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Investment in commercial real estate offers great rewards. It also offers great risks. The key to seizing the opportunities and minimizing the risks is knowledge and preparation.

All that’s required beyond that is common sense and an objective eye about the risks and rewards. And that’s the purpose of this article-to give you a quick guide to those rewards and risks so you can decide if the field is the right choice for you. Let’s look at the rewards first.

1)The first reward of commercial real estate investment is that it’s relatively easy to get into. In other words, you don’t need a PhD to be successful. In fact, you don’t need a degree at all. What you do need is a willingness to learn by yourself and from professionals in the field.

2)The second reward in the commercial business is it offers a great variety of investment opportunities. Properties can range from duplexes to multi-unit dwellings to shopping centers. This provides you with a wide range of possibilities-and profits!

3)The third opportunity lies in the ability to take advantage of leverage. Leverage is the use of other people’s money (OPM) to finance your commercial real estate investments. Through the use of leverage, you can get into the market by investing little of your own capital.

4)The fourth is the opportunity to achieve good returns. Historically, U.S. investors have received an average 8-10% annual return on such investments. Plus, unlike the stock market, commercial real estate is not volatile and doesn’t suffer the sometimes extreme ups and downs of securities investments.

5)The fifth -and one of the best!-is providing long-term appreciation. In other words, such investments tend to increase in value over time, putting money in your bank account on a consistent basis.

6)The sixth is that commercial real estate generate income and can do it over long periods of time (e.g., apartment buildings, office buildings, etc.).

7)The seventh reward is that they provide three real tax benefits–deductibility, depreciation, and deferability. You can deduct normal expenses, depreciate your investments, and defer taxes through the Tax-Deferred 1031 Exchange.

8)The eighth reward of investment is that it permits you to build wealth. With solid purchases, you grow equity over time, and, all the while, you receive income. Talk about a great retirement plan!

Now, let’s look at the other side of the coin-risks.

Risks of Commercial Real Estate Investment

The first risk is risk itself. By that, I mean that risk in commercial investments can be much higher, especially with larger projects such as office buildings or shopping centers. That’s why it’s important to keep a cool head and objective eye on every deal you consider. Remember this central point-the numbers must always add up! Never, ever fall in love with a property!

The second risk is the lack of knowledge on your part. In this field, amateurs are goldfish swimming among sharks. My best advice is to start with small investments and learn as you go. The best way to learn is to find yourself a mentor who’s willing to teach you the tricks of the trade. You may want to join a firm specializing in commercial real estate investments and work your way up.

The third disadvantage is that it requires capital. Since you’ll be dealing with professionals, you’ll definitely want to “put your money where your mouth is.” You’ll go nowhere without proof of capital.

A fourth risk of commercial real estate investment is that it ties up capital. You have to have the ability to carry the costs of such investments over a long period of time. In most cases, commercial real estate is simply not easy to sell quickly so you’d better have the reserves to meet ongoing expenses.

A fifth risk is a downturn in the economic cycle. If a recession occurs, jobs are lost and businesses suffer. In that case, your investments may produce little or no income for a while. As mentioned above, reserves of capital can help you weather such economic “storms.”

So, there you have it-a quick guide to the rewards and risks of commercial real estate investment. Now it’s up to you to weigh those risks and rewards and arrive at a decision-to invest or not to invest.

Good luck!

Jack Sternberg is a nationally recognized expert on real estate investment who’s been in the business for more than 30 years. Sternberg’s deals have totaled over $750 million and he’s been to the closing table more than 1,500 times. For more, visit http://www.askjacksternberg.com

Author: Jack Sternberg
Article Source: EzineArticles.com
Provided by: Guest blogger

You would be much delighted if investment of your hard earned money pays off. A sound planning is essential while investing your money in the real estate because of the ups and downs in the market. It thus becomes necessary to get sound property investment advice before you plan to investment in the real estate. You need to take into account various factors like rising prices in the market, shortage of rental properties, demand for properties in a specific location and more before devising your investment plan.

Planning

You should study and monitor the market with utmost care as it will help you in understanding the position and direction of prices in the properties market. Understanding this is very crucial as the prices vary consistently. It will also help you to estimate the actual value of proposed property investment by monitoring the market. Apart from that, you also get an idea on the future of the investment and mortgage dealings.

Various Aspects of Investment

When you wish to invest in a property, there are certain peripheral expenses than the actual cost. Real estate investment gets taxed according to its value. This is over and above the money spent for the maintaining and repairing the property. You will have to take into account all these factors when you actually project the incomes and resale value for the proposed property. Positive or negative gearing means the profits or the loss incurred from the investment. The additional income also gets taxed while the deductions are from the surplus amount and not the bare minimum amount.

Multitask with Equity

You can arrange sufficient capital for your new investment from the real estate equity which you own already, which is advisable instead of going for a financial assistance from a bank. This method is an ideal way to start your new investment. But you have to allocate only certain percentage of the price for new investment if there is no problem in repayment.

