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5 Basic Tips for Investing in Real Estate

You do not have to be an experienced buyer to invest in Real Estate, but if you’re just beginning, you’ll find that there’s a lot to learn. Here are 5 basic tips for investing in real estate to get you started.

1. Location Matters

You want to invest in the worst house on the best street because it gives you an opportunity to build equity. You can invest some money to fix it up and sell it to someone else who wants a ready-to-move-in house in a fabulous location. Professional real estate investors call this “fixing and flipping.”

2. Look for Wholesale Properties

Avoid paying “full price” for properties. Instead, look for so-called¬†wholesale properties that are offered at a steep discount. Sure, they’ll probably need some work. Run the numbers and see if the investment in rehab is worth the ultimate selling price.

3. Understand the Tax Benefits

Uncle Sam offers significant tax benefits to real estate investors. The most significant benefit, arguably, is the depreciation write-off. When you buy an investment property that includes a building, you get to write off the depreciation of that building as a tax deduction.

4. Check Your Credit Report

If you have problems on your credit report that are mistakes, get those resolved as quickly as possible. Banks aren’t going to loan money to you for a property that’s not your primary residence as readily as they’ll loan it to you for your own home. That’s why your credit has to be spectacular.

5. Use the “1% Rule”

The 1% Rule simply states that an income producing property must produce 1% of the price you pay for it every month. For example, if you’re looking at buying a property for $150,000, then the monthly rental income should be 150,000 x 1% = $1,500.

Wrapping It Up

Real estate investing offers the potential for fabulous returns. Be sure that you know what’s involved before you start.

To see the full article, Huffington Post; Invest In Real Estate

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