How To Buy A Home In A Safe Area

buy a home in a safe area

Buyers are often surprised to find that if they want to buy a home in a safe area, they oftentimes need to do their own research.

That’s because many laws – especially in the U.S. – prohibit real estate agents from telling buyers about the safety of an area.

Here are three easy things that can help you to buy a home in a safe area.

Buy A Home In A Safe Area With Multiple Visits

Many home buyers make the mistake of only visiting the home they are buying once or twice.  And that’s usually at the same time on the same day of the week.

To make sure that you’re buying a home in a safe area it’s important to make multiple visits are different times.

Going by the house at midnight on a Saturday is a great way to find out if there are a lot of noisy parties.

Visiting in the early evening or weekday mornings is a good way to see what the neighborhood is like when people are home.  It’s also a good way to meet your potential new neighbors.

Talk To The Neighbors

Speaking of which, there’s nothing wrong with introducing yourself to your next door potential new neighbor.

In addition to making new friends, it’s also a good way to gather intelligence about the home you’re thinking about buying.

Online Research

There’s so much information on the internet today that can help you to buy a home in a safe area.

Things like crime statistics and locations of sex offenders are important.  Aerial views of the neighborhood, and the locations of schools, churches, and shopping centers are also just a few key strokes away.

 

Three Easy Ways To Increase Your Home Value

increase your home value

Here are three very easy ways to increase your home value and get buyers to pay more for it.   After all, like the saying goes, why spend (a lot) of money when you don’t have to?

Best Way To Increase Your Home Value

Real estate is all about location, location, location.  But real estate is also about appearance, appearance, appearance.

Improving the curb appeal of your home and its appearance is easy and relatively inexpensive.  Things you can do to improve the appearance of your home and increase its value include routine landscaping, decluttering, and fresh paint in today’s designer colors both inside and out.

Updated Fixtures

New faucets, electrical outlets and switches, and door handles are pleasing to the eye of the new home buyer.  Replacing these items is also pretty inexpensive and can usually be done without using a high-priced handyman or contractor.

You can increase your home value by thinking of updating fixtures as improving the curb appeal of the inside of your house.

Energy Efficient Appliances

For home owners who have a little extra money in their budget,  upgrading to LEED certified, energy efficient appliances can pay off in both the short- and long-run.

Are you thinking about selling your home in the not too distance future?  First-time home buyers will appreciate – and pay extra for – the work you’ve put into updating the appliances in your home to today’s Energy Star standards.

If you’re more of a buy-and-hold home owner, then the money you save by having energy efficient appliances will quickly add up over a few years.

Highly-rated air conditioning units, heating furnaces, water heaters, and kitchen appliances can help save a surprising amount of money with today’s energy efficient standards.

 

 

Real Estate Time Management Tips

real estate time management tips

Here are two real estate time management tips to help take running your real estate business to the next level.

Emails Take A Lot Of Time

There are certain tasks in any business that are affectionately called ‘time sucks‘.

Time sucks are things that, well, take up a lot of time without giving you anything in return.  Like more income, for example.

Email can be a huge time suck in any business, but especially in real estate.  That’s because real estate agents only get paid when a deal is done . . . and not by the hour or on a salary.

Even for correspondence that is time sensitive, checking, sending & receiving emails should be limited to two or three times each day.  Many people schedule their email times for first thing in the morning.  Then again around lunchtime, and toward the end of the day.

Have A Routine & Stick To It

Another good real estate time management tip is to have a routine and stick to it.

Devote a certain amount of time each day – at the same time each day – to tasks such as real estate marketing & prospecting, or client outreach, and administrative work.

Remember, having a successful real estate business isn’t about how many hours you work each day.

It’s about how smart you work!

Relationship Between REITs and Rising Interest Rates

reits and rising interest rates

In today’s rising interest rate environment, many real estate investors are wondering what the relationship is between REITs and rising interest rates.

Here are three factors to consider.

Asset Quality of the REIT

Experienced real estate investors understand that not all real estate assets are created equal.  That’s why a time-tested truism is that real estate is all about location, location, location.

But in a hot market with real estate prices rapidly rising year after year, it’s easy to forget about quality and focus solely on quantity.  Sometimes traditional real estate companies do this all too often.

As interest rates continue to rise, REIT managers may have a hard time refinancing if they made the mistake of buying a low-quality asset at too high of a price.

Property Loan Refinancing Timelines

Loans on commercial investment real estate and larger multi-family property are usually made for only a few years at a time.  That’s because lenders know that volatility in the real estate market can appear at any time.

Another reason for short-term real estate loans is that lenders what to ensure that the asset is being maintained and that the real estate property management is top notch.

It’s important for both residential and commercial REIT investors to understand when each individual loan becomes due and what the prospects are for refinancing.

Real Estate Assets of the REIT

Investors concerned about REITS and rising interest rates should also investigate the quality of each individual asset that the REIT owns.  This will help to identify potential problems when the time comes to refinance.

