How To Profit From Your Rental Properties

How To Profit From Your Rental Properties

There are lots of people who believe that harvesting huge profits from rental properties is one of the easiest businesses they can do for enjoying a luxurious life. The reason which at first instance, seems to be responsible for this myth be no tension of establishing a personal office or factory, no tension of appointing huge staff for getting different tasks accomplished on time, no concern about the sinking of funds on etc. In simple words it can be said that lots of people think that earning rent from the property given on rent doesn’t require any huge investment.

But, is it really so as it seems to be or earning profits from rental properties is complex and requires the proper involvement of the person investing his funds in the property for giving on rent. This in-fact is the matter of debate which is mainly because of the discussions which they have from their known ones who have given their property on rent. Although, this can be true, but that is possible in the case if you have rented the portion of your house to only one or two tenants. But, in case if you have two to three properties which you want to give on rent then looking after those properties could be quite messy for you, especially at the time when your tenant calls you at some odd timings.

Moreover, if you some properties for rent located in another corner of your city or is some other city then looking after those properties could be quite daunting for you. Because looking after all the properties at the same time won’t be possible for you, anyhow, even if you succeed in managing it, you might have to struggle with your tenants for rent and other issues. Anyhow, even if someone assumes that investing in property is one of the easiest methods of earning, then they do not know that it is like hitting the bullseye. So, how a novice can get rid of various issues arising from Rental Properties Adelaide for earning expected profits from his property.

An answer to this question in simple words can be hiring the services of the rental property management group which is constituted by the group of mavens having vast experience in looking after the various aspects associated with rental properties.

Why you should hire the services of rental property experts:

As referred above that most of the people consider earning money from rental properties as an easy task, agreed that it is. But, do you know how to search for the prospective tenants, how to interview the tenants and get their documents verified, what are the legal documents required to be prepared before giving any property on rent or what to do in case if your tenant refuses to pay rent on time or tries to exhibit his ownership on your property? All these questions are just illustrations of the problems which as a newbie, you might face while investing your funds in property, there might be various other issues about which you might have even not imagined could disturb you once you have given your property on the rent.

Anyhow, if you are aware about all these problems and know how to get through them, then undoubtedly nobody can stop you from becoming rich in a few years. But in case if you do not wish to face all these issues, then it would be better to at-least will think of hiring the services of the property management experts to avoid any type of critical situation in the future.

These experts will work for you and take care of your property as their own property on your behalf and will look after all issues arising from the property, starting from the hunting of the tenants to sorting out different issues which might face because of your tenants. Let us, for instance, say that, you have not allowed your tenants to park their vehicle inside your garage during your absence, but still if they do so and argue with you that as they are paying rent for your house, they are liable to use the garage also. At that time if they did not stop parking their vehicle inside the garage at that time the only option left with you will be getting your house vacated from the tenants quite early before the expiry of their agreement.

Article Source: http://EzineArticles.com/9638865


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

How to Analyze a Rental Income Property

How to Analyze a Rental Income Property

It has been said that more millionaires have been created through investing in real-estate than any other type of investment. However, for the unprepared and uninitiated, the potential for catastrophic financial decisions is always present. In this next article in our series, we’ll look at some of the key location factors that influence the value of residential investment property.

The single most important factor influencing the value of your residential investment property is consistent and strong demand from your potential renters and buyers. So it stands to reason that you should be buying rental properties in same places that people want to live. Although this sounds simple, too many new investors fail to consider the long term potential of the area when getting started with real-estate.

State Level:

State regulation and fiscal policy has a great deal of influence on a residential investment property. State business and personal income tax, as well as goods and services sales tax can have a huge impact on the in-migration of people and business. More regulation and taxes means fewer businesses and jobs. Fewer jobs means fewer people, fewer people means less demand for your property (i.e. lower rents, lower property appreciation and lower return on investment from your rental property). When investing in real-estate, consider States with strong, pro-business policies.

City Level:

As your geographic location begins to narrow, the location factors affecting your residential investment property start to become more specific. Although a city’s policies on attracting and retaining business is still very important to the long term outlook for jobs, immigration and in-migration, more local factors like large regional employers and a diversified industries become increasingly important. When buying rental properties and considering specific cities, look for an unemployment rate that is less than the national and state average. Also look for higher than average household income (national and state). Strong local employment and higher than average incomes means the area is growing and this will ultimately attract more people.

