Real Estate

Turnkey Real Estate Investing

Story Published on June 9, 2008 ⋅  Email this Story ⋅  Print this Story ⋅ Post a comment ⋅

Real estate investing is far from easy, many people would say.

Investing for short-term appreciation isn’t a good idea these days. If you buy property and hope for quick gains, you’re likely to be disappointed.

As far as long-term appreciation goes, you can buy a property, looking to purchase one at a price that allows you to pay management fees. Otherwise, you can manage the property yourself. But what about the tenants?

In commercial real estate, you run the risk of not having any tenants, if the local market is glutted. And that is the case in many local markets. In residential real estate, you may find yourself doing a fair amount of maintenance. You may worry about finding the right tenant. How do you create a lease? How do you screen tenants so as to find the ones who will stay a long time and keep up your property for you?

You may decide to try a the truly hands-off alternative: a real estate investment trust (REIT). THis is a publicly traded fund that owns property (usually commercial) and/or mortgages. The value of these funds doesn’t trend with the stock market, so that can diversify your portfolio.

Like mutual funds, REIT funds must levy fees. The fees may cut into your profits, as owner. Instead, perhaps you would like to own a property outright.

Here’s a proposition to consider: an assisted investment where you are given a choice of new single-family houses for rental from low-cost local markets. You can also take advantage of negotiated contracts with reliable property managers, insurers, and loans at 5 to 10 percent down.

An arrangement like this provides you with a balance sheet with predictable income and expenses. Your tenant will simply pay off the mortgage. In 15 years, you can sell the house and walk off with the equity.

⋅ ⋅ ⋅ ⋅ ⋅ ⋅