Real Estate As An Investment

GOOD RULES  FOR  REAL ESTATE INVESTMENT

  Whether you plan to buy a home to live in or strictly for investment purposes, the more you know about the local real estate market, property management and the tax consequences of real estate investment, the better your chances are of making a profit.

BUYING TO SELL

There are a variety of ways to invest in real estate in addition to the home you plan to live in. Depending on the market and the expertise of the investor, buying fixer-uppers can be profitable and so can buying long-term rental income. Some people buy vacation homes that they rent out part of the year. When buying a fixer-upper, experts claim that a 15% profit is a reasonable expectation. In order to ensure an acceptable profit from that kind of investment, you need to know more than just the market and market trends for the area. When buying a fixer-upper you must also be able to estimate the cost of fixing up the property and holding it until it can be sold or preferably Exchanged to save taxes.

Many people choose to buy instead of rent a home as a hedge against inflation. General economic inflation can cause property values in some areas to increase. If you buy your home and sell it years later, you may realize a profit because inflation has increased property values. Market demand is another factor that influences the price of a home.
 

However, sometimes people are forced to sell during an economic downturn. When this happens the profit on their real estate investment may be reduced. Smart investors rely on a real estate broker who knows the local market including the number of sales and the price trends in the neighborhood where they are considering the purchase, or sale of a home. As an experienced and qualified real estate broker, I do not give investment advice but I can provide you with the data you need to make an informed and wise decision whether to buy, sell, refinance or exchange your real estate.

Jim Smith #350, Broker