10 Reasons to Use Land Trusts to Buy Real Estate

Land trusts are very effective tools used by savvy real estate investors.  They offer numerous advantages and few drawbacks.  Some people find the concept of land trusts to be complicated or confusing, but they are actually pretty simple to setup and use.

A trust is simply an arrangement in which someone holds something of value for the benefit of another party.  For example, you want to set up a trust for your son (referred to as a beneficiary).  So, you place $100,000 into an account at your local bank and appoint the bank as trustee.  The bank administers the property according to your wishes and “for the benefit” of your son.

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How You Make Money In Real Estate

Appreciation
The most common source for real estate profit is the appreciation – the increase in the value – of the property in question. This is achieved in different ways for different types of real estate. And, most importantly, it is only realized through selling or refinancing. (For related information, be sure to check out Avoiding A Big Tax Bill On Real Estate Gains.)

Raw Land
The most obvious source of appreciation for undeveloped land is, of course, developing it. As cities expand, land outside the limits becomes more and more valuable because of the potential for it to be purchased by developers. Then developers build houses that raise that value even further.

Appreciation in land can also come from discoveries of valuable minerals or materials, provided that the buyer holds the rights. An extreme example of this would be striking oil, but appreciation can also come from gravel deposits, trees and so on.

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Land Trusts

Do you use Land Trusts, or do you put your investment properties in your own name for all the predators and creditors to find?  I hope not!

In the early 90’s we had a rental property in Minneapolis, MN.  It was the middle of January, and we had an ice/rain storm.  Someone that was just visiting one of our tenants walked out into the rain, and there was about 1/2 – 1 inch of ice on the sidewalk, and they fell backwards.  That person cracked their head open and had to be rushed to the hospital.

We thought we had our assets covered.  We had a landlords insurance policy on the house.  Even if that didn’t cover it, we were protected because the rental property was actually owned by the corporation, not us personally.  Boy, were we in for a surprise when we found out we were being sued because the insurance only covered so much, they were coming after us for the rest.

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How To Best Negotiate A House Deal

Whether it’s selling your home or buying a home, more often than not you’ll come across a stage where you’d have to negotiate. Negotiation is the art of getting what you want at your terms and conditions. Of course, it isn’t that easy and it takes time and patience especially when it comes to real estate dealings.

So how do you negotiate a good deal for yourself and what are the points you can use to negotiate a deal to your favour. Well here below are some points you should consider:

Comparative market analysis of homes in the area. Ask your real estate agent or find out through other sources what other homes in the area are selling for and what they’ve sold for in the past. Having such figures can keep you in good stead during the negotiation process. It can be advantageous to either party. A seller may quote the price of a neighbourhood home to justify for his price or show that he’s selling for less while a buyer can use such facts and figures to justify for a lower price.

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Buying Country Acreage and Rural Properties, To Buy or Not To Buy

Almost anyone can become a rural property owner; if you are willing to set goals, establish what your purposes are, plan ahead and set targets that are all aligned toward the same result. And, if you can be patient instead of requiring instant gratification.

There is no more $50-an-acre land; unless you count some of the inaccessible and unusable properties that are sometimes available in blocks of 10,000 acres or more; and even these properties are rare. But you can get rural properties more reasonably now than in the past IF you are willing to be creative in your expectations and in the ways you use and modify the property.

If you are in a big hurry to find rural property, you will likely not be able to find what you are looking for. Rural properties have fewer buyers who want to purchase them, but there are plenty of dreamers who have not considered the realities. There are seldom bargains available because most folks who own rural properties know exactly who to call first when they want to sell. If the property really is a bargain it is gone with one of the first ten phone calls the seller makes. However, if you are willing to “think outside the box” of convention you may end up with what is a bargain property for you.

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