Turnkey Real Estate Investing |
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| By Phyllis Wheeler | ||||
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. Like mutual funds, REIT funds must levy fees. The fees may cut into your profits, as owner. Instead, perhaps you would like to own a property outright. You could consider a pre-packaged system where you choose a new or nearly new single-family house from a variety of relative low-cost local markets. With the system comes a pre-selected reliable property manager at negotiated rates. The loan situation is negotiated, too, at five to 10 percent down. Using such a system, You can set up an investment with known costs, and then let the tenants pay off the mortgage for you. It's a great way to start a college fund for your young child. All you will have to do is sell the house in 15 years and extract the equity. |
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