Why Real Estate Investing is Better Now Rather Than Later?

I consider why you should start real estate investing now rather than later and then follow it up with a few suggestions to help you get started.

The proverbial saying "time is money" is true in real estate investing. Due to a phenomenon known as compounding, money grows faster and faster as time goes by. So the sooner you put your money to work in a real estate investment, over time the more money you will accumulate.

Say, for example, that you start investing $1,000 a year into real estate for the next forty years. At a 9% annual rate of return, your $40,000 cash investment (thanks to compounding) will grow to over $369,000. Whereas, if you wait ten years before you make that investment, that same amount only grows to about $150,000.

In the same way, the longer you wait to get started real estate investing, the less time you have to combine the factors of time and compounding interest, and hence (assuming all things equal) the less wealth you can expect to accumulate as a result.

Say your goal is to retire at age sixty-five. Because of compounding, you stand a far better chance of achieving more wealth by retirement if you start investing at age twenty-five rather then at thirty-five, or forty-five, and so on.

How to Get Started Real Estate Investing?

Develop a plan - How much can you invest comfortably? Are you expecting cash flow or merely looking to make your money when the property is resold? How long do you plan to own the property? What amount of your own effort can you afford to contribute? What amount of wealth do you plan to accumulate, and by when?

Acquaint yourself with the local rental market - Read the local newspapers and see what types of income property have the highest demand for tenants. If there are tons of classifieds seeking apartment tenants, perhaps retail space is more in demand, and vice versa. In other words, learn what product would be best for you to invest in.

Acquaint yourself with the rates of return - At the very least understand the difference between cash and cash return, return on equity, and cap rate. Whereas cash on cash might show what your cash investment might achieve in one year, and return on equity over future years, cap rate helps you choose a property at a fair market value.

Invest in real estate investment software - It is never a good idea to rely on someone else's numbers. It's your money. Always run your own numbers on potential investment opportunities. Having the ability to create your own rental property analysis gives you more control about how the cash flow numbers are presented and a better understanding about a property's profitability.

Create a relationship with a real estate professional that knows the local real estate market and understands rental property. A qualified real estate professional acquainted with your market can be a real plus. It will not advance your investment objectives to spend time with the agent of the year unless that person knows about investment property and is adequately prepared to help you correctly procure it.

Avoid buying into real estate investing "trade secrets". Tons of real estate investing gurus out there repackage and sell the exact same material as the next guru. The sizzle in the business of real estate investing, however, is about owning a piece of ground that, if unduly researched and purchased sensibly by impartial numbers, with careful management, will likely be more valuable tomorrow than it is today.

How Much Do You Need to Get Started?
There's no set amount to start real estate investing. You could start out very small and then as you begin to earn more, start contributing more. Start perhaps with 2% of your income and then add a percentage point more each year to your contribution.

The important thing is to start real estate investing now, while "time is on your side" and you can in fact take advantage of a favorable real estate market and compounding interest over the passage of time to achieve your retirement goal.

Here's to your real estate investing success.

To know more about real estate investment, just go to http://hugepropertyroi.leadgenbuilder.com and get access to the book of "Earn Huge Returns from Property Investments"


Article Source: http://EzineArticles.com/2093268

9 Reasons Why You Should Choose Property Investment

Although there are many options for investing, property investment is one of the favorites. There are at least 9 reasons why we should invest in property and not other types of investments:-

1. The power of "Leverage"

To invest in our properties have the option to not use 100% of our money, but by using other people's money (OPM). One of the most common source is the money the bank loans. Depending on the country where we are, we usually can get a loan from banks ranging from 70% to 95%. In this case we only need to spend down payment of 5% to 30% of property price. This also means that leverage is approximately 3.3 to 20 times.

2. Relatively low risk

In general, investment in property is not like investing in the stock market where prices in one day can go down and up quite significantly. Only in certain situations where the economy was bad, property investments may be affected slightly. When compared with other investment types, such as opening a business, saving money on deposit or invested in stocks, property investment has a lower risk than those investments. If we look at the risk compared with income potential, the property has a relatively low risk with good potential income from rents and capital gains.

3. Two sources of income: rental and capital gains

Property investment offers a combination of rental income and capital gains. Investing in property is not only going to give us a positive cash flow but also the potential capital gains depends on property price increment

4. Full control to increase the value of property

If you have a property, you have full control of how you will increase the value of the property. There are many ways that can be done to increase the value of property, ranging from very simple things like painting the property. Other ways are to buy a few accessories or cosmetics, and renovations. These activities are very important especially when we want to rent or sell property. Some people do small renovations to increase the value of the property so that owners can sell at prices much higher.

