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Secrets of Making Money from Real Estate - Part 2
Leverage: With real estate, people and companies will lend you money to invest. How much real estate can you buy with $20,000? Probably between $100,000-$300,000, depending on the lender. So you only really need a small portion of the funds to buy an expensive asset. High level of control: With real estate you can do things such as write your own terms for the contract, increase the properties value, increase the rent, build, subdivide, negotiate lending terms. Although you have a high level of control with a business, it is a bit more risky. How much can you influence the price of stock? Well, not a lot unless you are within the company. Capital gains: With real estate you can instantly create wealth and equity by buying the property at a discount. Also the property can appreciate over time. For example, Growth is 8%. You buy a property for $125,000 with a $12,500 deposit. First year value: $135,000 $12,500 was turned into a gain of $144,865: over ten years! Just imagine if you had a property in an area of 10% growth! "Yes, but the value of property can go down too!". True the property market can go down, but if you follow the right investment strategies you wont loose money. It is that true the property market can go down. However if you never sell how will you loose money? You may loose equity at some point but the prices are bound to eventually come up again. Even if the prices are down you are still collecting the rent weekly so there should be no problem. Cash flow::The capital gains would be enough of a reason just to invest in real estate. But apart from your keeping your money safe, it can also provide you with a profit. Going back to the previous example, You have an interest only loan for $112,500. Lets assume the property has a 9% yield and the interest rate is at 5%. Rent from property per annum:$10,125 ________________________________ - Interest payments per annum: $5,625 - property taxes per annum: $1,000 - Insurance per annum: $600 - Repairs: $200 - Property manager: $1,000 Before tax profit: $1,700 Now whether you loose profit or gain profit at this point depends on where you live and the tax laws. For example in New Zealand from this point you could claim depreciation of building and chattels and make more profit after tax. You may also receive a tax break on the interest you pay on your loan. However even if you were taxed on the $1,700 you would still make money. Insurance:: How much would it cost to insure a business? The premiums would be HUGE! On the other hand, how much does it cost to insure a property, not a lot. Even if natural disaster occurred, with the right insurance plan you wouldn't loose money. Demand:: Home ownership is decreasing throughout the world, therefore it is more common for people to rent properties today then ever before. This will work in your favor because if demand is increasing for rental properties, prices for rent will go up. To sum it up using out example::You have made a deposit of $12,500 to buy you a $125,000 asset which, is becoming more in demand, in ten years can increase to $268,865 giving you equity along with a passive income of $1,700 per year! This article was written by John Whiteside. The original article can be found here http://www.use-your-equity.com/realestateinvesting.html . Use-Your-Equity can show you how to create value in your home, then show you how to use the newly created equity to make money. http://www.use-your-equity.com for more information.
MORE RESOURCES: Celebrity real estate agent Mauricio Umansky explains when housing prices will come down Fox Business CRE Broker Magazine: a New Beacon for Commercial Real Estate Professionals Announced by Massimo Group Markets Insider Seth Samowitz Takes Helm as COO of Bob Knakal's Innovative AI Infused BK Real Estate Advisors in NYC Markets Insider Prologis Warns of Slowing Industrial Real-Estate Market The Wall Street Journal Downtime: Pairing wine and real estate RichmondBizSense Blackstone Earnings Rise as Investment Giant Projects Commercial Real Estate Recovery - CoStar Group 21 Largest Real Estate Companies in the World Yahoo Finance Welcome to Real Estate Friday! theberkshireedge.com Big Tech Is Downsizing Workspace in Another Blow to Office Real Estate The Wall Street Journal 'It was surprising.' Metro Detroit man caught up in real estate scam; here's how to protect yourself WXYZ 7 Action News Detroit Banks' Commercial Real Estate Risks Are Uneven Federal Reserve Bank of Kansas City Office market collapse: Commercial foreclosures spike 117% in a year Business Insider Real Estate Briefs | April 19 | News, Sports, Jobs Cape Coral Breeze Inked: Recent LI real estate deals Long Island Business News EquityMultiple Bullish on Industrial Real Estate Sector, Brings Opportunity to Individual Investors AccessWire Seattle DJC.com local business news and data - Real Estate - Newmark puts Coliseum building up for auction Seattle Daily Journal of Commerce WHO?! This Southern Utah Town Is A Real Estate Hot Spot! Cat Country 107.3 and 94.9 Real estate transactions: Week of April, 2024 | Construction / Real Estate | insidetucsonbusiness.com Inside Tucson Business TikTok’s Origin Story: Court Files Show Role of GOP Megadonor Jeff Yass The New York Times Real Estate Minute – 04-18-2024 KFDX - Texomashomepage.com Motley Fool: Investors could trust real estate The Spokesman Review Mike Wyatt honored with Lifetime Achievement Award for brokerage career, community support - Dallas Business Journal The Business Journals Real Estate: Q1 2024 - Coronado Real Estate Market Update Coronado Times Newspaper Inside PROFILEconnect 'A Night at The Museum' Real Estate Impact Conference at the Coral Gables Museum PROFILE Miami Google's Strategic Job Cuts Reflect Ongoing Cost-Cutting Measures, Affecting Real Estate and Finance Departments Yahoo Finance Legacy Hills neighborhood in Celina wins award at DBJ Best Real Estate Deals - Dallas Business Journal The Business Journals 'A Man in Full,' starring Jeff Daniels as an Atlanta real estate mogul, dropping May 2 FOX 5 Atlanta Tom Thumb southern Dallas named one of Dallas' Best Real Estate Deals - Dallas The Business Journals Blackstone Real Estate Earnings up 15% in First Quarter The Real Deal Mixing real estate & renewable energy to help build greener world NoCamels - Israeli Innovation News Why you might not need a real-estate agent when buying a home Business Insider S.F. housing market: Still very few homes, selling even faster San Francisco Chronicle Real estate mogul concerned how Americans will deal with squatters: ‘Something really bad is going to happen’ Fox Business The Real Estate Top Performers share tips for buying or selling a house in today's market! WUSA9.com Will It Be a Pricier Housing Market in Spring 2024? Norada Real Estate Investments China home prices slumped in March as property crisis drags on Business Insider AI in real estate discussed during virtual forum Westfair Online A new real estate trend? Shopping malls converted into residential units in South Florida NBC 6 South Florida Fannie Mae, Freddie Mac clarify real estate commission rules National Mortgage News Documentary shows roots of segregation were planted in Chicago Tribune High Country Real Estate: First Quarter 2024 High Country Press Millennials Are Coming for Your Golf Communities The Wall Street Journal Boise Real Estate Market Steady Amidst California's All-Time Low KIDO Talk Radio ‘It doesn’t smell right.’ Michigan councilman linked to $69,000 marijuana real estate sale MLive.com Will Hilton Head real estate pricing rules change this summer? Here’s what’s in play Hilton Head Island Packet Former HGTV star from Los Gatos sentenced in $10M real estate fraud case CBS San Francisco REAL ESTATE | The Lofts at Cedar Lake include access to a 245-acre wooded campus washingtoncountyinsider.com Real estate: Buyer’s agents’ role in today’s real estate market Main Street Media of Tennessee Tiny California home the size of a hotel room will sell for 'considerably' more than its $1.7M asking price New York Post Arizona Coyotes owner cares more about real estate than hockey The Arizona Republic Retirees: Is it time to downsize, even in this real estate market? Effingham Daily News |
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