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Want To Earn Income Investing In Real Estate? 5 Things You Need To Know

Real estate income investing has been around for ages. Why? Because having a piece of land has been one of the most steadfast ways to increase your cash flow.  From ancient history (when it was profitable to have a place to grow crops and raise livestock for income) to present day rentals, leases, and even modern farming, real estate has remained constant for income investing.

 

Are your wheels turning yet? Good. You should work smarter, not harder. Let’s continue with a quick guide to how to start investing.

1. What Is Real Estate Income Investing?

There are numerous ways to increase your cash flow when delving into income investing.  Knowing what options are available to you as well as having a good working definition of how to start investing will be your first key to success. Consider the three main ways to make money in real estate:

 

  1. Real Estate Appreciation:  This means that the property you purchase increases in value. It can be a bit tricky, though, and you will have to do your research. Is there a high demand for property in the chosen area? Will the property be attractive to potential buyers or renters? How much will it cost you to upgrade the property, if needed?
  2. Real Estate Related Income:  This is a method of investing by making commissions from buying, selling, or managing properties. Brokers, agents, and rental management companies utilize this form of income investing.
  3. Rental Properties:  Rental properties will generate a monthly income for you. Whether houses, apartments, condominiums, office buildings or retail properties, if you can keep them occupied, you can collect monthly income. Rental properties are the easiest way to get steady cash flow.

2. Investing In Rental Property

When it comes to owning passive income property, there are a few different options to choose from:

  • Residential:  People need homes.If you’re considering investing, this is a good place to start. First, buy a property in a desirable location, then rent the house at a rate which will bring in more than your monthly payment for the property. As long as you have tenants, you have a monthly passive income flow. Houses, apartments, and condominiums are great properties to start with when considering income investing.  
  • Commercial Real Estate:  This method relates mostly to office buildings.  You should consider the pros and cons. The good: You get long-term renters and steady cash flow, especially if you are collecting rents that are greater than the market value of the property.  The bad: You are locked into the lease as well, and may miss the return that would come if the market value of your property went up.
  • Retail Real Estate:  These are your standard shopping areas, strip malls, shopping centers, and malls. With this type of income investing, you can charge not only monthly rent, but a percentage of the store sales, which would be a great incentive for the lessor to make the property attractive to buyers.
  • Multi-use Real Estate:  This is for the income investor who wants to do it all with one property.  A multi-use property could have retail spaces, office space, and residential spaces. The beauty of such a location is that you have the potential for built-in customers on all levels.  

 

You may not be interested in just straight passive income. You may think of income investing as investing and buying trusts in properties. Well, guess what? There is something for you too.

 

3. Real Estate Investment Trusts (aka REIT’s)

For the business and tax structure minded investor, REIT’s are a good option. You can buy these trusts through custody accounts, brokerage accounts, and Roth IRAsMany people choose this manner of investing because of the potential tax incentives and the ability to invest in larger projects. REIT’s also help corporations get the funding needed, via investors, to afford sizeable real estate projects, such as luxury hotels and shopping centers.

 

For more information about REIT’s, visit Investopedia.  

4. Investing Through Home Ownership

Homeownership is the first way that most people start their income investing journey. It’s one property, easy to manage, provides a home for your family, and has good income earning potential. A home is not the same kind of real estate investment as a commercial property or apartment building.  You live in it, enjoy it, and use it for your personal life. You put money into it and at its best, it increases in equity.

 

There are many practical and money-saving reasons for owning a home. When you own your own home, you are not putting rent in someone else’s pocket. A home mortgage is often lower than rent because the owner will price the rental to make a profit. If you have a mortgage, you are saving the extra income that you would have been paying in rent.

 

Pay off your home before retirement, and you have options to get equity loans against your home for other things you want to do. Home ownership is a viable income investing opportunity, as it is a gift that keeps on giving.

 

I’m sure you are just about ready to make the call. Let’s look at one more very popular way to get into income investing.

 

5. Investing In Real Estate By “Flipping”

 

Flipping properties (or real estate trading) seems to be the rage right now. The property trader does the exact opposite of buy-and-hold investors. They look for undervalued properties that can be fixed up and sold in a few months for a profit.

 

The problem with using real estate trading as an income investment option comes when the property doesn’t sell quickly, and the investor doesn’t have the money set aside to continue to pay the mortgage on the property. So be smart if you choose to invest by flipping.

 

The information above is just a small bit of what the starting income investor needs to now to be successful. It’s easy to get started. If you would like more information on how to start investing, contact us.

 

 

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Buyer’s vs Seller’s Market: 5 Reasons Why Now Is The Time To Sell

Are you contemplating selling your home in 2018?  If so, you’re probably going through a laundry list of things to do: should you paint the entire house or just the front door? Should you landscape the yard or let the buyer make it their own when they move into the house?

