How to Find Investment Properties

by Shawn Boday | Feb 7, 2019 | Real Estate Investing, Shawn Boday

Investing in real estate is an exciting opportunity, but, for those new to this type of investing, there are many unanswered questions. One of the biggest concerns new investors face is in finding the opportunities that will earn them a good return on their investment. There are actually a number of different ways to find new real estate investment opportunities, but you will still have to do your due diligence in researching any property you do find.

The Grapevine

This is still the best way to discover new properties that have just been listed and those that may be hitting the market soon. Since most properties don’t stay on the market for long, finding out about them early is often vital. Let people know you’re looking and you may hear about listings ahead of the public.

Craigslist

It’s hard to meet anyone who’s not familiar with Craigslist and it nears the top of the list for the most visited websites in the world. Think of it as a global classified ads site and you’ll begin to understand the significance it plays for investors. You can find deals for just about anything on Craigslist and that includes real estate.

Do Your Own Marketing

This is similar to word of mouth advertising, except that you’re trying to reach a much larger audience. By using print and digital marketing to notify the public about your real estate investing interests, you’ll bring sellers to your front door. This can help you find opportunities that will never reach the public eye if you act quickly enough.

LoopNet

This is a real estate listing site that specializes in sharing listings for commercial properties. The site hosts listings for apartment complexes and smaller multifamily homes as well as for restaurants, shopping centers, and other small business real estate ventures. LoopNet is often a good site to visit to find your next investment opportunity.
As you search the internet, you’ll likely find more sites that offer listings for real estate investment opportunities. While you may have to continuously check these sources until you find the right venture, your perseverance will pay off. It’s better to search for a longer period than to jump into an investment opportunity that carries too much risk. If you take the time to determine what you’re looking for in an investment opportunity, your chances for success will be multiplied.

Why You Should Invest in Single-Family Rentals

by Shawn Boday | Feb 1, 2019 | Business, Real Estate Investing, Shawn Boday

After a year marked by stock market volatility, many investors are looking for alternative investments to stocks. Such investors should consider the advantages of investing in single-family rentals.

High Demand

A low level of homeownership is one reason single-family rentals are in high demand. People are not seeking homeownership at the high rates of the past. Some seek single-family rentals to maintain their freedom to live anywhere. Others are would-be homeowners, but they have large amounts of debt from student loans and credit cards that make it difficult to qualify for or to pay a large mortgage.

With unemployment low and rising wages, strong job growth also is contributing to the high demand for single-family rentals. The country’s healthy labor market also is one factor that is leading the Federal Reserve toward a rise in interest rates, which would result in higher mortgage rates. An increase in mortgage rates would be good for investors in single-family rentals. Some people will continue renting because higher mortgage rates will price them out of homeownership.

Low Inventory

Currently, there’s a low inventory of single-family homes. The combination of high demand and low supply means landlords can charge more in rent (see below).

Rising Rents

A single-family rental has excellent potential for providing investors with positive monthly cash flow because rents are rising. Rental rates are expected to continue increasing in the near future.

Increasing Asset Value

The value of single-family homes has increased over the past year and is forecast for continued growth in 2019. Long-term investors in single-family homes are likely to see these assets gain value over time.

Asset Volatility Unlikely

Asset volatility is common in the stock market. However, prices in the housing market are not correlated to the stock market. The stability found in the real estate market may be attractive to equity investors.

Different Tenants

Cultural shifts and demographic changes have put new faces on tenants who rent a single-family home. Young adults are not putting the cultural value on homeownership that previous generations did. Although many young adults aren’t planning a home purchase, they still want the benefits of a single-family home, such as a yard and additional bedrooms, for their children. Downsizing baby boomers rent because they either cannot afford or don’t want a new mortgage.

