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Investing in Real Estate?

Investing in real estate has financial as well as personal benefits involved. Being a real estate investor give you the pleasure of having control over your investment and pride of ownership.?

Unlike stock your success as a real estate investor depends on the decision you make or don?t make. Financial decisions you make on your purchase of the property, the amount of rent you charge. Many investors will tell you they feel the same pride of ownership in a piece of property on the day they sell it as they did when they purchased it.

The attractiveness of an investment property depends a lot on you and your goals. As rule of thumb you should buy property you would be comfortable owning. Make sure the property is profitable. You have to do your homework first which is your analysis.?

Types of investment property?

Generally there are three types of property you can invest in- vacant land, commercial property, and residential property you also include apartment building and single family homes. You may want to focus on distress properties in the beginning ie properties that are going into foreclosure.

Personally I don?t think vacant land is a good investment, let?s say you buy a vacant plot of land and sell it in ten years or so for twice the price you bought it. You really didn?t make much money. Because vacant land produces no income to offset expenses, you have to pay real estate taxes, selling expenses, maintenance costs, liability insurance and special assessment costs, your annually cost of owning a piece of vacant land could run between 15% to 20% of what you pay. Don?t forget about inflation.?

Commercial Properties?

Commercial properties are rented to business owners. They are income properties. Some commercial properties include:

• Shopping centers
• Nursing homes
• Office buildings
• Restaurants
• Retail stores
• Warehouses
• Post office buildings
• Hotels and motels?

Residential property
as a beginner in real estate investing, you definitely want to concentrate on residential properties. Single family homes offer the best investment opportunities for the beginning investor. With experience you can start investing in larger properties such as multi-unit properties like apartment buildings.

?Single family homes

You will find a lot of single family homes, lots of flexible sellers also lower in cost. Keep in mind there more single family home sold than condos.?

Apartment buildings

?Personally I like apartment building. Investing in apartment building give you maximum leverage, it?s usually easier to deal with the seller of an apartment because they understand the process which makes them more knowledgeable. The opportunity to make a larger profit than single-family home, raising rents by a few dollars on each apartment can increase the buildings value by few thousands of dollars.

?Keep in mind the risk for owning apartment building are greater, mentality of tenants are different, they don?t typically care about much about the apartment, turn over are greater, higher maintenance cost, finance term are less desirable. Don?t start investing in apartment building until you have gained some experience in other type of properties.?

Distress Property

Distress properties are normally less expensive because of the condition of the property or sellers situation. These properties will be in need of cosmetic repair; in certain neighborhood you will also find multi-unit properties such as two-unit and four-unit rentals. You find these sellers are forced to sell because of high interest rate, job loss, divorce and death, finding sellers in this market will not be difficult.

Source: http://realestateinvestmentbusiness.com/investinginrealestate/

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