Tag Archives for " Real Estate Investment "

5 Reasons People Choose Real Estate Investment As Their Job

When young people are asked this question “What career would you like to choose in the future?” you will get to hear many answers. Doctor, pilot, president, business person, jet fighter pilot, astronaut, scientist, computer genius, surfer, swimmer, athlete, footballer, rugby player and even a hacker sometimes. The one answer that you will fail to hear a child replying is that they want to be a real estate professional.

A majority of the people today will attest that what they answered in that question when they were young is not what they are doing today. The good thing is that as an adult, you can finally make a wise decision based on income, passion, adventure and growth.

Below are 5 reasons people choose Real Estate Investment as their job.

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More freedom

The professionals have a lot of freedom since they can be their own bosses if they are not working for another real estate professional. Apart from that, one can design their own work schedule that will fit their day to day timetable. This means that they can work as much or as little as they want. While this is a good thing for many people, it can be quite a challenge for others.

To ensure that you are able to reap big rewards in the end (I mean fat commissions); you need to have a great work ethic. Uncle Ben in Spiderman told his nephew that “With great power, comes great responsibility.” In this case, “responsibility plus a great work ethic equals success.” While the professionals can work under a broker, it does not mean that he/she will be the boss always. Real estate agents can become their own bosses at the snap of the fingers. This provides more freedom to the professional which enables one to streamline their day to day activities.

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Higher rewards

According to research, many people look down on a real estate investment profession especially when they get to learn that a professional gets to earn around $40,000 in a year. This makes many people to think that real estate profession as a career is not rewarding. What they don’t know is that real estate professionals earn high rewards in terms of commissions. Every house a real estate professional sells means a fat cheque in the bank without even counting the yearly salary.

The best thing about being a real estate professional is that you can work as a part time profession treating the job as your hobby or work at it fulltime. In order to become a successful real estate broker, it means that you need to have goals, the right plan and an effective hardworking team.

When compared to an office job where you have to report at 9 am and leave at 5 pm while awaiting a monthly fixed salary, being a real estate agent seems more rewarding. While an office job can pay higher yearly especially in the corporate world, you will have to work crazy hours and meet even crazier demands.

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Ensures more control of your life

The one thing many people who work in offices fear is losing their job or quitting their job in order to start a business. In an office job, one is assured of a fixed monthly salary that comes with benefits such as health. Bonuses may be provided at the end of the year but it’s not a surety. For real estate professionals, they can start working under another successful professional.

Within 6 months or one year, they can decide to venture out and together with a few others; they can open their own real estate firm. They can get to hire their own employees and grow their firm with ease. Real estate professionals don’t fear losing their jobs as they know they can create one. This means that they have more control in their lives. One can build a business off one successful client.

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Less startup times

In most professions, you are required to undergo several certification programs in order to be qualified and be given a job. With real estate, you don’t have to undergo this; you can start now and earn commissions in no time.

Majority of the courses can be completed in no time while at other times; one can receive training from a qualified profession and still be successful.

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Unlimited room for growth

As a investment professional, one will not only grow their portfolio but they will get to grow themselves. One can hire many professionals who will enable the business to grow and acquire more assets around the world.

This will not only mean more money and success to you but to your business as well. A majority of successful people in different ventures will tell you that surrounding yourself with smart people is ultimate road to success.

Final Thoughts

A real estate investment job is not only a great way of understanding how investment works but it’s a great way to learn tips and tricks. You can grow to become your own boss and hire smart people to help you achieve your dream. The job offers you unlimited growth and unlimited rewards if done in a smart way.

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Various Types Of Real Estate Investments

The types of investments that involve real estate include Real Estate Investment Trusts which are also known as REITs, real estate partnerships, vacation rental property, rental property, and raw land investments. Each of these real estate investment types has its own advantages and disadvantages.

Real Estate Investment Trusts are companies that sells, buys, manages, and develops land and properties. These REITs are set up as a security that sells on all of the major exchanges just like a stock, and directly invests in real estate by mortgages or property. These trusts get special consideration concerning taxes and they usually offer a high yield and are very liquid compared to other real estate investment types. Individual people can invest in this type of real estate investment by purchasing shares directly on one of the open exchange markets or through an investment broker.

The next type of real estate investment we will look at is a real estate partnership. This is when several individuals partner together and pool their funds and resources for the sole purpose of real estate investment. Investments are made with joint ownership with the other partners in the real estate investment group.

