Your Plainfield, Naperville, Oswego and Aurora Real Estate Experts

REAL estate investing isn't just reserved for the moguls who play Monopoly with real buildings; for many regular, middle-class folks, it's considered a more reliable retirement plan than putting money in the stock market.

Of course, these people aren't buying a lot of high-rises. While some "mom-and-pop" investors do own office properties, they tend to be smaller, older buildings. Most small investors have been driven out of the commercial market by high prices and the emergence of well-capitalized real estate investment trusts, institutional buyers and pension funds.

So for the average, middle-class investor, here are two real estate options: buy smaller rental properties or invest in houses in need of a rehab.

Small rental buildings are still the most popular choice for retirement income. As a mortgage is paid off with rental cash flow, landlords can look forward to the day when their property is free and clear, and they can live off that rental income. Rental property is a good long-term investment. It's a self-liquidating liability.

For many amateur investors, real estate's financial risks soon become readily apparent. They are afraid of vacany, loss of equity if there's a downturn in the market, and the non-liquid nature of real estate. But owning investment property is a business! It's not passive like the stock market. Things to consider on the down side are late payments, rental damage, normal repairs and maintenance. But taking the time to research the prospective tenant's past rental history and current income can prevent many of these problems.

The key for any investor is to buy something that is attractive and has a strong likelihood of being rented and offering attractive lease agreements to encourage longer leases (12-18mo. minimum). Find good areas that are becoming very good areas. There were a number of spotty areas surrounding Naperville that are now being developed into areas that have become very attractive to the 1st time home buyer and the rental community.

Remember, the people who make money hold their property a long time, make a business of it, and are prepared to ride out real estate cycles.

Written by : LARRY BALLARD, Broker/Owner, Total Solutions Realty, LLC.

How can Total Solutions Realty help!

I have been buying rental property for over 30 years. As a result, I can show you what to buy, how to select the right tenants, when to sell, and how to shelter your profits. If you have questions, feel free to call @ 630-618-2000.