The Risks of Buying in Emerging Real Estate Markets

Between 2004 and 2007, real estate investors, hungry for break-even or positive cash flow rental properties, purchased income property out of state. California investors bought houses in Florida, Texas, and Oklahoma. Florida investors purchased houses in Louisiana. Texas investors purchased in Las Vegas. Some these investors made millions of dollars because of the appreciation in hot markets.

On the other hand, many beginning investors lost their hard-earned investment capital or only made a meager profit because they failed to do their homework on the out of state area's real estate market and customs.

If you 're thinking about buying investment properties in a different state than you're accustomed to, beware of these five surprises.

Surprise # 1 - 'These (extra) costs are the norm in this state!

Besides extra closing costs like pricey surveys, common in Florida but rare in California, other surprise costs included higher transfer fees and taxes. Property taxes in Florida cost much more for investors in Florida than in California. On the other side of the country, out of state investors were shocked by California's state tax held in escrow: 3.8% of the property's SALE'S price, no matter the actual profit made. In other words, an investor who made a quick profit of $20,000 on a fast flip could have more than the profit held until the next year's income tax filing.

Surprise # 2 - 'You can't lease this property!

New home developers and many Homeowners' Associations (HOA)s prohibit property owners from leasing their properties. Some of these restrictions got passed, without the investor being notified, during the property purchase phase. You must read the fine print to see if any clauses prevent the rental of the property. Home builders, to keep the value of the neighborhood up, added restrictions requiring the purchaser to occupy the home as a primary or secondary residence.

Surprise # 3 - 'This house will only rent for $750 per month, not $1200!

This was one of the top mistakes made by investor. Large real estate investing groups, selling out of state properties to local investors, inflated the rental income. Because so many houses were purchased in a limited area by investors, a rental glut lowered expected income. This created hardships for investors who suddenly had to pay out hundreds of dollars a month instead of reaping promised profits.

Surprise # 4 - 'You can't sell this house, now!

Some investors who couldn't rent the out of state property decided to sell because the values did rise significantly while the house was built or during the purchase time. However, many investors were stunned when they were told they couldn't sell the property within the first year after purchase. Restrictions prohibiting real estate investors from quick-turning their properties is a trend that is growing increasingly popular with some developers.

Surprise # 5 - 'Houses don't appreciate 30% per year here!

Perhaps you've attended or been invited to a high-power investment seminar that promotes out of state real estate investing. Some of these 'investor clubs' really are promoters who receive kick-backs in real estate commissions, property management fees, mortgage loan fees, and even fire insurance premiums. They tell stories of huge appreciation gains, which are probably true. However, not all areas enjoy significant appreciation--year after year.

Don't make the costly mistake of not fully researching the complete market customs and restrictions in the area where you're thinking about investing. If you can't afford to go to check out the area in person, choose another area that you can visit.

Determining the Listing Price of Your Home by William Bronchick

When it comes to buying a home, most potential buyers will use the listing price to as the number one factor to determine the homes that they look at. Even though you and a realtor may determine the asking price, the buyer will determine the selling price. If the price is too high, most buyers won’t give it a second thought - which is why you want to determine the listing price carefully.

If you set the correct price, you’ll notice a much faster sale. Setting the right listing price will also attract more potential buyers to your property as well. You’ll also notice an increase in response from realtors, and receive more calls about the property. The listing price is very important - and it can ultimately determine whether or not you sale your property.

A home can be overpriced due to several reasons. Overpricing is something you want to avoid, as buyers tend to steer clear of homes that have been overpriced. Normally, this happens when a buyer asks a lot more than the home is worth or valued at. Some buyers ask a lot more than the value of the home due to location. Although the location is very important, most potential buyers won’t give the home a second look if they think the price is too high - and more importantly out of their price range.

When you put your home up for sale, most activity will happen within the first couple of weeks. If you put the right price on your home, you’ll notice immediate interest. There are always buyers looking for homes in their price range, waiting for new homes to be listed or homes to be reduced in price. Buyers who are waiting to purchase may miss seeing your home completely if the price is too high.

