Investment real estate is real estate that produces income. Your residence is usually not considered investment real estate, but as it appreciates in value and your loans decrease you develop equity build up, which is a pretty good investment for the homeowner.
The investment property owner usually owns multiple pieces of real estate to generate rental income and profits through appreciation. Owning rental property is like running a business.
If you are considering real estate investments, you likely want to earn wealth on real estate based on the risk you are taking. You want to minimize the time you need to spend on the property. Organizing your investment plan and making smart choices can be critical.
You need to know your specific market conditions to make smart decisions. This is one of the areas where your Realtors’ local knowledge is an invaluable resource. All investment opportunities are not the same. A good investment in one market may not be a good investment in another location.
The tax implications for investments real estate play an important role in the overall investment strategy. Investment real estate is usually either residential rental units or commercial units used for business purposes, office spaces, retail property or warehouse and industrial.
The overall concept is to achieve capital gains as the property values increase overtime.
Real estate investing is not easy and is not for everyone. There are many challenges the investor must overcome. There are many misconceptions about real estate investing that you need to acknowledge. Often people think real estate investing is an easy way to “get rich quick”. Successful investors study their business, learn as much as they can, and have an investment plan.
Discipline is a key attribute and understanding leverage compounding and the importance of capital preservation.
Like any endeavor, there is a right and a wrong way to go about investing. Sure, luck sometimes plays a part, but careful planning, education and dedication are the keys to success.
Over the last 50 years of doing business, we have developed relationships with some of the top most successful real estate investors on the Peninsula; Terrace has helped many achieve their goals.
This article was published in the San Francisco Examiner.
Articles are written by Eric Ruxton and Larry Aikins, owners of Terrace Realty, Inc. and Terrace Associates, Inc. in Redwood City. Terrace has been in business more than 55 years and in addition to being an independent Brokerage Company, also owns and operates rental properties.