Real estate investing is far from easy, many people would say.
Investing for short-term appreciation isn't a good idea these days. If you buy property and hope for quick gains, you're likely to be disappointed.
If you're looking for long-term appreciation, you need to purchase a property at a price that allows room to pay management fees. Or you can manage the property. Here's what's hard to predict: the tenants.
Commercial real estate is risky too, depending on the local market. So you are thinking about residential real estate. Managing it yourself may mean you are doing a lot of maintenance. And how do you find the right tenant? How do you create a lease? What you want is a stable situation with a tenant who stays a long time and keeps up the property. How do you get there?
You may want to consider a real-estate investment trust (REIT), if you want an investment that is low-maintenance. You buy shares in a REIT fund, which is publicly traded. The fund typically holds commercial property and/or mortgages. The value of these funds may go up when the stock market goes down, allowing you to hedge your bets.
But REIT funds, like mutual funds, charge management fees. Are these taking away your profits? Perhaps you would prefer a property with a deed as your real estate investment.
Here's a proposition to consider: an assisted investment where you are given a choice of new single-family houses for rental from low-cost local markets. You can also take advantage of negotiated contracts with reliable property managers, insurers, and loans at 5 to 10 percent down.
Using such a system, You can set up an investment with known costs, and then let the tenants pay off the mortgage for you. It's a great way to start a college fund for your young child. All you will have to do is sell the house in 15 years and extract the equity.
Article Source: http://www.orbitaloc.com/
Search out more about one group that offers an easy real estate investing product. Author Phyllis Wheeler recommends PAREAS for real estate investors as she has watched this innovative start-up grow from its inception in 2005.
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