Great article… real estate agent buyers would be wise to give this some thought.
Are You Still A Real Estate Agent? Why?
It’s a crazy real estate market we live in, interesting times.
Rental Property Investing Basics
Whether you currently invest in real estate or are new to the idea, buying rental property in a college town might have crossed your mind. Much of the standard real estate investing advice applies to properties in college cities. But there are some key differences to consider before you start buying rental properties near a college. As you continue to build financial stability and wealth, it’s wise to take time to ensure real estate investment opportunities are the right decision. Below, we cover the basics to help you determine if real estate investing in a college town is the best decision for you.
About 85% of millennials believe real estate is a good financial investment — and they aren’t wrong. Unlike the stock market, real estate investing allows you to collect cash flow — or immediate financial returns. Plus, there are tax benefits, the possible appreciation of your property, and equity paydown. At the very least, your profits will help you pay the mortgage — and even your own bills. Here are a few ways to enter the industry and start investing in your 20s.
Tips for Buying Your First Rental Property
As you begin to explore the possibility of buying your first rental property, it’s important to keep in mind how much money to save for a down payment. Ideally, you’ll want to have a 20 – 30 percent down payment saved before:
a) looking for an investment opportunity, or b) apply for pre-approval.
Determine where you want to invest
Making good business decisions means buying and selling properties based on accurate deal and market analysis. That means pulling accurate comparables, analyzing and managing property repairs, and using important data points to determine the projected return on investment based on well-founded buying and selling scenarios.
I love comparing rental properties to the stock market because the stock market is the investment vehicle we are all taught to use. Whether it is individual stocks, mutual funds, index funds, or REITs, we are told the best way to save and invest is to put our money in the market. The problem with investing in the stock market is we are depending solely on stocks to increase in value. Retirement calculators are based on the stock market. They make us guess when we will die to determine how much we should save. We run out of money if we live too long or save too much money if we die too soon.
Here are a few tips to help you succeed at real estate investing:
partner with an experienced investor to teach you the ropes in your city. Offer to help him or her with business to learn how to become successful. You should never pay someone to teach you. Ask your investor friends who taught them to be successful. Focus on a niche. There are many ways to succeed and fail, in real estate investing. Focus on one or two areas of real estate investing and never deviate. My niche is owner-financed houses from $60,000 to $100,000. That is the only type of property I buy and sell.
Silent real estate partners or investors are individuals with a lot of money but not a lot of time. Sometimes referred to as “sleeping partners,” these individual investors provide the capital needed to invest in the real estate asset but do not participate in the daily management of the commercial property. Generally, silent partners lack the leadership skills, industry expertise, or time required to run commercial properties such as restaurants, hotels, or apartment complexes. However, as full shareholders, silent partners share in any profits, losses, and tax responsibilities that result from operating the property.