Hospitality REITs for this Summer

Hospitality REITs for this Summer

REITs, or real estate income trusts, are a great starting point for anyone who has an interest in jumping into the world of real estate investing. Unlike other investments, REITs have a tendency to be very stable, and they also pay dividends. These days, many stocks don’t pay regular dividends. REITs are a great choice for people who are on fixed incomes and seek to generate regular dividend income.

REITs exist for a number of different types of properties. There are residential, medical, and retail REITs, to name just a few varieties. One particularly good bet for the summer months are REITs in the hospitality space. Some hotel and resort REITs have had returns of up to 18% for investors this year.

Hotel and resort REITs have some advantages compared to other types. These include the benefit of predictability. Hotels and resorts track their occupancy rates. These are often very stable. Hotels and resorts also respond to the market very quickly, adjusting their rates from night to night.

Although the hotel industry has faced challenges from competitors like AirBnB, several REITs are still posting incredible returns. In fact, many REITs are still acquiring new properties and posting returns of 18 to 20%. Some of the hottest investments of the summer are hospitality REITs.

The Chesapeake Lodging Trust (CHSP) is one such investment. This REIT holds mostly upscale properties in its portfolio. Recently, this REIT was acquired by Parks Hotels and Resorts. Together, they will become the second largest REIT in their category. This is an exciting time to invest in CHSP.

Summit Hotel Properties (INN) is, by contrast, invested in very mainstream hotel properties. Some Hyatt, Hilton and Marriott International properties are included within this REIT. INN earns returns of about 6%. This is great for the category. Its return is over 20%.

Pebblebrook Hotel Trust (PEB) invests mostly in urban hotel properties. In 2018, they merged with LaSalle Hotel Properties. So far for the year, Pebblebrook has returned about 7.5%. The Pebblebrook dividend has been at 3.5%.

Finally, the smaller Xenia Hotels & Resorts (XHR) is also a great option. XHR’s return for the year is 29.6%, and the yield is almost 5%. Based in Orlando, Xenia owns just 40 properties across 17 states. Xenia has outperformed expectations in recent quarters.

If you decide to make this summer, the summer of your first investment, investing in a Hospitality REITs, like the Chesapeake Lodging Trust Pebblebrook Hotel Trust, Pebblebrook Hotel Trust, or Summit Hotel Properties, is a great way to start.
3 Ways Blockchain Will Change The Future Of Real Estate

3 Ways Blockchain Will Change The Future Of Real Estate

There is no doubt that technology is completely changing the landscape of real estate. From online listings to virtual tours to even online mortgage tools, technology is making it easier than ever to buy and sell a property. One technology, in particular, that is poised to completely revolutionize real estate is an emerging technology known as blockchain. Most people are familiar with blockchain due to its role in regulating cryptocurrencies, but the potential applications for blockchain are almost limitless. From reducing costs to creating faster transactions blockchain can impact the real estate industry positively in a number of ways. Keep on reading to find out how blockchain will change the future of real estate.

1. Significantly reduce closing costs and associated fees

At the moment, a significant number of expenses are incurred any time a property changes hands. Closing costs on just a single residential property can run up to five percent of the purchase price and commercial closing costs go even higher. While real estate overall tends to appreciate over time, it takes some time to appreciate beyond the costs lost just by the transfer of ownership. Blockchain technology has the capacity to administer smart contracts, which will cut out a number of parties currently involved in the contractual transfer of ownership, which will also cut down significantly on expenses.

2. Conditional transactions

Not only are the contracts produced by the blockchain, but they are also administered by the blockchain. This means that smart contracts can also include the conditional release of funds. For instance, a smart contract can be entered into in which the purchasing party has a certain amount of time to ensure the property is in satisfactory condition before funds are released to the buyer. Since the contract is administered by blockchain, any disputes are also settled by the blockchain itself in a thoroughly democratic matter.

