What are the advantages and disadvantages of doing Real Estate Investing or Investment?

Question

I'm thinking of quit working for someone else's money and working for my own money instead

Well I did some research but I just want to know other people opinion about this thing, anyway is it legal ?

Answer 1

Real Estate investing can be done in many ways.

The history of real estate is not what most people think.

It's cyclical. For instance, there were times when the economy soured and the values of real estate dropped.

In recent times, real estate values have risen to unimaginable levels, far and beyond the norm.

In the most recent several years it is seeing some softening, which could grow into something worse over time.

Too many have fallen victim of quick riches in buying properties which have had a good run, but there are limits to everything.

So, for those who got conned into buying a half million dollar property, and had to mortgage practically all of it, they now face higher costs in maintaining that mortgage (not including other maintenance which homes require).

With more and more people facing delinquency and ultimately foreclosure, it's conceivable that the real estate boom can unwind down into a serious economic problem with far reaching consequences.

Best advice I would recommend to anyone getting the real estate itch is to thred carefully...there will be bargains soon, but don't jump at anything.

Find a location where the homes are modestly priced and the area is stable and growing, and after you do careful planning, then you may wish to get involved with trying to buy a piece of property.

Remember, go by the old standard of carrying a mortgage of no greater than two times your annual income (combined if married), so that means for most married couples earning together about a hundred grand, do not go beyond two hundred grand mortgage and try and buy a home on a decent piece of land, that sells for around two hundred grand.

I believe this is the best start for most people who don't want to be renters for the rest of their lives.

All those condos out there, and all that fancy crap that looks so magestic and sells for half a million bucks and more, ain't worth it!

Real estate can either be rewarding over time, or a living hell...it all boils down to timing.

Those who bought when it was cheap now are sitting pretty.

Those who got dragged into the recent hoopla are now biting their nails.

Answer 2

Real Estate... they aren't making any more of it. (well... a little bit in Holland..)

When you buy real estate you are getting something tangible that is usually good at holding value.

Real Estate typically rises in value faster than inflation.

When you buy a property you can rent the property and essentially have the renter make your payments. You get a very high return on investment that way.

There is the potential for a market downturn, with resulting property value being less than the amount you owe. This is usually temporary as long as your property and surrounding properties are maintained in good condition.

You will have taxes and insurance as added expenses. (normally offset by rent)

In general, Real estate is a good investment.

At this time though, we are in the middle of a market correction due to various factors. Prices should stabilize at a slightly lower amount within a few months if there are no surprises. Some institutions got a little lax in their lending practices and some people with excess credit card debt have begun defaulting on loans.

We are at an all time high percentage of the population owning homes rather than renting. That in and of itself is good news for the real estate market.

Answer 3

Advantages:

HUGE return on investment. 25% - 100% per annum is possible.

Nice tax writeoff AND a positive cash flow if the numbers work out right.

Capital gains taxed at lower rate.

Disadvantages:

Tenants. A good one is a godsend. A bad one is a nighmare.

Market forces. When an area goes to pot, you may be stuck as a slumlord. If too many properties in the area go to rental, rates may drop too low for a positive cash flow.

Depreciation recapture. The tax man ALWAYS gets his due.

Passive activity loss limitations. You can show a loss only to a point.

Answer 4

Real Estate investing can be done in different ways.
http://rexmn.com/

Answer 5

He's right. You do need to research this a lot... it's a crazy venture that can have dire consequences if one doesn't start right. Look at Amazon, buy books, research until you're blue in the face... know what you're getting into...

Answer 6

...and this web site is as far as you can get in your research to real estate investments?