You often hear about every day people who made their money investing in the stock market, but you also hear about people who lost it all the same way. You hardly ever hear about real-estate investors who lost all there money because it doesn?t happen nearly as much.
Those who invested in the key areas of real estate years ago are living the dream! The information I am providing I feel will prove helpful for any experience level of investors.
Why just think about it! Do something about it!
Everyone has heard there is money in real estate but no one does anything about it! This is because no one hears actually how much money there is to make by investing in real estate. Why doesnt everyone try to make there share?
The reason is simply the fear inside of everyone. The majority of people feel that it is to much work and to much of a risk to take. Even with all the helpful information thats out there today. People still feel they dont know enough to take the chance of investment. Fortunately for you it will always be this way and they will always be the ones supporting you with rent money each month.
What do you have to look forward to?
When I decided that investing in real estate was what I wanted to do. I really didnt know what to expect The only thing I knew was that making money without dealing with my boss was what I wanted. No one just said here I want to pay you so you dont have to work, I had to come up with a plan and idea of exactly what I wanted to do.
Real estate takes alot of time and patients. You will be dealing with all types of tenants good ones bad ones and everything in between. You also need to deal with stuff when it breaks, heating bills, and just fixing the place up now and then.
Looking at it that way may upset you but dont forget, I dont have to follow my boss around asking what he needs done next all day for the same salary every week. Getting paid for extra work you accomplish is a breath of fresh air after working 40 hours a week trying to help your boss make money. Knowing extra work you do helps the company more then it helps you.
The weather is crummy and I want to get away I leave, its that simple I dont loose money! I EARN it my rent money keeps coming each month and loans keep amortizing! The job does itself even while I lay on the beach.
Knowing that I could have the freedom to go where ever I want when ever I want while earning money doing it was enough of a reason for me to love real estate. All this without a boss breathing down ur neck and throw in the other little benefits I think I found my new full time job!
Cash flow
It is what is says basically cash flow is the difference between your income and your expenses. Basically it?s your situation when it comes to your investment you can have a positive or a negative cash flow. If you dont know what one you want please dont read anymore!
When you do obtain a little positive cash flow never use it all to pay get out of a debt in a certain area. You have alot more options by keeping a strong positive cash flow.
Appreciation
The two types of appreciation are economic conditions and market appreciation.
Economic conditions would be out of your control like a inflation in a certain area but as you know the more popular the area the higher cost of living so you dont make as much here.
Market appreciation is the more profitable of the two its a increase in value due to renovations. Buying a home touching it up and reselling for a profit would be a example of market appreciation.
Appreciation is the increase in value of a property. There are two kinds of appreciation. The first is from economic conditions beyond your control, such as inflation. But you won?t gain much from this type of appreciation since the gain is offset by the higher cost of living.
The second kind is market appreciation, which you can control. When you improve a property (through renovations), you force its value higher. You can purchase a piece of property in need of repairs and bring it back up to neighborhood standards or slightly higher; this will give you a property that is much higher in value.
Leverage
Having the ability to borrow a percentage of the value of a piece of property is what leverage is. Most of the investments im sure you have been looking at are not even a comparison to real estate when it comes to leverage. In example a couple who buy a single family home can obtain up to 95% financing. This being said allows you to purchase real estate with little or none of your own money. Like I said what other investment offers this high of a degree of leverage?
Amortization
When you are able to make money off of other people?s money how could you not be involved! Loans of course have interest but each payment also goes to pay off principal. Principal reduction is called amortization and this my friend can make you wealthy!
Advantages
When you own your own real estate and are focused of making profit with it, you have the option to deduct interest and other payments when tax time hits. Although purchasing real estate just to receive tax advantages is not what you should be aiming for. You need to purchase it because it makes sense.
Benefits of purchasing
Owning your own real estate business is wonderful way to escape and obtain the financial freedom you have been looking for.
Remember real estate can be a hobby or it could be your new full time career the sky is the limit its what ever you make it.
Ryan Dymond writes on marketing and business related issues. You can learn more by visiting my blog, Investing in Real Estate [http://make-money-with-real-estate.blogspot.com]
[http://make-money-with-real-estate.blogspot.com]
Source: http://estate.learntrend.net/loan/real-estate-investing-start-learning-today/
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