To determine the listing price of your home, you might consider having it appraised before you put it on the market. This way, you’ll know the full value of your home. You can sell it for market value or go a little under, although you should never attempt to go way over the value. In doing so, you’ll miss out on a lot of potential buyers. The home market is very competitive these days, which is why you want your home to draw as much interest as possible.

Keep in mind that realtors really have no control at all over the real estate market, only the plan behind marketing. Realtors don’t determine the asking price - the seller does. You can ask a realtor for advice, although you are the decider of your listing price. If you do things right and take each thing step by step, you’ll set the listing price in the right area and have no problems selling your property.

The Benefits of Real Estate Partnerships by William Bronchick

If you are thinking about investing in real estate, you should know that you don't have to do it alone. There are several that are thinking of the same thing as you, but don't have the proper resources to begin the process. Building partnerships to invest in real estate is one of the great ways to start building an income off of owning property.

One of the benefits of having someone else investing in real estate with you is that it will allow for any missed parts of the process to be covered. This is especially important in the beginning of the process. If you are unsure of different parts to look at with the real estate investing or if you don't feel like you can cover all of the areas alone, a partner can help in determining what you are missing. Everything from contract work to needing a third person can be handled and put together from missing links. Two heads are always better than one, especially if you are just beginning.

Having a partner to help you with investing can also be beneficial because of organizational needs that will need to be met. Everything from basic paperwork to taxes and even procedures can be better when handled by two people. You will want to make sure that everything that is set for your profits is understood by both and whatever is missed will be picked up by your partner in order to keep the benefits coming in organized.

By having more than one person involved in the investment of real estate properties, you will be able to set your goals, keep standards and move forward in the business. Finding the right person who has the necessary tools will ensure that you will be successful. Having the right help will provide you the ability to continue to expand your business and make plenty of profit from real estate sales.

(NEXT POST... the bad side of partnerships)

Get Rich in Real Estate (Slowly) by William Bronchick

If you try to browse the internet, you will see a lot of topics on how to acquire wealth. Getting rich is probably what many people desire but very few get what they want. Do you agree with what experts say that an easy way to get rich is to through real estate investing?

Entrepreneurs are always looking for ways to attain extreme wealth but they are also struggling to manage their finances and the business. There is never really an easy way to earn extreme wealth. You should work hard for every penny you earn and that also applies to real estate investing. Even if other investors are quite successful in the real estate business, there is no guarantee that you will have the same fate.

To ensure your success in the real estate business, you should master proper leverage. You should learn about different systems such as automation, duplication, and delegation. You should be creative to multiply the results of your resources and effort. This is very important to ensure that you get enough profits in the future. Try to set realistic goals.

About 90% of the rich people are into real estate investing. Again, you need to keep in mind that it’s not really easy to gain wealth even in real estate. Don’t believe in what infomercials claim. You must learn about the different processes involved in real estate. When pursuing your business, you will encounter many income generating opportunities like lease options, foreclosures, rentals, commercial properties, tax liens, short sales, being a loan officer or agent, investing in mortgages or in notes, and many others. Investing in mortgages promises high gains but you need you study how it works.

When entering the real estate business, you should choose between purchasing single families or condos. To some, purchasing multi-unit properties is a great advantage because they can have the property rented. While they are paying for the mortgages, they will also earn income from the rental rates every month. There are those who purchase properties who are hoping to gain profits by reselling them at a much higher price.

You see, there are a lot of things to consider when purchasing investment properties. If you don’t have the right knowledge, you will not last long and you’ll end up wasting your money. You need to ensure that your capital is protected. True enough, the first few years can be very tough because you have very high expenses but in the later years, you will see money rolling.

There isn’t exactly one way to be extremely rich. Well, if you’re born rich, then you’re lucky because you already inherit wealth. What about those who were born as ordinary individuals? You should not be discouraged even if you were not born with a silver spoon in your mouth. If you try to learn about the foundation and basics of real estate investing, you too can become rich.

