Category Archives: real estate

Land Buying Tips

If you are thinking of making a land investment, for building a home or for business; it is very important that you study as much about it, as possible, before you buy it. Its value has a reputation of appreciating over the years. So, buying land is almost always profitable. However, the rate at which the value appreciates, is totally dependent on the rate of development around the area. So, make sure that you choose it smartly.

Tips on Buying Land

Land remains the most sought after asset in the world. All things can be manufactured, but land can’t. It is the most sound investment to make. It is a more secure investment than stocks or bonds. However, investing in terra firma can be quite a tricky business. There are many issues to deal with and many things to watch out for. It can be a complicated business and one needs to carry out the whole business very carefully. Here are some tips, for those who came in late, in search of their promised land.

Location, Location, Location
When it comes to buying land, there are three important things to think about, which are location, location, and location. Yes, location matters. First of all, if you are clear about what purpose you are buying it for, your search is simpler. It helps when you know exactly what you want. See that you have electrical connections around your land so that you can get one easily, when you go into the construction phase. Water supply is another thing to look out for.

If water ain’t there, not much is going to grow there and life will be difficult. Ensure that your land is easily accessible by road. This is very important, as otherwise, transporting building material during construction becomes difficult. Also, it’s good to choose land, that is close to your place of residence. Otherwise, commuting will consume a major part of your time. Be ready for a lot of travel, to choose your promised land. Start with real estate advertisements in papers or approach real estate agents.

Check Topography and Surface Features
Check the topography of the land carefully. Avoid marshes and lowlands, as they are difficult to build upon. Hill slopes are also tough terrains to build upon. If you intend to buy it for agricultural purposes or otherwise, it is a good practice to get the soil type and quality checked.

Check if the land has an underground base of bedrock, that can hold water. If the bedrock’s there, possibilities of finding water underground are greater and may solve your water needs, in times of scarcity. If you are buying it for residential purposes, you must think from a landscaping point of view and evaluate it accordingly.

Ensure Title Clearance
Ensure that the land title is clear and there are no legal problems associated with it. Get the legal papers checked for authenticity. Many adventurers who were careless, have been conned by false papers and duped out of their life’s earnings. Take legal advice and professional help in making your purchase agreement.

Market Research
Research market prices in the area before going into a deal and agreeing on a price. Get a real estate appraisal. This way, you can ensure that you are paying a reasonable price. It is better to pay for the land in cash directly, instead of going for real estate loans. Loans can be very costly and can put a lot of financial burden. Saving money and buying your land within that budget, is a better option.

Land dealings are never simple. Rounds of negotiations and bargaining go on for days, before a price is agreed upon. The process can be even more complicated, when estate agents are involved in the process. Be patient and persistent. Ensure that everything about the deal is carried out through proper legal channels and consult a real estate attorney.

Real Estate Investing Tips

investing-in-real-estateWhen you have extra money, you think of ways to invest it so as to earn more money. If it is a huge sum, an idea of buying second home may always pop up in your mind. Buying real estate can help you earn large amount of profit on the basic investment. Real estate investment is a fabulous business and you can do it along with your existing job or business. But, this doesn’t mean that it is a very simple business which just involves buying a property and selling or renting it. It’s a wise investment and definitely, you need to invest your time and brain in this business to make it successful. So, what are you waiting for, go through these real estate investing tips mentioned below before you start off.

