Late night TV infomercials tout the benefits of becoming a real estate investor - promising that you can become rich beyond your wildest dreams.
All you have to do is send in $5,000 or so for a course and you'll have it made.
Guess who is becoming rich from that one? But that doesn't mean real estate investment is a bad thing.
Most millionaires in the U.
S.
acquired their wealth through real estate.
If you buy it right and sell it right, you'll make money.
And if you have the patience to "buy and hold" your long term gains can be significant.
Most seasoned investors will tell you that "you make your money when you buy a house.
" And buying it right is Rule #1.
That means you cannot allow yourself to fall in love with a house and buy it because it reminds you of Grandma's house or because it has some feature that captures your attention.
You have to leave emotions completely out of the picture.
Location is all-important.
Begin by choosing neighborhoods where you'll be willing to buy.
You must not, under any circumstances, buy a home in a run-down neighborhood.
If you do, you probably won't be able to sell it, and the kind of tenants you'll attract will demolish the house.
So look for good, solid, mid-range neighborhoods where the current residents take some pride in ownership.
The yards don't have to be manicured by a full-time landscaper, but they do need to be relatively neat and tidy.
The lawns need to look as if they've been mowed recently.
And the houses need to look like they've seen a paint brush some time within the last 15 years.
Avoid neighborhoods with cars up on blocks and overstuffed furniture sitting out in the weather.
Neat and tidy neighborhoods with homes in a middle price range hold their value and have appeal for working-class citizens.
These are the folks who not only want to own a home, but who are likely to be able to get a mortgage loan.
Do your research and choose a house where children will be able to attend a good school, and major employers are reasonably close by.
The next rule is to pay less than market value.
How? By concentrating on foreclosures and probate properties.
These houses will probably be a bit run down and in need of some cosmetic work, but it's worth the effort when you can add $30,000 to the value of a house by doing $4,000 worth of painting and re-carpeting.
Do have the house inspected by a professional - and steer clear of houses that need expensive repairs.
You don't want to begin paying to replace floor joist or re-wire panel boxes.
Your purchase offer should include a contingency for approval of the condition of the house after you've gone over the inspection report.
You could be out the price of an inspection, but that's better than getting in over your head with extensive repairs.
Get acquainted with a good real estate agent who will alert you when a good buy comes on the market - and who will prepare a market analysis to show you the true market value of any home you're considering.
Then, once you've found that agent, stick with them.
Your loyalty will be rewarded by theirs, and they could bring you many opportunities.
All you have to do is send in $5,000 or so for a course and you'll have it made.
Guess who is becoming rich from that one? But that doesn't mean real estate investment is a bad thing.
Most millionaires in the U.
S.
acquired their wealth through real estate.
If you buy it right and sell it right, you'll make money.
And if you have the patience to "buy and hold" your long term gains can be significant.
Most seasoned investors will tell you that "you make your money when you buy a house.
" And buying it right is Rule #1.
That means you cannot allow yourself to fall in love with a house and buy it because it reminds you of Grandma's house or because it has some feature that captures your attention.
You have to leave emotions completely out of the picture.
Location is all-important.
Begin by choosing neighborhoods where you'll be willing to buy.
You must not, under any circumstances, buy a home in a run-down neighborhood.
If you do, you probably won't be able to sell it, and the kind of tenants you'll attract will demolish the house.
So look for good, solid, mid-range neighborhoods where the current residents take some pride in ownership.
The yards don't have to be manicured by a full-time landscaper, but they do need to be relatively neat and tidy.
The lawns need to look as if they've been mowed recently.
And the houses need to look like they've seen a paint brush some time within the last 15 years.
Avoid neighborhoods with cars up on blocks and overstuffed furniture sitting out in the weather.
Neat and tidy neighborhoods with homes in a middle price range hold their value and have appeal for working-class citizens.
These are the folks who not only want to own a home, but who are likely to be able to get a mortgage loan.
Do your research and choose a house where children will be able to attend a good school, and major employers are reasonably close by.
The next rule is to pay less than market value.
How? By concentrating on foreclosures and probate properties.
These houses will probably be a bit run down and in need of some cosmetic work, but it's worth the effort when you can add $30,000 to the value of a house by doing $4,000 worth of painting and re-carpeting.
Do have the house inspected by a professional - and steer clear of houses that need expensive repairs.
You don't want to begin paying to replace floor joist or re-wire panel boxes.
Your purchase offer should include a contingency for approval of the condition of the house after you've gone over the inspection report.
You could be out the price of an inspection, but that's better than getting in over your head with extensive repairs.
Get acquainted with a good real estate agent who will alert you when a good buy comes on the market - and who will prepare a market analysis to show you the true market value of any home you're considering.
Then, once you've found that agent, stick with them.
Your loyalty will be rewarded by theirs, and they could bring you many opportunities.
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