many people this days are taking up real estate investing as there life career and many others as a part time work. do you have a dream of becoming an investor? or you are already in the investing business.
below is everything may want to know about estate investor and they became an average American investor. Traditional real estate investments can be broken down into two broad categories; checkout our top 100 real estate agent in US
residential properties like your home, rental properties or flipping homes to buy, then resell for a profit and commercial properties, such as apartment complexes, office buildings and strip malls
Why is there an increasing trend in the number of independent real estate investors?
The traditional 30-year mortgage loan, being the most sought form due to low monthly payments,
Has its figures appearing to be at a low ~3.40 compared to 4.17% from 2014, which only makes the investment market more appealing and yielding.
As a matter of fact, the low interest rates are what helped the investors bring back up the housing market by restoring buyer confidence and stabilizing the prices.
Many have come to witness this trend and have jumped on it, which explains the increase in the number of investors looking to purchase a second investment property to lease.
This is also due to the rising rental rates and decreasing vacancy rates.
American richest investors
Real estate investing has minted its share of multimillionaires over the years as well as a handful of billionaires, including President Donald Trump.
While the president might be the most well known real estate billionaire, he doesn’t even crack the top-10 list of richest real estate investors in the U.S
according to the Forbes 400 list. Here’s a brief look at that elite group of billionaire real estate investors.
Stephen Ross: Estimated net worth $7.6 billion
Stephen Ross is the founder and the chief executive officer of the related company and the owner of both the Miami Dolphins and Sunlife Stadium.
He started out by developing affordable housing.
However, he has expanded his real estate investment into other development opportunities, including leading the Hudson Yards Redevelopment Project in NYC.
After more than a decade of planning and construction, the first of two phases opened in 2019. It features eight structures that house residences, offices, a hotel, retail space, and a cultural center.
Leonard Stern: Estimated net worth $4.5 billion
Leonard Stern started in his father’s pet supply business in 1959 before venturing into the real estate market seven years later by purchasing a warehouse in New Jersey.
His company, Hartz Mountain Industries, now owns more than 260 properties, comprising over 45 million square feet of residential, office,
hotel, and industrial properties, primarily in the New York/Northern New Jersey area.
John A. Sobrato & Family: Estimated net worth $4.3 billion
John Sobrato started selling houses in California while he was still in college.
He later worked to develop industrial properties and founded his real estate company, Sobrato Organization, in 1979.
Today, that company owns more than 7 million square feet of office space, mainly in the Silicon Valley area of California, as well as roughly 6,700 apartments.
Sheldon Solow: Estimated net worth $4.2 billion
Sheldon Solow made a major real estate gamble in 1972 by betting his entire net worth on building 9 West 57th Street in New York City.
The 50-story office tower has unobstructed views of Central Park, making it a highly sought-after building.
In 2016, it appraised at more than $3.4 billion, making it one of the most valuable office buildings in the city.
In addition to that landmark property, Solow also owns several other office buildings on 57th Street as well as residential real estate near the East River.
Jerry Speyer: Estimated net worth $4 billion
Jerry Speyer is the Chairman of real estate developer Tishman Speyer.
His company has developed over 152 million square feet of real estate, including skyscrapers in iconic cities like New York, Chicago, Berlin, London, Frankfurt, and Paris.
He’s also redeveloped several landmark properties, including the Rockefeller Center and the Chrysler Building in Manhattan.
Igor Olenicoff: Estimated net worth $3.9 billion
Igor Olenicoff came to the U.S. from the former Soviet Union as a teenager.
He lived out the American dream by building a real estate empire.
His company, Olen Properties, owns more than 8 million square feet of office space and 15,000 residential units, primarily in California.
Jeff Sutton: Estimated net worth $3.8 billion
Jeff Sutton is the founder of Wharton Properties, which owns many prime retail locations in Manhattan. Wharton has acquired more than 120 buildings throughout New York City and the surrounding area. It owns marquee properties along Fifth Avenue, Times Square, and 34th Street.
Benefits of Investing in real estate
We all, to some extent, recognize the potential financial rewards we could attain from real estate investing.