5. Safe and sure investment in the long term

Property prices usually will not fluctuate so much. In general, it may take some time for property prices change over time. This is different from the stock market for example where prices can change dramatically in the evening.

6. Protection against inflation

Unlike a savings or deposits where interest is given is usually much lower than the rate of inflation, property prices usually follow at least the inflation rate. In this case, investing in property is still a better option to protect them from inflation.

7. A good vehicle to achieve financial freedom

Using rental income to generate positive cash flow, it is possible to achieve financial independence after a few years depending on the level of success of each person in the property investment. For example, if a person has income of $3,000 per month, that person can be financially free by making cash $3,000 per month with 5 properties with each property generate positive cash flow of $600 per property per month. Consider it a small house or row house, $600 rent would be very reasonable and quite conservative in this regard.

8. Can reduce the tax burden

Founded the company and buy property using the name of the company can save taxes. Rental property can be considered as income taxes and usually will apply only after deduction of all expenses charged. Buying property on behalf of the company will be more profitable than buying on behalf of individuals.

9. Become rich through property

Property investment can bring people to become truly wealthy. The key to wealth in property is through capital gains. For example, someone is investing in an apartment for $500K price with a down payment of $50K. Monthly rent of the property sufficient to pay the bank monthly installments, so automatically, financed by a bank installment monthly rent. After 20 years, the property has been paid in full and the price has been appreciated for example, to $1M (this is conservative, because the property prices in general will increase triple or even quadruple in 20 years). In this case the net profit from investment ($1 M - $50K) = $950K. If this person has 3 apartments and a total net profit would be almost $3M in 20 years. This guy really has become a millionaire with property investment.

If you keen to learn more on property investment, just go to http://hugepropertyroi.leadgenbuilder.com and get access to the book of "Earn Huge Returns from Property Investments" 

Article Source: http://EzineArticles.com/3897224

How Real Estate Investments Return Profits?

If done responsibly and wisely, investing in real estate is a great way to grow your wealth. This should be done with conservative financing and with a thorough knowledge of the tax implications. Moreover if you are investing in real estate properly, you will get a superior return of your investment in more than one ways.

The very first means of income would be the cash flow from the rental income. In a stock exchange scenario, dividends would be paid. But a properly selected and managed rental property would give you a steady stream of income in the form of rental payments. If you evaluate, the percentage of income gained through rental payments have exceeded the dividends yielded on average. There is only little risk associated with the cash flow in real estate investments. Sometimes real estate prices and homes in some years and areas would have a downside. But this would not affect the renting property and those who are getting income from that would continue to get the benefits without any decrease in amounts.

The second advantage is that the property value would increase due to appreciation. The value of the investment property would increase over the time. If you do proper research over the property scenario, you can easily find out which property would become the most sought after one in the following years. You can buy that property and wait for the time to ripe. The property value would increase based on factors like economic conditions, scarcity of land etc. hence you make use of the situation and sell it then. But this trend cannot be considered as static as it is subjected to change based on areas and time.

There is one more option available in the property value appreciation. If you get one property in cheaper rates, purchase it and do necessary changes. The renovated property would yield more income. This is much safer method of purchasing. This can be done with the rented property too. You improve the property while you get the steady flow of rental income. Upgrades to the appearance and functional efficiency of a real estate investment property can increase its value significantly. Improving the property is important since it is good to maintain the interests of the renters in the property as trends and styles change.

Rents would be considerably increased as a result of inflation that drives up home construction costs. However the fixed mortgage would remain constant over time. Housing demand occurs as a result of population growth and as result rent prices are increased if housing supply in not met.

As income increase, you can use it to pay down your mortgage. Thus the increase in equity can be used for other purposes and investments. There are options available for the real estate investors to take out equity loans even though it is frequently assessed by selling property. The equity loans can be sought if the terms are right and those funds can be utilized for more investing or other purposes.

Last but not the least there are various opportunities to buy below market. This means you should have the experience to locate a value priced property and thus increase your net worth.

In order to learn more effective strategies to make more profits from your property investment, I strongly recommend you to download this book of "Earn Huge Returns from Property Investments" by clicking here at http://hugepropertyroi.leadgenbuilder.com

Article Source: http://EzineArticles.com/4224630

Earn Huge Returns from Property Investments Video Introduction

Do you want to earn maximum rent or gain a high returns on investment from properties?

