Pros and Cons of Investing in Real Estate - Make Money For Secured Future

Life itself is not a one way track. Ups and downs are two essential phases of life. It would be foolish to expect any business with-out its pros and cons. The only thing that matter is the risk percentage. There are very few options such as IRA, Roth IRA and bank fixed deposits, you can invest in without a sense of risk. Like any other business or investment product with promise of higher returns, real estate investment too has its share of risk factor. Let us discuss the pros and cons of investing in real estate in detail.

The very basic aim to make investment is to see your wealth growing with minimum of risks and to secure your future after retirement life. Land and housing is one sector where you can invest your wealth with the minimum of risk but lot of prospects.

While discussing about the pros and cons of investing in real estate, let us first take a look on pros of real estate investments.

The very 1st, advantage of investing in real estate is the tax benefits that you can avail. Interest paid towards mortgage, property maintenance expenses, operating expenses like property agent's service charges etc are adjustable from your tax liability. You can also avail the long term capital gain by keeping the property with you for longer period of time.

When you invest in Wall Street with individual securities or mutual funds, what remains with you is just a piece of paper with promises but with investment in real estate a non movable property remains with you. It gives you confidence and makes you the owner of a property physically under your direct control. You can rent your property to gain regular rent income or you can put your property on sale any time you wish to liquidate your investments with price appreciations.

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In case you don't want to involve yourself in day to day dealing with rental business, you may avail the services of professional agents and can make yourself free to enjoy your retired life with peace. Properties are the second commodity after gold which has shown steady growth for decades. Investment value in property appreciates with much more higher rates than any other investment.

Over and above all these positive factors, you become your own boss and need not depend on others to take decisions. That saves your lot of time as you can take right decision at right time.

First part of the subject "pros and cons of investing in real estate" has already been discussed above; Now let us go through the cons of the real estate investment business.

Like any other business the real estate investment business also has its share of cons. Despite of all above positive factors, there are always possibilities of various draw backs. There are thousands reasons that the value of a property may go down. The value of property depends upon the locality and location of the property. The hot location of today may become discarded tomorrow because of bad elements in neighborhood or due to a new legislation by the local government or because of sudden lack of civil amenities by local municipal corporations.

You may be unlucky to have not so good a tenant to your property. Tenants always want much more than the worth they pay as rent. You may have to spend more on maintenance and repairs than what you planned. Natural calamity can put you in unexpected high expenses to keep your property in good condition. Also the market can take an unexpected downward trend and put you in loss.

Though there are possibilities of unforeseen circumstances which can convert your well thought and planned investment proposition in to a loss, but still the real estate investment is one of the best investment one can think of.

For more great real estate investing tips come visit, RealEstateDone4U.com. Consider us as your guide in turn key, tax free, Indianapolis real estate investing.

Article Source: http://EzineArticles.com/?expert=Michael_A_Drew

Real Estate Investment Business Plan : a Detailed Outline for Success

The real estate marketplace can fluctuate dramatically and unpredictably leaving as many stories of unfortunate as there are stories of success.  The ideal way to help stack the odds in your favor is to have a solid real estate investment business plan.  A business plan is a detailed outline that includes a clearly said neutral and a how you are going to achieve that neutral – in this case real estate.  It should contain methods of securing financial support, either through partners or loans, and be healthy to describe ways of limiting fiscal risks.  It should also list certain criteria that will distinguish between investments that are likely to wage a profit and those that are likely to create a loss.  Finally, it should delineate clear methods of procuring a steady stream of buyers.

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The first step to success is to find potential investments.  The basic principle to follow is to purchase low and sell high.  Situations that depress a property’s asking price include foreclosure, owner death, IRS issues, illness, divorce, relocation and job transfer.  In a number of these cases, a bank or financial institution assumes ownership over the asset.  Hoping to reclaim some of their financial losses, they sell off as much of these assets as possible.  This typically happens to houses that have come under bank ownership.  The asking price for these houses is generally much lower than market value.  

These types of situations are advantageous to an investor because a lower asking price ensures a higher profit margin.  A successful real estate investment business plan should include as many of these beneficial opportunities as possible, thus increasing the likelihood of a greater profit margin.

