[Ctd] Armando Montelongo - armandomontelongo.com - Types Of Real Estate - An Investors Choice
paul.kholer at gmail.com
Mon Sep 24 14:35:27 PDT 2007
Armando Montelongo - http://www.armandomontelongo.com/
There are different types of real estate, and different ways to invest in
them. Which way is best is for you to decide, according to your particular
needs. Here are a few ways to consider, with their advantages and
1. Rental houses. Advantages: One of the easier ways to get started, and
good long term return on investment. Disadvantages: Being a landlord isn't
much fun, and you typically wait a long time for the big pay-off.
2. Rent-to-own houses. Advantages: When you buy, then sell on a rent-to-own
arrangement, you get higher rent, and the buyer is usually responsible for
maintenance. Disadvantages: The bookkeeping is tricky, and most tenants
don't complete the purchase (this can be an advantage too, but it does mean
more work for you).
3. Low income rentals. Advantages: The same as with any rentals, but with
higher cash flow. Disadvantages: The same as with other rentals, but with
more repairs and tenant problems.
4. Fixer-uppers. Advantages: A quick return on your investment, and it can
be more creative work. Disadvantages: Higher risk (many unpredictables) and
you get taxed heavily on the gain.
5. Buy for cash, sell for terms. Advantages: You get a high rate of return
by paying cash to get a good price, and selling on easy terms to get a high
price AND high interest. Disadvantages: You tie up your capital for a long
6. Buy land, split it and sell it. Advantages: It is simpler than most real
estate investments, with the possibility of great profits. Disadvantages: It
can take a long time, and you have expenses, but no cash flow while you
7. Boarding houses. Advantages: You can get a lot more cash flow renting a
house by the room, especially in a college town. Disadvantages: You can get
a lot more headaches renting a house by the room, especially in a college
8. Commercial real estate. Advantages: Long term triple-net leases mean
little management and high returns. Disadvantages: Tough market to break
into, and you can lose income on vacant storefronts for a year at a time.
9. Buy, live in it, and sell. Advantages: The new tax law means you can fix
it up, and sell for a big tax-free profit after two years, then start the
process again. Disadvantages: You have to move a lot.
10. Speculation. Advantages: Buying in the path of growth and holding until
values rise can yield large profits, especially if you buy low to start.
Disadvantages: Prices aren't that predictable, you have expenses with no
income while you're waiting, and transaction costs can eat much of the
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