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The ABC of real estate investing

Integrating real estate as part of the diversification of your investments is a viable option. Experts from Ebbets Field Apartments experts indicate that if a correct choice is made (in the investment) the advantage is to obtain profits of up to 30%, in an average period of three years.

Under the conditions in which the financial markets are, in which the uncertainty prevails - low-interest rates, pronounced volatility in the stock markets, and great instability in the main currencies - is that some investors begin to turn to see other forms of investment, not financial, to avoid seeing their assets deteriorated.

Some take refuge in precious metals such as gold, others in Real Estate such as land, houses, buildings, apartments, housing complexes, such as Ebbets Field Apartments, or timeshare.

Investment in real estate should be considered as a complement rather than a way of displacing other investment instruments, it is part of the diversification of a portfolio.

The percentage of equity allocated to the purchase of a Real Estate will depend on the amount of equity. For example, if someone has five million pesos, 50% would be perfect. Anyone who decides to invest in a Real Estate should approach a real estate professional because doing it on their own can mean problems because you have to know in detail notarized and legal documentation and the best areas to invest, which avoids putting your risk at risk. heritage.

Where to start

You must determine the amount of money allocated to such investment, consider that it is a long-term investment (two to five years) and that it is not liquid. From a million and a half pesos is an acceptable amount to invest in a property, with less of that the options are reduced. On the other hand, to generate surplus-difference when making the purchase against the sale of a Real Estate - the investment must be matured for three to five years.

Ebbets Field Apartments experts share that the goodwill of a property depends on the existence of a large real estate project, that the area has projected to have important roads or that it becomes a fashionable area; characteristics that a real estate consultant comes to glimpse.

Risks and benefits

Have a need for immediate liquidity; It is intended to sell above the market value and consider that the time in which the sale will take place can vary between six and twelve months are some of the risks of investing in Real Estate.

While, if a correct choice is made, the advantage is to obtain profits of up to 30%, in an average period of three years, but it depends on the type of property, the place where it is located, the time it is settled in the property and that no adverse circumstances existed during the time in which the property was held.

Factors to consider

In general, when investing in Real Estate, it should be considered that the property is registered in the Public Registry of Property, that it knows its fiscal situation, that it can be written, that it is legally tradable (that it has deeds), that it is not intestate, that identifies hidden vices of the property and that the area is known.

On the other hand, Ebbets Field Apartments experts indicate that it should be considered that approximately 8% of the value of the property will correspond to the notary and tax expenses. That is why you have to approach a real estate specialist with a long history because unfortunately anyone can buy or sell a Real Estate, but without any experience or knowledge. A stock or insurance broker needs a license to practice, a real estate advisor does not, putting the estate at risk.

Presale

Acquiring a good in presale is an attractive option to invest because of the high levels of surplus-value, -if a project is acquired that is in mock-up or flat whose value at that time is one million pesos, but it is known that at the end of the project (in a year or year and a half) its value will increase to two million pesos-, for example. However, the developer must be considered, researching at Profeco, visiting their offices and asking for recommendations; with which the risk is reduced, although it is never eliminated.

Remodeling to sell

Another option to invest in Real Estate is to buy to remodel and sell, obtaining profits of up to 30%.

Passive Investment

Passive investors usually provide only capital and allow professionals to invest in real estate on their behalf. Experts from Ebbets Field Apartments share that, as with stocks and bonds, passive investors are responsible only for their investments.

Private equity fund

It is an investment model where investors pool their money in a single fund to make investments. Usually, they are limited liability companies with a designated manager or management group. The fund manager is in charge of money management so it is not necessary for the investor to get involved. However, as an investor, it is important to have the financial and real estate knowledge necessary to understand the risks and possible benefits of each investment, since the minimum investments are generally quite high.

Experts from Ebbets Field Apartments point out that investment minimums may vary, but generally, they are not less than $ 100,000. Private equity funds typically use a “two and twenty” model, in which they charge an annual management fee of 2% and an additional commission of 20% on any benefit the fund obtains.
Real estate investment platforms online

Online real estate platforms group investments and invest in real estate investment opportunities that would otherwise be difficult to find or out of reach at the individual level.

