Real Estate 12/17/16

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RealEstate

INSIDE: HOME & GARDEN

Saturday, December 17, 2016

INVESTING FOR BEGINNERS:

How to invest in real estate BY BARBARA FRIEDBERG  TRIBUNE CONTENT AGENCY

Investing in real estate is a popular strategy for growing wealth. Adding real estate investments to your portfolio can add diversification and help protect your wealth from the volatility of the stock market. Check out these real estate investing tips for beginners to discover if you want to own property, buy shares in a real estate investment trust, join a real estate investment group or join the real estate movement through the sharing economy.

HOW TO START INVESTING IN REAL ESTATE

• Decide which route you want to take to become a real estate investor. Then, follow these general steps to start investing in real estate: • Determine how much time and money you want to spend on this type of investment. • Set your real estate investment budget: $1,000 to $3,000 for fund investors up to five figures for direct real estate investors. • Do your research. Find out which real estate options and group investment options are available to you. • Choose the real estate investment option that fits with your financial and time availability. Less time and money is required for Real Estate Investment Trusts (REIT ) investing, whereas greater outlays are required for direct real estate investing. • Save up a cash cushion, as investment-related expenses will crop up. Direct real estate investors will need a larger cash cushion than hotelier real estate investors.

• Be prepared for setbacks. Like any other financial endeavor, you’re likely to experience challenges. But if you do your homework first, you’ll be prepared.

TYPES OF REAL ESTATE INVESTMENTS

A few options exist for getting started as a real estate investor. Depending on your resources and personal interest, you can find the beginner investing choice that best suits your financial strategy. Here are four of the most accessible types of real estate investing:

RENTAL PROPERTIES

To become a direct owner in real estate, find a home, condo or apartment building, buy it and then rent it out. Before becoming a landlord, you’ll need a down payment, property inspections and to review the property’s rental potential and expense records. Benefits of real estate investing include the opportunity for steady cash flows and capital appreciation, along with tax benefits. However, it takes due diligence to uncover a suitable rental property selling at the right price. And, a key lesson in Real Estate Investing 101 is this: The rental property’s expenses — repairs, maintenance, etc. — shouldn’t be greater than your rental income, or you’ll be losing money instead of making it. If you have the down payment, time and motivation for direct real-estate investing, find a real estate agent who deals in rental properties and start viewing properties. Be prepared to evaluate the property’s financial records. Do the math to ensure your

rental property will provide a good return on your investment.

REAL ESTATE INVESTMENT TRUSTS Real estate investment trusts, or

REITs, are real estate investment

companies that own or finance incomeproducing real estate. REITs buy many properties — including apartments, hospitals, hotels, industrial facilities, office buildings and mortgages — and then sell ownership shares to individual investors. REIT investors enjoy many of the same benefits as direct real estate investors. REITs must pay out at least 90 percent of its taxable income to shareholders annually. REIT returns

outpace the consumer price index, according to REIT.com, making REITs a good inflation hedge. REIT funds might increase in value, but positive returns aren’t guaranteed. Buy during a housing bubble, and when real estate prices return to normal, your REIT might drop in value. You can invest in a REIT as easily a mutual or exchange-traded fund. Sign into your investment brokerage account, punch in the fund ticker symbol, choose the number of shares and click “buy.”

REAL ESTATE INVESTMENT GROUPS

To start a real estate investment group, pool your money with other investors to buy property together.

You get the benefits of owning a rental property — without the cash and management responsibilities. The National Real Estate Investors Group offers education and information about how to join a group. Club goals — education alone, or education and investment — and monthly dues will vary. Joining a real estate investment group provides the opportunity to learn and potentially invest in real property. But getting into business with others is complicated and doesn’t always work out. Read the group’s policies carefully before joining, and have an exit strategy, just in case. To join a real estate investors’ group, search online for local groups, or start CONTINUED ON PAGE 6

FEATURED HOME OF THE WEEK

FEATURED HOME OF THE WEEK

UNDER CONSTRUCTION – FRONT LANDSCAPING INCLUDED!

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This “Pebble Beach” home affords an easy commute to Denver or Colorado Springs! The 3,372 square foot property is complete with four bedrooms, three bathrooms and a main level study and laundry room. Other features include granite countertops, stainless steel appliances, hardwood floors and a finished standard basement with nine foot walls. The master bathroom has an oval soaking tub with tile surround as well as tile floors. The exterior of the home in finished with beautiful stucco and stone.

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New construction rancher featuring 3 bedrooms, 2 baths, 3-car garage and Pikes Peak views. The open floor plan offers tons of natural light, hardwood floors, fireplace and a beautiful gourmet kitchen. The kitchen includes custom cabinetry, stainless appliances, granite countertops and pantry. The master suite features a walk-in closet and 5-piece bath. The third bedroom would also make a great office with wonderful views. The outdoor spaces include a front courtyard with mountain views, backyard patio with beautifully manicured lawn. Please call today for your private showing!


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