The Benefits of Real Estate Investing
Author: Ken Smithbr
Source: articleage.combr
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Real estate investing is increasing at a staggering rate these
days. More and more individuals are learning that real estate
investments can offer wonderful earning potential. Real estate
investing is a process which has many attractive qualities that
make it a viable money-producing opportunity. There are a number
of benefits that go along with purchasing real estate
investments and the following paragraphs will highlight some of
these benefits. As you will see these attributes make it quite
apparent why individuals are becoming interested in investment
opportunities of this type.
Build Equity in the Property For those individuals who are
looking to invest in real estate on a long-term scale, there are
certain benefits to doing so. When individuals purchase real
estate and hold onto it for awhile, they are ultimately able to
build a good deal of equity in the home they are purchasing as
an investment property. Equity is a beneficial aspect for the
homeowners as the more equity a property has, the more that it
adds to the net worth thereof. This is an important and
frequently cited reason why individuals do choose to invest in
real estate and maintain the property as an investment for a
long period of time thereafter.
Possible Tax Advantages Another benefit of purchasing real
estate for investment purposes is the possible tax advantages
that one may receive as a result of owning the investment
property. Depending on a variety of factors, individuals who own
investment property may just see some gracious tax advantages as
a result. Therefore, individuals may be more than ready to
invest in real estate once they have looked into possible tax
advantages that result from engaging in a transaction of this
type.
High Rate of Return on the Sale of the Property When the
investment property is sold somewhere down the road, the
homeowners will most likely see a high rate of return on the
sale of the property. Depending on the market at the time of the
purchase and sale, this rate of return may be more than generous
when one looks at the profit margin. Some factors to consider if
looking to purchase property and sell it within a short period
of time after the initial purchase include current market for
property sales, renovations and upkeep necessary to get the
property ready for the sale and ability to hold on to the
property longer if a sale does not come as quickly as one had
expected. If one has considered all of these possibilities and
still feels that they will be able to sell the property quickly,
then this is a wonderful benefit of real estate investment.
Lease the Property to Tenants While some real estate investors
choose to purchase the property and then sell it shortly
thereafter, there are other individuals who have a different
reason for purchasing investment properties and wish to obtain a
profit by other means. These individuals are ones who prefer to
purchase the property and then lease it out to tenants. By doing
so, the homeowners are able to pay for any mortgage which may be
present on the property plus receive any additional income from
leasing the property to tenants.
Investing in real estate is a wonderful way to gain equity in a
piece of property, take advantage of possible tax benefits and
maybe even make a considerable profit from the sale of the
property once the individual feels like doing so. These are some
of the many reasons why individuals are purchasing real estate
as investment property and current low interest rates make now a
perfect time to buy. The benefits of real estate investing are
difficult to pass up, so go ahead and find your first real
estate investment property!br
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Is Putting Real Estate in Your Self-Directed IRA a RealisticInvestment choice?
Author: Joshua Gearybr
Source: articleage.combr
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The pursuit for a secure retirement has become progressively
more difficult. Given the uncertainty of todays stock market in
light of corporate governance failure on a massive scale with
the Enron and WorldCom scandals, the poor recovery of investment
because of the panic selling of stocks and bonds that have since
wobbled their way back up, without bringing investors funds
with them and the political and economic uncertainty generated
by the war against terrorism, it is not surprising that
investors are looking for alternative choices to invest their
retirement funds.
These days, many investors prefer to have a wider range of
choices and the ability to diversify their retirement fund
investments outside the poorly performing, so called
conservative choices of stocks and bonds, and into other areas.
This has resulted in a massive expansion in the market for
self-directed IRAs.
Oftentimes the phrase self-directed IRA is tossed around by
prominent investment firms and is only narrowly understood by
the majority IRA investors. Unbeknownst to many self directed
IRA investors many investment firms would have them believe that
the term self-directed IRA only refers to the ability to choose
which stocks, bonds and mutual funds they can buy. Fortunately,
there is more to this narrative.
