Real Estate Investments

Everyone wants to make money. This economy makes it especially necessary to go beyond your day job and make some kind of long-term investment. The problem is that many people don’t have what it takes to survive the ups and downs associated with stock markets and investment. That’s why with the housing and land market just beginning to pull out of it’s lowest slump in years the hottest investing grounds are literally investing in ground. Owning a piece of land is to own something that can not be replicated or replaced, which is what makes land constantly increase in value. Investing in property is a great choice for nearly anyone especially since there are so many kinds of property investments you can make.

Income Property

Though we hope that all investment properties translate into income earned at some point an income property is what we call properties that are developed to generate income on a regular basis. Owning a residential property, like a home or an apartment and renting it out is the most common form of income property. You can also invest in warehouses and offices that you might rent out to businesses, these would also be considered income property. Taxes will be different on this kind of property because it is a passive income rather than a long-term investment, this can be a good thing or a bad thing depending upon what you’re looking for.

Urban Property

Urban property is the kind of land you might buy up because it’s location has great potential with the progress of urban sprawl. As cities grow they need more land. Developers will spend gobs of money to buy up land they can build into new appealing residential areas. Buying a piece of property with a great location near a city isn’t going to give you quick returns, but with patience and a few years the value of this property can be high in profit.

Rural Property

Rural land is different than urban property. Rural land can occasionally be consumed into the fringes of cities or spreading communities that want the “space” of the country. This is not common though. What is more common is investing in undeveloped property where you can raise livestock, grow crops, harvest natural resources, set up wind farms or solar-panel farms. Amazingly owning a large piece of rural land has many potential forms of income that can turn a quick profit as well as a long-term one. Of course, there are also many people who buy rural mountain property for recreational purposes or to build up cabins, the right piece of land can have endless possibilities.

Though it is essential to choose the right property carefully, the options for good investment are almost endless and they’re all of value. From rental properties to wind farms owning any land is a very strong investment that only continues to grow in value. Learn more about the options that you have and invest in the one good that you can really build upon!

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Real estate investing can be incredibly profitable. In fact, some of the wealthiest people I know are real estate investors. That said, there is some risk involved in this kind of investing. There’s no shortage of real estate investors who went bankrupt when the real estate bubble burst. People got over-leveraged and weren’t cash flowing. This lead to a lot of big issues for some of them.

There’s no question that if you’re going to invest in real estate, you need to know everything that can help you to increase profit. I have two ideas that have worked great for me.

How I Saved $74k By Improving My FICO Score

I just bought a new home – a town house. I’m living in it now, but bought it as an investment property. My plan is to move out in a few years and rent it out. The town house cost $209,000 and I invested $20,000 cash in the down payment. I borrowed the the rest and my loan amount was $188,900.

My FICO score is over 800 so I got prime rates on my loan. I ended up at 3.99230n a 30-year fixed mortgage. The payment on the property is $900.49 and over the course of the 30-year loan, I will pay $135,000 in interest.

A few years ago, my credit score was around 650. If I bought the same home at the same price with a 650 credit score, things would look completely different.

The interest rate on the loan would probably have been an additional 1.8This would have put the rate at 5.79nd that would have pushed the payment up to $1,107.17. Right now town homes in the complex are renting for $1,200-1,400 so as you can see, the extra interest would really cut into my cash flow.

Over a period of 30 years, I would pay a total of $209,678.86 in interest, an increase of $74,309.86 over what I will be paying.

Since I plan on keeping this property for the full 30 years, that’s an extra $74k that I will have in my pocket. On top of that, the cash flow is a lot higher which opens me up to get into more investments.

If you plan on doing any real estate investing with leverage (by using loans), I highly recommend getting your credit straightened out. You can find more information on this subject on my site: Doctor 650.

How I Saved $19k By Buying Out Of Private Mortgage Insurance

The seller who I bought from agreed to pay 2n closing costs. That gave me about $4,000 to work with. I decided to use the money to buy out of the mortgage insurance that’s usually attached to a mortgage loan. Since private mortgage insurance generally adds 0.5nnually to the cost of the loan, there was a huge amount of savings there. In fact, over the life of the loan I would have paid $19,000 in mortgage insurance.

The beauty of this strategy is that I didn’t spend my own money to execute it.

My credit score made it possible to buy out of my mortgage insurance. With 650 credit, I wouldn’t have qualified for my loan or any conventional loan for that matter. My only option would have been an FHA loan which would have required mortgage insurance.

My Investing Going Forward

I feel like I’m set up extremely well to do more real estate investing in the future. My property will cash flow $300-500 as soon as I move out and I’ll roll that money into paying down the loan early. While I’m working on that I can work on getting more properties under similar terms. Without the money I saved using these two methods, the math and business model wouldn’t work nearly as well.

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Post image for Investing in Real Estate

The real estate investments sector — both commercial and residential — is often looked upon as a promising and relatively stable sector. Historically, at least until recently, real estate investments were looked upon as promising and safe choices that witnessed nothing but growth. While there is some truth to this recognition, real estate investments, in recent years, have become just as prone to volatility and market force influences as any other investment class.

Despite these changes in market conditions, over a long period of time real estate investments could prove to be viable and profitable investments, especially if one makes the investment during early stages. Apart from the timing of the investment, the location and growth potential of the community where real estate investments are made is very critical, and is in fact the most critical component of a successful real estate investment strategy.

Done right, real estate investments could not only demonstrate appreciation and capital gains, but also offer the possibility of earning a fixed revenue stream in the form of rental income and other revenue gains that are typical of the real estate sector.

Over the years, savvy real estate investors, such as Trump, have made billions of dollars in profits. While not everyone can become Trump in one lifetime, there are some powerful real investing strategies that, if adhered to, can generate substantial capital gains. The reverse holds true as well and immature real estate investment decisions could result in unimaginably large losses.

In addition to direct real estate investments in properties, investors can also benefit from the services of Real Estate Investment Trusts (REIT) which pool in investments from many investors to recruit professional real estate investors. The profits are then re-distributed to investors. Time share, commercial property, hotel rooms, and other forms of real estate investments are becoming increasingly popular these days.

In addition to buying property from sellers (or through brokers), many real estate investors take advantage of auctions of foreclosed homes to buy property at relatively low prices and resell them for a large profit. Foreclosure specialists often deal with such investments and reap millions of dollars in investment gains.

Disclaimer: This article is not intended as investment advice. You must check with a qualified professional before making any investment decision.

Photo by: woodleywonderworks

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