What You Should Know About Investing in Real Estate
If you are considering real estate as an investment, there is a lot to know. When it comes to investing for beginners, it makes sense to speak with a reputable real estate broker that can help out with legal aspects of the transaction.
If you are a new or novice investor, some other things to know about investing in real estate are:
It’s Not Easy
Don’t make the mistake of thinking that real estate investments are easy money- they are not. In fact, if you are not willing to put in time, money, and risk- often at a fiscal loss- real estate investing might not be for you. It can be tough to make decisions that impact your investment and that could cost you.
When getting started, there are many options for buying your first property. You might take out a mortgage and make payments. The equity that you have in other properties can serve as leverage and help you get where you want to be and acquire properties without actually having the cash. The biggest drawback of using leverage to buy an investment property is that you may take on more than you can maintain in times of financial uncertainty or falling markets. Be careful.
Set up Ownership
Don’t use your own personal name when it comes to managing and investing in real estate properties. Set up a company with its own accounts to hold investment funds, rents, and taxes. This will help to manage risk and protect your personal assets in case of a bankruptcy or other issue. Furthermore, it will curb legal risks if someone should get injured on the premise and sue you; some of your personal assets, like retirement, may be protected. Talk to your real estate broker to learn more about setting up an ownership method that makes the most sense for your needs.
There are Benefits
The pros and perks of investing in real estate include money, naturally, and it is considered less risky and less volatile than the stock market. Typically, investors see a steady incline in their holdings over time. Over time, you may be able to set up a nice reliable income stream through rents and tenancies that provides a second income. Also, as an investor, you may be able to deduct a range of expenses that helps keep taxes low at the end of the year.
Consult with a Pro
As with any investment, it makes sense to talk to a pro. Don’t try to navigate the often-tricky world of real estate investing on your own; hire a real estate professional with an in-house broker who can help with any legal questions or issues that could arise.
Thinking about investing in real estate? It can be an exciting venture! Let Team Hensley help; call us to learn more about properties that may be a wise investment for you today. We offer the experience and expertise to help you make sound decisions that will help you reach your investment goals.