In contrast, a growing culture of investors is educating
themselves on their investment alternatives and they are now
starting to invest in real estate and other non-traditional
assets. Indeed, any legitimate business investment is open to
them both as single investors and undertaking group investments.
If you know what you are doing or have expert advice in the
area, it is possible even with low cash reserves to diversify
retirement portfolios and in particular to capitalize on the
growing real estate industry for example.
Most conventional financial planners dont offer truly self directed IRA plans
since they may operate under plan documents which only allow
investors to invest in stocks, bonds and mutual funds. Nor is it
in their interest to do so. Their commission structures are set
up to favor investment in the financial markets whether this is
in the best interest of the investor or not. Which means their
advice is hardly objective.
Of course, this is not advising that investors completely
abandon stock market offerings, merely that they do not keep all
their eggs in one basket. Just as stock markets rise and fall so
can real estate prices. But diversifying your investments
minimizes the risk on your returns.
Procuring real estate for investment purposes with an IRA
provides several favorable tax breaks. A Roth IRA allows the
investor to benefit from tax deferral while it is growing and to
be free from tax on distribution in contrast to a traditional
IRA which is taxed at time of distribution. Nor is there a
minimum distribution and investors can also continue to pay into
Roth IRAs which can be of benefit if they intend to pass them to
their heirs (which can be done without taxation). In addition,
unlike 1031 exchanges, there are no specified investment
timeframes or requirements to procure like kind investments.
Finally, capital gains tax is not applied since taxation does
not occur until distribution.
All of these factors contribute to making real estate investment
with IRA funds very tempting. However, it is not something that
should be undertaken lightly nor should investors, unless they
are experts in their own right in the tax and investment laws,
undertake for themselves, due to the strict and sometimes
complex legislation imposed through the IRS. Otherwise they may
find themselves exposed to penalties and taxes. Just as you
choose a traditional financial advisor when looking into stock
and mutual fund investments you should also look a properly
qualified self-directed IRA advisor.
First, traditional financial advisors are not usually best
placed to give advice on real estate investment. While they have
a good understanding of stocks and shares, they have very little
experience of the real estate market. Instead, you should look
for an advisor who can help you structure IRA and real estate
entities, evaluate investment opportunities and avoid infringing
self directed IRA rules in setting up investments.
Your IRA advisor will need to have extensive knowledge of
self-directed rules and the expertise to implement complex deals
plus a good strong background in real estate and real estate
development. Because, while an investment in a single property
is probably no more difficult than buying your own home, using
private funds, especially self-directed IRA funds to invest in
real estate developments, real estate lots, purchasing apartment
communities and other larger scale real estate investments is
something that most people dont have the requisite knowledge to
undertake.
A good example is rehabilitating individual residential real
estate. If you have never undertaken this kind of work, it can
be a very risky business. Without substantial amount of real
estate investment experience, you can easily lose your IRA
retirement money. It is very important to have an appropriate
real estate advisor who understands where to find to good real
estate opportunities and knows what a realistic real estate
investment and realistic rate of return is and how to
appropriately manage a real estate rehabilitation or real estate
development project from start to finish. Mainstream
do-it-yourself TV shows showing rehabilitation projects are a
case in point as the majority of people go over budget during
the rehabilitation and the majority of times lose money. Dont
let this happen to your retirement.
Ability to offer advice has to be accompanied by permissibility
to offer advice. A self directed IRA custodian (as opposed to a
self directed IRA advisor) may not offer any investment advice
to an investor. It is prohibited. They must maintain a neutral
position and can only give you advice on the IRS regulations and
their firms investment policies. Therefore, an IRA custodian
cannot offer advice on real estate transactions, which is a good
thing because their primary purpose is to hold account holders
monies.
