Real Estate Investing: A Smarter Approach

Although, most financial planners, advise their clients, real property investing, should be, a core, component, of an overall, investment strategy, it is important, to fully, consider, personal needs, limitations, goals, and priorities, pursue the best paths, to proceed, and invest wisely, for one’s personal, overall, financial situation. Some invest in real estate, in a passive way, by purchasing, shares of a Real Estate Investment Trust (REIT), but, it must be understood, all of these are not created equal, and there are challenges, and limitations. Others become a shareholder, or minor/ limited partner, in someone else’s project. Another approach is investing in real estate, by purchasing specific, smaller, investment properties, such as two – families houses, and/ or, smaller single – family homes, A few participate in larger projects, because they are able and willing to. Regardless of, how one proceeds, it’s important to do so, smartly, and, in a well – considered, focus manner. With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, what this means, and represents, and a smart approach to investing and participating in real estate.

1. Personal home/ residence: Although, most people buy a home, because it make sense, to them, and, many consider, it, a part of the so – called, American Dream, it would be wise, to consider, the price, neighborhood, and other relevant financial considerations.

2. Real estate investment trust (REIT): Some get involved, by purchasing shares in a Real Estate Investment Trust, which is often referred to, as a, REIT. These vehicles are somewhat similar to stocks, and, other securities, but, with certain, significant differences. First rule should be, to realize, every project is not the same, and some sponsors, have far better, track records, than others. Also, past performance is no guarantee, into the future. Another issue is, there is often, very limited liquidity, for these, during specific periods, so, if one needs, liquidity, these are probably, not for them. An REIT should be considered, when it right for an individual, after he carefully, realizes the advantages and disadvantages, as well as potential risks, and rewards. Buying these, means, one is buying a partial, or limited, ownership position, in a specific project.

3. Investment, residential property: Some are attracted to participate in residential, investment property, either multi – family houses, or, a single unit, which is being purchased, to rent, for investment purposes. Consider cash flow, rate of return, up – front funds, needed, reserve funds, and personal comfort zone, issues, related to the responsibilities of being a landlord.

4. Larger projects: Wealthier individuals often, participate, by larger investments. However, the same considerations, and what the risks, versus the rewards, may be, should be thoroughly, considered, from the onset!

For most, investing in real estate, as a component of one’s financial/ investment portfolio, is worth considering. However, before doing so, it’s important to do so, in a smart, well – considered, way!

How To Protect Your Home & Real Estate Investment

Disclaimer: This is based on my personal and professional experience. It’s still best to consult with an attorney or your accountant for further clarification.

Today, let’s talk about your properties and what you can do to protect them. Some of you might have recently acquired a property or invested in one but don’t really know how to protect the investment long term. It’s hard to not have assurance on the protection of an investment you spent thousands or millions of dollars on. It’s best that hear from personal and professional experiences on how these people were able to go about protecting their investment.

With my years of experience, I’ve found that the best way to protect your properties is to put it under a Trust. I’ve done this many times that at this point, it only takes me a few minutes to put one property on a Trust.

It works like this: I pick a trustee and you pick anyone that you trust. Then, there will be two important documents that go on the Trust. These are the Trust Certificate and the Declaration of the Trust.

This has a number of advantages. For instance, someone sues you for an accident which involves your house. They’ll see that a Trust owns it and they’ll pull out more information from the Trust.

However, they’ll see that the Trust doesn’t own anything else since what I do is I put each property on separate Trusts which is under its own name.

Most of the time, the attorney would back out when they see that the Trust only has one property. They know how tedious it is to go through the process, especially those owned by LOC.

Another advantage is if ever you get married to someone who owes child support or taxes, their financial obligations will attach with the house. But when your house is under a Trust, no one can touch it.

For me, this is a good thing to have. It reassures you and protects your rights as a property owner or heir. It could be a challenge for you to take the first step, but with the right attitude and goal, you should be able to find a way on how to protect your investments.

Real Estate, And Financial Planning: Best, When Used Together!

Many, often, articulate, some of the essentials, of financial planning, but, do so, without fully, paying attention, to what this should include, and mean! There are many necessities, including the need, to include, all possible components, which might enhance one’s ability, to be, as successful, from a financial perspective, as possible. However, many, only look at this, in terms of stocks, bonds, and other investments, without, fully considering, where real estate, should fit in, to the overall equation. It takes intelligent, financial planning, both, from an overall perspective, as well as, a specific one, to determine, how to create, the proper balance, and direction, for each of us. There is no such thing, as, a, one – size- fits – all, approach, but, rather, this article will attempt to consider, examine, review, and discuss, why, in most instances, real estate, should be, a vital part, of one’s personal, financial plan.

1. Beginning the process: One should begin, this process, by giving himself, a check – up, from the neck – up, and determining what his personal, financial goals, are, and why. Real estate, should be broken into two categories: personal housing; and investing. For most people, the value of their home, represents, their single – biggest, investment, as well, as housing, and owning, a piece, of the American Dream! In many instances, from an historical perspective, investing in real estate, has been a quality decision, because, not only, does the property, itself, help to keep up, with inflation, but, there are tax benefits (including depreciation, etc), and, when, done, properly, a positive, cash flow. Before, this can be done, effectively, and efficiently, it’s important to be prepared, for the financial necessities. These include: funds for down – payment, and closing costs; financial reserves for repairs, renovations, maintenance, and upgrades; and; a reserve for contingencies. When investing, consider cash flow, rates of return, and, both, the possibilities, and ramifications.

2. Do you wish to be a landlord?: Are you, ready, willing, and able, to be, a landlord, and the associated responsibilities, stresses, strains, hassles, and potential tensions?

3. Balanced portfolios: Wise investors seek to diversify, and, doing, so, means, properly, balancing, investments in stocks, bonds, savings, real estate, etc. Real estate, traditionally, increases, in value, at, or slightly, more, than the inflation rate, while, bonds, often do not, and stocks, are often selective, and challenging, to balance, and choose, properly and effectively.

4. Personal home: How important is it, to you, to achieve, some part of, the American Dream, by owning a home, of your own? It makes sense, to weigh, whether you should buy, or rent, where to do so, advantages and disadvantages, and the ways, to be, financially prepared, for contingencies, and enjoy it!

5. Investing in real estate: Some people use Real Estate Investment Trusts, or REIT’s, to participate, in real estate investing. They hope, to take advantage of professionally managed, portfolios, but, should, recognize, some are, more conservative, and income – oriented, while others, may be, less secure, and more speculative! Others begin their involvement by buying a two – family house, and it is wise, to weigh, the costs, versus, the potential, and risks.