Simple Ways To Invest In Real Estate

Rental Property Investment

Investing in Real Estate

Buying real estate is about more than just finding a place to call home, buying a home is also an investment, and a very good one.

For one, the fact that you will very likely be spending several years at your property, and possibly making updates to make it more livable and cost efficient, means you stand to make significant gains by the time you sell it. 

So over the long term, ten years or longer, your real estate equity should increase dramatically.

Here is why:

  • Despite pricing bubbles, poor lending practices and economic recessions, over time the value of your property will go up.
  • While you own your home and are making your monthly or bi-monthly mortgage payments, you are paying down the actual total amount owed, known as the principal.

If you combine these two basic elements – they combine to increase the nest egg you are building, Since you will own a greater percentage of a property that is increasing in value. For these 2 reasons alone, real estate is considered the best investment people with average incomes can make.

Rental Property
There are other ways to invest, if you find yourself able to buy a property you do not have to live in, but can rent it out to tenants. In this way, you are adding a third factor to your investment program – someone else's money.

If you are able to secure well behaved tenants for your property and keep it occupied for at least 85% of the time, you can consider yourself a successful landlord.

Here is the basic rules for a rental property to work for you. IF the rental payments equal your total payments (mortgage, taxes, repairs) then you are in a very good place, as long as you ae able to continue these payments when the property is not occupied. If we calculate that it will be 15% of the time, then you need to be able to cover all the annual expenses x 0.15. So if your total annual expenditures equal $18000.00, then you need to have access to a float (emergency money) of $2700.00.

Most people shrug this off and say they can cover that amount with a credit card. But credit cards charge high interest. You need to know you can carry this property when it is empty – without putting pressure on your living income.

Real Estate Investment Trusts (REIT)
Real estate investment groups are sort of like small mutual funds for rental properties. If you want to own a rental property, but don't want the hassle of being a landlord, a real estate investment group may be the solution for you.

A company will buy or build a set of apartment blocks or condos and then allow investors to buy them through the company, thus joining the group. A single investor can own one or multiple units of self-contained living space, but the company operating the investment group collectively manages all the units, taking care of maintenance, advertising vacant units and interviewing tenants. In exchange for this management, the company takes a percentage of the monthly rent.

This may not bring you the same potential returns of owning a single rental unit all to yourself, but it does take away the risk. Some rental groups will guarantee your income even when your unit is ready.

It is really up to you to weigh your risks, assess what you can afford to sustain. If your current housing costs are 25% of less of your total income, you can probably afford a form of real estate investment. If that is the case, you will probably want to talk with a mortgage broker or bank lender to see what you can afford to invest.

Albuquerque Real Estate Investing Basics

Albuquerque Real Estate house property

Real estate investments may not be everyone’s cup of tea, but some Albuquerque residents who have already tried investing in real estate know that it can be profitable. Real estate investment experts say there are several keys to making significant profits in real estate investment deals. And when the deals are profitable, you will certainly be well on your way to success.
 
For neophytes, here is a lot to learn, but in the long run after you have gained some experience, you’ll hopefully become a master at closing profitable real estate deals.
 
There are 5 core skills that are necessary for building a real estate investment business. These will be the key factors in creating a profitable Albuquerque real estate investment portfolio.
 
These are the 5 core skills of real estate investment:
1) You must learn when and where to find the right kind of sellers.
2) You must learn the art of being a master negotiator when it comes to closing your real estate investment deals.
3) You must be able to quickly and accurately analyze each real estate investment deal so you’ll know exactly when to proceed and when to pull the plug.
4) You must become an expert in all areas of real estate investment and understand such terms as lease options, cash sales, wrap mortgages, short sales and other terminology common in the real estate investment trade.
5) You should totally understand the meaning and concept of investing in real estate, including all of the financial risks and benefits.
Now is a great time to consider investing in real estate. There are great potential rewards and the effort you put forth can yield enormous monetary returns on your investment.
 
Your confidence level will grow when you’ve gained some experience and closed on your first few Albuquerque real estate deals. But, don't stop there…
 
Continue to learn about real estate investing and to develop your investment skills. In a short time you may find yourself managing a profitable and growing portfolio of Albuquerque properties.
 
Continue to follow your real estate investment "game plan" and always keep an eye out for the hidden investment opportunities. The opportunities are definitely out there and with a little knowledge and desire can be yours for the taking.

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