Tips for Investing in Real Estate

  • Scrutinize the property before buying. This is one of the most important tips. Check with the nearby localities about your site. Examine your site properly, do not be negligent about doing this. You can also hire a professional inspector for this.
  • In any business, research has prime importance. A comparative study will prove beneficial, before doing any deal. You need to do a research to know about the average property value, around your property. This will help you in deciding the value of your property if you have to sell it.
  • Similarly, check the rent of properties in this area if you are planning to rent your property. This is the best way to measure the market value of your property. The sale price of your property is almost equal to that of the nearby properties and even the rent will be almost equivalent.
  • The rate will only increase or decrease depending upon the amenities and condition of your property. This research is necessary even if you are renting your property because, if you decide a higher amount of rent as compared to other properties with similar features, then it will be difficult to find customers.
  • Also, a person who can afford highest price, will think of buying instead of renting, so reasonable rent price is important.
  • There are various fields in the investment business. Get specialized in any one field, this will help you to gain deeper knowledge and have updates of those investment properties. For example, you can focus on fixer- uppers, foreclosures, low down payment properties, starter homes, small apartment buildings, condominiums, etc.
  • You need to be thoroughly aware about the current tax laws, real estate loan options, loan payments, cash flow statements, etc. Also, you need to study the tax properly and calculate your advantage.
    An essential factor is tax, as it makes a huge difference between negative and positive cash flow. Newcomers can take help from tax advisers. You can also take advice from a real estate attorney for legal matters relating to your property.
  • If you are renting your property then you must have the necessary information about tenants. Know where they work, their hometown, contact numbers, etc. Collect the security deposit as well. Also, respond to all their complaints; solving them on time will help you keep up good relationship with them.
  • Negative cash flow will lead to frustration. If a property is reducing your cash everyday then it may lead to a lot of stress followed by financial problems. So, note out any issues that may affect your cash flow negatively and make you to sell the property even before you earn enough benefits out of it.
  • Remember that you have to first secure your investment and then earn profits out of it. Opt for the best insurance coverage for your investment. For this also, research the available options and the benefits of each over the other.
  • Learn the art of real estate negotiation. You have to be a good negotiator to do this business. Highlighting the plus points of your property, in a way that customers forget the minus points is much important. Your convincing abilities will be helpful while deciding the price.

Starting a real estate investment business is a great option of investing your surplus money. It all depends on your knowledge and confidence to make this business, a success. Study about real estate field thoroughly and be a successful investor.

Real Estate Investing Business Plan

Real estate is one of the booming sectors and everyone wants to make a mark here. There is a lot of competition and only those with vision, passion, and the ability to work hard can achieve this success. In this field, one of the most important things a businessman should be aware of is a business plan. It basically includes creating a written outline that evaluates the economic viability of your business venture based on real estate investment. It helps you define your objectives, i.e., what you want to achieve from this particular venture. It also helps you to focus on your goals, aims, and targets.

A carefully designed plan can also help you attract more lenders, investors, and banks. It makes you look neat, professional, and reliable, which is very important for the investors so that they can trust you and believe in your abilities. It also helps you to find out probable weaknesses and shortcomings in your plan that you can improve. Mentioned below is a template for it that would help you to create one on your own.

Main Elements

Executive Summary
In this section, you are supposed to write the long-term vision and mission of your venture. Here, you should provide the reader with a brief introduction to the entire business plan. As the name suggests, you should pen down the overall plan in a summarized manner. You must also mention your objectives and start-up details, along with some general information about your business.

Company Background
In this section, you should write about the entire history of the company, the people associated with it, and its journey so far. The kind of ownership of the company, something about its owners, achievements of the company, etc., should also be mentioned here. If it is a new company, then why and how it is/was established, who is it inspired by, etc., should be mentioned.

Market Research and Business Strategies
Here, you should write about your target industry, customers, and real estate financing status. You should give the detailed description of the real estate investing industry you wish to work with. Apart from this, you should also mention about your understanding about the industry and how you would like to work with a difference. You should also write about the business model you have already established or planning to design. Also, mention the strategies you have formulated for the same based on your market research analysis.

Marketing Plan
Here, you should mention everything about this aspect, including how you are going to market your new venture. Provide detailed information about promoting and marketing strategies, including which medium you will choose to advertise, how frequently you would engage in this activity, how much budget is allotted for advertising, etc. And to decide these things, you need to study the opponents, identify your USP, and plan accordingly. All these aspects have to be mentioned, so that readers come to know about the viability of your business plan.

Financial Plan
You must write how you are going to start this venture and from where the initial money is coming. You also need to mention the probable profit and loss you are expecting. You must describe the entire begetting plan with adequate details. Also, mention the sales projection and implementation strategies of all the projects. This helps the investors ensure that you are not involved in any illegal activity and that it is safe to be associated with you.