In short, real estate investment is a realistic option for most
investors looking to diversify their holdings, but the key to
benefiting from it is getting the right advice from the right
source.br
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Investing In Real Estate Investors
Author: John Roush
Source: articleage.com
With the never-ending changes in our Real Estate Markets real estate professionals are starting to pay attention to the sound of new commission streams of income. Some realtors have either shied away or ran-away from such terms as "Cap Rate," & "Cash-on-Cash Returns." Terms that only the 'smart' and 'numbers-oriented people use to determine if a Real Estate purchase is a "Good Deal", or not. A majority of the realtor brethren attended real estate school because they are excited and passionate about the promise of selling real estate and making a fantastic living. That being said "Times are a Changing." Even if you live in a Hot Market where residential real estate sells in 2-3 days there is an old approach to real estate that is growing faster by the day?..Residential Real Estate Investors.
This deft group of real estate investors is taking real estate and the real estate investment world into a new era! No longer accepting the crazy volatility of the Dow Jones and NASDAQ families. Unwilling to accept the investment practices of their fore-fathers these Investors throw caution to the wind for returns above the traditional 5-6% in their Roth or IRA accounts. These Investors are bold and oftentimes aggressive. Today's Real Estate Investors are all about the fast fix-n-flip, high appreciation, and rock solid monthly cash-flows. Cutting their teeth on investment in their own home-towns is only the beginning as the Serious Investors turn to points outside their own back-yards to other regions that demonstrate greater promise and higher returns. You may say well how does this older adult view their investment opportunities? For starters the age of these stealth hunters ranges from 28 to 68. From "Rich Dad-Poor Dad" book series to Trumps magical presence on "The Apprentice," the young real estate entrepreneurs are making their dreams happen to the tune of 3-5 acquisitions a year! Got your attention now? The typical Investor has good to great credit scores. Excellent cash reserves or hidden resources of partners with cash, and a willingness to make the deal happen at nearly any cost. The best kept secret of all is that these investing beasts travel in packs. Where you see one another is very close behind. In other words they know the people that you need to know to grow your investor database even larger. If the real estate professional does a good job the happy clients are likely to refer many of their fellow-investors. Not just investor clients but their regular every-day real estate business. Face it, if you can demonstrate to your clients how adept you are with their largest personal purchase of real estate, then wouldn't you suppose they will be over their "trusted real estate advisors" opinion on buying a basic home, condo or beach house?
So what if you haven't been focused in the real estate investment sector. And you are thinking this all sounds pretty good, let's give it a try. First question to ask yourself is who have your clients been working with or exploring their options of real estate investing with over the past 3-4 months. Statistically 6 out of 10 clients have considered investing in real estate or have already begun doing so before their realtor even has a chance to blink an eye. Got your attention now? How about the fact that in less than one year I increased my annual commissions by 30% by just positioning myself within my primary data-base of clients. All I did was let them know that I was ready, willing and able to begin assisting them with their "Investment Realty" needs. What I learned during the first year was that if I could create an environment for my clients to learn more about real estate investing that they would thank me in a variety of ways?.Most importantly they would call me before writing a contract and would make sure that I was involved in every contract that wanted to make a real estate purchase. Before long 30% went up to 45% and further. Even if you aren't interested in expanding your client database, at least consider protecting the turf you have for so long spent tireless amounts of time and financial resources to maintain their allegiance. On the other hand if you are looking at your real estate career and are wondering how to reposition yourself for market growth certainly to go well into 2025, here are a few known facts about how real estate investors can improve your business.
1. Real Estate Investors are literally everywhere. Successfully tapping into your current database could increase your annual commissions by 20-30%.
2. Real Estate Investors will be loyal to the professional that helps fill the gap of their investment education. Workshops, mentoring groups, finding the "golden deals" in your market makes a huge impact!
3. Investing in Real Estate Investors doesn't have to mean that you lose your "typical" residential realtor position. Being a real estate investment specialist means you are smarter than the average realtor in the market.
4. Mortgage professionals are struggling to provide real estate investors with property deals, so when you can place an investor into a good deal the referrals will begin to flow even more.
5. Real Estate Investors tend to be more conscientious about your personal time away. Investors also like to shop Monday-Friday for their deals before the "Weekend Warrior" investors get out into the competition. This translates into more normal hours and days of operation for you and your business.