If you want it, then you can access to the tips to earn you high property ROI(Return On Investment) now at http://hugepropertyroi.leadgenbuilder.com

Real Estate Investing For Beginners - What Every New Investor Wishes He'd Been Told Before

As a new real estate investor, when you begin researching information on real estate investing for beginners, you'll find that there are a lot of gurus and mentors out there looking to sell you high priced information. You'll also find plenty of chatter-boxes at local real estate investing forums and other watering holes that will share (brag?) all day long about their investing trials and tribulations, especially if they have tenants or rehabs. (Those types of projects tend to be fraught with problems, something that can scare beginner real estate investors off - when maybe it should be attracting them!) You can also find some excellent offline resources at the library, bookstore and your local investor club. Maybe you'll even find someone who's out in the trenches on a regular basis and is willing to take you out on the streets to show you some of his properties.

What you won't find as often, especially for free, is a coherent, executable business plan detailing what it takes to get going with real estate investing as a beginner.

What you really need is a handbook entitled: Real Estate Investing For Beginners that lays everything out for you A to Z, with what to do at every step along the way.

Unfortunately, putting together a super and useful reference like that is time consuming and you have to consider that a) If someone is already making money investing in real estate, her time is valuable, and b) if she's going to invest her valuable time in putting together a real estate investing guide for beginners, she's got to have an angle.

That's an excellent thing to keep in mind - everyone in the real estate investing education industry seems to have an angle. They are directly incentivized to make you feel that real estate investing is easy, you can do it, and if you just part with some money, they will give you the handbook with all the answers.

BEWARE: If you can't figure out how they're getting paid, you're missing something... Everyone wants to get paid in this business.

Well, I hate to tell you... I don't have that comprehensive handbook for you either.

That's the bad news.

The good news is that I can give you some very important words of wisdom that helped me when I was getting started in real estate investing as a beginner. (And I started right out of college without a good job or anything, so don't think it can't be done.)

Real Estate Investing Observations - What Every Real Estate Investing Beginner Needs To Know:

1) You will have to trade time or money to get what you want in real estate. You can't get something for nothing, so even if you buy an expensive course to get someone else's experience and shave years off your learning curve, you'll still HAVE a learning curve. Plus, you'll need to find leads, and that type of marketing takes (you guessed it) time and/or money.

2) Leverage cuts both ways. When the market is going up, leverage can be a great ally in helping you acquire more property with less of your own money. However, when the market is soft or declining, as also happens with real estate market cycles, having a lot of leverage can put you "upside down" on your equity and cash flow - a very risky situation. Protect yourself by "making your money when you buy" and passing up those "skinny" deals.

3) It's all about NEGOTIATING with the motivated sellers. A lot of courses make you believe that if you find the motivated sellers, you can just pluck up the deals like daisies in the orchard. That's almost true. Whether you're working in commercial or residential real estate, you'll get much better deals when you negotiate with a motivated seller. However, the key is that you must NEGOTIATE. You have to make offers that will work for you and engage the sellers in conversation. Very rarely will the buildings be lying these listed for 50 cents on the dollar (if they are, they'll be snapped up by other investors). You have to find sellers that you think may be motivated and offer them your low cash offer or terms offer in order to see if they're willing to work with you. Engage them in the conversation by making lots of offers, and NEGOTIATING with the ones that are motivated.

4) Figure out your rate of return. Sometimes, when you don't have a deal, it's easy to think "any" deal would be good. However, sometimes the best deals are the ones you PASS on - you "make" your money by saving yourself from some expensive mistakes. Don't waste time on property that doesn't make sense when you run the numbers. Don't get emotionally attached just because someone says they're motivated or willing to work out terms with you. Run the numbers. Always focus on the numbers.

5) You get paid for solving problems. This is a business with a lot of problems. Sellers can get very emotional, or have a lot of financial trouble, at the time that you'll be working with them. That's stressful for anyone, especially when the transfer of a large asset like a house, apartment building or office/retail center is involved. Realize that you may go through some challenging emotions of your own. That's natural. If you can hold it together and survive the up-and-down roller coaster, you should do okay.

No one says real estate is easy unless they have a course to sell you. It can offer some great returns, but there's a reason not everyone goes after them. Not every property is a winner and finding and acquiring the winners can be a challenge. However, if you are committed to making your real estate investments work for you, then focus on getting yourself educated and staying in for the long run.

In order to learn more effective strategies to make more profits from your property investment, I strongly recommend you to download this book of "Earn Huge Returns from Property Investments" by clicking here at http://amzn.to/29k0ddR
Article Source: http://EzineArticles.com/2108639