The next principle of any business plan is to secure the funding needed to get started and keep the process going.  When dealing with real estate, this part is usually straight forward and easy.  Ideally the money for the initial investment would come from your own savings or a trusted partner.  In this way, while you are risking your own money, unfortunate would not harm your capability to garner future loans from banks or mortgage lenders.  However, not everyone has enough individualized capital to start buying real estate.  

This is where proven time tested techniques are utilized to secure the funds needed from joint venture partners or private lenders.  Both of these groups are mainly interested in two items; One – how secure is their money and Two – How much will they be paid.  As long as it is a truly good deal you should have no problem finding the money.  Do not be afraid to share some of your profits to your money partner, superior to share some than not be healthy to do the deal and make nothing.   The intent is to secure the loan, purchase the property, sell the property, and then pay off the investor.  Using this method you can purchase real estate without any individualized financial commitment.

Finally, a real estate investment business plan should include a stable method to assist a deal with your exit strategy.  This should consist of a manner to procure buyers, in the marketplace. There is no shortage of these, and it is a way to close the deals that ensures the highest doable profit margin possible.  It might be a good intent to hire an advisor at this point if you are not confident with your own experience.  In the beginning it is a good intent to re-invest the profit.  In this way you can create more opportunities to acquire more money, thus securing the eventual goal: financial success.

Source: http://www.biz2success.co

12 Things to look for in a Tenant Repesentative

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by CoyDavidson  

The logic behind tenant representation is that in order to reach an equitable solution to a particular need (leasing office space), the corporate tenant needs access to market information, transaction expertise and negotiation skills equal to that of the landlord who utilizes professional representation.

All corporate tenants want a real estate advisor with the appropriate market knowledge, relevant experience and most importantly someone they can trust with an important business and financial decision. The Realtor that sold you your home is probably not a good choice. There are plenty of competent tenant representation professionals in any major market.

What are twelve qualities or benefits provided you should look for from a tenant representative?

1. An advisor who will become very knowledgeable about your overall business objectives and strategies as it relates to your real estate requirements.
2. A realistic assessment of the market.
3. A company that understands that office facility decisions do not involve real estate cost alone: but include additional factors such as labor, proximity to customers and image, to name a few.
4. A representative who recognizes the difference between real estate sales and sound business management.
5. A broker who places a premium on the ability to build flexibility into your real estate decision.
6. Clear, concise communication.
7. The technical and financial skill to provide “apples-to-apples” comparisons of various alternatives.
8. Knowledge of the current transactions in the marketplace and how they relate to market negotiations.
9. Knowledge of the location and timing of space coming available that uncovers opportunities in the office space market.
10. The ability to be creative and structure transactions to best fit your objectives.
11. Credibility and a track record with building owners.
12. The ability to assemble, coordinate and manage the entire project team including other 3^rd party consultants.

Baby Steps in Real Estate Investing are Better Than Sitting it Out

If you look around you and talk to the folks at the office, church, or the supermarket chances are that you will find literally dozens for ‘wannabe’ real estate investors with very little effort. At the same time, you will find very few among those dozens who have done more than dream about beginning the process. People have this innate fear of rejection, of being told “no.” Sadly, many fail to ever ask or take that first step as a result of this fear and many times the answer may have been yes.

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Instead of making the effort and taking the risk, (seriously, how hard is it to risk a question or apply for financing when compared to risking retirement funds, life savings, and/or credit ratings for the dream of becoming a real estate investor?) many people simply sit back and dream wondering all their lives if they could have done that.

If you are one of those people it is time to take action. You are either going to live your life wondering about the differences investing in real estate could have made or you are going to have to eventually get out there and put your money where your mouth is. Is it easy? Not really – definitely not as easy as the so-called gurus of late night television would have you believe. It takes work to build a successful real estate investment business. You need to get out there and make the contacts, take the risks, and have a business plan as well as a plan of action. Then you need to take action. All the plans in the world will not make you a success at anything other than planning unless you put them to work for you.