Some items to research include:

  • Uniqueness of property
  • Competitive environment
  • Occupancy and tenant types
  • Asset class – retail, office, industrial, multi-family residential
  • Economic drivers of the market area

REITs and Rising Interest Rate – The Crowdfunding Alternative

Investors who are worried about specific REITs and rising interest rates often find that crowdfunding can be a good alternative to buying a publicly-held REIT.

That’s because crowdfunding organizations such as RealtyMogul and Fundrise raise capital for one specific asset purchase at a time.  This makes it much easier for the individual real estate investors to determine whether the real estate investment makes sense for their portfolio.

 

How To Buy A Rental Property Investment

rental property investment

Owning a real estate rental property investment is one of the most time-tested ways to build wealth and generate income.

Here are three things to consider when buying a rental property investment.

A Rental Property Investment Isn’t Your Home

Many beginning real estate investors make the mistake of buying a rental property investment the same way they would buy a home to live in themselves.

They focus more on the amenities-  lush backyard, high-end fixtures & appliances, and a swimming pool – than looking at the property as a business.    True, items like these will attract tenants.  But they will also be more expensive to maintain, repair, and replace when damaged beyond repair.

Experienced rental property real estate investors prefer to buy a basic home with minimal upgrades and amenities.  Doing this allows for a quicker turn between tenants and less expensive repairs when needed.

Go Where The Renters Are

An easy way to determine where to buy a rental property investment is to buy in areas where there are already apartments or smaller multi family dwellings.

While doing this might sound like common sense, it’s surprising how many beginning investors in real estate don’t do this.

Apartment building developers & property managers have already done the heavy lifting.  They’ve figured out where the renters are and what the market rents are for the area.  Rather than reinventing the wheel, savvy smaller rental real estate investors simply adapt to what the big players have already done.

Treat Your Rental Property Investment Like A Business

As a small real estate investor it’s very easy to get caught up in tenant drama.

Remember, the tenant is your customer and not your friend.  You’re providing a nice place for them to live.  In exchange you expect the monthly rent to be paid in full and on time, each and every month, and the property to be well kept.

Experienced real estate investors know that once they allow a tenant to pay the rent late it will quickly become the norm and not the exception.

How To Buy A Multifamily Property

buy a multifamily property

Many real estate investors decide to buy a multifamily property after owning one or two single family rental houses.

While the asset classes are similar, there are some distinct differences between owning single family rentals and buying a multifamily property.

Before You Buy A Multifamily Property

Here are some general things to consider before you buy a multifamily property.

These are general comments.  They will vary depending on what market and what country your real estate investments are:

Exit StrategyBefore you buy, think about selling

When you invest in a single family home as a rental, selling it is easy.

That’s because you have a bigger buyer pool.  You can sell a rental house to another real estate investor, to the tenant, or to an owner-occupier who is buying the house to live in.

Selling a multifamily property is different.  Yes, you could ‘go condo’ by turning each rental unit into a property for sale.  But often times that’s easier said than done.

When the time comes to sell your multifamily real estate investment, your pool of prospective buyers is going to be other income property investors.

Unit TurnsHow quickly can a vacant unit be made rental ready?

We all know that time is money.  This is especially true when it comes to property managing and leasing multifamily property.

The term ‘unit turn’ refers to how quickly any needed repairs and updating can be done when an old tenant moves out and a new one moves in.

Some of the keys to turning a unit quickly include having the same fixtures, appliances, paint and flooring in each unit of your multifamily property.

Tenant TypesUnderstand who you are renting to and why

Knowing the type of tenant you will be renting to is key to successfully investing in multifamily property.

You will also want to have a firm understanding of the unique characteristics of your specific tenants.

For example, young professionals in an urban area will expect more amenities and stylish decor.  Other renters are just looking for a simple place to live.

Two Tips For New Landlords

tips for new landlords

Good tips for landlords are hard to come by, especially if you are new to the business of real estate property management.

Here are two more tips for new landlords that can save a lot of time, money and trouble.

Pictures Don’t Lie

Experienced real estate property managers and landlords leave as little as possible to the tenant’s imagination.

That’s why it’s a good idea to take photos of the appliances.  This includes the model label on the back of the machine.  Then, include this detailed information as part of the written real estate lease contract.

That way if an appliance happens to be missing during the move-out walk through it will be much easier to determine the replacement cost that the tenant is liable for.

Utilities Should Be Turned On

The rental lease that the tenant signs should specify that the utilities will be on when the move-out walk through is done.

Most leases actually call for this, but frequently the tenant doesn’t keep the electric, water, and gas turned on.

The reason for having the utilities on during the walk through is so the landlord or property manager can check for active water leaks and other damage that may have been caused due to tenant neglect.

Other Tips For New Landlords

New landlords are always anxious to get their first rental property rented.

But getting the wrong tenant will be much more expensive than taking the time to find and keep a great tenant.

A few other tips for new landlords include:

  • Don’t negotiate on the rent amount or down payment
  • Always run a tenant income and credit report and background check
  • Put everything in a written contract
  • Be aware of the landlord tenant laws in the market where your rental property is located

Remember, it’s always more expensive to get rid of a bad tenant – and to fix any damage caused by them – than it is to take the time and find and keep a great tenant to rent your property.

