Melvin Feller both an adjunct professor in real estate and real investments and financing located in Texas and Oklahoma invests across the country and now sees this current economy as a great time to be investing in real estate. Melvin Feller has taken a class of college students out to the field to test the theory that anyone can invest smartly and by asking the right questions. This was a test for Melvin Feller and his new upcoming College Class Book on “Today’s Real Estate Techniques — What Works in This New Economy.”
His students did well with 10 out of 14 students having bought or been deeded real estate that these students turned around and made profits on. Melvin Feller called this his first outdoor lab with boots on the ground for university learning!
However, as Melvin Feller suggested, if you are looking to get into real estate investing you will want to do your research and take advice from people who know what they are talking about. Real estate investing, if done properly, can make you wealthy and financially independent, over a period of time. Investing in real estate can be risky at times, due to the current economic situation. This article will give you some great advice if you are wanting or thinking about real estate investing.
Real estate investment has been proven to be less risky than buying stocks. It attracts numerous people from numerous different backgrounds and real estate investing has three main benefits: the tax advantages from deprecation and the equity growth. The best benefit is that is looked at as forced savings account because your renters are paying off the mortgage.
The term depreciation in real estate investing means purchasing with money that came from a mortgage that has the yearly rents less than the interest of the current mortgage and the expenditures paid for the property’s maintenance. These items convey benefits from taxes and the most important thing is the interest of your mortgage that become highly coveted tax deductions on annual basis.
Equity growth is defined as the appreciation earned from the value of your properties. One point to remember and always keep at the forefront of your mind is that is not guaranteed, because you have no guarantees that the value of a property will raise. You always need to know that real estate is micro economically controlled and thus id depend upon that city’s economic policies and safety issues.
When planning your real estate investing you don’t have to start by investing in a place where you live. Just by following due diligence principals on various surrounding areas and getting to know the area like the back of your hand; you can buy an apartment or house that you can then rent out. Furthermore, real estate investing that’s done in a city which you are not going to live actually removes some of the stress and emotion of what and where to buy. The main reason is because you will need to turn the daily management of those properties over to property management company.
If you get into real estate investment as landlord, but you feel that you just do not have the time and/or the skills to manage, you can hire a property manager that will take care of the property management for you. Generally, the fee for their skills are around 10% of the profits, but there are many advantages, you save a lot of time and you will certainly profit from the experience and knowledge property managers have.
One of the most important decisions to make as your preliminary thinking about investing in your local market, I recommended that you try to locate rental property in growing areas that provide everything a tenant is looking for which includes: leisure activities, restaurants, transportation and a sense of belonging to an area that they love.
Another possible risk in real estate investing is the chance that the value of the property you purchased may actually decrease in retail value, and you may feel that will be forced to sell the property quickly, so consider this when buying and try to pick an area where you know and understand that rents are stable. Many areas have price drops and increases. However, we generally never see where rents decrease over this invent. In fact, rents generally have increased and the tenants are still making a profit for you. So rather then sell the property, it is actually a great time to purchase more property.
The last item in regards to purchasing and renting out a property is that before doing the initial purchase that you do an in-depth research regarding the history of tenancy in that specific area. The main reason I suggest this is because if there are too many tenants in a given area your vacancy factor may increase, which translates into longer period of vacancy between tenants.
I have described some of the most basic information you will need if you want to start investing in real estate. Real estate investment is not easy so you should take this advice and do further research with well-seasoned Realtors and Investors if you think that this is the ring thing for you.