Vacation rental property is one type of real estate investment that provides a rental income most of the time. This type is considered a long term investment, but a big advantage is that you can sell this property and get the value of the property no matter how many years you collect rent for the property. The disadvantage is that as the owner of the property you are responsible for any damage, repairs, and maintenance even if the renter caused the problem. If the problem was caused by the tenant then you do have some remedies available in civil court for the cost of repairs and parts. This investment property is generally rented for short periods of time, and there may be periods of vacancy where there is no rental income from it.

Rental property can be one of the best real estate investment types when it comes to long term income. This type of investment property usually provides a monthly income unless the property is vacant. No matter how long you own the investment property you should get back at least the value of your original investment, and in most cases much more. You collect rent for as long as you own the property without your investment ever losing value, so the monthly income minus expenses is a lot like a very high interest payment. Raw land real estate investment is when a person or company invests in raw land and then makes a profit off of the natural resources of the land or develops the property.

No matter which real estate investment type you choose, you should be aware of all the advantages and disadvantages for the type you are planning to invest in. Do the research and make your investment plan, including which types of real estate you want to invest in. Do your homework before investing and you will never be sorry afterward.

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3 Things You Must Do to Succeed at Real Estate Investing

Acknowledge the Basics

Real estate investing involves acquisition, holding, and sale of rights in real property with the expectation of using cash inflows for potential future cash outflows and thereby generating a favorable rate of return on that investment.

More advantageous then stock investments (which usually require more investor equity) real estate investments offer the advantage to leverage a real estate property heavily. In other words, with an investment in real estate, you can use other people’s money to magnify your rate of return and control a much larger investment than would be possible otherwise. Moreover, with rental property, you can virtually use other people’s money to pay off your loan.

But aside from leverage, real estate investing provides other benefits to investors such as yields from annual after-tax cash flows, equity buildup through appreciation of the asset, and cash flow after tax upon sale. Plus, non-monetary returns such as pride of ownership, the security that you control ownership, and portfolio diversification.

Of course, capital is required, there are risks associated with investing in real estate, and real estate investment property can be management-intensive. Nonetheless, real estate investing is a source of wealth, and that should be enough motivation for us to want to get better at it.

 

Understand the Elements of Return

Real estate is not purchased, held, or sold on emotion. Real estate investing is not a love affair; it’s about a return on investment. As such, prudent real estate investors always consider these four basic elements of return to determine the potential benefits of purchasing, holding on to, or selling an income property investment.

1. Cash Flow – The amount of money that comes in from rents and other income less what goes out for operating expenses and debt service (loan payment) determines a property’s cash flow. Furthermore, real estate investing is all about the investment property’s cash flow. You’re purchasing a rental property’s income stream, so be sure that the numbers you rely on later to calculate cash flow are truthful and correct.

2. Appreciation – This is the growth in value of a property over time, or future selling price minus original purchase price. The fundamental truth to understand about appreciation, however, is that real estate investors buy the income stream of investment property. It stands to reason, therefore, that the more income you can sell, the more you can expect your property to be worth. In other words, make a determination about the likelihood of an increase in income and throw it into your decision-making.

3. Loan Amortization – This means a periodic reduction of the loan over time leading to increased equity. Because lenders evaluate rental property based on income stream, when buying multifamily property, present lenders with clear and concise cash flow reports. Properties with income and expenses represented accurately to the lender increase the chances the investor will obtain a favorable financing.

4. Tax Shelter – This signifies a legal way to use real estate investment property to reduce annual or ultimate income taxes. No one-size-fits-all, though, and the prudent real estate investor should check with a tax expert to be sure what the current tax laws are for the investor in any particular year.

 

Do Your Homework

1. Form the correct attitude. Dispel the thought that investing in rental properties is like buying a home and develop the attitude that real estate investing is business. Look beyond curb appeal, exciting amenities, and desirable floor plans unless they contribute to the income. Focus on the numbers. “Only women are beautiful,” an investor once told me. “What are the numbers?”

2. Develop a real estate investment goal with meaningful objectives. Have a plan with stated goals that best frames your investment strategy; it’s one of the most important elements of successful investing. What do you want to achieve? By when do you want to achieve it? How much cash are you willing to invest comfortably, and what rate of return are you hoping to generate?

3. Research your market. Understanding as much as possible about the conditions of the real estate market surrounding the rental property you want to purchase is a necessary and prudent approach to real estate investing. Learn about property values, rents, and occupancy rates in your local area. You can turn to a qualified real estate professional or speak with the county tax assessor.

4. Learn the terms and returns and how to compute them. Get familiar with the nuances of real estate investing and learn the terms, formulas, and calculations. There are sites online that provide free information.

