Real Estate Investment
No one wants to lose money when investing in real estate. Moreover, when it comes to real estate investment, point-blank: The purpose is making money. The question is, how do you make your money work for you?
Concerning real estate, your return on investment, or ROI, should always exceed the amount that you pay in taxes and how much any general upkeep may cost, such as maintenance, utilities, and even insurance.
Although home buying can be intimidating for many, real estate investment is founded upon a rather simple idea. In fact, you could even equate many facets of the real estate industry to the board game Monopoly. OK. I know what you’re thinking. And, yes, this is an oversimplification. However, the fact remains, that the economic factors at play in the real estate industry are conceptually quite fundamental. In other words, the person who avoids bankruptcy, “passes GO,” and amasses the most property wins the game; all the while, collecting rent.
Of course, it’s important to remember that simple doesn’t necessarily imply easy. After all, investing in real estate is no game and has genuine consequences. So, it’s important to understand how to avoid minor inconveniences to the “Mom; I’m moving back in” problems in homebuying.
Here are a few ways that you can make money in real estate:
Many factors come into play when relying on appreciation as a source of income from a real estate investment. For instance, appreciation takes time to increase in value. Scarcity also plays a role in appreciation because if you invest in the wrong location, you might find yourself between a rock and a hard place. Flat out, real estate appreciation is squarely business. As a matter of fact, it’s much riskier than putting your money into a cash flow system.
Cash Flow Income
Cash flow income centers around larger-scale buying and relies upon steady income from rent. By allowing the tenant to occupy your property, you’re not only mitigating your investment risk, but you’re also generating cash. Additionally, this income can come from a variety of sources and not just homes. For example, cash flow can come from storage properties, convenience stores, office buildings, and rental homes.
Real Estate Related Income
Here at Veltri Realtors, we’d like to think we know a thing or two about realist the related income. After all, this income allows brokers just like us serve your needs and the day-to-day regarding real estate. That said, it’s always a good idea to pair up with other realtors and brokers when you’re out in the field. On a side note, if you don’t have a running contact-list, and keep it managed, then you’re well behind the curve.
Notwithstanding my tangent, this type of income is relatively easy to understand. A percentage, or commission, of every sale, goes to the people who help you the most when buying a new home, REALTORS®.
Here’s a couple of simple, tricks-of-the-trade :
There are a couple of things you can do when purchasing a property. For starters, you can leverage debt against your equity, like when taking out a mortgage. Now, it will serve you to remember, although this lowers the barrier for entry regarding real estate investment, it can also be dangerous.
You don’t want to lose your behind on monthly payments or interest costs, do you?
Keeping this in mind, when investing in real estate DO NOT buy equity in your own name. Instead, purchase property under an LLC or a Partnership. That way, if things go sour, you can protect yourself against extreme personal loss or even bankruptcy.
In the End
It always helps to work with a licensed real estate agent, alongside reliable contractors, dependable attorneys, and a well-rounded team.
When you’re ready to reach out to a real estate agency, choose one that is best for you!