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Why you Should Invest in Multifamily Properties?

Are you a first time investor looking for a secure and guaranteed way of making a real estate investment? Then multifamily properties might be the most appropriate form of investment for you.

When it comes to making investments in property and real estate, every investor might have a different outlook. Some might prefer distributing their investment among different property units to not put all of their eggs into one basket, but others might not have the same approach.
There are a ton of benefits that come with investing in properties like multifamily houses where all your wealth is tied together.

Any property that has more than one unit is considered a multifamily property. The smallest units are duplexes, which are called two family homes in different parts of the U.S. Then triplexes and four-plexes with three and four units in each property.  

Most rental multifamily properties are financed by banks just as single family homes usually are. The most popular way of making such an investment is by acquiring ownership of the multi-unit property where the owner resides in one of the units and rents out the rest of the units to tenants. This is an easy way to secure your investment. This kind of setting can be financially benefitting and help lower the interest rates and even lower down payment in certain cases.

It also saves a lot on the cost of property management fees as you will easily be able to self-manage the property instead of lending the job to another party, which would cost you heavily in the name of managing your property, which usually rounds up to hundreds of dollars each month.
This also saves a lot of inconvenience for the owner whenever there is a need to visit the property as there is usually a rental home. The owner can monitor and maintain the property along with their own residence without any extra cost or hassle.
The owner has the liberty to choose the tenants’ demographics for his multifamily property considering whichever kind of family or people would be easier for the owner to manage.

As these properties grow in scale, they begin to fall in the category of “commercial real estate.” Any property with five or more units falls in this category and qualifies for a more expensive kind of financing. This is because the property on a scale that large does not strictly qualify for a residential property.

Profit margins and complexities grow as the scale of the property units grows, and each kind of investment attracts different kinds of investors. From two family properties to high-rise apartment buildings, the opportunities are endless.

One of the many benefits of investing in a multifamily property is the steady cash flow it generates each month. Especially in strong markets where it is relatively easier to re-lease the property to the owner after another, to keep the income flowing consistently. Setting rent rates is also easier as they are mostly quite predictable. This helps the investor generate a dependable and safe amount of income throughout the year with the minimum amount of risks and expenses.

The current economic downturn caused by this pandemic has made investors rethink their investment strategies. Those who had invested in properties that were deemed “non-essential” because of this pandemic have suffered a great loss. However, housing is a basic necessity that can never lose its value no matter how badly hit every other business sector might be, which makes a multifamily property investment the safest kind of investment in real estate investment.

The upcoming government has every investor conscious about the change in tax rates, and no one is sure as to which parties will be benefited from the new expected taxation standards. In multifamily homes, there is a great tax advantage. Like most investors, you can use a mortgage to finance the property. Because of asset depreciation, a sizable amount of income coming from rent can be balanced each year, making this class of asset one of great profitability.

There are tons of more benefits to Invest in Multifamily properties, and we are here to guide you along the way, feel free to contact us for a consultation.    

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Is Inventing in Airbnb Properties Still A Good Idea?

Inventing in Airbnb Properties

People who have invested in Airbnb have made a huge fortune with short-term rentals. But, it’s not all that easy – there are a ton of things that most real estate investors ignore, which results in loss of their money. Like any other investment, Airbnb also needs due diligence and a strategy.

If you’re planning to invest in Airbnb properties, then you’re in luck as we’ll be sharing some of the things that you should know about before you invest in Airbnb properties today.  

Don’t Jump Right Into It

Every real estate investor’s dream is to make millions overnight, but sadly, that’s not how it happens. The same is with Airbnb investment. Before deciding to invest in this particular market, ask yourself that do you really want to be a part of it at all? While we could help you in deciding but only you and you alone should answer that.

Just like any other business, you need to start small. Don’t jump right into it as that never turns out good for anyone. When making a business strategy, consider the pros and cons of investment in Airbnb properties. Doing the proper research before investing in this market will help you understand it better and make it easy for you to decide whether to invest or not.

There Are Regulations Involved

Yes, you heard us right – there are regulations involved, and we recommend you understand them before you invest in Airbnb properties. In some cities, it is restricted and even illegal to lease properties on a short-term basis. These cities include New York, San Francisco, and Santa Monica. In these cities, it is illegal to rent out properties unless the permanent tenant or the owner is residing in the property while it is being rented on Airbnb.

If you don’t comply, you might be subjected to harsh legal consequences that could ruin your future in the Airbnb market. We don’t say this because it could happen, we say this because it has happened to Airbnb investors and, as a result, they had to pay hefty amounts of cash in fines. So, be careful and understand the regulations before you plan to invest in Airbnb properties.

Tough Competition

If anyone has told you that investing in Airbnb is the easiest way to make insane money, then let us tell you that you’ve been fooled. The Airbnb market is very competitive, just having a rental property isn’t enough, you should know the art of marketing it as well.

Airbnb claims to operate in almost 65,000 cities with more than 3,000,000 listings. So, how could you make your property stand apart? Let us tell you a little secret. Airbnb market runs on reviews from people who’ve rented your property. In order to get a good review from them, you need to spend a little extra, like quality beddings, professional photography, welcome basket, bathroom accessories – all of this coupled with the right marketing will surely make your rental property stand apart from the rest.    

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Understanding Self Directed IRA For Real Estate

Self Directed IRA For Real Estate

Individual Retirement account (IRA) allows individuals to save money for their retirement in a tax-advantaged way. When there is saving, there is the idea of investment as well, and one of the most misunderstood and least discussed is the self-directed IRA. People usually confuse self-directed IRA with other types of IRA, like SEP IRA and Roth IRA. But self-directed IRA is a category of its own and is completely different from other IRAs.

Before we dive deep into the technicalities of the IRA, let us first understand what does Self-directed IRA means.

What is the Self-Directed IRA?

The self-directed IRA is basically an “individual retirement account” in which the investor, which is you, will have complete control and responsibility for all the investments in your account. While typical IRAs that are offered through different financial institutions tend to limit your investment options – we are talking about bonds, mutual funds, and stocks. With a self-directed IRA, you can easily invest in a huge range of investment opportunities, such as real estate.  

Self-Directed IRA For Real Estate

Planning to invest in real estate? Wise move – but before you do that, we need to know a few things. First things first, you need to set up a self-directed IRA. Some reputable companies and firms offer individual investors the ability to set up their own self-directed retirement account. Because of the complex nature of the IRAs, we recommend that you have a custodian that will take care and provide you with all the information and guidance as you navigate yourself through the uncharted territory of the IRS tax code.

What Do You Need To Know About IRA Custodians?

Just like real estate agents, IRA custodians could also have complicated fee structures. Therefore, we advise you to do your research and understand all there is to (potential fees and expenses) before you contact a custodian as it could heavily impact your overall return on investment.

Benefits of Self-Directed IRA investment in Real Estate

You’re the one in-charge

The name says it’s all, “Self-directed” IRA makes you the one who is running the show. You’ll be solely responsible for handling your financial future. With some help from a trusted accountant and a real estate IRA, you will be able to make the right decision that will keep you happy in the later part of your life.

Higher ROI potential

When you invest in real estate through Self-directed IRA, you’ll have more flexibility regarding the overall amount that you want to invest, which means there is the potential for higher ROI.

Investing in real estate is a dream for everyone, and the self-directed IRA is the perfect route to do so. With financial freedom, you’ll be the one making decisions and controlling your own financial future so you could see a happy ever after.