Start real estate investing now. You will be rich in time especially if you’re hardworking and knowledgeable. Gather all the possible information resources you can find online and offline. Read and understand the facts you obtained and apply them in your investment decisions. Even if it may take some time, you’re guaranteed to have wealth through real estate investments.

Test your luck in the industry but try to ensure your success as well.

Don't Get Caught Up in Real Estate Scams or Illegal Practices by William Bronchick

There are many ways to legitimately make money in real estate.  There are also many shortcuts that are illegal, fraudulent, or a downright scam.

Here's a few of them:

1. Lying on Your Loan Application.  Whether it be saying you will live in the property or overstating your income, these are lies that can get you caught up in legal trouble.  If you get caught, you go to Club Fed.

2. Cash Outside of Closing.  Giving the seller or buyer cash outside of closing not reported on the HUD is a violation of RESPA.  This can also land you in Club Fed,

3. Not Reporting Rental Income.  It's tempting to screw the Government by undereporting cash you receive, but why risk it?  Instead, be aggressive on your deductions.

4. Doing Work Without Proper Permits and Inspections.  Many investors will disturb lead paint, asbestos or hide hold.  All of these can get you sued, not to mention fined by the EPA.  Do the job right, and disclose it.  Also, don't do any life-threatening or health and safety repairs without a proper permit.

You can make an honest living in this business without breaking the rules.  Keep on the straight and narrow path and you will succeed. 

Property Flipping Benefits by William Bronchick

The obvious benefit and sought after benefit of flipping real estate is the profit. This is one incredibly tangible benefit, particularly when the profits are large and quick to come your way. Of course there are risks. Most ventures that offer high profit also come with a high degree of risk. Money, however, is not the only benefit that can be associated with flipping real estate though it is certainly the one on most investors’ minds when they get into this line of work.

Let’s talk profit first. Profit is the one reason that most people get into this business. The days are long and the work is hard. This is definitely not the type of work one would ordinarily undertake for the simple love of getting one’s hands dirty. This is real work that leaves you bone weary at the end of the day. However, when all the work is done and you get around to making the sell, you will find that the profit involved in a successful flip is well worth the effort you’ve put into the process.

The good news is that the savvy investor can still manage to make money even when the situation may not work out quite as planned. This is yet another benefit to flipping real estate. If the flip doesn’t work out, there is always the option of leasing to own the property or renting the property out. The profits in these situations are considerable less than a straight out flip but it can prevent financial ruin that is often the risk of a flip gone wrong. The fact that there are options and that you aren’t necessarily left ruined at the end of a bad flip is definitely a benefit. There aren’t many types of investments that allow you the option to save yourself the way real estate does.

One of the intangible benefits of flipping houses is that you are in essence working for yourself. In other words you do not have to punch a time clock or worry about overtime (at least not on your part). This can be a bad thing too if you lack the discipline required to get the job done. However, most of us will view this is a huge check in the pros column when deciding whether or not to take the plunge into the wonderful and frightening world of real estate investing.

Even though this is a business that requires a lot of work in order to turn an attractive profit there is some satisfaction at the end of the day involved in knowing that you are working for yourself and not to make someone else wealthy or in order to punch a time clock. That feeling of satisfaction is one that you should hang onto when the brand new toilet you’ve just installed becomes a geyser. Of course there are mistakes along the way, what other job keeps you on your toes quite like this one?

Real estate investing, house flipping in particular, can be one of the most frustrating types of investments a soul can pursue. At the same time it can also be one of the most rewarding mentally, spiritually, and financially. This is something you should keep in mind when deciding whether or not this is the right path for you. 

Don't Get Scammed - Do an INpsection

One question that seems to be commonly asked among those who are interested in real estate investment, particularly in flipping properties, is whether or not a real estate inspection is really necessary. The long and short answer to that question is absolutely and I will do my best to explain exactly why this is so.

First of all, a real estate inspection is the act of having a qualified (and in many states, licensed) professional take a look around the property you are considering and informing you of obvious and potential damage or problems with the property. This is not something you want your uncle Bob doing, unless of course, good old uncle Bob has had the training and experience to know what to look for in an inspection and know what those things could mean.

