Tag: Real Estate Page 9 of 10

5 Ways to Add Value to Your Apartment Rentals

On November 28, 2016

Adding value to your apartment homes will give you the opportunity to increase rent and show tenants you are available and willing to assist them with any need. There are numerous ways you could increase the value of your apartment homes. Here are five ways to do so.

1) Increase Rent 1-3% Annually

Make sure to stay on top of your competition. Research their amenities, apartments, and rents. You can even go for a tour of your competition’s apartments to see what they offer to their tenants. This will allow you to make educated assumptions of how much you can increase your rent. According to Blake Hilgemann of Time Magazine, “Make sure you know the rents in the area, researching sites such as Zillow, Rentometer, Craigslist, and the MLS if you have access. You may find there is plenty of room to increase your revenue a small amount each year (1%-3%) while remaining competitive.” With these tactics in mind, there are plenty of other ways you can increase the rent, as well, in such a way that will keep tenants with you instead of leave you for the apartment complex down the street.

2) Make Updates to Increase the Rent

Paint walls with neutral, earthy tones, and use accent walls to add a home-like feeling. These types of paints can add serious value to tenants. For new tenants, it will draw them in and will likely have them feeling at home just by entering the apartment. While with current tenants, it will show them that your are serious about increasing the value of their apartment homes. Replace aged appliances with new, stainless steel appliances. This adds a clean look that will add value to your tenants’ and future tenants’ apartments. This will likely have them willing to pay an increase on rent come the end of their annual lease agreement.

3) Add a Swimming Pool

Adding a pool to the property will pique potential tenants’ interests, as it is one of the first amenities tenants will want to check out.

Keeping a pool clean and chemically balanced is vitally important if you add a pool in your apartment community. Make sure to have it thoroughly cleaned weekly and have certain maintenance checks done daily, according to your pool guys’ recommendations.

4) Utilize Landscapers for Beautiful Curb Appeal

Keeping a landscape fresh and trimmed is an excellent way to add value to your apartment rental properties. Using a landscaper to do this for you will keep you in the seat of managing the property instead of doing it yourself and possibly wasting your time. This can be a great investment to draw in your audience.

5) Take Safety Precautions

Switch out utility equipment indoors and outdoors for increased safety. Keep outdoor lighting fresh and bright to light up the areas in which they touch. Lighting streets significantly reduces crime. Keep them on timers so that they come on right when it is getting dark. Make sure to change the timers with daylight savings times! Replace the bulbs with eco-friendly, energy-efficient bulbs to reduce costs.

Use bulbs that are around 2000-3000 kelvin to provide light that looks warmer and cozier for areas such as living rooms and bedrooms. Use bulbs that are between 3100-4500 kelvin for bathrooms to help wake tenants up in the morning and for work areas, such as basements. Use bulbs that are 4600 kelvin and above for security lighting outside and garages.

Hire a night guard to show tenants you take safety seriously. Wall in the community and install gates to enter and exit the community. You can even hire someone to screen incoming automobiles at the entrances of apartment communities for added security. These all help increase the safety and security in and around apartment communities.

These are all ways you can increase the value of your apartment rental properties and your profit at the same time. What ways have you increased your rental properties’ values? What are some ideas you would share with others? Tweet me @WDarrowFiedler with any questions or thoughts!

10 Red Flags When Considering a Real Estate Investment

By W Darrow Fiedler

On November 17, 2016

In Investing, Real Estate

If you are looking for real estate to invest in, then you certainly want to read this blog. Make sure to stay away from the ten biggest red flags that you can encounter when searching for properties.

1) Demands a Deposit
When you have not seen the property yet, do not put down a deposit. Oftentimes, scammers will pull legitimate properties from legitimate sites and then take down the posting and disappear once they get your money.

2) Pressure to Act Immediately
Scammers will pressure you to put money down and act quickly. This is typical of scammers. Doing so can cost you money and legal fees to deal with them after the fact. Go at your own pace and make sure to consult trusted people about your purchase before moving forward.

3) Instructions to Not Consult Others
Speaking more on the topic consulting others, make sure to consult your lawyers and lenders before moving forward. Discussing all investments with trusted professionals before moving forward is vital to a successful purchase.

4) Upfront Fees
Before services are actually given, no fees are allowed to be made, according to the FTC’s Mortgage Assistance Relief Services Rule.

5) Extravagant Guarantees
When someone guarantees that they can expect to make a certain ROI in a certain amount of time and that this would work for anyone buying this property, it’s time to think about another property to invest in.

