South Orange County Blog from Bob Phillips

Four Excellent Reasons to Buy a Home So You Can Get out of the “Renting Rut”

Three Excellent Reasons to Buy a Home So You Can Get out of the Renting a home is a good option for some, but buying a home just might be the best thing for you.

There are some big advantages to buying a house that will help you get out of your renting rut and focus more on your future.

#1.)  Build Equity

Did you know that when you rent a home, you help someone else build equity? Any changes that you make with your landlord’s approval puts money back in his or her pocket. Keeping the yard clean and taking care of routine maintenance builds equity in that property. When you buy a home of your own, you have the chance to build equity of your own, which can add significantly to your net worth.

#2.)  Save On Your Taxes

When you rent a house, you cannot deduct the money you spend on your taxes. Though some states will let you make a small deduction based on the total amount you spend in rent each month, you cannot make any deductions on your federal taxes. When you buy a home, you can save with a few different types of deductions.

The federal government lets you make a deduction if your home is worth more than what you currently owe on your taxes. If you purchased your first home, you can make a deduction in regards to your property taxes. You can also deduct money that you spend on some renovations and energy saving appliances.

#3.)  Put Your Personal Touch On Things

As long as you continue renting, you live in a home that belongs to someone else. Your landlord has final say over what you do and do not do. This often means that you cannot make repairs or significant changes without seeking approval first.

Renting a home lets you put your personal touch on things. You can paint the walls any colors you want, rip out the carpet to add hardwood flooring or even make significant changes outside to turn your new home into your dream home.

#4.)  Interest Rates Are STILL Incredibly LOW!

One factor that has contributed to home affordability has been the incredibly low interest rates that have been available for the last couple of years.

Now that you know more about the benefits of buying a home and how that purchase can get you out of the rental rut you’re in currently, isn’t it a good time to give me a call? I would be thrilled to assist you in becoming a homeowner. Let’s go home shopping!

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From RealtyTrac: Buying is more affordable than renting almost everywhere

A new blog from Trey Garrison of HousingWire.com, dated December 26th, 2014.

From RealtyTrac: Buying is more affordable than renting almost everywhere

rent-versus-buy“Buying is still more affordable than renting in the majority of U.S. housing markets, while the opposite is true in markets with the biggest increase in the millennial share of the population over the last six years, according to RealtyTrac.

RealtyTrac analyzed 2015 fair market rental data recently released by the U.S. Department for Housing and Urban Development for three-bedroom properties in 543 counties nationwide with a population of at least 100,000. In the 473 counties with sufficient rental and home price data, the fair market rent for a three-bedroom property in 2015 will require an average of 27% of median household income, while buying a median-priced home requires an average of 25% of median household income based on the median sales price in November.

Buying a median-priced home was more affordable than renting a three-bedroom property in 68% of the counties analyzed, representing 57% of the total population in those counties.

But in the 25 counties with the biggest increase in millennials between 2007 and 2013, fair market rents for a three-bedroom property in 2015 will require 30% of the median household income on average while buying a median-priced home requires 36% of median household income on average. For the analysis millennials were defined as anyone born between 1977 and 1992.

“First-time buyers and potential boomerang homebuyers are stuck between a rock and a hard place in today’s housing market: many of the markets with the jobs and amenities they want have hard-to-afford rents and even harder-to-afford home prices; while the more affordable markets have fewer well-paying jobs and tend to be off the beaten path,” said Daren Blomquist, vice president at RealtyTrac. “Those emerging markets with the combination of good jobs, good affordability and a growing population of new renters and potential first-time homebuyers represent the best opportunities for buy-and-hold real estate investors to buy low and benefit from rising rents in the years to come.”

The top markets with the biggest increase in the percentage of millennials over the past seven years were counties in Washington, D.C., San Francisco and Denver, all of which saw an increase of more than 50% in the share of the population that is millennials.

Other markets in the top 25 for biggest increase in millennials included counties in New York, Nashville, Portland, St. Louis, Seattle, Charlotte, Minneapolis, Indianapolis, Atlanta, Orlando, Austin, Des Moines and Midland, Texas.” ( End of Trey’s blog.)

