Real Estate Essentials – Passive Income From RE Investments



Learn How You Can Explode Your Passive Income Through Mastering Real Estate Investments

Real Estate Essentials – Explode Your Passive Income Through Mastering Real Estate investments is an eBook that is aimed at helping you become successful by investing in real estate. This is research based on expert advice and firsthand experience of real estate investors.

And today the book, from which this post was extracted is yours for the keeping. Yes, it’s your FREE gift simply because you are a visitor to this, the REAMS blog-site.

Following is the excerpt from chapter 2 of Real Estate Essentials – Explode Your Passive Income Through Mastering Real Estate Investments

What to Consider Before Investing in Real Estate

Synopsis

In chapter two, we look at the factors to consider before real estate investment. There are many benefits of this kind of investment. However, you just can’t rush in and put your money in it before making a few considerations.

  • Capital
  • Returns on investments
  • Analytic abilities
  • Investing your time
  • Stress Management
  • Research
  • Market Research
  • Return rates
  • Type of investment to make

There are people who are well suited for real estate while others may not be able to handle the pressures and stresses that come with this kind of investment. You have to learn about what to expect in the industry so that you can gauge which category you fall in.

Remember, even if you don’t have what it takes, maybe you can work on this. There are things that you can learn with time. There are also solutions to some hurdles that may be presented by real estate investments.

Think About This!

Capital

This is one of the key considerations to make before investing in real estate. You will need to have adequate capital in order to make your investment. Even if you save a lot of money, probability is that you will require further funds such as loans.

To invest in real estate is not easy because properties normally cost a lot. In addition, apart from buying the property, you may have to do some repairs or renovations. You have to ensure that it is in good condition so as to get a good quote when you decide to sell it.

Apart from the cost of buying property, there are also additional transactional costs that you will incur. For instance, there may be a brokerage fee. There are also taxes that have to be paid. You can look for loans or other means of raising the capital well in advance. If you don’t manage to do this, you should then consider alternative investments.

Returns On Investments

Investing in real estate doesn’t guarantee overnight success. If you are looking for an investment that will give you returns in just a month or two then this isn’t the right investment for you. Real estate investors know that you have to be very patient in order to get your returns. You also need to set realistic goals.


If you try to rush your investment, chances are that you will make losses. Desperation may force you to make bad decision such as selling your property for less money that you would have if you had taken your time. Real estate investment can be very profitable but it takes time. In addition, it also takes a lot of hard work. This is not the kind of investment that you will make and just wait for returns to materialize. You will need to work hard so as to succeed.

Time Investment

You should be willing and able to invest both time and effort before getting into real estate investments. There are many people who have managed to invest in real estate on part-time basis. This means that they have full time jobs but still have to manage their investments. This doesn’t mean that they don’t have to give adequate attention to the investments though.

It is good to try and see if you can spare adequate time in advance. Just test yourself like you would if you had already made an investment. You can use sometime to consult with people in the industry and carry out some research. This will allow you to determine how much time you can invest in real estate. If you try out this exercise and find out that you are unable to spare sometime from your job, then you are not ready to invest in real estate.

Click this link to get Your FREE Copy of REAL ESTATE ESSENTIALS eBook!


More Relevant News

Wells Fargo To Exit Wholesale Channel After Fair-Lending Accord

From Bloomberg, an article written by By Dakin Campbell and published Jul 12, 2012 11:58 AM ET

Excerpt:

“Wells Fargo & Co., the largest U.S. mortgage lender, said it will stop funding loans originated and sold by independent mortgage brokers after settling a federal fair-lending investigation.”

“The company made $7.4 billion of mortgages through brokers in the first quarter, the most of any lender and 21 percent of the industrywide total, according to Inside Mortgage Finance, a trade publication. The loans made up about 5 percent of the company’s total, according to the statement.”

The Real Estate Mortgage: An Instrument Of Stability


The real estate mortgage is used today by most people to complete their home purchases. Real estate mortgages have been instrumental in providing stability, comfort and happiness to many people by making what otherwise would be an unaffordable house, affordable.

Some real estate investors also make use of the real estate mortgage to complete their investment property purchases. However, a real estate mortgage is not free money and anyone who buys real estate or plans to buy real estate using the real estate mortgage must understand the concept of this instrument very clearly.

Real estate mortgage – also referred to as real estate loan or real estate financing- is the money that you borrow from a private or institutional entity (usually a bank or mortgage lender) for the purpose of buying a property.

A real estate mortgage generally covers the major portion of your purchase price and the remaining portion must be paid by you in the form of a down payment, which is usually a percentage of total purchase price. That percentage is dependent on a number of factors and you can generally reduce it to even 5% by opting for Private Mortgage Insurance (PMI).

FHA and VA mortgages (i.e. mortgages insuranced through FHA and those guarantee through the VA) reduce the down payment requirement on the purchase transaction even further thus making the real estate mortgage that much more important a factor in the home purchase. Whatever you borrow from the mortgage lender for your real estate mortgage needs must be repaid over a period of time and, of course, you will also need to pay appropriate (or prevailing) interest rate on that mortgage.

The term of your real estate mortgage and the prevailing market rate will determine the amount of interest you pay on that mortgage. Generally, you are required to repay the real estate mortgage in the form of monthly instalments which consist of both interest and principal portions of your loan. Also, there are various types of real estate mortgages, described as fixed interest rate mortgages, adjustable interest rate mortgages and hybrids (a combination fo the two).

So depending on what type of real estate mortgage you decided on, your monthly payments might either remain constant (fixed rate) for the full term of the mortgage or is adjusted periodically (adjustable rate) on the basis of a financial index. Besides that, some other costs are also associated with real estate mortgages which are commonly referred to as closing costs, which may include inspection fees, attorneys’ fees and title charges, among others.

Some properties may need certain repairs, which could have an impact on the appraised value and, as a consequence, could affect the mortgage approval amount. If such is the case, there will need to be a discussion between buyer and seller as to who will absorb the costs associated with the repairs.

So, really, you need to understand the concept of real estate mortgages and the related costs clearly before you actually decide on your home purchase and the type of mortgage you will utilize, since your ultimate goal is to be secure in your new home with the least chance for expensive surprises.