5. Consider investing in real estate investment software. Having the ability to create your own rental property analysis gives you more control about how the cash flow numbers are presented and a better understanding about a property’s profitability. There are software providers online.

6. Create a relationship with a real estate professional that knows the local real estate market and understands rental property. It won’t advance your investment objectives to spend time with an agent unless that person knows about investment property and is adequately prepared to help you correctly procure it. Work with a real estate investment specialist.

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7 Top Real Estate Investing Jobs

Of course, with these examples, the amount of work, time and knowledge you put into it will certainly pay off more (or less)

1. Property Profiling (birddogging) – this popular way to get started in real estate investing provides a real estate investing job with a decent income – something along the lines of what a factory worker would make in the area.

2. Lease Purchase – this powerful tool can be utilized to buy and sell property with no money out of your pocket (a Real Estate Investing sandwich), while keeping a nice pocketful of money for your time (can you tell this is one of my favorites?) An active person can make about 1.5 – 3 times more than the Property Profiler, on average.

3. Subject To – with a bit of training, you can make this method of real estate investing really pay off big. Once you know how to negotiate these deals, your real estate investing income will reach that of corporate executives – with much less of a time requirement.

4. Foreclosures – while highly lucrative and one of the top income producing methods of real estate investing, the time and knowledge required to actively pursue such deals is becoming more difficult all the time.

The payoff to those that can perform these deals is huge – about 10 times that of the Property Profilers, however, finding deals is much more difficult due to the number of people looking for them.

5. Tax Lien certificates – this is a true form of Real Estate Investing – actually putting your money into something that produces a return – one of the safest investments around with returns that beat any other form of passive investing. If you have money to invest, this is a great area to get into with 15%+ return with almost no down side.

This is still a real estate investing ‘job’ as tax lien certificates are short term, quick turn profit generators, not sustained over time, plus they take skill and talent to make the maximum profits.

6. Short Sales – this form of Real Estate Investing is another job, as your knowledge level and timing are extremely important. A lot of money can be made with this type of Real Estate Investing job – as much or more than any other form – once you know how.

7. Secondary notes/Purchasing Equity positions – a ‘higher level’ of real estate investing, where more knowledge is needed to limit the risk, however, the returns on equity position purchases can be extremely high – from 6%-10% for fully passive results and ‘sky’s the limit’ for purchasing equity positions.

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Three Smart Reasons To Invest In Real Estate

Buying Property Is A Double Investment

When you purchase stock in a company, you are counting on your purchase increasing in price as the years go on. That is all it does. When you invest in real estate, not only does your property appreciate in value, but you can also use the space. The average existing home appreciated 5.4 percent from 1968-2009. So a $100,000 home purchased in 1968 would be worth nearly $864,000 today. That alone makes it a good investment. But if you lived in that house during that time, not only were you gaining the increased value every year, but you were not paying rent to live elsewhere. If you rented the property out, you were making the 5.4 percent a year, plus whatever profits were gained from your tenants.

Tax Benefits

Investing in stock or contributing to your 401k is a solid investment strategy. However, it does not offer all of the benefits that real estate does. When you purchase a property, there are a myriad of tax write offs and deductions available. This is especially true if it is purchased as a rental property. Even minor expenses such as driving to check on the property, installing an alarm system, or buying new light bulbs can be written off. So not only are you increasing the value of your investment with each purchase, but you avoid paying taxes on that same amount.

Property Is A Vanishing Commodity

“Buy land, they are not making it anymore.” This is as true today as it was 100 years when Mark Twain said it. With increasing zoning laws and land use restrictions, it is becoming harder than ever to build new homes or businesses. Every property purchased makes the available market smaller. While we are nowhere near capacity yet, the value of existing properties only increases, and will continue to do so over time.

Investing in real estate can be a frightening undertaking. However, if done cautiously and with good advice, it is one of the best investments on the market. It is a finite commodity that will only increase in value. It provides the investor with a number of options for tax benefits. And most importantly of all, it is an investment that not only accrues value, but provides the owner with a place to live or rent as well. No other investment can offer the double value that real estate does.