Assumptions
In this section, you would mention the assumptions related to your business venture and the industry. For example, you can make assumptions about the interest rates or growth rates, etc., based on the background research of the industry and your business plan. This helps the investors to understand your confidence level, as well as your risk calculation abilities. It also provides them a chance to know about your thinking process and your perception about the industry.

Management Summary
In this summary, you should appeal and motivate the people to work with you. This is quite similar to the closing statement, where you should mention that goals are realistic and you have the manpower and strategies to reach them. You have to write this last piece in such a way that your faith in this venture should be reflected clearly from your words. You should use promising and regressive language that would make the readers live your dream.

You can personalize the above template as per your needs and choice. Use a catchy and simple language that is easy to understand. A rightly and precisely designed and formulated business plan is sure to fetch great success to you.

Tips For Buying a Commercial Property

If you are considering investing in brick and mortar and are thinking of buying commercial real estate, there are many points of consideration. Unlike any other investment, putting your money here, can be a tough decision to make.

Investment Tips

Commercial real estate investment is all about creating a cash flow generating asset and all your efforts need to be directed towards ascertaining its potential value. It’s no secret that these are times of economic recession and the real estate market has taken a beating. However, if you think optimistically, this is a time of opportunity, as a piece of real estate, which was beyond your reach in boom time, can be bought at a substantially lower price today. Here are the major points of consideration, while purchasing a commercial property. These are certain pertinent questions, which need to be asked, that help you assess the profit potential of a real estate investment and make your choice simpler.

What Kind of Property are You Looking For?
Even before you can start thinking about this investment, you need to have a plan about the revenue generating mechanism or business plan, that is going to reap cash for you, through this investment. Are you planning to buy a rental property, business premises for your company, or a shop? If you make up your mind regarding this, you’ll know what type of property to look for. That will simplify your search.

What’s Your Budget?
The next thing to ponder upon is to come up with a maximum purchase limit. If you are planning to make the purchase using a mortgage loan, then you need to decide on the maximum down payment, that you could make. A knowledge of your purchase limit will see to it that you don’t go overboard, when negotiating on price and land up in a soup. Start looking for banks that offer commercial real estate mortgage loans, once you decide the property, which you plan to buy. There are many financing options to choose from.

How to Search For Them?
There are various channels through which you can search for such properties. Online and print classifieds are a place to start your search from. Approaching a real estate agent is one of the best ways of searching, as they have extensive databases of properties for sale. They can find you a property, that fits within your price range and requirement. Be on the lookout for properties being auctioned.

How to Evaluate the Revenue Potential?
When it comes to evaluating the value of real estate, with respect to commercial gain, location matters. Consider what is the scale of profits, that you can hope to make, from those premises. If it’s a rental establishment, calculate what is the cash inflow. If you plan to open a shop or your company office there, location is the most important factor.

Ensure that title of the property is clear and get an architect to evaluate the structural solidity of the building, if it’s an old one. See if there are any pending tax payment issues associated with it. Get a real estate consultant to provide you with a valuation of the property, according to current market prices. This is known as an appraisal. When all of your homework is done and you choose a property, make an offer to the seller yourself, or via his real estate agent.

Negotiate for a fair price and arrange for a mortgage if the deal goes through. See to it that all the legal formalities are handled properly. A real estate attorney can handle it for you. Once you buy the property, you could either opt to manage it on your own or let a management firm handle it for you.

To sum up, leave no stone unturned in evaluating the earning potential of a property before you buy it. If the potential is substantial, the risk you take while opting for a mortgage loan, is lessened.

Adverse Possession

There are many rules and regulations regarding acquisition of land by adverse possession. Till today, this method has helped many people own properties around the world without buying them with their own money or making any kinds of investment. In the next section, we shall know more about this method of real estate possession.

When is Adverse Possession Possible?

In order to become an owner of a piece of land by this method, a person needs to actually possess it by physically using it. The claimant must have something to show in court which will prove that he has actually utilized the land. For instance, if as a user of the property that belongs to someone else, the person has paid taxes on it regularly, it might be considered by some courts. There is a statutory period which is the number of years for which the person needs to hold the land in order to claim ownership for it.

