Why Real Estate Investing Can Be Easy

Using leverage to buy real estate is the fastest way to build your portfolio. As Conrad Hilton’s mother once said, “If you want to launch big ships, you have to go where the water is deep.”There are 4 main benefits of building a Real Estate Portfolio.

The first is Cash Flow. In many of today’s transactions creating cash flow can be obtained by strong negotiating. It is currently becoming a buyer’s market and you will need an agent that will be dedicated to helping you obtain the property at the best price. Interest rates are still low and minimal closing costs can be obtained from the many lenders pushing their product lines.

The second benefit of building your real estate portfolio is Inflation. As you make improvements to your buildings, in today’s dollars, you will beat inflation. You will compound your money as you make improvements that last over years. The decrease in long-term expenses will help you make a larger profit in the long-run. Think long-term with real estate.

Tax breaks are the third benefit. Investing in real estate has always been heralded by Americans and you will be rewarded for it. There are numerous tax shelters that can be used. You will be able to take advantage of the many tax breaks with concerns such as capital gains, deductions, and everyone’s favorite - DEPRECIATION.

Lastly, we can’t forget Equity Build-up. Buying real estate is an investment that can have high reward over time. Obtaining financing and paying your mortgage on time every month is like an automatic investment program. You are paying down the principle every month while the market is going up over the long-term. It is a win-win scenario.Many of the overnight get rich quick schemes are a scam when it comes to real estate. You will do well by aligning yourself with a great team - Mortgage Officer, Real Estate Broker, Inspector, Attorney and Accountant - that will look out for your needs. If you buy a building at the best price (have your Real Estate agent create a Comparative Market Analysis for you) and are willing to put some sweat equity into it, you will create wealth for yourself over time.

10 Important Tips to Successful Real Estate Investing

Raja” Ahluwalia

When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know:

When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know:

1. Compare Property Values and Rents

Financial statistics only go so far; the best measure of a property’s market value is often the sale prices of nearby properties. The same holds true for area rents. A low price can often be justified by a reasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a need.

2. Be Careful - Tax Laws May Change

Don’t base your tax investment on current tax laws. The tax code is constantly changing, and a good investment is a good investment regardless of the tax code. The right property with the right financing is what you should look for as an investor.

3. Specialize In Something You Know

Start in a market segment you know. Whether you focus on fixer-uppers, foreclosures, starter homes, low-down payment properties, condominiums, or small apartment buildings, you’ll benefit from experience by specializing in one aspect of investment real estate properties.

4. Know The Costs Going In!

Know the financial statements inside out. What are operating expenses? What are loan payments? Vacancy costs? Taxes? What does the cash flow statement look like? These are key issues that must be addressed before making a solid investment.

5. Know Where Your Tenants Are Coming From

If the last rent increase was recent, your tenants may be considering a move. If tenants have a short-term lease, they may be living there simply to attract unsuspecting buyers. It is also important to collect the tenants’ security deposits at closing.

6. Assess The Tax Situation

Taxes are an integral part of successful real estate investing, and they often make the difference between a positive cash flow and a negative one. Know the tax situation, and see how it can be manipulated to your advantage. It may be a good idea to consult a tax advisor.
7. Investigate Insurance Coverage

If seller’s coverage is based on lower-than-current replacement value, your insurance cost may increase when you pay a higher purchase price.

8. Confirm Utility Costs

Ask the local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant’s rent.

9. Consult Your Accountant

Taxation is a key element of successful real estate investing, so be sure to find an accountant who is well-versed with the constantly evolving tax code.

10. Inspect!

Make sure that you always perform a thorough inspection of the property before buying it. Never, ever buy any property without at least examining the site. In some cases, hiring professional inspectors to examine the structural mechanical system may be a sound investment.

(c) Copyright 2005 Madan Ahluwalia. All rights reserved.

ABOUT THE AUTHOR

10 Important Tips to Successful Real Estate Investing

Raja” Ahluwalia

When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know:

When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know:

1. Compare Property Values and Rents

Financial statistics only go so far; the best measure of a property’s market value is often the sale prices of nearby properties. The same holds true for area rents. A low price can often be justified by a reasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a need.

2. Be Careful - Tax Laws May Change

Don’t base your tax investment on current tax laws. The tax code is constantly changing, and a good investment is a good investment regardless of the tax code. The right property with the right financing is what you should look for as an investor.

3. Specialize In Something You Know

Start in a market segment you know. Whether you focus on fixer-uppers, foreclosures, starter homes, low-down payment properties, condominiums, or small apartment buildings, you’ll benefit from experience by specializing in one aspect of investment real estate properties.