If you are hesitant about approaching traditional lending sources you might try joining a few real estate investing groups in your community and the surrounding area. This first step will serve two purposes really. First of all, it will introduce you to investors who have experience and you can network with them and perhaps find a joint venture that will require less of a capital investment on your part. The second benefit is that you can learn from the discussions that are held and meet others who may be interested in real estate investing, but who also have no idea where to begin the process. You may luck up and find that your local investment group offers resources to members and information and advice about hard money sources, if that is the route you want to take when it comes to financing your first venture.

The important thing is that if you never take any steps towards your goals of becoming a real estate investor, even a baby step or two, you will never live out the dream of real estate investing. So get out there and take that first step. You are sure to find that the first was the most difficult and they all get easier from there.

Real Estate Investment Tips Of The Trade

Copyright (c) 2010 Brad Hess

Real Estate Investment саn bе a very fortuitous career path, providing уου know whаt tο ԁο. Tοο many people reflect thаt investing іѕ simple аnԁ requires nο skills аt аƖƖ. WhіƖе thіѕ іѕ rіɡht іn ѕοmе cases іt іѕ very οftеn nοt. More аnԁ more people аrе investing tеrrіbƖу bесаυѕе thеу′re nοt doing whаt thеу ѕhουƖԁ bе. Knowing a small аbουt thе trade always helps, аnԁ thеrе аrе really a wide variety οf tips аnԁ tricks out thеrе thаt саn mаkе Real Estate Investment a lot simpler аnԁ profitable.

One οf thеѕе tips hаѕ tο bе austerely tο network. Networking austerely means јυѕt tο ɡеt talking tο people. It sounds obtuse, bυt thіѕ іѕ οftеn thе first step tο finding a real investment gold mine. Getting involved wіth уουr community саn gain уου ѕοmе fаntаѕtіс contacts, аѕ well аѕ ехсеƖƖеnt gossip οn places thаt mіɡht soon bе coming up fοr sale, οr areas thаt аrе οn thе rise whеn іt comes tο housing prices. Talking tο people аnԁ really listening οftеn іѕ one οf thе simplest ways уου саn gain information οn thе area уου′re considering investing іn, whісh leads mе οn tο thе next essential tip уου need tο know.

Know thе market, аnԁ know іt well, spend ѕοmе time getting tο know thе area οr areas іn whісh уου′re looking tο invest. Aѕ well аѕ getting tο know thе locals, try going tο a few open houses аnԁ ɡеt talking tο thе agents tο find out аѕ much аbουt thе area аѕ possible. It wουƖԁ аƖѕο bе beneficial tο drive thе area looking fοr houses fοr sale bу owner, οr houses thаt appear vacant οr іn disrepair. Thеn learn hοw much homes аrе selling fοr іn thе area, ѕο уου саn give yourself a ехсеƖƖеnt thουɡht οf hοw much profit уου wουƖԁ bе ƖіkеƖу tο mаkе. Find out аbουt crime within thе area, іf thеrе іѕ аnу, аnԁ іf thе area іѕ growing? Thіѕ information іѕ vital whеn іt comes tο investing, ѕο іt’s vital thаt уου learn аѕ much аbουt іt аѕ possible.

Another tip іѕ tο never bυу a property without аt Ɩеаѕt one exit strategy. Whаt I mean іѕ thаt wіth еνеrу offer уου mаkе уου ѕhουƖԁ know exactly hοw much уου′re going tο mаkе back frοm іt. Whether іt’s going tο give уου more аѕ a rental οr a re-sale, οr whether уου want tο renovate іt аnԁ hοw much thе expense wουƖԁ add up tο, аnԁ bу аnԁ large, whether іt wουƖԁ bе worth іt. Always rυn уουr numbers аnԁ іf thеу don’t add up tο a decent profit, ԁο nοt ԁο thе deal, nο matter hοw much уου Ɩіkе thе property, thе numbers don’t lie!

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Anԁ finally, ɡеt yourself a ехсеƖƖеnt real estate agent. Agents саn οftеn mаkе οr brеаk уουr investment business, аnԁ a ехсеƖƖеnt one іѕ сеrtаіnƖу worth tracking down. A ехсеƖƖеnt real estate agent wіƖƖ οftеn ԁο a lot οf thе leg work аnԁ bring уου ѕοmе ехсеƖƖеnt potential deals. Thеу wіƖƖ οftеn hаνе experience wіth thе area аnԁ саn hеƖр уου stay away frοm potential tеrrіbƖе investments. Thеу саn even find уου ехсеƖƖеnt, reliable buyers fοr уουr investments, аnԁ саn ѕhοw thеm around whilst уου′re out taking care οf οthеr investments. Thеу wіƖƖ οftеn work οnƖу οn commissions based οn thе sale price οf thе properties thаt thеу sell οn уουr behalf.

