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Investing in Real Estate? Here’s What You Need to Know

Investment in real estate is one of the biggest chunks in the investment pie. In the United States alone, more than 65% of the families own their primary residences. No wonder real estate investment remains a profitable market for investors. But is it easy to invest in real estate? Here are some things you need to consider before investing.
One of crucial elements that you need to know before investing in real estate is how the economy is doing overall. Numbers and statistics may bore you but the numbers you can get from the data in employment, current prices in the market, and other economic index will give you an idea if the current financial situation is conducive for investing in real estate.

Knowing the current trend in the economy can help you decide which type of property would be best suited for the present economic situation. Bear in mind that there are different types of real estate investment. Investments in office buildings and mixed properties will not be affected too much when the hotel industry is not doing well. It is important that you understand the cycle of which the economy is at presently.
Another crucial element that you need to look at before investing is how the interest rates are going. When interest rates are high, mortgage rates increase as well. When interest rates are low, it is relatively easy to get a mortgage in the property that you are eyeing but this will also mean that a lot of people can invest in real estate as well and this demand will raise the prices of the property.

If you are interested in investing in real estate but unsure of how you can manage your investment, then it may be a wise decision to consider investing through managed funds. The industry has a real estate market which, like mutual funds, pool together the investment of different. REITs or real estate investment trusts have relatively lower capital requirements. As they have higher liquidity as compared to investing in a property on your own, getting profit from your investment can be easier, depending on how the market is doing.

Before investing, check out the subsidies and government policies that are available for real estate investors. The government has tax incentives that can help you buy your property but be aware of the risks involved. Sometimes, the government can offer subsidies just so that demand for real estate can be increased.
As with anything, learning as much as you can before investing will always work for your benefit. Be aware of the false trends and learn when to jump in so that you will get the best value for your investment.

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Buying A Home? Here’s What Real Estate Experts Are Projecting For 2019

Now that we are still relatively into the early days of the 2019, what should we, as real estate investors prepare for? Will this be a year of good fortune? Or will investing in real estate this year create more problems and challenges than the year that passed?

Experts are saying that the prices for real estate, especially the residential type will still be a good addition to one’s portfolio but be aware that the number of interested buyers may be waning down. High prices in the market is causing homebuyers to hold on to their money instead of investing it in the market.

Another factor that is causing the market to slow down is the high mortgage rates. For 2018 the rates skyrocketed to its highest for seven years. Although the rates have gone down since last year but real estate experts are saying that it has a high probability of going up by this year and this will make it even more challenging for would-be buyers to let go of their money.

When before those who are selling real estate can demand for prices as there were not a lot of supply in the market but this year it will be a little different. As the price for the home is slowing down, sales will be expected to drop and it may not be as rosy as it was last year.

To get the best value for your money, you need to save up and pay a bigger down payment to help cushion the impact of paying higher mortgage.  It is better to prepare for the maximum amount that you can possibly save up for. If you need more time to do it then wait a bit more. Waiting and saving up more is better than just setting your sights on the minimum amount that you can give.

One thing is clear, investing in real estate is still a sound investment but just be aware that it may not be as lucrative as it was in the past year. Being realistic with the expectations is the way to go. List down what your non-negotiables are and identify what you can let go.  Research about the neighborhood that you want and be honest with yourself – is this a location that you think is right for you now and in the next 10 or 15 years? Preparation is key, so save up as much as you can.

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Real Estate Investment Types; What Suits You Best

So you think that as long as you have a piece of property and that somebody is paying rent monthly, you are good to go? Yes, that is one facet when investing in real estate but investing in real estate is much more than that. It would help if you could dig deeper and learn more before you go into Real Estate investment.

Where will you put your money? Do you want to invest in a residential property or would you rather go for commercial real estate? If you have an even bigger budget, you might want to consider going into an industrial real estate or retail real estate. There are other types of real estate investment such as mortgage lending, leaseback or sale transactions or REITs and mixed-use real estate as well.

Knowing the characteristics and limitations of each type will help you decide which is best suited for your need. Here’s an explanation of some of the types of real estate investment that you can plunk your money into.

