Real Estate Investing
Why you should Invest in Real Estate
By Kirk Stalcup
Just about anyone can invest in real estate. What other investment can a person put 5 to 10% of the total value of the investment down and control what happens to it. You now have option:
You can buy, fix it, and flip it
You can buy, fix it, and rent it
You can buy, rent, and hold it
You can buy fix it and pull the equity out (tax free money, check with an accountant on this one) and then rent it
Another plus to investing in real estate is someone else (the renter) is paying the mortgage. Let’s say that a property is purchased for $150,000 on a 15 year note and the rental income pays just enough to “break even” every year for15 years. The owner now has a property that is paid for in full. All the future rent is the owner’s income (minus taxes.)
It gets better. If the property appreciated for 15 years at a rate of 3% per year, it should be worth somewhere around $226,888, with 10% down ($15,000) plus closing cost of around $4,800 would total $19,800 invested in the property. The same amount in a savings account which paid 5% would be worth $39,202.
What would happen if you set a goal of buying one investment property per year for the next 4 years and held them for a total of 25 years? Using the same math as above it would cost $19,800 a year to buy your rentals (or $79,200 over the next 4 years). That is a lot of money but the rewards are even better, your net worth would be around $1,067,214. Even if you just bought 2 properties your net worth would be around $533,607. Would your retirement be better?
Investing in real estate is not risk free but you can control your risk by the why you run your business. Please check in next month on how to get started in investing in real estate.
Keller Williams Greater Omaha - Omaha, NE
Welcome to ActiveRain!
If you would like a few tips on getting the most out of ActiveRain, please visit my blog Welcome to Active Rain. It has a few simple steps of what to do now that you have joined.
If you ever have any questions, just let me know.
Troy Trumm
Feb 24, 2008 12:56 AM
KEIRE Realty Group - Manassas, VA
Principal Broker/Owner
Hi Kirk,
Welcome to Active Rain and congrats on your first post! The opportunities to learn and network are incredible here. Best of luck to ya!
-Keith
Feb 24, 2008 01:32 PM
Homebuyer Representation, Inc. - Salt Lake City, UT
Buyer's Agent - Certified Negotiation Expert
Kirk - Welcome to Active Rain! For some tips on how to get started here, check out my blog entry at ActiveRain Fast-Start Tips for Quick and Easy Points
First off - Get your picture uploaded!
Happy blogging and good luck!
Feb 24, 2008 02:30 PM
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