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Real Estate
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Being Informed
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MATTERS
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Investing in a Downturn continues...
Tips for Better Investing
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* Think cash on cash.
* Determine your return based on the equity you have in the deal, not the total price of the property, says Zide.
* Make your money on the buy.
* Don’t make the mistake of believing that the asking price represents the final price or value or expect short-term appreciation to bail you out. Do your analysis and negotiate, notes Still.
* Get preapproved for a loan.
* Follow the same advice you give clients and get a mortgage preapproval before you begin looking at properties. Otherwise, you miss a buying opportunity in this dynamic market, says Blackwell.
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* Protect your assets from lawsuits.
* Always hold each investment property in a limited liability company or other legal entity to protect the rest of your assets in case you’re sued, suggests Kennedy.
* Don’t buy more than you can manage.
* With more than 10 or so properties, you’ll probably need a professional manager or you’ll take too much time away from your career, says Wehner.
* Don’t overlook deductions.
* Even if a property is generating income, tax deductions for depreciation and expenses such as mileage related to managing your investment can reduce your taxable obligation, says Kennedy.
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