Real Estate Investment 101

Unlike many local real estate brokerages, Associated Realty Group specializes in investment properties. We help investors and developers locate or sell rehab and rental properties. Leading this effort is our team of Real Estate Investment Advisors.

In addition to helping you to buy or sell properties, our advisors will go above and beyond the efforts of a typical agent, to ensure that your investments are right for you. They will help you to analyze deals and accompany you through the entire investment process.

If you are looking for representation, visit our Contact (LINK) section and contact our office or an individual agent. If you are looking for more information on real estate investing, click on one of the links to the left to get started.

Why Invest in Real Estate?

With the variety of investment opportunities available you must be wondering why anyone would want to invest in real estate? Bonds, CDs and mutual funds can all offer consistent rates of return. The trouble with these investments is that, though relatively safe, they only offer modest rates of return. Additionally, they all require a significant initial investment.

Rather than following the typical pattern of investment, you could be using these funds to secure investment properties and realize significantly higher rates of return. This is not some get-rich-quick scheme like you may have seen on the late night infomercials. Such methods are often ineffective and tend to focus mainly on cash flow. They also propagate a slumlord landlord style that relies on quantity over quality of properties. Responsible investors value cash flow, but realize most of their profit through appreciation, tax deductions and principal payoff. When accounting for these profit sources, a single four-family property can offer annual returns as high as 70% per year, with annual tax deductions reaching over $20,000. Compare that to the 4-5% annual yields normally seen through bonds and CDs.

Best of all, with recent changes in the lending industry, you may even be able to purchase such investment properties with little to no money down. Compare that to the high initial investment required to get into stocks and other investments. People with credit scores as low as 620 have been receiving these rates in the past few years. You may also be eligible to temporarily or even permanently defer the capital gains taxes on your properties. These are just a few of the many methods you can use to maximize your profits. Now that your interest is sparked, its time to learn How to Get Started.

Managing your Investments

When managing your investments, there are a variety of things to consider. Listed below, you will find a sample of these considerations:

  1. To Manage Yourself or to Outsource - Managing your properties yourself can help to increase your investment profitability. The major downside, however, is that it can be a time consuming and frustrating process. Filling vacancies, raising rents and fixing toilets is not what most investors have in mind when buying properties. If you hire a property management service they will handle these issues for you. The fees for such services vary from one property and one company to another. Typically, the larger the property the more necessary a property manager can be. Your agent should be able to help you decide what is right for you, but in the end the decision is yours. If you want more information on our property management services, click here.

  2. Tax Considerations - Taking advantage of all the tax deductions your investment property can offer is also important. You will need to keep thorough and accurate documentation of all your expenses. Unless you are comfortable handling these expenses yourself, it is recommended that you hire an accountant. They will help to minimize missed deductions, errors and risks of an audit.

  3. To Incorporate or Not to Incorporate - The legal protection offered by forming a corporation is something every investor should consider. With a one-time fee of only $120 you can form a corporation and quitclaim properties to its legal protections for around $30 per property. Any lawsuit brought against your corporation could not make any claims on your personal property. See your attorney about this before incorporating to learn more.

  4. Hold Long Term or Short Term - When purchasing an investment you should always consider whether you will hold it for a short or long period of time. Always keep in touch with trends in the area of the property. The key thing to consider is that you should never get too attached to your properties. If you get a great offer for a property don't dismiss it off hand simply because you weren't planning on selling it so soon. There are always more opportunities coming to the market, so don't get married to those you currently own.