Investing 101
Reasons to Invest in Real Estate:
Cash Flow - After bills have been paid and the tenant has paid rent which should pay the mortgage, the goal is for inventors to be left with “passive income”.
Tax Deductions - any expenses from the operation of a rental property can be deducted from the income made from the property to reduce the amount of taxable income.
Diversification of Investments - diversify your investment portfolio beyond assets such as stocks and bonds. Traditionally, residential real estate investments have little correlation with the overall stock market. Real estate is often more countercyclical, meaning they tend to do well when stock market returns are not.
Common Ways to Invest in Real Estate:
Rental Properties - depending on your investment strategy, you may want to consider being an active investor which is buying and flipping homes to put back on the market to gain profit or a passive investor meaning buying-and-holding a rental property for the long term to earn a passive income.
Real Estate Investment Trust (REIT) - REIT’s are investment companies that own, operate, and/or finance residential and commercial real estate. You can purchase shares of publicly-traded REITs on most major stock trading platforms.
Tips For Starting a Real Estate Business:
Create a business plan and investment strategy that includes your short-term and long-term goals and has an outline to guide you towards success.
Estimate and plan for all start-up costs including arranging your business entity, business license application and asset management.