Answer: Essentially you want to buy a two-family property and instantly have a situation where one unit covers all costs. That would give you a rent-free unit. Then you want to know if such an investment is a better choice than the stock market.

Let’s assume that you now rent and that you also obtain a benefit from the $95,000 in cash you have available. As a first step you have to look at the cost you now pay for shelter and subtract the interest, dividends or whatever other benefit you receive from your cash. How would owning a two-unit property with a given rental compare? (You have to subtract the benefits of the $95,000 because when the money is used to purchase the two-unit property the interest, the dividends and other benefits it now represents will be gone.)

A second issue concerns the matter of whether you want to be a landlord. Have you considered vacancies, maintenance, having tenants nearby, lifestyle issues, etc?

Third, no one knows what properties will be worth in the future — and the same goes for stocks. Moreover, you are not buying all real estate or all stocks, you’re buying a particular property in a given community. What the market does generally and what specific properties do specifically may be different.

There are some things which cannot be calculated without assumptions and it follows that such calculations are only as valid as the underlying estimates and guesses. In the case of future values, there’s no way to know beforehand whether today’s presumptions will be on the money at some point down the road — or way off base. History has little value because past performance does not guarantee future results. As proof, think of all the people who invested in Enron, Fannie Mae and Freddie Mac because the numbers looked so good….

Before going further, speak with several local real estate brokers who work with investors. Also, check with the local community planning office to see how they envision the future in terms of population growth, jobs, etc.

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Syndicated originally by Content That Works and posted with permission.

Is Now The Time To Buy A Duplex? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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Answer: Just by reading the paper, checking the classifieds and speaking with local people you already have general notions regarding prices, maintenance, local rental rates, demand and such.

Local newspapers are great sources of market intelligence. Look for new roads, schools, malls, office buldings, etc. to see where development is headed.

The next step is to look for a suitable first property. Depending on your market that likely means a duplex, triplex or fourplex where you live in one unit and rent the rest. Most lenders regard such properties as “owner-occupied– homes and that means you can get financing with little down and the best rates. No less important, the rent from the other units will offset your costs and make it easier to qualify. Owning such a property for several years will teach you much about property management, repairs and related subjects.

As to who to trust, the best approach is to speak with as many brokers, lenders, lawyers and insurance brokers as possible. Explain your interests, see who makes sense and who wants a long-term business relationship. In addition, visit the library and go through books regarding real estate investing, financing, negotiation and brokerage. Avoid those titles that promise instant wealth.

Lastly, take the basic course in your state to qualify for the real estate license test. Such classes offer substantial information and may lead to a new career.

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Syndicated originally by Content That Works and posted with permission.

How Can I Start Investing In Real Estate? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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