Hostile possession of land which means the person claims its ownership and occupies it in opposition to the owner’s true rights is one approach that can be taken. The application of the person for permanent ownership of land can be rejected if he does not have exclusive possession of the concerned land. The claimant needs to hold the land personally even though there is opposition from other people.

Understanding the meaning of exclusive possession of land is important for all those who wish to benefit from the laws related to adverse possession. One can prove exclusive possession of land easily if he has made any significant changes to the property such as building a fence, leveling the plot of land or any other construction work on the plot.

The claimant needs to establish his intention to possess the land during the time he was controlling the land. Most states allow possession of land to a person who has lived there for 10 to 12 years at a stretch. Many places require people to be in possession of the land for 15 years. However, one must note that this requirement (number of years of possession) can change from one place to another. So, confirming about the same from local authorities and knowledgeable people would be a good idea.

Getting the property back is possible for the real owners from the person occupying it by approaching the local court with proof supporting their statements. At some places, adverse possession may not be considered hundred percent legal as it involves getting the property without making payment for it. There have been instances when cases have been filed against people for making false or illegal claims over properties of other people.

Another thing to note here is that claims of possession cannot be made against council owned land. This is really a very complex process and may require much more time than expected. So, do not be in a hurry to get the desired results and be patient so that the entire process is completed smoothly. The claimant or the owner must take help from real estate attorneys and realtors for clearing doubts. The Federal laws, rules and regulations related to it are subject to change anytime and hence one should keep an eye on the latest real estate news.

Land Investment Advice

It must be noted that land investment does not mean investment in property. Land investment means investment in land without any construction over it. The piece of land or real estate that has certain construction or structure on it has been classified as property.

Mark Twain jokingly once said that, one should buy land, because its production has been stopped. In a literary sense the statement is hilarious, and from the point of view of economics it is a fact. Land which is one of the most important resources, is needed for the simplest purpose – human existence.

Demand and Supply Analysis of Land

Land has an inelastic and non-growing supply, and at the same time it has an infinite and ever-growing demand. In simple words, the total area of land in the world is limited. In short, higher demand and limited supply of land has escalated the land prices throughout the world. There are several reasons such as vicinity to amenities, utilization resources, cultivable characteristics of land, or other such features tend to escalate the cost of land even more.

This is also the reason for the different price levels in the different parts of the country. The rule of thumb is the more convenient and resourceful the land, the more is demand for it and vice versa. More demand means that the price of the piece of land is going to steadily rise.

Hence, as an investment, you will need to hunt for a piece of land that has very good value projections. To do so, you will have to conduct some market research and analysis. While researching, there are a couple of channels such as realtors and estate planning experts, who you can approach if you are dealing in a mammoth investment.

Locations and Features of the Land

The best pointer to the value projection of a particular piece of land is its features. When you decide to invest in land, you will have to look up and research the different features of land. First, the geographical and geological characteristics have to be observed such as is it an industrial, barren, agricultural or mountainous piece of land.

Usually the barren and mountainous piece of land would not get much of a high price projection. The second aspect is the significance of the surroundings. For example, if the plot of land is situated on one of the main roads of the city, then the projection is magnificent, if it is situated near an industrial belt then you got a lot of returns, if it is barren and still next to or in the vicinity of an urban region, then again there is good chance that you have struck gold there.

The features of the land itself, and even the ones of the surroundings is a great pointer so as to learn how much will the value of land will increase. Your analysis should thus be precise and in detail. Hollywood Boulevard is one of greatest examples of how the features of land and its surroundings affect its price. Reading more and more real estate investment tips, land for sale columns, and land investment advice that appears in the newspapers, magazines and websites will certainly help you a great deal.

Mortgages and Loans

One of greatest worries of buying a plot of land is the financial consideration. There are three things that you can do to make the investment a really rewarding success. Point number one, get in touch with banks and public lenders and get pre-approval of the real estate loan. Calculate the installments, closing cost, add up potential interest rates and then, compare the same with your research. If you feel that the investment cost is much lesser than the sales costs that you are anticipating, then the purchase is worth it.