3. Swift transactions

On average, it takes roughly 50 days to close on a house. This is in part due to all of the many checks that need to take place before a mortgage can be fully approved, including inspection, appraisal and reviewing the property title. Not only can smart contracts reduce the costs associated with a change in ownership, but they can also significantly reduce the time it takes as well. This means that the time may not be far off when individuals can buy and sell a home as quickly, cheaply and conveniently as they can rent an apartment.

Follow These Rules When Investing In Overseas Real Estate

Follow These Rules When Investing In Overseas Real Estate

Why Invest In Overseas Real Estate?

Overseas real estate investments can provide you with additional opportunities besides the ones in your home country. They can also offer handsome returns and let you diversify your investment portfolio. As with all investments, foreign real estate investment does have its risks. You can minimize these risks by following the following rules.

The Rules to Follow when Investing in Overseas Real Estate

One can be overwhelmed quite easily by a foreign culture. Don’t get culture shock by studying the place you want to invest in ahead of time. Find out about the local culture, the way business is done, and the lifestyle of the area you want to invest in. This will help you make a smarter and less risky investment.

The laws of the foreign country you want to invest in may differ from the laws of your home country. Make sure you know what the rules for foreign investment in property are. You should also make sure that you follow all the rules and regulations in that country. Otherwise, you may find yourself facing legal battles or lose your investment altogether.

Foreign investments may be extremely attractive to investors. That attraction may come with considerable risk. High returns usually entail high risk, so you don’t want to invest all of your money into foreign real estate. It is wise to start small at first and then increase investments if they are successful.

A certain area may look extremely appealing to you as an investor. You may want to invest only in that area. This will leave you vulnerable to a downturn or disaster in that area. You don’t want to concentrate all of your investments into one location or basket. Spread the foreign real estate investment around to minimize risk.

Financing for an overseas real estate investment can get complicated. It can also get expensive. Be sure to look at all your options. The best way to avoid expensive financing and loads of paperwork is to pay with cash.

Finally, you should not attempt the investment alone. Enlist the help of local experts and professionals such as accountants, real estate agents, and attorneys. They can help you locate the ideal foreign real estate investment for you. Be sure you consider liquidity needs as well and the tax impact the investment will have. Taking this into consideration can help you pay fewer taxes and have more cash readily at hand when needed.

How Climate Change Can Affect Real Estate Investment

How Climate Change Can Affect Real Estate Investment

Climate change is a huge concern in our time. It has become such an evident issue that even governments and other stakeholders across the globe boost their concerted efforts of responsible use of the environment. Effects of climate change, such as adverse and rare, weather elements, flooding, hurricanes, extremely high and low temperatures, among others are already having a major impact on various industries including real estate. Here is an overview, according to experts, on how climate change is, directly and indirectly, affecting real estate.

  • Accumulating losses of real estate property

Adverse weather conditions, especially extremely high precipitation and hurricanes, have a huge impact on the structural integrity of real estate properties. Buildings in the path of major hurricanes in the United States suffer partial or total destruction. In the state of California alone, for instance, rising sea levels, extreme weather elements, coastal erosion, extreme floods, and wildfires cause an average of $3.9 billion worth of damage annually.

  • Reduced property demand in some areas

Properties located in states that experience extreme weather elements, especially hurricanes and high rainfall, have been determined to suffer low demand. This is even as anticipating property owners shy of purchasing properties from those areas for fear of suffering losses. States such as those located along the East Coast, including Florida, are particularly affected by annual hurricanes.

The reduced property demand in some areas is accompanied by hiked prices of properties located in states where the weather is favorable. This is because more anticipating homeowners choose to purchase property in those areas, thereby leading to increased demand.

In addition, real estate engineers are expected to up their game as far as design and construction of homes and properties are concerned. Buildings are expected to be constructed with reinforcements in order to withstand the extreme forces of weather such as hurricanes.

  • Increased property insurance

Property insurance companies have also been largely affected by extreme weather conditions brought by climate change. The increased risk of homes being exposed to adverse weather conditions and thereby suffering destruction has led to insurance companies to rethink the factors to consider in risk calculation. The cost of insuring a property located in an area that is highly prone to adverse climate change is exponentially high. Homeowners are there for paying the cost to secure homes in such areas.