Identify and Pool your resources

Quite often, it becomes difficult for a new investor to completely own a property with his money. It is not possible always to fund for the entire investment from your pocket as most are common investors. Hence, using the collective property deal is a better and wise idea. Identify likeminded friends, family, relatives or colleagues and pool your resources in order to fund the investment in a new property. But ensure to make an agreement among your partners regarding the method of sharing the benefits and losses, so that there would not be any hassles in the future. It is advisable to go for a legal agreement depicting the proportion of investment and sharing methodology to prevent problems. Sharing of benefits or liabilities is generally proportional to the investment ratio.

Help from Professionals

A professional counselor or a real estate agent can provide you the required Property investment advice to plan your investment methodology. They will also assist in assessing the scope and future value of your investment as they have more knowledge about the market.

Join Forces with Our Nationally Recognized Real Estate, Mortgage, investment Financing Experts to Navigate the Current Market to Earn Record Profits. Visit our advisers now at http://www.realestateadvicepros.com/

Author: Tom Wee Arnold
Article Source: EzineArticles.com
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An IRA is an Individual Retirement Account that can be used for holding investments to save money for retirement by cutting down on taxes. These investments can be in the form of stock investments, mutual investments and also Real estate investments.

Yes, it is possible for you to own investment property in IRA. The home that you have always dreamed of possessing after retirement can now start taking shape in front of your eyes. It doesn’t matter if your money is occupied in IRA. You do not need to wait for years for that Real Estate property you crave to own. You can gain access to a part of your IRA money to invest in property and be assured of enjoying the luxury of it after your retirement.

Most of the IRA investors have a mistaken notion that they cannot invest their IRA money. Actually, you can. Invest your IRA money in investments like stocks, mutual funds, bonds or the property market. This includes buying of residential set ups or commercial buildings. The only thing that is considered is that the IRA money cannot be used to buy any property in which you actually reside. It must be an investment property. But the best thing is that, when you retire, you can get it turned over to you at the current market value.

Real estate investment in IRA is lesser known among customers as the advertisement for it has not been up to the mark. But clever investments in IRA actually allow you to pocket a tax-free income smoothly.

Though it may sound difficult, investing in real estate property in IRA is not much of a complicated process. With a little help from legal and tax service providers, you can actually proceed step-by-step towards your goal. Once you have decided on the property that you intend to buy, you should try to locate a trustee and a company who can manage your property and collect rents for you.

For a self-directed IRA account, contact a trustee that can transfer segments of your already existing IRA to your self-directed one. Also, take referrals from friends and colleagues to locate a competent attorney who can create comprehensive documents and deeds for your investment for Real estate in IRA. This way, you can defer the tax consequences and still get to own the property of your dreams.

The best part of investing your IRA money in real estate is that, it allows you to pay all maintenance, taxes, improvement costs and other property management charges from IRA. The rental incomes, in fact, also are driven back to the IRA for sure, but that becomes a part of your existing IRA balance and yes, you can use it to invest in other areas like stocks, bonds and mutual funds.

Any real estate buying through IRA makes it necessary that it is purchased without any debt financing.

Investments in Real estate through IRA accounts are slowly taking over the market, as it offers a higher and stable tax-free return, as compared to other popular modes of investment. The best way to save money from tax and bunch up voluminous money for post retirement has been shown by IRA investments. It not only offers superior returns to the investor, but also defers taxes from the income of the property.

Roth IRA is the best way to save money from real estate investments. Provided you satisfy all the criterion, they offer tax exemption on all withdrawals, if you hold the account till you are 59.

As a real estate investor with IRA money, you should keep yourself updated on investment and property issues and take help from experts where you need, to get the maximum tax benefits and returns.

For more great IRA Real Estate investing tips visit, RothIRARealEstate.com. Consider us as your guide in turn key, tax free, Roth IRA real estate investing.

Author: Michael A Drew
Article Source: EzineArticles.com
Provided by: WordPress plugin Guest Blogger

While real estate is one of the most exciting investments you can make, selling your house is one of the biggest decisions you will ever make in your life. If you are planning to sell your house anywhere in Atascocita, Kingwood, and Humble Texas, there are a number of things that you must take into consideration. For instance, you will need to know and to learn about the market value of homes you may own in the area.

Knowing the Basics of Selling Your House

It is a common knowledge that if you want to be successful, you will likely have to sacrifice some things and make hard choices. Selling your own house will take a significant time commitment if you want to do it profitably. That means between handling prospect inquiries, follow-ups, showings, and most of all marketing, you must expect and be ready to invest about ten to thirty or more hours per week and probably even more than that in the beginning as you put together your marketing plan as well as your sales tools. So if you don’t have that much time to invest, consider giving the job to someone who does. Fortunately, real estate professionals can offer a valuable assistance to owners who are trying to sell their house.

Selling Atascocita, Kingwood, and Humble Texas House

If you are selling your house in Atascocita, Kingwood, and Humble Texas, you need not worry about having to learn all these things as there are a lot of options available for you. One of these options is by getting a professional advice from a qualified real estate agent. While agents cannot predict how much a particular property will apprise, they can give you the history of price trends in the market area. Make sure to find a qualified source for real estate services covering the Atascocita, Kingwood, and Humble areas. Look for a reputable one-stop source that will render you with an outstanding service at all times. By doing so, you can be assured that you will be provided with the aid and information you desperately need.

