We’ve been talking a lot about investing in real estate and how important it is to keep yourself protected should you decide to invest in the Arizona housing market. While I spend a lot of time walking clients through the process of living trusts and wills, there is a great deal of focus that has shifted to LLC paperwork for local investors. So, let’s talk about real estate investing for a minute.

The whole goal of investing in Arizona real estate is to grow your money, right? As I mentioned last week, the only way to invest safely and to increase your ROI is to protect that money right from the start with an LLC, which I can personally help you with. But, generally speaking, the goal of every home investor is to make a profit to cover to risk.

Understand the Risks

Investing in Arizona real estate means understanding the risks and weighing those against the possible profits. You must take into account taxes, utilities, insurance, and any fixes and/or renovations that need to be made. After all of that is taken into account, you can sit down and realistically consider how much you’ll need to ask as a down payment, and how much you’ll need to charge as rent.

Understand the Profit Game

Investors are in this game to make money, plain and simple. If you are successful at investing in Arizona real estate, you can make a great amount of money to build your investments and overall profits. If you are unsuccessful, however, you can find yourself filing for bankruptcy quite quickly. Here are some tips from About.com regarding the four simple steps that investors take to guarantee profit:

Real Estate Appreciation – when an Arizona real estate property becomes more lucrative and valuable over time due to upgrades in the area, new schools, new shopping centers, new parks, or renovations that you have added to the property. This added value will increase the price of the home, increase rental rates, and increase resale value.

Cash Flow Income – this form of investment real estate can be more commercially focused, where the rent that you make counts as continual cash flow. “Cash flow income can be generated from well-run storage units, car washes, apartment buildings, office buildings, rental houses, and more.”

Real Estate Related Income – this is where experience, connections, and the right mind-set become crucial. “Specialists” such as real estate brokers, real estate management companies, get to keep a percentage of monthly rent in exchange for managing the daily operations and keeping the property clean.

Ancillary Real Estate Investment Income – this is small real estate business can make huge profits based on the idea that vending machines constitute a small amount of real estate, but placed in thousands of office buildings can generate quite an income.

There are two crucial elements that must be considered before jumping into the Arizona investment pool:

First, you must sit down with an expert who can put together the Limited Liability Company paperwork to protect all of your assets and help you lower risks. According to About.com, “your 401(k) plan assets, Roth IRA investments, and other retirement accounts should be out-f-reach.” Contact us for more info.

Second, you must find an experienced realtor who has expert knowledge of the Arizona investment game, where you should by, what you should by, and how to measure out the risks vs profits. Contact Troy Reeves at RelocateAZ.com for more info.

Need Help?

If you are not sure as to what legal document you currently have contact one of our professionals to help you with your estate planning. They will make sure you have all of your grounds covered and have the right legal documents that best suite your wants and needs.

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