What is the best way to make money from property?

Question

Is it best for me to buy at auction, renovate then sell? Should I look at building a portfolio of properties to rent? Is there anything else I can consider? What would be the tax implications?

Answer 1

read tips on real estate, investing and more on this site

Answer 2

Probably read real estate books that are not written by people trying to make a lot of money off of the books. Before buying any real estate books or packages, search the web for reviews because a lot of real estate information is hyped.

Some of the information depends on the market. Sales have slowed down and foreclosures have gone up. So it is possible to buy cheap properties, It is just questionable whether you can unload them on a timely basis for full-price. The market may be going down over time, so renovation may need to be done more quickly.

Rentals are being discounted in my town and I don't think the property values have come down enough to make rental buildings worth the value.

Depending on where you live, you may be able to make money constructing prefabs that don't look like prefabs and either selling or renting those.

You may want to become a real estate broker so that you can buy and sell more cheaply.

The tax system is wonderful when it comes to real estate. You could build a community of prefab homes, rent them out, take all of the rental deductions and depreciation, move into each home for two years before you sell and the taxes you would pay for each sale would be minimal.

Answer 3

I know a few people who buy HUD and VA repo's. May need a little fixing and can sometimes buy below cost. Depends on how many people Bid on it. Normally if your credit is good you can buy one house a year, if I remember correct. After a few year if you keep the payments up then you can be considered an investor and buy 5 houses a year. Most the people I know do this and Rent the houses for 5 or more years. Depreciate the house for Tax deduction and when it can no longer be used as a deduction they sell it for the equity and buy more. I had worked in Real-estate about 10 years ago and this was how it worked then. A lot can change in 10 years. Contact a local Real-estate Broker (ERA, Century 21, Remax etc.) Ask them how you buy a HUD/VA repo and if there any available in the area you looking. At the time I worked in this you did have to go through a Broker to make a Bid. They not let you mail it in. Check with someone that work with Taxes about the Depreciation or look on the web @ http://www.irs.gov/
I do want to add this; when you rent these houses you may not make a lot at first after you pay the mortage, but, it does add up in time as you get more houses. One lady said she was only making about $50 on one house after insurance/payment, and, put that $50 back for repairs. Her plan was letting the renters pay and then make the real money when she sell for the equity, and when you selling 5 or more houses a year it adds up. ;-)

Answer 4

Professional investor always insists on cash flow positive from the start. It has been hard to do in the past few years as housing price inflated. However, if you wait for 6 months to a year, you will find a much better deal.

good luck!

http://money.cnn.com/2006/08/15/real_estate/Metro_home_prices_fall/index.htm
http://money.cnn.com/2006/08/23/news/economy/homesales/index.htm