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Real Estate Investment-A Quick Tour

What is real estate investment? The real estate investment is the investment of funds in financial assets or property rights in order to obtain the return or financial statements. Some of the ways that this can have is the return of financial return, asset appreciation, or the recovery side (for example, to buy the land around a luxury development assures the view of the surrounding green spaces and “holds” the high price for lack of a competing bid), among others What are the possible forms of real estate investment? As with any investment, real estate investment-profit. However, in real estate investing there are many ways to achieve profit: 1. Buy and sell buy, merge and re-sell value, thereby obtaining a financial asset, which can add up valueof the following ways:Works By performing restoration work or remodeling can add to property value much higher than the cost of the same Projects through the design approval of construction / expansion / change of use (eg move from industry to housing)extends the value of the property Growing market- When the market is growing, you can simply buy themselves, continued for a period prescribed and re-sell Buy well

When you buy below the market price, can go back to sell at market price thereby obtaining an asset Assignment of position- may give up rights, such as giving up a position in a preliminary contract of sale, since the buyer is willing to pay a premium to the initial investor Highlight properties- in some cases it is possible to make a highlight of a property eg a house with a large field where you can highlight a piece that will serve to build another house. In these cases the profit can be generated by sales of shares resulting from, or sale of a party, leaving the rest far below the actual cost or no cost Buy and sell property-income buys these cases umimóvel, recovered and rents up. Then the property is sold to an investor interested in fixed income and valuation is done by comparison with other possible applications of money, such as bank deposits or investment in bonds and shares.Buy-buy for performance, prepare for sale and lease, and the profit to net rents, plus the valuation of the property Housing can buy yourself a fraction, a building or a set of units and rents to market prices.Before you rent will have to recover (if still used), equip (optionally appliances and furniture) and set the rules, such as the target customer, the kind of asking for guarantees (guarantor bank guarantees, etc.)

The type contract and the contract term.Trade, services and industry- in this case the target customer is a company and therefore may not be necessary to remodel the space and equipment. However, it is important to define the type of companies that do not want to allow the space in question (eg a bar night in a residential building), the type of collateral, the type of contract and its duration. It is also important to the negotiation of works to be carried out and state in which the tenant agrees to leave the property.Other- there are alternative forms of investment income, such as fractions of the cases included in holiday resorts, hotels operated by major international networks, etc.Other ways to profit from real estate, there are many other ways to profit from real estate investment:Investment funds, participation in investment funds, obtaining dividends and appreciation of heritage Participation in consortia, participating as an investor in real estate development projects such as large housing developments, and other aparthotels, getting management on behalf of a professional team Others, in addition to the forms described here, there are other forms of investment, lack of deep knowledge on the part of the author and are not highly relevant to the vast majority of investorsArticle Search, not discussed here.

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What Is A Real Estate Investment Trust

A real estate investment trust is a device that permits you to invest in real estate and property but without the usually hassles associated with purchasing such property on your own. A real estate investment trust is a system where a group of investors collectively gather their funds into a legal trust and invest in various forms of real estate. If you’ve ever heard of other investment mechanisms such as mutual funds, you’ll understand the way real estate investment trusts are supposed to work. A real estate investment trust may also be known as a REIT and a REIT invests in different types of property. The different types of property that are invested in may be residential or commercial or even for leisure purposes. Simple REITs may invest in property as a simple as an apartment block or as complex as a group of hotels and leisure parks. Some real estate investment trusts even own shopping centers and movie theatres and it all depends of the purposes of the people who initially set up the real estate investment trust.

Different types of REIT’s exist and some of these trusts are private in nature. A number of these real estate investment trusts are public and can be found on stock exchanges such as the NYSE and the London Stock Exchange. One form of real estate investment trust is the mortgage REIT, which provides a unique service in that it supplies new home owners with money in order to purchase new property. People may also invest in such devices in order to get loans and securities which are backed by these REITs and mortgages. As with any investment device, a certain form of risk is always involved and methods have been created to effectively handle these types of risk. The risks that are associated with a real estate investment trust will vary and can be dependent on a varied number of factors some of which include the location the investments are based in and other factors.

In recent times REITs have increased in popularity due to a different number of reasons. Some people prefer real estate investment trusts because they are associated with factors that they can easily understand. Some people prefer REITs because they are identified with development and growth. Others simply make investments for certain reasons which are often driven by emotional factors. Statistics have shown that some relations exist between the prices of stock and the prices of real estate and profitability of REITs may easily be determined by monitoring for such statistics and varying volatility of stock markets in a particular region.

If you want to invest in real estate but you have often been scared of the problems of tying down all your money in one particular investment, REITs make perfect sense for you. The increased popularity of these devicesFeature Articles, the growth of demand for quality real estate on a global scale as well as the opening of new vistas for investment such as the economies of newer countries on the boom such as the UAE and the countries of the former Eastern Bloc of Europe show better times ahead for early investors.

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