There are good reasons that might prevent someone from investing in real estate. The lack of adequate finances certainly would make it difficult for someone to become a real estate investor and purchase rental income property. Even with a suitable mortgage, without the required 20 to 30 percent down payment required by most lenders some just simply cannot afford to invest in real estate.

Finances aside, though, some can afford to purchase investment property but do not because rental properties require property management. The idea of having to deal with tenant issues or late night calls about a leaky water heater does not set well with those who simply do not want the aggravation.

Yes, rental property is generally management-intensive, but real estate investors do not have to deal directly with it. For about 5 to 10 percent of the gross income the investor can hire a professional property management company to do the dirty work for them. A property management company can insulate the real estate investor from day-to-day tenant issues and field those late night calls. Normally, the tenant is never even given the owner’s name, address, or telephone number.

The point is this: if you are in a financial position to begin investing in real estate but are reluctant to do so because of concerns about property management, there is a solution.

Okay, but you might object to the idea of having to pay for a property management service. Perhaps you see it merely as an additional expense that eats into the monthly cash flow and therein makes real estate investing a poor investment opportunity. Fair enough, but you must not lose sight of the overall benefits of real estate investment; like appreciation and tax shelter.

Keep in mind that real estate investing is a business and the fees associated with property management are part of the costs associated with running that business. You must spend money to make money. Moreover, not unlike the many real estate investors before you, rental property ownership has the potential of making you a lot of money. That is what real estate investment is all about; and the reason why others no different then you are engaged in real estate investing.

ProAPOD real estate investment software has decided to put the real estate Glossary of Terms included in all our real estate investment software solutions online for easy access to users who might have the newest Microsoft Vista windows platform installed on their computers.

Unfortunately, Vista did away with the necessary Help.rtf file it provided in previous versions of Windows and no longer includes it with the Vista bundle. Because this is the file our real estate investment software solutions uses to create our Help files, it does require a computer have the Help.rtf file in order to access it. This, of course, was never an issue until Vista, but now, for those using Vista, it is required to manually download the Help.rtf file from Microsoft in order to access our Glossary.

Needless to say, this latest action by Microsoft does not set well with either ProAPOD or the many users of our real estate investment software who are expecting to have a Glossary of Terms readily available in the software. As a result, ProAPOD real estate investment software has decided to post the Glossary online for those who want to access it without having to make the additional download required by Microsoft.

To access the software Glossary of Terms, simply go to the ProAPOD website (www.proapod.com) and click the link ProAPOD Glossary in the menu under Other Resources.

by: Steve Gillman

Investing in real estate should be a pleasurable and profitable activity. Listen carefully to investors, though, and you hear not just success stories, but sad tales of stress and losing money. Here are some tips for keeping your real estate stories happy ones.

1. Have a top price. Properties have a market value, and then they have their value to you. Many investors pay too much just because everyone else is doing so, and then they have negative cash flow month after month. Just because others are paying too much for duplexes, doesn’t mean you have to. Once you decide on a top price that works for your plan (which hopefully involves cash flow), start below that and don’t go a penny higher. The time to set your limit is before the negotiations start, not during them.

2. Choose partners carefully. Investing in real estate can be an uncertain process. Too many decision-makers just make it more so. If you must have a partner, clearly define your roles before you start a project. Group decisions tend not to work well, and will cause you much stress. It is often best if one partner puts up the bulk of the money, and the other runs the show. Agree to a plan, then step back if you are investing the capital, and let your partner do his thing. Of course, step up and take control if you are managing the project.

3. Listen to what the market is saying. When the cabinet guy asked me for a decision I realized that I knew nothing at all about which cabinets people like. I asked him which ones home owners were most often choosing, and he pointed to one that three quarters of his last forty customers had chosen. Then that’s the one I want, I told him. Why would I argue with the market I am trying to sell to? I have seen sellers paint a home a certain color because they like it. That’s a quick way to reduce the market value of a home. What colors do the potential buyers like? That’s what is important.

4. Understand the numbers. Investing in real estate is all about the numbers. If it is an income property investment, it’s about one number in particular: cash flow. Be aware of whatever the local formulas are, whether gross rent multipliers or capitalization rates or whatever. Ultimately, though just be sure that after every last expense you’ll have cash flow from the very first month. If it is a residential fixer-upper, know what it will sell for and what it will cost to fix it up - before you even make an offer.

5. Don’t confuse investing with gambling. Investing in real estate isn’t gambling, or at least it shouldn’t be. There is risk, but unlike true gambling, the odds are in your favor. At least they should be, and you should be able to clearly see the outcome. This why you shouldn’t invest based on the assumption of continued fast appreciation. Over time, real estate values do trend upwards, but there is no guarantee that prices will continue up at any particular rate during a given time. Do deals in such a way that they’ll be profitable even if prices go nowhere. If values go up, you’re that much better off.

6. Do the research. Understand the statistics and information you are looking at. It is possible that the real estate agent will show you only the comparable sales that make the property look more valuable. With a bit of your own research, and an understanding of how the various numbers are arrived at, you can avoid overpaying. Many counties have made researching prices easy, with sales prices online. Other web sites, such as the U.S. Census site, have information on population and jobs. Understanding these figures can mean not investing in real estate just before the town declines.

These tips, like all others, are just guidelines of course. You can “gamble” on rising values, for example, if you really did your homework and know the demand for housing in a town is about to explode. You might pass up a great opportunity too, because you refuse to go $500 over the top price you set. While having a few rules and guidelines is a good place to start, don’t let them take the place of thinking when investing in real estate.

About The Author
Copyright Steve Gillman. For a Free Real Estate Investing Course, visit: http://www.HousesUnderFiftyThousand.com.