Investment Real Estate Advice, Information and Tips
Below you'll find some free real estate investing advice:
- Tax Breaks and write offs:
Investors can write off depreciation, claiming a portion of the value of the investment each and every year; on paper this might wipe out much of your profit that would be reported to the government. (Remember: The taxes you'd have owed are only deferred, not forgiven; you'll have to pay the IRS sometime down the line...)
- Research the Investment Property:
Every development or project has a write-up of the investment that you will want to study inside and out. You will learn about the property, and often times see through much of the hype that is common in this industry.
- Watch Free Advice:
This should go without saying but watch your source for real estate investing advice. It seems everyone now a days is an investment real estate expert without even ever buying a piece if property. If you had cancer would you take medical advice from someone who's only experience is a magazine or newspaper article they read on the way to the office?
- Watch Out for High Pressure Salesmen or Use Gimmicks - Some sales people can be extremely persuasive and persistent. They often use gimmicks like offering you a "once in a lifetime opportunity". While in today's market many brokers are offering free cruises and vacation as rewards for your business be on your guard when the main tool for there sales is the free give away.
- Before investing in any real estate properties make sure your decision fits into your overall investment goals. If you don't have an overall investment strategy then now is the time to develop one:
1. Think about what you want to achieve financially and how soon do you want to achieve it.
2. Set goals for yourself
3. Follow your goals and don't get side tracked by get rich quick schemes
(They don't work...)
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Basic Real Estate Investment for Beginners
Here are some basic facts about real estate investing for the beginner new to the investment real estate industry:
Before committing to an investment property, you should have a fundamental understanding of the real estate market there. For example, be aware that, in general, investment real estate properties are not liquid investments. Barring recent updates in the industry, real estate does not always sell at a moment's notice. In some areas it could take months to sell a property while in other areas (Orlando, Palm Beach, Panama City, Dallas, San Antonio, Miami, Las Vegas) real estate seldom sits on the shelf, be sure to research the market of each CITY not state before you invest.
Make sure you have enough capital on hand to cover any short-term losses due to vacancies between tenants if you plan to rent the properties. If you have problems renting out a unit it may be a good idea to hire a property management company.
Be ready to make fixes quickly and respond to the renter's needs. If you're not prepared to or are willing to be a hands-on landlord, consider hiring a property management firm.
Is it retail, wholesale, lease/option, sell with owner financing, or rent? Before jumping into the investing game be sure to research each of these forms of investing and make your decision based upon your educational background, personality, and available assets. However, it is strongly recommended you find one strategy and stick with just one.
When searching for information on real estate developments be sure to look at the numbers and not the pictures. Numbers are the backbone to real estate investing and better you can read and understand them the better chance you'll have at success.
Costa Rica offers a variety of attractive vacation destinations for those seeking a serene escape from their everyday concerns. The neutral nation that abolished its military provides a refuge from today’s chaos in exquisite beachfront real estate, mountainside retreats, and all the luxuries and conveniences of modern living. Foreign ownership is simple, property taxes are low, and real estate prices are stable while tourism continues to rise and help the economy thrive.
Twenty-five percent of the nation’s land has been designated a national wildlife preserve, keeping the environment safe from the over-industrialization that plagues so much of the modern world. Only a three-hour flight from many major US cities, Costa Rica is a convenient vacation destination with a tourism industry that generated over $1.6 billion in the last year alone. Recently, several major US companies have set up offices in Costa Rica, bolstering the national economy even more.
Different Real Estate Investing Schools - Lease Optioning VS Preconstruction
When it comes to buying investment real estate, there are many schools of thought on what’s the best strategy for making you the best ROI. Some believe lease optioning your investment property is the best and safest way to go. For getting the most out of each investment dollar, though, and seeing a quick return, I believe that it is often best to purchase a preconstruction property in a good location that will quickly appreciate in value for the quick return and steadily increases over the next several years for a strong long term ROI.
Remember, anyone can make money in the preconstruction real estate market as long as they have a good brokerage backing them up. With preconstruction you’re buying below market value which makes it a very safe investment.
Tax Advantages for Real Estate Investing:
Taxes are an integral part of successful real estate investing, and they often make the difference between positive cash flow and negative cash flow. Be sure to familiarize yourself with all the different tax situations, and see how they can be manipulated to your advantage. Until you have some experience under your belt it may be a good idea to consult a tax advisor to find out hat advantages are best for you.
Real Estate Investing Costs - operating expenses, taxes, cash flow :
Know the financial statements inside out. What are the operating expenses associated for real estate investing? What are loan payments and mortgage payment for each month? How much cash flow do you lose if there are vacancies? Are taxes high in that particular area? What does the actual cash flow statement look like, is there wiggle room for slow months? These are key issues that must be addressed before making a living in investment real estate.
Real Estate Investing is NOT a Get Rich Quick Market:
Many amateur real estate investors are lured into real estate investing by the promise of quick, easy money with no money down, but it's NOT a get rich quick field. In fact it takes much research and countless hours of experience to hit the goals many investors want to hit. The good news is that the majority of “amateur investors” who sign up for the thousands of real estate investment seminars give up the idea within three months of taking the training. So don’t be scared of a saturated market, your competition is much less than you might have thought.
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Pre-Construction Investments
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There are 3 general stages to follow when investing in a preconstruction real estate property. You have a chance to make some earnest money. Remember, this is an investment; its value will increase over time.
Reservation Stage – The investor normally gives a minimal amount of cash funds to the developer, normally in the amounts of $5,000-$20,000. By putting a minimal amount of money down, you are forming a non-binding contract with the developer called a preconstruction reservation. In the case of a cancellation or price increase of the preconstruction real estate project the investor receives a full refund.
Contract Stage – The contract stage begins, when the developer and the investor enter in a binding contract together. The investor is required to put down anywhere from 5% to 25% of the cost designated by the developer. The developer is prohibited from raising the price of the preconstruction real estate property. Remember, that before you sign that contract you are eligible to back out of the reservation agreement and collect compensation.
Selling/Assigning Contract – If the developer offers a resale program to the investor, he/she is allowed to sell the preconstruction real estate property to another buyer. If a resale program is not offered to the investor then he/she must close on the property before it may be sold, rented out, or used for personal use. |
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