April 5, 2010

Real Estate Investing | The Property Investor – Investment Options

To some people, purchasing a real estate property is not just about finding the perfect home… it’s also about doing business and making money from it. The property investor is always looking for investment opportunities that can give high, big gains. Investing in real estate properties is less complicated as compared to stocks or bond investments and this may be the reason why a lot of people are making the shift.

For many years, it has been the practice of property investors to purchase properties and have then rented out by tenants. This is also called landlording. As the landlord, you will be responsible for paying the maintenance costs, taxes, and mortgage. Such expenses are covered by the monthly rental income that the landlord receives. To ensure loyal tenants, the property investor should charge reasonable rent because over time, the property will appreciate in value and you would have already paid off the mortgage. It’s up to you whether you will hold on to the property or you sell it. There are times when problems set in. What are you going to do if you encounter bad tenants? Such situation will leave you with negative cash flow which can affect mortgage payments and other relevant costs. Another problem is the vacancy rate. You have to ensure that the property is situated on a location where there is a low vacancy rate.

Another option would be investment groups. This is a great option for those who want to get rental properties but don’t want to be in the dirty business. The property investor can own one or more units but then a certain company manages all the units. You no longer have to attend to maintenance, interviews, advertising, and other tasks. The company that manages the units receives a certain percentage from the monthly rents.

If you are a ‘wild investor’, you can go for trading. These investors are different from landlords. In this case, you will be purchasing a property and hold it for a short time. This is more popularly known as flipping. You can start by purchasing undervalued properties and selling them for profit. Most investors who are into trading will not spend for repairs or home improvements. This can provide you with a regular cash flow. Some landlords are also into flipping properties to take care of their cash flow needs.

These are some of the investment options for property investors like you.

I’m Mark Bottomley, an experienced real estate investor. I would like to share my expertise about the property investor though this site http://www.thepropertyinvestor.info.

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5 Comments on Real Estate Investing | The Property Investor – Investment Options »

April 3, 2011

David Crook @ 2:44 am:

Thanks for the comments on my WSJ piece. It grew out of the first chapter of my book, “The WSJ Complete Real-Estate Investing Guidebook.” The chapter, “Your Home Is Not an Investment Property,” outlines the differences between home owning and real-estate investing. I am currently working a new book (out next year) that further expands on the issues of owning a home and managing what for most people is their largest asset.
Thanks agian for the attention.
Best,
David Crook
david.crook@wsj.com

May 18, 2011

mattangelo1985 @ 3:07 pm:

US Probate Leads provide probate investing, Probate leads and Probate Properties for people with interest in real estate investing. This is a great start to finding lucrative deals.

June 19, 2011

Trust Deed Investing @ 3:30 pm:

Great blog. You should point your readers over to Jan Brzeski’s You Tube channel. He has a handful of really informative lectures on there discussing trust deed investing, bridge lending and real estate investing.

September 19, 2011

Simpson G @ 6:44 pm:

Las Vegas real estate isn't going to be increasing in value anytime in the next 5-10 years. If you have the cash burning a hole in your pocket and you know that finding good tenants to rent to is going to be easy, and you don't need to see an increase in property values for a long time, then Las Vegas is great.

Real Estate can be a great investment, if you do it right. If you are going to be mortgaged up to your eyeballs without a property manager and don't know how to run the numbers correctly, it can be a complete nightmare.

Too many people forget to add in things like closing costs, mortgage interest, upkeep, utlities, HOA fees, property taxes, etc, and when they see a $10,000 return without counting all that, they get hooked. Then suddenly they don't understand why they aren't making their mortgage payments and dread that next property tax bill.

November 3, 2011

mhaize @ 5:21 pm:

Yes, talk to your accountant regarding sale of primary / secondary residence.

The sale on duplex, you may have to bite, unless you convert it into another secondary residence (after the sale of the house at your former state).

There's great savings potential in planning these sales, talk to your accountant, as there are details here that you may need to know. Can't answer your question with limited detail.

Goodluck,

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