Have I ever mentioned how much I love real estate? I love love love it! It is my goal to be a full time investor (but I want to do it all debt free so it may take a while).
I used to work for a company that teaches people how to invest in real estate and I wrote a bunch of articles about everything real estate. When I left the job I had my boss release the rights to all the articles I wrote so now I get to share them with you (for FREE!).
The first in the series (that I'll do weekly) is: Why Should I Invest In Real Estate?
If you’re thinking about a career in real estate investing, you’ve probably come up with a lot of reasons why you should invest. I’m going to go over some of those reasons, along with some of the cautions of real estate investing.
Real estate is a necessity of life. Everyone needs a place to sleep, a place to eat, and a sanctuary to get away from the outside world. It will always be in demand.
Real estate is one of the few things that appreciates (almost a laughable statement in the past few years, but generally true and it will be true again). When you buy a car, as soon as you drive it off the lot it is worth hundreds or thousands of dollars less than when you bought it. Your house is a different story (usually). Depending on the market, of course, your house and property could appreciate tens of thousands of dollars in one single year.
If you're in a market where prices have become so low it's ridiculous, I'm excited for you! Those houses are on clearance! And who doesn't like buying awesome stuff on clearance?
Caution: Not all markets are appreciating at the same time (and some are depreciating). When you invest, do your due diligence. If you plan on banking on appreciation, make sure you’re in a good market.
Real estate is a tax shelter. Many people want a tax break. Owning real estate provides a tax shelter for the owner. You can get a tax write-off for the interest paid on that property, assuming you have a mortgage.
You have control of your real estate. It’s your business. You can decide if you want to rent it, lease option it, sell it, fix it up, or the like.
Earn residual income. If you rent or lease option your real estate, you can receive positive cash flow each month. This allows you to reinvest that money into another property where you can make more money.
There is funding available in many neighborhoods for revitalization. Often, if your house was built before 1936, you can get grants to fix it up.
Get quick income. If you flip a house, assign a contract, or fix up a house, you can make a lot of money quickly. Whatever you do, stage that sucker so it looks amazing. You will get more money every time.
Caution: You may have a contractor do any rehab work. Get a quote on the cost to fix it up, and then plan on spending double… just to be safe. A lot of rehab properties end up costing more than what you were originally quoted. The same applies if you do the work yourself.
Real estate investing can be a very lucrative business. If you are just beginning (or thinking about it), you are probably a little nervous. That is very normal. To make sure you do things correctly, get a mentor that can help you through the process. This can be a real estate agent that is familiar with investments or a friend that has invested in many properties. You will probably have a lot of questions during your first few deals. Keep going, you will learn quickly and it can become second nature to you.
*Disclaimer* I am not a legal adviser, accountant, or anything else that enables you to use this information as anything more that interesting information. I encourage you to seek advice from a professional before doing anything with real estate.