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Buying Investment Homes

With so much insecurity going on about the economy and so much instability in the stock market, investing in real estate may be the best choice for investors and business starters. The new technology and the internet era have created enormous flexibility for people to move around and rental properties are in high demand. Even though real estate is an excellent option for investment, there is a lot of planning and preparing to get into this business. Having knowledgeable professionals like real a estate agent and a mortgage specialist can be your best choice. Bad investing decisions are very common for investors, and the more knowledge you can gather the better are your chances in being successful as a real estate investor. Being aware of the pros and cons of real estate investing and learning the essential factors to consider before starting your business can dictate your success or failure in the real estate industry.

The Advantages and Disadvantages of Investing in Real Estate

There are a few advantages and disadvantages in real estate investing. Sherry Zander (n.d.) explains these factors and how they should be carefully considered according to your priorities.

Advantages

  • Constant income: Receiving rent money from your investment homes are a great way to have a passive and secure income that will guarantee your retirement.
  • Money invested can increase: Besides having the money invested in a home, you can still have significant profits should the home market increase.
  • Access to Credit: The further you invest in real estate the easier it is to find credit for more investments.
  • Security to your family: Having investment homes can have long-term benefits including in the case of your death, your family will be secured.

Disadvantages

  • Fixer-Uppers: Fixer-Uppers can come at a high cost. They are the most rewarding, but sometimes the costs of fixing it can surpass the profit; therefore, being aware of those costs can help you make the best decision.
  • Rental process: Renting your investment property can be very overwhelming, and the decision to rent it out to the right person can be difficult. However, renting it to that someone that will take care of your property is imperative.

Important Points to Consider When Investing in Real Estate

There are also some important factors to consider when starting your business as a real estate investor. David Shepp (2016), also explains that the increased number of renters have made investing in rental properties an attractive market, but essential considerations must be taken from the beginning.

  • Plan on having the cash flow for down payments: When you start investing in homes, you rarely have the full amount of cash to pay for the house. Most of the time, you will resort to home loans. Since the type of loans available for investments usually requires a significant down payment, plan to have the down payment money available. A mortgage specialist will be able to assist you.
  • Choose your partner wisely: If you are going to have a partner to start investing, make sure is someone you are comfortable doing business, and someone you trust. This partner will be your business partner.
  • Choose a professional real estate and mortgage specialist: It is essential to have a knowledgeable real estate agent to help you find the best deals. Also, if you will be working with home loans, having a savvy and knowledgeable mortgage specialist that you can trust is imperative.
  • Learn to be handy and fixing things: You may hire a handyman but if you are starting on a budget, doing things yourself may be the way to go. Learning as much as possible about home constructions and repairs will go a long way on your investments.
  • Consider hiring a property management company: Having a property management company to help you collect your rents and take care of your properties can be very beneficial. Evictions are very tedious and time-consuming issues that can take very long if you do not know how to go about the legal procedures.
  • Home insurance and home warranty: Problems like flooding or fire can happen. Having home insurance and home warranties are expenses that are necessary if you want to secure the money you have invested in your property.
  • Income taxes and legal issues: Once you become a real estate investor, you will be taxed by the government accordingly. Also, there are several legal aspects of owning homes like being sued by someone and losing your properties. Having a business established may be the best solution for your investment. Sitting down with an accountant and a real estate lawyer can be very useful.

As real estate investment increases, increased knowledge in this industry is a must to any new or experienced real estate investor. If you are considering venturing in this profitable business, let's sit down and talk about the options you may have in the financing department. Your success is our success.

 

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Shepp, David. (Mar. 10, 2016). 8 Things to Consider When Buying Investment Property. U.S. News.

Zander, Sherry D. (n.d.). The Advantages & Disadvantages of Investing in Real Estate. SF Gate.

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