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Tips for Finding New Tenants

Posted in Home Leasing, Home Renting, Orange County Real Estate, Real Estate Investing, Real Estate Tips by southorangecounty on November 25, 2014

Tips for Finding New Tenants

Mother and children outside home for rent“Here is the scenario: You have a great opportunity to boost your income by introducing your rental property to the real estate market.  The research is done, the investments are made, and now a vacancy is primed for amazing tenants to make it their new home. The problem you now face is, how do you find these amazing tenants?

Many landlords, property managers and real estate agents find themselves in this situation time and time again where the rental market competition is fierce. Statistics have shown that one-third of the population are renters and the common mindset has been shifting to this living scenario being the more preferable option. Furthermore, these renters are not just the college age demographic with little to no credit. There are nearly as many renters age 30-65 years old as there are renters who are under the age of 30.  This now begs the question, “How can one of these potential applicants become my new, great tenant?”

With such a broad span of ages regarding potential tenants, there should be an equally diverse range of methods to attract them to your vacant property.

Here are some of the most successful methods for filling a vacancy:

Word of Mouth

This is not the old game of telephone you played as a kid, where you give someone information, they pass it along to someone else, and you hope it returns to you the way you intended. Today, leveraging technology can turn anyone’s voice into the most effective megaphone you can imagine. Some of the most trustworthy tenants can come from those you know. Tell everyone you can about your vacancy through every channel at your disposal.

  • Check your phone contacts and text people that might know a potential applicant.
  • Use every social media network you have at your disposal. Post the rental advertisement on Facebook, Twitter, Instagram, etc. Be sure to include photos!
  • Incorporate your vacant rental property into small talk conversations as you go about daily activities. A simple “. . . my day has been going well, I’ve been looking to fill a vacant rental. . .” can open the door to find your new renter.

With any method you use do not forget the old adage, “a picture is worth a thousand words.”  Keep multiple photos of your rental property on your cell phone and share the photos any time you promote the vacancy online.

Know Your Target Audience

Is your vacant property close to schools, malls, business parks or other areas of interest in the city? Look at this information and use it to your advantage to find some high-quality applicants. If a college is in the vicinity, post flyers on campus and highlight features of the house that might be attractive to renters who may not have much experience living on their own. Do not just consider advertising in locations close to shopping, as a perk to consumers. Anywhere with a large number of businesses have employees who likely would be excited to have a short commute.

Know Your Policies

There is more to filling a vacant rental than just finding someone to occupy it.  The ultimate goal is find well qualified renters who will treat the property with care and pay their rent on time. You will want to filter out the riff-raff that can waste your valuable time trying to rent a property for which they are clearly not qualified. Worse, they could end up creating additional, unnecessary costs for the property. To establish a set of clear, concise and most importantly legal rental policies, there are a few steps you can take:

  • Begin by educating yourself on jurisdictional rental laws. These can be found by doing a search online and referencing a state’s government (.gov) guide and the city website. For example, California released an online guide to outline the responsibilities of landlords and tenants.
  • Once you know the essentials of what is legal and illegal when renting a property, the next step should be writing a set of criteria to be consistently applied with each applicant. This should be a ‘go-to’ document that can be easily read by applicants to know whether they are qualified before they request your time to view a property. Common elements of these criteria include: A base credit score for acceptance; status of rental history (prior evictions, poor payment habits, etc.); minimum, provable income per month; and specific criminal convictions that will result in a denial.
  • Make sure policies you create are compliant with federal regulations, set forth by the Fair Housing Act and also state and city regulations. Many of these requirements ensure no discrimination takes place during the application process –both intentional and unintentional.

When a clear, concise and legally permissible rental policy is available for applicants, they can decide before they apply whether your vacancy is a viable option. This alone not only protects you, but will help bring in more qualified applicants to view your rental property.

 Don’t Schedule ‘Interviews’, Plan ‘Viewings’

It is in our nature as people and within our society to know and trust people. This is a good thing, but when it comes to renting a property it can pose some potential problems. The ‘interview’ stage of filling a vacancy is based on perception and opinion by the renting agent. This type of subjective reasoning can get the best of us in trouble and even eliminate the greatest potential tenants.

