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Real estate and leveraging:
Perils and pitfalls abound - Selling
How to spot a bad apple when screening
tenants
Ask the Advisor - Is
multifamily housing
This publication is distributed with the understanding that the author, publisher and distributor are not rendering legal, accounting or other professional advice or opinions on specific facts or matters, and, accordingly, assume no liability whatsoever in connection with its use. ©2009 REAma09 |
Leveraging other people's money has
always been a primary tool for real estate investors. Using
leverage, savvy investors have been able to make more money, much
more quickly than they could have otherwise. Although there are
advantages to using leverage, there's also increased risk of loss.
This article delves into the topic, explaining how leverage works
and exposing some of the red flags that could get you in trouble. A
sidebar goes into the loan-to-value ratio and how it fits into the
leverage equation.
A perennial challenge for real estate
investors is how to transfer property to their heirs in the most
tax-advantaged way while also maintaining control of the property
and its income stream. The IRS pays special attention to
transactions among family members and generally assumes that any
transfer among them is really a gift. Whether a transfer is
considered a gift or a sale can have significant tax consequences
for both parties involved. This article explains how to structure
the transaction in a manner that suits the IRS.
Many real estate professionals use the
"lease with option to buy" method of structuring deals, because it
enables them to collect higher monthly payments and higher prices
overall than they could in a normal transaction. Lease options bring
buyers to the table who otherwise wouldn't have been able to
purchase, thus enabling sellers to move houses in a down market.
But, as popular as this method is, both lessees and lessors need to
be aware of certain tax implications. This article explains what
those are.
Screening out troublesome tenants is a
critical task for any landlord. By eliminating the bad apples before
they move in, you can avoid many aggravating problems that may arise
after they're settled in. The key is to implement a smart screening
process and stick to it. This brief article explains how to do just
that.
Although multifamily housing's
rate of return is generally lower than that of real estate ventures,
it's considered a less risky, more stable investment within the real
estate sector. That's because, even though businesses may fold in
difficult times, people will always need a place to live. The
multifamily housing real estate segment isn't without its concerns,
however. This article explores the pros and cons of such
investments.