Real estate investment. It seems you can’t turn on a weekend television program and not hear how yet another person has amassed untold wealth through real estate. HGTV reality shows make it all seem so easy, right? But what’s the real deal on this often-talked-about form of investment?
Once we finally pay off our student loans we seriously begin looking for ways to better manage our monetary finances. This is when talk starts to focus on likely investments that would make this a reality. Enter real estate.
Investing In Real Estate Seems Doable
For starters, the reason you always hear so much about real estate investing is that it’s often the first thing people think of when they hear the word investing, simply because everyone needs a place to live. Real estate is tangible. Solid. It’s easy to understand, at least from a layman’s point of view. For the everyday Jan and Joe, real estate seems, well, so doable.
We see the product everywhere:
- Residential homes
- Condominiums
- Duplexes
- Apartments
- Industrial Parks
- Corporate (Motels/Hotels/Office buildings)
Real Estate
We drive by and momentarily imagine ourselves the proud owner of such establishments. Some of us may make tentative steps to learn more. But often, not having enough hours in the day to devote to research, coupled with the learning curve stops us. But let’s not let that be you. Like most things in life, the purchasing, leasing, rent-to-own, flip and more can be accomplished if we do one thing first: start where you are.
A Strategy For Everyone
Real estate investing has, within it, enough strategies to suit every type of investor. The question is, do you know which type of investor you really are? Do you want quick returns? Then you might be interested in “Flipping Houses”. Do you want to create a passive retirement income? If so, you might begin buying and renting houses for the long term appreciation/income.
Once you have that question sorted out, you could hop online and search websites that offer solid investment information; not only for investing in real estate, but any wealth generation strategy. One you’ve accumulated a significant “nest egg” then you might consider someone like Anderson Advisors for help with learning about asset protection strategies like LLCs, taxes and even running your own non-profit.
Real Estate Strategies For The Rest of Us
Wholesaling. If you’re a young 20-something, or simply a new cash-strapped first-time investor, wholesaling offers a way to get your feet wet and put some real dollars in your pocket. You would work with a partner, preferably, a seasoned investor. Your job would be to drive the neighborhoods scouring out the best deals — according to your investor buyer’s criteria. You being new, with little cash, would use your free time to seek out deals. The investor, who has the cash, has little time. You bird dog properties and assign your position over to the investor. At closing, you receive a check for your efforts. Repeat. After a few deals, you will be ready to hold on to properties of your own. Wholesaling can give you a great start.
Flipping. If you are handy with tools and have a good design sense you can try following in the footsteps of the HGTV pros. You need to be able to find a good deal on a house that needs as little work as possible to improve what appears to be a major flaw keeping buyers away. In some instances it could be as little as a terrible paint job or terrible curb appeal. The key is to be able to accurately access how much it is going to cost to fix the problem and how much it is going to increase the market value. Unfortunately, flipping is trickier than it appears on TV.
Buy and hold. You take these monies and then purchase residences for your own portfolio. You place good, two-income families into the properties. Choose individuals who have always paid their rent on time. We’re talking about covering your assets by running thorough credit checks during the application process. Set the monthly rent at a level that allows you to cover your payment to the bank, and still leave you with some positive cash flow. Your renter will maintain the property and get up every day to go to work to pay their rent. You, as an owner, will retain all of the major benefits: appreciation, tax benefits, and monthly income. Later, you can refinance the appreciation to pull out cash to fund another investment property, sell or keep the retirement passive income once the property is paid off. Real estate gives you options.
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