Many who are planning to flip properties enter into the situation (particularly first time flippers) with the attitude that they know there are problems with the property and that is why they are purchasing the property. The problem is that the untrained eyes may miss some problems that should be addressed before moving along to other problems.

For instance, if there were obvious signs of plumbing problems that could result in a leak behind the wall, you wouldn’t want to paint that wall or replace the floors until you had the possible leak checked and either confirmed or denied and repaired if necessary. Otherwise you would likely need to undo the work (wasting both time and money) that had already been done by the time you found out about the leak that a competent inspector would have told you about before you even began working on the property.

Inspections are great before placing the bid on a house because they actually give investors a bargaining chip. For the true (at heart) investor this is a fact that simply cannot be ignored as it directly affects the bottom line price. If the roof needs to be replace you are justified in offering a lower amount. If the electrical system needs to be updated, this is something that should be adjusted or amended in the final offer. These are also things that are easily identified by a qualified and competent property inspector. Any thing that can save time and money is great when investing in property and an inspection can do both.

Another great thing about a good property inspection is that it often sheds light on the amount of money that will be needed in order to get the house in good working (or flappable order). Knowledge is very important in this line of work and can mean the difference between taking on a project (if the repair budget won’t exceed the eventual value of the property) or walking away if the expenses would be too great to turn a decent profit. As an investor you should never take on a property that is pretty much guaranteed to be a failure, it is simply not a wise financial move to make. It doesn’t matter how much the property calls to you on a personal level in the business of investing the bottom line is the only call you should be taking.

More importantly however than any of the things mentioned above, a proper home inspection can inform you of potentially hazardous conditions within the home that the untrained eyes may not take notice of. Some of these things include toxic mold, which can be financially disastrous as well as hazardous to your health; foundation issues, and structural damage that is threatening the integrity of the property. An inspector should also notice the structural integrity of homes that could affect your home if they are weakened or fail all together. While these things seem so simple, it is often the simple things that lead to the greatest disasters. Whether or not you realize it, a good home inspector is one of the best tools you can have in your arsenal when it comes to flipping real estate as an investment venture.

Tips for Beginning Real Estate Investors to Avoid Scams - by William Bronchick

For beginners, real estate investing is never a walk in the park. It has a lot of risks. There are numerous companies that sell property investments for novices but the question would strike you with the trust that they impose. This is a beginner’s investment guide for one to realize the things that he or she needs to say “no” to and what should be regarded as false reassurances.

Tip 1 – Scout the area

Before investing in a property, you must first asses the area. Does it have every inch of it being desirable for a family, a couple or an individual to live in? For beginners, you must first try to settle on the ones that’s “safe”. Ignore those that have risks attached to it. Stick to the properties with good reputation. Areas having good reputations will not cover any mortgage therefore looking for an area where figures do stack up is more appropriate. You have to be very careful with individuals and companies who indulge in selling properties that looks ancient or having lots of deserted houses or was known to be an area having illegal activities like drug trafficking and so on. These kinds of properties are fine but if you don’t have any kind of background yet, stick to the safest areas offered.

Tip 2 – Trust no one

Ask yourself this – do I have the money to afford the property of my choice? Commissions come in huge packages. Individuals or companies have ways of creatively getting your attention and dodging you into agreeing with their offer. Some of the truths are hidden lies that often make you think that you can afford a particular property where in fact, it will lead you to bankruptcy. If you think you can’t afford the property, don’t accept the offer. Turn it down. You will have a certain gut feeling about this, rest assured. Don’t be easily swept with seemingly wise words and sweet nothings. Follow your own pace. However, pushing yourself to achieving your goals will lead you in achieving learning and development.

Tip 3 – Ask

Don’t be afraid to pop out a question especially for those who are saying so much. If an agent or a certain individual offers you something, ask the person if he or she has invested in the property that he or she is offering. If they have, then, it proves that the property is and will be a good investment. But if they haven’t invested in anything that they claim, pop another question. Sometimes, what companies and agents offer will speak for themselves. Think, if what they offer are so fantastic, then why haven’t they invested on it? Until they have satisfied your questions, might as well turn down the offer.