3 Ways to Invest in Commercial Real Estate

by Shawn Boday | Jan 18, 2019 | Business, Real Estate, Real Estate Investing, Shawn Boday, Uncategorized

3 Ways to Invest in Commercial Real Estate

When the topic of real estate investing comes up, most people think of fix and flip opportunities. While that was once considered a valued method for building wealth, it’s certainly not the only way to get started in investing in real estate. By looking at several options, you may identify a method that best appeals to your skills and resources.

Directly Investing in Commercial Property

The fix and flip is starting to die out as people realize this isn’t the get rich quick scheme that television suggests. However, buying into a commercial property and holding onto it as a source of rental income is a legitimate way to make money in real estate. It requires patience and commitment because it will require you to maintain the property in good condition. You will also have to manage tenants and ensure each unit is consistently providing income. If you have the time and passion to devote to a commercial rental property, this may be the investment for you.

Becoming a Limited Partner

As a limited partner, you invest capital into a commercial rental property, while allowing another partner to manage the day to day operations. While you may get a say in how major decisions are handled, you leave many of the operational decisions up to the general partner. You simply invest capital along with other investors and, in exchange, you own a percentage of the property. If you want the perks of real estate investing without having to get your hands dirty, this is one way to accomplish that goal.

Invest in an REIT

Also known as a real estate investment trust, an REIT is essentially nothing more than a mutual fund that invests in real property assets. Each REIT focuses on a certain type of asset, so you can choose a REIT that invests in commercial shopping centers or one that invests in multi-family homes. The benefits here are that you don’t have to devote much personal time to the investments, while the REIT diversifies your holdings to maximize your potential for growth.

These are a few of the most common ways to invest in real estate. As mentioned, each type of investment requires a different level of personal involvement. This may be one of the deciding factors in determining which type of investment is right for you. Alternatively, you may choose to try multiple types of real estate investments to maximize your earnings. Your personal tastes and needs will determine which strategy is best for you.

A Beginner’s Guide To Investing In Industrial Real Estate

by Shawn Boday | Jan 10, 2019 | Business, Real Estate, Real Estate Investing, Shawn Boday

A Beginner’s Guide To Investing In Industrial Real Estate

Industrial real estate has long played second fiddle to more consistent investments like apartments and traditional retail outlets, but industrial investment is suddenly breaking out in a big way. The past few years have seen a steady 10% growth in the market, and the market was valued at almost half a billion in 2017. It’s a trend that’s likely to stay steady, bolstered by the growth of e-commerce and the need for more warehouses to support their operations. If you’ve ever considered investing in industrial real estate, now’s the time, and here are some tips that can help you make the most of your money.

Determining a Property’s Value

The industrial sector has been in decline for some time, and that means that there’s less in the way of formal standards for evaluating their value. You may have to do some extra work to figure out a property’s worth. Start by measuring the square footage and comparing it to other warehouses in your region. From this baseline, you can adjust the value by using a number of metrics like age, security, and the presence of useful equipment and technology.

Determining the Right Location

While residential and commercial properties have fairly similar standards for desirability, warehouses follow different rules. The one major selling point for a warehouse’s location is how well positioned it is to deliver product efficiently. The ideal location is situated near a major transit hub like an airport or seaport as well as a centralized highway. And while that’s the principle thing to keep in mind, picking a warehouse that’s near a major population center can also be a huge selling point that can increase your property’s values significantly.

The Advantages of New Properties

The obvious choice for new investors might be to put their money into aging warehouses. Older warehouses in urban areas are often outperforming newer developments due to their location, but there are a couple of reasons why they’re unwise choices for a long term investment. The scarcity of these locations makes them highly competitive targets, and many of them aren’t equipped to meet the needs of new e-commerce retailers. Their lack of height means that they aren’t well-suited to the more efficient verticality of modern warehouses, and upgrading them to accommodate the robotics that power the modern warehousing industry is so costly that they can’t really be seen as an economically frugal alternative to newer developments built from the ground up to meet the needs of tenants.