If an applicant has found your property, they know your rental policy, and they are still interested in it; the next step is to use methods that can keep all applicants on a level playing field. The most common of these is performing a background check that will provide the same type of nonbiased searches on all applicants. These checks will provide objective information that can be backed by credible data so the decision does not fall on any kind of ‘gut instinct’ that can lead to an applicant feeling they were discriminated against. This is the time when many sections of your rental policy can be checked off to ensure the applicant is a good fit for the property.

Finding great tenants can be a game of patience, but the more preplanning that goes into it, the better you can expect the end result to be. If you can begin the process the right way, you can build the type of relationship that makes relisting properties few and far between.” ( End of Ryan’s blog post.)

From Bob Phillips:  I have been helping my landlord clients get their rental properties successfully leased for almost 4 decades.  I have the resources to thoroughly screen prospective tenants, and have an outstanding record of successful tenancies.  If you’re about to rent a property you own, give me a call, and let’s discuss the possibilities.

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Thinking About Buying Rental Properties?

4_Quick_Tips_On_Becoming_A_Young_Real_Estate_InvestorThinking About Buying Rental Properties?

While housing is still very affordable in many areas of the country, it seems like a good time to purchase real estate as an investment — that is, to own rental property. Should the average American consider this as a legitimate means to grow their financial portfolio?

In a word, yes. Even during the housing recession you heard the experts maintaining that real estate was still a valuable investment. There are many reasons to take the plunge and invest in rental properties. Here are a few.

It’s a good time to buy property. Rates and property prices are generally low right now, which means you can get a great mortgage rate and a good price on a property you like. But rates and prices are slowly building all across the country. This is both a plus and a minus: every eighth of a point rise in rates means your purchase power goes down. You’ll get less property for the money, and as home prices rise you’ll pay more for less as well. But keep in mind

that property you purchase now will cost more in the future. As the market continues to recover, your investment should appreciate steadily.

Your expenses are offset in several ways. By buying a property and renting it out, your tenants will be covering a large portion of the costs you incur. Over time, rents will increase as you pay off the mortgage, leaving more income as profit. In addition, you’ll benefit from tax breaks and incentives* on depreciation and expenses.

Appreciation works in your favor. Your investment will be appreciating on the entire value of the property. If you put 25% down on a $400,000 property, you may be paying 4.5% interest on the 75% you borrow, but a 3% appreciation on the value of the property is on the entire $400,000, not just the $100,000 you put down. Compare that to your return on an investment in the stock market.

Diversity in your investment portfolio is a good idea. See above. And remember that by spreading out your investments, you’re more likely to reap the benefits of a changing economy.

You can invest in your retirement. If your $400,000 investment appreciates 3% per year for the next 20 years, just think of what you can do with the money when you sell the property upon your retirement. Or perhaps you bought a property you would want to retire to.

It’s true that being a landlord can be stressful for many people. However, the benefits of investing in property usually outweigh the negatives for most landlords. I am always available to review your goals and to help you determine the strategy and options that can benefit you the most. In addition, I’m also experienced with the management of rental properties and am available to relieve you of that chore.

Call, text, ( 949-887-5305 ) or email me ( BobPhillipsRE@gmail.com ) today to start to explore the possibilities.

*I am not a tax advisory expert. The information contained in this article is for informational purposes only and may not reflect current tax year rules and regulations. Consult your tax advisor or the IRS for current tax year rules, restrictions and regulations.

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Southern California Rents Are UP

prices-upShould You rent or buy? This is a question many would-be homeowners ask themselves. All too often You are left with the thought that owning is simply unaffordable. Fortunately, I have news for anyone who is “on the fence” about buying or renting; the decision to buy might become a little easier, as a new study from USC  predicts that rents will rise over the next two years.

According to the research performed by USC’s Lusk Center for Real Estate, rents across Southern California are expected to rise significantly by 2016 – the latest reminder of growing affordability difficulties throughout California.

In Los Angeles County, it’s expected rents will jump by 8.2% by 2016, increasing to an average monthly rent of $1,856. Similarly, rents are expected to increase by 8.6%, 9.9% and 6.9% across Orange County, the Inland Empire and San Diego County respectively.

On average, the SoCal region is expected to see an 8% bump, increasing faster than the 3%-4% rise we’ve seen this year, or more than 10% since January 2013.

