Realestate Investing Tips and Tricks!
Investing in realestate can be a rewarding and profitable experience. But, before diving in it's imperative to have a solid understanding of the process involved. After all, realestate investing does require money. You'll want to learn everything you can about the pros and cons of playing the realestate game before shelling out your hard earned cash.
Basically, there are two ways to make money in realestate investments. First, you can acquire appreciation on property you buy directly. Second, you can invest in realestate financial instruments such as shares of real estate investment trusts (REIT) or stocks of housing developers.
There are many different types of real estate, but most fall into either residential or commercial properties. Residential properties include family homes, second homes, vacation homes and rental properties. Rental properties include duplexes, apartments, condos, mobile homes or even private islands.
Commercial realestate includes multi-family properties such as apartment buildings or condominium complexes. Other commercial properties include office buildings, office complexes, retail shops, restaurants, shopping malls and strip centers.
A lesser known commercial realestate investment opportunity is that of vacant land. The land can be used for farming or ranching, or to erect office buildings or housing developments. RealestaeInvesting in vacant land located in rapidly growing areas or those expected to grow within a few years can be extremely lucrative.
Residential property is by far the most popular realestate investment. Many people choose to invest in single dwelling homes as rental property. Although rental properties generally provide a good return on investment it can take years to turn a substantial profit. In the meantime, you have the headaches of being a landlord.
An option to residential rental realestate is to invest in rent-to-own houses. Basically, you rent the home to an individual for a certain period of time. A percentage of the rent is applied toward the purchase of the home. After two or three years, the tenant obtains financing and purchases the home for a set amount.
Rent-to-own properties offer the opportunity to turn a faster profit; however, legal documents are required and specific bookkeeping records are required by the Internal Revenue Service. If the tenant is unable to complete the purchase, the contract becomes void. You can then decide to sell the property or engage in another rent-to-own contract.
House flipping is another popular choice with real estate investors. House flipping involves purchasing a home in need of repair or renovation. Investors purchase the home under market value, make the repairs and update the home, then sell it for a profit. Typically, the entire transaction takes place within three months.
Although house flipping can yield a tidy profit, it's not without risk. If you decide to go this route, take time to educate yourself about the market where the property is located. Otherwise, you could be sitting on the property for quite some time.
Published on September 11, 2007 at 10:51 PM | Comments: 3
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