With so many opportunities to invest, Purchasers should choose an investment product through analysis and comparison. A primary reason for investing is Profit. Wealth building is also an important investment goal as is sheltering otherwise taxable income thru the tax shelter afforded by depreciable real estate. Many American fortunes have been built through the proper investing in real estate.
Here Are a Few Reasons Why People Invest In Real Estate:
Income from Cash Flow
Appreciation in Value
Forced Savings Account
Source of Tax Deferred Funds
Provides a Controlled Investment
Provides Shelter and Recreation
Types of Property For Investment
Single Family Residential - This involves the typical single family residence converted to produce income by becoming a rental property. This is the most common type of real estate investment other than amenity real estate.
Multi-Family Dwellings- This dwelling type includes duplexes, triplexes, and quads. Although some individuals own apartment complexes and the like, but the majority are owned by groups of investors who organize into a general partnership, limited partnership or corporation.
Resort and Vacation Homes- Investing in a resort or a vacation home is important to a large segment of American tax payers as well as International Buyers. Most of these units are owned by individuals generally for personal use, however many units become rentals for the remainder amount of time producing income.
Office Buildings- Many office buildings are owned by individuals. However partnerships and corporations can also be the owners of office buildings and complexes.
Industrial Buildings- This type of property is generally owned by the corporation operating the plant. They may also be owned by municipalities. Some are owned by partnerships but very few are individually owned.
Retail- Retail investment is basically owned by the business operators. Single units are generally owned by individuals, as are strip malls. Malls are usually owned by partnerships and corporations who lease out single units.
Tips For Investors
Investors should invest a minimum of cash in the property. Leveraging is the key.
Buy in an area that he/she can comfortably afford; locations are at the discretion of the investor, but the future resale value should always be kept in mind.
Investor should search for properties with the “right things wrong”
Try not to look at the property until all numbers have been reviewed
Make sure financing is in place and use other professionals such as tax advisors in your decision making process
Avoid becoming emotionally attached to a property
Look for growth opportunity
Do not hang onto investment if it has not increased in value within time frame initially projected. Take the loss, sell, or exchange the property.
Offers should be relevant to the present property value. Consider two contingency clauses
1. Satisfactory appraisal
2. Approval of a professional inspection report
Investment in Real Estate
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