4. Know The Costs Going In!

Know the financial statements inside out. What are operating expenses? What are loan payments? Vacancy costs? Taxes? What does the cash flow statement look like? These are key issues that must be addressed before making a solid investment.

5. Know Where Your Tenants Are Coming From

If the last rent increase was recent, your tenants may be considering a move. If tenants have a short-term lease, they may be living there simply to attract unsuspecting buyers. It is also important to collect the tenants’ security deposits at closing.

6. Assess The Tax Situation

Taxes are an integral part of successful real estate investing, and they often make the difference between a positive cash flow and a negative one. Know the tax situation, and see how it can be manipulated to your advantage. It may be a good idea to consult a tax advisor.
7. Investigate Insurance Coverage

If seller’s coverage is based on lower-than-current replacement value, your insurance cost may increase when you pay a higher purchase price.

8. Confirm Utility Costs

Ask the local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant’s rent.

9. Consult Your Accountant

Taxation is a key element of successful real estate investing, so be sure to find an accountant who is well-versed with the constantly evolving tax code.

10. Inspect!

Make sure that you always perform a thorough inspection of the property before buying it. Never, ever buy any property without at least examining the site. In some cases, hiring professional inspectors to examine the structural mechanical system may be a sound investment.

(c) Copyright 2005 Madan Ahluwalia. All rights reserved.

ABOUT THE AUTHOR

5 Killer Tips to Successful Real Estate Investing

1. Always do comparisons on property values and rents.

Do not rely solely on statistics. The best way to gauge a property’s market value is to check the sales prices of similar properties in the vicinity.

The same goes for the value of rents in the area. If the price is low, you can justify it with a decent rental value as tenants who can afford to pay high rent may well opt to purchase the property themselves.

Thus be reasonable on the rental prices.

2. Stay alert as tax laws may change

Don’t bet on current tax laws for your tax investment. The tax code is always evolving and regardless of the tax code, a great investment will remain just that; a great investment.

As a real estate investor, you should look for the right property with the right financing.

3. Be a specialist

Begin in a market segment you are familiar with. You can focus on one of the following:- Fix-uppers, foreclosures, low down-payment homes, starter properties, small apartment buildings, condominiums, etc.

By being a specialist in one of the market segments of real estate investing, you’ll surely benefit from the experience.

This is important for a successful real estate investing.

4. Find out all the costs involved

You must know the financial statements very well for example, operating expenses, loan payments, vacancy costs, taxes, etc.

Do not forget the cash flow statement. You must do this before taking the plunge and investing.

5. Find out where your tenants come from and their plans for the future.

Your tenants may consider moving if you increase your rent recently. If your tenants are renting for a short-term, it could be that they are staying there to attract unsuspecting buyers.

Do not forget to collect at least 2 months deposit as a security measure.

In summary, taking action is key to a successful real estate investing…

Knowing the Market is Key to Real Estate Investing

Real Estate Investing

A current hot topic on television, real estate investing is seen by many as a way to “Get Rich Quick”. What they don’t explain on shows like “Flip This House” is that the investors are professionals with years of experience. People that are not experienced or committed to learning the ropes are in for a hard lesson if, and when, they bite off more than they can chew. One of the best things a real estate investor can do is learn the local market conditions.

Know Your Market

Understanding you environment and market conditions will definitely give you a chance to make your investment a success. For instance, buying low and selling high is probably not going to happen in buyer’s market conditions. Of course there are exceptions to every scenario. When in doubt, do your research. Check out the newspaper. Watch the homes for sale in your own neighborhood. See how long they have been on the market. If you are planning on having a professional real estate agent market your home, talk to them. Get the information about market conditions prior to making the initial investment.

Where to Look

1. Look in the newspaper: Read the local real estate section in the newspaper.

2. Pick up the free magazines listing homes for sale at the grocery store.

3. Visit the neighborhoods in which you would like to invest and watch how long homes are sitting on the market before selling.

4. Check the internet. Find a local real estate website with information regarding local real estate market conditions. For example, a real estate agent in Birmingham, Alabama offers information on the Birmingham Alabama real estate market conditions and advice for home buyers and sellers.

Once you have familiarized yourself with your local real estate market, you will have a better idea of what to expect from your investment. Remember, there is one consistent fact to the real estate market, it changes. So staying current on the market should be a priority with any real estate investor. Once you have become educated on your real estate market, you will be able to look for homes that have good investment potential and be able to discern whether or not a positive return on investment will occur within your time frame. Which in turn will make your investment scheme a success.