What impact will higher rent have on the housing market? While the study from USC suggests that rental vacancy rates will slightly decline, many RE professionals are certain that this bump will be enough to drive some renters back into the buying market.

Richard Green, director of the Lusk Center, commented on the matter saying, “Though the economy and employment have improved, renters’ incomes are stagnant. So while net absorption and occupancy rates are moving in the right direction, affordability continues to worsen.”

In South Orange County, we are presently entering the Fall buying season, during which prices tend to become more negotiable. ( I usually recommend this time of year – until the end of January – as THE best time of the year to buy a house.)  Softer, more negotiable prices, combined with historically low interest rates, make for an unusually good environment, for buyers.  If you’re even just in the thinking about it stage, this might be a good time to get serious, and give me a call.

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More homeowners becoming landlords

An article by Les Christie, of CNN Money, 6/17/2014

ForRentSignHousePhotoLow mortgage rates and soaring rents have convinced a growing number of homeowners to hang onto their former homes and become landlords instead.

“Clients tell us all the time, ‘We’re never going to sell our home, even after we buy a new one,'” said Glenn Kelman,   CEO of the brokerage, Redfin.

Susan Young of Lawrence, Kan., refinanced the mortgage on her house in 2013, landing a 3.25% rate on a 30-year fixed loan. She bought another house but has not put her old home on the market.

“If the interest rate was high, I’d sell,” she said. “But this is such a perfect loan package, I just can’t bring myself to give it up.”

She gets $1,100 a month in rent, several hundred dollars more than her expenses, and is using the profits to pay off her mortgage.

Redfin reports that 19% of current homeowners either purchased or refinanced homes between 2011 and 2013 — when rates were historically low falling just below 3.4%.

Chris Cannon and his wife currently live in Mt. Lebanon, Pa. and plan to move to start a family. But he will a hard time letting go of his home.

“It would be incredibly hard to give up the 3% mortgage we have,” he said. “When we bought in November 2012, rates were at the bottom — about 3.4% for a 30-year — and we paid a couple of points to get ours down to 3%.”

He figures he can rent his home in Mt. Lebanon for $1,400 to $1,500 a month, easily covering his mortgage payment and taxes which total $1,100 a month.

The math works in most landlords’ favor these days. Rents have risen by about 20% nationwide since mid-2006, the housing bubble peak, while home prices are still about 21% below what they were at that time.

For people who are still underwater on their mortgages and unable to profit from a sale, renting helps soften the blow.

Juliana Ruiz and her husband Mauricio Jimenez bought their three-bedroom Pembroke Pines, Fla., home for $362,000 in June, 2005 when the market was red hot.

They opted for an adjustable rate mortgage, which turned out to be a great deal: rates have plunged, as have their mortgage payments. Now, they pay a 2.75% rate and owe $250,000 on the home, which is worth about $300,000 thanks to a recent surge in home values.

But since they now have three children and both Juliana and Mauricio work mostly from home, they needed more room.

They bought a six-bedroom home nearby and have been renting their old place out for a year.

“The local real estate market allows me to cover the mortgage and small incidentals with the rent collected,” said Ruiz. “At the same time, my property value is increasing.”

If the mortgage rate starts to climb, they’ll consider selling. By then, they hope they will be able to sell for a profit.

Of course, there are downsides to becoming a landlord. Owners have to make repairs, deal with tenants and cover expenses, even when the property is vacant.

“[Being a landlord is] definitely not for someone who hates spending money on plumbing repairs and new locks,” said Young.

And some tenants can be demanding, say if the water isn’t hot enough or the air conditioning not cold enough.

“Tenant happiness is important to me and I try to give them whatever they ask for — within reason,” she said.

The surge in landlords is working out well for most owners, but it is taking a toll on the housing market, according to Kelman. Every home converted into a rental property is one less that goes on the market. And in hot real estate markets these days, very few homes are up for sale.

“It’s a major reason we have low inventory and limited sales growth,” said Kelman. ( End of article.)

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The Top 5 Ways to Make More Money on Your Rental Properties

for_rentAn article by By Blake Hilgemann, from the BiggerPockets.com Blog, June 15th, 2014

Blake’s Website:

 http://www.rentalproperty101.com

Are your properties being fully utilized?

