Buy A Foreclosure Home

Real estate investing may be a lot of things, but it isn’t easy. At least that’s what a lot of people think.

If you’re investing for short-term appreciation, you are in for a bumpy ride in the current business climate. I think most people would agree that short-term appreciation isn’t a reasonable goal these days.

If you’re looking for long-term appreciation, you need to purchase a property at a price that allows room to pay management fees. Or you can manage the property. Here’s what’s hard to predict: the tenants.

Depending on the local market, commercial real estate can be pretty risky too. So you are thinking about residential real estate. If you manage it yourself, you worry about excess maintenance costs. You worry about finding the right tenant. You worry about creating a lease.

You may decide to try a the truly hands-off alternative: a real estate investment trust (REIT). THis is a publicly traded fund that owns property (usually commercial) and/or mortgages. The value of these funds doesn’t trend with the stock market, so that can diversify your portfolio.

But REIT funds, like mutual funds, charge management fees. Are these taking away your profits? Perhaps you would prefer a property with a deed as your real estate investment.

Here’s a proposition to consider: an assisted investment where you are given a choice of new single-family houses for rental from low-cost local markets. You can also take advantage of negotiated contracts with reliable property managers, insurers, and loans at 5 to 10 percent down.

A system like this will give you a predictable set of expenses and income. In fact, your tenants will pay off the mortgage for you. You can start a college fund for your kid this way–you can sell the house in 15 to 20 years, and take out your equity.