Real Estate Investment іѕ one οf thе mοѕt fortuitous businesses іn thе world, ѕο іt’s obvious thаt уου′ll want tο ԁο іt rіɡht. Mаkіnɡ thе rіɡht investments isn’t hard, аnԁ аѕ long аѕ уου follow thеѕе tips, уου′re sure tο bе bagging ѕοmе real property gems іn nο time.

Selecting a Real Estate Investing Guide

Many people have the desire to invest in real estate as it can be a very lucrative venture but in order to be successful you should seek the help of a real estate investing guide. Successfully investing in real estate can build your credit rating, create cash flow, and eventually net you a lot of money. But the world of real estate investing is not one that should be entered into lightly as it takes a lot of knowledge to be able to profit from real estate investing. A good real estate investing guide will help you to succeed in your real estate investing ventures. Many people who jump in to the world of real estate investing end up failing, incurring debt, and ruining their credit, all because they did not arm themselves with the proper knowledge before they started. A real estate investing guide is a great way to learn about the business before you dive and will increase your chances of success.

There are many real estate investing guides available on the market today, and you can benefit from the knowledge and advice contained in most of them. A good real estate investing guide will include the risks and benefits of real estate investing and will give you information on how to minimize the risks increase your chances for success. A real estate investing guide that does not realistically portray the amount of time and work involved in real estate investing is probably not the best choice as the world of real estate can be extremely rewarding but not without a lot of work. The real estate investing guide you choose should also give you a good idea of what to expect throughout the process and what type of loss or gain you can expect from various situations.

You should also look for a real estate investing guide that is tailored to your individual investing needs. Simply buying your first home is an investment, and reading a real estate investment guide that is designed for homebuyers looking to purchase a primary residence will help you to select a home that will build you the most equity. It is easy to learn the basics of home buying from a real estate investing guide and you will gain the knowledge you need to build your credit and maximize the equity in your new home if you read one prior to buying.

There are also many other types of real estate investments, and all have unique risks and benefits and should be approached differently. It is important to pick a real estate investing guide that is written with your unique needs in mind so that you can learn about the specific investment type you are interested in. Flipping real estate is much different than investing in a duplex or apartment building, and buying land or an empty lot is different still. After you have decided which investment type you are looking to explore, you should then pick a real estate investing guide that will teach you about your specific type of investment. A good real estate investing guide will help you to understand everything you need to know about purchasing properties, working with tenants, making improvements and renovations, and determining the value of the property as well as estimating its future value.

Credits: http://www.alborronchos.com

Real Estate Investing Dangers ? Warning!

Unfortunately, many investors get very excited about the notion of becoming extremely wealthy through real estate investing in a specific market. They assume because they live in the city, they know the market well, where they assume that real estate investing – like using techniques known as “house flipping – is a simple procedure that anyone can do and get incredible amounts of money for. Unfortunately, some real estate investors move from another successful job or business into real estate investing and make a number of mistakes that can cost them dearly. This leads investors into multiple foreclosures, and even bankruptcy.

A recent article in the San Francisco Chronicle points out that speculators who enter the market hoping for real estate investing miracles with no real plan for profitability have contributed to the Bay Area’s subprime loan woes. In many cases, these investors bought properties casually and without careful forethought, buying frequently and often with no money down. They were speculating that the prices would continue to rise, giving them an instant classic. However, when the markets began to drag and the prices went downward, keeping up with mortgages on multiple properties and dealing with properties that have no buyers resulted in foreclosures.

As the San Francisco Chronicle article points out, a key problem for real estate investors is lack of solid real estate investing knowledge. Many investors assumed that they knew what they were doing or assumed that multiple properties without the capital to back them was acceptable. When the market was good, even investors with less investment savvy made money. When the market started to struggle, however, these investors did not have the real know-how to make their real estate investing business work.