Have you maximized profits on the properties you already own?

If you cannot confidently answer yes to these questions then continue reading.

The 5 Tops Ways to Make More Money With Your Rental Properties

Rather than just acquiring as many properties as possible, let’s take a step back and think about whether or not the best way to make more money right now is to focus on your current portfolio.

1. Decrease Vacancy

To maximize the profit of your rental properties you must first minimize vacancy.

The best way to do this is to find a long-term tenant so that you don’t have to deal with turnover. This is covered separately by my next point because it is not the only way to keep your property occupied.

In the event that your tenant must move, vacancy can also be minimized by keeping turnaround time to a minimum. A friend of mine owns a condo in the D.C. area that is rented to 3 individual roommates.

Although multiple tenants have moved on, he has kept occupancy at essentially 100% by posting ads the minute he learns of the move. Demand in the area is so high that he will have immediate interest and line up a new tenant to move in on the coat tails of the old one.

You might be thinking “how does that apply to my property in an area with lower demand”. The thing is, nearly every property in every neighborhood has solid demand at a price.

What do you think would happen if you lowered the rent of this property by 25%?

People would be falling over each other to live there, even if it meant breaking their current lease, wouldn’t they?

If not, then you have invested in a seriously economically depressed neighborhood!

I am not suggesting that you offer your properties for ridiculously low rents, but am exaggerating to make the point that if your vacancies are high you may be doing it to yourself and need to think about your price point.

Every month of vacancy costs you 8.3% of your potential yearly revenue, so you would be better off renting every property one month faster for 5% less rent, two months faster for 10% less rent, and so on.

Another way to think about vacancy is this. If a property does not have some characteristic that sets it apart from the rest and sells itself such as a prime location or a to-die-for kitchen, you can give it one by providing the best value in town.

I once had a vacancy problem that cost me almost six months in rent. By my calculations above, I would have made out much better if I had lowered rents by 30% and found a good tenant immediately! Of course, I was not expecting such a problem in the beginning.

The property is a large 4 bedroom 2.5 bath home in a very family friendly community. It became vacant right around Thanksgiving, which I learned is the worst possible time to be selling or renting a home to families since very few want to move during the holidays and in the middle of the school year.

The first mistake that I made was to slow play the work that needed to be done to make the home truly desirable as a rental. It needed new interior paint and carpeting, and rather than taking care of it immediately, I prioritized a big vacation to New Zealand that I was about to embark on.

Two months later there had been very little interest and I realized I needed to lower the rent a bit and get the home in prime condition right away. The work took a few weeks and I waited some more. Still no one was biting. I could not figure out why there was no interest.

Finally, I lowered the rent to about 8% below market value. I had lost almost 50% of the property’s annual revenue before I found a renter! What I learned from this is that it hurts much more to keep a property vacant than it does to drop rents, pay a contractor to put it in prime condition immediately, and provide value to a new tenant.

In retrospect, I would have been better off lowering rent by 10% or more at the first sign of trouble. For this type of property in this area, I also learned to make sure that leases come due in the summer months when there is a much larger pool of renters.

2. Minimize Turnover

Turnover costs money in multiple ways.

There are advertising costs, the cost of patching and painting walls and replacing flooring that your previous tenant would have lived with, and, of course, vacancy. It’s a little counterintuitive, but this is another area where relatively lower rent may have the tendency to increase revenue.

Recall my example of lowering rent by 25%. For that price, your tenants may never want to leave. It would take a job transfer or personal situation to force them to give up such a deal.

One of your goals should be to find quality tenants that take care of your property and pay consistently. When you find these people, do what you can to keep them!

Some people will inevitably leave because they are moving across the country or buying a home, but the last thing that you want is to lose your best tenants to the landlord down the street, dealing with the expense of acquiring a new tenant and lost revenue in the vacancy.

The price of rent is not the only factor involved in tenant retention. The other key that is in your control is customer service. Whether you personally manage your properties or have a property manager, make sure that your tenants are treated with respect and professionalism, their concerns are valued, and matters are dealt with urgently and to their satisfaction. A good tenant/landlord relationship keeps tenants from thinking about moving.

