Is it possible to make money investing in real estate? You see all of those ads for courses that cost hundreds of dollars, and claim to teach you how to make money by investing in real estate. The truth is that some research and knowledge can save you hundreds, and even thousands, when you invest in rental property. If you have some money to invest, rental property is a great way to turn your money into a lifetime of income.
There are many advantages to investing in rental property, but there are a few disadvantages as well. One advantage is that it is a long term investment that in the past has given an annual rate of return at around nine or ten percent. This is comparable to the stock market, but with significantly less risk. The capital gains tax on any profit you make from your rental property is twenty eight percent, which is less than most investment or employment income. One of the disadvantages of investing in rental property is the cost of tenant repairs, and another is vacancies.
There are some tips to follow to maximize the return on your rental property investment. The first is to consider a month to month lease for your rental property. Most landlords prefer to rent for a fixed period of time, like six months or one year. The advantages are less vacancy and more stability. There are some disadvantages to having a longer lease time as well. One is that it takes much longer to get an unwanted tenant out due to the legal system. With a month to month lease you are only required to give a tenant one month of notice to have them move. Certain groups of people, like college students and workers who may be relocated among others, actually prefer a short term month to month lease, and these groups will usually not sign an agreement for an extended time.
A short month to month lease can actually save you money in your real estate investing. This is because it is easier and quicker to raise the rent if your expenses for upkeep and other costs go up. With a longer lease, you can not raise the rent for that length of time, even if your costs go up. With a month to month lease, if your costs go up, you only have to give the tenant one month of notice before you can charge them more.
In summary, it is sometimes better to have a month to month lease with your rental real estate investment. The benefits far outweigh the costs, and certain good tenants would prefer the shorter terms. The short time length allows you to get any undesirable or non paying tenants out a lot faster, so good tenants can be found and moved in. This can save you quite a bit of money, repairs, and hassles. You invested in real estate to protect your money and make it grow, and a shorter lease period will work harder for your money.
Saturday, February 6, 2010
Sunday, January 31, 2010
Short Sales - A Great Opportunity for Realtors in These Tough Times
Article by:
Chris Badger
We all know the story. Sales are down everywhere, some areas more than others, but virtually no area is untouched. My community is a Midwestern college town that is rarely affected by recession, but still sales were off 21% in 2008.
But with sales down, the one thing rising in the real estate world is the number of Short Sales. The number of Short Sales is rising, and rising fast. RealtyTrac predicts that by the end of this year that 50% of sales nationally will involve Short Sales! Whether or not they're right about the number, there is no question that the number of Short Sales is growing fast.
There are several reasons that the number of Short Sales is growing. Property values being down is one, also over leveraged properties, high foreclosure rates and on and on. But there will be more of them if for no other reason than there is more awareness of Short Sales.
In addition lenders are gearing up to better handle the crush of Short Sales offers they are flooded with. Just yesterday I was talking with a Loss Mitigator from Citimortgage and he told me that his desk had just been moved because they were expanding from the current 350 in the department to 1300! And that's just one department at Citi. That is just one of many similar stories I've heard.
So there is no question that lenders want to do Short Sales, or they wouldn't be expanding their departments so fast.
So how does all this make for a great opportunity for Realtors?
It's a great opportunity because most agents hate Short Sales. Many agents don't want anything to do with Short Sales. Most Realtors think Short Sales are a pain. The truth is that most agents have no idea what they are doing with Short Sales. Because most agents don't know what they're doing, the Short Sales become more problematic, they take longer to close, and often don't even close at all!
Now since most agents either hate Short Sales, or they don't really know what they are doing with them, then they are not out there actively looking for Short Sale listings. So doesn't that sound like there could be a lot of Short Sale listings that an agent looking for them could find?
You bet it does. I've had agents just give me listings, those dreaded listings that they don't want, not even asking for a referral fee! Once people know you're good at Short Sales the listings will find you. But until that happens it is really pretty easy for you to find the listings that most agents don't want. How to do that is a topic for a different article, or several articles, and I'll try to get to that soon.
