So, You Want To Invest In Real Estate?
There are a lot of different ways to invest in real estate. And one of those is buying investment properties for sale. Maybe you’re looking for a retirement plan or maybe you want to just make money off rental properties. Regardless of what your goal is, there are benefits and drawbacks to every strategy – but when it comes down to it, investing in real estate is all about putting your money into something that’s going to appreciate over time.
Here are five reasons people invest in real estate.
1) It’s a conservative investment
Yes – investing in real estate can be very conservative. It’s obvious that the stock market is volatile, and that the commodities market only allows traders to speculate about what they think is going to happen. But there’s no reason why real estate investment needs to be on that level either. When you buy cheap, fixer-upper properties you can get a return on capital of 12% or more, and investors believe there is still room for growth because 97% of all purchases are negotiated. You can make money buying old homes without worrying about losing your shirt if the property doesn’t appreciate quickly enough for you.
2) You can get started for less than $10,000
Investing in real estate has to be one of the easiest ways to get started with investing. You don’t need hundreds of thousands of dollars to invest in real estate. You might not even need fifty thousand dollars. If you’re a US citizen and you have at least $500,000 in assets then you can take out a loan with the SBA, which will give you access to investment property loans that have an interest rate as low as 2% above prime. You can take out a loan for as low as $50,000 and have access to properties that need lots of work but are still worth a few thousand dollars. There are also lots of different real estate investment opportunities right at home in your own city. If you live in Atlanta you can invest in the property being built condos or homes in the city; if you live in New York you can invest in rundown apartments and foreclosed houses, etc.
3)Real estate appreciation is guaranteed
It’s obvious that the stock market has been volatile recently, and no one knows what the commodities market will do next week. But investing in real estate is very different than those other markets because properties tend to appreciate over time. Over ninety-seven percent of all real estate transactions are negotiated, which means that 97% of all buyers are able to come out ahead. Even if those properties don’t appreciate fast enough for you, you can always buy more as your budget allows. And the SBA loans are secured by the property without interest payments or balloon payments that will increase the loan’s value if the property appreciates. Because of this, interest rates on these loans are so cheap it’s difficult not to make money.
4) Real estate is a tangible investment
Investing in stocks can feel like gambling to some people, but you have no idea what’s happening with your stocks when they’re in an account at a brokerage firm. Even if you happen to know all about the company and feel comfortable investing in the stock of a company, with real estate there’s something more concrete to hold on to. You can visit your property every day, see it being renovated, and watch your money grow. It’s a much easier way to see progress because there are tangible goals that you can work toward.
5)Regulated by the government
There are no guarantees when it comes to investments, but investing in real estate is regulated by FDIC insurance so that if the bank goes out of business or decides they don’t want to honor your loan then that’s covered; however, once you own the property you can do whatever you want with it. This is one of the reasons some investors love investing in real estate. With a mortgage, you have to fulfill the loans that you are given, but with real estate, you can do whatever you want with them. There’s no mortgage company taking a hefty interest each month while you just sit back and enjoy your investment.
The truth is that there are many benefits that come with owning real estate, especially if you invest in something that will grow over the next few years, which is what I do.