Neighborhood Level:

As you begin to narrow down the neighborhoods within your selected city, there are several factors that will impact your real-estate return-on-investment. Proximity to schools, shopping, business and transportation should all play a role when buying rental properties. Consider the city’s expansion plans for any light rail public transportation. Historically, investing in real-estate near (but not too near) the future site of a transit station has produced properties that have appreciated at a much greater rate than average. From the household shopping to the daily work commute, relative location and access to transportation are some of the most significant factors people consider when choosing where to live and should be a major factor in your decision when buying residential investment property.


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

The Purpose of Investing in Real Estate Should Be to Create Passive Income

The-Purpose-of-Investing-in-Real-Estate-Should-Be-to-Create-Passive-Income

When investing in real estate there are many different avenues to choose from. When deciding which avenue is best for you, it’s important to consider the difference between passive-income generating avenues and earned or working-income generating avenues. In fact, in my opinion, understanding the difference between passive income and working income is one of the most important things to consider when investing in real estate.

Working Income vrs. Passive Income:

Working Income: Working Income is buying a house, fixing it, and then selling it for a profit. Or building a house then selling it for a profit. Or my favorite is buying a house, holding it (hoping it will appreciate in value, while losing money every month), then selling it.

Passive Income: The best way to understand passive income is to play Robert Kiyosaki’s board game, “Cash Flow 101.” To win (get out of the rat race), you have to get your monthly passive income to exceed your monthly expenses. It’s a real eye-opener. In his game, the quickest way to achieve this is purchasing cash flowing rental properties. Passive income is income that is earned without you doing the work to earn it. Rental income is a great avenue for passive income.

Here are a few reasons why investing in rental properties are an attractive avenue for investing in real estate:

Lower Taxes: Passive income is one of the lowest taxed forms of income, especially rental income. Uncle Sam likes that you’re providing affordable housing and is willing to cut you some slack on the taxes. When you buy, fix, and sell a property, that income is taxed as capital gains and you’re going to pay Uncle Sam 25-40%. Also, owning rental properties is a business, allowing you to write off operating expenses of your business.

Depreciation: This is a benefit often overlooked. Owning rental property provides a non-cash write off over the useful life of the property. Depreciation is defined as the loss in value of the property over time due to wear and tear, physical deterioration and age. Residential income property is depreciated over a 27.5 year period using straight line depreciation (or in other words, depreciated by equal amounts each year over its useful life). While your accountant will do the math, the point is, it’s a non-cash expense lowering you overall tax liability.

Time: Perhaps the best benefit of investing in turn-key rental properties is that it creates time. Remember, passive income creates time, working income takes time. The problem with working income, not only in real estate but in any business, is you have to keep working to make money. The whole reason why any of us get into real estate is for the life-style it can provide. To me, real estate is a means to and end. It doesn’t define who I am. But if done right, it provides time and money to be, do, and have everything I want in life. That’s what this is all about. While a measly $200/mo cash flow on a single family rental property doesn’t sound as sexy as flipping a house and making a quick $15,000, you have to look at the bigger picture.

For example; if you acquire 20 turn-key properties from Equity Services, LLC, each providing $200/mo cash flow, that would be $4,000/mo passive income. That money comes in while you’re eating, sleeping or surfing on the beach (we have a lot of Hawaiian investors)! Now there is some work you’ll have to do, unless you get someone else to do it. Someone has to walk to the mailbox to collect your checks! I get my kids to do it. (There’s more to it than that but you get the point). If 20 properties seems too hard to achieve, remember the old saying; “How do you eat an elephant? One bite at a time!” Well, how do you acquire 20 rental properties? One house at a time! We have one client, Mitch, who is buying his first rental property from Equity Services, LLC. His goal is 500 units in 3 years. Wow! He’s definitely caught the vision of passive income.

Equity Services, LLC = Turn Key

When we’re asked what it is we do, we often state that we sell “turn-key rental properties.” In fact, if you look at our company logo, you’ll see a house with a key. So what does turn-key mean? It means, we have a system in place to handle everything from acquiring the properties, to managing the renovations, to providing the tenants and everything in between. While there are many benefits to using Equity Services, LLC such as our houses are priced right, they have equity, etc., the real value we add is by saving you the time and energy to acquire solid cash-flowing properties. We have a strong relationship with the banks and purchase distressed properties at a discount. We renovate the properties to our high standards (we have rehabbed over 100 properties since 2007). The property manager handles filling the units and managing the tenants. As Timothy Ferriss states in his book, The 4 Hour Workweek, “Our goal isn’t to create a business that is as large as possible but rather a business that bothers us as little as possible.” We have developed a proven system that saves our investors their valuable time. Every now and then we run into the “do-it yourself” investors. We had one investor who gathered information from us, flew down to Michigan, and bought a house. He quickly found out that it wasn’t as easy as he thought, especially long distance. If anything, it helped him appreciate what we do.

