How to invest in real estate for beginners

How To Invest In Real Estate – Guide for Beginners

If you look around for the wealthy and super rich individuals and families across the country, you will find that majority of them have amassed huge wealth not from their jobs or businesses but from real estate investing. It is a method of creating asset and wealth that is not only safe and reliable but also easy if you know what to do and which mistakes to avoid. Our Excel Mortgage Calculator can help you determine your monthly payments and required down payment. Here is a guide on real estate investing for beginners.

How To Invest In Real Estate

There are many ways to invest in real estate. But to be successful in this field, it is necessary to study the local housing market and the factors that affect the profitability of a real estate project.

Two of the most popular ways to invest in real estate are residential real estate and commercial real estate. Single family homes, town-homes, and condos come in the category of residential real estate. You can buy and resell these properties to book a profit later. You can also purchase residential property to earn rental income from it.

Commercial real estate consists of condo buildings and multifamily apartments as well as shops and offices that are mainly intended for business purposes. You can buy such properties to either rent them out or lease out to your tenants. Any residential property containing more than 4 units is referred to as commercial real estate. This distinction is made by lenders who have different criterion for borrowers applying for a loan to buy these properties.

No matter which type of property you buy, you can benefit monetarily from it in different ways.

  • Income through renting
  • Income from appreciation in value
  • Depreciation benefits when filing tax returns
  • Benefits from deductions provided by government in interest repayment

You can choose from these different ways to invest in real estate. Different people have different skills and they choose the method of real estate investing according to their financial goals and their abilities. If you have small capital to begin with, you can even earn money by taking good deals to investors. This is referred to as wholesaling and you need to identify distressed properties available at less than their market value to earn commission for these deals.

If you are good at rehabbing, you can earn good money by buying a home, fixing it, and selling it later to book your profit. If you have enough money to put forward as down payment, multifamily apartment buildings might be a good idea for you.

Retirement Income Main Income Sources

Retirement Income – Your 7 Sources

Retirement Income

Retirement income – What are the main 7 sources for retirement income? I’ll explain the differences between the different sources of retirement income so you can better plan for your future.

1. Welfare or Charity

While most people would never like to picture themselves having to be put on welfare. There is a reality of poor planning that could result in the dependency of money from charity. Frequently, I see churches and family members asking to raise funds immediately after an unexpected death of a loved one. One of the easiest things to do to prevent the need to rely on others is to have enough life insurance for both you and your spouse.

Retirement Income – Your 7 Sources Continued Employment

2. Continued Employment

So you’re now 62 or 65 or even 67… what’s next? You may realize that you do not have enough income to cover your bills which could include the mortgage, the car payment, and other necessary bills. So one option would be to continue to work. I guess if you enjoyed your full time job, then this would not be an issue. Unfortunately, a majority of the population at the age of 65 are tired of working for their past 40 yrs. Don’t forget that health issues could really be the number one determining factor on whether you can continue to work.

3. Non Qualified Assets or Mutual Funds

Non qualified assets are things that have already been taxed. This could include your savings account, monies in your CD’s, your stocks and mutual funds purchases made from after taxed dollars. How long you can live off of your non qualified assets depends on the size of your account and your monthly living expenses.

4. Roth IRA

Roth IRA‘s can be great source of income in addition to your other qualified accounts. The best thing about Roth IRA’s is the fact that you can take future income distributions without having to pay any taxes. Depending on how well the account is managed and grows, this could provide much more retirement income especially when you do not have to pay taxes.

5. Traditional IRA

Traditional IRA are just another form of qualified accounts. Chances are if you had an old 401k and did a rollover, it would have been rolled into a traditional IRA. I would say a majority of retirement accounts are qualified accounts in the form of a 401k or traditional IRA.

Retirement Income – Your 7 Sources 401k

6. Qualified Plans

Anything that allows you to contribute on a pretax basis could be considered a qualified plan when it comes to retirement. A 401k is the most common through payroll deduction. Others could include a 403B or tax sheltered annuities. Pensions and annuities are great forms of retirement income because of the predictive nature of the investment. It only makes sense to have a stable and predictable form of income each month once your do plan to retire.

7. Social Security

For current seniors, this is the most anticipated form of retirement income. In 1960, for every retired senior taking social security benefits, there were more than 50 workers paying in. They predict that 20 years from today, there will only be 3 workers paying into social security for every retiree.

Retirement Income Conclusion

More sources of retirement income is always better than just one. Can we solely depend on social security for your retirement? I don’t think so. It’s impossible to expect your social security benefits to pay you more than what you were earning during your working years. With a sensible investment strategy and having your mortgage paid off can really help increase your income at retirement.

Get More Information On 401k Contribution Limits 2019