking for? This will be dictated by the type of property you normally buy. If you focus on single family homes in the $75,000 to $150,000 range, then loans up to $150,000 are what you?ll be seeking.

2. What will the terms be? Think carefully about how you will want to pay your loans back. This will, of course, change as you get into the mechanics of each individual loan and each individual property, but your prospective lenders will want to know what your intentions are. Do you plan to use the money for three years, five years, ten years? Will you make interest only payments with a balloon at the end of the term? The terms are limited only by your own creativity, but think about them now, and add them to your outline.

3. What rate will you be paying? A good rate of return compared with what they can earn elsewhere is what will attract your potential private money for real estate investing lenders. The rate you choose is up to you, and will be negotiable based on market conditions, but you should give your prospects a starting figure. Ten percent, eleven percent, twelve percent? Be prepared to make adjustments, but have a place to start.

4. How often? What will be your approximate frequency of use? Lenders want to know that they have a reasonable expectation of return. Don?t sign them up if you can?t use their money, because you?ll just be setting them up for disappointment. Only sign up as many lenders as you can reasonably expect to actually use.

As you think through these questions, others may occur to you. Write them down, along with the answers. Then, use your outline to develop your Lender Fact Sheet. Give this sheet to your prospective private money lenders at your seminars or one-on-one presentations, and be prepared to explain your terms.

If you want more on how to get private money for real estate investing, visit http://www.private-money-real-estate-investing.com for tips, techniques, and strategies.

Real Estate Investing - How To Get Started

If you are new to the world of Real Estate Investing, don’t feel bad. Maybe you have yet to do your first deal. We have all been there. I’ve met a lot of experienced investors, and not one of them came out of the womb with any deals under their belts- even though some of them would like you to believe they did!

We all have to start somewhere. Everybody has to do their first deal- their icebreaker. There are only two kinds of investors- those who have, and those who haven’t- done a deal that is. If you’re one of those who haven’t, this article is for you. I’m going to answer your most burning question- “How do I get started?”

How do I know this is your most burning question? Because not too long ago it was mine. I remember looking at investors who had only done one or two deals and thinking, “Those people are good! How’d they do that?” Now I know, and after reading this article, so will you.

There really are only five simple steps to getting started.

The Five Steps

Step One- Relax.

Step Two- Build your knowledge base.

Step Three- Open your eyes.

Step Four- Make offers.

Step five- Finish what you start.

The end.

Just kidding. I know all I’ve done is excite your curiosity, and if I leave you now you’ll hunt me down and kill me- I wouldn’t blame you. So I’ll explain the five steps.

Step One- Relax. Believe it or not, for me this was the most important step. Most people working toward their first deal are way too intense. I was. For weeks and months it was all I could think about, morning, noon, and night. I was tense and irritable. My family suffered. I suffered. My job suffered. And still no deal.

So, I consciously decided to relax. I didn’t stop working toward my goal, I just stopped obsessing and worrying about it all the time. I watched the things I was telling myself (my self-talk). I reminded myself that, since I was doing all the right things consistently, my first deal was right around the corner. I told myself the truth- “It’s only a matter of time!” I forced myself to relax, so I could focus on the really important things- my faith, my family, and my fitness (body, mind, spirit).

When those things are in alignment, success can occur naturally and easily- almost without effort. Try it yourself- for the next three days consciously relax and let go of the tension you feel about getting that first deal!

Step Two- Build Your Knowledge Base. Many people get this one out of order. They try to cram all sorts of knowledge into their head before they are relaxed enough to absorb it. Your brain doesn’t work like a machine. Try to stuff it full when you are tense and feeling pressured to ‘get a deal’, and you will recall next to nothing. Relax first, and your brain will work the way God designed it to- smoothly and efficiently. You’ll be amazed at what you will learn, and how fast you’ll learn it!

Read anything and everything. Buy books and courses, listen to tapes, attend conferences and seminars. Visit all the investing websites and bookmark the ones you like. Read the forum posts, the free articles, and the success stories. Especially DealFiles!

