Real Estate Investment continues to be one of the most sound ways to build to your retirement, ensuring your financial stability, when you do finally decide to retire from your career. Given the long term gains Real Estate makes, it’s a very attractive proposition:
1) Real Estate is one of the few investment vehicles where you literally build your portfolio using the bank’s money.
2) Because of depreciation and mortgage interest deductions, your cash flow should be tax free. (Most of the time you won’t pay taxes on your cash flow)
3) By definition, these long term investments are retirement planning. Unlike a 401k, IRA or other retirement account, you can’t put this off. Your property is always appreciating, over the long haul, and thus helping you prepare for retirement.
Sounds exciting, right? It is. Buying property on the speculation of it increasing in value can be risky. To those ends, today we want to share with you four tips that will ensure your success, as you build your Real Estate Investment Portfolio.
1) Remember: Start Small
There is definitely a learning curve as you get started in Real Estate Investing. If you don’t do your homework or rush into something underprepared you risk loosing your chances of making any money. Starting with a smaller property, such as, a one-unit rental property or a small flip can be a great way to “earn your chops”. After your first success with an income property you can use your earning to invest in something a little bigger and better.
2) There Are Deals Out There – Look For Them
You will not make money if you buy a property for over market value and it’s hard to make money buying a property for current market value. Look for an investment that is devalued and put a little work into it to rennovate it to raise it to the price you know it’s worth.
3) Need To Fix Something? Don’t Wait – Better Property Condition = Higher Rental Rates
If your investment property needs any renovations, updates, or modernizing then don’t wait. Start the necessary improvements as soon as you can, so that if you are planning on flipping the property, you don’t end up holding the property longer than you want, or if you are going to rent the property, you will be able to ask for a higher rent amount. Get a couple bids from contractors and go with the best deal that will complete the project in the shortest time.
4) Consider Things Like 1031 Exchanges
If you want to keep real estate in your investment portfolio then don’t sell all your assets. Rollover your profit into a bigger and better property to continue your cash flow. Or, if you have invested in a rental property then you can always buy a second rental property as long as you have budgeted for all expenses. Keep your real estate portfolio growing.
