Real Estate Investing Is It a Cash Cow or Dud

Originally posted 2011-08-31 12:01:08. Republished by Blog Post Promoter

Is real estate investing still a good way to make money?  To answer this question, we will examine what occassional debt  such as credit cards can do to your financial future.

Most people use a credit card like it is a never ending money tree and spend, spend, spend.  If this occurs, you will never achieve wealth.  Here is why.  If that credit card’s interest rate is eighteen percent, you are paying eighteen dollars, for every one hundred dollars you spend.  The latter is an example of “living rich while growing poor.”

The objective in growing rich is to use the concept that the rich use.  It is, use OPM, other people’s money, to become financial free.

The steps are simple.  Reduce consumer debt.  Next, build assets through homeownership, save money, and invest.  Third, borrow against those assets to increase your net worth.

A critical requirement of OPM is that the moeny acquired needs to be used to maintain and/or improve your wealth.  In other words, it is not wise to use your newly acquired funds to purchase stock because the stock may be a higher risk proposition than real estate.

After all, real estate can reduce in value, but it will never be worth zero, unlike stock.  Yes, real estate is always  worth something even if there is no structure on the land.

The land, the dirt, the trees, the air, is all worth something.  So, next time you have some extra money do your homework and consider real estate as your

Is It Possible to Save Money During a Recession

Saving Money During a Recession: Mission Impossible?

Recession is a word that fills people with dread and bad visions.  It’s a time people consider bad for finances, a time capable of magically shrinking a dollar’s value overnight.  It also automatically increases the cost of basic living.  And where money is a huge concern, people always ask, ‘Can I still save for real during a recession?’  The answer is: of course you can.  You just need to be wise and creative about the whole thing.  Here are ways how:

Plan your purchases.

By planning your purchases, you’re effectively planning your expenses.  This will help eliminate the danger of impulse buying and unnecessary spending.  Try to look at the bigger picture when it comes to your basic needs.

Plan for a week’s worth of groceries, for example, so you’ll have an idea of which items you truly need (and want) and which items you can do away with.  To make sure that you maximize your planning efforts, consider incorporating items on sale into your planning.  If there are foods on sale that week, for example, why not plan your week’s menu using what’s currently on slashed down prices?

Implement the ‘B’ word.

Budget, that is.  If you want to be able to save money during a recession, learn to discipline yourself and your family.  Using your plan as a reference, come up with a weekly or monthly budget and then stick to it.  If you must overshoot it, you should have a very good reason to do so.  Otherwise, don’t spend.

Keep an eye out for bargains and discounts.

Learn to monitor stores for seasonal sales.  You’ll save a lot of money by buying items on sale than in their regular prices.  During a recession, that’s considered wise spending.  Check out store or newspaper ads and don’t be shy about asking for cheaper alternatives, getting store rebates or using discount coupons.  Consider buying at discount stores as well.  Each dollar you don’t pay is a dollar you save.

Buy in bulk.

If there are items in your house that are often in use (paper towels, canned beans, yoghurt, etc.), consider buying in bulk.  Many stores offer items in packs, which means you’ll save money in the long run if you buy them instead of paying for individual items.

Put off bigger purchases.

A good rule of thumb is, if you can’t afford it, don’t buy it.  If, for example, you have enough money for a downpayment on a new LCD TV but will have to borrow money off your credit card just to tide you over for the next few weeks, it would be really insane to make a purchase.  Wait until you can truly, comfortably afford something.  The worst you can do during a recession is not just failing to get money saved but also going into debt.

Practice prevention, not cure.

If you look closely, there are many things you do in your home that are siphoning precious dollars from your wallet.  Simple steps such as repairing and maintaining your home and appliances, using more efficient equipment and cutting down on unnecessary consumption can do wonders for your wallet and piggy bank.  And what better way to treat a recession than to be prudent?

Earn extra money.

If, after all your efforts, the money you have saved is still not enough, don’t let recession get the better of you.  There are times when your efforts are just not sufficient – mostly because you don’t earn enough.  Instead of asking for a raise that might never occur or waiting for a promotion to drop on your lap, consider finding other means with which to earn (and save) money.

Consider getting a part-time job, work extra hours, do selling on the side or offer your skills as a freelancer.  The extra income you earn, along with your recession-powered money-saving plan, will help you make enough until after the tough times are over.

Related articles

• Simple Ways to Recession Proof Your Home (taylorbrownrealestatetalks.com)
• Tips for Buying Property During a Recession (taylorbrownrealestatetalks.com)
• Billeater: 9 Money Saving Tips to Help You Conserve Cash (savings.com)
• 7 Tips on Improving Personal Finance Post Recession (moneyning.com)

Tips to Not Allowing Your Fixer Upper to Be a Money Pit

If you decide to become a real estate investor some time in your career you will purchase a “fixer-upper”. In today market, you find a lot of homes will need some work before they are habitable. Often you will purchase these houses at a bargain price. However, it should be noted that not every house that is available for a low price is a bargain. Sometimes, people only find this out after doing a lot of work. You do not have to be one of these people if you adhere to these tips.

First you need to realize what a  “money pit” is.  It is  a house which looks like a bargain when you initially buy it, but when you soon realize the extent of the renovations that needs to be done before the property is habitable you realize that you will have to spend a lot of money.  If you are selling the property, you may not make a profit.  If you plan to live in the property, you’d  spend more on fixing it up than you purchase the property for.   Of course, by the time you have found this out, it’s already a little late.

Before buying a house which requires work, it is always advisable to have a inspection of the property by the contractor that does your rehab work.   If the contractor you have do the inspection of the potential property is an employee or subcontractor that you use you may save money on purchase a property that you will have to put a lot of money into to make it habitable.

Therefore, the biggest piece of advice is hiring a contractor before hand, check his reference, and have the contractor bid on small jobs to get a feel for cost and establish a working relationship before using the contractor in your real estate business on a regular basis.

 

Related articles

• Would You Buy a Fixer Upper? (casasugar.com)
• Ask the Reader – a Fixer Upper Home Or … (moneyning.com)
• Should you buy a fixer upper [infographic] (holykaw.alltop.com)