Tip 4 - Be on your guard

There are a lot of people who will go into such lengths such as fooling other people for their benefit. You shouldn’t be fooled by what companies claim about property masters or gurus for these may lure you into believing nothing. In real estate investing, you have to always be on your guard to avoid certain decisions that can lead you into a predicament.
Following these simple tips will definitely guide you into having a more profitable and risk-free deal. These tips will give you a head start.

Real Estate Investing - It's Foundation - By William Bronchick

Real Estate Investing – It’s Foundation

Before you even consider entering the real estate industry, you should know of its foundation. Real estate investing has no room for investors with very little knowledge of the different processes involved in the business. Many have failed and if you don’t want your fate to be the same as theirs, you should start learning all the things that you need to know. How can you survive the competitive market if you hardly know anything about real estate investing? There are lots of information sources online but look no further because some of the most important facts are already revealed in this article.

The first is ‘Criteria’. This refers to the checklist that you will utilize in order to identify the real estate property that you plan to buy. You can purchase the property at the buyers market. Since the market offers a lot of opportunities to real estate investors, you should set a certain criteria. Establish the things that you’re looking for and you also need to take advantage of existing market conditions. What kind of properties are you planning to buy?

Are you going to get single families or condos? Can you resell the property or perhaps have them rented? With so many opportunities to choose from, you might find it difficult to purchase the property that you want. You can focus in short sales or foreclosures; the choice is yours. These things will all present themselves in different situations. You can include them in the criteria you’ve set to determine the least risk and greatest opportunities.

The second important foundation is the Terms. The subprime backlash wave made ‘Terms’ even extremely important. Interest rates have remained fairly low in the recent years and the overall prices are declining or stagnant. The buyers market is filled with different emotions and you should try to establish adequate parameters. By doing so, you can easily tell when you should walk away from a certain deal or when it’s the right time to make a go for it.

Another important foundation is ‘Network’. The market is a very large one and if you’re alone, you may not be able to survive the extreme competition. Having a network of good relationships with fellow real estate investors is very important. If you have good relationships with other investors, they can help in providing you with opportunities. Your fellow investors should know about your predetermined criteria. You should also have your own real estate attorney just in case you encounter legal proceedings.

If you know the foundations of real estate investing, you will know what properties to buy, how you will purchase them, and who can help you.

Try to master these areas to ensure a solid place in the market and to enjoy continuing success. Criteria, terms, and network are the basic foundations of real estate investing. The many successful investors that utilized these areas are still enjoying continuous success. If you want to enjoy the same triumphs, you should study the foundations of real estate investing. Be prepared at all times because there are also risks involved.

Having adequate knowledge about real estate investing can serve as your key to success. With knowledge comes power; educate yourself before you finally enter the industry. It is definitely a competitive one and very few newbies are able to overcome the many difficulties.

Creative Real Estate Investing

Creative real estate investing is defined as the usage of non-traditional ideas and methods of selling and buying properties. Here, the buyer will initially secure his finance taken from a lending organization and pay the full amount together with borrowed funds which will serve as his down payment.

One of the effective ways in purchasing a house is through cash payment. Unfortunately, the typical family is not really in its proper financial situation to get into an agreement like this. Majority of the families are can modestly afford a down payment, thus, they are forced to secure what was left of the price of their purchase through mortgage from a lending institution. However, buyers should not exhaust their entire savings just to pay a huge down payment amount. This will lead to deprivation of reserves if in case any fall back happens or income will go down in the future.

What are options?

An option in real estate investment is termed as a person’s right to purchase a property for a specified amount on a certain period. The owner may choose to sell his or her option to someone. The option buyer then hopes that the value of the investment property will either down or up. The seller will receive a premium known as option consideration. The buyer also has the right to purchase the property or selling it to another person which he or she can exercise. This is usually done to gain control over the property without investing a lot of cash. Premiums in option are generally non-refundable. Options represent equitable interest and are recorded by the county recorder.