Losing real estate property, reducing the demand, and increased property insurance are only a few effects of climate change. As the situation worsens as will the real estate industry.

4 of the Best Types of Real Estate Investment Software

4 of the Best Types of Real Estate Investment Software

Successful management of real estate properties requires a significant amount of skill and due diligence. The vast number and type of calculations to make in order to manage properties accurately can be mindbogglingly challenging. Real estate investors have a reprieve as they can invest in the acquisition of real estate investment management software available in the market. Here is an overview of such notable software.

RealData

RealData is considered one of the best real estate investment software in general given its ease of use platform coupled with multiple features and capabilities. Among the various features that RealData provides include analytic tools, data presentation, as well as marketing abilities for both residential and commercial real estate properties. The city is also equipped with various decision making and analysis tools capable of simulating different management inputs in the management of properties.

ZilCulator

ZilCulator is a freemium real estate investment software that is greatly suitable among new beginners and aspiring investors. Among the various tools that the platform offers include calculators that can analyze different kinds of real estate calculations such as market cap rates and mortgage rates. The platform can also simulate cash flow analysis while also enabling the investor to compute tens of expenditures such as repairs and new investments.

CREmodel

CREmodel is a multi-family property management software that doubles as a suitable apartment, project, and shopping center management platform. The software is well integrated with various spreadsheet templates and functions that enable the property investor to undertake different kinds of presentations and Excel-based calculations. Among the various analysis tools that CREmodel uses include return on investment analysis, cash flow analysis, cash-on-cash return analysis, and loan-to-value computations.

Real Estate Analysis Software LLC

Real Estate Analysis Software LLC offers combinations of different functions on one convenient platform. The software is particularly optimized for helping investors to analyze and simulate cash flow and return on investment before deciding on whether to invest in a property or sell it. Additional notable features that the Real Estate Analysis Software offers include a lease vs. buy analysis that gives an investor a chance to visualize how making either of the investment decisions would affect their cash flow and goals.

Software like Real Estate Analysis Software LLC, CREmodel, ZilCulator, and RealData help make investing in real estate an easier process. Introducing technological advancements like these is helping to revolutionize the real estate investment industry and bring it to the future.

3 Ways To Value An Investment Property

3 Ways To Value An Investment Property

Investing in real estate has a number of advantages over other types of investing. For instance, if you buy $100,000 worth of stock in a company and the company goes under you may end up losing your entire investment. While you may end up in a situation where you need to sell an investment property at a loss, you will rarely ever lose your entire investment. Conversely, however, real estate investments also incur ongoing expenses that you have to factor in before making the investment. Unlike a stock or a bond that has a value set by the market, the true value of real estate investments can be much harder to assess. To determine the true value of an investment property the following three key components need to be considered

1. Income potential

Unless you are just purchasing land, most types of real estate investments will have some type of income potential that has to be factored in when considering the value of a property. There are a number of ways to determine income potential depending on the type of property it is. To determine income, you need to determine the capitalization rate. Put simply, the capitalization rate is the projected annual income from the gross rent multiplier divided by the current value of the property.

2. Comparables

One of the most common methods of evaluating real estate investments is to compare the property you are considering investing in with other comparable properties in the area. While there are a number of variables that will affect both the price and income potential of the property you are considering versus other properties, finding properties that are legitimately comparable and accounting for differences can give you a fairly accurate estimate of what you can expect from your property.

3. Capital Asset Pricing Model (CAPM)

A CAPM is a comprehensive evaluation tool that considers a number of intangible variables such as the safety of the neighborhood and the age of the property and compares it to the expected ROI of other types of investments. For instance, you can expect an older rental property to need more major repairs and you can expect high tenant turnover in less desirable neighborhoods. These will all have an impact on your rental income. If a real estate investment is likely to have a smaller ROI than another investment tool, then it doesn’t make sense to invest in real estate.