Don’t limit yourself to learning just one kind of investing. If you classify yourself as merely a ‘flipper’ or ‘rehabber’ you may miss out on a tremendous opportunity because you’re not looking for it. Visit my Resource Page for advice on the best educational materials out there.

Before I flipped my first house, I read books and courses on foreclosures, subject-to, lease options, and a hundred other investing strategies. Because I taught myself to relax, I never felt overwhelmed with too much material. When the time came for my first deal, I used techniques from many different sources. I didn’t have to think too much about it- the information was there, waiting for me to access it.

A word of caution- stay relaxed! Don’t treat this like a job. You should be enjoying this. If not, you may want to rethink why you’re doing it in the first place.

Step Three- Open your eyes. After you have consciously relaxed, and while you are building your knowledge base, start to look around you. You are looking for opportunity, and you will be amazed at where and when you see it. Opportunity can take several unexpected forms, and show up when you aren’t looking for it. In fact, that’s usually the way opportunity presents itself. People you meet, things that happen around you, any of a hundred things that occur as you move through your days.

For instance, a conversation you overhear may present an opportunity you would never know about otherwise. Context is crucial. Now that you are relaxed and learning, you are free to interpret things you see and hear in a fresh way. You start looking at people, places, and events through the eyes of a Real Estate Investor, because that’s the way you are training your mind to think. This is very good.

It’s also called ’serendipity’, a fifty-cent word meaning “the phenomenon of finding valuable or agreeable things not sought for.”

I found my best resource- my Realtor- this way. He was introduced to me by a friend. I said, “You’re a Realtor? Do you handle any foreclosures?”

He said, “I work for the largest foreclosure broker in the area.”

“Oh, really?!” My eyes were open.

Finally, don’t expect miracles in a day, a week, a month.

Watch. Listen. Think. Keep your eyes open.

One day soon, the deal will be there.

Step Four- Make offers. I’m not kidding here. Some people expect to get their first deal without ever making any offers. Usually, their fear is holding them back. Click this link to read my article on Four Ways To Eliminate Fear. Making no offers leaves you with nothing but wishing and hoping, bad overall strategies for success in anything.

Follow the three steps above and you WILL make offers. There’s a neat dynamic at work here. Follow the logic. You relax. You gain knowledge. Knowledge builds confidence. You open your eyes. You see an opportunity. You make an offer. Making the offer builds more confidence. You make more offers. One is accepted. You get scared. You go get more knowledge. You gain more confidence. You close your first deal. Confidence soars. Get the picture?

No offers - no deals. Simple, huh? Don’t get caught up in trying to know everything before you make an offer. You never will. Put in the time and effort. Learn well. Make offers. Enough said.

Step Five- Finish what you start. This one is easy for some of us, hard for others. If you are one of those people who get cold feet, prepare for it in advance. Decide ahead of time you will finish what you start and close on every deal you make an offer on. There are a lot of roadblocks in Real Estate Investing, any one of which could bring your deal to a screeching halt if you let it. In many cases, you are the only one who has what it takes to bring your deal to the closing table.

Determine ahead of time that, no matter what, the deal will close. Often it feels like you must put forth superhuman effort. Not true- merely human effort will work. Your human effort. You may not know it yet, but you have what it takes. Push through to the end and finish what you start.

That’s it then. Five simple, little steps that anyone can take. The only difference this time is, you are the one taking them. So much the better. After all- it’s your turn, isn’t it?

Now, go make more offers!

Do What’s Best For The Homeowner

When it comes to making money in real estate be the diamond in the rough and be the one that homeowners can trust!!!!
www.foreclosuremoneynow.com

The First Steps In Real Estate Investing

With all the stories of people making tremendous amounts of money in real estate it’s no wonder why so many are looking at real estate as an investment vehicle. It offers more security than the stock market, provides great potential returns, offers tax benefits and let’s not forget; it sounds cool to be ‘in real estate’. Everybody can buy and sell stocks from their phone or computer these days. But real estate, now that’s something else.