It goes without saying that there are many benefits of investing in real estate that outweigh the costs, and you as a real estate investor could be earning a steady flow of income to secure financial freedom for the long haul.
Whether you want to quit your mundane 9-5 job and become a full time real estate investor and/or save up for your retirement, you are on the right path to fulfill your financial goals sooner than you might think.
It takes one rental property to establish your real estate business and get yourself a reliable source of constant rental income.
This year definitely looks promising for investors, and your real estate investments will earn you high returns indeed.
The real estate market and the housing conditions are in tip top shape and you can rest assured you will be making money if you invest in the right locations. It is a simple equation:
if the economy is growing, the housing market will flourish and there will be an abundance of real estate opportunities to tap into across the country.
Before you set forth with buying your first rental property, make sure you conduct real estate market analysis and consult a real estate professional.
If you want to reap financial rewards from investing, you have to make wise and calculated real estate investment decisions in order to grow and diversify your portfolio.
Do not depend on luck to win you money in real estate, there is no magic formula, it is all about studying your potential investment before closing any deal. you may also like to checkout our blog post on car insurance in US
Moreover, if you want to succeed in this industry, you have to know everything about real estate including the benefits you will gain in the short and long term. Now let us proceed with the
benefit of real estate investing.
Long Term Financial Security
The benefits of investing in real estate provide investors with long term financial security.
When you have a steady flow of cash in succession, the rewards of this investment bring on financial rewards for a long time.
Owning a rental property can afford investors a sense of security because of the property’s appreciation in value over time.
This means that your property’s value is most likely going to increase because land and buildings are appreciating assets.
With that said, however, there is no guarantee the value will increase indefinitely.
That is why it is always recommended to thoroughly research the location before closing the deal on the house of choice.
majority of people invest in real estate for the steady flow of cash they earn in the form of rental income. This passive income is a huge incentive to get you started and buy your first rental property.
Depending on the location, you could be earning significant income to cover your expenses and make you extra money on the side.
Urban cities or towns with colleges and universities tend to reap higher income because the demand is always high in those areas.
If chosen wisely, you can secure a steady flow of income for a long time and even save for retirement.
And you do not have to stop at investing in one property at a time; you can pick up the pace
And invest in multiple rental properties all at once to increase your positive cash flow and diversify your real estate investment portfolio.
You can manage by hiring a professional property management professional if the workload becomes too much. One tip to keep in mind: location, location, location is key to smart real estate investing.
One of the benefits of investing in real estate is the tax exemptions investors get from owning a rental property.
This is a major reason why many choose to invest in real estate. For example, rental income is not subject to self-employment tax.
In addition, the government offers tax breaks for property depreciation, insurance, maintenance repairs, travel expenses, legal fees, and property taxes.
Mortgage Payments Are Covered
The benefits of investing in real estate include your tenants as well.
Simply put, the rental income you receive each month is more than enough to cover your expenses, including your mortgage payments.
Essentially, your tenant is actually the one paying your mortgage.
One of the benefits of investing in real estate is a hedge against inflation. With high inflation, your rental income and property value increase significantly.
Real estate investors welcome inflation with open arms because as the cost of living goes up, so does their cash flow.
Disadvantages of investing in real estate
Real estate is expensive and highly illiquid.
Investing in real estate, even when borrowing cash, requires a large upfront investment.
Getting your money out of a real estate investment through resale is much more difficult than the point-and-click ease of buying and selling stocks.
Real estate has high transaction costs.
A seller can expect to pay significant closing costs, which can take as much as 6% to 10% off the top of the sale price.
That’s a hefty cut compared with stocks, especially now that most brokers charge no fees for stock trades. see also real investment trust
Real estate investments can be more work than stocks.
While purchasing property is easy to understand, that doesn’t mean the work of maintaining properties, especially rental properties, is easy.
Owning properties requires much more sweat equity than purchasing stock or stock investments like mutual funds
It’s difficult to diversify your investments with real estate.
Location matters when investing in real estate. Sales may slump in one area, while values explode in another.
Diversifying the purchase of real estate properties by location and type (a mix of residential and commercial, for example) requires much deeper pockets than the average investor has.