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Is It Time for You to Become a Real Estate Investor?

Written by Dan Stuenzi  |  Posted on September 09, 2010  |  Permalink

Perhaps you've thought about becoming a real estate investor.  You watch all the home makeover and other real estate shows, see all the informercials on getting rich in real estate, and have read every book that includes the words, "No Money Down."  The first things you should realize are that TV shows are entertainment, not reality; people get rich in real estate, but not quickly; and "no money down" deals are few and far between in the Omaha real estate market.

That being said, real estate has historically been a good investment - and when it comes to land, they aren't making any more of it!  The benefits of investing in real estate include:

  • leverage (control a property that has a value considerably higher than your cash investment)
  • tax breaks (interest, property taxes, and repairs are all tax-deductible)
  • equity growth (in spite of occasional market corrections, real estate tends to go up in value over the long haul - especially here in the Midwest)
  • cash flow (if you buy the property correctly, it should provide extra income to you each month)

And, in spite of public perception, it's actually a great time to become a real estate investor - especially if you plan to buy and hold the property as a rental unit.  There are lots of homes for sale in inventory, interest rates are still at historical lows, and sellers are motivated.

Lending practices have tightened up (thankfully for the country) so that you really do have to have some money to become an investor - just like you would if you were investing in stocks and bonds, gold, or even a savings account!  Of course, even if you have to put 25% down, you still have much greater leverage than you can get in any other comparable investment.  And if you're fortunate enough to have cash, you can really find some great deals.  As always, "cash is king!"

Now, on TV you see a lot of "fix and flip" programs, but this market is not ideal for that type of investment.  Although you can get good prices on fixer-uppers, the point of a flip is to sell quickly, and get your money back out.  And this market is not made for selling quickly!  On the other hand, if you want to invest as a long-term retirement plan, this market could be ideal.  With a wide range of choices, great interest rates, and market values at the bottom - there's only one way to go long-term!

 

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