A Realtor can help you decide which of these things matter most. But first, one of the most important factors to consider when selling a home is what kind of housing market you are experiencing. What exactly does it mean to be in a buyer’s or a seller’s market, and more importantly, which are we in right now? Never fear; we’ve got you covered.

A buyer’s market is aptly named, as it’s the deal time to buy a home. Typically, there is an excess of homes on the market and not enough buyers to go around. This trend tips the negotiation factor scale to the one in the market to purchase–the buyer holds all the leverage because they have plenty of other options.

On the flip side, a seller’s market is one where the seller holds the cards. Favorable conditions for a market in the seller’s corner include low-interest rates, a strong economy or at least one on the upswing, and a shortage of homes for sale. At this point in 2018, we can put a checkmark next to each of these three factors. Add a couple more current trends to our list, and now is an excellent time to sell.

1. Interest Rates Have Dipped–For the Moment

Home sellers across the U.S. have enjoyed historically low-interest rates since 2011, but this won’t last forever. While rates are straddling the low to mid 4% range, for the time being, big name housing authorities such as Freddie Mac, National Association of Realtors, National Association for Homebuyers, and Mortgage Bank Association are predicting across the board that our luck may be running out. Rates are predicted to rise next year from a half to a whole percent. In fact, some of the least optimistic forecasts say rates will increase by the end of 2018.

Sellers and buyers are at an equal disadvantage when interest rates go up: buyers will back off at the higher interest rates, dropping sellers’ prospects of making a deal at the price they want to list. Savvy buyers will be looking to snap up their piece of the American Dream before the interest rate increases, so it is wise to act fast and get your home on the market now, preferably well before the end of the year.

2. The Economy Is Growing

Across the nation, we have rising wages, stock market jumps, and lower unemployment rates. 2018 is gearing up to be a healthy year for our American economy. Consumers, by and large, understand that economic health leads to more positive feelings, which leads to more spending, which leads to more Americans pouring back into our economy and housing market. With recent tax cuts leading to even more money in the pockets of American home buyers, this is the time to sell.

3. And So Is the Homeownership Rate

The homeownership rate saw a steady decrease across 2005 to late 2017, but by late 2017 it had finally begun to creep back up for the first time in over ten years. At this time in 2018, it’s still climbing. While we’re not at the rate we were over a decade ago, any amount of growth is good news.

And there’s even more good news: experts at Realtor.com predict that an influx of millennial first-time homebuyers will be ready to get in the game in 2018, potentially making up almost 50% of the home-buyers market. With optimistic home buyers flooding the markets, now is a great time to sell.

4. Inventory Is Low

The number of houses on the market is low, sending buyers scrambling to sign papers and accept terms on their dream home. While about 1 out of 3 optimistic Americans believe that the housing market 2018 will be better than it was 2017, the experts unfortunately disagree. Forbes predicts this low housing inventory crisis might actually get worse before it gets better.

A low inventory market drives house prices up and can make it a challenge for buyers to wheel and deal. Instead, buyers understand that agreeing to the listing price or even going higher, might be the only way to secure the deal on grabbing that dream home off the market. Sellers clearly have the advantage in this scenario.

5. The Timing Is Right

2018 is just starting to stretch its arms and get its kinks out, making this the prime time to sell, and real estate trends dictate that spring is considered the ultimate time of year to list your home. And it makes sense–we’re just past tax season, and people are still in the throes of New Year’s optimism with some extra cash to boot. Allergy season has its advantages: your blooming grass, trees, and flowers work to enhance your home’s curb appeal, making your house more likely to attract potential buyers. The housing market is partially driven by weather, after all, and it’s looking like sunny skies across the U.S. for the next few months. Seller, take heed.

Can’t sell in April or May? Don’t give up hope if you can’t get that “For Sale” sign out front just yet. The upswing for home buying generally stays strong through early to mid-summer, and in sunny climates like Florida’s, home buyers often keep on the lookout for a new home through fall.

Are you looking to sell in the Fort Myers or Cape Coral, FL area? You are doing so at the perfect time, with growth on the rise and our seller’s market in full swing. The hardworking team at Rebecca’s Realtor will expertly guide you every step of the way, ensuring your home selling experience is a breeze.

Call today to get in touch with Rebecca!

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4 Events That Will Want to Make You Move to Cape Coral, Florida

Most can agree that Cape Coral, Florida is a beautiful place to live, even if only seasonally.

Yes, I’m looking at you, snowbirds.

There are many reasons one would choose to live in this beautiful section of the sunshine state. However, Cape Coral is so much more than the 400 miles of canals- more than pristine sunny beaches or the Caloosahatchee River, which is fun to say five times fast.