The best thing about land investment is that the demand and price are always going upwards, and there is going to be no dearth of potential customers once you decide to sell the land. There are many options that you can execute even before selling the land, for example you can develop the land, or construct an entire set of buildings or some houses, or some commercial place before selling. Developing a farm or any other commercial place before selling that one piece of land is also a great idea to have a side business, till you decide to sell the place.

Property Investment For Beginners

Traditionally, one of the best high return investment options has been investment of money in real estate. While the property prices may go up and down in the short term, over the long term, they have always appreciated substantially. The ownership of a piece of land is an investment you can eventually bank upon, as it acquires value through development of the areas in its vicinity. With the falling of property prices, many people will advise you to stay away from investing in real estate. However, if you look at it from a different perspective, you will see opportunity in this situation.

Properties which were once beyond your budget reach are suddenly within your range. For those of you who have been smart enough to save money throughout the past bearish decade, now is the time to invest and take advantage of the opportunity, which has presented itself. In this Buzzle article, I shall share some tips on real estate investment for those of you, who are smart enough to recognize the opportunity this recessionary background has presented.

Tips on Property Investment for Beginners

Any investment comes with its share of risks, which cannot be entirely eliminated but lessened through research and planning. Same goes with real estate investment. You have to do your homework and get your research right to end up on the winning side. Here are some tips for beginners.

Know about the Range of Real Estate Investment Options
Firstly, you need to begin with a study of the varied range of investment options in real estate, which you may consider. You may invest in buying residential houses, commercial properties, condos, apartments or purely specialize in land investment. There are a lot of options out there and you need to consider the entire range, to decide which would ideally suit your investment budget and align with your future plans.

Invest to Sell or Invest to Rent out Properties
There is the important decision of deciding whether you buy to rent or buy to sell again for a profit. The former option is open, if you buy residential properties. You can create a regular income source for yourself by investing in rental property.

Otherwise, you also have the option of entering the house flipping business, which is buying old houses, renovating them and selling them back again for profit. You may buy a piece of commercial property, hold it till the prices rise and sell it to make a substantial profit.

It’s All About Location
Remember when it comes to property investment, it’s all about location. The price of any real estate property is largely a function of location. The localities decide the price range and therefore you need to research the price trends according to location, before you make a purchase.

Research & Do the Math
Once you have decided on what kind of property you plan to buy, what purpose you intend to buy it for and are clear about the amount of money you are willing to spend, start researching real estate listings to find properties that fit the bill. Calculate the returns you plan to gain from the investment and the amount of mortgage loans you can afford to apply for.

Networking With Real Estate Agents
A real estate agent can make your job easier in finding properties that are exactly what you are looking for. Creating a good network of real estate agents who can point you towards good investment properties is essential. Real estate brokers can handle the legal affairs associated with purchase and sale of property for you. They can make an offer to owners on your behalf and negotiate on your behalf.

Making Financial Arrangements for the Investment
Once you have decided on the property and made an offer, you need to arrange for the money you plan to invest. A pooling up of your own savings and a mortgage loan if needed, can cover the total investment amount. Talk to financial institutions and mortgage brokers for financing options.

The key to making good investment decisions in real estate, lies in research. For a property, the location is the most important aspect of consideration and all other points come later. Good location, with access to resources in its vicinity, creates an opportunity for eventual growth of property value. With a pooling in of your own savings and a mortgage loan, you can buy strategically located properties and rent them to generate revenue, or sell them as the prices appreciate substantially. You can’t eliminate risk, but minimize it by putting your money into properties with high potential of price appreciation. Get a good real estate agent to advise you and a mortgage broker to assist you in the arrangement of finance.

How to Start Investing in Real Estate

Real estate has always been a good investment option. It is also a much safer option compared to other forms of investment such as the stock market. However, before you invest your hard-earned money, it is necessary that you are aware of the risks and expected returns from the investment. So, this article will give you some pointers on how you can go about beginning your foray into the real estate business.

Market Study
If you wish to invest in real estate, but have a limited budget, then conduct a thorough market research to know about attractive investment opportunities. By doing a careful study, you will understand which property deal suits you the best and will generate the maximum returns.

