Rent and Hold or Fix and Flip

Home-for-rentOne of the best investments that you can make today is real estate. While purchasing your own home is certainly a laudable and beneficial way to invest your funds, many have discovered that buying properties to rent or fix up and sell can be a fabulous way to make significant profit.

Buy Where There is Demand and Rent It Out

However, you should be aware that real estate investing is not without risks. There may be times when you do not have a tenant or find yourself with one who ends up costing you through damages or refusal to pay. Additionally, you need to be certain that you purchase property in an area that has a low vacancy rate. Otherwise, you may end up with a piece of property that is very difficult to rent.

To minimize your risk with real estate investments, it is often worthwhile to work with a real estate investment group. This will allow you to buy into a property that is maintained by a management company. They handle the day to day operations of the rentals for a percentage of the collected rents. This will cut into your cash flow a little each month but the alternative of having a vacant property can potentially derail your investment. As a resource, here are some real estate investment analysis spreadsheets which will help you make key decisions with your venture.

The Fix and Flip Method

One way to gain profit through real estate is by flipping properties. This is a common method for many who understand how to find and resale properties quickly. There are a couple of methods that people usually employ when flipping land and buildings like this.

The first is finding a property that needs no repair. It should be priced too low or in a market that is really hot at the time. Both of these allow for a quick return to the market at a marked up price.

Alternatively, if you have the skills, you may want to purchase residential or commercial space that may need some minor adjustments. Simple things like remodeling the kitchen can increase the value of it. However, before you make alterations, you need to determine the impact on property value compared to the money and time you are putting into the changes. You want to choose the changes that will provide you the greatest return on your investment.

Real estate investing is something that many have found quite profitable. If you have limited funds or are uncertain about the idea, you may want to join an investment group. However, you may be more comfortable with employing one of the flipping methods. No matter what you decide, do your research and you will learn how to turn a profit.

The Different Types Of Real Estate Investing

Renovated HouseWhen you say “real estate investing”, most people think it’s all about buying a property and renting it out as a landlord. However, the truth is that there are other forms of real estate investment that you can venture into.

House flipping

House flipping was very popular at the turn of this century. How does it work? You buy a property for cheap and sell it for high. The key to making a lot of money with this venture is to find a rundown property that you can buy at a really cheap price, like $50,000, and sell it for at least $150,000 after renovation and repairs. If you buy a house for $50,000 and sell it for only $55,000, it’s better to just go and find a job — if that is the case, see REITs below :-)

House flipping is expensive and time-consuming. While it’s obvious you need to have the money to buy a property, you need to have a keen eye for picking the right property at the right location and at the right price. Also, in order to make a great profit, you need to have so-called sweat equity.

The people who can make the most money from flipping houses are carpenters, plumbers and professional builders. As a matter of fact, many of these skilled professionals flipped houses on the side at the height of house flipping’s popularity. If you need to hire a professional to do repairs, it’s going to reduce your margin of profit.

Real Estate Investment Trust (REIT)

REITs are the mutual funds of real estate property. If you own REIT shares, you own property but you don’t need to deal with the problems and challenges of being a landlord. The company offering the REIT buys or builds some apartment blocks and other real estate property, after which they allow traders to purchase shares, thus sharing the ownership. You as the investor are part owner to a property, but it’s the company offering the REIT that handles the maintenance of the property as well as its sales marketing. In addition, the company also manages the tenants

You will find several types of REITs, however, in the traditional model, the lease contract is in the name of the investor title. The quality of an REIT depends on the quality of the company offering it. Theoretically, REIT is a safe method of investing in real estate, however, REIT companies are susceptible to exactly the same costs that haunt the mutual fund industry.

The Biggest Investment of Most of Our Lives

home investmentWhen you think about it, buying real estate is the most high priced item that most of us purchase in a lifetime. The beauty is we can do it by leveraging a small amount of investment capital (especially with foreclosures) to multiply the performance of the investment. Let’s not get ahead of ourselves — real estate is a dog-eat-dog world and you need a sound strategy and the best resources in your arsenal to be successful. This website strives to provide that go to source and insights to help you become a real estate star.

Why Choose Real Estate As An Investment Vehicle?

Whether it be straight up investment properties or searching for home that you will be living in, real estate offers a great opportunity to grow your net worth. For many of us saving money is difficult, especially as everything gets more expensive while our salaries remain flat. So why not take a necessary expense and transform it into an investment? Creating a forced savings system with great upside potential is great when it is money you would have spent anyway on rent.

Not A Sure Thing But With The Right Knowledge…

Real estate is by no means a guarantee as certain areas of the country has been hit hard. However for those that live in areas that are appreciating or ready for a upturn, this website will be most helpful. We will cover topics such as investment properties, how to search for a home the right way, and what to do at each step of the buying-selling process. Understanding everything from how appraisals can affect the sale of the house, to making sure your home inspector covers your bases, will be a huge asset to you as you move forward.

The School of Hard Knocks

You maybe wondering what makes us qualified to provide this information? Well the truth is we have failed many times, enough times to learn all the ins-and-outs and pitfalls of this kind of investing. We just hope that by sharing this information we can help you to not make the same mistakes that we made. If you have an open mind you will be able to leap ahead, save yourself time and get the most out of every heartbeat you put into your real estate venture.

Thanks for your interest and check back soon to see our latest entries.