Real estate is one of the best investments to create a passive income stream if you better manage risk… But real estate comes with a high amount of risk, just like any other investment. With real estate, you have real property, tenants, and high amounts of debt that can complicate your portfolio and add risk to your investment. These are a few ways you can better manage risk in your real estate portfolio
How to Better Manage Risk in Real Estate Investing: Don’t Take on Too Much Debt
Taking on debt to invest in real estate is essential if you’re not incredibly wealthy from the get-go that is. But for most of us, you are going to have to take out a loan on any property you want to buy. Many times this debt is helpful, allowing you to put less money down upfront to purchase, and having your income stream set up to pay it off.
But the key is not to take on too much debt. Your credit score and income will limit how much money you can take out in a loan – but it’s also important to calculate your projected income stream before taking out a loan. Any loan that will have a monthly payment that is higher than your projected income from renting your property is too much debt.
Protect Your Investments
When dealing with large-scale investments, your liability increases in the event of litigation or other issues with tenants, etc. This is why protecting your investments by establishing and operating an LLC is essential. An LLC, or Limited Liability Company, allows you to protect your personal assets in the event of bankruptcy or other liability issues.
Operating as an LLC can help protect your real estate holdings from your personal liability. This is essential to protect your investments from you, and you from your investments.
How to Better Manage Risk in Real Estate Investing: Start With Multi-Unit Properties
The more units in your property the more diversified your rental income stream becomes. In a single-family home, if your tenants don’t pay rent, or your home is vacant, you have no income supplementing you. But in a multi-unit property, you have other units all rented separately which allows for more security in your investment income.
Real estate is a fruitful investment that should be in any investor’s portfolio. But real estate carries a high amount of risk that needs to be considered when setting up your business affairs. Following these three pieces of advice will help you protect your investment, and make your real estate investment as safe and risk-free as possible.
See you at a meeting soon!
The Southwest Florida Real Estate Investment Association is the leading source of SWFL real estate investing events that provide investment education and networking in southwest Florida. We analyze the housing market and foreclosures and provide information, education and networking events in order to build a network and knowledge base for investors and potential investors. Our members include real estate agent, brokers, investors, hedge fund managers, rehabbers, wholesalers and more.
Our SWFL REIA General Meeting is held in Fort Myers where we provide education on hot topics in investing and an opportunity to enjoy the camaraderie of your fellow investors. You’ll get a chance to ask for advice from successful real estate professionals and even make a few deals on your latest projects.
To become a member, anyone can register as an individual, a couple, or a corporation. Being a member opens the doors for endless networking opportunities, advice from members with decades of experience, new ideas from entrepreneurs, camaraderie with those just beginning, and deals and contracts done in the meeting room. For those interested in Cape Coral rental property investment and/or Fort Myers rental property investment, SWFL REIA will be able to provide a network to help launch a successful investment career.
The SWFL REIA is known and respected as a source of current, actionable and useful information about the housing market in the area that we meet.
We meet twice a month.
One of the premier sources for real estate investing networking and education is the SWFL REIA. In the real estate world, the SWFL REIA is different in that they do not do information product sales. Their meetings are focusing on the best ways of investing in real estate by collaborating with other property investors who are sharing their experiences.
We look forward to meeting you at a meeting soon!
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