Easy Real Estate Investing
Many people think real estate investing isn’t easy.
If you’re investing for short-term appreciation, you are in for a bumpy ride in the current business climate. I think most people would agree that short-term appreciation isn’t a reasonable goal these days.
If you’re looking for long-term appreciation, you need to purchase a property at a price that allows room to pay management fees. Or you can manage the property. Here’s what’s hard to predict: the tenants.
In commercial real estate, you run the risk of not having any tenants, if the local market is glutted. And that is the case in many local markets. In residential real estate, you may find yourself doing a fair amount of maintenance. You may worry about finding the right tenant. How do you create a lease? How do you screen tenants so as to find the ones who will stay a long time and keep up your property for you?
You may want to consider a real-estate investment trust (REIT), if you want an investment that is low-maintenance. You buy shares in a REIT fund, which is publicly traded. The fund typically holds commercial property and/or mortgages. The value of these funds may go up when the stock market goes down, allowing you to hedge your bets.
But REIT funds, like mutual funds, charge management fees. Are these taking away your profits? Perhaps you would prefer a property with a deed as your real estate investment.
You could consider a pre-packaged system where you choose a new or nearly new single-family house from a variety of relative low-cost local markets. With the system comes a pre-selected reliable property manager at negotiated rates. The loan situation is negotiated, too, at five to 10 percent down.
An arrangement like this provides you with a balance sheet with predictable income and expenses. Your tenant will simply pay off the mortgage. In 15 years, you can sell the house and walk off with the equity
Tags: Reality