One of the challenges that many are faced with is putting up the money to acquire a piece of property. Although in reality this is usually not the biggest obstacle. You might say “Hey, what do you mean, not an obstacle. I would love to invest in real estate, but I just can’t afford to!” The point is that hardly anyone who buys a piece of real estate has enough money in their account to pay for it. That’s where your banker comes in. Let’s face it. Do you know anyone that owns their own home? I mean truly own it? Probably not. Sure, you know a lot of people that have a house to their name, but wait until they get behind on their monthly mortgage payments and you will soon find out who really owns their house. That’s right, the bank. So if these people can use the bank’s money to buy a house, why can’t you?

Now ‘owning’ your own home may sound like a somewhat obvious way to get started in real estate, but it is also a very good way to do so. You might say “Duh…” But apparently this little step is overlooked by a lot of people. Just take a look at how many people are still renting a property instead of buying one. Now of course the relation between rent and housing prices varies from country to country and even from area to area. But wherever you go you will still find people renting, because in their mind “they don’t have enough money to buy a house.” In reality it would be much cheaper for them to buy!

When you rent, you are pretty much flushing your money down the toilet. Of course you are getting the pleasure of living, but the point is you’re not building anything long term. Every dollar you spend on rent is a dollar you will never see again. Whereas if you own your own home, instead of paying rent you would be paying for your mortgage. Even though there is a lot of variety in mortgages these days, the basics of practically all mortgages are more or less the same. Every month you make a payment which consists of two parts: interest and principle. The interest part can be compared to rent. Those dollars are gone with the wind and you will never hear from them again. However, the part of the payment that goes to the principle is money you keep. Every dollar that is used to pay off the principal is a dollar you put in your own pocket.

So if you’re thinking about getting started in real estate and you don’t ‘own’ your own house yet… Change it, and get some experience. It’s a great first step towards building your capital and in many cases, it just makes more sense financially. It can also supply a range of opportunities for accelerating the process of building your net worth. When real estate prices go up, so does the value of your property. Whereas the money you owe the bank, your mortgage, remains the same. In other words this helps you build your net worth. Compare this to people that are paying rent… Their net worth does nothing. However their landlord’s net worth is doing very nicely in this scenario and he or she will probably love you for it. So if you get a warm fuzzy feeling about making somebody else rich at your own expense… Keep renting. If you would rather build your own capital instead… Buy your own house!

Many home owners have accumulated more money through appreciation of their property than by working a full time job for many years. Now before you go out and buy the first property you lay eyes on, don’t forget that some security measures are in order here. As you may or may not know, real estate prices do not always go up, and certainly not in a straight line. Yep, this can be shocker to some people, as well as an ugly reminder for those who overlooked this minor detail in the past. If for some reason you would have to sell your home in a down market, it can be a costly adventure. You wouldn’t be the first to end up with a house worth considerably less than the mortgage resting on it. So make sure to keep some slack. In the long run real estate prices have always been on the rise, but in any cycle there are down periods. By keeping some slack and being patient you will be able to sit through these times and profit from the long term up-trend.

About the Author

Jim Mack is an expert on business, health and well being. He regularly contributes articles on these subjects. The Best Investing Tips

Real Estate Investing Basics

If you don’t think that real estate is something you want to buy into, read further and then decide if you want to give it a miss. Do yourself a favor and ask anyone who has already invested in real estate and they will probably tell you that their are pro’s and cons. Everything in life is a risk, buying a second hand car, buying company shares, quitting your job to work from home, the list goes on. One thing is certain, you won’t know unless you try.

