Archive for July, 2009

The Basic Costs of Real Estate Investing

July 31st, 2009

The cost of investing in real estate is not the same for everybody. You may want to spend less than $100k while some investors surpass $1 million on every deal they make. With this in mind, there are some basic costs of real estate investing that fit into several categories.

1. The cost of the property. No matter what, if you are investing in real estate you are going to spend money on the property and all that goes along with it. As noted above, how much you spend on a piece of real estate depends on what you want as well as your budget.

2. Taxes. If you own real estate you are going to pay taxes on it. Do you have enough money in your budget to buy the property you want while also being able to afford the taxes?

3. Maintenance. Investing in real estate means making repairs and upgrades from time to time. You do not need this money upfront, but make sure you have enough available so you can take care of the proper fixes when need be.

Getting involved with real estate is a great way to turn an initial investment into bigger things. Consider the three basic costs above when deciding how much you can spend on your next piece of real estate.

Prevent Crime at Your Apartment

July 30th, 2009

Dodge Charger Police Car
Renters are hit by crime more than people realize, but by working together landlords and tenants can help prevent crime at their apartments.

Security Requirements

Check with state and local housing agencies to see what the security requirements are for rentals in your state. Make sure that your residence is complying with all requirements that relate to the safety and security of the residents.

Do a Walk Around

Landlords and tenants should do an annual walk around of the property together. Look for entrances that might not be locked properly, spots that seem poorly lit, bushes that criminals could hide behind and any routine suspicious activity.

Communicate Frequently

If you are a tenant then you should let your landlord know immediately if there seems to be any criminal activity occurring in or around the property. If you are a landlord and a crime has been committed, let the other tenants know so they can be more watchful of their property and possible criminal activity.

Encourage Community

Say hi to your neighbors and get to know them. People are more likely to look out for those they know than complete strangers. Landlords should get involved in this also and know every tenant by name (if possible). Create a feeling of community in your residence and you?ll find that people are happier and more charitable.

Creative Commons License photo credit: aresauburn???

Foreclosed Homes Become a Safety Threat in Southeast United States

July 29th, 2009

Atlantic hurricane season officially lasts from June 1st to November 30th in the U.S. And this year, besides the next big tropical disaster, cities on the coast have one more thing to worry about: foreclosed homes. According to an article by CBS (link: http://wbztv.com/business/hurricane.season.foreclosure.2.1026901.html), foreclosed homes pose a bigger problem than just falling investment values in hurricane-prone areas.

With no one to secure hurricane shutters, clean up debris or even prevent theft and vandalism, foreclosed homes become a liability not only to property values but to the safety of nearby homes and residents should a hurricane occur. Loose roof tiles, unprotected windows, empty garbage cans?all of these can become dangerous projectiles should a hurricane strike the area.

The root of the problem lies in the growing difficulty of tracking down the person or entity responsible for maintaining and securing the property. If the prior owner has vacated the premises, they could be states away. If a bank is set to take possession but has not yet taken title it ?puts the property in a sort of limbo? with the bank not yet caring for it, yet preventing neighbors, community associations or well meaning helpers with threats of trespassing and no legal right to attend to the building.

In some cases, like large, developed areas like Jacksonville, property management companies can be hired by the banks to take care of these foreclosed homes, but other, smaller cities might not have the manpower or funds.

The solution remains a mystery, as even the Florida Division of Emergency Management says securing foreclosures is not a priority. It seems, for now, residents of coastal states like Florida, Alabama, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Texas and Virginia will just have to hope that storms and hurricanes are taking a year off to let the economy and housing market recover.

What do Renters Want

July 29th, 2009

If you’re looking to get renters into your open units then maybe it’s time to take a look at supply and demand, basically, are you giving renters what they want?

If you ask tenants what they want in a rental unit you’ll get a bunch of ideas but three things will remain constant. They want a fair price, a quality home and something that is convenient to them. Keep in mind that convenience means different things to different people.

Beyond the basics tenants are looking for some amenities that give them convenience and comfort. They like bigger bathrooms, generous kitchens, and they love storage. Many large rental units are adding fitness areas, co-op libraries, community space and other luxuries that actually don’t cost a lot for the property owner but add a lot of value to the residents.

Another trend that is catching on everywhere has hit rental units as well, is the green movement. If you’re looking to get socially and environmentally conscious tenants (usually very good tenants by the way) then incorporating as many ecofriendly aspects into your home are important.

And finally, if you’re looking to attract tenants, let them know what plusses your units offer. Advertise your highlights and gear them to the sort of tenant that you want and that best suits your environment.

Home Trends for 2009

July 28th, 2009

Sustainable Kitchen
With this belt tightening economy people are changing the way they?re decorating and building new homes in 2009. One trend is that the economy is taking a toll and homes are smaller and more practical and people are looking at the important things in their homes because they?re spending more time at home.

The average home size had been 2,300 square feet and that is dropping pretty dramatically, by at least 100 square feet. In fact some of the McMansions built in the last decade may not be as desirable to buyers as older, smaller homes.

You?ll also see a lot less luxury around the house, both inside and out. People are no longer concerned with having the high-end everything and are looking for low maintenance, environmentally friendly features to add to their home.

With the cut backs in luxuries the new trend in uber chic is less is more. Look for design trends and home d?cor to pare down and become sleek with a focus on simple lines and multiple functions.
And because people are spending more time at home and focusing on entertaining the family together you?ll see televisions, game systems and living rooms on the rise. These areas will be where more money will be spent and the little luxuries may creep into the fray.

