Three Questions And Answers About Real Estate Investing

14 May 2016
 Categories: Finance & Money, Blog

When some people think about investing, they automatically imagine stocks and bonds. However, real estate can be an excellent investment option because it can generate rental revenue and the property may appreciate in value. Yet, it can be common for individuals to overlook investing in real estate because they are uninformed about this option. Learning about the following questions and answers should help you to be better informed about this investment path.

Are There Strategies To Limit How Much Time You Will Spend Fulfilling Your Landlord Responsibilities?

Some individuals may be hesitant about owning rental properties because they may be concerned about the responsibilities that come with being a landlord. While it is true that landlords have a variety of responsibilities to their tenants, you should be aware that there are companies that can handle these aspects for you. For example, a property management firm may be able to provide you with tenant screening, rent collection and maintenance services. By outsourcing these aspects of owning rental properties, you can help ensure that you spend as little of your free time as possible tending to these responsibilities.

Is It Difficult To Get Financing For Investment Properties?

Another frequent concern that some people may have is financing these properties. If you fail to meet the mortgage qualification requirements, you may be able to include the rental income from the property for extra income consideration. This is done by calculating the rental price of properties in the neighborhood. Each bank can handle this part of an application differently, which means that you will need to speak with loan officers from several banks before you find the best option for your situation.

How Can You Better Manage The Tax Implications Of Owning Investment Properties?

The property taxes that can come with owning numerous pieces of real estate can be another reason individuals may be hesitant about committing to buying investment properties. Fortunately, you should be aware that you can work with a tax attorney to help you minimize the impacts of these taxes. These professionals have a detailed understanding of the local tax laws, which will allow them to help you calculate exactly how much taxes will be owed on the property at the end of the year. Being armed with this information will help you to set the rent at a rate that will more than cover the tax obligations generated by the real estate. Additionally, if you plan on owning numerous pieces of real estate, it may be beneficial to create an LLC to help minimize your legal liability and separate your personal assets from your rental properties. Luckily, these attorneys will be able to help you determine if this is a suitable option for you.

For more tips, consider reading a real estate investing blog or two to gain some inside perspective.