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Many people invest in real estate for one thing: to make money. Even when the interest rates are low, they are sure to rise and that means profits. The higher the stakes, the higher the risk—so start here to learn what it's all about, and be prepared to hire some expert help.
Single-family residence: Single-family residences come in many forms, but first-time real estate investors are usually advised to buy a detached residence and rent it out as its market value appreciates. Why are these so popular? Because they're "easy." They're easy to find and easy to buy, relative to other types of properties, and they hold appeal both to renters and to buyers at resale. Mortgage brokers know this—so these properties are also usually easier to finance and refinance.
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Financing Facts
- Finance all or part of a down payment or renovation by opening a home
equity line of credit, using their primary residence or another rental property
as collateral
- Some buyers form a limited-partnership agreement with friends or other investors to afford higher-ticket properties. Often the only person who makes a profit in these situations is the managing partner
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Vacation property and second homes: Investment options in this category are myriad, from outright purchase to fractional-interest contracts and timeshares. Even if the property isn't income producing, it can appreciate into a worthy investment, and mortgage interest is fully deductible. If you do rent the property when it's not in use, realized income and tax obligations depend on what percentage of the year it's kept for "personal use"—a tightly defined term you should discuss with a real estate attorney.
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Karen Dancsec, CRS, ABR, ePRO ·
Office Phone: (800) 490-4312 · Cell Phone: (239) 430-2450
Website: http://www.napleshomerealty.com · Email: Karen@NaplesKD.com
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