6) Lack of Documentation
Some scammers promise documents, such as titles and deeds, but they never show. Make sure to get all the documentation necessary to make this deal go through before taking any steps forward.

7) Location is in a Bad Neighborhood
Many factors play into buying a home, but location is the most important. You have probably heard the common phrase, “Location, location, location!” If the home is a great place in a poor or vandalized area, proceed with caution. Stay away from slummy or run down areas. You want to make sure a location has a great school system and economy, as well as an active local police enforcement to protect the citizens.

8) Businesses Are Closing
If you are looking to invest in an area that has businesses closing, beware. You want to invest in an area that has a great economy and demand for residents. If businesses are closing, it’s likely that people are moving out of the area to better locations.

9) Photographs Looked Altered
If you are looking at a property online and the photographs look altered, you may be making contact with a scam artist. People will alter photographs to make a property look better than it really is. Make sure to visit the property first hand before making any big decisions.

10) The Property Requires Too Much Maintenance
A property that requires a lot of maintenance or seems like it would need a lot of maintenance is not a good buy. You do not want your expenses to exceed your income from the property. One way to tell if a property is like this is to see how long it has been on the market. Make sure to do your research on properties to find out if they have been on the market for too long.

Do you think there are other red flags to watch out for? Tweet me @wdarrowfiedler, and we can talk about it!

Real Estate Investing 101: From Cradle to Grave Part Two

By W Darrow Fiedler

On October 26, 2016

In Investing, Real Estate

We are back with “9 Insightful Ways to Find Real Estate” and “Finding Ways to Fund Your Investment!” Let’s dive right into it.

9 Insightful Ways to Find Real Estate

Turner recommends using the following search methods:

The MLS: The MLS is the Multiple Listing Service. This can be found on websites, such as Realtor.com or Zillow.com, making the process of finding a property a click away.
Commercial Brokers: They are knowledgeable about real estate and can help you find a great deal. They also, sometimes, have listings that are not posted yet, which they can share with you.
Loopnet: “Loopnet.com is the largest listing site for commercial and large multifamily properties.”
Direct Mail: This includes signing up for print methods of marketing for properties.
Networking: Going to investment groups and real estate minded communities are great ways to find investors, venture capitalists, real estate gurus, or even partners. Networking can prove to be extremely profitable in the real estate industry. You never know when you will need a connection.

Turner also recommends:

Driving for Dollars: This simply includes driving around and looking for properties that interest you.
Craigslist: You can search for properties on the site, post an ad to showcase your search, or search for landlords who may themselves want to sell their property or know someone who does.
Eviction Records: Eviction records are in public records; so, find some properties that are being evicted, and your likelihood of finding a property to invest in will skyrocket.
Wholesalers: Wholesalers will purchase solid properties and, then, sell them to you for slightly higher prices.

Finding Ways to Fund Your Investment
According to Paul Esajian of Fortune Builders, here are four basic ways of financing your investment opportunities.

Cash Financing: Cash is the main source of financing that anyone would want for their property. This method allows for buyers, “to save on interest, increase their cash flow, and receive instant equity in their investment.”
Traditional Lenders: Traditional lenders require about one-quarter of your down payment up front with a good to excellent credit score.
Hard Money Lenders: Hard money lenders “provide short-term, high-rate loans.”
Private Money Lenders: Private money lenders are often-times venture capitalists. They want to invest financially, as well as offer their time in being an active part of the process. “Generally speaking, private money lenders will provide investors with cash to purchase real estate properties in exchange for a specific interest rate.”

After reviewing all of this information we have above, I suggest focusing on managing your property once you have bought it. Managing your property is critical to having a successful future. You can do this yourself, which can become a full-time job at times, or reach out to a property management group to do it for you.

If you are serious about real estate investment and want to learn more, check out BiggerPockets Ultimate Beginner’s Guide to Real Estate Investing. You can find blogs on my website, wdarrowfiedler.net, regarding real estate investments, as well. Tweet me @wdarrowfiedler with comments, thoughts, or questions about real estate investing!

Real Estate Investing 101: From Cradle to Grave Part One

By W Darrow Fiedler

On October 19, 2016

In Investing, Real Estate

If you are anything like me, you know that real estate is an infinitely complex, riveting topic. The real estate industry has endless facets that one can endlessly dive deeper into. When trying to find your way around real estate investing for the first time, it can be entirely overwhelming. That is what I am here for. With almost four decades of experience in the real estate industry, I can lead you through the basics of real estate investing with ease.

