START EARLY TO INVEST IN REAL ESTATE. THE YOUNGER YOU ARE THE BETTER TIME WILL WORK FOR YOU
Our forefathers thought they could make money multiply by buying real estate, collecting the rents, and eventually selling for a capital gain. Our forefathers were right. Throughout history, investing in income properties has been a highly profitable way of putting money to work. When you invest in real estate you can see and control what your dollars are doing. You can inspect the property. Very little luck is involved in your profit or loss; virtually all factors can be examined ahead of time. So your own efforts and common sense count heavily. Furthermore, inflation’s bite is lessened, because rents and property values tend to keep rising. Rents should bring you a reasonable yield on your money. And you get important tax advantages, as we’ll see. Realty ventures have been making money for small investors during almost every period of United States history. Here’s a fairly typical example from the recent past:
A young doctor put $5,000 into an old hotel that had been converted into apartments. Within a year it was making a profit. He became fascinated with real estate as a hobby. So he took $1,000 from his apartment profits and used it as a down payment on another property.
HOW YOU CAN BECOME FINANCIALLY INDEPENDENT
Five years later he had back, tax-free, his original and only out-of-pocket investment of $5,000. Using only cash generated by rentals and sales of his various buildings, in another eleven years, he found himself with an equity of $166,000 in real estate worth $1.2 million at current market values. “Real estate can’t be lost or stolen, nor can it be carried away,” Franklin D. Roosevelt once said. “Managed with reasonable care, it is about the safest investment in the world.” Of course, it might conceivably be damaged by fire or storm or civil commotion, but it is insurable against such risks. Few other investments can be so well protected by insurance. Year by year the activity in real estate increases. For some. people it is simply an inflation hedge. For others it ties into retirement planning; it may involve buying an apartment building for income and living in one unit, while perhaps spending part of each day as an apartment manager. But most investors are in it mainly for the profits.
THE REAL ESTATE INVESTING OWNED ADVANTAGE
There are bigger potential profits as in buying raw land-but
there are also horrendous risks. You speculate in land, but you invest in income real estate. You make money by going into debt when you invest in real estate. The basic strategy for profits in real estate is simple:
(1)stay as deeply in debt as possible with safety;
(2) make maximum use of the depreciation allowances and other tax shields (3) up-grade your property and sell or trade it as soon as you can. The idea of staying deep in debt sounds worrisome at first. But it’s comforting to know that a big, conservative financial institution is glad to look over your shoulder, advise you, approve your borrowing and say, “Don’t be afraid. We’re willing to invest three or four dollars for every one of yours.” Even those gloomiest and most cautious of calculators, the life insurance companies, understand the great potential and small risk involved in owning income-producing property. That’s why they make 70 or 80 percent loans on these properties. They know that rental properties rise in value, have a low foreclosure rate. and are highly profitable in the hands of anyone who takes the trouble to understand what he’s doing. This stay-in-debt principle just means that you use as little as possible of your own money and as much as possible of someone else’s. In other words, you use leverage. Start your search with CRGHOMESNJ.com go to multifamily search and call us to disscues the properties you llike.