What is a lease option?

A lease option is comprised of two main parts namely an option and a lease (rental agreement). This is written in either one or two contracts. A rental agreement occurring between the potential lessee or tenant and the owner is implied as a lease. Leases hold the lessee responsible for paying the maintenance, upkeep, insurance and taxes of the property. Lease payments are typically five to fifteen percent higher than the rent of the property. For the lessee to have tax benefits, this lease type is structured as if the lessee is the owner himself.

What is sandwich lease option?

This is not, at any way, an option. This is just created by tenants who wish to exit his or her unit as the tenant not having exit options written by the landlord in their lease. In order to provide mitigation option (a way of reducing costs and risks), a person can find a tenant to replace the unit. The tenant found for replacement becomes the tenant of the existing tenant and not the tenant of the landlord. The legal tenant will now have the right to create whatever rent, policy and deposit systems that he or she wishes to imply on the new tenant.

To further understand the process in sandwich lease option, a branch of creative real estate investing, further explanations are provided. The moment the new tenant notices any need for maintenance or has encountered problems with the unit, he or she will contact the landlord who will then contact the real, legal landlord in for repairs and maintenances to happen.

The new tenant is required to achieve payments to the temporary landlord who will then make the rent payment to the original landlord, thus, making things legal and paid.

Joining a Real Estate Investor Association by William Bronchick

Of recently, real estate investing has again become one of the most popular trends in making money. This is a fact. Some of the richest persons in the world who proudly maintained a real estate investing status have acquired more and is still growing. Give it a moment. If you think that real estate investing is your thing and you don’t have the slightest idea on how it works, then it’s time to spend some time in trenches.

Below are some of the tips on how to effectively join an investing group. This would be moderately challenging but if followed effectively, one will get through.

Step 1 – Be knowledgeable

Do a quick research on the investment groups concerned with real estate within your area. You can do this through an online search. Finding your right guy will be faster if done on the net although, there are investment groups not found on the Internet. A one-click search engine will reveal a lot of appropriate groups within the city. It is much appropriate to find a group within your area before looking into the bigger picture. This will help you ease out your options.

Step 2 – Attend meetings

It is always a plus when you attend meetings of groups. This will help you determine the group’s status and what you can get out of them. You have to realize if that group provides more advantage than disadvantage. A lot of investment groups allow those vying for membership to attend their functions without charge or for a minimum fee which won’t hurt the budget, and will not require commitment. Investors know that there is nothing appropriate which would fit the majority. It is up to the person to decide if the opportunity is the right thing for them.

Step 3 - Ask related questions

Whatever it is that pops out of your mind, ask it. Don’t hesitate to bring about questions that will be beneficial on your part. Make sure that when you ask, the member whom you brought up the question with is knowledgeable, approachable and have made quite an experience with regards to the investment field. You must remind yourself of you purpose in joining the team and it is to network and gain knowledge.

Step 4 – Join in

Simply said than done. It is quite simple to join but you have to keep in mind that before joining, you have weighed the pros and cons of the group. Because every real estate investment group produces sets of rules and standards to follow, you have to make sure that it has met the criteria you have set on yourself. Don’t agree with the terms if you don’t feel comfortable with the group. The moment you have decided to join in, commit. Invest your energy and time working with your group. In every group, there are certain fees to provide so make sure that you are aware on the price. Still, if you are hesitant to commit, visit other groups and analyze them well.

A piece of advice though, in real estate investing, joining clubs or organizations concerned with investment must meet all your expectations otherwise the partnership will not work. There are several type of real estate investment clubs that offers a lot.

Joining a club will give you a better view of where you’re heading.

And, if you're in Colorado, be sure to join the Colorado Association of Real Estate Investors (www.carei.com).

Why Real Estate Investing?

At present, the number of real estate investors continues to rise  continually because many individuals today realized the high earning potential of real estate investing. Real estate properties have very attractive qualities that ensure viable income opportunities. If you want to enjoy the many benefits of real estate investing, start choosing your investments now.

