financial protection

Financial Protection Advice for Real Estate Investment

From risks to rewards, real estate investment has been a boom industry and a luring attraction for countless individuals. With housing market fluctuations and financial uncertainty plaguing the market, many investors may prefer to use caution before plunging into the possibilities. Read on about financial protection for these investment options.

Although rental properties, land investment, and personal real estate ventures are commonly viewed as “safe” choices in the investment world, there are still risks involved. Several aspects of real estate ventures are often the last ones considered when a “good deal” appears on the horizon, including important details that any new investor should consider.

Real Estate Taxes and Write-Offs

When real estate properties or resale profits are at their height, the risk of real estate investment seems at its lowest point. The hazards, however, are still real and waiting to challenge investors during market tumbles and economic downturns, with unforeseen hazards from taxation and debts.

While tax incentives exist to encourage rental properties, empty houses without tenants or upkeep quickly spiral into a headache for owners. Investing time and money maintaining one or more homes can be a financial headache, especially with no tenant revenue to aid in the process.

Potential real estate hikes and property taxes also pose a problem for investors whose rental properties are now unprofitable and in some cases, in need of substantial investment to repair damage or renovate tenantless structures with dried-up rental capacity. Undesirable rental properties can spiral into money pits at worst, and break even financially at best for inexperienced real estate investors.

Financial Protection – Debts and Loans

Real estate’s risks are incurred partly from loans and invested capital involved in the process. While those investments seem like necessary hazards for reaping a profit, those decisions can become problematic when the market declines, leaving properties “under water” with dimmer prospects of future profits.

Investors must be prepared to weather rental property loan payments and property upkeep even when dreams of long-term payoff seem dim. If the property looses tenants or exceeds the owner’s monthly finances, then investors are at risk of losing it unless they enter the venture financially prepared to see it through the worst of market experiences.

“Flipping” Houses and Other Risks

The practice of “flipping” houses, or making quick real estate turnovers was a popular trend at the height of market values. While economic upswings make real estate flipping a tempting investment, the risks involved form an expensive wager beyond stock market moves.

Likewise, the cry “location, location, location” also holds sway over property values. Investors should be aware of housing trends and future projects within the rental property’s neighborhood and community, to avoid ending up with a great property whose value is erased by surrounding properties and troubling social and economic issues.

Investors who weight the risk and are still willing to take the plunge may be rewarded long-term with financial gains. A future market recovery will find many investors who have weathered the storm and acquired a few properties with significant value. Potential investors, however, must weight the risks and rewards of property investment individually before venturing capital for possible future gains. 

This has been an article about financial protection of real estate investments.

patrick mackaronis

Patrick Mackaronis: Guidelines for Your Country Living Search

Country living can involve major changes. And, moving beyond urban boundaries can mean a lot of different things. For some folks, it may be the simple desire for a quieter and safer place to raise their children away from the hustle and bustle of urban life. For others, it may mean the chance to raise animals, or to put down roots, which could require something as simple as a garden plot or acres of leased or purchased land. The search for a house on a small lot or for something a bit larger can be vague. With deliberate preparation, a good deal, a just-right place can be closer at hand than luck alone might provide. The following is a post by Brabble CEO Patrick Mackaronis, a thought leader in the field of entrepreneurship in New York City.

Patrick Mackaronis, Brabble CEO and Founder Weighs In

Learning About Your Wants and Needs

Know what you want. Maybe all you’re looking for is fresh air, a little space between homes, and a community environment you consider healthy for your kids. Do you really want a farm, or a ranch, or something a little smaller? Thinking about your motivation for moving to the country, as well as your long-term goals, should be as specific as possible.

Know Your Boundaries. Although employment may be a controlling factor in finding a place to settle, other important considerations include weather and the proximity to a metropolitan area or the distance from family members. How about schools, shopping, and medical care? Make a list of the factors that are important to you.

Know what you can afford. Some buyers look for farms when they should be looking for farmettes. With the help of a banker or a real estate broker, and Internet research sites, you can pinpoint your price range. After adding your cash on hand for a down payment, what’s a realistic loan level for you and your family? And, how much money will you need soon after you make your move to the country?

Learning About Special Needs for Country Living

Ask about country living. What you need to know about yourself and your country living dream may be revealed when you to people who are knowledgeable about living outside the city. Seek out different points of view, talk to the neighbors around the places you think you’d like to own. Have a frank question-and-answer session with people who really know about country living.

Ask about employment. Is a job important to you? Where can you realistically find work to supplement what you may earn from the land? In today’s job market, this question and realistic answers can’t be left to chance. Be cautious about your optimism. Some of the best real estate bargains may be in areas with high unemployment rates.

Ask about transportation. Access to farm markets, routes to jobs and schools, and connections to highways may be important to realizing your hopes and dreams for country living. Checking with the country road commission and the bus route coordinator in the school district may reveal important considerations, like how long your kids will be on the bus going to and coming from school.

Learning About the Country Land

Be certain about water supplies. Well and septic tests should be part of your real estate transaction. However, during your search for a country home you should be in touch with the county health department, and even local well-drillers, to get insights about water. Is it drinkable? How deep is the water table? How about mineral contents? These are not small questions.

Be certain about soil conditions. What is right for raising cattle is not necessarily right for raising cash crops, is that right or not? While garden plants may survive, even thrive, anything else may not be worth seeding. Caution: Your reputation with a green thumb in the garden may get a bigger test with a larger plot of land. Get in touch with agricultural experts to help you evaluate soil expectations.

Be certain about land use. Just because the property you want to buy is outside the city, doesn’t mean the land can necessarily be used for agricultural use or for raising animals. Are there minimum land use requirements? How is the property and surrounding land zoned? Make a call to the county zoning officer. Ask about how you can use the land you want to purchase.

Learning About the Real Estate Market

Find Information Online. The Internet has become a great resource for making the best use of your time as you discover more about your potential move to the country. Real estate brokers can be helpful. too. However, finding a good deal before it hits the market may depend on your connections early in your country living search, states Patrick Mackaronis.

Find Information Around Town. Local folks may be the first to know about friends and neighbors who are about to put up a “for sale” sign. Ask around. Check with the farm and ranch supply store manager, chat up the mail delivery person, listen to what the hair cutter has to say about potential deals in the area. You may be surprised what you can learn.

Find Your Dream With Patience. You may get lucky or be blessed and make a great find and buy with your move to the country. Chances are, you’ll need to invest a good bit of time and energy in building up your knowledge and awareness. This article is just a starting point towards a way of thinking that puts emphasis on not rushing. This article is also for making your quest for country living as fruitful and satisfying as it can be.

Patrick Mackaronis is the CEO and Founder of social media company Brabble. For more information, visit Patrick Mackaronis on Twitter at @pmackaronis.