Investing With A Partner Can Be A Smart Move

I try to invest in Real Estate in different areas to avoid putting all of my eggs in one basket. Spreading your investments around can help you hedge against the possibility of declining value in a particular neighborhood. If you were to buy all of your Real Estate in one area, and it became a bad neighborhood over time, it could present disastrous results to your Investment Portfolio.

An Investment Partner could be the key to multi-property diversification. A partner can cut your expenses in half allowing more property deals to take place. For example, lets say you had $200,000 cash to invest. You could buy 1 moderately sized home using all of your capital or you could use the money to buy 2 small homes for $100,000 each. An Investment Partner contributing 50% of his own capital would allow you to double the number of homes in the fore mentioned example thus allowing you to spread your capital investment over a wider area. The cost of ownership is also cut in half making this type of investing attractive to those with limited cash reserves.

It is important to note that Partnerships don't always work out. It is important to find a partner who thinks the way you think. If your partner's personality is very different from your own, it could spell trouble. A plan should also be implemented so all parties know what their responsibilities are. Someone will usually take the lead due to location of the property or because they have an expertise or skill the other may not have. Accounting is a major area of importance with Partnerships. Tax liabilities are split between both parties as well as profits. Record keeping becomes crucial when 2 parties are involved.

Investing with a partner can be a smart move but make sure you pick your partner wisely.

Current Housing Unit Numbers

At the end of 2007, there were 128.6 million homes in the good ol' USA. 17.7 million of those homes were vacant, 75.2 million of those homes were homeowner occupied, and 35.7 million were occupied by renters.

Note that 35.7 million were occupied by "Renters". As I mentioned in earlier posts, people are being forced to rent as a result of losing their homes or having less than perfect credit making it difficult to buy a home. This is a factual overview that supports the notion that renting your investment property can be a great alternative to trying to sell it in this depressed market.

Rents are on the rise, and an investment in rental property now will not only allow you to capitalize on the cheap prices, but also allow you to make an 8% to 10% return annually from the rents you can now command.