The most important thing you need before purchasing something as expensive as real estate is a good credit score. To do this get a credit card in college or even earlier if you can. This will help you build up a good score, and a good score can help you negotiate with banks on loan agreements.
Once you have a good credit score, and a job that allows to you to pay your mortgage bill every month, look into the type of real estate you want to buy. The most logical thing to look at first is a house for yourself to live in.
If you are single and able to buy a house, this is a great opportunity to buy a house that needs some work done on it. Finding a house that is not very appealing, but has the potential to be so with some elbow grease, can allow you to increase the value of the home and sell it for a profit in a few short years.
For your first property, don’t look for an abandoned house that needs to be torn down and built back up. Instead start with something manageable that can be fixed up little by little over time, and is still inhabitable while repairs are going on.
This allows you to focus on your job where you’re trying to climb the ladder, and not having to put everyday into a big project that you barely have time for. A small fixer-upper can give you weekend projects around the house to do over the course of time, and by the time you’re done your house could have appreciate by tens-of-thousands of dollars, allowing you to move on to a bigger and better house.
If you build up enough equity, you could invest your money in more residential houses that need some work, fix them up in a couple of months and then sell them for a quick profit. This is a great way to make a lot of money fast, but be careful and take advantage of the 1031 exchange that the IRS offers.
This clause states that investors who buy and sell like properties will not get slammed with taxes for all of the profits they make since a great deal of those profits go straight back into another investment property. You have to apply for the 1031 exchange and fill out paperwork for the IRS to ensure that you qualify for use of the exchange, but the time it takes to get approved will be well worth the hundreds-of-thousands of dollars that you could potentially save in taxes.
If you are not really interested in residential homes, commercial real estate is a good alternative to invest your money in. Commercial real estate is a much broader market to get into. You can buy store-front locations, factories, office buildings, retail space, etc.
Commercial properties are also eligible for the 1031 exchange, allowing you take advantage of the tax break if you buy and sell several commercial properties. Though commercial properties are more difficult to fix up in terms of floor plans, most investors give the space a large warehouse-type feel, with no walls, just a completely open floor plan.
This is a wise route to go since businesses will most likely bring in their own things to make the space usable for their purposes. This will be a good selling point for people wanting to put in a retail store, restaurant, warehouse, or manufacturing site, since they usually have unique set-ups for their equipment to be functional.
This strategy allows you to market the space for a wide-range of businesses, because each can put anything in the space without having to worry about changing any existing walls because there won’t be any. This will allow you to sell the space more quickly because more people will be considering the space for their business.
Real estate is a great outlet to invest in and help you build equity for any future endeavors you may aspire to; whether that be buying a home, starting a business, or building your retirement, the money that can be made in the real estate business can set you up for a financially sound future.
Tommy Greene has worked since 1991 in property investments. He loves all things financial. He recommends (http://www.stanjohnsonco.com) for your property investment needs.
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