With it being general knowledge that the real estate and housing market is in the tank, you might be a little hesitant to pull the trigger and invest in real estate. However, if you have some fortitude and some patience, now might be an excellent time to invest in real estate. Interest rates have been dropping, and some say they may drop further. Foreclosure rates are going up, which makes some deals readily available and aids in lowering the median home prices.

 

Many people who invest in real estate may be in a hurry to pay off, but remember; you are using rental income to help subsidize the mortgage payment. If you truly have a long-term horizon, you can rest easier knowing that someone else is paying more of the interest and principal each month than you. For rental properties or investment real estate, make sure you are also leveraging all of the tax benefits of depreciation and valid expenses. When you invest in real estate, money is made or lost behind the scenes, not when the final deal is made. For example, you may have turned a $10,000 profit on the sale price after one month, but if you paid an attorney $1,000, your contractors $5,000, and your real estate agent $5,000, you lost money on your deal. Improvements to your property, such as new cabinets, landscaping or tiling are things that can really add some value. Hire professionals to do these things for you only if you need the help. For instance, changing locks, putting in new plants or painting the walls are things you can likely do. You certainly do not want to do something you are not capable of doing -- that can become even more costly than just hiring a contractor. In your deal, consider the skills you have and what really needs to be done to get the place up to par. In terms of other professional services, perhaps you should avoid hiring a rental agency that will take 10% to 15% plus the first month’s rent; you can place classified ads and answer your own phones.

 

I have an email bulletin that I send out weekly that shows New foreclosure properties in the Coweta and Fayette counties. Please submit your email if you would like to receive the bulletin. I hate Spam, so you will receive a confirmation email that you will need to click on to complete the subscription. You can always quit anytime you like.