By leveraging their natural empathy, aligning real estate purchase strategy with investment objectives, gaining an understanding of potential real estate markets and lining up the appropriate financing, women can be successful in creating wealth through real estate investment. Real estate investment can provide significant tax advantages and establish long-term income potential for smart investors. See the following article from JasonHartman.com for more on this.
Lisa Bromma, author of “Wise Women Invest in Real Estate”, is the guest of Jason Hartman’s Creating Wealth podcast series, episode 143. Despite their capacity for empathy and attention to detail, women have historically been intimidated by real estate investment. Replacing fear with confidence, capital, and expertise is the formula for success, and education is its foundation.
“How you buy a piece of property is where you make your money,” according to Bromma, so it’s vital to know your market before investing. That means being familiar with fair market value and circumstances specific to the property. Determining an ideal strategy depends on individual investment objectives. Buy and hold investors choose the long-range view while others focus on amassing profits in the short-term by rehabbing and flipping properties. While the conservative approach offers the security of rental income in retirement, women often have too much on their plate already, and prefer to avoid the stress of being a landlord. The antidote is to enlist the services of a property manager, or have in place a property management system. Whether or not you choose leveraging debt through refinancing as your strategy, it’s essential to have an investment plan.
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Responsible investors research before they buy, paying attention to population, employment, industry, schools, and factors specific to their intended market. Desirable properties offer tax and depreciation advantages, positive income, and potential appreciation.
The key to successfully negotiating a deal is to ask questions that “get to the seller’s true motivation,” where the ability to empathize gives women an edge. Whether dealing directly with a seller, or with a local bank or developer, the objective is to craft a scenario where both parties win. For instance, investors offer a solution for bankers faced with a backlog of properties. But don’t fall for the hype; realize that it takes real effort to negotiate deals like short sales.
In terms of rental property management, “your lease is your most valuable tool,” especially if you decide to take on the role of property manager. Since ideally you want long-term renters, offer incentives and be willing to be flexible. For example, to accommodate conscientious pet-owners you could charge pet-rent. Ensure that your property manager has the proper credentials, a solid and verifiable background in managing rental property, and clear accounting practices.
Alternative sources of financing, including private lenders, are increasingly utilized by today’s investors. Lining up your lending sources in advance is crucial. To find private lenders, network through real estate investor groups and conferences, but be prepared to provide something in return. Arm yourself with a marketing plan that includes a repayment strategy.
Finally, exploit the tax advantages available to real estate investors. Look into the tax-free Roth IRA conversion offered for 2010 (and with conditions in 2011 and 2012). Find out more at www.WiseWomenInvestor.com and www.TheEntrustGroup.com.
This article is based on Episode 143 of Jason Hartman’s Creating Wealth Show. You can listen to the full podcast at JasonHartman.com, a real estate investment and wealth creation site.