Does Real Estate Still Make Sense As a Financial Investment?

For many people, the only real estate investment that they make will be in the home they live Cheap Run Down Houses For Sale in. Homeowners can do well in this market provided that they meet these two conditions:
1) They need to be patient when buying so that they are able to wait for a “Great” deal to come along.
2) Keep your home for at least four to five years after buying so you can create some equity from your initial investment in the home.
Using Real Estate as a Way to Increase Your Wealth for Investors
From an investor’s perspective, you can get better deals in real estate right now than you could at any point in the last fifty years, IF you know what you’re doing. For example, some investors are buying distressed homes that sold five years ago at $120,000 for as little as $20,000. With a bit of fix up each of these homes becomes a viable property because they can be rented out for more than twice the monthly mortgage payment. The other reason these homes make a good financial investment is because the purchase price plus the cost of fix up is considerably less than what other similar homes are selling for.
The difference between making a good deal and a poor deal is often dependent on the motivation of the seller. Learning how to negotiate a short sale from a lender who does not want to foreclose on the home, or discovering how to use creative financing when dealing directly with a motivated home owner can make all the difference in the world when you are looking to make a good return on your investment.
Do Short Sales make good financial investments?
A short sale is when the lender decides as the best choice, considering its various options, to take less than what is owed on a property instead of waiting to go through foreclosure. Most investors who work short sales look for an opportunity to get a home way below even its current value, then immediately resell the property to a homeowner at or just below the current market value. This allows the investor to make a decent return on his own, or a friends investment capital. This return is significantly better as a financial investment than most other alternatives that are available today.
Lease Options as an Investment Vehicle
One of my favorite methods of buying a house, using a lease option, allows you to make a great return on your money while also limiting your risk. To structure a lease option you’ll need:
1) A motivated seller. No shortage of these in today’s market.
2) A loan payment that is low enough for a typical rental payment to Real Estate Broker Uk cover the entire payment including principle, taxes, and insurance.
3) An agreement where you can buy the house at any point in time over the next ten years for either what’s owed or no more than about 80 percent of the current value. Of course, not every seller is going to agree to this which is why you focus on working with motivated sellers.
Next, you turn around and offer the home on a rent-to-own basis and get your “Tenant Buyer” to agree to take care of all the maintenance and repairs in exchange for the right to buy in two or three years. From the Tenant Buyer’s perspective this is a good financial investment because they can get into their own home even if they have less than perfect credit.
If your Tenant Buyer ends up buying the house, you’ve just made money on the small financial investment that it takes to set up a lease option. If they don’t buy or move out, you simply find another Tenant Buyer and do it again. Then after another two or three years you are able to finally collect on your financial investment.

READ  Taking Advantage of Real Estate Cycles