Tips For Better Real Estate Management

Tips-For-Better-Real-Estate-Management

Managing rental properties can be a tedious process sometimes landing you into legal issues. As a property manager or owner, you should think about preventing problems even before they occur to have an easier time maintaining order. Apart from making your tenants feel worthy, you should also find ways of making the management process easy for you especially when handling large properties or multiple properties. When you are organized in how you handle your property, it becomes easier to keep everything in check and a few tips can help you put in the best measures into the management process.

Tip 1 – Get a professional property manager

If you are a property owner with little knowledge of how to go about management, you should consider getting a professional property manager to ease out the process for you. Professional managers with some knowledge and experience in the real estate industry will know exactly how to go about the process and find organizational solutions to ease everything out. When there is a manager in place, you will feel more at peace and have fewer issues to deal with.

Tip 2 – Embrace technology

There are very effective real estate management solutions available thanks to technological advancements. Real estate management software is among the best solutions you can find to make the process easy and organized. Such a solution can improve communications and payments and data maintenance for the property. With the right system you will have an easy time collecting, returning and holding security deposits, as well as inspecting and documenting rental unit conditions before move-outs. There is just so much you can do with real estate management software to streamline processes so look for the best solution.

Tip 3 – Handle tenants appropriately

First of all you should consider screening tenants before allowing them into your property. It is a simple way of keeping troublesome characters off your property. It is also important that you put tenant landlord agreement in writing to keep things clear and ensure that you treat all tenants equally and without any discrimination. Discriminating prospective tenants based on sex, race, origin, disability or even familial status can land you into trouble. It is also important to respect their personal privacy even if the property is yours by notifying them prior to entering their rental units. Handling tenants appropriately will save you from a lot of trouble especially legally.

Tip 4 – Keep the property in top shape

Regular inspections are very important so you can make any improvements and changes where need be. Recklessness on your part leading to safety and security issues can lead to hefty losses in terms of compensations. You should therefore make a point of making prompt repairs and consider having a security system in place to give your tenants the sense of security they deserve as well as ensure that their safety is not compromised in any way.

Tip 5 – Oversee managers

They should be competent enough to keep your property in check. It is therefore important that as a landlord you choose and supervise property managers. Background checks and clearly spelling out their duties will prevent issues cropping out later.


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

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

Buy and Hold – Real Estate Investors Know Best

buy-and-hold-real-estate-investors-know-best

The main advantage real estate offers to those investing is leverage. Using a small amount of money, or even no money down, in some cases you can buy real estate worth tens or hundreds of thousands of dollars. The second advantage is the price appreciation that occurs in real estate, you may doubt this right now, but as a buy and hold investor you look at a 10 year property value appreciation, in which central Pennsylvania (Harrisburg, Lancaster, York) real estate investors saw a gain of 10-12% at current market value. A true retirement plan. The third advantage these savvy investors take advantage of is rehabbing a fixer upper, and if acquired properly will put a quick 20-30% of equity in your pocket to start the leverage ball rolling.

Multi unit buildings, small apartments, and single-family homes that you rent are good investments, because there is always a shortage of housing, and there are always people who can afford to rent but cannot afford to buy a home. There could not be a better description of the current housing market. The high price of home ownership, and the fact that it is generally undertaken with borrowed funds, there will always be renters, those who are afraid of the financial obligation or unwilling to leverage themselves into ownership, or today just plain old fact the lack of bank lending.

Pricing of real estate is also boosted by the simple law of supply and demand. The supply of rental properties is growing slowly, and the population that is currently in need of them has exploded, through both the record numbers of foreclosures, and the tightened credit market. As long as demand for rental housing continues to outrun supply rental rates will creep up, and market time of those rental units will come down.
Article Source: http://EzineArticles.com/1869707


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 Benefits of Owning Rental Properties

the-benefits-of-owning-rental-properties

Investing in rental properties is one of the most profitable ventures for an investor. A lot of investors have shown interest in real estate over the years because of the benefits associated with the real estate investment business. Although the number of people who are already in this line of business is large, there are still others who are not aware of the benefits of investing in rental properties. These properties are also known as turnkey investment properties, which means they are completely managed by an independent turnkey company and the investors get their monthly rents.

Some of the benefits of owning these investment properties are:

1. Monetary Benefits

Monetary benefits are those benefits that are directly measured in terms of the cost or returns on the property. The main interest here is how much money can be earned from owning a particular rental turnkey property. It can be divided into three basic benefits:

Cash flow: This is the money that will be left after settling taxes, debt service and operating expenses. It is the cash flow of the business and there are some things that could influence the income you can get from owning an investment property. Some of them include market competitions such as how developed is the location of your property and a sudden change in the market. In all of this, if the amount of revenue received from the business exceeds the amount of money spent, the excess is your cash flow.

Appreciation: This is often described as the nominal increase or rise in the value of a property. When the value of a rental property increases in absolute dollar terms, it is said to have appreciated. This normally occurs if the rate of increase in the value of a property exceeds the current inflation rate in the market.

Financial Leverage: This is the benefit received from the use of other people’s money (borrowed funds). This borrowed fund usually cost less than the return earned from its use. The investor will thus have control over a much larger investment.

2. Non-Monetary Returns

These are the benefits that cannot be measured directly but by the investor’s personal investment aims and opportunity cost linked with a particular benefit. The benefits are as follows:

Pride of Ownership: When you are the owner and controller of a turnkey investment property, there is this pride that comes with it. As a result, you can confidently manage and make decisions concerning the property.

Diversification: Investing in real estate can be a way of diversifying your investment portfolio to ensure that the risk is shared across different kinds of investment businesses.