For the investing novice, don’t be afraid of the challenges and pitfalls you may encounter along the way. There is so much to learn in this industry, but if you look at the bigger picture and you are prepared to learn, you’ll definitely become a master at closing profitable real estate deals.

http://realestate.the-right-time.com/

About the Author

Cathryn Keane, Chesterfield, Derbyshire, UK

Real Estate Investing : Graduated Lease

New business start-ups need at least a few months to stabilize and it could take a few months before a break-even point occurs. To help such businesses as well as to counter he slack in rentals, commercial, industrial property owners have designed a lease called the graduated lease to entice new tenants. In a graduated lease, the lease amount is low for the initial couple of years and gradually increased proportionally the next three years in a typical five-year contract. This strategy worked so well that people have applied graduated lease to residential property too.

Graduated Lease: How does it Work? Let us say there is a person x who leases a commercial space using a graduated lease for a period of five years. The lease includes the maintenance, taxes, insurance, utilities and janitorial services charges. His office space is 2,000 squares in a 30,000 square building. He pays $20 for each square foot so his yearly base rent will be $40,000 and for fiver years $200,000. In a graduated lease he can pay $2,500 each month for the first year {$30,000}, $3000 each month for the second year {36,000} and $ 3,500 each month for the third year {42,000} and $ 3,833.3 each month for the next two years {$91,999.9}. The low monthly rental for the first three years gives X the chance to utilize the money to develop his business and stabilize financially, hence a graduated lease will work to the advantage of the lessee.

Lessees who lease commercial and industrial properties therefore prefer this kind of lease. Usually, graduated leases are offered at a flat rate for the first two years, and gradually increased as per the lease term typically five years. Lessees can negotiate to get as low an escalation cap as possible for each additional year. The lessee should make sure he understands the terms of the contract properly and that he is not paying rent for space he does not use such as a foyer or lobby to which he has no access as it is on another floor. The landlord has to ascertain that the lessee has no deceitful intent and has no record of fraud or history of delinquent rental payment. The lessee should not cause damage and or repair to the property and abscond without a trace, leaving the landlord in a lurch. It is therefore necessary for both parties to hire an experienced attorney and see to it that they are not being cheated, by carefully verifying the due-diligence and all documents presented.

Graduated leases are helpful for new entrepreneurs who can use the money saved on the first few years of the lease to build and establish their business.

There are firms that offer services and products to help new entrepreneurs run a successful business.

Directions for Success in Real Estate Investing

The one thing I want you to think about as we are starting the New Year is the single most important factor in all of business. Take and throw everything you know out the window because without this one possession, you’ll end up more lost than driving down an old country, dirt road in Alabama.

It’s called direction…

Direction for you and your business…

Since it’s the beginning of a new year, you should initiate the year off on the right foot. Take the next few days to work on your real estate business instead of in it. What do I mean here? Shut off all the phones and conduct some serious soul searching to figure out what it is you’re really looking for from your real estate business. See, it’s time for you to stop tiptoeing along and get to work. This can be your year to stop being a “lookie-lou” and become a real investor. More on that in a sec but let me ask you -

“What direction are you heading in right now?” Are you where you want to be in life?

And no I’m not trying to sound like the latest Geico commercial with Tony Little yelling, “Yeah Baby, you can do it.”

I’m being totally serious here. See, a few years ago, when I worked at the J-O-B, I had a Franklin Covey planner that I tracked all of my goals, my appointments, heck my entire life in that one little book. Anyway, after moving a little over three years ago, my wife found this little book tucked away in a pile of stuff. She opened this book and proceeded to read what I had written for my goals and the direction for our businesses and our lives. She was shocked to see that nearly all of the items I had listed had come to pass. And the ones that hadn’t were not our really our goals anymore, as we were striving for bigger things.

So, the moral to the story is this: if you don’t know the direction you’re heading in, then how in the heck do you intend to ever get there? Do you think one day, you’ll suddenly wake up and say, “Oh, this is exactly what I want”?

I think not.

You’ve got to have a plan: A plan of Massive Action to get your butt moving in the right direction.

Now, some of you may ask, what do I do if my plan fails?