 

 

 

Why Home Prices Keep Rising & More People Keep Renting

home prices keep rising

One reason that home prices keep rising can be found in a recent report by the Pew Research Center.  The report notes that more households are renting than anytime over the past 50 years.

Over the last 12 years the number of people who own a home has remained basically the same, while the number of people who rent where they live increased by over 25%.

Everybody Is Renting

This rise in renters is across all demographic groups:

  • All age groups have seen an increase in rental households, with 65% of people younger than 35 renting where they live
  • White, black, and Hispanic ethnic groups have all seen a rise in renters over the last 10 years
  • People of all education levels are renting more, with households holding a bachelor’s degree or higher having the largest increase in renters

The rise in home renters is a pattern that is going to continue for quite some time.  It is also a reason why the costs of condos and single family home prices keep rising.

Why Do Home Prices Keep Rising?

Since 2012 private equity has moved into the home rental market in force.  Large REITs and smaller crowdfunding groups now buy homes in quantity and rent to the people that were foreclosed on and forced into bankruptcy during the last housing crisis.  These mega-home rental organizations continue to buy both new and existing home inventory.

The shortage of skilled labor and zoning laws that constrain the supply of new construction are another reason why home prices will continue to rise.

In 2011 only 13% of the members of the National Association of Home Builders cited labor costs as a concern.  Now 82% of home builders say rising labor costs are their biggest concern.  Both immigration policy and the increase in natural disasters such as Hurricane Harvey in Houston cause labor shortages in the construction sector.

Lumber futures have increased by more than 57% since President Trump imposed tariffs on Canadian lumber.  While that’s good for people in the lumber business, it is a disaster for single- and multi-family home builders who use lumber for framing.

In Summary

An increasing amount of new home construction and existing inventory is being purchased in bulk and turned into rental property.

At the same time the supply of new housing is limited by rising labor and materials costs and well-intentioned NIMBY governmental zoning policies that cause a shortage of buildable land.

How To Buy Your First Rental Property

how to buy your first rental property

I was recently quoted in a Fit Small Business article about how to buy your first rental property.

You can click on the above link to read the complete article.  But, here are two time-tested tips on buying a rental property along with some extra commentary.

When You Buy Your First Rental Property, Basic Is Better

Basic is always better when buying a rental property, and it also makes the real estate financing easier.

That’s because the more variables there are, the more things you have that can go wrong.

For example, a ‘plain vanilla’ house with very simple landscaping and inexpensive fixtures & appliances presents less of a risk to a real estate investor than does a luxury home with everything high-end, including a pool and a spa.

(Buying a condo to rent out is also a good option, but there are certain items to be aware of with this type of investment.)

While it’s true that a luxury rental will command a higher rent, there are also more things that can go wrong and more expensive repairs.

Often times, the bottom line or net income is exactly the same with a basic rental than with a luxury rental house.

Buy Where Renters Are

This is a common-sense item that new landlords and buyers often overlook.  They get so caught up in the house itself but they forget that they’re buying the house to rent out, not to live in themselves.

An easy way to know where the home renters are is to look in an area where there are a lot of apartment buildings.

Apartment developers and managers have already done all of the market research, so that you don’t have to.

Plus, when you have a rental house in an area where there are a lot of apartments, you’ll be able to rent to people who want to ‘move up’ from apartment living.

Even if you already own a rental house or commercial property, it’s always good to go back to the basics every now and then!

Sample Real Estate Profile For LinkedIn

real estate profile for linkedin

Here’s an example of a real estate profile for LinkedIn . . . or for any other social media platform that you’re using to building your online real estate presence.

It can be used whether you work in residential or commercial real estate.  This sample real estate profile for LinkedIn is also good for both companies and individual real estate agents as a lead-in for your professional bio.

Real Estate Profile For LinkedIn

[Your company name] is a full-service brokerage serving the Greater [Your city] area.

Our brokers specialize in all asset classes of real estate including: single family, multifamily, mixed-use, retail, office, industrial, special use, property valuations, property management, fix-n-flips, JV equity sourcing, and note sales.

[Company] works with real estate investors of all sizes – from experienced private investors to beginning real estate investors.

We know from our years of experience in the business and successfully closing hundreds of transactions that maximizing the return on your real estate investment in [City or Market]’s competitive real estate market takes more than just one person.

That’s why [Company] utilizes a unique, integrated team approach when buying or selling real estate on behalf of our clients.

While other real estate brokerages in [City or Market] limit the opportunities that their clients see, [Company] thinks outside of the box. We understand the power of team work and cross-marketing.

Our proprietary global network of over 150,000 active investors allows us to reach as many qualified buyers and sellers as possible, as quickly as possible.

[Company] combines today’s high-technology with an old school, hands-on approach.

We’ve built our solid reputation in the [City or Market] real estate market the old fashioned way . . . one client at a time.

[Broker-specific copy goes here]