Investing Through Real Estate
If you own your home you may have contemplated investing money into another home. Not selling the one you own but adding an investment to your real estate portfolio.
Although the real estate market may seem like the wrong place to invest at this time, you may want to reconsider for some very good reasons: Interest rates are the lowest they have been in decades; home foreclosures’ are at their highest making availability of good deals a real possibility and lowers the home prices.
If you are ready to dive into an investing opportunity with real estate, consider some of these tips:
Look for creative financing opportunities. If you are thinking of a short term loan you may want to consider an adjustable mortgage with a low temporary interest rate. Adjustable mortgage rates have been a source of problems to the housing market as well as buyers. However, if you know you can sell a home in a short period of time, they allow you to pay only the interest leaving the principle for the buyer to pay.
On the other hand, if you intend on renting the property, you may want to go with a more conventional interest plan. The latter is more of a long term investment whereas the short term loan is for a quick profit, within 2-5 years time.
When looking for investment property you may look at a “fixer upper”. These are very economical if you intend on doing the work yourself. Regardless of the type of work needed, if you are unable to do it yourself, you can plan on spending any money you saved on the purchase during the remodeling or the repairs.
Changing door locks, landscaping, painting and minor plumbing work can and should all be done by you, saving you time and money. If the home needs a new roof and you can’t do the work, maybe you should think about passing up the bargain.
Last but not least, know the market trends. Before listing real estate, check the market. Know what the buying trend is, whether homes are selling for more than the asking price or down. Talk to your financer. Find out what required loan down payments are running and what kind of volume they have on home loans.
The most important thing to remember during this process is to use good basic business skills. Your primary goal should be to make money by purchasing a home, fixing it and selling it again, or using the new home as rental property. Either way you should use your better judgment when considering the purchase of a secondary home for investments purposes.
Although the real estate market may seem like the wrong place to invest at this time, you may want to reconsider for some very good reasons: Interest rates are the lowest they have been in decades; home foreclosures’ are at their highest making availability of good deals a real possibility and lowers the home prices.
If you are ready to dive into an investing opportunity with real estate, consider some of these tips:
Look for creative financing opportunities. If you are thinking of a short term loan you may want to consider an adjustable mortgage with a low temporary interest rate. Adjustable mortgage rates have been a source of problems to the housing market as well as buyers. However, if you know you can sell a home in a short period of time, they allow you to pay only the interest leaving the principle for the buyer to pay.
On the other hand, if you intend on renting the property, you may want to go with a more conventional interest plan. The latter is more of a long term investment whereas the short term loan is for a quick profit, within 2-5 years time.
When looking for investment property you may look at a “fixer upper”. These are very economical if you intend on doing the work yourself. Regardless of the type of work needed, if you are unable to do it yourself, you can plan on spending any money you saved on the purchase during the remodeling or the repairs.
Changing door locks, landscaping, painting and minor plumbing work can and should all be done by you, saving you time and money. If the home needs a new roof and you can’t do the work, maybe you should think about passing up the bargain.
Last but not least, know the market trends. Before listing real estate, check the market. Know what the buying trend is, whether homes are selling for more than the asking price or down. Talk to your financer. Find out what required loan down payments are running and what kind of volume they have on home loans.
The most important thing to remember during this process is to use good basic business skills. Your primary goal should be to make money by purchasing a home, fixing it and selling it again, or using the new home as rental property. Either way you should use your better judgment when considering the purchase of a secondary home for investments purposes.