Before you run out and quit your “working income” J.O.B., consider this; Keep your job but focus on building your passive-income empire. Use you earned income to invest in more passive income. Then as Robert Kiyosaki teaches in his book Rich Dad Poor Dad, once your passive income surpasses your expenses, you’re financially free. And remember, “profit is only profitable to the extent that you can use it. For that you need time.” (T. Ferriss, The 4 Hour Workweek)


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

Top 5 US Property Markets

Rules-to-Follow-When-Buying-Investment-Property

With a recovering US Housing Market, now is the best time to invest in USA property. The only thing you have to decide is where to buy. Read on for info on the Top 5 USA Property markets…

1. TEXAS – Hands down the number 1 place to buy property in this economy with a 11.5% estimated profit increase according to the ROI. “Texas Real Estate defies US property market” says Texas Real Estate Magazine. The rise in property prices means an increase in returns and value for your investment. Finding reliable tenants for your property is also extremely important. It is a good thing that Austin is a job creating machine that expects to have created more than 810,000 new jobs by the end of 2012. Unemployment is also expected to drop from 7.1 percent in 2010 down to 5.8% by the end of the year. The bottom line is that buying USA property in Texas will give you ample returns and tenant security.

2. TENNESSEE – Memphis and other cities in Tennessee faced hard times during the housing crisis. Right now, prices are extremely low because of the large number of foreclosures. Have you ever heard the expression “Buy low, sell high?” Property prices in Memphis are expected to rise steadily over the course of the next decade, making it a hot spot for potential USA property investors.

3. FLORIDA – All the recent speculation about the USA property market has thrown the media into a frenzy. However, when it comes to the Florida market, everyone seems to agree. Zillow and Florida Relators are reporting an upward shift in prices across the state. The numbers show that single family home sales are up 30%! The increase in sales is a good sign that prices will begin to rise steadily for 2012. This prediction is supported by the Federal Reserve’s report on an increase in borrowers wanting prime residential mortgages. Banks are expected to start issuing more loans over the course of 2012.

4. ATLANTA – This place has the total package for USA property investment. For the past decade, Atlanta has seen some of the largest population increases in history. A growing city certainly means a growing economy and a decrease in unemployment. Still, prices are extremely low due to the large number of foreclosures. At the same time, rent hasn’t seen the same decreases most other cities in the USA. A strong demand for renters means that you won’t have problems finding quality tenants!

5. OKLAHOMA – The best thing you can do is stay away from the West Coast. Places like California, Nevada, and Arizona are bust markets. Instead, look at middle states with strong economic fundamentals. Oklahoma City has a reliable economy and steadily increasing housing market. Sometimes, the safe play is also the best!


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

6 Benefits of Real Estate Investment for Savvy Entrepreneurs

6-Benefits-of-Real-Estate-Investment-for-Savvy-Entrepreneurs

As being a property investor isn’t always glamorous however it is among the how to build wealth within the Long haul, specifically for the entrepreneurial-minded. Listed here are six reasons why you need to consider purchasing rental properties.

1. Income.

Lots of people purchase rental properties due to the money flow – the additional money that’s left in the end the debts happen to be compensated. The money flow can offer ongoing, monthly earnings that are mostly passive, enabling you to spend time creating a business, traveling or reinvesting in additional property.

Income from property is stable and more foreseeable than other companies. That’s ideal for entrepreneurs long lasting the good and the bad of start-up existence. The money flow might help float you although the bad occasions and live well throughout the good occasions.

2. Tax benefits.

Allow me to inquire quick questions: should you earn $100,000 at the own small business and that I earn $100,000 through rental properties, who get’s to help keep more?

Actually: I actually do. Since the government rewards apartment proprietors.

Not just may be the income caused by your rentals not susceptible to self-employment tax, the federal government offers tax benefits including depreciation and considerably lower tax-rates for lengthy-term profits.

