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Growing opportunities for real estate investors April 15, 2007

Posted by Jay Medina in News and Information.
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As most people know, real estate is a cyclical industry. Last year’s downturn in sales activity has motivated some real estate investors to turn away from more property acquisitions. However, some astute analysts say this is a very opportune time to invest, or start a real estate investment program.

“Owning some income-producing real estate, in addition to having a solid portfolio of other investments, can be a very good thing,” said Dave Ramsey, author of the book, “The total Money Makeover.” For investors willing to invest for the long term, owning properties can be a path to financial freedom for many, he noted.

Single-family homes make very good first properties because they don’t entail the same hassles and headaches association with multi-unit apartment buildings. Homes can be easily turned into rentals and are also much more affordable than, say, multi-family units like duplexes and triplexes, according to Robert Sheehan, economist for the National Apartment Association.

Home sellers are now more realistic with pricing, so the current housing market offers a lot more choices for buyers who get more for their money. That translates to more and better opportunities for investors.

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Comments»

1. Chris Thomas - April 17, 2007

Dave’s advice also includes doing your real estate investing “debt free.” Don’t forget that!

2. Jay Medina - April 17, 2007

Chris, thank you for your comment. I agree that debt-free is a good goal to have. However, I believe there is responsible debt and debt that is just bad overall.

Having a good amount of money to invest in a rental property can be money well spent, while financing the remainder is still an option to consider. A sufficient down-payment can secure financing at attractive rates, and increase tax benefits for the investor. Paying cash for a property would not only tie up otherwise liquid funds, it would also eliminate the tax benefits from the financing that would be in addition to the tax benefits the property provides itself.

My advice is to be “debt-free”, but make the mortgage the last debt to go, while working to pay off any other high-interest, non-tax deductible debt first (credit cards, car loans, etc.).

This way investing is done in a smart long-term fashion, and not necessarily an overnight get-rich-quick, which could in turn provide lasting security for the investor.

Thanks again for your comment, I appreciate you sharing your views.

-Jay


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