Again, selling the house on your own is a decision that should not be taken lightly. The truth is that there is so much more to know and you might need somebody’s help for selling your home than by selling it yourself by simply putting on a “For Sale” sign in front of your lawn. Knowing the basics and seeking the advice of experts in the real estate field will help you find all the knowledge that you need in order for you to successfully sell your home.

Terry Wygal is a renowned real estate investor. As a local mentor, he is an expert on Selling your Houses and Houses for Sale in the Atascocita, Kingwood, and Humble Texas areas.

Author: Terry Wygal
Article Source: EzineArticles.com
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Like other investments, the success of tax lien investments is in finding a property that is worth more than the back taxes owed. Because each state has different laws, investors in certificates and deeds must learn the state procedures where they want to invest to make profitable investments. Investors can earn a profit in two scenarios: 1) If the delinquent taxes are paid, the investor will receive the principal paid for the lien along with any interest which has accrued. When purchasing a certificate, the investor is actually paying the outstanding tax bill at auction for the property owner, with the promise of being paid back (with interest), in a timely manner. 2) If the late taxes are not paid by a certain date after the sale, the investor can ask the government to foreclose, and the deed holder will take ownership of the property.

Tax Lien Investments have long been an attractive investment for many americans, providing a competitive rate of return (16%-24% in some states) that is backed by real property. The rate of return on your investments will be based on your knowledge and expertise in this type of investing, and the rate that is guaranteed by government not on the ups-and-downs of the stock market. As we all know not much is guaranteed however, with investments topping 95% to 98% success rate most successful investors feel that the investment risk of tax liens is much less than that associated with investing solely in the stock market. The end result is a flexible but highly secured investment with little downside and market risk. These certificates are a win-win investment opportunity, both for the current owner (who is freed of his debt at the time of sale), and the investor, who may have the potential of making thousands when they resell the property.

Lien Investment is the ultimate blending of good returns and security for any type of investor. From Investors who have large capital to investors who little capital, or an investor who does not wish to become full-time property managers or who one who desires a passive, high yield, part-time investment will delight in these opportunities.

While most investors are use to small returns on investments if they play it safe, or decent returns but high levels of stress when taking high-risk investments, Tax Lien Investments provide an extremely high return, AND carry next to no risk at all. Certificates may just be the best keep investment secret of all time.

Stuart J Miller is enamored with tax lien investing. If what you have just read grabbed your attention on the possibilities of investing, go to Tax Lien Investments for more information and a complete ‘System’ to show you how to invest in profitable Certificates and Tax Deeds.

Plus receive these 3 bonuses FREE-

1) Exclusive private invitation to attend a one-of-a-kind Q & A teleseminar with the tax Lien lady,
2) How to use a Self-directed IRA to invest in tax lien certificates and deeds,
3) State guide to tax lien and deed Investing in every state. Tax Lien Investments

Author: Stuart J Miller
Article Source: EzineArticles.com
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Due to the today’s situation, a lot of investors are aware that now is the best time to purchase just about everything and property therefore is no different. So, if you have also decided to buy, read the following tips assessing property investments, surely, they will be useful for you.

1. You should decide what exactly you want, it is vital you get your strategy right from the start. Ask yourself: Do I want income or capital growth? Do I prefer short-term or long-term investment? So, once you know what you want, it is easier to decide which kind of deals to enquire about. In the case some doubts appear you need to think about whether you want to have cash now or later? Today, in a situation of a down market, a lot of investors wish to generate income now rather than speculate on getting it in 2 year’s time. The reason for this is that they need it now. He situation would be the opposite in an upmarket.

2. It is crucial for you to be ready for both ups and downs. As good as an investment may sound when you are looking at it, do understand that, barring extremely secure guarantees, it may not work out. If this is not an amount of money you are prepared to lose, you may wish to go for something more secure, for example, bonds.

3. The other critical point to keep in mind is doing your own research. You should understand that this is, not just for your peace of mind, but that will be better for your investment. Don’t just take your broker’s word for it, check the deal out. The following things must be taken into consideration:

• Are the rental comparables offered correct for the area?

• Are there a lot of independent evidences to support the perceived investment case?

• What other developments has the supplier built before and were they delivered as promised?

4. It is also very important to ask for evidence to back everything up that is said. It means you should ask for title and building permits whether it is an off-plan deal and get them checked out; ask for a copy of the policy and check for loopholes if the product involves insurance; make sure you have copies of all contracts you will be signing in the case you are purchasing an off-plan,

5. Remember that big not always means good. When using service partners, using the most well known brand might not be the best move because rather often the bigger companies have less time for you or are less willing to bend their rules.

6. If there is such a possibility – view the property if possible. The point is that lots of investors have bought property over the phone, which may or may not be a good thing to do.

7. Different styles of property deals should be consider. Actually there are a number of different types of deals available today, for instance, off-plan, below market value (BMV) deals, Developer Joint Venture schemes, and in different sectors such as student lets, short business lets and nursing homes. That is why you should have a good hunt around in order to find the type of deal that suits your investment.

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