The reason why anyone wants to get into real estate investments are simple: Money. One can either make billions of dollars in the industry or, to the opposite extreme, lose billions. There are literally hundreds of ways to make money and build wealth from a real estate investment, but we are going to stick with a few basics to help make the learning curve easier.

The oldest method in the book is to purchase real estate that can be rented for a profit. And example of this would be buying an apartment complex or single/multifamily home that can be turned for a profit. Gaining a profit from a real estate purchase is a marathon, not a sprint. It is a business, not a hobby. In order to make money from a real estate investment, usually one must earn just enough money from the rent that is being paid in order to cover the cost of a mortgage. Then, one can start earning a profit once that mortgage is paid off.

To begin, I will describe the ways in which one can earn money from a property and then go into the popular types of property that people purchase. In Part Two, I will dig into ways to find properties and ways to fund your investments.

4 Ways to Earn an ROI on Your Real Estate

According to Brandon Turner of BiggerPockets.com, there are four key ways of building wealth from a real estate investment, which are the following:

“Appreciation: When property values rise, the difference between what you owe and what it’s worth will increase.
“Cash Flow: When a property is rented for income, and there is more income coming in each month than expenses going out.
“Tax Benefits: Owning investment properties can help offset income from other areas of your life (see your tax advisor for more information.).
“Principle Reduction: If you carry a loan on the investment property, each month your amount owed decreases slightly. For example, if you buy a single family home with a thirty-year mortgage, after thirty years the loan would be paid off (with the help of the tenants’ monthly rent payments) and you’ll own the property free-and-clear.”

Now that you know how money is earned in this industry, I will explain the types of property that people commonly purchase.

Popular Types of Real Estate

Turner suggests there are a few different types of common real estate that people invest in for a great ROI.

“Single Family Homes,
Multifamily Properties,
Apartment Complexes, and
Commercial Buildings.”

When going into real estate, it is important to keep in mind that it is vital that you choose one type of niche in which to invest. When you spread yourself too thin across multiple different strategies for investing, you become a source of knowledge to no one on real estate. When searching for ways to fund your investment, your investors will be less likely to trust you since you are not an expert in any one field.

For “9 Insightful Ways to Find Real Estate,” and “Finding Ways to Fund Your Investment,” check back next week! Tweet me @wdarrowfiedler with any thoughts or questions.

What to Consider When Investing in Real Estate with a Partner

By W Darrow Fiedler

On August 19, 2016

In Finance, Investing, News

Investing in real estate is a great way to add to your investment portfolio by securing a physical property that will net you returns in the future. Even so, the prospect of buying an investment property can be daunting for many people, which makes it much more appealing for a lot of first-time investors to go into their first deal with a partner. A partnership helps defray the cost of the investment, and it also provides a buffer for error by distributing responsibility across multiple parties, instead of just one. Still, there are a few aspects of partnerships in real estate investing that can be troublesome if both parties are not knowledgeable about potential pitfalls. Here are three aspects of real estate investing partnerships to be aware of before signing on the dotted line.

1) Who will supervise and pay for work on the property? Part of investing in real estate is often performing standard renovations to make sure that the property nets the highest amount of revenue when it gets put on the market. Before you put money down, have a frank discussion with your potential business partner about whose responsibility it will be to handle the work on the property – who is paying for it, who is supervising it, and who is completing the punch list once it has been completed. This conversation will help to inform both parties about their individual responsibilities, and it will save you an uncomfortable discussion later on if and when important details fall through the cracks.

2) How are you splitting equity? Presumably, the intention of investing in real estate is to increase its value and net greater returns on the property over time. It’s important to mutually agree on a split in equity before the property makes it to the market; if you wait until afterwards, you’ll automatically increase the likelihood that you’ll end up having an acrimonious, partnership-ending conflict over the split in equity later on, which could cost you not only a business partner, but also a significant amount of money.

3) What will you do if one party wants to leave the partnership? As with any business, it’s important to draw up a contract between both parties that clearly and irrefutably outlines what the terms of the agreement are and what will happen if one person decides that they no longer want to be involved in the ownership of the property. If you have a contract in place, then there will be no miscommunication about the roles and responsibilities of each person down the line, and there will be no conflict when one person decides to disengage, because you’ll already have a plan in place for this exact situation and others like it.

While it can be challenging to invest in real estate with a partner, it can also be infinitely more rewarding and significantly more lucrative. So, then, as long as you go into your business arrangement with open eyes and clear guidelines for the functions and division of labor for your business, you will set yourself – and your business partner – up for success in the rewarding world of real estate investing.