3. The borrowed funds pay lower.

When you purchase accommodations property utilizing a mortgage, your tenant is really the main one having to pay the loan payment, thus growing your internet worth every month. Due to the loan pay, lower accommodations rentals are basically a checking account that grows instantly, without you depositing money every month.

Today you may owe $200,000 on the apartment, but the coming year you may only owe $195,000 since the tenant is making the payment for you personally, causing you to $5,000 more potent. Three decades lower the street, or regardless of the term of the loan, it’s compensated lower to $. You have a substantial asset that you could sell or continue renting, all because of your tenant having to pay the mortgage.

4. Appreciation.

As the loan has been compensated lower the need for the property, generally, rises. Yes, I understand, recessions do happen. Values do increase and lower. Use in the wrong duration of the marketplace. I receive it.

However…

With time, values do climb greater and greater. This is exactly why I am not within this property game for one year or perhaps a decade. I’m within this for existence. I understand my qualities continuously climb to ensure that 3 decades from now, everything is definitely worth way over I’m having to pay for this today.

5. A hedge against inflation.

Are you able to imagine having to pay $ 10 for any gallon of milk? Or $ 5 for any chocolate bar? While individuals prices appear exorbitant for you, this is actually the future due to inflation. Inflation is the procedure through which prices increase because of the worth of money decreasing.

Some people fear inflation, like an apartment owner, I expect it!

Once the cost of the gallon of milk hits ten dollars a gallon, you know what else will shoot over the top? Everything, including rents and property values! The main one factor that won’t increase, however, is my fixed-rate loan payment. As inflation pushes living costs greater and greater, my income is only going to increase. For this reason, the property is frequently known as “a hedge against inflation.” When inflation hits – I am ready!

6. Control.

I do not like my future associated with a boardroom on Wall Street or perhaps a nervous Chief executive officer in Plastic Valley.

For this reason, I select to take a position the majority of my earnings in tangible estate, knowing that I’m the one that accounts for my failure or success.

Basically, desire a better deal, I have to hustle to locate it.

When the rental market will get more competitive, I’m able to compensate by growing my advertising.

If values drop, I’m able to decide to wait for it or enhance the property they are driving the worth support.

Quite simply, I receive to manage the problem, and my financial future, with my very own two hands. Which suits me all right.

Don’t believe that simply by owning some rentals you’re instantly likely to begin building wealth. The property is effective – as long as you’re employed it right.

You have to learn to find bargains, how you can evaluate an investment and the way to finance any qualities you need to buy. Furthermore, you have to address it just like a business and nurture it as being it matures. It’s likely not really totally passive in advance, but because countless individuals throughout history have found, the payoff is worth the journey.

Article Source: http://EzineArticles.com/9600570


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

Need To Learn About Real Estate Quickly?

Tips-For-First-Home-Investors

Investing in real estate can be very profitable over time. However, in order to do well you must know what you are doing. The tips below can help you become a great real estate investor.

Learn all you can about the market before investing a dime in real estate. There is a ton of knowledge to gain and many methods that can make or break you. Read every source you can get your hands on; you can’t be too informed.

Decide which type of investing you will focus on with real estate before you begin. Flipping a property may be for you. Or, maybe you prefer rehab projects. Look at your interests and skill set when making a determination.

Make sure you pick a comfortable niche. You will find more success by focusing on a single market segment, as opposed to taking on varied projects. It is very important that you stay with what works and what you are good at, and that is the best way to generate lots of success for you.

Don’t assume that any property values always rise. It is dangerous to assume that any piece of property will rise in value. You want to instead focus on those properties that can provide you with a cash flow. Property value appreciation will help you invest in future properties.

If you plan to rent a property, use caution when selecting a tenant. The prospective tenant needs to be able to afford both rent for the first month as well as a deposit. If they can’t get their money together at this time, they probably won’t be able to make the rent. Keep on looking for a tenant.

Consider business properties as well as residential ones when you are considering new buildings to buy. Not only can a business property be rented for longer terms, but they can bring in a lot of money. You might think about a mini-mall or an office center, allowing you to broaden your portfolio.

Work well and play well when dealing with other people. Try to lose the image of them as competitors. By working well with others, you can network and increase your overall success rate. You can have many satisfied clients if you help one another. This can better your reputation.

Search the market for foreclosures, as these can gross you the most income during your investing. These properties will be listed below the market value of the home, as you can get some great deals to turn a profit with. There will be a bidding war, but if you win you could be sitting on a gold mine.

