Real estate investing refers to the act of owning, buying, managing, renting and or selling of real estate properties for a profit. Real estate investment could be very beneficial in wealth creation if you go about it the right way as it can also be a very risky investment deal if not properly thought through.
Some of the major causes of failure in real estate investment are flipping, which is related to short term profits without any effort and also having negative cash flow for a long unsustainable period prompting reselling properties at a loss.
To make it big in real estate investing you have to act smart before you get into business as well as once you are in business. How do you do that? It is necessary to have a plan on acquisition of the real estate investment property; investment opportunities are challenging as well as pricing as finding properties to invest in could be tough with too much competition from other interested investors. In retrospect locating property to buy or invest in is very challenging as some of these information is not readily available in the market.
Being smart at property acquisition has a lot to do with your success or failure in the business of real estate investment. Having basic information on properties through market listings, public auctions, banks, government entities, private sales and real estate agents will put you a step ahead in proper and beneficial acquisition. Real estate investing is very promising in return profits thus before you start investing you must have a source of leverage and investment capital.
Buying property could be quite costly depending on the source; rarely does initial payment consist of complete cash price of property but instead mortgage loan or debt buying. It is important to note that one of the best ways to invest in real estate is through the Real Estate Investing Trusts as it is the easiest way to invest without paying the federal income tax. REIT has made so many things easy for millions of investors as well as providing them with so many benefits and stakes as shareholders in major business properties. Requirements are for investors to pay 90% or more of their profits as dividends to shareholders. The fact that you can use your retirement portfolio in real estate investment with the help of REIT provides you a life cover of benefits.
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How to invest in real estate
So how do you invest in real estate so as to retire early and rich? You may buy a basic rental property where you become the landlord and take charge of paying mortgage as well as maintaining the property. This kind of investment works perfectly for you if you choose the best location for your rentals; a place where people will always want to live as well as with low vacancy rates so as to ensure you don’t overspend and run into a negative cash flow.
In real estate investing you may become very wealthy within a very short time if you work smart and only choose properties that will return your investment capital in double quantities. In addition, making a lot of money from real estate investment demands that you lower your expenses at a considerably good level; this can be achieved by purchasing property that is of very good quality to avoid frequent maintenance expenditures. You must have an understanding with tenants in property protection to avoid repairing houses every time a tenant moves out. Investing wisely as well as keeping your focus on the goal; wealth acquisition will see you retire as early as in your 30’s.
Real estate investing will help you retire early as it basically involves accumulating wealth and saving as much capital as possible. Patience is the key to succeeding in real estate investment. Buying a home may be a well calculated move if you get a very good one. This means that with the returns from this property you will be able to get additional properties of the same worth or even more.
Reproducing properties puts you at a very good place to earn very high returns that may not need you to work at all but focus on reconciling and acquiring more and more properties. Focusing on the investment opportunities available is very important as it allows you to evaluate the worth of your investments in a certain period of time. For instance, getting to sell 5 homes in 10 years is a major boost to your finances as it will mean focusing on opportunities that present themselves to you.
Why you need to take risk and invest in real estate
Being a risk taker will determine your success; real estate investment is a risky business. However if well calculated it pays real well. To be successful in real estate business it is mandatory to be informed on the goings of the real estate market. You also need to establish your local sources and build a good relationship as well as use online sources to evaluate different opportunities and risks. In addition, carry out a wide research on various real estate investment groups and check their websites and publications for advice regarding various properties on the markets.
Now over to you. Are you investing in real estate? What kind of investments are you doing, short term or long term? Share your experiences with us using the comment box below.
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