INVEST IN REAL ESTATE (CHAPTER-1)

IS REAL ESTATE FOR YOU?

Over the years, many wealthy people have become this way by investing in real estate. Investing in real estate is one of the things that can generate stable financial returns every month. As the value increases, your investment will also increase.

When the value of your real estate investment increases, you can withdraw your funds. However, those who are interested in real estate investment should know that it is more than just making money.

When considering investing in real estate, especially residential properties, there are many things to consider. There is no doubt that it can make you very rich, but it will take you a long time.

Transport to make it work for you. If this is your first time in the industry, consider weighing your options on how you will purchase the original property. Not many people have enough advance payment to buy real estate with cash.

Therefore, some people don’t save money first, but they get a loan in order to get started. Some experts say that it is best to wait and save money first. Therefore, the monthly income generated from this will go to you instead of the lender.

You can also accumulate wealth faster by paying the full amount in cash. However, the bank can still lend you the funds needed to purchase real estate. Make sure you have reserves to prevent you from falling into a financial crisis. Finally, you can still repay the loan.

Of course, it is best to pay all the money first, and then pay in cash, after which you will only be responsible for repairs, maintenance, taxes and other miscellaneous items. While making an investment in a property, you need to know how much it costs, including taxes.

You must do this every year or you may end up as a mortgage for your house. In addition, you need to determine the monthly rent for the people who you will allow to live there.

Some investors go to leasing or management companies to collect rent, which can relieve some of the duties from your schedule. On the other side, you have to give more money to the company for outsourcing.

You can do this only when you are financially stable. As a potential investor, you are responsible for collecting rent and other fees (if any).

Make sure you have enough cash for anticipated and unexpected repairs. You never know when something will stop working overnight. It is better to be prepared for these things than not to be prepared.

WHY PEOPLE INVEST IN REAL ESTATE?

Many people know that real estate investment is very profitable, so they will only let people get their share of the pie. They know this is a good way not only to accumulate wealth for themselves, but also to pass on wealth to future generations.

In addition to monthly rental income, there are other factors that make people invest in real estate. Some of them are:

1. As the value of the property to be rented increases, you can make profit as its value increases. In turn, this can help you sell and reinvest in properties that already have a higher value; the increase in the value of the rented property may also lead to the use of credit lines in the future.
2. In terms of equity, as an investor, you can invest money to improve your property. It doesn’t have to cost a lot of money. This can help increase the value of the property. Compared with the situation without any improvement, your property will grow faster. Therefore, if you spend $3,000 on cosmetics and other goods, the value of your property may get twice or more the amount you spent on decoration.
3. Becoming a real estate investor during an inflation period is not necessarily a bad thing. Although rents will increase during this period, the mortgage must remain the same, which can increase your cash flow. But you can also attract more tenants (if you have vacancies), because some people may not be able to get a mortgage during this period. As the demand from tenants increases, so will your rent. This is the supply and demand side of the agenda.
4. Using “other people’s money” or “OPM” is a good reason for people to invest in real estate. You can find a bank that provides loan guarantees for your real estate investment. The higher your credit rating, the more likely you are to obtain good fixed-rate, low-interest credit. You can also look for zero-down loans, but the risk is greater. You will have to pay more for the mortgage because you did not consider the down payment. When the real estate value increases, you will make a profit with the monthly cash flow.
5. Real estate investing is considered a business. You can use the expenses from it and deduct them from your taxes. Anything that you purchased, had repaired, any fees and anything else related to the investment in question. Even if you have properties that are out of the regional area where you have to travel, those expenses can also be deducted from your taxes. If nothing else, being able to deduct expenses from your taxes is like marriage made in heaven.
6. Ever heard of getting tax-free cash? Suppose your rent increases and you have positive cash flow. The extra part can be used for other purposes. When the time is right, consider refinancing. If you do this, you can get a larger mortgage, about $20 more than the original. He will repay the initial mortgage, and then he will have a good excess. The excess is deemed tax-free.
7. The 1031 Exchange is named after Section1031 in the Internal Revenue Code. It discusses how real estate investors can hold off on capital gains taxes when selling one of their properties. There are three conditions that have to be met before the 1031 Exchange can go into effect:
   • It is real estate property investment and not a main residence for the investor.
   • The real estate property can be swapped for a property of the same or similar kind.
   • In regard to replacement, there must be certain time frames in place and adhered to.

If investors use the proceeds from the sale of another property and invest in another property, they may hold off capital gains from future property transactions. Investors are more likely to obtain additional capital and more income and profits from additional rental properties.

USING REAL ESTATE INVESTMENTS AS PASSIVE OR RESIDUAL INCOME?

Real estate investment funds can be used as residual or passive income. In any case, you can always get income from renting out your property. In order to make money flow, you need to know a few things.

To start the real estate investment process, you have to purchase one property first . Find a house that does not require a lot of work and is suitable for renting to potential tenants. You can also look for foreclosure in other types of houses.

People can get foreclosed homes for a steal, usually at auctions. The banks are desperately trying to get rid of these homes because it will be loss for them if they keep them. You will still be able to make an investment once you get it fixed up and suitable for living purposes.

If you continue to invest in real estate, you will eventually benefit from it. Don’t expect any unexpected luck. You need to accumulate wealth through real estate investment. The era of economic and real estate market changes will finally come. However, if you persist, you can still benefit from it.

If you have residual or passive income, you will make money by owning a rental property, and you don’t need to do any work on the property yourself. Renting a property, can help you keep your money in your pocket.

Over time, this property will make you enough money to eliminate the need for a full-time job. In most cases, this is the goal of most people. The key to wealth accumulation is to persevere and not to get discouraged. There will be some properties will continue to generate income, while others may be unstable.

Your goal is to make you and the bank happy by earning a stable income, rather than working long hours for very little money. It will come in time.

Also check out this blog INVEST IN REAL ESTATE THROUGH FUNDRISE.