Below are ten categories of real estate, and different ways to invest in them. The best one for you personally is something only you are able to decide, according to your specific needs. To help you do that, I listed a couple of great factors and bad points for each kind.
1. Renting single family homes. Great factors: An simpler way to get started, and great long term return on investment. Poor factors: Being a landlord isn't much fun, and you usually wait a long time for the big pay-off. You also lose all your income when a house is vacant.
2. Fixer-uppers. Great factors: Fast return on your investment, and it could be more creative work. Bad factors: Much more risk (many unpredictables), and also you get taxed heavily on the gain.
3. Low income housing. Good factors: Similar to any other rentals, but with higher cash flow. Bad factors: Comparable to any other rentals, but with more repairs and tenant problems.
4. Promoting rent-to-own houses. Great points: Should you buy, then market on a rent-to-own arrangement, you get greater rent, and also the buyer is usually responsible for maintenance. Bad points: Bookkeeping could be tricky, and most tenants do not complete the purchase (this can be an advantage too, but it does mean more work for you)
5. Commercial properties. Good factors: Multi-year triple-net leases mean little management and higher returns. Poor points: A tough market to break into, and you are able to shed earnings on vacant storefronts for any year at a time.
6. Land, split and resold. Good points: Simpler than some real estate investments, with the possibility of great profits. Bad factors: It could be a slow procedure, and you have expenses, but no money flow whilst you wait.
7. Boarding houses. Great factors: You'll generate much more money flow renting a house by the room, particularly in a college town. Bad factors: You'll generate more headaches renting a home by the room, especially in a college town.
8. Invest money, market with terms. Good points: A higher rate of return is possible by paying money to obtain a great cost, and promoting on simple terms to obtain a higher cost AND high interest. Poor points: You require a great deal of money, and you tie up your capital for a long time.
9. Invest, live in it, sell it. Good factors: The tax law lets you fix it up, and sell it for a big tax-free profit after two years (should you live in it), then begin the procedure again. Poor factors: You may turn out to be attached to your expense, and you will need to move a lot.
10. Pure speculation. Great factors: You can make large profits purchasing within the path of growth and holding until values rise, and it is really a low-management investment. Poor points: Growth in value isn't usually predictable, you've expenses with no income while you're waiting, and transaction costs can eat much of the earnings.
There are lots of ways to invest in real estate. These ten are just to get you thinking about what is feasible, and what type of investing suits your personality. Once you figure that out, you might wish to look into other categories of real estate investment.
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Orignal From: Groups Of Real Estate Investment
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