Commercial real estate are pieces of property that are used for offices, stores and any type of business entities. The good news about this kind of real estate is that you have a long term agreement with your renter- meaning you have steady cash flow for a long time. The downside of this kind of agreement is that if the rental prices in the area shoot up because of an economic boom, you can’t raise your rates as you have to honor what has been agreed upon when you signed the long term lease.

Mixed-use real estate are properties that are more flexible in nature. In one building, you can host offices, retail shops, and everything in between. Combination real estate like this is like putting your eggs in different baskets. This way, if one office does not do well, then you can still earn from the other tenants of your building.

REITs or Real Estate Investment Trusts is another avenue for you to have a diverse real estate portfolio. Being a landowner can be a source of great money but an even greater headache. So if you don’t’ want to deal with the day to day operations of being a landowner, then investing through a REIT is a good option for you. Investing in REIT is like buying stocks, or shares, from a reputable company – you become part owner of the properties that these companies own and you just wait for the dividends to come.

As always, know the pros and the cons of the kind of real estate that you want to invest in. Check how deep your pockets are because some properties take longer to put money back in. So learn as much as you can so that you will know what is best for you.

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Here’s How To Succeed In Real Estate

Before you venture out into investing in real estate it is best to learn from the experts on how they made their real estate business soar. These experts have cultivated habits that help them grow their business and if it served them well, it would be beneficial for you as well.

It would help if there is a business degree to help real estate investors in knowing what to do with their investment but it is not necessary. Knowing how the successful investors managed their business and learning from them is enough to help those who are interested to get into the business.

Failing to Plan is Planning to Fail

Nobody wants to invest their hard earned money into something that doesn’t’ have big chances of succeeding. Unfortunately, new investors sometimes go with the flow without even learning about the basics of real estate. Just like any other businesses, before starting you must have a solid business plan. Putting your plan on paper will give you a visualization of the possibilities and will give you an idea of how your business will run without having to do it yet.

Honesty is Still the Best Policy

Maintaining a morally upright business practice will bring you places in the long run. You may have to deal with competitors who are double-dealing and it may seem that they get ahead of you all the time but do not fret because sooner or later their illegal practices will catch up with them. Do not be tempted to take the shortcut especially if it is not honest. In a cutthroat industry like real estate, one single wrongdoing can haunt you for the rest of your career. So better start doing the right thing from the beginning.

Build Relationships

In the real estate business, you need all the help you can get. Everybody can be of help to you in one way or another so don’t burn bridges as much as possible. Referrals form a big chunk you’re your business so everybody must be treated with utmost respect. If you can’t give your customer the property that he wants, feel free to refer your client to somebody else –this will help you build a good business relationship that will benefit you at the end of the day. Early on, developing a good relationship with your Accountant, business partners, clients and everybody with who you deal with will be beneficial as you grow your business.

The business climate will change at will. So make sure that you keep yourself abreast of the changes in the market and you should never stop learning. You may not be able to serve everybody in the market so it is best that you find your place and be the best that you can be in your little corner.

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Three Important Tips for First Time Real Estate Investors

Investing in real estate can be a scary venture for somebody who is going to do it for the first time. So what should a first-time real estate investor do to greatly increase his chances of getting his money’s worth? Learn and be informed!

Oftentimes, first timers do not ask questions because they do not want to sound as if they don’t know anything. To be honest, when you don’t know anything, you speculate. And once you speculate, you are not making an informed decision which will lead to a potential money loss in the future.

Cash flow is King

When you invest for the first time, thinking about renting out a more stable middle-class property as that will give you lesser chances of experiencing a downturn. Bear in mind that you need to have a steady cash flow before you proceed to another investment. Think about the cost, how much you will spend on improvement and how much the rent will be after renovation. Make sure that your future renter can afford your real estate.

Carefully Flip

It is so easy to get carried away when we flipping a home. One of the very real risks is when prices in the housing sector fall and you end up losing a lot of money. Be realistic in your expectations. Look at the location and try to identify who your possible customers will be. How much can they afford? If you go all out and your house becomes the best house in the neighborhood but if it costs double that of the market standard, then you stand to lose.

