Real Estate Resources for New Investors

*This post originally appeared on www.michaelmorrow.org.

If you want to be a successful real estate investor, then you have to do your research and build up your knowledge base. With so much information out there, though, you might not be sure where to start. Which resources are worth pursuing and which resources should you avoid? Below are some of the top real estate resources for both new and veteran investors alike. While this isn’t a complete list, it is a great starting point as you walk down the path of real estate investment.

Real Estate Listings

The obvious first step to becoming a real estate investor is actually purchasing a property, and you can’t purchase a property if you don’t know what’s available. Today there are numerous websites that feature local real estate listings. Zillow and Trulia are two of the most popular. Zillow is particularly useful because it gives you access to various helpful statistics that will give you more insight into particular neighborhoods.

Property Assessments

Property assessments are essential to understanding the true value of a property as well as how much of your money will go toward taxes. In many cases this information is online, but it can be difficult to locate. Patriot Properties and Vision Government Solutions are two helpful sites that feature extensive databases of property assessments. State & Local Government on the Net is another resource that can help you find property assessments for a particular area. The site doesn’t actually list the property assessments, but it lists local government websites by their particular topics.

Trends

If you want to be a knowledgeable real estate investor, then you should have some awareness of what’s trendy in home design. Houzz focuses on highlighting the latest trends in home design. The site is a great resource for inspiration. Plus it features a database of local professionals who you can hire to do repairs, interior design, and other services.

Books

One of the best ways to increase your real estate knowledge is to read a book. Here is a list that will help you get started. It features seven of the best books for new investors. One book that’s not on the list that you should still check out is Real Estate Finance & Investments written by William Brueggeman and Jeffrey Fisher. The book is currently in its fourteenth edition, and it’s used in college classrooms around the country. After reading the book, you will definitely feel more comfortable with the entire investment process.

Self-Directed IRAs vs. 401(k)s and Traditional IRAs

*This post originally appeared on Michael Morrow | Financial Planner.

When most people think about retirement savings they think of 401(k)s and IRAs. However, another option to consider are self-directed IRAs. While self-directed IRAs share a lot of similarities with 401(k)s and traditional IRAs, there are some important distinctions to consider. What sets self-directed IRAs apart from other options, though, are the variety of investment options available to you. Keep reading to learn more about the benefits of self-directed IRAs as well as some of the drawbacks of 401(k)s and traditional IRAs.

401(k) Drawbacks

  • There are numerous fees associated with 401(k)s, and most people don’t realize how much they’re even paying. Most of the time the fees aren’t even listed on your account statement. Over time these fees eat into your balance.
  • If you withdraw money from your account before the age of 59 ½, you’ll face penalties. Unfortunately, life doesn’t always go as planned. You might need to withdraw money due to divorce, job loss, or some other unforeseen circumstance. Take a look at this post to learn more about early withdrawal fees. In addition to the penalties, you will also have to deal with taxes. Any money taken out before the age of 59 ½ will be taxed as regular income.

IRA Drawbacks

  • Every IRA plan has contribution limits. If you contribute too much to your account, you will have to deal with IRS penalties. The penalties vary with age. For example, if you are under the age of fifty and you contribute too much, you’ll face a maximum penalty of $5,000. This article has more information on excess contributions.
  • When you reach the age of 70 ½, you have to withdraw funds from a traditional IRA account regardless of whether you need the money or not. Failing to withdraw the funds results in a penalty—typically a fifty percent tax on the minimum amount that was supposed to be withdrawn.

Self-Directed IRAs

A self-directed IRA is often a better option for investors. With a self-directed IRA, you can include assets like real estate rather than the traditional assets that most IRA accounts allow. Self-directed IRAs also offer tax benefits that aren’t available with traditional retirement options. As with every investment self-directed IRAs are not risk-free. However, investors who choose self-directed IRAs select assets that they understand well, so they are aware of the risks associated with the assets held in their self-directed IRAs.

Real Estate: Making Money Regardless of the Market’s Direction

*This post originally appeared on www.michaelmorrow.org.

One of the most difficult aspects of investing is dealing with market volatility. However, when it comes to limiting losses there is one asset that stands out above the rest: real estate. The U.S. Census Bureau reports that the price of real estate has increased in a consistent manner since 1940. While the subprime mortgage crisis limited its growth for a couple of years, it recovered relatively quickly and continues to increase in value. Keep reading to learn more about the basics of real estate investing and how you can continue to make money when the market is down.

Why Invest in Real Estate?

The best time to invest in real estate is the present. As stated above, real estate investments have attractive returns over time and some of the lowest volatility compared with other investments. Real estate is a great choice to add diversification to your portfolio. Research shows that during bear markets when stocks are down real estate usually goes up.

Research

One of the most important keys to finding success with real estate is doing your research. Before you purchase any real estate you need to understand which markets will give you the biggest return. If you plan to rent out your property to individual tenants, you should make sure you purchase property in an area that’s attractive to renters. The area around universities is usually the best location to purchase property since student tenants will be available each year.

Decide Your Approach

Do you want to be a landlord, or do you plan to flip properties? There are advantages and disadvantages to each approach, so, again, you will have to do your research. When it comes to flipping properties, you also have some decisions to make. Will you refurbish homes before selling them, or will you search for undervalued homes in growth markets and sell them without making any improvements.

Find a Mentor

If you have never invested in real estate before, you should connect with experienced investors to learn some of the pitfalls to avoid. There is likely a real estate investor club in your area, or you can reach out to individual investors and ask to buy them lunch or dinner. Target investors who are active in the area where you are interested in investing. They’ll be able to provide you with the best insight.

Get Started

The easiest way to get started is to read more about real estate investing. Visit this link to see a list of some of the top real estate books.