When handled correctly, investment properties can be profitable undertakings. Yet, the potential rewards do not come easy. It takes a large amount of hard work and dedication to experience desirable results. For those that want to try a hands-on approach to their properties as well as take home the full profit, here are tips that can set them up for success.
Become Skilled at Organization
Handling one property may seem easy, but with multiple estates, many more activities can occur at a wide variety of times. To keep the properties updated and rent collected on time, owners have to become experts in organization. This involves having all the necessary documents, dates, and repair work scheduled, recorded, and saved in a secure place. Better yet, they will see even more positive results if they master computer and web-based applications well.
Understand Market Value
There is a fine balance in creating a profit from rental holdings. If the owner charges a price that’s too high, they won’t find the tenant they require. Yet, if they charge less than they should, they can suffer a tremendous loss. By learning about real estate market analysis, they can see how size, location, and price can factor into their income-generating process.
To gain a profit from their real estate, owners must keep them filled with desirable tenants. This is best done by using the most popular online and print sources, which will yield a large pool of applicants. Moreover, they should showcase the features that cause their property to stand apart from other rentals.
Thoroughly Screen Potential Tenants
As owners acquire and rebuild their properties, they have a vision in mind about how they would like their real estate used. No one wants to see their hard work go down the drain by excessive damage or delayed payments. By deep-diving into the past of prospective renters, they will learn if they have a steady income and good credit. Owners can also speak with the applicant to learn if they have pets and how many people will occupy them.
Even after making the right decisions, owners will still encounter problems they have to solve. The best way to prevent problems from getting out of hand is by preparing for them before they occur. By maintaining relationships with lawyers, contractors, and handymen, a property owner won’t have to lose precious time when an issue occurs.
Just by setting up the right structure and plan, property owners can experience an impressive return with multiple investments.
Traditional real estate has been turned upside down by the introduction of virtual technology that assists home and commercial buyers and sellers.
Real estate, once considered a transaction resulting from a personal relationship between agent and seller, was already changing before the COVID-19 pandemic, but it is evolving now more than ever.
The benefits of virtual reality (VR) in real estate include the following:
(1) Distance is irrelevant.
Are you thinking of becoming a snowbird and looking for a home in Florida while living in Pennsylvania? Instead of booking multiple trips, you can narrow down the neighborhoods and homes you are interested in online from the comfort of your home.
(2) Properties under development come to life.
Design of commercial properties has always been guided by architectural drawings and two-dimensional mock-ups. Now, VR allows three dimensional views and makes it easier for buyers to request and implement timely changes because they are able to see the building in a more realistic view.
(3) VR is cost effective.
Yes, the technology costs money, but it quickly pays for itself. Consider the popular app called RoOomy. It allows for virtual staging.
According to Thinkmobiles.com, since 1985, real estate agents have been actively staging homes. Staged houses sell in 80% less time and often for higher prices.
RoOomy opens the staging process to the homeowner and allows the person to visualize how the house could be furnished to best meet his or her needs and preferences.
Because it is technology-based, the components can be reused. Gone are the days of the realtor dragging pictures, plants, and decor from a sold home to the next house for sale.
V-commerce goes one step further and allows the homeowner to purchase the actual piece that he or she has virtually staged in the home.
With so many benefits, it is hard to believe there are people who are not sold on the VR real estate experience.
Sam DiBianchi, founder of DiBianchi Real Estate in Fort Lauderdale, Florida tells Fortunebuilders.com,“Real estate is personal. Technology cannot get personal with a potential buyer or seller–it’s impossible.”
DiBianchi adds that VR is an excellent tool, but he believes it should be used as a tool and not be the all-encompassing real estate experience.
When it comes to financing real estate, there are a variety of channels. Some are very standard and well known, while others are hidden gems. Some factors to consider when selecting an avenue are the timeframe, the amount, and down payment. To get ready, set up contacts with as many financial systems. When a viable piece comes up, run it past several outlets to compare interest rates, fees, and terms.
This type of financing is something that big-box banks and institutional lenders offer. The loan officer must adhere to standard protocol. In the event some data does not fit into the box, they may not approve the deal. Some individuals choose this form because it is straightforward and comfortable.
Some hybrids of traditional real estate loans are FHA, USDA, and VA. These are government loans, and each one requires the applicant or property to meet specific criteria. Borrowers will pay mortgage insurance on an FHA loan. USDA loans are restricted to certain rural areas, and to qualify for the VA product, one must be a veteran or a veteran’s spouse. Both active and retired military personnel can apply. These loan products have different down payment requirements, which run from nothing down for the VA loan to 20% or more.
Private money is an agreement between two parties that does not need any outside confirmation. Private money can come from friends or family members or outside groups. Peer-to-peer platforms are popping up online. Through these portals, people can put in their credentials, the type of project, and the cost. Investors on the site comb through the opportunities and offer deals, or some operations have preset parameters.
Interest rates are typically higher, but the terms can be very flexible. Often these investors can get the cash out quickly, which is essential in a hot market.
Depending on the contract, there may be little to no down payment. For family and friend loans, that is not uncommon, but the peer-to-peer ones usually require some down.
Hard money is a blend of traditional financing and private funds. A hard money lending company collects funds from a group of investors. The borrower will have to meet some standards, and the process will go through a review. The investors will want some level of security, which can come in the form of a hefty down payment.
If the S&P CoreLogic Case-Shiller Home Price Indices are anything to go by, then the West Coast real estate is experiencing a boom. More home buyers are looking to Phoenix, San Diego, and other West Coast cities for the best real estate opportunities. If you are an investor, what are the top 3 spots to consider for real estate investment at the West Coast? Check them out below.
San Jose is a high-income capital of Silicon Valley with an excellent history of long term investment opportunities. Here, home values are some of the most expensive in the United States. Yet, the San Jose market is currently a buyer’s market with some of the most successful high-tech firms on the listings. In turn, sellers are willing to accept the asking value or below. Zillow estimates the median prices for San Jose at $1,002,873. The last ten years saw the industry appreciate by 77.36%.
In the Los Angeles area lies Hawthorne, a hidden gem for rental properties. Up to 70% of the residents here own or live in rental units. In turn, expect a high and steady rental income from your investment. The average monthly rent stands at $1,736. Typical neighborhoods with rental values are on an upward trend of as high as 194%, including Delta, Washington Ave/W135th St, and Del Aire. Plus, most home sizes fall in the two bedrooms’ apartment complex category.
When you are looking for an affordable real estate investment opportunity on the West Coast, get to Anaheim. With a median price of $685,000 and an appreciation rate of 41% in the last three years, this buyer’s market is popular with single-family homes. Further, it is a favorite tourist spot home to attractions like Disneyland that push up the rental income of the houses. Average mortgage costs stand at $2,535. Then, expect the sellers to lure you with competitive listings as they tap into the lower demand.
Other prime real estate spots at the West Coast include east of Los Angeles as you get to the Interstate 710, Portland’s’ rental units that are popular with students, and Oakland that is now appealing to a higher class of tenants. Then, liaise with an experienced broker who will take you through the steps of owning a part of the West Coast today.