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Real estate transactions: How they fit into a financial plan

For those looking to make solid investments, real estate may be a great option. If Alberta residents make wise real estate transactions, it could bode well for them regarding their long-term financial goals. Building wealth is important for the future, especially when families include children. Many solid financial plans include the procurement of real estate.

There are a few ways to make real estate work in a long-term financial plan. One of the most popular is buying a property that needs some TLC and then flipping it (selling it right away) once the work has been done. Of course, the seller hopes to make a profit on the property. If done the right way, this could be lucrative, but if not, buyers could stand to lose their shirts. Getting the help of a real estate professional is prudent before purchasing a handyman's special.

Purchasing income properties may be another good way of making some long-term financial gains. But, investors will have to find good, pay-on-time tenants, maintain the property in order and be prepared to act as a landlord. Purchasers must make sure that rents cover the mortgage, taxes and any other expenses that might arise from owning income property. 

Setting up a real estate investment trust (REIT) may be the best way for some people to build equity in their real estate holdings. Often these are geared toward commercial investments. Establishing a mortgage investment corporation that uses investors' money to finance mortgages may be an added possibility for some people. These companies are usually utilized by those who don't qualify for traditional mortgages, so setting up this type of business comes with some risk.

An Alberta lawyer may be able to help a client pondering some wise real estate transactions to build a financial portfolio. It is best to know the legalities associated with these types of deal to make the best choices possible. A lawyer will be able to help point out loop holes and flaws in contracts to help his or her client make the best deal possible.

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