Real estate investing for beginners summary of the book

Scott, who worked in Silicon Valley and at several Fortune companies, practices what he preaches. There are a lot of expenses you can deduct as a real estate investor, but the key is making sure that you're claiming every deduction you're eligible for. And aside from that, you also have to report the income you're earning from property investments to avoid getting in trouble with the IRS. Amanda Han and Matthew McFarland are both certified public accountants, and they draw on their knowledge and expertise to offer a thorough tax guide for real estate investors in "The Book on Tax Strategies.

It's a must-read to add to the list if you're looking for strategies and tips to minimize what you owe to Uncle Sam on your real estate investments. There's just one problem—you don't have a million bucks lying around to sink into property investments. Author Gary Keller draws on the wisdom of more than millionaire real estate investors to create a handbook for building wealth through property. The book covers the biggest myths about money and investing that often prevent people from achieving millionaire status, as well as how to vet real estate opportunities to find the ones that prove most profitable.

You don't have to be rich to appreciate the strategies and techniques Keller advocates, but it's possible that you could get rich in real estate by applying the principles he touts. As the title of the book suggests, you'll learn basics like how to achieve wealth through real estate, ways to find and evaluate properties, negotiating deals, how to increase income through property management tools, and much more. McElroy himself has over 26 years of senior-level experience in multifamily asset and property management.

Even more, reviewers agree that this is a great starter book, praising how informative and easy-to-read it is for first-time investors. This is a great read for investors who live in an area that's not particularly suited for investing or for those looking to widen their real estate investments nationwide.

Although out-of-state investing is considered risky, author David Greene argues that rules, technology, and markets have changed well enough so you can successfully invest anywhere. Greene, who has built a multi-million dollar portfolio, goes into the strategies he has implemented from investing in over 20 rental properties. Learn how to find great deals in any state regardless of where you live, how to identify which neighborhoods to buy and which to pass up on , how to renovate a project remotely, and more.

A REIT is a company that owns property investments; as a REIT investor, you get the benefit of dividend income generated by those properties without any of the headaches that go along with being a landlord and having to deal with tenants directly. With few exceptions, the average sale price of homes in the U. However, as vaccines were rolled out and pandemic concerns waned, home prices accelerated to reach all-time highs by This chart from the Federal Reserve Bank of St.

Louis shows average sales prices between and Q1 the most recent data available. The areas that are shaded in light grey indicate U. Home Prices. The long-term results of the coronavirus crisis have yet to be seen.

Rental Properties If you invest in rental properties , you become a landlord—so you need to consider if you'll be comfortable in that role. As the landlord, you'll be responsible for things like paying the mortgage, property taxes, and insurance , maintaining the property, finding tenants, and dealing with any problems.

Unless you hire a property manager to handle the details, being a landlord is a hands-on investment. If you choose your properties and tenants carefully, however, you can lower the risk of having major problems. One way landlords make money is by collecting rent. How much rent you can charge depends on where the rental is located.

Still, it can be difficult to determine the best rent because if you charge too much you'll chase tenants away, and if you charge too little you'll leave money on the table. A common strategy is to charge enough rent to cover expenses until the mortgage has been paid, at which time the majority of the rent becomes profit.

The other primary way that landlords make money is through appreciation. If your property appreciates in value, you may be able to sell it at a profit when the time comes or borrow against the equity to make your next investment. While real estate does tend to appreciate, there are no guarantees. This is particularly true during periods of intense volatility in the real estate market, including most recently throughout the duration of the COVID pandemic.

From February to March , median real estate prices in the U. The dramatic growth has left many wondering whether prices are due to crash. Flipping Houses Like the day traders who are leagues away from buy-and-hold investors, real estate flippers are an entirely different breed from buy-and-rent landlords.

Flippers buy properties with the intention of holding them for a short period—often no more than three to four months—and quickly selling them for a profit. The are two primary approaches to flipping a property: Repair and update. With this approach, you buy a property that you think will increase in value with certain repairs and updates. Ideally, you complete the work as quickly as possible and then sell at a price that exceeds your total investment including the renovations.

Hold and resell. This type of flipping works differently. Instead of buying a property and fixing it up, you buy in a rapidly rising market, hold for a few months, and then sell at a profit. With either type of flipping, you run the risk that you won't be able to unload the property at a price that will turn a profit.

Still, flipping can be a lucrative way to invest in real estate if it's done the right way. By doing this, REITs avoid paying corporate income tax, whereas a regular company would be taxed on its profits, thus eating into the returns it could distribute to its shareholders.

Much like regular dividend-paying stocks, REITs are appropriate for investors who want regular income, though they offer the opportunity for appreciation, too. REITs invest in a variety of properties such as malls about a quarter of all REITs specialize in these , healthcare facilities, mortgages, and office buildings. In comparison to other types of real estate investments, REITs have the benefit of being highly liquid. A company will buy or build a set of buildings, often apartments, then allow investors to buy them through the company, thus joining the group.

A single investor can own one or multiple units of self-contained living space. But the company that operates the investment group manages all the units and takes care of maintenance, advertising, and finding tenants. In exchange for this management, the company takes a percentage of the monthly rent. There are several versions of investment groups. This means you will receive enough to pay the mortgage even if your unit is empty.

The quality of an investment group depends entirely on the company that offers it. In theory, it is a safe way to get into real estate investment, but groups may charge the kind of high fees that haunt the mutual fund industry. As with all investments, research is key. It is an entity formed to buy and hold a portfolio of properties, or sometimes just one property. However, RELPs exist for a finite number of years. An experienced property manager or real estate development firm serves as the general partner.

Outside investors are then sought to provide financing for the real estate project, in exchange for a share of ownership as limited partners. They provide the ability to gain diversified exposure to real estate with a relatively small amount of capital. Depending on their strategy and diversification goals, they provide investors with much broader asset selection than can be achieved through buying individual REITs.

Like REITs, these funds are pretty liquid. Another significant advantage to retail investors is the analytical and research information provided by the fund. More speculative investors can invest in a family of real estate mutual funds, tactically overweighting certain property types or regions to maximize return. Why Invest in Real Estate?

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