Real Estate Profits

Real Estate Investing for Beginners – Part 1 Introduction
Author: Jennifer Mackay

As a beginning investor in real estate, it is imperative that you start with a solid strategy and understand the fundamentals. In this article, it is my intention to offer a few insights into real estate investing for beginners.

A few ground rules…

First let’s agree that unlike stocks or bonds investing, real estate investing is not considered a ‘Liquid’ investment. What this means is, you can not sell real estate as quickly as you can sell stocks or bonds. Stocks or bonds can typically be traded very quickly through a stocks brokerage firm.

Real estate however, requires skill, patience, a marketable product and technique to liquidate. Even when using a professional, it may take awhile to sell investment property.

Realizing this at the beginning of your investment strategy will save you grief and money during the life of your investments. Knowing you can not simply ‘Flip’ (the process by which you can buy and sell real estate property very quickly) every real estate investment opportunity that comes along will assist you in making sound investment decisions.

Commercial Real Estate Investing

Due to the complexity of commercial real estate investing and the calculations used in strategies, this article will focus primarily on residential real estate investment strategies. At times, we may discuss items relating to commercial investments, but only when needed for clarification.

Investment Financing

Before you begin to look for a real estate investment , it is advisable to research how much you can afford. One way to accomplish this is to find and work with a qualified professional real estate agent who knows the area in which you are interested in purchasing. Agents often work with and can suggest a lending company or mortgage professional.

In addition you can work directly with a lender or mortgage professional.

Working with a real estate agent provides you with several benefits, not the least of which is they are typically well informed of news and growth markets in the area you are interested in investing.

Investment Strategy

Long term or Short term Investing: Let’s describe long term investing as real estate purchases that are maintained for more than 5 years. Short term investments we will consider purchases maintained less than 5 years. The length of time for either of these strategies canvary greatly depending on market conditions and income/expense ratios from the investments and other factors.

Along with your investment strategy of long or short term investments, an advisable consideration is what do you expect from a Return On Investment (ROI) perspective. ROI can best be described as how much money you expect to make on your real estate purchase and in what time frame.

Summary

Intelligent investing is about balancing risk and reward.

Real estate investing requires education, and for new investors it is advisable to work with an experienced real estate professional. Let’s not forget lots and lots of homework and research.

If you take your time, work with a knowledegable real estate professional, there is no reason why you would not be able to realize the financial gains others have realized in real estate investing.

End of Part 1

© Copyright 2008 Jennifer MacKay. All Rights Reserved.
Article Source: http://www.articlesbase.com/real-estate-articles/real-estate-investing-for-beginners-part-1-introduction-341537.html

About the Author:

As a Keller Williams Success Realty Real Estate agent and REALTOR® working in Panama City Florida, my mission is to provide the public with quality Panama City Florida Real Estate services!

Real Estate Investing for Beginners – Part 2, Types of Properties for New Real Estate Investors
Author: Jennifer Mackay

Not all real estate property types may be appropriate for new real estate investors. There are many factors to consider when making the decision to add real estate to an investment portfolio.

When deciding on a residential real estate investment strategy, some options for new investors to consider include:

Rental units

Rental units can be considered both long term and short term investments. Types of properties that may be considered for this category would include:

* Detached single family homes
* Attached single family homes
* Multi-Unit properties
* Condos/Townhomes

Being a Landlord

Not everyone has either the desire or inclination to be a landlord. Dealing with tenant and property issues can be very stressful and time consuming. One way to minimize the impact of being a landlord is to hire a professional property management company.

Hiring a professional property management company has several advantages:

* Allows owners of rental properties to be ’shielded’ from dealing with tenant and property issues directly.
* Provides a buffer allowing the owners to maintain a hands off approach to managing their properties.
* May provide a less stressful experience
* Offers the ability to purchase real estate investments not immediately local to the investor.
* Provides a single contact point for all issues regarding the investment property.

Professional property managers are well versed and prepared to manage tenant and property issues as they arise. They will typically take care of all issues relating to the property.

Many offer their services at reasonable prices and rates while others can be quite expensive depending on additional services being offered. You may expect property managers to provide the following services:

* Advertise properties available
* Receive applications for tenancy
* Perform Credit and Background checks for applicants
* Recommend rental pricing
* Pay maintenance and/or repair bills for the owner
* Send monthly statements and rental income (Less any outstanding bills.

Typically these are deducted and itemized from the rental income and will appear on monthly statements)

Flipping or The Bane of New Investors

Often times, new investors in real estate are overly anxious to ‘flip’ properties and make a significant profit. Rumors of how friends or acquaintances have made allot of money is often the incentive for ‘flipping’.

The real estate market fluctuates greatly. Yesterdays great ‘flipping’ market may be (recent market trends as an example) tomorrows ‘Hold on to it’ market. While this is certainly a desirable quality of an investment property, it is and should not be the primary consideration for new real estate investors. The competition for this type of real estate investment is fierce and occupied by seasoned, experienced professional builders and investors

Property Types

Let’s discuss the various property type which may be considered by new real estate investors.

The selectionof the type of real estate property for investment purposes may be based on several factors.

These factors include:

* Financial considerations – How much can you afford?
* Availability of properties – What types of properties are available?
* Location – You’ve heard this one a thousand times – Location…Location…Location…
* Income potential – Does the property in question match your real estate investment strategy?

Detached and attached single family homes Single family homes whether attached or detached are often the first real estate property type new investors seek. In many areas, they offer the most availability of any property type.

Prices obviously vary greatly with these property types as well.

Multifamily Properties

Apartment units such as duplexes and triplexes should be considered as a viable option for new real estate investors.

Many investors and real estate professionals use apartment buildings as a point of entry to a portfolio of commercial real estate holdings and to build their equity before moving on to larger commercial real estate investments.

Duplexes, triplexes and fourplexes are two, three and four-unit buildings that may or may not be owner occupied.

Summary

Selecting an appropriate type of real estate property in which to invest is a primary consideration for all serious real estate investors.

Real estate investment strategies include the decision of whether or not to become actively involved in the management of the property. Professional property managers offer alternatives to assist in a “hands off” approach to owning residential income property.

Knowing there are options on the various types of properties to purchase as investment may provide new real estate investors the information needed to make that final decision to become a real estate investor.

End of Part 2

© Copyright 2008 Jennifer MacKay. All Rights Reserved.
Article Source: http://www.articlesbase.com/real-estate-articles/real-estate-investing-for-beginners-part-2-types-of-properties-for-new-real-estate-investors-341541.html

About the Author:

As a Keller Williams Success Realty Real Estate agent and REALTOR® working in Panama City Florida, my mission is to provide the public with quality Panama City Florida Real Estate services!