To assess whether your property manager is performing in a way that fosters good tenant/landlord relationships, send a post card soliciting feedback from your tenants, letting them know that their opinion is valued and they can contact you directly if a they are dissatisfied with their manager.

3. Increase Rent Strategically

Now for the contradiction.

After telling you that lower rents can lead to higher revenue, I will proceed to tell you to increase your rents on your longer-term tenants. This is really not a contradiction at all. Rather, it is a delicate balance that requires knowledge of your property’s value relative to your competition.

Increasing rents is a touchy matter. As I mentioned, tenants may be more loyal if they can’t find lower rent elsewhere. But this doesn’t mean that you should never raise rents when you have good reason to do so.

Once you have acquired a tenant, there is a cost for them to move. If the value of their current rental is significantly better than the value of a new rental plus the cost of moving, you still have the upper hand.

Make sure that you know the rents in the area, researching sites such as Zillow, rentometer, Craigslist, and the MLS if you have access. You may find that there is plenty of room to increase your revenue a small percentage each year (1-3%) while remaining competitive, and there is no reason to give this up.

Two tactics that I use to increase rents are to communicate an offset to new costs such as increased HOA fees, which cover utilities and amenities that they enjoy, and to have them coincide with an upgrade to the rental.

For instance, I may plan to paint the exterior of the home or upgrade old windows from single to dual pane anyway, but I will schedule the work to coincide with a lease renewal and the tenant feel they are getting something out of the deal.

I may even ask them if there is anything that would make them more comfortable and select items from this list that will justify rent increases while increasing the market value of the home. In other words, make improvements that are necessary for maintenance or have immediate return on investment.

4. Be Diligent on Late Fees

Showing kindness and respect to your tenants does not mean being a pushover when it comes to rent collection and late fees.

Collections are not the most enjoyable part of being a landlord, but are an essential part of running a profitable business. Make sure that your tenants understand that this is a business, they have signed a contract, and it is your job to complete this transaction, following the contract and all applicable laws (including eviction proceedings if necessary).

Realizing that this is your business, you are leaving money on the table by only loosely following the contract and allowing tenants to get away with paying late without the appropriate fees.

By doing this, your tenants will likely see if they can get away with late payments several more times, causing you extra work and stress which should, of course, be compensated through those fees.

If your tenant goes as far as sending you a late check without including the late fees, politely explain that rent is not considered paid until all fees are collected, and that unfortunately you cannot accept this payment until all fees are paid. If you hold firm, they will quickly learn that you cannot be taken advantage of and will most likely comply.

5. Add Revenue Streams

This form of revenue does not apply as easily to single family residences (SFRs), but can be a great way to increase cash flow in multi-family properties.

Look for the opportunity to add services like coin-operated laundry and vending machines, which will not only provide revenue but will add resale value by raising the CAP rate.

If you are particularly entrepreneurial, you may even find additional revenue streams in your SFRs. An idea that I have had is to offer house cleaning and landscaping services to my tenants at the time they sign the lease. These are responsibilities that they have per the lease and may not be excited about taking on.

Basically, you become a one stop shop for taking care of their home. You can negotiate the rates of independent landscaping and cleaning services, contract them out, and collect a fee as the contractor. For instance, if a cleaner agrees on a $75/month fee, you may offer the service to your tenant for $85/month, increasing your annual revenue by $120.

Before you worry about buying additional properties, think about whether or not you are maximizing those that you already own.

Are vacancies and turnover as low as they could be?

Are you increasing rents in a way that will not cause you to lose quality tenants?

Are you collecting all of the fees that you are entitled to?

Could you easily create new revenue streams?

You may find that you can reach your business goals not only through acquiring a large number of properties but by operating a smaller number of properties more intelligently. ( End of Blake’s article.)

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Do It Yourself, Or Hire It Done? Renovating Rental Properties

DIY Or Hire It Done Renovating Real Estate Investment PropertiesSometimes, when buying – or even thinking about buying real estate for investment purposes, you’re faced with the need to fix up the property.

The question then arises: Should I fix it up myself or hire it done? Unfortunately, no one can give you the right answer. However, there are a few questions that you can ask yourself to help decide the issue:

1. Do I Have The Time?

Time is an issue that many people forget about, but it should be one of the deciding factors. Some renovations, such as handles, hinges or kitchen hardware can take very little time to do. Others, like retiling a bathroom, can take hours, or even days to accomplish.