6. Real Estate Investors buy-sell cycles are shorter than primary home purchasers resulting in more transactions in shorter time-frames.
If any of these points are encouraging you to seek new options in your business then make sure to sign up for the monthly "Grow your Real Estate Investment business" e-mail newsletter from www.InvestorLoft.com additionally, other excellent tools to improve and expand your real estate business can be explored at the InvestorLoft's educational Shoppe.
By John E. Roush, Broker-Owner Atrium Real Estate Investments. John is a full-time real estate agent specializing in real estate investment and real estate investment education. To contact John send all correspondence to Johnr@investorloft.com
?2005 http://www.investorloft.com
Real Estate Investment Clubs: How To Get Started
Author: Chris Anderson, PhD
Source: articleage.com
Over the last two weeks, we have discussed how being a part of a real estate investment club, or group, can result in exceptional investment opportunities that are not available to individuals.
Now, let's look at the typical path for a real estate investor who is interested in investing outside their local area. Once they learn the approach, now they fire up their Google search engine. Hmmmm, let me see, let's type in Preconstruction. When I did that, I just got 899,000 (literally) web pages that matched that search term. Now, they go through the top 30 or so and learn about all the reasons why you should consider this project, or that location, or be a part of.
I remember facing that scenario about 3 years ago. What I started to notice was that there was a select few groups that got really good projects and the other 98% of the web sites got leftovers. Since I was only interested in finding projects (I had no idea that we would create something like GetPreconstructionDeals.com at that time), I wanted to know why. The answer was very simple.. These real estate investment clubs had substantial buying power so they were getting good deals. So I joined their lists.
Even as part of those lists however, I became frustrated. Why? Largely because I couldn't get the kind of information that I was looking for to make the investment decision. Long story a little shorter, the realization that real estate investment club buying power was very important, and the frustration of not being able to get enough info led to the creation of www.GetPreconstructionDeals.com.
But now that we are on the other side of the fence, with over 15,000 registered investors, we understand soooooooooo much more about what it takes to be apart of a group and get access to truly good projects. Regardless if you work with us or you work with others, let me give you some specific steps you can take to improve your odds:
Find a major group where you line up with their philosophy and then join their mailing list.
Determine, in advance, what types of projects you are looking for and can afford. That way, you know your own criterion.
VERY IMPORTANT STEP: Find other like minded people either that are already part of the big group or are from your circle of influence. What you just did was now created a mini real estate investor club within a much larger group. If you are excited about it, go get your friends excited as well.
Let the major group know that your real estate investment club exists, that you have X like minded people, and are looking for (fill in the blank)_________________________.
Just so you understand why steps 3 &4 are so important, consider our latest project in Tampa. This project has been hugely popular but we had no idea, in advance, if it would be popular or just interest a few. Now, all of a sudden, we have over 200 people expressing interest and wanting calls.. Yikes!
With a tight deadline imposed by the developer, where do we start? We know from experience that many of these 200 will not be serious which is fine. First, we start with our Mastermind Members because we know that they are seriously interested in getting projects.
Next, we then go to members who we KNOW are serious and make sure they get everything they need. Then next, we start with the others in the order they were received.
In contrast, suppose there was a group of 5 like minded individuals that we KNEW were serious about condo conversions in Florida with rent Guarantees. In all likelihood, BEFORE we even agreed to put this project on our web site, we would have been in contact with that real estate investment club asking "what do you think"
Now, suppose that same group then recruited a few more buddies and got up to 20 members in their real estate investment club, all looking for roughly the same thing. Next, they then communicated their interest to us. Of course, that real estate investment club would play a big role in future projects meeting their needs but that is only a small part. Instead, we could then start LOOKING for that project, putting out feelers around the community, etc. Basically, this turns the process around and we now ASK developers for specific projects.