But are Short Sales a big pain? Nope. Think of it this way. There are a few additional documents you need to collect from the client when you take the listing. Then there are a few extra notations in the listing. When you get a contract signed you have to organize and send some papers to the lender. In a few weeks they call you back and you have to talk to them two or three times. Then you get ready for closing like any other deal.
That's not so hard is it?
Now if you don't know what your doing it isn't quite that easy, they can take a long time, the lender will seem like a pain (while they are thinking that you're a pain), lots of frustration follows, and the deal isn't very likely to close.
So if you know what your doing, Short Sales are pretty easy. But if you don't they are hard and frustrating. It's no different than anything else we could be talking about is it?
So the number of Short Sales are rising fast, and most agent either don't know, or don't even want to know how to handle Short Sales. That makes for a pretty good opportunity now while the market is slow.
Chris Badger
We all know the story. Sales are down everywhere, some areas more than others, but virtually no area is untouched. My community is a Midwestern college town that is rarely affected by recession, but still sales were off 21% in 2008.
But with sales down, the one thing rising in the real estate world is the number of Short Sales. The number of Short Sales is rising, and rising fast. RealtyTrac predicts that by the end of this year that 50% of sales nationally will involve Short Sales! Whether or not they're right about the number, there is no question that the number of Short Sales is growing fast.
There are several reasons that the number of Short Sales is growing. Property values being down is one, also over leveraged properties, high foreclosure rates and on and on. But there will be more of them if for no other reason than there is more awareness of Short Sales.
In addition lenders are gearing up to better handle the crush of Short Sales offers they are flooded with. Just yesterday I was talking with a Loss Mitigator from Citimortgage and he told me that his desk had just been moved because they were expanding from the current 350 in the department to 1300! And that's just one department at Citi. That is just one of many similar stories I've heard.
So there is no question that lenders want to do Short Sales, or they wouldn't be expanding their departments so fast.
So how does all this make for a great opportunity for Realtors?
It's a great opportunity because most agents hate Short Sales. Many agents don't want anything to do with Short Sales. Most Realtors think Short Sales are a pain. The truth is that most agents have no idea what they are doing with Short Sales. Because most agents don't know what they're doing, the Short Sales become more problematic, they take longer to close, and often don't even close at all!
Now since most agents either hate Short Sales, or they don't really know what they are doing with them, then they are not out there actively looking for Short Sale listings. So doesn't that sound like there could be a lot of Short Sale listings that an agent looking for them could find?
You bet it does. I've had agents just give me listings, those dreaded listings that they don't want, not even asking for a referral fee! Once people know you're good at Short Sales the listings will find you. But until that happens it is really pretty easy for you to find the listings that most agents don't want. How to do that is a topic for a different article, or several articles, and I'll try to get to that soon.
But are Short Sales a big pain? Nope. Think of it this way. There are a few additional documents you need to collect from the client when you take the listing. Then there are a few extra notations in the listing. When you get a contract signed you have to organize and send some papers to the lender. In a few weeks they call you back and you have to talk to them two or three times. Then you get ready for closing like any other deal.
That's not so hard is it?
Now if you don't know what your doing it isn't quite that easy, they can take a long time, the lender will seem like a pain (while they are thinking that you're a pain), lots of frustration follows, and the deal isn't very likely to close.
So if you know what your doing, Short Sales are pretty easy. But if you don't they are hard and frustrating. It's no different than anything else we could be talking about is it?
So the number of Short Sales are rising fast, and most agent either don't know, or don't even want to know how to handle Short Sales. That makes for a pretty good opportunity now while the market is slow.
Wednesday, January 27, 2010
Do You Have A Real Estate Business Plan?
Do you have a real estate business plan or are you planning on just jumping into the real estate investment game unprepared? If the answer is the latter, you have to develop some sort of investing plan in order to succeed in this business.
Real estate is one of the most viable investments available. What is unique about investing in real estate is that you are presented with a tangible asset instead of a piece of paper. You can use any knowledge that you have with regard to fixing property to put sweat equity into the investment. When you go to sell the property, you will get the equity back in cash. Real estate investing can be done on the long term or short term basis.