If you don’t have the time to do these things personally, you’ve already answered the question.

2. Do I Have The Money?

Obviously, money is as important a factor as time. Often, if you don’t have the time, you do have the money to hire someone. However, if you have neither the money nor the time, you may need to reassess whether you can really afford the real estate you’re thinking of buying.

You may want to continue looking to find something that needs fewer repairs or that you can get at a lower price.

3. Do I Have The Know-How?

Granted, there is a lot of do-it-yourself information out on the Internet. However, if you don’t have the necessary knowledge to understand what they’re saying, you’ll either have to research more, or hire someone.

Being knowledgeable on what you’re doing may not be so important when, say, you’re painting the living room, but it’s incredibly important if you need to rewire a room or want to knock down a wall.

The main key when deciding on what property to buy, what renovations need to be made and whether to do it yourself is simple: Be realistic. Be honest with yourself.

Can you really do this? Can you really afford it? Remember, if the answer is “no,” it could just mean “not right now.”

Don’t be afraid to wait until you have everything in place before picking your investment properties. If you’re careful with your time and money management, you may find yourself able to buy that dream real estate investment property.

4. Need Help?  Contact Bob Phillips.

I have been helping South Orange County clients buy and manage their real estate investment properties for almost 38 years. If you are thinking of buying investment real estate, or need help with managing ones you have now, I would be thrilled to have the opportunity to be your trusted agent.  Call or text me at 949-887-5305 or shoot me an email at BobPhillipsRE@gmail.com.

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Thinking About Buying An Investment Property? 6 Tips To Ensure You Get A Good Buy

House_for_rentPurchasing an investment property is one of the most important decisions that you’ll ever be a part of. As such, it’s a necessity to make your decisions with only the most careful of consideration. Here are the six tips that you need to heed in order to ensure that you get a good buy.

Find The Right Property At The Right Price Yes, this is a whole lot easier said than done. However, it’s not impossible. All it takes is some patience and research. You have to determine what everything in your area is selling for in order to be able to spot a bargain! Further, you need to know that various property classes will outperform each other. For example, land and home units will appreciate differently.

Figure Out The Cash Flow It’s always a good idea that you know how to maintain your mortgage repayment obligations over the long term. It’s recommended that you analyze the cost of servicing any loan only on an after-  tax basis. By taking this approach, you have the power to calculate and put the cost into actual terms that make sense for you.

Look For A Good Property Manager Finding a good property manager who is a professional in his or her field is vital. Your property manager’s job will be to make certain that everything is in order between you and any of your tenants. A good property manager can extract the best possible value for you from your property and help to keep your tenants in line as well. I have been helping South Orange County clients with their rental portfolios for over 35 years.

Choose The Appropriate Type Of Mortgage There are many options available for financing the investment property that you choose, so it’s best to get sound advice. Options such as a variable rate loan and a fixed rate loan are both popular choices, but your specific circumstances will dictate what’s most suitable for you. Consider that variable rates often end up being cheaper over time, yet fixed rates at the right time are ideal.

Take Equity From Another Property Leverage the equity from your residence or another investment property. Doing this is actually an ideal way to purchase your investment property. Equity can be calculated by way of calculating any difference between what you owe on your mortgage and the overall value of your property.

Comprehend Both The Market And Dynamics When Buying It’s best to analyze what other properties are available in the area when you’re looking at an investment property. It’s very advisable to actually talk to both local people and real estate agents in the neighborhood. They can give you hints on small, yet vital, things like which side of a street is considered more desirable.

These are the six tips to help make sure that you get a good deal when buying an investment property. They can make the difference between purchasing a great property that has a high return on investment and purchasing a lemon.

Thinking of buying a potential rental property? Give me a call or text, ( 949-887-5305 ) or an email, ( BobPhillipsRE@gmail.com ) and let’s talk about the possibilities.

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Is It Better to Rent or Buy? Help From a New Calculator.

rent-vs-buyA new “Rent vs Buy” calculator from the N.Y.Times:

Is It Better to Rent or Buy?

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