We also understand that in a web community like ours, it is not necessarily easy for you to get access to like minded people. On March 1, on an experimental basis, we are going to try introducing something that we believe will help. We will introduce an investor forum where everybody will be able to interact and hopefully establish some powerful, mini, real estate investment clubs. In addition, there will be several other features of the forum that we believe will spark lots of interest.
We hope that this forum will provide a real estate investment club atmosphere where you can not only work with others but where you can also tell your friends to come visit and participate. In the way that we think and operate, having more, focused investors around does not increase competition but rather substantially increases the ability to get access to very good projects.
Copyright 2006 Chris Anderson
Dr. Chris Anderson is the founder of http://www.GetPreconstructionDeals.com and is referenced in many venues including the New York Times and USA Today. Get his weekly, thought provoking articles by signing up today!
Should You Use a Property Management Company or Manage Your Real Estate Investment in Florida?
Author: Lisa Carson
Source: articleage.com
When considering investment properties, first of all, it must be determined that it is profitable and a good idea to purchase rental properties. Let's talk about this aspect. Owning rental property produces rental income which, if after expenses are deducted produces a profit, would be viewed as a good investment. Add to this the possibility that property has the potential to increase in value over time and you have some solid reasons to purchase investment properties.
If the rental income is paying more than the monthly mortgage amount leaving some excess for home repairs, it is possible the home could be paid off entirely by renters. At some point in the future, this same home can be sold with the seller receiving the full value of the property. Sounds like you can't go wrong in owning rental properties. But is this true? It all depends on whether the investor has thoroughly completed their homework.
If you are presently considering an investment in rental properties, be sure you do some thorough research. It's important for the property investor to gather adequate information before committing to rental property ownership. Searching the internet, reading real estate publications, attending seminars, and speaking personally with property investors is a great beginning that will place you on the road to making a wise, informed decision. Starting up a business is a little like real estate investment. Knowing the facts and putting time into the purchase gives you a much greater chance of success. Doing your homework can prevent disastrous property investment decisions.
Why a Real Estate Investment in Florida?
There are many issues that need careful consideration before making a final decision on property investment. These include the location of the property, Are you interested in an urban or rural location? What is the condition of the property, how much maintenance will be required to keep it in good working order? What are your financing options? What do taxes run on that particular piece of property in that location? How will you select tenants?
These are all vital questions that could determine the success or failure of your venture. Let's refer to the first and probably most important of questions to ask regarding property investment. What location will you choose? In searching for the best possible location, it is important to look at trends among renters. The American population continues to grow with a gain of about one person every 14 seconds. Where are all these new people coming from? An increase in our own population and immigration account for this strong growth. With this in mind, it is safe to say there will be a continued need for housing in the future. Concerning the immigration population, California, New York and Florida lead the list, in that order, in new residents. What a potential pool of people to pull from! Looking at the cost of real estate purchase in these three states, a real estate investment in Florida ranks among the most reasonably priced. Along with the strong immigration growth, Florida is a hot tourist destination, making it an ideal location for the purchase of rental property.
Real Estate Investment in Florida - Where is a Good Choice?
Along with having the 3rd highest rate of population growth, the high tourism rate is definitely a great reason for a real estate investment in Florida. With its year-round temperate climate and vast array of attractions, both natural and created, it is the ideal location for family holiday vacations. Families and singles return again and again to enjoy the delightful holidays Florida offers. Deciding where to purchase your real estate investment in Florida may be a difficult decision. Tourists in Florida are searching for sun and fun. A real estate investment near the beach, from Key West in the south to Jacksonville in the north and east from Daytona Beach to Fort Myers would offer good returns on your investment. Beach lovers will pay top dollar for rentals near the ocean. Let's consider Central Florida as a wise real estate investment. Walt Disney World has made Orlando the 3rd favorite tourist destination for overseas travelers. Only Los Angeles and New York City rank higher. With its resplendent and numerous lakes, tropical landscaping and modern, clean skyline, Orlando, the largest city in Central Florida, has aptly earned its title of "The City Beautiful". Along with the biggest drawing card of all, Walt Disney World, theme parks such as Universal Studios and Sea World, have made Orlando one of the largest markets in the world for tourism. 2.6million international travelers flocked to Orlando in 2004, according to the Orlando/Orange County Convention & Visitors Bureau, a 12 percent increase from 2003.