Investing in an Airbnb Property

by Shawn Boday | Dec 3, 2018 | Airbnb, Business, Real Estate, Shawn Boday

Airbnb is undoubtedly leading the way for the vacation rental ownership market. Airbnb is a worldwide sensation with properties located in 190 countries. As of November of this year (2018), 640,000 people have invested in and are hosts of an Airbnb property. As others see the popularity of the site and its competitors, many wonder if they should jump on board and invest in their own vacation rental property.

Investing in an Airbnb Property

Many people that would’ve otherwise never thought to rent out their home or apartment are looking into buying a piece of property just to get in on the popularity of Airbnb. Thinking of doing the same? Before you invest there are a few considerations you will want to take in account:

1. Research the Local Rules and Ordinances

Before purchasing a property for short-term rental, research the rules and ordinances in the area. Some cities enforce certain rules that limit short-term rentals in favor of long-term rentals. Depending on where one lives, they may find that investing in an Airbnb property breaks the law.

Moreover, some local rules force renters to pay additional taxes and fees on the income generated with their Airbnb. Similarly, these renters may also be forced to obtain certain licenses to be able to rent out their property.

2. Ensure that the Property Can Also Be Used for Long-Term Renting

Buying a property specifically for Airbnb? Be sure that the property is also available for long-term renting. As business is always ebbing and flowing, it isn’t feasible to solely rely on revenue from short-term rentals.

3. Keep Tax Rules in Mind

Renters that set their Airbnb property lower than the market value may find that they are disqualified from using the property as a tax write-off. Before setting the rates or the property, research the IRS tax code and ensure that the property is in accordance with federal guidelines.

4. Review All the Expenses of Your Short Term Rental

While renting a room in one’s apartment on Airbnb requires little additional effort, renting an entire property tack on extra responsibility for the renter. In addition to maintaining the property by repairing and cleaning it, the owner must pay for the water gas, cable, electric, and Internet. All of these should be reflected in the price of the rental.

Don’t invest in an Airbnb if all the aforementioned considerations haven’t been made. Failing to consider these four things can turn a potentially profitable investment into a loss.

How to Research Investment Properties Before You Buy

by Shawn Boday | Nov 20, 2018 | Business, Real Estate, Real Estate Investing, Shawn Boday

There’s a level of risk inherent to any investment, but successful investors can tell you that making money in this manner should never be a game of chance. Research constitutes a significant portion of any investor’s job, and that’s especially applicable when dealing with real estate. Any number of factors could affect the value of your property, but these tips can help you get some sensible grounding in the industry.

Learn the Lay of the Land

The value of a property is about a lot more than the size and quality of the home. The neighborhood and city it occupies is just as important, and getting a feel from the street level can help you not just predict what the property is worth now but what it might be worth in the future. If possible, you’ll want to make sure to visit the house itself so you can get an understanding of the local traffic situation, aesthetics, and access to entertainment and public facilities. Driving around can give you a big picture understanding, but going out on foot is just as important. Speak with local business owners and residents to get an understanding of the attitudes and get to know about upcoming development projects. This can be a good barometer for how well you can expect your property’s value to grow.

Assess the Market

There are a number of online resources that can help you determine if the property you’re looking at is a smart investment or a money trap. Check with a local Realtor or with online rental directories to get an understanding of typical rent in the area, and then evaluate that against your budget and the cost of your investment. Zillow can be a great resource here. You can also dig up the mortgage and lien history on your property directly. This information is public record and can be uncovered online without too much effort.

Scope Out Total Expenses

Figuring out the cost of your investment is about more than just comparing the cost of your mortgage to the average rent. You also have to take utilities, maintenance, and insurance into consideration. This will help you more accurately determine what your overall costs can be. And while some owners may be reticent to give up this information, the promise of a reliable buyer can often encourage them to be transparent with that data.

After putting these tips to use and conducting thorough research, you are ready to make your investment!

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