Submitted by: MohitJain

Before you invest your money in real estate there is one important fact that you should know to help you avoid significant financial hardship or even personal bankruptcy. You should not put any real estate investment in your name directly. When people invest in real estate they are doing it with the purpose of renting it out and if someone gets hurt and then sues you this means that you would be responsible for anything beyond the insurance settlement. This could be devastating to you financially. In order to avoid this you should use a legal structure called Limited Partnership or Limited Liability Company.

These are special legal structures that a good attorney can set up or you can do yourself. To file the paperwork the requirements are not overwhelming but you do need to use a different one for each real estate investment you have. This is a technique that is referred to as asset separation. It is called this because if one of your real estate investment properties got in trouble you may be able to put it into bankruptcy without hurting your other real estate investments or your own personal finances.

When investing in real estate there are good and negative things about each one you invest in.

Leasing a single-family homethe good thing about this type of real estate investment is that is a simple method of getting started in real estate investments. It can also give you excellent long-term return. On the negative side being a property manager can be a lot of work and you will usually have to wait a while before you see that real estate investment pay off in a large way. Another negative is that if the home is empty you will lose your cash flow so you will need to make sure that it is always rented out.

Low income propertythis is much like other rental property investments but you will have a larger cash flow. With this type of real estate investment property the negative aspects could be renter issues such as late payments, non-payments, not keeping the home or apartment well maintained, and more maintenance.

Rent-to-own or buy-on-contract homesinvesting in these types of property you will receive increased rent payments and the one who is renting the home is usually responsible for the upkeep on the home. If the tenant does not fulfill the contract then you would have the right to cancel the contract and have them become renters or move so you can sell or rent it to someone else. They would not be entitled to any refund in what they paid toward the contract. It would be counted as rent. Negatively speaking the accounting for these homes could be difficult as you have to make sure that you are deducting what they pay from what they owe along with any interest being charges and there are usually attorney fees to make sure that the contract is legal and binding.

About the Author: This article is penned by

Mohit Jain

for Ruchi Realty, a real estate company with major real estate Kolkata projects in full swing. Their premium high rise residential tower Active Acres Kolkata is one of the hottest

upcoming residential projects in Kolkata

. So if you are looking to buy a

properties in Central Kolkata

then this property is worth buying.

Source:

isnare.com

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