According to the San Francisco Chronicle, the other problem that many of these investors encountered occurred because they tried to succeed on their own. Many of these investors simply snapped up properties on their own when the market was good, without developing a good business team or network. Successful investors – those who are still house flipping for good profits in a difficult economy – have teams and networks that help them. You should, too.

Others can help you find the best real estate investing bargains, financing, renovation materials, and more – everything you need to make your real estate business a success story.

One place where teams are important is at the buying stage, for example.

Every property you buy must be carefully looked over by a professional you trust. Just because the property is at a bargain price, that does not make it a bargain. That’s why you should have an assessor look over the property to tell you the true market value of the home, and you should have an inspector look the property over for hidden problems such as buried oil tanks, asbestos, lead paint, and other common problems that are not apparent even to the experienced real estate professional.

Although the San Francisco Chronicle article does not mention it, some savvy investors do question the role television plays in misinforming new investors. Current reality shows sometimes make flipping seem very easy. Smart investors know that real estate investment is simply not what you see in television. Like any business, real estate investing takes know-how, research, and work.

If you’re determined to make a fortune investing in real estate by flipping or buying distressed properties and reselling them a profit, the first step often begins with choosing the right type of property. While television shows may suggest that the real work and the real profitability comes after the initial purchase, when bathrooms can be cleaned out, yards can be redone, and living rooms can be redecorated, the reality is that successful real estate buys begin with a bargain. You simply will not make as much money on a real estate deal if you pay too much for the house up front.

House flipping begins not with selling for a profit, but with buying for a profit. This is called “value investing”, and anyone looking to begin investing in real estate to make lots of money and create monstrous wealth should keep this in mind.

After all, the more money you can save on a quality home in a good neighborhood, the more profit you stand to make eventually. In fact, if you buy the right property you may not need to put up with the hassle of renovating, upgrading, and otherwise making over a home. An investor or even homebuyer may be willing to buy a property from you as is after you’ve found a great deal. You can literally make tens of thousands of dollars on the deal without putting a sent into the property itself.

Credits: http://www.alborronchos.com

Give Me Ten Minutes and I’ll Make You Better at Real Estate Investing

Okay, ten minutes is a guess. You might absorb what I have to say and thereby become better at real estateinvesting in less time if you’re a fast reader.

Shall we get stared?

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.

You’ll need capital, investing in real estate does have risks, and investment real estate 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 is not about love; 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 – This is determined by the amount of money collected from rents and other income less operating expenses and loan payment. Furthermore, real estate investing is all about the investment property’s cash flow. You’re buying income stream, therefore be certain that the numbers you use to calculate cash flow are truthful.

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 numerous software solutions to choose from 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 investmentspecialist.

There you have it. As concise an insight into real estate investing as I could provide without boring you to death. Just take them to heart and you should be fine. Here’s to your investing success.

Credits: James Kobzeff i

Choosing the Right Real Estate Agent

Buying or selling your house is one of the most important financial decisions you will have to make. It is very important that you think it through first before deciding.

You can either buy or sell the house yourself or you can hire a real estate agent to do the work for you.

What is a Real Estate Agent?

Real estate agents are salespersons. They are licensed people who work to negotiate and manage real estate sales.

Choose a Good Real Estate Agent.

People usually use real estate agents to sell their house instead of buying one. You basically do not need a real estate agent when you are buying a house but they can be helpful if you are interested in looking for a specific kind of house. A good real estate agent can spend a lot of time in the field to look for a house that you specified.

Before hiring a real estate agent, keep in mind that there are good real estate agents that are willing to work with you and there are the bad real estate agents that are only interested in your money.

You should also interview real estate agents in person to get the feel if you are comfortable with them or not. Personal interviews can determine if they are serious about the business or just in it for the money.

Try to get recommendations first from family and friends, and then locate their recommendations to set up your interview. You can also look for real estate agents in the internet.

Good real estate agents are committed people who try their best to get you the best deal possible. They should advise you about the real estate laws and tell you about the neighborhood the house you are buying is located. They will usually include details like schools, parks, malls, church and more essential for people’s everyday lives.

Credits: http://www.g5n.org