This type of thinking simply comes from the fear of failing. This stops most investors dead in their tracks from ever buying their first property. They read articles, books, and even buy courses, yet they remain inactive in buying any real estate, never realizing their dreams of escaping the rat race. They talk a big game about what they’re going to do, but they always seem to be just talking and not doing.

My response to the above question is that we can play “the what if” game all day long and still be at the same point you’re at now except a little more frustrated. But let me ask you this: What if your plan works? What if you knew beyond a shadow of a doubt that you wouldn’t fail? Would you then still procrastinate? Would you put off running that ad to buy houses? Would you still drive by that house in preforeclosure, yet convince yourself they’re not at home so that you won’t knock on the door?

It’s time you get serious about your financial future because the one thing that keeps passing us by regardless if we take action or not is our time.

So, I ‘m going to show you how to get off your butt and take action. It’s something I’ve used for years and believe that you’ll benefit as well. Here it goes.

First, I want you to identify where you want to be. This is the most important piece to the puzzle. Get some direction about your business and your life. Identify what’s makes you tick… Write this down. This could be something like you want to buy six houses per year with a net of $10K or whatever your situation is.

Next, what actions do you need to take to get to this point? Write down, what you’ll have to become as a person to fulfill your goal. Now, this person that you have to become, what do they do? What actions would they take?

Now, I want you to ask yourself, “What is it you can do over the next ninety days to get closer to your goal?”

Then, write down the actions and tasks that you’ll commit to completing in the next ninety days to realize your goal. When I say commit, I mean you have to be committed more than the average “Hollywood marriage” and stick with your plan adjusting it as you go along the way.

Along the way, as you complete some of the tasks, you want to reward yourself. Maybe, you’ve finally sold that house that seemed like it would never sell or maybe you’ve talked with 20 sellers or whatever your tasks was, then reward yourself accordingly. Now, I’m not saying break the bank, just take a percentage of your profits from your next deal as a reward for your work. Maybe it’s a weekend getaway or it could be as simple as having a nice dinner with your family.

Now, you must remember to focus like a “laser guided missile”. It’s easy to get caught up with everything going on around you, however it’s crucial you remain focused with your eyes clearly set on your goals. I admit that I struggle with this every day. With the internet and running several businesses, it’s easy to get involved with all the day-to-day crap or surfing the net for hours on end. Ask yourself daily; what is the most productive, profitable use of my time? Finally, at the end of the ninety days, it’s time to look at what you’ve accomplished and repeat adjusting your plan from what you’ve already completed. I want you to do this process starting with the end in mind of where you want, and then backing your way to do the things necessary to achieve the end result.

If you fail to take time to do these simple yet powerful steps, then I grant that you don’t have what it takes to be a successful real estate investor. You must remain as the visionary for where you want to lead your business and the steps to getting there. If you fail to have this vision, then you’ll always be working for someone that does. However, if you follow theses simple steps, then you’ll be amazed at the amount of ground you can cover over the next ninety days. Commit to making this your best year ever. Screw the resolutions and focus on getting things done!

About the Author

Derek Pierce, full time Real Estate Investor, shows you the exact strategies to his success in his Free Book: “How I Went From Corporate Guinea Pig To Real Estate Success”. Get your copy and Real Estate Investing Tips by going to http://www.thereisecrets.com

Real Estate Investing For Your Future

Everyone wants to be rich, right? Well, actually, everyone says they want to be rich. But few people want to actually take responsibility for taking control of their future. And that’s what you have to do in order to get rich: Take control.

Easier said than done, right? Not really. There is so much literature on the bookshelves about how to do it, anyone can learn how. And that is the key. You have to learn. You have to educate yourself. If you think that there is simply too much material out there and you wouldn’t know where to start, then you can stop worrying, because you’re already making yourself financially smarter. Simply by visiting this site and reading these articles, you are giving yourself an important education that will give you the tools to take control of your financial future. You are one step closer to being rich.