Real estate platforms offer investors the ability to put their money into single investments or a diversified portfolio of real estate. Some offer only debt investments and others offer debt and capital investments. There are also some that focus on a specific city or region and others that invest throughout the country.

Many real estate investment platforms carry restrictions, such as accreditation requirements and high investment minimums, but not all. There are pages from 500 dollars you can invest, without any restrictions.
In conclusion

Experts from Ebbets Field Apartments point out that the real estate sector has a history of good performance. Real estate investment offers the potential to make significant profits. When managed intelligently, it can become a valuable source of cash flow.

As with any investment, real estate investments require that you understand and evaluate the risks and possible rewards before starting. Depending on the way you choose to invest in real estate, you will need different amounts of time, initial capital, knowledge, and patience.

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Ways to invest in real estate

There are many ways to invest in real estate with any amount of money, time, and investment horizon. Ebbets Field Apartments experts share that real estate investment options fall into two main categories: active and passive investments.

Active Investment

Active real estate investment requires a large amount of real estate knowledge and administration or delegation of responsibilities. Active investors need a financial and real estate vision apart from negotiation skills to improve their capitalization rate and the overall return on investment.

House Remodeling

Home remodeling is the most active way to invest in real estate. An investor buys a house, makes changes and renovations to improve its market value, and then sells it at a higher price. The remodeling of houses is a short-term investment, since after some time without renting the house the investor begins to lose more and more money.

House Flipping

Home remodeling can be exciting. However, it also requires a deep financial and real estate knowledge to ensure that the renovation of the house is within the desired time and budget in order to guarantee a profit. Success and financial burden rest entirely with the investor.

Another type of investment-related to home remodeling is the quick purchase and sale of a house. This happens when an investor buys a house that he thinks has a lower price than he should. Then, try to sell it as quickly as possible in order to generate a small profit. Generally, these investors sell these houses for remodeling.

As with home remodeling,Ebbets Field Apartments experts indicate that deep financial and real estate knowledge is also required to make it work, apart from having contacts and the money needed to sell the property quickly.

Property rental

Property rental also requires active management, but unlike home remodeling, it is a long-term investment. Any type of property (residential, commercial or industrial) can be a rental property.

Property owners get regular cash flow, usually monthly in the form of tenant rent payments. This can provide a stable and reliable income stream for investors, but it also requires a lot of work or delegation of responsibilities to ensure operations run smoothly.

As the owner, you must take care of finding the tenants. Once you have them, you must collect the rent, manage the money, and take care of the maintenance of the building.
Airbnb

Ebbets Field Apartments experts share that Airbnb allows residents to rent their homes every night, usually as an alternative to a hotel. Airbnb rentals are similar to property rentals but are limited to residential properties. Additionally, these properties are only available for short periods.

The owners earn money by renting their house or apartment at night. What can provide a regular or irregular flow of income, depending on demand? The owners are responsible for furnishing and maintaining the house in the necessary conditions for the tenants.

Airbnb rentals require much less experience and supervision than traditional rents for several reasons. Especially because Airbnb facilitates the reservation of the property and creates the contract agreement between the owner and the tenant.

Real Estate Investing for Beginners

Historically, investing in real estate was considered an activity reserved only for people with a lot of money. In the past, there was no facility to choose between different forms of investment such as stocks and bonds. This has evolved, giving you the opportunity to invest in people with diverse interests and budgets.

Ebbets Field Apartments experts indicate that this facility implies the entry of investors into a market that they do not know but could benefit from it. For this reason, in this blog, we will give you the basic information of the world of real estate investments or real estate investments.

We must start by asking ourselves:

What is a real estate investment?

According to Ebbets Field Apartments, investing in real estate is the purchase, rental, or sale of land and any structure in them in order to earn money. The real estate sector is generally divided into three categories: residential, commercial, and industrial.
Real estate construction

Residential Real Estate Sector: The residential real estate sector consists of family homes, multi-family homes, houses, and condominiums. However, it is important to consider that houses that are larger than four units are considered commercial property.