If you hope to sell a property you buy, then you need to factor in any remodeling or upgrades and repairs you make. If you plan to rent it out, set aside a maintenance budget, as well. Regardless, you must have a little discretionary income to put towards these things.

Reputation is important in the investing world. Therefore, always tell the truth and try not to make any enemies. Most importantly, follow through on what you say you are going to do. If you are not sure if you can do something, do not make the claim in the first place. Your reputation could suffer and affect your business as a result.

Try to eliminate emotion while you are negotiating. You won’t live here; you’re making an investment. Control your emotions so that you never overpay and cut into your potential for profit. You’ll end up with more money this way.

There are many benefits to investing in real estate when it comes to wealth and income. It can be hard to figure out. With any luck, this article can help new investors get started.

Article Source: http://EzineArticles.com/9602895


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

14 Reasons You Must Consider Owning Rental Properties

14-reasons-you-must-consider-owning-rental-properties

Rental properties have historically been the #1 wealth building strategy in real estate. You borrow money to buy your asset and then have someone else pay for the costs of your asset as you enjoy the benefits of appreciation, equity build-up, tax advantages, and cash flow. What a system!

Here are the 14 reasons you must consider owning rental properties.

1) Leverage (OPM)

The most powerful tool in real estate! You can typically borrow between 70% – 80% of the cost of the property and yet still receive 100% of the benefit of appreciation. OPM stands for Other People’s Money and is what helps fund your deals.

2) Someone Else Pays the Expenses

A good rental property is one where the rents paid by the tenant more than cover all of the expenses associated with the property and yet you still receive all of the benefits, including appreciation.

3) Appreciation

Typically home prices increase in value over time. According to the Texas A&M Real Estate Center, the median list price for a home in the Austin/Round Rock, TX MSA in 1990 was $72,252. In 2015 it was $260,000!

4) Loan Paydown / Equity Buildup

Even if you do not have much equity when you initially purchase the property, without contributing any additional capital you can build up significant equity. You get the duel benefit of using the rents collected to paydown on your mortgage while simultaneously enjoying appreciation. The house is now worth more in value than when you bought it and your loan balance is now lower than the original amount you borrowed. Over time, these two factors are significant!

5) Tax Benefits / Deductions

Most expenses associated with the cost of ownership can be directly deducted from any income you receive on the property. The tax benefits of owning real estate are extensive and are definitely worth exploring.

6) Depreciation

So even though as we discussed earlier home prices historically rise over time, for tax purposes you get to “depreciate” a certain percentage of the value of the rental property each year. Depreciation, which is an expense for tax purposes, serves as a powerful income shield.

7) Inflation

Inflation normally has a very negative connotation for most people. As a real estate investor, you put the power of inflation on your side. As the cost of living increases, you concurrently increase rent. The loan payment is fixed and you are now paying back the loan with “cheaper” dollars. Inflation is a great ally for debt financed properties!

8) Yield (Passive Income)

One of the key problems facing retirees is where to achieve decent yield on their investments. Real estate offers incredible passive income once the note is paid off.

9) Positive Cash Flow in Interim

Until the note is paid off, a good rental still returns several hundred dollars a month in positive cash flow.

10) Hard asset / Less volatile

With real estate you have the security of a hard asset that you can drive by and inspect at any time of your choosing. Additionally, although property values can go up and down, real estate is typically less volatile than other asset classes.

11) Own Property Free and Clear at End of Note

If you have a positive cash flow rental, other than the initial down payment, the rents collected from tenants have paid for all of the costs associated with the property. Once the loan is paid off, you now have an incredible cash flow producing asset with no debt attached to it.

12) Easy to Refinance

As property values increase over time, rental properties are relatively easy to refinance. This allows you to pull out equity and move it into other great property opportunities as they come along. Your initial down payment on the first property could serve as the equity that springboards you into many others.

13) Timing

With rental properties you decide when you sell. This is critically important for any tax minimization strategy. Additionally, by controlling the timing of a sale, you may also be eligible to capitalize on tremendously positive tax deferment programs like a 1031 Exchange.

14) Financial Freedom

This is the ultimate goal and what makes all of the hard work worth it! With long-term ownership of rental properties, you are able to create enough passive income that all of your living expenses are covered. You have no financial need to work at a job and have the freedom to pursue work (or any activity) for fulfillment.

As you can see from the list above, the economic structural systems and tax laws truly do benefit real estate investors! Real estate truly is an amazing tool you can use to transform your life!


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com