Not only are you one step closer to being rich, but I am going to tell you what you would learn if you were to read every single book in the financial section of the book store. It’s not about complex accounting principles or Wall Street magic. You can hire professionals to take care of those kinds of details for you. What you will gain from truly learning how to get rich is this: You have to change your thinking habits.

That’s it. The fact of the matter is, you only have to get out of the habit of thinking like an employee and start thinking like an investor.

I’ll give you a moment to digest that one. It’s such a simple concept, it can take you by surprise. But it’s true. Just think about the kinds of conversations you and your fellow employees tend to have when you’re talking about your jobs: ?If only the boss would let me do this.? Or how about, ?I can’t do that?I’d lose my 401K!? The employee mindset is a fearful one, dependent on the system to take care of them. Oh sure, they put in the hours so they can have a roof over their head. And that’s exactly what they get?a roof over their head. Maybe a two-week vacation once a year if they’re lucky.

If you want more than that?to be rich, for example?you have to start thinking like the people who control the money. Think like the people who work smart, not hard. With a little thought, you can figure out how to make your money work for you.

Now, who are the people who work like that, who actually control the flow of money in our economy? You might be tempted to say ?corporations,? and you would be right to an extent. But corporations are not people: They are financial entities. Think about the people behind the entities and you are on the right track.

That’s right?the businesspeople. But they are only near the top of the food chain. If you go to the very top, what you find is…investors.

Investors are at the top of the food chain because they know how to make their money work for them, instead of slaving for their money. And they are laughing all the way to the bank because they know what a simple concept it is. They know that anyone could do it. And they know that most people won’t because they are stuck thinking like employees. The sad thing for most people is that they will never break that habit. You don’t have to be one of them.

All you have to do to become one of the big fish is invest. It’s that simple. Investing in real estate is a good bet because it’s a stable investment. It’s so stable, in fact, that the bank will actually lend you money to purchase it. No kidding.

That’s the long and short of what you will learn if you read every book available to you on how to start thinking rich and stop thinking secure. They will tell you how easy it is. They will tell you to change your thinking. And they will tell you to let the experts deal with the details.

About the Author:

Alex Anderson Connects Investors With Florida Investment Properties and Minnesota Real Estate Investment Property in Appreciating Markets.

Real Estate Investing : Graduated Lease

New business start-ups need at least a few months to stabilize and it could take a few months before a break-even point occurs. To help such businesses as well as to counter he slack in rentals, commercial, industrial property owners have designed a lease called the graduated lease to entice new tenants. In a graduated lease, the lease amount is low for the initial couple of years and gradually increased proportionally the next three years in a typical five-year contract. This strategy worked so well that people have applied graduated lease to residential property too.

Graduated Lease: How does it Work? Let us say there is a person x who leases a commercial space using a graduated lease for a period of five years. The lease includes the maintenance, taxes, insurance, utilities and janitorial services charges. His office space is 2,000 squares in a 30,000 square building. He pays $20 for each square foot so his yearly base rent will be $40,000 and for fiver years $200,000. In a graduated lease he can pay $2,500 each month for the first year {$30,000}, $3000 each month for the second year {36,000} and $ 3,500 each month for the third year {42,000} and $ 3,833.3 each month for the next two years {$91,999.9}. The low monthly rental for the first three years gives X the chance to utilize the money to develop his business and stabilize financially, hence a graduated lease will work to the advantage of the lessee.

Lessees who lease commercial and industrial properties therefore prefer this kind of lease. Usually, graduated leases are offered at a flat rate for the first two years, and gradually increased as per the lease term typically five years. Lessees can negotiate to get as low an escalation cap as possible for each additional year. The lessee should make sure he understands the terms of the contract properly and that he is not paying rent for space he does not use such as a foyer or lobby to which he has no access as it is on another floor. The landlord has to ascertain that the lessee has no deceitful intent and has no record of fraud or history of delinquent rental payment. The lessee should not cause damage and or repair to the property and abscond without a trace, leaving the landlord in a lurch. It is therefore necessary for both parties to hire an experienced attorney and see to it that they are not being cheated, by carefully verifying the due-diligence and all documents presented.

