Real Estate Investments

Many investors have real estate investments in their portfolios for diversification. Unlike stocks and bonds, real estate investments usually require more maintenance and real estate investors often feel that they actually own physical properties instead of stocks that they cannot see or touch. Real estate investment returns have historically been very high returns but the real estate market does fluctuate. In buyers market, prices of real estate are down and return on investments of real estate properties are low.

What are real estate investments?

Real estate investments can be anything from single family homes, duplexes, townhomes, apartment buildings, condominiums, commercial buildings, vacation homes, or even land. Single family homes are the easiest to invest in and most people starting out in real estate investments usually start by buying single family homes, fix it, and sell it back to the market for profit. It takes more skills and advanced knowledge of real estate investments to invest in real estate other than single family homes. Before you invest in any real estate properties, you must have a thorough real estate inspection done, see also how to choose real estate inspector and Radon Testing.

Funding sources for real estate investments

Apart from having an eye for finding a sweet real estate investment deal, investors need to be able to secure a source of funding for his/her real estate investment. If the deal is very good, then it is easy to find funding. However, nowadays good deals are hard to find and lenders are more strict about their lending policies.

You can find you real estate investment loans the traditional way or you can use the deal as your collateral and find a private investor, private hard money lender, or other non traditional sources of funding for your real estate investments. Almost every state has private hard money lenders. Private lenders love good deals and they know a great deal when they see one. Funding from private sources is especially handy when the home prices are high and an investor may not have the credit to borrow. California real estate investments, for example, are expensive and traditional lenders may not lend to low income investors.

What to do with your real estate investments?

There are many strategies of what to do with real estate investments. However different strategies work in different real estate market. An investor can buy a home, flip it or fix it and resell. If an investor wants to fix a property, then he/she should know how much to improve property to get good return. Over fixing will only waste time and resources. If you don't mind being a landlord, you can rent out the property. Rental income is a good source of income but many people find being a landlord too troublesome. Whatever you decide to do, you must know your exit strategy by the time you made an offer for a property. See also real estate investment tax breaks.