Security: There is this sense of security that comes with owning a rental investment property. There is a collateral attach to real estate, which can’t be found with stocks.

All these benefits ensure that owning a rental property can help you achieve your financial goals by creating a secure source of passive income. It’s all about getting educated and taking some risks.

 


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

A Great Wealth Building Strategy With Outstanding Cashflow Returns

Turnkey-InvestmentWhen it comes to real estate investing, there are really two categories – investing for capital gains and investing for cashflow. Capital gains investing includes strategies where properties are bought and subsequently sold for a capital gain. Cashflow investing on the other hand involves purchasing properties and holding them to collect the cashflow they create.

Each strategy offers benefits but if you are trying to build wealth, then investing for cashflow is the strategy you must choose. The reason for this is because cashflow investing offers five different ways to profit from the investment.

1. Cashflow

As the term implies, cashflow investing creates a monthly passive income from the rent that is collected on the property. There are expenses like taxes, insurance and property management, but if purchased right, the rental income from the property should pay these expenses and also provide a monthly cashflow.

2. Appreciation

Many investors do not think of appreciation when they invest in rental properties. However, over time as a property appreciates it creates equity that the property owner can borrow against.

3. Depreciation

Depreciation is an expense the government allows you to take which covers the loss in value to the property due to wear and tear. The great thing about depreciation is that it is what is called a paper loss, meaning you do not actually pay for this expense. You are allowed to claim the expense though, and thus your taxes are lowered. At the time of writing, the US Government allows rental property to be depreciated over 27.5 years. For example, if you purchase a property for $27,500 you would be able to claim a $1000 depreciation deduction against the property every year for 27.5 years.

4. Interest Deduction

If you mortgage the property you are purchasing, the interest paid on this mortgage is deductible thus reducing your taxes.

5. Principle Reduction

If you mortgage the property, the rental income the property generates will pay your mortgage payment. Your tenant is effectively paying for the property on your behalf.

Because of these profit centers, cashflow investing is a great way invest in real estate, and if you purchase multiple properties it can be a great way to build wealth. However, setting up rental properties is not necessarily a straightforward thing to do. To be successful, an investor must have the knowledge on all of the following:

  • Where properties should be purchased
  • How to renovate the property to demand the highest rent
  • How to screen tenants properly
  • How to properly manage the property

Fortunately there are companies out there like Memphis Buy And Hold that offer real estate investors the opportunity to purchase “Turnkey” rental properties in great markets like Memphis. As the name implies, a turnkey property requires nothing more than the investor to purchase the property and start collecting rent checks. Finding the property, renovating, tenant placement and installation of the property management company are all taken care of by Memphis Buy And Hold. The only job the investor has once they purchase the property will be to cash the monthly rent checks.

aboutdcDerrick is a Memphis native 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

Why Purchase Turnkey Rental Properties

Untitled-3In relation to the economy and the uncertainty of where the financial markets are heading, corporate bailouts, bank bailouts, insurance company bailouts and the overall picture of real estate uncertainty poses one of the greatest times to secure income based properties. This downturn in the economy is not something that we (those of us who have experienced the 60’s and the late 70’s & 80’s) have not seen before in varying degrees but not altogether very different than today’s economy. By that, I mean the down turn in terms, of interest rates either up or down, double digit unemployment, banking & S&L failures, foreclosures – large inventories of real estate residential and commercial and tight credit.

Is the picture taking shape, yet? If you will go back and do your research on foreclosures and real estate in general for the downturn in the economy and then compare real estate in the various categories; residential, commercial and multi-family you will discover which had real value. Well, since you want me to tell you I will, it is income based properties. The rate of return on a property has and will always drive the value. The key is what parameters do I use to determine what type of property to purchase. The property that offers solid contracts for 1 year or longer, evaluate the rental clientele (less likely to vacate), location, condition of property (new or rehabbed) and if you are an absentee owner check the reliability of the management company are all keys, plus many others to consider when investing in rental income property. I will give you a hint on the asset base of some of the richest individuals in the world, it is real estate properties with an income base.

Investing in rental income property is wise for the short and long term. Those values are based on the stability of the income received. Property should be, today, well below values of last year and should cash flow at the lowest level of rent available for the area. Special rental circumstances offer better rates and those are the ones you need to search out and evaluate. Tax incentives for buying properties and higher depreciation, if available, are advantages to you the investor. Take advantage of any government programs to assist in paying for the property and, also, in renting the property. Who has more money than our government and why not get some of your tax money back, it spends, at least, for now.

Hopefully you will do your homework and find proof positive that income property will hold its value when purchased for the right price with a net ROI of 20% or greater. Make no mistake that there are inflated properties out there with a rental rate that will not hold up as the employment rate increases. They offer incentives to purchase which is the first sign for the buyer to beware, then check out all the surrounding property and rental rates. Rental property can be owned and managed by you with you doing all the work or having a turnkey situation with a management company in place. How valuable is your time and what is it worth for someone else to deal with the problems has to be the obvious question that you the investor must answer.

With the current real estate foreclosure, REO bank properties, short sales and other depressed real estate properties, you the investor can take advantage of the best of both worlds. Low real estate prices from several sources and cheaper rehab pricing can produce a win-win situation for you the investor. Capitalize on the market conditions of today and start making money to secure your future with higher rents and appreciation in value in the upturn. Financing these properties can increase the volume of properties and income which is a smart move with the low interest rates. Financing is a different horse of a different color and will require more time and space which leaves the door open for a future topic.

aboutdcDerrick is a Memphis native 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