Before you can start investing in real estate and expect to make money, you need to develop a real estate business plan. Treat your real estate investing business as a real business and you will see results. If you treat it like a hobby, it will pay like a hobby. So be sure to take your business seriously, right from the start.
In order to be considered a serious investor, you are going to want to take a real estate investing course to learn everything that you can possibly learn about the business. This includes how to find the properties that are the right opportunity, what to look for in a property, how to invest in the property, how to make an offer, what type of real estate documents are needed and how to protect your investment. Questions about financing and how you can invest in real estate with little or no money down should also be something with which you are quite familiar.
Too many real estate courses are taught by people who have never invested in real estate before. They are good teachers, they are just not familiar with what they are teaching. It can be a waste of time and money to take such a course. When looking for a real estate investment course
, look for one that is taught by someone who actually has had experience in the real estate investing game.
Real estate is your golden opportunity to make money. No where else can you expect such a high return for so little money. And if you are using the home as a place of business or even living in it, you are making even more money. As a matter of fact, if you buy and sell several times, and do some minor repairs to the homes that you are living in, you can be mortgage free after a couple of years. Imagine being able to create equity right out of thin air. You can, if you know the right way to invest and the right properties to buy. And in order to so that, you need a solid real estate business plan.
Do not go into real estate investing and treat it like a hobby. Treat it like the career you want it to be. Just as you would not embark on any other career without training, you need to get real estate training. Not just any training, either. Just as you would not want to settle for a mediocre education, you should not want to settle for anything but the best when it comes to real estate training.
Start your real estate business plan off right by seeking out the best real estate course that encompasses everything you need to know and is taught by knowledgeable individuals who have experience in real estate. This will get your career as a real estate investor off to a jump start.
For more info visit our website at http://www.chicagorealestateandapartments.com
Real estate is one of the most viable investments available. What is unique about investing in real estate is that you are presented with a tangible asset instead of a piece of paper. You can use any knowledge that you have with regard to fixing property to put sweat equity into the investment. When you go to sell the property, you will get the equity back in cash. Real estate investing can be done on the long term or short term basis.
Before you can start investing in real estate and expect to make money, you need to develop a real estate business plan. Treat your real estate investing business as a real business and you will see results. If you treat it like a hobby, it will pay like a hobby. So be sure to take your business seriously, right from the start.
In order to be considered a serious investor, you are going to want to take a real estate investing course to learn everything that you can possibly learn about the business. This includes how to find the properties that are the right opportunity, what to look for in a property, how to invest in the property, how to make an offer, what type of real estate documents are needed and how to protect your investment. Questions about financing and how you can invest in real estate with little or no money down should also be something with which you are quite familiar.
Too many real estate courses are taught by people who have never invested in real estate before. They are good teachers, they are just not familiar with what they are teaching. It can be a waste of time and money to take such a course. When looking for a real estate investment course
, look for one that is taught by someone who actually has had experience in the real estate investing game.
Real estate is your golden opportunity to make money. No where else can you expect such a high return for so little money. And if you are using the home as a place of business or even living in it, you are making even more money. As a matter of fact, if you buy and sell several times, and do some minor repairs to the homes that you are living in, you can be mortgage free after a couple of years. Imagine being able to create equity right out of thin air. You can, if you know the right way to invest and the right properties to buy. And in order to so that, you need a solid real estate business plan.
Do not go into real estate investing and treat it like a hobby. Treat it like the career you want it to be. Just as you would not embark on any other career without training, you need to get real estate training. Not just any training, either. Just as you would not want to settle for a mediocre education, you should not want to settle for anything but the best when it comes to real estate training.
Start your real estate business plan off right by seeking out the best real estate course that encompasses everything you need to know and is taught by knowledgeable individuals who have experience in real estate. This will get your career as a real estate investor off to a jump start.
For more info visit our website at http://www.chicagorealestateandapartments.com
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