When it comes to the idea of investing many people think about stocks or any other thing apart from real estate. As much as the industry might not be glittering gold dust there are good reasons why you should invest your money in it.
1.Gain more leverage. Real estate is one of the few investment vehicles where using the bank’s money couldn’t be easier. The ability to make a down payment, leverage your capital, and thus increase your overall return on investment is incredible.
2. Grow, tax-free. Buying rental property based on speculation of its value is a dangerous tactic since cash flow is the key. However, appreciation over the long-run is certainly realistic and at the least you should be considering a tax-deferred strategy. In the future, you may even consider a 1031 exchange, charitable trust, or an installment sale to lesson your tax liability further.
Sourced from: http://www.entrepreneur.com/article/228506
Now that you know that there are benefits when you invest in real estate you could be wondering why many people fail. There are many mistakes that beginner investors in this field make. It could be lack or research or not having enough money to pursue the investment.
Real estate investors and first-time home buyers face an uphill battle in a slow real estate market. When it comes to buying and selling properties, it is still possible to make money, but it won’t be easy. However, avoiding some classic mistakes will help put you on the right track.(Considering jumping into the real estate market? Read Five Things Every Real Estate Investor Should Know first!)
Mistake 1. Lack Of Research
Before most individuals buy a car or a television set they compare different models, ask a lot of questions and try to determine whether what they are about to purchase is indeed worth the money. The due diligence that goes into purchasing a home should be even more rigorous.
Mistake 2. Getting Lousy Financing
Though the real estate bubble in North America ostensibly popped in 2007, there are still a large number of exotic mortgage options. The purpose of these mortgages is to allow buyers to get into certain homes that they might not otherwise have been able to afford using a more conventional, 25-year mortgage agreement. (Learn more about exotic mortgages in Choose Your Monthly Mortgage Payments.)