Fix Your Budget
First fix the budget for your realty investments. Decide what is your investment capacity first. Before you decide the amount to be invested, take into consideration factors such as your annual income, current liabilities, monthly expenses, etc.

Finalize the Type of Property
There are different kinds of properties you can choose from. Apartments, row houses, independent villas, bungalows, penthouses, offices, shops, residential plots or commercial land are some options which you can explore. Be aware that commercial establishments will cost much more than the residential ones.

Finalize the Location
Location plays a crucial role in all kinds of real state investments. Whether you get good returns for your property will depend on where your estate is located. So, study the areas in the city and find out the current property rates and scope for further price appreciation there. Ideally, you can try to invest in upcoming locations where you can get properties at cheap prices.

Check the Developer’s Reputation
Checking the reputation of the property developer/builder from whom you will be purchasing the property is extremely important. You should buy a property from a developer who has a good track record of delivering properties on time and having the best construction standards and quality in the real estate industry. Make sure that the developer has followed all the necessary laws while constructing the project and there are no controversies and legal hassles.

Check the Plan
The next step is to check the floor plans with the developer. Visit the developer and understand each and every minute detail and specification of the project. Take along a property agent/realtor whom you know so that he can guide you in your property selection.

Get Finance from Lenders
Real estate is one of the biggest investment options in the life of any person and a lot of money is required for that. So, you might feel the need for finance and hence you should approach top banks with your income and personal information details. Also take the project details to get your loan sanctioned easily.

One way to invest in real estate is by selling a property you own and buying a new one for higher returns. So use these tips and some advice from an expert before you dabble in the world of real estate.

Investing in Commercial Property

In the aftermath of the real estate property market meltdown, people were naturally averse to taking risks, by investing in residential and commercial property. As a seasoned investor would advise you, in such bearish times, there are a lot of opportunities to take advantage of. With the real estate prices hitting rock bottom in recent times, many properties can be bought, at a fraction of the price they would have earned during boom time. While there is substantial amount of risk involved in buying commercial property, with proper research and wise choice, there’s profit to be made. At the outset, let me expound some of the advantages of investing in properties of the commercial kind.

Advantages of Investing in Commercial Property

Commercial properties primarily include office spaces, shops, storage warehouses, industrial spaces or any other piece of real estate that is leased out or used for commercial purposes. Location and space are two of the prime requirements of businesses and leasing a property is a much more affordable option for them, instead of buying it. This presents commercial property investors with an opportunity to make substantial profits.

One of the prime advantages of investing in commercial properties are the long leases and high rent that owners can earn. Compared to residential properties, commercial ones tend to maintained a lot more professionally, which automatically reduces expenses. The high percentage of return on investment, in excess of 8% to 9%, justifies commercial real estate investment.

Properties in prime locations can expect an annual hike of 3% to 4% in rent, which guarantees higher returns in the future. By handing over the maintenance and administration to a commercial property management firm, you can simplify your life and reap profits in the long term. Commercial property that are located in prime business zones are always in demand and hence you can expect a decent resale value in the future, when the prices in that locality appreciate substantially.

Commercial Property Investment Tips

You need to appreciate the prime importance of ‘Location’, when it comes to investing in commercial real estate. Businesses are looking for office, shop spaces, warehouses with all the necessary amenities and resources in their vicinity. So choosing a commercial space in the right location is the first important thing and it requires a substantial amount of market research to find such properties. You will have to network with real estate agents, who have a database of such properties on sale.

Decide on how much you are willing to invest, which will automatically limit your choices and help you focus on what kind of properties you can afford to invest in. Once you have shortlisted a few properties, determine the asking price and the projected returns through lease, after accounting the maintenance and taxation costs. If you are thinking of buying commercial property and plan to arrange for the investment corpus through a mortgage loan, do the math and determine the profits you will gain in the future after maintenance costs and loan installments. If the math shows you that the investment is a feasible one and you are guaranteed that your principal is safe with decent returns, go for it!