If you have established long term goals, then you should invest on a certain scale over the long term. For instance, you purchase a real estate property. You need to hold it for a few years so that the home equity is built until it becomes a good or excellent deal.  Homeowners benefit a lot from equity because when equity is high, the net worth is also high. Many real estate investors prefer to invest over the long term for this reason.

By purchasing a real estate property, you will also enjoy the tax advantages that come along with it since you now own your investment property. Tax advantages vary depending on the property you purchase. Before engaging in any transaction, you should look into the possible advantages that you can get. Compare various properties and choose the ones that have the highest tax advantages.

Some investors tend to purchase properties and then resell them for a higher price. This type of investment promises high returns. You should consider the time of the purchase and the market condition. Check for the profit margin once you decide to sell the property. There are several factors that you need to consider before you purchase a certain property such as current property sales, upkeep, and renovations.

Can you hold the property for a short period? You should always be prepared because there are times when you can’t easily sold the property you’ve bought. After looking into these factors, you can now determine if a certain property is profitable or not. If the property can be sold quickly, then you will enjoy the benefits that come along with it.

There are real estate investors that become landlords. Some investors purchase properties but they don’t resell them; instead, they lease the property. If the property comes with a mortgage, the investor will need to pay for it but he or she will also receive additional incomes from the rents.

So you see, there are a lot of benefits if you decide to enter the real estate business. To summarize, the benefits are – build equity on the property, tax advantages, high return from reselling properties, and earn additional income by leasing properties.

It doesn’t really matter if you have short term or long term goals. The earning opportunities in real estate investing are really attractive. It’s no wonder why many people are now into the real estate business. If you want to enjoy the same benefits, try to determine if this is the right thing for you. You need to be interested in the purchase of real estate and you need to have adequate capital. To generate capital, you can take advantage of grants provided by governments or you can get capital in other ways.

Real Estate Investing - a Good Choice for Parents

Here’s good new to all parents out there who are supporting their kids to finish college. According to statistics, a great percentage of individuals are not able to finish college because of financial constraints. Some students are able to support themselves in college but parents should still back them up. You can help your kids in finishing a college degree and you don’t need to depend on your salary alone. You now have an option and that is real estate investing.

Parents like you should develop a solid plan so that you can support your kids all the way through college. Your decision is very important because you can only benefit from real estate investing over the long term. You can’t expect immediate success in the real estate business. You need to be dedicated, knowledgeable, patient, and hardworking. You need to devise a solid investment plan to ensure that your money will not go to waste. Students often rely on scholarships, student loans, part time jobs, and savings to pursue their studies. Now, there is another option and that is real estate investing. Even the students can take part in the decisions related to real estate investments.

It would take several years before you can see the fruits of your labor. While you’re child is young, you should already consider real estate investing. Learn from the experts and try to contact a mortgage broker. Also, don’t forget to choose a real estate attorney to help you with all the legal matters. Savings is very important and you should already have one named after your child. Your child will surely be able to pursue any college degree if you prepared for his or her future at an early date.

Parents should consider building an investment portfolio for their kids to support the college years. If you already have a savings account, you can earn interest on the real estate investments. Most parents are hesitant to be in the real estate business especially if their children are still young. But this should not be the case; set long term goals and start real estate investing now. When you’re child is already older, you will still need to establish short term goals. By starting early, you can already learn so much from the market conditions.

Even if you encounter downturns, you have enough time to recover and earn more money. In the early years, you may experience a lot of difficulties because you have a lot of expenses and cash flow is limited. After several years, you can now enjoy high income because you have very few expenses; just in time for the college years of your child.

When you’re child is already in college, you need to be less aggressive with your investments because of the risks involved. The present value of your investments should be protected so that when your child needs money in college, it will be easily accessible.

So what are you waiting for? Parents who have small children should start investing in real estate. Real estate investing may sound very difficult but if you’re equipped with the right knowledge and tools, you can be successful too. Study about real estate investing now and prepare the needed capital.