Should I invest in real estate?
The recent "hot" real estate market has inspired many to become real estate investors. If you are thinking about investing in real estate, you will need to establish your goals first. Do you want to buy fixer-uppers and then sell them after you have improved them or do you want to buy homes that can be turned into rental properties?
Everyone is familiar with the idea of buying property that is in need of repair, fixing it and selling it for a profit. What most fail to calculate is the cost of the materials, repairs, holding expense (monthly payments, utilities and insurance for a vacant home) and closing costs associated with the future sale. If a property is not purchased at a price far below its potential market value for the neighborhood - it will result in a loss once the project is complete.
To avoid losing money, the down payment, closing costs and mortgage must be added to the cost of repairs and labor as well as to the fees for selling the home to determine basis. If the market will not exceed the total of those expenses, you will not make any money. If the market does exceed the total; you can evaluate if it exceeds the total by enough of a profit to make the project worth doing.
The second form of investing is to purchase homes that you will convert to long-term investments or rentals. In this instance, you are collecting monthly rental that should equal or exceed your principal, interest, taxes and insurance for the property. In stable markets, the appreciation for the property should be in the range of 3-5% (higher in some markets) and the tenant's rent will make the payment. The challenge to owning rental property is in finding good tenants who are rent-worthy and the role of becoming a landlord who is subject to constant repairs.
Real Estate Frequently Asked Questions
Where can I find real estate listings?
How do I find information on properties outside my local area?
What is a buyer's market?
What is a seller's market?
What does FSBO mean?
How do I know if I'm ready to buy a home?
What should I look for in a neighborhood?
What are the financial benefits of owning a home?
What is the difference between market value and appraised value?
Should I sell my existing home before looking for a new one?
Should I take a first time home buyer program?
What do new home buyers need to know?
What online resources are available to first time home buyers?
What books are available for first time homebuyers?
What types of relocation services do real estate agents offer?
What special issues do I need to consider when relocating?
How do I learn about the area to which I'm relocating?
How do I find a relocation company?
How do I plan my move?
How do I find a moving company?
What should I look for in a reputable moving company?
What types of things should be included in a moving quote?
Who provides the moving supplies?
Should I rent my own moving truck?
What is included in real estate closing costs?
How will I know what my real estate closing costs will be?
What closing information goes into the public record?
Who uses public records, and are they free?
How long will it be before we close on our new home?
Where do I find an appraiser?
Why do I need an appraisal?
What is included in the appraisal?
Why do I need to pay an appraiser?
What information do I need to give the appraiser?
What's included in the appraisal report?
Can I get an appraisal online?
How do I know how much to offer?
Will my offer be accepted?
Is the deal final once the offer is accepted?
How do I know what fixtures or decorations the seller is taking?
How do I find a commercial real estate lender?
How do I find a commercial real estate broker?
Where can I find commercial real estate listings?
What is the difference between residential and commercial real estate?
How can I get at the equity in my home?
Can I borrow against all my equity?
What can I use a home equity loan for?
What is sweat equity?
What is equity?
How do I know how much equity I have in my home?
What is a first time home buyer program?
What do I look for in a home inspector?
What does an inspection consist of?
Why do I need a home inspection?
What do I get in the inspection report?
Who should get the home inspection?
What is a fixed-rate mortgage?
How long a mortgage should I get?
Can I pay off my mortgage faster?
What is an adjustable rate mortgage?
How do FHA and VA loans work?
How do I get the best loan terms?
Should I get an interest only loan?
Do I need mortgage insurance?
Who qualifies for no down payment or low down payment loans?
How much of a mortgage can I afford?
How much should I put down on my house?
What's a reverse mortgage?
What will a mover do?
Is real estate a good investment?
What about buying a vacation home?
Do I have to wait for a buyer's market?
What is an MLS listing?
How do I find a licensed real estate agent?
Should I work with a buyer's broker?
How do I pick a real estate agent?
How much will a broker charge?
Can I negotiate the realtor's fee?
What is the difference between a real estate agent and a real estate broker?
How do I get my real estate license?
What services do real estate agents provide?
Should I sell my home myself?
Should a get a loan with no closing costs?
What are closing costs?
How long does it take to complete a real estate course?
How do I find a real estate school?
Can I study for the real estate licensing exam online?
What if I'm relocating for my job?
I am the buyer. Closing on the 25th. Seller wants to stay in house for three days *after* closing. How can I *best* limit my liabilities if someone were to get hurt , brak something ? etc... Is there a legal form online I can download/print ?
i was wondering if i found realestate for sell and sold it to a buyer to make profit and both parties new is that legall why or why not
How do I find a first-time buyer's program and should I use it?
The home we are buying is in good condition. Do we still need an inspection?
Can the seller pay for the home inspection?
My new company is offering me a relocation package. What does that include?
We are selling our home. We don't want to use someone our friends refer. How can we select our own agent?
I know that we need an appraisal for the home we are buying by-owner. How do we go about finding one?
How can I use the equity in my home?
How do we go about buying a home?
Should I invest in real estate?
How can I simplify packing and moving?
How do I go about the process of buying a new home?