Real Estate Investment in Florida - Where in Central Florida?
Having established the fact that Central Florida is a hot tourist market, it would stand to reason that a real estate investment in Florida, particularly the Central Florida area, would make good business sense. But how would one go about locating a desirable area and property for this investment? A beginning search would lead you to researching properties listed with the major real estate companies or visit craigslist.org in your area. Deciding which type of property is important. Do you prefer a single family residence, a townhouse or condo? Keep in mind that townhouse and condo purchases may offer onsite property management services. Will your real estate investment in Florida purchase be in a new development, or in an established, older area? Purchasing rental property in a new development often offers pre-construction prices which can be substantially lower than prices post construction. Are you available to manage the property, or do you wish to employ a property management company to take care of the details of property upkeep, record keeping and renter booking? Doing it yourself can save you 6 percent and more of the cost of rent, but can end up costing you if you don't know what you are doing. If you do not plan on living in close proximity to your rental property, it would be wise to consider spending some extra dollars to employ a property management company. This will save you headaches and time, your own time for property maintenance and the time it takes to locate renters.
Real Estate Investment in Florida - Consider Davenport, Fl
Considering a real estate investment in Florida, just 5 miles southwest of Disney you will discover the quiet, quaint town of Davenport, Fl. Its central location yet off the beaten track give it an appeal all its own. Davenport, Fl is only 2 square miles in size. With its small town appeal, it is an attractive rental option for tourists. Davenport, FL is under 30 minutes from Universal Studios, Sea World, Disney World and other Orlando attractions. It is just one and ? hours from Kennedy Space Center and within an hour's drive to Tampa (home of Busch Gardens) and Cocoa Beach. After a hectic day at the major tourist attractions, what a welcome respite it would be for renters to lodge in this quiet location which is surrounded by orange groves. Convenience is another drawing card with a Super Wal-Mart, open 24 hours a day, just nine miles away. Kissimmee is just a short drive with its spectacular nightlife entertainment options such as Arabian Nights and Medieval Times. Family oriented Kissimmee attractions, Green Meadows Farm and the Silver Spurs Rodeo are also nearby. The small town environment of Davenport, Fl offers a quiet stay that is near all the most popular attractions, including theme parks, family spots and great shopping and dining, located not far from the Florida Mall, outlet malls and the Orlando Mall.
Bimini Bay, Davenport, Fl
Located in Davenport, Fl in close proximity to Walt Disney World, is a brand new development, Bimini Bay. On 80 acres, 360 three bedroom two bath townhouses are ready for purchase. The Davenport, Fl townhouses are turnkey ready with fully equipped kitchens, appliances and all that is needed to set up house including linens. There will also be 360 fully equipped one bedroom apartments. The planned amenities include a resort pool, two movie theatres with stadium seating, a major chain restaurant, a large Club House, a pool, lazy river, water slides, exercise room, tennis and volleyball courts along with many other features. The best part about an investment in a townhouse at Bimini Bay, Davenport, Fl is that the property maintenance aspect is taken care of for you. The investor reaps the benefits of ownership such as property appreciation and the ability to stay in the purchased property for a minimal fee without the headaches of property management. The onsite management team takes care of maintenance, markets the property and secures renters. The investor receives the same rental income each month, making this a low stress investment. At the beginning of this article, there was discussion on managing rental property yourself or obtaining a management company for this purpose. Purchasing property at Bimini Bay ensures the on-site management will handle all the issues of property management, while allowing the investor the advantage of a steady income along with the benefit of using the property.
Lisa Carson
Real Estate investment in Florida Expert
http://www.biminibayresortinvestment.com
Offering the only Guaranteed Monthly Rental Program in Orlando Florida for Florida investment Properties