The most recent Case-Shiller index for home prices showed that the median price of a new house in America rose from $217,200 in March to $229,000 last month. This means that you need more money now than a year ago to buy your dream house. More and more people are having trouble getting mortgages due to stricter lending requirements by banks and mortgage companies. To make the matter even worse, your property value might still be dropping.
If you are lucky enough to have a steady income and a larger amount of cash that you can invest then real estate is just what you need. It means that over time as prices go up so will your investment. Just keep in mind that housing market is not always appreciating.
The best way to invest in real estate today is by buying foreclosures or short sales. The prices of such property are much lower than those for conventional property, and as property values rise the difference will be your profit.
Avoid long distance deals unless you use a trusted partner with local knowledge. There are many agents who claim to be experts in the field but are actually runnersfor large real estate companies who work on commission. You can avoid most of these guys by sticking with smaller agencies or working with one agent at a time until you become familiar enough with the process to manage without them.
Take your time when choosing which properties are right for you. There are a lot of factors to consider before buying a property. It is better to go slow and make sure that you are making the right choice rather than rushing into your first purchase only to have it turn out badly.
Take advantage of foreclosure listings, short sales and bank-owned properties being sold at discounted prices, but remember that even good deals will need your full attention.
Make sure you’re financially ready to do the work required and that you know exactly what your budget is.
You will be required to pay for repairs, insurance, taxes and more. Do not get over your head in debt when doing this. Investigate tax deductions .
Remember that you can also invest in real estate by buying shares of companies that own rental properties. The company’s asset is the real estate it owns while its liabilities are the mortgages or loans that you will own as investor.
This method is different than buying real estate directly, because the company’s management takes care of all upkeep and management costs so that you can focus on the investment returns.
The most common form of investing in rental properties is by purchasing shares of REIT or Real Estate Investment Trusts. These are publicly traded companies that own the properties they operate, so you have to pay for them, but these are easier to get into than buying a house or condominium.
Investing in rental property can be rewarding financially and emotionally, but it is far from easy. Make sure that you do your research before making any investment in real estate.
Always remember that there are risks involved when you buy properties, but if you do your homework and use common sense then it is all worth the reward.