What Is Real Estate Investment?
As a company that is in the business of real estate investment, we believe that we are your best bet when it comes to turning different opportunities in the real estate market into potential riches. But before you delve into how it can be a source of wealth; we shall help you understand what real estate investing is and what it is all about.
From an academic viewpoint, real estate is defined as immovable property (or land) along with anything affixed to it. This includes buildings, the ground, trees, and other natural resources. Investment is the act of using cash to acquire something to make it a source of income.
If you combine the two, then real estate investing is the purchase of real estate to make an income and acquire wealth.
Our Theoretical Definition
The academic definition does not entirely hold true. Our theoretical take on what real estate investment is all about does not focus on you only. We believe and are confident that you invest in real estate and make riches using other peoples’ money. In short, you need to know how to identify potential prospects and look into ways of enlarging your investment. For instance, consider the following two examples:
1. It is possible to make some significant money from payouts from annual after-tax cash flows or even through equity building via the appreciation of an acquired asset.
2. Investing in real estate opportunities with non-monetary returns that can help secure and control ownership thus aiding in the diversification of your investment portfolio in the real estate space. It can lead to the growth of the asset’s value making it profitable.
The potential of making money by investing in real estate is significant; however, we wish to point out that real estate investing is not a bed of roses. You will need enough capital and have a level of appetite for risk. But you also need to include the guidance and expertise of professionals in the real estate industry. That is where we at Victory Real Estate LLC come in. We can help with the management aspect of things so that we can help you grow your investment and receive the best possible returns.
Therefore, why should you consider putting in your time, money, and effort into investing in real estate? Below are five indisputable benefits that you can bank on which will hopefully be all the convincing you need.
1. It has tax benefits
Land ownership is a matter that needs proper governance with robust legal mechanisms in place to safeguard an individual’s investment in real estate. As such, governments understand the significance of real estate ownership and development; hence, the many tax advantages associated with such investments. Take, for instance, mortgages where their interest is deductible in most cases. It’s even possible to have profits that are tax deductible depending on how you handle and finance your real estate investment. Therefore, you get to enjoy a bit more money in your pocket by deducting your tax expenses and sheltering your profits from your tax bill.
2. It offers significant profit potential
For the money-making point of view, all investments should yield profitable returns. However, with the real estate industry, we live in times when the supply of affordable and secure housing is rather thin. As a result, things are not looking promising with the growing number of deteriorating homes and less-than-standard constructions. Therefore, it is a situation with some promise for the real estate investors that see an opportunity in buying, renovating and then renting out or selling properties for a profit. The potential of investors making notable profits is as high as 40%. This has the possibility of being even higher.
3. It can help diversify your investment portfolio
We are confident that investing in real estate is one of the most promising ways of diversifying your financial portfolio. With so many investment options available today, why should you consider having your eggs in one basket? Moreover, the opportunities differ with some having a high potential for profit and others for substantial losses. Thus, it boils down to your appetite for risk. You not only need to make a financial decision but an informed one. And that is why we are here. Our goal is to help you identify the most promising chances and make the most of them when investing in real estate.
4. It can be a reliable source of income
When investing in real estate, you are dipping your hand into a money-making opportunity with several options. For instance, you can opt to sell a property for profit. Afterward, you can use a portion of that money to invest in another property for a similar outcome. Alternatively, your real estate investment can be one that supplements your monthly income by opting to rent out your property. You can have a property manager, such as us, help you with the acquisition, development, and management of your rental. That way, you can focus on other income generating investments.
5. The investments appreciate in value
If there is one thing that you can count on is that the value of your investments is bound to increase. The growth can be as much as 9% per year based on some variables in the market. This is also without you do anything significant to the investment. In short, you can enjoy some substantial profit while doing nothing at all. Therefore, imagine how much you can get if you opt to do some upgrades or enlist the services of a real estate management agency to help you grow your investment?
Real estate is one of the most promising ways of improving your financial situation. It is a solid investment with notable benefits that make it one of the top choices when it comes to options that can be the highlight of your investment portfolio. And if that is the case, then how can you become a successful real estate investor?
How To Become A Real Estate Investor?
We believe that a real estate investment should be made smartly. That is why we strive to help you make money even with no money down when investing in real estate. We can give you a better picture by highlighting the following five principles of how to play your cards right.
1. The money is in the purchase
Think of this along the lines of investing in stocks. The value of your investment should be in the acquisition of the asset, where you buy low to sell high. Therefore, you should consider putting in your money when the market price slumps. That way, you have better odds of getting a significant capital appreciation when the market heats up. But to enjoy such an outcome, you need to do some real estate valuation. And since you may not have the time on your hands, that is why we are here for you.
2. Always monitor cash flow
It is common for a real estate investor to have a monthly income on their investments. That is money that they inject back into their investment for things such as doing repairs or paying mortgage installments. However, fluctuations in the real estate market are inevitable. This causes interest rates to rise and fall drastically. As such, you should keep a close watch on your cash flow as well as any hikes in the rates that can potentially erode your target ROI. We highly recommend that you set up a rainy-day fund. That way, you can keep some of the incoming cash for emergencies.
3. Leverage people’s time and money
Always remember that no one can do everything. You should try to do your best at what you know you can do. If you are good at fishing for potential properties but are not good at negotiating deals, then have professionals, such as us, handle the rest for you. Perhaps, you may be good at décor. In that case, you can let the realtors find the best deal, meanwhile, you can focus on the interior design of the property on offer.
Also, consider getting interested individuals on board. This means people that can be your partners. They can help you source the capital needed for your real estate investment. This will help lessen your financial burden. Overall, you are bound to reap significantly if you spend your time and money in building a team of partners and advisors that will work for and with you. Reward them financially for their input, and you will have a group of dedicated professionals that help ensure that your investment makes you money.
4. Make the most of a good rainy-day cash balance
Over the years we have been in the real estate industry, we have seen investors that started with little capital and made it big. The key to their success is their appreciation of the power of leverage when investing in real estate. Any prudent investor will strive to leverage as much as possible so that they can control or own property that is worth more than what they own, many times over. However, they also cannot overlook the significance of hedging themselves against uncertainties; thus, they will have some money set aside for a rainy-day, such as when unit occupancy of the property is low.
5. Connect and network with real estate professionals
This last point is the closing statement, and we would like to point out that you will enjoy the best investment deals in the market if you enlist the services of real estate management professionals. Partner with these experts, such as Victory Real Estate LLC, and we can open your eyes to the different possibilities out there. Have the first player advantage by networking and working with real estate brokers.
Get In Touch
Get in touch with us today, and we will help you start your journey in real estate investment on the right foot and will set you up for success. Call us at (267) 666-0666 today!