Real Estate Investing
Investing in real estate could potentially be very rewarding and lucrative, if of course you know what you?re doing. Since the dawn of time, investors and businessmen have always turned to real estate for various investment reasons, tactics and strategies. Real estate has long been a favored asset class. Whether you?re a large or small investor, you should always consult with a real estate attorney in Michigan regarding your potential real estate venture.
Residential v. Commercial
Different investors employ different strategies when it comes to investing. Strategies differ with respect to the types, sizes, and phases of properties investors invest in. Many of the smaller real estate investors begin their real estate investing ventures by purchasing a hand full of residential single family homes. These homes are either purchased using cash or by obtaining a mortgage. If obtaining a mortgage, the investor should make sure that the rental return percentage is above the mortgage rate. Many times its better to invest cash in a property or maintain a low mortgage; tenants leaving abruptly and coupled with a soft market can wreak havoc on an investor without the cash flow to make the monthly mortgage payments.
The more sophisticated or seasoned real estate investors tend to invest in and buy up commercial, industrial or high density residential properties, as opposed to single family homes. These investors have a large amount of money to invest and investing that money in single family homes just wouldn?t be feasible or efficient. Commercial properties are far more expensive, but could yield far greater returns that your average single family home.
Many commercial buildings, such as high-rises or bigger commercial outlets are owned by investment vehicles. Investment vehicles are usually corporate entities owned by sophisticated investors that invest solely in real estate investments.
Its highly recommended that one contacts and meets with a Michigan real estate attorney (If investing in Michigan); consider it an insurance policy on your investment.
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