Investing in Real Estate: Is it Wise to Put Money in Real Estate?

Many investors have been burned by the economic shakedown caused by the burst of the housing industry bubble. People stopped paying their mortgages as the market value of their homes dropped way below their equity and loan. As people defaulted on their loans, mortgage-backed securities did not give the kind of yield its investors were initially promised. One financial giant after another fell from grace as credit rating agencies downgraded. That was about five years ago. Today, a lot of the financial institutions and government economies are starting to show signs of recovery. Some countries have actually benefited from the economic crisis as foreign investments started pouring in from distressed countries. With this kind of outlook, many people are asking if it is already wise to invest money into real estate.

investing in real estate

The answer has always been yes. Even in a down market, there are opportunities to gain from. Everything depends on how much money you have to invest, when you intend to reap the fruits of your investments, and which markets have the potential to give you the best returns on your investment. When you have only a small amount of money to invest, there is no room for you to make mistakes. You have to make sure that the risks you take in your investment are carefully thought out and calculated. You have to take extra steps to ensure that you invest in real estate properties that are projected to be “winners.” Although there is no way to absolutely say that a particular investment is worthwhile, being prudent in your investment decisions gives you a better chance of growing your capital.

If you want to make a wise real estate investment decision, you have to make sure that you are properly advised. Unless you are an industry expert yourself, you need help spotting the right kinds of real properties for you investment profile. You also need someone to help you make financial computations to justify such an investment. You want someone who will make conservative assumptions about the different variables that will likely impact your investment yield. The more realistic the financial projections are, the better it is for the investor to make his decision.

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Passive Income with Rental Properties

Contrary to what people think, investing is not only for retirement. Most middle-aged people or even the younger ones are beginning to invest and strive to have passive income to enjoy a higher standard of living. That is why despite of the global crisis, financial institutions became highly leveraged. Investing doesn’t necessarily mean thousands or millions of dollars. It doesn’t matter if a person will start with $100 or $10,000 as a capital. What is important is to make the money multiply as much as it could through passive income.

Passive income is basically what you earn even without actively participating in the earning process. There are many ways to earn through passive income such as stock market, mutual funds, time deposits, etc. But a great way to generate passive income is through real estate as real estate has countless opportunities for making big gains most especially in rental properties. For bigger gains, an investor may find a property that will pay for itself or even makes him a little money each month. The demands in rental properties increase while the rents tend to go up each year yet the mortgage on the investment property remains fixed.

There’s no doubt that rental property investment can provide a steady source of income for almost a lifetime most especially in later years after the mortgages are paid off. However, as with any investment idea, investing in rental properties is not risk proof and requires a lot of patience. A rental property investor must understand the responsibilities involved and he must be knowledgeable in things like fair market rent, landlord and tenant laws, etc. If a person want to own a rental property, but don’t want the obligation of being a landlord, Jackson Real Estate may be the solution for him. It is but wise to outsource the management of properties to a trusted real estate management group like Jackson Real Estate most especially if a person owns more than three rental properties. The real estate management group usually handle all dealings with tenants, from finding and screening tenants to collecting rent to maintenance thus saving the investor from the hassles of maintenance and some work while earning.

 

 

 

 

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