Tag Archives: Investing

The Imminent Arrival of the Institutional Investors

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In recent months, it is apparent that more and more large US firms have gone house hunting! These companies from New York and California started to appear at foreclosure auctions. They carry plastic folders crammed with cashiers' checks, because auction house only accepts cash and astonish locals with how much they are prepared to pay.     "Everybody is in Atlanta right now — they're following the distressed market," Tom Ruff, managing director of AZ Bidder LLC, a Phoenix-based firm that buys foreclosed homes for investors that expanded to Georgia. Renting a house was 57 percent more expensive than owning in Atlanta in August, the same as a year earlier, according to Trulia Inc. Higher rents make it more profitable for private equity firms to buy and lease properties to tenants, many of whom don't have the necessary credit score or down payment to finance a purchase. As more investors buy properties at auction, banks are listing fewer foreclosed homes on the open market, helping to drive up prices and competition for the diminishing pool of distressed homes, said Les … Continue reading →

Don’t Go It Alone

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Investing in real estate is like trying to lose weight; it is far easier and productive if you have some support. Just as your weight loss efforts will benefit from a personal trainer, proper equipment, and a well-devised plan, so will your real estate investment efforts. Have a plan Sit down and devise a complete, specific plan. It is not good enough for your plan to be, “I want to be rich.” Just as a weight loss program should include a specific goal, such as losing 40 pounds, your investment plan must have a specific goal in mind. Furthermore, the plan must include how to get there and when you want to achieve it. Equipment A good pair of walking shoes, a treadmill, and some weights might be part of your weight loss plan. For investing you will also need certain things – books to educate you, notebooks to jot down things you learn, software programs for calculating various things such as return on investment and property valuation tools, as well as many other tools to help with the process. … Continue reading →

Don’t Discriminate as a Landlord

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Nothing can sink your investment earning capacity quicker than being slammed with a discrimination lawsuit. If you are going to be a landlord, you must clearly understand the law and adhere to it strictly. The Fair Housing Act of 1968 and the Americans Disabilities Act both prohibit discrimination on various classes. A landlord cannot legally discriminate on the basis of color, race, nationality, religion, age, gender or familial status. Disabled people are also protected. A sure way to get “caught” is to place discriminatory statements into advertisements for your property. While you probably already understand that you could not print “Catholics only,” you might not realize that, “walking distance to Catholic church” imparts the same feeling even if you did not intend it to. In fact, it is suggested to avoid using the terms, “walking distance” as that can be misconstrued as discriminating against wheelchair-bound people. Obviously you will see a ton of possibly discriminatory statements as you peruse real estate ads, and this does not mean that each one will be facing a lawsuit or fine. However, it is … Continue reading →

Dealing with a Default Tenant

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Most property investors that deal in rental property eventually face the dreaded non-paying tenant. Learn about eviction and collection options and policies in your property’s area before you enter the arena of leasing property. Knowing how to word your lease contracts and how to best choose tenants is important at the beginning of the process. Security Deposit Most landlords require tenants to pay a security deposit. This amount can vary but in some cases the amount can be limited by law or by local market trends. The security deposit can be used not only for damages, but also for back rent as long as you comply with laws regarding notification. Court Judgement In order to get more money from your evicted tenant, you will need a court-ordered money judgment. The procedure to do this will vary from state to state. Once you have the judgment, you can proceed in various ways. This path however could be costly. Filing for a “levy of execution” on bank accounts is one of the easiest methods. This will be a fairly easy matter as … Continue reading →

Building Wealth in Real Estate

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Most people try to purchase their home at least 30 years before they plan to retire. Why? So that it is paid off before they retire so they can live easier in retirement. Makes sense, except very few people stay in the same home for 30 plus years; the average is about five to ten years. It is no wonder many of our seniors are struggling with a mortgage payment. Is there a better way? You bet! The answer lies in having more than one property. Perhaps you are thinking, “What? And pay for even more mortgages now?” In reality, by putting tenants in the properties, you should have no monthly expenses whatsoever, and often will have an additional income. Have enough properties producing an income and the mortgage on your home is covered as well. Guess where this leaves you in 30 years – yep, you got it, a bunch of free-and-clear properties, STILL producing income. Imagine no longer worrying about whether the social security program will still be around. Even if you have moved a number of times … Continue reading →

Benefits of Owning a Rental Property

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Owning rental properties, or in fact most any kind of property, is full of benefits to an investor. The issues in the market these days do not change that, and in some ways even makes it the best time to invest. Appreciation Although we have seen some value drops in real estate the past couple of years, it seems we have likely seen the bottom as prices have been more level lately. While it may take awhile to climb back up and even longer to get to where they were in the boom times, a buyer now is more likely than ever to enjoy appreciation on their portfolio of properties in the future. Depreciation Another advantage of investing in real estate is building and content depreciation. In the United States, the life of a residential rental property is considered by the IRS to have 27.5 years so on a $50,000 property one can deduct roughly $1,800 dollars in taxes a year. Furniture and equipment can usually be deducted over 7 years. Rental Demand Mass foreclosures have turned homeowners into renters, … Continue reading →

Becoming a Real Estate Investor

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The first step to becoming a real estate investor is just like entering into any business: you must start with a plan. Planning is a two step process – one part being to set specific goals and the other the action plan to accomplish the goals. Setting Goals Goals must be specific rather than vague. For example, a goal of “retire rich” is far too vague. A better goal is “have 10 properties for retirement” and an even better one is “have 10 properties within 10 years making $X per month in passive income.” Make sure your goal is reachable and attainable. Setting a goal too high will lead to frustration, but too low will sell yourself short. Action Plan An action plan is going to include all the steps that you will take that will make reaching your goals possible. It will include setting up milestones along the way – such as have 1 property per year in order to have the 10 properties in 10 years goal you set forth. It will also include those activities that will … Continue reading →

Bad Tenants Come From Bad Landlords

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Undoubtedly you’ve heard about the golden rule, “one should treat others as one would like others to treat oneself.” This is an incredible good rule for landlords to follow with the following tweak, “one should never rent to others that which they would not consider living.” Act Fast Too often landlords fail to provide for their tenant and then shake their heads when the tenant trashes their property, never considering that their actions or failure to act has led to the problem. A tenant is far less likely to have pride in their surroundings when the landlord shows no pride in the property. That doesn’t mean the property has to be made into a veritable showcase, but it needs to be maintained with repairs made quickly and effectively. Whose Fault? Another way a bad tenant is the fault of the landlord is that the landlord must be wise in the tenant selection process. There is more involved than a credit and referral check. When a landlord is showing a property to a prospective tenant, they should also be observing things … Continue reading →