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Real Estate Investing Options For Novices

Aug 17, 2007
There are various options and strategies that yield different results. Given below are a few strategies that can help you in your real estate investing mission. It is important to understand the risk factors before committing your hard-earned money in any such venture.
Real estate investing is an easy way of getting quick and assured returns on your investment provided you know what your goals are and how to do it properly. With inflation cutting into your regular income, it is always desirable to earn that extra bit of money in order to be able to meet emergency financial requirements, college education of your children or for building up a financial reserve for your retirement. Real estate investing can help you in all these objectives once you know exactly which investment option would suit you best.

Beginners in this field need to be extra careful as they can lose their hard-earned money if they make real estate investments without getting professional advice and making a thorough research. There are many strategies that can help you in making the right decisions and going for the right options.

Buying And Selling Strategy

This option enables you to make some fast cash by buying a bargain house and disposing it off to another investor. The trick lies in locating such a property and finding another real estate investor who would pay you for locating such a bargain deal.

Rental or Residual Income Strategy

This strategy enables you to get monthly income from your investment. You need to look for a property that you can obtain at a bargain value and that would fetch a good rental income. As long as you are able to get a monthly rental amount that exceeds the monthly mortgage payment, you are in business. This can prove to be a double-edged tool if you are not able to get the rent that you had anticipated or if the mortgage interest rate is high, thus escalating the monthly mortgage payment.
This option is ideal if you have a good credit rating that will enable you to get a low mortgage interest rate. Moreover, you can get good returns in a few years as the rental income moves up and the mortgage payment remains the same.

Property Investment Strategy

If you do not want to deal with tenants and your goal is to make long-term profit, you can buy a property, refurbish it and sell it at a profit. You can also buy a property, transform it and then sell it.
Apartment buildings can be transformed into condominiums and old houses can be transformed into luxury villas. You can also indulge in speculation by buying land cheaply at an undeveloped site and then waiting for the area to develop before selling it at a profit.

Flipping Option

This strategy can be used to great advantage and profit. You need to look for a property that is in a bad shape and available at a bargain price. You can then start refurbishing this property using all your creative skills and transforming it into an extremely attractive house.

The next step is to find a buyer who would be attracted by this property and who would be willing to pay you much more than what you paid for it and the refurbishing cost. However, it is necessary that you have the financial resources to go through with this process and be able to hold on to the property until such time that you are able to find the right buyer. A lot of hard work and risk of speculation is involved in this strategy.
Although, hard work is needed, knowledge will be your key to profits.
About the Author
James Klobasa, once broke with no job and $20,000 in debt made a choice that changed his life forever. That choice was investing in Real Estate. With the founder of, The Little Building Co. you too, can learn at Real-Real Estate Investing
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