Investing in real estate can be an exciting and lucrative choice- one that can provide a fair and substantial revenue stream.

While it may be considered a high-risk venture, a well-planned and implemented asset management strategy can provide amazing results.

Part of an effective strategy involves having the right real estate management and investment portfolio, such as a long-term and sustainable investment plan for those looking to generate a steady cash flow for their real estate property investments.

Who can benefit from real estate investment management services?

• Property owners who plan to purchase residential or commercial properties to generate revenue through rentals
• Entrepreneurs seeking to invest in residential and commercial properties
• Capital investors wanting to provide funding for real estate property acquisitions for long-term real estate investing
• Private investors or homeowners with more than one real estate properties

What are the benefits when investing in real estate?

The benefits for investing in real estate properties far outweigh the technicalities and difficulties in establishing one.

Steady cash flow

Long term management to real estate property is a guaranteed way of ensuring a steady cash flow for your real estate property. For instance, regular rental payments are usually considered passive income which is far more sustainable and predictable compared to investments in commodities, currency trading or sales. Having the right company to manage your real estate investment management portfolio is critical to ensuring that you get a steady cash flow for your physical assets. Whether your property is located in a commercial, residential or industrial zone, leasing out your property is a good opportunity to earn revenues through rental payments. Investment properties are a veritable source of income for real estate property owners and investors.

Tax exemptions and government incentives

The government encourages real property owners to rent out properties. It provides incentives through tax benefits as a result of depreciation and reduced tax rates for long-term profits.
Aside from the tax incentives, real property taxes are usually factored in as part of the rental payment. Rental payments in some areas are not subject to self-employment tax in favour of the property owner.

Sustains your mortgage payments

If the property was acquired through a loan and is under mortgage, the monthly or regular amortisation is paid for by the tenant through the income generated from rent.

Appreciation and growth potential

Property value appreciates over time. The primary factors that affect appreciation and growth potential are economic growth, population, and employment rates. If the property was acquired through a loan and payment is made regularly, the value of the property generally goes up. Loan obligations or mortgage value goes down and subsequently ends up to increasing the value of the property. This is one of the primary reasons why real estate investing is not a one-off deal. But it does take time to build and sustain the growth value of the property.

How to you can invest in real estate

Purchasing methods and average returns are important factors that play in real estate investment management. The manner with which real estate property is acquired is a factor in getting satisfactory average returns.

Cash purchase

This may be a good acquisition method for real estate investing. Investors planning to purchase in cash are guaranteed of higher returns on their investments. This is simply because cash purchases do not entail obligations for mortgages and loans. This equates to high monthly cash flows. This gives property owners an average return between 6% – 8% a month, exclusive of appreciation and growth potential of the property.

Financed purchase

This is the process by which property is acquired by means of loans and mortgage. Conventional financing schemes usually offer higher returns between 9% -11% as a result of leverage due to a small capitalization at the time of acquisition. Compared to a cash purchase where bulk payment is made, such as $300,000 or $600,000 as against a down payment of only $10,000 or $30,000 upon takeout of the property on purchase. This could allow the investor to enhance their real estate business portfolio with the acquisition of additional property for investment.

Superannuation

This option goes well for those with established retirement funds to their name. In Australia, superannuation can be used as a funding source to purchase either residential or commercial property or as a leverage when applying for a loan to secure a property sale. There are investors who make use of their superannuation accounts as alternative assets such as acquiring real estate property that can be set-up without incurring withdrawal liens or penalties. Most of these retirement accounts can be eligible for real estate investment provided it is assigned a qualified self-directed custodian.

Find the right management company for real property investments

There are several important factors that need to be considered to employ the services of a reliable and trustworthy real estate investment management company.

1. Pay attention to company reputation and track record.

It should be a company that possesses an excellent track record, especially one that successfully provides the best yields and protection for property investments. Always make sure to work with an agency that has a high success rate to make sure that your investments are in good hands.

2. Experience is key. Expertise on key property aspects is critical.

Experience and expertise always go hand in hand. In the real estate industry, relying on gut feeling is never a safe proposition. A reliable investment manager must know how to calculate risks before putting money in. Expertise is never a negotiable factor. It is needed to make sure that your investment is in good hands with industry experts who know where to channel your investments.

3. This is not a hit and run venture. The more tenants renewing lease contracts over a period of time is your best chances of getting a steady flow of income.

It takes time to see growth in real estate investing. The value of your property goes up generally over a period of time in order to hell provide you with sustainable revenues and income for your real estate investment venture.