Real Estate Investments Tips For Developing a Profitable Financial Portfolio
- By Simon Volkov
- Published 09/20/2011
- Real Estate
- Unrated
Real estate investments can make or break a financial portfolio. In today's uncertain market many investors are considering when to buy, what to buy and how to buy it. There are numerous types of investment properties, each with their own unique advantages and disadvantages.
One of the more popular real estate investments involves trading like-kind properties. Known as 1031 exchanges, investors can exchange houses, business equipment, airplanes, boats and other types of investment properties. Personal residences and vacation homes cannot be transferred using 1031 exchanges. However, if the properties are rented on a regular basis, houses can be traded for like-kind rental homes.
1031 exchanges are closely monitored by the Internal Revenue Service. In order to transfer like-kind properties, investors must retain the services of a Qualified Intermediary (QI) to manage all facets of the exchange.
Investing in distressed properties can be a profitable venture, but requires the ability to know the difference between a diamond-in-the-rough and a money pit. Appropriately named, distressed properties generally require extensive repairs and renovations to restore them to their original luster.
Distressed properties include bank owned, foreclosure and short sale real estate. These properties are either in the process of being foreclosed or already repossessed by the bank.
Foreclosure real estate is sold at discounted prices through public auctions. If no one buys the property it is returned to the mortgage lender. At this point, the property is referred to as bank owned or real estate owned (REO).
Bank o
wned homes are generally priced higher than foreclosure homes. Many foreclosure houses have creditor or tax liens attached. When the bank takes possession of the property they negotiate with creditors to have liens removed. REO properties are sold with a clean title; eliminating monetary and time-consuming tasks for the buyer.
A lesser-known, but highly profitable real estate investment is that of probate properties. Probate homes require a bit more investigative work than other types of real estate, but they can be a goldmine once you learn the process.
Probate real estate includes property held in probate court. Probate is the process used to validate a decedent's Will and settle their estate. When a person dies, everything they own must be accounted for and distributed to rightful heirs and beneficiaries.
During probate the estate is responsible for paying outstanding debts and any real estate related expenses, including mortgage payments, insurance and taxes. If the estate is unable to pay expenses, the probate executor can sell the property.
Expenses exist even if the property is owned outright. Oftentimes, heirs do not want the responsibility of caring for the home. If they live out of town, maintenance must be contracted out. Selling the property can provide financial relief and reduce administrative responsibilities.
Probate real estate investing isn't for everyone. For those who take time to learn the techniques, these properties can be an untapped goldmine.
Real estate investments have always been a stable option for wealth-building. Even in today's unsteady real estate market, exceptional deals can be found. Individuals who take time to develop an investment strategy plan can reduce their risks and increase profit margins.
One of the more popular real estate investments involves trading like-kind properties. Known as 1031 exchanges, investors can exchange houses, business equipment, airplanes, boats and other types of investment properties. Personal residences and vacation homes cannot be transferred using 1031 exchanges. However, if the properties are rented on a regular basis, houses can be traded for like-kind rental homes.
1031 exchanges are closely monitored by the Internal Revenue Service. In order to transfer like-kind properties, investors must retain the services of a Qualified Intermediary (QI) to manage all facets of the exchange.
Investing in distressed properties can be a profitable venture, but requires the ability to know the difference between a diamond-in-the-rough and a money pit. Appropriately named, distressed properties generally require extensive repairs and renovations to restore them to their original luster.
Distressed properties include bank owned, foreclosure and short sale real estate. These properties are either in the process of being foreclosed or already repossessed by the bank.
Foreclosure real estate is sold at discounted prices through public auctions. If no one buys the property it is returned to the mortgage lender. At this point, the property is referred to as bank owned or real estate owned (REO).
Bank o
A lesser-known, but highly profitable real estate investment is that of probate properties. Probate homes require a bit more investigative work than other types of real estate, but they can be a goldmine once you learn the process.
Probate real estate includes property held in probate court. Probate is the process used to validate a decedent's Will and settle their estate. When a person dies, everything they own must be accounted for and distributed to rightful heirs and beneficiaries.
During probate the estate is responsible for paying outstanding debts and any real estate related expenses, including mortgage payments, insurance and taxes. If the estate is unable to pay expenses, the probate executor can sell the property.
Expenses exist even if the property is owned outright. Oftentimes, heirs do not want the responsibility of caring for the home. If they live out of town, maintenance must be contracted out. Selling the property can provide financial relief and reduce administrative responsibilities.
Probate real estate investing isn't for everyone. For those who take time to learn the techniques, these properties can be an untapped goldmine.
Real estate investments have always been a stable option for wealth-building. Even in today's unsteady real estate market, exceptional deals can be found. Individuals who take time to develop an investment strategy plan can reduce their risks and increase profit margins.
Simon Volkov
Simon Volkov specializes in buying, selling and exchanging real estate investments in California, Washington, Arizona and Nevada. He offers investment opportunities, along with hundreds of real estate investing articles via his website at www.SimonVolkov.com.
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