Buying Real Estate – Strategies For A Sound Investment

Real estate prices are on the rise, and a shortage of rental properties makes it a prosperous time to invest. Before making the leap, take time to develop a winning strategy to ensure that your investment properties will be as sound as they are profitable.

Property is a long-term investment. Home prices go up and down. You’ll need to cover initial investment costs, make repayments on the loan, weather the cycles of property prices and tenancy changes, and make sure there’s enough money to cover expenses, even when rental properties are vacant.

Tax-Savvy Investing

When property income exceeds expenses, or rising house prices allow for increased rent, your earnings will be taxable. Should you decide to cash in on rising property prices by selling, you’ll owe capital gains tax on the profit.

Should mortgage payments and maintenance costs exceed income on a property, the net loss can be applied to other income to reduce overall taxes. Annual interest and maintenance costs on investment properties are also tax deductible.

The Informed Investor

Keep up-to-date about real estate prices and market developments in your area. Take time to research typical rental yields, service costs and availability, and average house value increases over the last few years. The Real Estate Institute of Australia is an excellent resource. Doing your homework will help you to choose the most profitable properties.

Investing With Equity

If you can manage the repayments, using the house value equity from another property is one way to start investing. Equity from a current property can give you a significant deposit and reduce your new mortgage and interest costs considerably.

Investing With Partners

Real estate can be purchased jointly to reduce individual costs. You can even divide the expenses unevenly so that all partners can invest according to their resources. Those who invest more will own more value in the house than those who invest less.

If you choose to invest with others, be sure to have your solicitor draw up a contract to clarify who pays what and for how long. The contract should also define how much stake each investor will have in the house value after the mortgage is paid.

Finding The Right Loan

There are many mortgage products on the market from which to choose. You have the option of an interest-only loan or a principal-and-interest loan. You can chose a fixed or variable interest rate. There are 100% and 110% loans. A shorter term loan will cost less, as will property purchased with a larger deposit.

Select a mortgage with features that work with your current situation. You can refinance your loan later, especially if real estate prices rise and you want to use the equity. The mortgage market is competitive; new loan products are offered all the time. Mortgage Choice offers a free and helpful service called Home Loan Health Check to learn about other loans that might work better in the future.

Buyers’ Agents And Property Finders

Buyers’ agents and property finders are invaluable sources of information about local property prices and the most profitable real estate investments in the area. They’re familiar with home prices and can share suggestions and expertise to help you find profitable properties. Agents are also skilled at negotiating with sellers and other agents to obtain the best property prices.

Accountants And Investment Advisers

Accountants and investment advisers can help you make certain your investment is sound. They can catch details you might have overlooked and help you to plan ahead. An investment adviser can help you maximize your financial position, while an accountant can help you to evaluate whether expenses will be manageable.

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Real Estate For Investment – Should You Consider Real Estate In This Market?

A lot of people are into real estate investing in spite of the weak economy. Why is that? Why should you consider real estate for investment purposes? While the current economic climate is a little tough, a worthwhile investment option can still be found in the real estate sector. One of the reasons is that people will always need a place to live!

Benefits to investing in property or real estate can be plentiful. Not only you can receive recurring monthly returns but you can also see a great increase in market value in the future. A real estate investment could mean anything from a house, land, building, apartment or any other property type with which you can make money or gain equity.

Many investors are considering real estate for investment primarily because of the income they could get from it via rental options. Normally, cash generated from property is by renting it out to qualified renters and I can’t stress the word ‘qualified’ enough!

After the mortgage is paid down, you’ll still need to pay property tax, but if you do this the way I will teach you, you can create a set of assets that will make your family set financially for life.

Another good reason that can motivate you into getting into real estate for investment purposes is in it’s ability to appreciate in value and sometimes quickly and exponentially. These days, more and more people are looking for an apartment, private home, condominium unit or any other property for lease. They are scared to purchase a home and then lose it to foreclosure. Now along with the growing population comes a lot of people who cannot seem to buy their own house because of bad credit and/or low income or simply fear and thus, just look for a place to rent. Just imagine if you have a property that you can turn into an apartment or duplex, you can easily have the money you invested in it start to come back to you quicker if you have someone else pay you rent and you build equity that way. Sell now in Denver

Your overall goal as a real estate investor should be to have enough funds that will cover all of your expenditures and still have a good amount of money left over for you every month. If you are thinking about investing in real estate for rental purposes, it is crucial to do a little research about the market for equivalent rentals and to learn about what your possible income could be.

Never jump in without knowing your numbers and that includes the values of the surrounding properties and where the value of the surrounding properties looks like they are headed.

Assuming your property is properly maintained for years, it has the possibility to appreciate in price over time and bring you a nice return after a few years. You should be aware that appreciation depends on a number of factors including market variables and fluctuations that can determine how the price of a property may increase.

Sometimes you may want to hold on to a property and simply rent it until the numbers tell you it’s time to sell. You’ll hear me beat a dead horse about this, but it’s so important, you must know your numbers!

Generally, real estate values increase by around four percent each year. This can lead to significant home or property value increase later on. Many property owners are taking advantage of appreciation by refinancing their mortgage to have the property sold or for investment somewhere else.

However, be very careful when refinancing because sometimes that ‘lower payment’ comes at a higher price tag than you thought! I’ve prepared some powerful investment information for you below, enjoy.

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