Commercial Real Estate Sector: In the commercial sector, the properties are focused on business. Commercial real estate is classified into different categories including offices, premises, land, or multi-family housing.

Industrial Real Estate Sector: As the name says, Ebbets Field Apartments experts indicate that these properties serve the industrial business.

In addition to property types, there are three main ways to earn money with real estate investments: interest received on loans, appreciation, and rent.

Interest received from loans or debt: A real estate loan is an agreement in it that investors lend money to a real estate developer and earn money from interest payments. Types of debt include senior debt, junior debt, and intermediate debt. These depend on the number of investors.

Appreciation: The appreciation is the increase in the value of a property. This is the result of many factors, from the increase in the quality of the area in which it is, to the remodeling done by the owner. The appreciation represents the potential gain that a property can have at the time of its sale.

Rent: The owner of a property can choose to receive income by renting it. He can do this directly or hire someone to administer it. Depending on how you decide to handle it, you could receive 100% of the income or share it with a third party.

According to Ebbets Field Apartments experts, each category of real estate and type of investment has its own set of risks and rewards. Regardless of the type of real estate you want to invest in, it is important to analyze and understand what you are investing in.

What is real estate?

Real estate, real estate in English, refers to the land, as well as any physical property or improvements placed on it, including gardens, houses, walls, etc. In turn, a property is a good that binds the ground inseparably, physically and legally. Buildings and land are real estates. Experts from Ebbets Field Apartments share that real estate can be grouped into three groups: Residential, commercial, and industrial. Examples:

• Residential: Undeveloped land, houses, condos.
• Commercial: Office buildings, warehouses, retail store buildings.
• Industrial: Factories, mines, farms.

After this brief introduction about real estate, we will discuss the difference between personal property and real property, how real estate works and why they are important.
Real Estate: Personal property & Real property

First, Ebbets Field Apartments experts will differentiate between personal property and real property.
Personal property or personal property, includes intangible assets, such as bonds, stocks or other investments, also includes tangible assets such as furniture, computers, beds or clothing.
Real estate (Real Estate) is located within the Real property. Real property is a less used term and includes real estate plus a series of rights over these. This set of rights includes the possibility of the owner using his property as he pleases. In short, the Real property includes physical objects and rights over them, while real estate is only physical objects.
The set of rights that the owner has over his property is divided into 5:

• Possession: Right to occupy the property.
• Enjoy: Right to use the property without external interference.
• Control: The right to determine one's interests.
• Exclusion: The right to reject the interests of others.
• Provision: Right to determine if the property is sold or transferred to another party and in what form.

Real Estate: How does it work?

There is a wide variety of ways to invest in real estate. Ebbets Field Apartments experts indicate that they range from investment in real estate trusts (REITs) to the purchase or rental of multi-family homes.

For investors who are not struck by the idea of ​​taking over a house and having to "take care" of their tenants, there are REITs, which offer the opportunity to participate directly in the ownership or financing of projects real estate REITs are negotiable as a set of real estate assets. REITs can generate real estate income such as office buildings, apartments, shopping centers, warehouses, and hotels. Many of the REITs specialize in only one type of real estate.

Most investors decide to buy REITs because of their good dividends, although they are generally fully taxable. All real estate sectors are affected by different economic cycles. Therefore, the more diversified, broad and more geographically, the less exposed you are to regional weakness and economic cycles. A smaller REIT will have higher volatility, but you can get more growth potential.

Real Estate: Why are they important?

As Ebbets Field Apartments experts have commented in the previous section, real estate, in addition to having a real value that investments can understand touching and feeling, can be an excellent tool to diversify. If you pay the appropriate price for a property, there is a high probability of having constant long-term potential gains as an owner.

Portfolios that have real estate tend to outperform those that do not have them in the long term. In addition, the risk of real estate is reduced compared to the stock or bond markets.