Finding Your Comfort Level: How to Choose Investments That Won’t Shave Years Off Your Life

Investing in real estate is a smart way to build an investment portfolio while also bringing in steady cash flow. There are many ways to invest in real estate, some taking more time and energy than others. Depending on the level of commitment, there are many types of investments to choose from:

Multifamily Properties

Renting out a multifamily property brings in multiple sources of income. With so many units in one place, if someone were to move out there are still other units to bring in money. This leaves less of a risk of a $0 income. Another benefit of investing in a multifamily property is the exit strategy when it comes time to sell. Investors of the choice of selling the home, converting the units into condos to sell them off individually for much more money or finding partners with capital to partially cash them out.

Single-family Home

Another smart investment is a single-family home. Unlike a multifamily home, there is only one source of income, but it comes with much less maintenance. This makes it the best kind of investment for first-time investors. Investing in a single-family home is cheaper than most investments, easier to manage, and even easier to sell. When an investor chooses to sell a single-family home, it’s easy to find a buyer. Most of the time, the current tenants will be interested in buying the property. If not, a single-family home is always an easy sell in the real estate market.

House-Flipping

Although choosing to flip a house takes a bit more time to see a profit than other investments, it can sometimes offer a much bigger payout. After restoring and upgrading the property, the only thing left to do is sell it. Renting out the property will take much more time and maintenance over what could be years. Flipping a house can take a year max, depending on the number of repairs, and an upgraded property is much easier to sell. Be sure to find the right kind of property to sell in order to get the most out of the profits.

REIT Investments

There are ways of investing in real estate without searching for a property to rent out or flip. An investor should consider investing in REITs (Real Estate Investment Trust) for a very much hands-off investment. Through this type of investment, a company that owns, operates or finances income-producing properties will use an investor’s contribution and give the investor a share of the income. These properties will range from apartment complexes, offices, shopping centers, or even hotels. It’s the perfect way to invest in real estate without taking on too much of the risk.

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Top 5 Mistakes Real Estate Investors Make at Networking Events

Networking events are an important way for investors to find like-minded people who can help them achieve their goals. Unfortunately, many real estate investors do not get the most out of networking events because they make some common mistakes. Knowing what to avoid will help investors have successful networking events.

Only Going to Networking Events Occasionally

Keep in mind that it is necessary to go to more than one networking event. Regularly attending events is how people get to know each other and build trust with each other. Taking the time to attend as many events as possible is essential to launching partnerships.

Ignoring Strangers at Events

Of course, it is tempting to just stick with friends at a networking event, but this goes against the whole purpose of networking. It might be intimidating, but remember that everyone else is probably a little nervous too. Going out of one’s way to introduce oneself to strangers can have very promising results.

Not Listening to Others

Of course, it is important for a person to talk themselves up during a networking event, but always focusing the conversation on themselves can make a person look selfish. Instead, try to ask people about who they are, what they do, and what they like. Remember to truly listen to people instead of just being quiet while they talk. This helps build stronger relationships that may be useful one day.

Skipping the Follow Up Stage

Even the most exciting conversation at a networking event will not actually result in any investment opportunities unless a person follows up. Not following up after a person says they will is particularly problematic because it makes it seem like the person is unreliable or flaky. Follow up can be as simple as sending an email to thank someone for their time or say it was nice to meet them.

Attending Events Without Offering to Organize

Those who only bother with the attending part of a networking event are missing out. Volunteering to help organize future events is a good way to get really involved in the local investment community. Being part of the organizing committee is a good way for people to draw attention to themselves and make it look like they are a pillar in the community.

How to Get the Most from Your Real Estate Investment with This New Tax Law

The Tax Cut and Jobs Act has provided real estate investors with a tremendous opportunity to earn more income and stabilize their investments. The reduced taxation rates for incomes generated from real estate investments are expected to lead to a slight drop in property prices while also putting more money in the hands of landlords. As a real estate investor, you need to be well aware of the various strategies you can put in place to get the most from your real estate investments.

Get your investment strategy right

The reduced taxation rates for properties are making the real estate industry more lucrative than ever before. Even as you anticipate to venture in the industry, you need to get your investment strategy right to ensure you don’t commit critical mistakes that may haunt you financially later.

Firstly, real estate due diligence should be exercised before committing yourself to buy or sell any property. Both short-term and long-term costs and benefits should be well outlined to give you a benchmark of your financial investment portfolio.

In addition, you need to be cautious about how you leverage yourself to ensure you don’t over-leverage. Over-leveraging yourself would most definitely make you secure bad loans which would threaten your properties with repossession.

Become operationally efficient

Most property developers normally stop at completing the development of their properties. To be effective and build yourself a good investment portfolio, you need to lay in place proper operational procedures and strategies targeted at boosting and stabilizing your incomes.

One of the measures you should put in place is ensuring that you market your properties well. Marketing, even when you still have tenants occupying your properties, helps build yourself a strong name in the market. It also makes your work relatively easier when it comes to obtaining new tenants after the existing ones vacate the premises.

In addition, you need to ensure that you screen your prospective tenants well, especially regarding their financial profiles and whether they have jobs or not. This ensures that you only work with tenants who have a good financial profile who will make your work easier and will not cause unprecedented delays in rent payment.

As a landlord, you will also be required to manage your properties well in terms of ensuring any maintenance requests from your tenants are promptly attended to. Fulfilling your obligation as a landlord helps build for yourself a good reputation among your tenants.

WHY PRIVATE EQUITY REAL ESTATE FIRMS ARE OVERTAKING TRUSTS

It has recently been estimated that among high-net-worth individuals, approximately 33 percent of their portfolios are currently made up of real estate holdings. Among those, a large percentage is made up of private real estate equity, typically including properties that the individuals are involved in managing on a daily basis, even if they have hired a professional management company to do the dirty work.

However, there is still a high demand for hands-off real estate equity investments. Many investors with large amounts of capital looking to diversify into significant real estate holdings are having trouble because there has previously been no middle ground between outright private ownership and the completely passive investing experience offered by real estate investment trusts, also known as REITs.

Many people simply don’t have the time, skillset or the inclination to jump headlong into managing commercial properties, even if the majority of tasks can be effectively delegated. That has left those with significant investment capital who would like to diversify into real estate grappling with the many shortfalls of REITs, at least until now.

Private real estate equity firms are gaining in popularity, and these firms have some huge advantages over REITs. The types of properties that typically make up a private equity real estate portfolio are office buildings, industrial properties, retail shops and multifamily apartment buildings. There are also specialized investments such as elderly and college dormitory housing, hotels, self-storage units and medical buildings, to name a few.

One of the reasons that people are drawn to this type of investing is that private real estate equity companies don’t suffer from the immense pressures that REITs are under to produce dividends. This means that they are under no obligation to quickly acquire properties when they are cash-rich but property-poor. A private real estate equity firm can sit on a pile of cash for as long as it chooses to do so. And this means that the well-run variants of this company structure never have to make questionable purchases in overbought markets. It also means that they can hoard cash, optimally positioning themselves to pounce when genuine market opportunities arise.

Additionally, REITs have become notorious for consuming large amounts of the funds’ capital through fees and costs. This has caused a steep decline in the amount of money being invested in the REIT market. Private real estate equity firms, on the other hand, can often maintain high levels of both vertical and horizontal integration, keeping all management, maintenance and construction functions in-house. This can dramatically reduce the costs associated with middlemen and outsourcing.

This article was originally published on http://matthewgorelik.co