All the benefits of investing in commercial real estate
Real estate remains an excellent investment in 2020
According to Andrew Carnegie, “ninety percent of all millionaires became so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.”
While this quote is decades old, it’s still true today. And while you can make money from wholesaling or house flipping, it’s only a short-term profit. It can, however, be a great tool for getting the money you need to build a long-term portfolio of rental properties.
With multiple rental properties (each one generating positive cash flow), you can fund your retirement without having to worry about all the economic factors that can affect the value of stocks and bonds. And it’s never too late to start!
If you’re young, you can save up for a down payment so you can buy your first rental property. And from there, you can grow your real estate portfolio over time. If you have five to ten years before you reach retirement age, you can convert any of your low-yield investments into real estate so you can increase your monthly retirement income. You can even do it if you’re past retirement age.
Here are the factors you should consider as you look at residential rental property investments (whether they’re single-family homes or condominiums):
You may think that every one of these factors needs to be perfect before you decide to buy a rental property, but it’s rare for that to be the case. You should, however, try to maximize each of these factors as much as you can. And sometimes, one can be more important than all the others.
Once you have enough money for a down payment and are ready to buy your first rental property, you want to make an informed decision. Here are the steps you should follow throughout the location and acquisition process for a rental property:
These are all the pieces of the process, and all of these steps will help you get the most out of your rental properties.
Everyone knows about foreclosures and the great deals that can sometimes be found, but the days of massive foreclosures are over. Many of the foreclosed properties you’ll find today will be in bad condition, with some of them being vacant for a year or more. But it doesn’t mean you shouldn’t be looking for foreclosures on sites like RealtyTrac.com. They’re still out there, so you might be able to find one that’s in rentable condition.
Here are some other ways you might be able to purchase deals for your rental real estate portfolio:
Once you have found your niche and have honed your skills, you just have to keep doing the same thing over and over – all while adding more properties to your rental portfolio. As you pay down mortgages, you may want to leverage it with the equity you have built. But you want to do it carefully so you don’t overextend yourself.
Many real estate investors went under during the 2007 market crash because they were over-leveraged and couldn’t get enough rental income to keep making mortgage payments. Like every investment real estate has risk and should be carefully evaluated especially when you bring debt into the equation. But with that being said, real estate which cash flows should have a place in everyone’s retirement plan!
Real estate remains an excellent investment in 2020
Apartment syndications appeal to a lot of passive investors, because they have a number of tax benefits (the most important of which is depreciation). Fixed asset items are long-term, tangible pieces of property or equipment that are used in specific operations to generate income and are not expected to be consumed or converted into cash […]