Beginning Investor

Posted by | Investing | Monday 10 May 2010 11:20 am

Intermittently, clients inquire about real estate investing or income property. Income property is real estate that generates rental income. Examples are: apartment buildings, shopping centers, office buildings, and/or warehouses.
Investment property is purchased real estate that is expected to increase in value over time. An example is a single-family house or multi-family dwelling. Both of these properties are purchased to generate X dollars over Y time. The key to this equation is over time. An investor, either large or small, must allow their investment to work for them over a length of time, and not expect immediate profits. At times, there can be a loss.
Real Estate Investing is the desire to, or act of achieving a portion of your annual income from business activity that centers on real property. Real Estate investing means different things to different people. It can be as simple as owning one rental property, or it can mean being a partner in a multi-million dollar commercial enterprise. In other words, you as an investor, decide where and how you will earn money due to real estate. Be aware that this form of investing can take many routes. There are wide ranges of income opportunities for the real estate investor.
A potentially successful real estate investor should possess the following character traits.
· The ability to set realistic goals
· The ability to prioritize activities
· The ability to manage time
· A willingness to learn
Another paramount trait is Patience. Considering investing requires a review of your personal financial budget. If you do not have one—may I suggest you check out the site.
For those who have a personal budget, discern how much you can possibly lose without crying all night or behaving as if you lost front row tickets to the Superbowl! If you are going to take food, shelter, or clothing from you or your family-forget about real estate investing for now. Return when you have more cash or you are credit worthy. (Becon scores above 800.)
Investors have to decide on an investment property niche. [If commercial properties are more your inkling and you have the capital, call me immediately: Tony Hawkins, ABR @ 919 951-1807.] A probable starting point for a first time investor is the multi-unit family residence. These are 1 to 4 units (apartments) located within a 50-mile radius of your principle residence. This gives you the opportunity to property manage the site yourself. Collect the rent, landscape, fix the plumbing, repair the windows, advertise for tenants, and develop good landlord-tenant relations. However, if you would like, I can property manage the site for you. (Part of the investment calculation is to account for a vacancy rate.)
Presently, most lenders require a 20% to 30% down payment on investment properties. If you do not have a particular lender in mind, I can recommend a few for you to interview.
I will meet with you to discuss your requirements, location, and property choices and how patient you are. We will work together to discern how much money you are able/willing to invest, and do some math together. I will assist you in locating the correct property(ies) for you.
This is an overview of a real estate investor for informational purposes. The Internet, while providing some facts, does not consider the uniqueness of Land, where the property is physically located, the local market’s economic cycle, and the community’s zoning laws. The availability of property, prices, terms & conditions, etc. vary tremendously from locale to locale.
The basics of a real estate investment: it can be a very lucrative and yet potentially risky business venture. Investment property ownership is wonderful. Being able to provide housing or space for those who need it is quite benevolent, especially if you can get paid for it. However, you can lose your shirt if you are not careful. Call or e-mail me for further discussion on income producing properties.