Types of Real Estate Investment Loans

Types of Real Estate Investment Loans

Real estate investment is among the most successful field of investment in the world today. The investment is projected no to go down anytime soon as investors are flooding in each day. Just like any other form of investment, an investor needs to have some financial zeal to engage in this business. But most investors don’t always have bundles of cash on hand. Most of the top real estate investors borrow money from real estate fund lenders. Below are some of the most popular lenders for real estate credit and investment property loan lenders.

1. Hard money lenders

For many years now, Hard Money lending has been a crucial resource for almost all types of investments. It involves offering funds in the form of short-term credits of between 6 to 60 months. Hard Money may charge high interests and in most cases, may not have forestallment penalties. Traditionally, Hard Money lenders have been processing funding very fast and few requirements.

2. Transitional Funding

Transitional Funding is arguably the easiest and speediest lending method for most investors in real estate assets, especially in house flips and wholesale deals. More so, this type of lending is among the least popular forms of real asset financing. Transitional Funding works best for the investors who wish to be in, on, out and receive their real estate payments quickly. The terms of this funding method are too good that some people think it is a scam until when it works for them. Transitional Funding is solely for investors who do wholesale real estate deals. In Transitional Funding, an investor gets 100% funding, and their creditworthiness, income proof, and assets do not have to be checked. Besides, these types of lenders do not have to require the production of full title reports, appraisals, or insurance.

3. Private Lending

As the name suggests, Private Money Lenders are people with money and wish to loan it on real estate. These individuals consist of all kind of people with savings and investment or surplus cash intending to receive passive income. Private Money lenders are flexible and allow investors to negotiate their terms of lending. Their terms vary from one investor to another. The popularity of Private Lending has marked a significant rise due to more awareness of the opportunities they provide.

Hard money lenders, transitional funding, and private lending are all great ways that real estate investors can receive a loan and not miss out on a potential real estate investment.

4 Questions to Ask Yourself Before You Start a Career in Real Estate Investing

Investing in the real estate industry is one of the lucrative options available in our time. Before making a move to actualize your ambitions, due diligence should be exercised, especially since the sector can be quite volatile and risky. Here’s an outline of 4 important questions that you should ask yourself before delving further with your ambitions in real estate investments.

1. Why do you want to invest there?

The first question revolves questioning the actual ambition that drives you to think of investing in the real estate industry. It is meant to get you back to the drawing board and evaluate the precise reasons as to why investing in the real estate industry may be beneficial to you. As a beginner, you may need to focus more on the various benefits of investing in the real estate industry. Comprehensively understanding your purpose for the investment gets you moving on the right track.

2. How financially stable are you?

This question revolves around the broad concept of how to finance your real estate ambitions to ensure that you meet the goals you have set. You may need to look at your credit score and whether it qualifies you to obtain financing for your real estate projects or not. In case you have decided to pursue alternative financing options, such as partnerships, self-financing, and equity financing, you will need to exercise due diligence before investing in real estate.

3. How much of risk can you take?

The real estate industry is a risky business. Before taking a step further, you should understand the various risks in the real estate industry and whether you are willing and capable of taking them without jeopardizing your capital. Your risk tolerance levels will advise you on the kind of properties to invest in.

4. Are you self-motivated enough?

Profits in the real estate industry may be hard to come by, just like in any other business startup. You may, therefore, find yourself going for months without having made a single sale. Determination during such a tough time is crucial as it keeps you going. Being self-motivated is, therefore, a crucial quality that you should endeavor to propagate in your career as a real estate investor.

6 Real Estate Crowdfunding Platforms for Main Street Investors

6 Real Estate Crowdfunding Platforms for Main Street Investors

Traditional real estate investing requires a tremendous commitment of time, money and resources. As a result, most investors shy away from considering real estate as a investment option. Recently, real estate crowdfunding has emerged as a viable alternative for the average investor. Real estate crowdfunding allows investors to buy shares in single-family homes, multi-family apartment buildings, and commercial properties.

Crowdfunding in real estate offers two primary advantages.