No, Cape Coral is so much more than all of those things. In its young existence, roughly 44 years, it has well established itself as a top city in which to retire. In 2012, Cape Coral even landed on the Forbes Magazine list of the Top 25 places to retire. But don’t worry, there is plenty of space for everyone. Cape Coral is the third largest landmass city in all of Florida.

If that isn’t enough, here are some activities and yearly events that may seal the deal on making Cape Coral your home.

Cape Coral Oktoberfest

cape coral oktoberfest

Presented by the German American Social Club

October 19-21 and 26-28

This annual two-weekend event will give you a whole lot of Munich in the sunshine state. As far as entertainment is concerned, Cape Coral Oktoberfest has non-stop music playing during all hours of the event. Should you feel the desire to break into your lederhosen and dance the  Schuhplattler, the festival has two large dance floors to wow other Oktoberfest cape coral revelers with your fancy footwork. After all that dancing, you can shuffle on over to von Steuben Hall for Schnitzel and potato pancakes. It goes without saying, but of course, there will be more than enough Kolsch to wash down your fine German cuisine.

Cape Bike Night

By Cape Coral Parks and Rec

Held in February, April, October, and December

This event will speak to more than just motorcycle enthusiasts. For the bike lovers, this is a great opportunity to check out the latest and greatest in motorcycle accouterments. There are plenty of vendors along SE 47th Terrace to please all your eating and drinking desires. And then there is the entertainment aspect of the event. While the future music acts have not yet been announced, the history of headliners will no doubt impress you. With names like Skid Row, Lita Ford, and Firehouse, rest reassured that you will not be bored by any means. This nearly quarterly event is on the second Saturday of February, April, October, and December. The cape coral bike night is an enjoyable event, and thousands of motorcycle riders agree.

Cape Coral Cardboard Boat Regatta

By The Rotary Club of Cape Coral

After its inaugural event in 1994, the Cape Coral Cardboard Boat Regatta struggled to gain popularity. In 2002, the cape coral boat parade almost ceased to exist, but when a new committee oversaw the organizing, they opened up the event to other boating clubs – thus allowing the renewed interest to flourish to the popularity it has today. The regatta allows for several aquatic events – from juniors single and double paddles to parent/child teams and adult singles and doubles. There is even a “Paddle with Your Pet” category. There are very strict rules to making the watercraft. For example, the watercraft must be constructed with corrugated cardboard – any other materials to assist balance is prohibited. Seams must be glued, not duct taped together.

While the event is free to attend, proceeds from t-shirt and vendor sales go to charities that The Rotary Club supports. The regatta draws a large crowd every year, and it never fails to disappoint.

 

Cape Coral Arts and Music Festival

By Rotary Club of Cape Coral

January

This 33-year-old, two-day event is packed with a bounty of visual and auditory entertainment, attracting thousands upon thousands of art enthusiasts yearly. Festival-goers can view over 300 artists’ work in a variety of mediums such as metal, pottery, jewelry, photos, and canvas.

Enjoy the talents of the myriad of musicians spanning a wide variety of genres, sure to please even the most discriminating music lover. The event and event parking are both free. A diverse array of food and beverage vendors are on hand to satisfy any appetite or thirst you conjure up while cruising through the festival. If you are in the market for the perfect piece to hang over the mantle or place on the entryway table, the Cape Coral Art and Music Festival is the place to find what you’re looking for.

Again, there is so much more to Cape Coral than sandy beaches and sunshine. There is bountiful, fantastic seafood to be enjoyed. There are marshes the explore. The Historical Museum and Rose Garden is a great place the learn about the history if the area. There are year-round farmers markets to satisfy all your fresh food needs. For those who are on the quest for the perfect Caribbean rum, make a reservation for a tour of Wicked Dolphin distillery and sample their wide assortment of award-winning rums and “rumshine.”

Grab some R&R by cruising the canals and boating on the Caloosahatchee River. If you want to stay on dry land, you can bike the extensive bike paths throughout the city. Don’t have a bike? That’s fine – stop by Hollywood Bicycle Center and rent a bike for the day. Hop on over to Sanibel Island to do some shopping and check out one of the cozy restaurants. Take the kids out to dig for fossils. Who knows, you just might discover a new prehistoric creature. But at the very least, you might find teeth from a not so prehistoric alligator. Take a boat ride along the canals and look for one of the 3,000+ Burrowing Owls that call the banks their home.

There is so much more to Cape Coral than the fine events and festivals mentioned here. Eat good food, have fun shopping, or just enjoy what Cape Coral has to offer. Get out there and explore this fine city and, most of all, HAVE FUN!