Creative Commons License photo credit: Jeremy Levine Design

Determining What to Charge for Rent

July 27th, 2009

If you?re a landlord and want to set a price for a rental unit or to adjust the current price you can?t simply pick a number out of the air. Well, you can but it?s doubtful that you?ll get renters at that price or that you?ll make ends meet. It?s a little more complicated than that and requires a little work.

The first thing you should do is determine your expenses. Is there a mortgage? Are there additional fees related to maintenance or other items that you pay regularly. Figure out any depreciation and appreciation. Remember to add in your regular upkeep fees. This gives you an idea of what you need to survive and what would give you a nice profit. But this is not necessarily what you?ll be able to get from the market.

The next step is to review your local rental market and see what people are paying for similar properties. This is really the best indicator of what you can charge for your rental units. By pricing yourself too high for your local market you may risk having too many open units. By pricing your units too low you may not break even and you risk getting undesirable tenants.

If you find that you need much more than your local market accepts then you?re probably not going to be financially successful and it may be time to consider a different line of business or make some drastic changes to your business model.

Are You Ready for the 2010 Winter Olympics Washington?

July 27th, 2009

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Pacific Northwest, get ready for the largest influx of tourists since the 1962 Seattle World?s Fair. With the Seatac International Airport, U.S./Canada border crossing station, and easy distance to the celebrated Canadian city itself, Washington State will be just as much in the spotlight this winter as their northern friends. No matter how you look at it, the 2010 Winter Olympic Games in Vancouver B.C. will have both the hospitality industry and the property management sectors in the state on their toes this winter.

Washington State Tourism is taking full advantage of being the ?gateway to the Olympic Games?? with its brand new website page www.ExperienceWA.com/2010WinterGames. With travel packages ranging from Mount Rainier to the Tri Cities area, the entire state is prepping for Olympic enthusiasts to take a few extra days exploring the Pacific Northwest. If you?re a Washington company, now is the perfect time to leverage your business.

How can Washington businesses capitalize on this? Try some of these ideas:

Whether you?re a Vancouver property management company, or a bed and breakfast in Forks, it?s time to start planning for the millions of tourists who will be arriving in a few short months.

Creative Commons License photo credit: debaird???

Becoming a Landlord

July 24th, 2009

Becoming a landlord for some people is an easy decision, it?s something they?ve always contemplated and researched thoroughly. For others it?s not such a snap decision but it may economically be the best solution.

In our current economic climate many people are finding themselves stuck with a home that is worth a lot less than what they paid or the current mortgage. In some situations the residents can?t afford their mortgage payments and are being forced to move into a much cheaper rental. In both of these situations renting your home may be the best decision as you can recoup some money while waiting for the market to turn.

If you think that becoming a landlord is for you there are some things you have to weigh carefully before jumping in. One of them is can you accept someone else living in a place you once thought of as home. When you sell a house this is a consideration but the feeling goes away after you?ve separated from the home. When you rent your home this feeling lingers and is very difficult for some people to overcome.

The other consideration is can you treat this as a business venture with all of the implications associated with it. There are legal implications involved in being a landlord and decisions should be made without emotion. You?ll also need to know the basics of being a landlord or you?ll want to hire a property management company.

And then you?ll have to recalculate the financial implications to make sure it?s a feasible choice for you and won?t cause you any more financial hardships.

Landlords and Late Night Repairs

July 23rd, 2009

{twisted} pipe dreams
Being a landlord is not an eight hour a day job. There will be days when you rarely think about your property, but others that call for much more attention. Simply put, if you are going to work as a landlord you should be ready for calls and repairs at anytime of the day or night. If you are not ready for late night repairs you may want to think twice about becoming a landlord.

If you are called on to make a repair you have to quickly assess the situation, and then determine the right course of action. For instance, a tenant who calls with no heat in the dead of winter will need some sort of assistance. If you don?t give it to him you could be in a lot of trouble. On the other hand, there are some repairs that may not need to be fixed right away. Of course, you don?t want to delay anything that will put a tenant and/or your property in harm?s way.

Being a landlord is not always an easy job. You can make a lot of money by investing in real estate, but don?t think you will never have to work for it. After making a few late night repairs you will realize just how hard you have to work to get paid. Simply put, being a landlord is a hands on job that will call for your attention morning, noon, and night.

Creative Commons License photo credit: normalityrelief

An Investment Property Takes Time out of your Life

July 22nd, 2009

When you invest in real estate you better be ready to be hands on. This is not the type of investment that you make and then sit back hoping for the best. If you are going to get involved with investment properties you should be 100 percent ready for this to take a lot of time out of your life. Of course, you are getting a lot in return. Most notably, you have the chance to earn a lot of money while growing your portfolio.

How much time does it take to manage an investment property? This all depends on what type of investment you make, as well as how hands on you want to be. For instance, you may want to invest in duplexes that you can rent to tenants. In this case, you can handle all the landlord responsibilities on your own or you can hire somebody to help. Either way, the work needs to get done. How this happens depends on the amount of time that you want to put in.

Fortunately, once you settle into a groove you will find it much easier to manage your investment property. You will get on a schedule of what you have to do and when you have to do it. This doesn?t mean that emergencies will never come up. But for the most part you should be able to plan your days and stick to this schedule. As long as you have some flexibility built in you should be alright.

Yes, an investment property does take time to manage. You have to decide if putting time into this process is worth it both personally and financially.