Living in America certainly has its perks compared to some parts of the world. There are more successful real estate moguls that live and work in the U.S. than in any other nation. For investors wondering if stocks are better than real estate, the answer to that question lies in the success of each market. While the stock market can plunge hundreds or thousands of points per day, real estate has a track record on annual appreciation. There are creative ways to buy investment property without using up all of your personal cash. You can learn the ways to leverage your current finances to help create more wealth with your investment strategies.
Creative Ways to Buy Investment Property
Strength in numbers is the tactic that real estate agencies use to purchase investment propertes. At any given time, 10 to 20 agents are competing for the opportunity to convince buyers to list properties with the agency. Much of the remaining time is spent showing properties and countering purchase offers. By taking a page out of a real estate agency playbook, you can build a great group of people to help you invest. Not everyone has cash to chip in, but many working adults have IRAs that can be used to pool together in a real estate investment fund. By utilizing a group investment strategy, properties become much cheaper to purchase and can be rented on the open market faster.
Banks are now offering extremely low interest rates to all qualified investors. The plummeting home prices and low interest rates makes seeking financing an excellent opportunity compared to cash based purchases. As an individual investor or part of a group, a loan can be secured to buy investment properties much easier. Waiting until the market shifts and home prices rise might change these historically low rates. The time to make a decision about pruchasing an investment property is now. Working closely with a turnkey investment property company can have a property on the market, rented and with a lease signed in as little as one month.
Property transfers are becoming more common as a way for investors to make money by getting out of one investment and putting money into another. A 1031 exchange is an exemption of the IRS tax laws that allows for a like-kind exchange to take place when certain conditions are met. Under a 1031 exchange, a property sale is exluded from taxes when a similar property is exchanged within a short period of time. This can add up to substantial savings on the exchange or transfer of one property for another. The tax savings can be reinvested into other investment properties or securities that have high growth ability.
Avoid Real Estate Risk with Education and Perseverance
Investors usually lose money with investments because of poor business decisions. Real estate properties consistently appreciate in value, but rental properties that are rented out to unqualified tenants, are located in bad neighborhoods or have rent too high or too low can all impact the success of an investment property. By educating yourself and persevering through challenges, you can find success by being creative and knocking down boundaries.