Graduated leases are helpful for new entrepreneurs who can use the money saved on the first few years of the lease to build and establish their business.

There are firms that offer services and products to help new entrepreneurs run a successful business.

The First Steps In Real Estate Investing

With all the stories of people making tremendous amounts of money in real estate it’s no wonder why so many are looking at real estate as an investment vehicle. It offers more security than the stock market, provides great potential returns, offers tax benefits and let’s not forget; it sounds cool to be ‘in real estate’. Everybody can buy and sell stocks from their phone or computer these days. But real estate, now that’s something else.

One of the challenges that many are faced with is putting up the money to acquire a piece of property. Although in reality this is usually not the biggest obstacle. You might say “Hey, what do you mean, not an obstacle. I would love to invest in real estate, but I just can’t afford to!” The point is that hardly anyone who buys a piece of real estate has enough money in their account to pay for it. That’s where your banker comes in. Let’s face it. Do you know anyone that owns their own home? I mean truly own it? Probably not. Sure, you know a lot of people that have a house to their name, but wait until they get behind on their monthly mortgage payments and you will soon find out who really owns their house. That’s right, the bank. So if these people can use the bank’s money to buy a house, why can’t you?

Now ‘owning’ your own home may sound like a somewhat obvious way to get started in real estate, but it is also a very good way to do so. You might say “Duh…” But apparently this little step is overlooked by a lot of people. Just take a look at how many people are still renting a property instead of buying one. Now of course the relation between rent and housing prices varies from country to country and even from area to area. But wherever you go you will still find people renting, because in their mind “they don’t have enough money to buy a house.” In reality it would be much cheaper for them to buy!

When you rent, you are pretty much flushing your money down the toilet. Of course you are getting the pleasure of living, but the point is you’re not building anything long term. Every dollar you spend on rent is a dollar you will never see again. Whereas if you own your own home, instead of paying rent you would be paying for your mortgage. Even though there is a lot of variety in mortgages these days, the basics of practically all mortgages are more or less the same. Every month you make a payment which consists of two parts: interest and principle. The interest part can be compared to rent. Those dollars are gone with the wind and you will never hear from them again. However, the part of the payment that goes to the principle is money you keep. Every dollar that is used to pay off the principal is a dollar you put in your own pocket.

So if you’re thinking about getting started in real estate and you don’t ‘own’ your own house yet… Change it, and get some experience. It’s a great first step towards building your capital and in many cases, it just makes more sense financially. It can also supply a range of opportunities for accelerating the process of building your net worth. When real estate prices go up, so does the value of your property. Whereas the money you owe the bank, your mortgage, remains the same. In other words this helps you build your net worth. Compare this to people that are paying rent… Their net worth does nothing. However their landlord’s net worth is doing very nicely in this scenario and he or she will probably love you for it. So if you get a warm fuzzy feeling about making somebody else rich at your own expense… Keep renting. If you would rather build your own capital instead… Buy your own house!

Many home owners have accumulated more money through appreciation of their property than by working a full time job for many years. Now before you go out and buy the first property you lay eyes on, don’t forget that some security measures are in order here. As you may or may not know, real estate prices do not always go up, and certainly not in a straight line. Yep, this can be shocker to some people, as well as an ugly reminder for those who overlooked this minor detail in the past. If for some reason you would have to sell your home in a down market, it can be a costly adventure. You wouldn’t be the first to end up with a house worth considerably less than the mortgage resting on it. So make sure to keep some slack. In the long run real estate prices have always been on the rise, but in any cycle there are down periods. By keeping some slack and being patient you will be able to sit through these times and profit from the long term up-trend.

About the Author

Jim Mack is an expert on business, health and well being. He regularly contributes articles on these subjects. The Best Investing Tips

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