  • Investors are not required to make a large capital investment. The minimum investment for some deals is $500.
  • Investors are not responsible for property management. The crowdfunding platform’s management team handles the upkeep and management of the property.

There are over 100 real estate crowdfunding platforms to choose from. Here are six crowdfunding platforms that cater to the average investor.

Fundrise

Fundrise offers investment in real estate projects ranging from single-family rental homes to commercial property renovations. Investors can invest for as little as $500 with Fundrise’s Starter Portfolio. For a minimum investment of $1,000, you can upgrade to one of three Core Plans — Supplemental Income, Balanced Investing, or Long-Term Growth.

RealtyMogul

RealtyMogul allows investors to invest in multi-family properties and debt securities through their two Real Estate Investment Trusts (REITs) — MOGULREIT I and MOGULREIT II. MOGULREIT I requires a $1,000 minimum investment. MOGULREIT II requires a $5,000 minimum investment.

Rich Uncles

Investors can invest in multi-family properties and student housing through Rich Uncles’ BRIX REIT. The NNN REIT gives investors the opportunity to invest in commercial, industrial, and retail properties leased to corporate tenants. Both REITs only require a $500 minimum investment.

stREITWise

The 1stREIT Office REIT provides investors the option to invest in commercial office properties for a minimum investment of $1,000. Since its inception, the fund has returned a dividend of 10%.

Upside Avenue

The Upside Avenue REIT gives investors the chance to invest in multi-family apartment buildings, senior living facilities, and student housing for a minimum investment of $2,000. The REIT has been in existence since 2002 and has averaged a 15 percent return on investment since inception.

Groundfloor

Unlike the other crowdfunding platforms mentioned, Groundfloor uses crowdfunded investments to provide real estate investment loans to borrowers. The rate of return on these loans ranges from 5.5 percent to 26 percent, based on the risk level.

These are 6 of the best crowdfunding platforms for main street investors, but there are so many more out there. Before committing to one, make sure you do your research. Feel free to consult your colleagues on which one is their favorite. Hopefully, you will have a better sense of what crowdfunding are available and can make an informed decision on which one is the best for you!
How to Prepare for the Next Recession as a Real Estate Investor

How to Prepare for the Next Recession as a Real Estate Investor

Unfortunately, no one knows when the next recession is coming. This can be daunting for real estate investors and the well being of their career. Smart real investors prepare to take advantage of the discounted real estate deals that become available during an economic downturn.

Purchase Well Now

Buying the right properties today will put real estate investors in a good position during a recession. Not overpaying for properties is important. An appropriate purchase price keeps more funds available for the future. Also, properties must provide a positive cash flow.While the location of properties is always an important factor in real estate, owning properties in the wrong location could mean financial disaster in an economic downturn. Investors should select properties in communities that aren’t dependent on one industry or employer. A recession increases the probability of a single industry or employer to fail, and as residents leave the community in search of economic opportunity, investors’ rental units become vacant and unprofitable.

The other location consideration is the neighborhood. Like school teachers, real estate investors classify neighborhoods with the letters A, B, C, or D. For many investors, properties in A-class neighborhoods are too expensive for positive cash flow. During a recession, properties in B-class and C-class neighborhoods should continue to provide positive cash flow because these communities tend to attract employed, long-term renters. Landlords who want to get ready for a recession should avoid D-class neighborhoods, which will likely see an increase in evictions during an economic downturn.

Get Access to Funds

Purchase prices usually drop during a recession. Investors need to be ready with access to funds. Some investors may be able to save up cash. Other investors should start networking now and build relationships with lenders. That way when the recession comes the lenders will already be familiar with the investor and his or her work. However, investors need to be careful that they don’t borrow so much now that they’re overleveraged when the recession hits.

Become a Real Estate Investor Before the Recession

A recession isn’t the time to start a real estate investment business. It takes time to establish a network, generate leads, learn how to buy the right properties, and find financing. When economic conditions lower prices in the real estate market, newcomers may find that experienced investors were ready and have taken the best deals. The most essential preparation for a recession is having expertise as a real estate investor before the downturn begins.