Investing In Real Estate
Real estate investing is a hot topic again. It's a funny thing how one day everyone wants to dump their real estate investments and the next day everybody is jumping back in. Well, it's no wonder. The real estate investing community went through such a gyration, including all of the crazy buying that speculators went through over the last few years. The last two years have been one of the worst in history.
If you look at the graphs, the housing prices in many cities and states have dropped 20% to 40%, and even 50% in some hard hit areas. The drop resulted to a much more affordable homes. The "bad behavior" on the part of speculators have discouraged and the government has stepped in as well to help people who would like to acquire these homes. But now, real estate investing is back on the upswing. The number of property values started to make sense again.
In this recession, how can one benefit from real estate investing? Let's do a bit of the math. If you can finance a $100,000 mortgage at 6%, your mortgage payment is somewhere in the $600 range. If you add property taxes and insurance, your monthly outlay would probably be around $750. Now, assuming you can rent that property out for $900 monthly. A cash flow positive investment is more visible now.
Having that real estate investing scenario, it simply does make sense to hold on to that property for 10 to 20 year more and get great financial benefits. Why do I say so. The logic is that outside of general maintenance on the properties, you're getting someone else to pay for your mortgage. Also if property values increase over time, you could get even more benefits from a big windfall, when it comes for you to sell the property.
Not everything works as planned, of course. That's what happened over the last several years. Real estate investing people bought up properties at extraordinarily high values. And, then the market crisis hit, properties lost their value, and no one could re-finance or carry the loan payments any more.
This drastic change of fortunes could happen to anyone. Real estate investing is not something that anyone should just go into haphazardly. Many of the age old phrases, such as "location, location, location" are especially true in real estate investing. Also, make sure the numbers "pencil in." If you think you're going to take a cash flow negative property and hold on for property value increase think again. Those markets may never come back again.
This is why it's extremely important to know what you are doing in real estate investing. There are several companies, gurus, etc. who purport to tell you how, what, when and how much. Many of the gurus are fly-by-night scammers. They will try to sell you a bill of goods. You should make sure to look at gurus who have been around a while and have a loyal following. Some examples of these people are Donald Trump, Robert Allen or Carlton Sheets. Basically, they've been there, done that. - 23196
If you look at the graphs, the housing prices in many cities and states have dropped 20% to 40%, and even 50% in some hard hit areas. The drop resulted to a much more affordable homes. The "bad behavior" on the part of speculators have discouraged and the government has stepped in as well to help people who would like to acquire these homes. But now, real estate investing is back on the upswing. The number of property values started to make sense again.
In this recession, how can one benefit from real estate investing? Let's do a bit of the math. If you can finance a $100,000 mortgage at 6%, your mortgage payment is somewhere in the $600 range. If you add property taxes and insurance, your monthly outlay would probably be around $750. Now, assuming you can rent that property out for $900 monthly. A cash flow positive investment is more visible now.
Having that real estate investing scenario, it simply does make sense to hold on to that property for 10 to 20 year more and get great financial benefits. Why do I say so. The logic is that outside of general maintenance on the properties, you're getting someone else to pay for your mortgage. Also if property values increase over time, you could get even more benefits from a big windfall, when it comes for you to sell the property.
Not everything works as planned, of course. That's what happened over the last several years. Real estate investing people bought up properties at extraordinarily high values. And, then the market crisis hit, properties lost their value, and no one could re-finance or carry the loan payments any more.
This drastic change of fortunes could happen to anyone. Real estate investing is not something that anyone should just go into haphazardly. Many of the age old phrases, such as "location, location, location" are especially true in real estate investing. Also, make sure the numbers "pencil in." If you think you're going to take a cash flow negative property and hold on for property value increase think again. Those markets may never come back again.
This is why it's extremely important to know what you are doing in real estate investing. There are several companies, gurus, etc. who purport to tell you how, what, when and how much. Many of the gurus are fly-by-night scammers. They will try to sell you a bill of goods. You should make sure to look at gurus who have been around a while and have a loyal following. Some examples of these people are Donald Trump, Robert Allen or Carlton Sheets. Basically, they've been there, done that. - 23196
About the Author:
Darryl Degenhardt, a well-known professional who understands that superior client service and dedication are smart business. He has found great opportunities in real estate investing.
posted by X - Men @ 2:08 AM
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