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May 8

8 ways to invest in property without breaking the piggy bank

Posted by at 15:18 | Default | Comments(0) | Reads(1652)

Property investment has become increasingly popular. This is partly a reaction to economic uncertainty in the stock market. It is also a result of an increase in awareness of the different methods of making money in the property market. Anyone can invest in property, although you should always be aware that there are risks. As with any investment there are different levels of risks depending upon the method of investing chosen. There are eight ways to realistically incest in property:

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1.  Long term rentals
Long term rentals can require an amount of cash up front. You will need to have a sizeable deposit in order to purchase your first house and to be certain that the monthly rent received will be sufficient to cover the loan repayment plus all bills and overheads. Traditionally, this is not an effective way of earning money in the short term. Long term as the loans are repaid and the houses have gone up in value there is the opportunity to make significant returns on your investment.

2.  Fixes & Flips
This has become an increasingly well known part of property investing thanks to the participation of several celebrities. For fixes and flips to work you will need to purchase a house which is in need of repair and then get all the work done to create a stunning home. This can then be sold for far more than the purchasing price and the proceeds can be used to purchase the next property.  It would appear to be common practice to employ contractors to fix the house up rather than attempting the work yourself.

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3.  Purchase a home
Buying a property to live in is still a property investment.  The house may be chosen for convenience or for its looks and not for the practicality of a resale.  You may own the house for long time but at some point in the future you can sell it for a reasonable profit.

4.  Real Estate Investment Trusts (REITs)
With this approach you do not actually purchase a property yourself. Instead you purchase a portion of the trust, much like a stock option or mutual funds. The REIT will invest in a variety of properties including houses, land or even government buildings. Dividends and profits are paid to the shareholders (you). The advantage of this type of investing is that you have done very little work for your profit.

5.  Long distance properties
Long distance properties can work for rentals or flipping. In essence, it is the same for both! Some property markets are so inflated that it can be impossible for the first time investor to obtain a foot hold. This is when you need to look at markets hundreds or even thousands of miles away. It will require research to establish the right part of the country for you and your aims. What if you buy a property in Turkey? You will also need to find a good real estate manager, property manager and contractor as you do not want to visit the property too often yourself!

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6.  Vacation rentals
Purchasing a vacation rental means finding a house which you can afford in a desirable holiday destination. The house is then rented out to holiday makers and the rent should cover your costs. It is possible to charge much higher rents than with long term rentals but the market can be very seasonal. This can make it difficult to make a profit, particularly as the advertising and management costs are much higher.

7.  Short term rentals
This is a particularly risky approach to property investment although it can sometimes be brought about through necessity. The idea is to purchase a property and then sell it again quickly for a profit. It relies on the market appreciating and may not mean huge returns for your investment. House prices need to rise fairly significantly to ensure you cover the legal and financial fees and it may mean being stuck with a house while waiting for the market to improve.

8.  Non performing notes
Many people find themselves in the unfortunate position of being unable to keep up with their mortgage repayments. After a set period many mortgage companies will sell the mortgage, known as a non performing note, to people or companies and you can buy them at a significant discount. Money is made on your investment by either collecting the payments from the homeowner or by foreclosing and dealing with the necessary legal procedures to sell the property and release the funds.

By Davis Miller and http://www.propertyturkey.com/


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