There Are Many Ways To Invest In Real Estate

By Doherty • May 26th, 2011
Property market

Image by alancleaver_2000 via Flickr

To successfully invest in real estate, there are numerous methods that are available, from securing property for long term investments to obtaining rental unites to provide a stable revenue. As there is currently an unprecedented low on mortgage rates, the potential of acquiring a great deal is at an all-time high, however it is recommended to undertake research and planning to make sure the property returns a profit on the investment. Here are some proven tactics used to create earnings from real estate holdings.

The idea behind house flipping is to locate and buy houses that are being sold at a low rate and providing sufficient improvements to be able to flip them quickly for a substantial profit.. In an effort to find the right opportunity you may need to look away from your region so if you live in Toronto you could run into a fitting house in the Halton Hills real estate market or elsewhere. In a perfect world, the best method to avoid disaster in this case is to find potential clients lined up for the property before your purchase so you will not wind up paying a mortgage that you had not anticipated. Many times properties that are available for sale due to foreclosures are ideal targets for property flipping as they are inexpensive enough and no improvements are needed..

To provide an on-going income, single family homes and units can be lucrative if the owner has diligently planned for expenditures and can balance the costs with rental payments. The commitments of being a rental owner are time consuming, so if your life is packed already, this may not be the most viable option.. You also need to think about the value of the rental real estate compared to rent since rents are high in areas such as Toronto but the cost of real estate are much greater than the nearby Hamilton real estate market in general.

Often before a major civic renovation or private enterprises coming into an area, housing and retail prices are low. Smart investors who can foresee growth in the long-term often snatch up these homes while they are cheap and sit on them until the market shifts and they can resell them for a substantial return.. An example of this can be witnessed in Toronto where the Etobicoke real estate values have risen as more local amenities, such as shopping and restaurants, have been constructed. Using short term lending can be a good tactic if the premium interest rates can be put off in case of delays or changes in plans.

To reduce your overall taxable income, real estate investments can serve as tax shelters. By working with an accountant, you can claim costs incurred by interest on mortgages, closing costs and property taxes.. As well, there are often tax credits and incentives for first time home buyers that can effectively reduce the cost of buying a property.

To preserve your investments, it is important that you utilize expert consultants, however do not rely on them for all your information, do the homework yourself regarding possible real estate investments.. Always examine the property thoroughly before buying and speak to previous owners if possible.. In case of unexpected delays or repairs, be sure to maintain a three month emergency fund to ensure your investment does not impact your financial situation. Never pay more than fair market value for a home, and try to negotiate a 10-15% initial payment.. By utilizing practical strategies and basic, proven marketing principles, property investments can be lucrative even though the general depressed market, that is affected by variations that can become windfalls if carefully managed..

 

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