Buying real estate can be much more than just finding a place to reside in. For some people it is even a hobby, such as flipping houses.
Most people have to do a real estate transaction at some point in their lives, and some find it a fascinating chance of catching and creating value. Real estate has become a common investment vehicle, and it continues to be popular despite a very bumpy industry.
Plan your investment in real estate
Before we dive into the various kinds of real estate investments available nowadays, it is worth looking at one of the main attractions it can provide traders and investors. Investing in real estate gives you one tool that is not as commonly available to stock market investors: leverage.
If you want to buy shares or bonds, then you have to pay the full value when you place your buy order, unless you have some type of financing in place. But even if you are an sophisticated investor buying on margin, the amount of capital you can borrow will usually be less than what you can easily access for a real estate purchase in the USA.
A traditional house loan generally requires a 20% to 25% down payment only. However depending on where you live, there exist various kinds of mortgages that could require as little as 5% down when you get the keys to your newly acquired property. This means that you can control a much larger real estate protfolio then your initial capital, by only paying a fraction of the overall value up front. Of course, your house loan will eventually pay the overall value of the house when you purchased it (plus a not unimportant quantity of interest), but you control the whole resource the minute the documents are signed.
Real estate provides better profits than trading stocks without as much volatility
Historically in real estate, your risk of loss will be reduced by the length of time you hold on to your house. When the industry improves, so does the value of your house, and as a result you will progessively develop more equity. On the other hand the risk is much greater in trading stocks and there are extensive factors beyond your control that could adversely impact your investment at any time.
Real estate gives you additional management of your investment because your property is a tangible resource that you can leverage to take advantage of several revenue sources while enjoying capital appreciation.
Real estate has a high tangible asset value
Real estate is a smart investment for many reasons. You can enjoy an excellent rate of return, amazing tax advantages and leverage your real estate portfolio to develop your wealth. Real estate will always serve as a secure tangible asset to minimize the risk in your investment portfolio.
A good investment in real estate is not only a secure financial investment; it is also an investment that can provide years of fun, pleasure and precious remembrances that will last a lifetime.
This is what emboldens both real estate flippers and property owners. They can take out a second house loan on their homes and put down payments on two or three other properties. Whether they rent these out so that income from renters pays the house loan or wait for a probability to sell for a good profit, they control these resources, despite having only paid a small part of the overall value.
Where to invest
It is never too late to invest in real estate, but where to invest?
Prices vary dramatically from one region to the next, from city to city and depending on the neighborhood. If you have the flexibility to choose your location in the United States, look no further than Chicago as prices are still depressed compared to the national average.
Kale Realty brokers will be able to point you in the right direction depending on your budget. They are part of a residential real estate company that covers the entire Chicago area including its suburbs. Investing in real estate requires that you do your homewoek as not all properties are made equal, and you can trust these folks to do the groundwork for you.