Scratch the Surface

Before buying your real estate, compare it with three others. It would be wise to go to the local city departments to check if there are any road widening projects, possible new developments, and other possible obligations that might tie your investment up. Remember that investing in real estate will not always have a fast turn-around, so make sure that you don’t tie your money down unnecessarily. Learn as much as you can about what the future holds for the property you are interested in by asking around.

What if your tenant skips town and can’t pay you anymore? If this happens, can you still pay for the mortgage on your own? Make sure that you can still manage when something like this happens. It is always a good idea to start small and grow it big. Do not be pressured into investing in something that is way beyond what you can afford at the moment.

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3 Critical Keys In Understanding Real Estate Investments

Beginners in real estate investing can learn from the experts. These experts have experienced the avoidable pitfalls of investing and as a new investor, there is no sense in committing the same mistakes again.

Clean Up Your Credit Report

When investing in real estate, it is almost certain that you are going to financial institutions to borrow money. Even if you think that your credit report is clean, it won’t hurt to double check. There might have been unintentional errors that you need to resolve and it is affecting your creditworthiness. Even a single error can let lenders see you as a loan risk. If your credit rating needs improvement, clean it up first before you apply for a loan.

Location, Location, Location.

You might have heard this line a lot of times already but there is a reason why that is so. Investing in a dead location will give you a dead investment. There is a thin line between optimism and lacking in judgment. Others may tell you that the piece of property you are eyeing will triple in price in the next 5 years. But are you liquid enough to wait for 5 years? Do not be overly optimistic and make sure that your real estate is in a good location, today.

It would also be best to look for the cheapest and most rundown house in the most expensive location that you can afford. This way, you can remodel it, flip it and sell it at the best price. Don’t look at the house, look at where the house is located.

Take Advantage of Tax Benefits

Talking with a tax adviser will be beneficial for you as there are tax benefits that can be possibly enjoyed when investing in real estate. One of the possible tax deduction that you can avail is the depreciation write-off. The depreciation of the building in the property that you bought can be written off in your favor. It is best if you consult a tax adviser as there are possible deductions that you can enjoy as well such as insurance, maintenance expenses, and mortgage interest.

The possibilities of getting rich through real estate are endless but we’ve also heard a lot of people losing their fortunes because of it as well. But do not be discouraged. Learning as much as you can will give you an informed decision on what to buy, where to buy and when to buy.

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About Joseph Aldeguer

Joseph Aldeguer brings to the table his over 25 years of working as a professional real estate investor. Being an advocate for homeowners nationwide, he knows what matters most for every consumer. He is not only a nationally recognized real estate industry expert but he is also a well known financial authority who hosted high rating syndicated radio and television shows during the country’s real estate boom.

He gave his audience his wealth of wisdom through his ABC/WLS Chicago radio show, Making Money With Joe Aldeguer. His viewers benefited from his extensive knowledge and expertise in financial and real estate as he gave them pieces of advice on which actions are profitable and beneficial. Joseph also hosted financial literacy programs on ESPN/Chicago, CBS/KLSX Los Angeles, ABC/KGO Hawaii KABC Los Angeles, and ABC/KKFI San Francisco.

Joseph Aldeguer started as a commodity futures broker and trader. He worked his way up and earned his Series 3 License in 1988. He cemented his reputation as a professional broker and trader when his clients began making money as he went into buying and selling of commodities like crude oil, gold, and the stock market. One of his field of specialization was foreign currencies as he had a knack of knowing which global businesses would earn money.

As a financial expert, Joe knew that he needed to diversify his portfolio and so in 1990 he ventured into real estate knowing that the real estate boom in the US was about to explode. He was right. A little over 17 years old, he got his first investment property. Even before the real estate boom became obvious, Joe knew that it was just a matter of time before everybody would join the bandwagon and by 1993 he started one of the most profitable mortgage brokerage firms in the country.

When Joe turned 26, he established The Mortgage Exchange. At the height of the real estate boom, the suburban Chicago firm had over 350 mortgage loan officers. For 16 years, the company closed over $10 Billion loan businesses and this spectacular accomplishment gave Joe one of the most coveted recognition in the industry – Business Man of the Year in 2002. On the same year, Joseph Aldeguer’s firm got nominated as Mortgage Company of the year. He also made it to the cover of the NY Times Business section in 2005.