If you have a commercial space in a prime location, there is always going to be demand from businesses and the chances of your investment being highly profitable are higher. Work out the yearly maintenance costs for the property, research every aspect of the investment thoroughly before going ahead. Here’s me wishing you all the very best for your commercial property investment endeavors!

Investing in Real Estate for Retirement

Over the last few years, the interest rates of various investments have fallen and despite all the attempts taken to make the economy stable, millions of people had to extend their work years just to maintain the minimum standard of living. Yes, everything lost has its value, but one asset has only risen in spite of this recession – real estate. Most people dream about spending their retirement period in a calm and quiet place. A place where the crime rate is low and the entire surrounding is filled with intelligent people who are just living the much-needed peaceful and retired life. However, all these dreams can only turn into reality if an individual makes intelligent decisions regarding his/her investments.

How to Invest in Real Estate for Retirement

There’s no doubt that investing in real estate is a smart move, but it is advised to check out all the loopholes before putting money in a piece of property. Buying real estate is more than just living on a piece of land. The practice of property selling and buying has become a popular practice over the last few years, and more and more people are joining this bandwagon. Yes, the real estate market has plenty of lucrative opportunities for investors, but sometimes dealing in real estate can be more complicated than dealing in stocks and bonds. In this piece of information, we understand different and safer ways of investing money for real estate.

Giving on Rent
An vacant, habitable house can rented to a tenant for a considerable period of time. The owner pays for its maintenance, mortgage and various additional taxes. The rent on the property is usually decided on the basis of its location. The land owner earns a fixed income every month which is known as rent. In due course of time many landowners charge more rent in order to gain more profit. However, the best thing to do is to charge rent which would be enough to cover the mortgage payment. Plus the value of the property is likely to have appreciated with time. As soon as the tenant moves out due to various reasons, it is advised to put up the property on the market to earn additional profits.

Real Estate Trading
This is perhaps the fastest form of making money in the market of real estates. In real estate trading, the traders buy properties from owners with the motive of holding them temporarily and selling them for a better profit later. This practice is also called ‘Flipping Properties’ and traders who follow this usually purchase properties which are highly undervalued or are very high-priced. In some cases, when traders purchase a low priced property, they try to increase its value by doing some renovations on the property. This customization can actually result into a huge profit for the trader.

REITs
One of the most easiest ways of investing in real estate is putting money in the Real Estate Investment Fund (REIT’s). A RIET is created when a trust or a corporation uses the investor’s money to buy and operate properties. RIET’s function just like stock trade. The trust or corporation has to pay out 90% of all its taxable profits in the form of dividends to its various investors. By paying the dividends, the REIT is exempted from paying corporate income tax. RIET is the perfect choice for people who want to earn regular income.

401 (k)
Most people believe that the money saved through the 401 (k) plan is simply for retirement. However, there are some smart investors who have figured out ways to invest in real estate without disturbing the money saved for retirement. 401 (k) account holders can take out a loan against their account. The money which comes from the loan can be used to buy real estate. However, there are some limitations which come with the loan. First and foremost, there’s a cap on the amount which can be borrowed. Normally the cap is of $50,000 but it can be less depending on the money in the 401 (k) account of an individual. Another thing to remember is that real estate purchased through this method is not eligible for any tax benefits.

Roth IRA
Almost everyone in the US knows about the Roth IRA (Individual Retirement Account), it is a great form of investment and is non taxable. People who open an IRA account deposit some money from their salary in the IRA for retirement. In some companies the employer deducts some part of the salary and deposits it in the IRA of the employee. The good news here is people can use the IRA money to invest in real estate. Let’s make it more simple; If you have $50,000 in your IRA account and you want to purchase a property which is priced at $100,000. You can put in $50,000 of your own money and put in more $50,000 from the IRA. This makes your IRA account nil but you can put back that $50,000 once you sell that property at a better rate.

For legal advice regarding these investments, it’s necessary to get in touch with your attorney.

Investing money in real estate for retirement is a good idea if the investor keeps himself/herself updated with the latest regulations and strategies of the market. Real estate is perhaps the best way of earning easy money in retirement but before the game of investment begins it is a good idea to know all the rules.