January 27, 2023

When seeking a loan for an investment, it’s common to focus on interest rates, fees, and repayment terms. While all of these are important areas to consider, dealing with a legitimate company should out way all of these other considerations when deciding who to have fund your next investment project. Scammers often pose as personal loan providers to trick those seeking loans into giving up their hard-earned money.  Scammers can be tough to spot because many of them sound convincing. By understanding the most common types of scams and their warning signs, you can hopefully avoid becoming their next victim. Below we will look at some of the most common personal loan scams.

Loans Without Credit Checks

Getting a loan without the company requiring a credit check is appealing to borrowers with poor credit who may struggle to secure loans with legitimate companies. Often times, loan seekers are so relieved to find a company willing to work with them that they don’t do their due diligence before agreeing to the terms of the loan agreement. It is only after they hand over their personal information and possibly some fees to the scammer and the funds promised never appear that they realize their mistake. All reputable lenders assess credit when someone applies for a loan. Some legitimate lenders do occasionally offer loans to borrowers with poor credit, but they will still run a credit check and use it to offer a higher interest rate.  Instead of falling for this common scam, you should opt to apply for a secured credit card instead.  If you come across a lender offering a personal loan with no credit check, run.

Loans With Fees Or Collateral Upfront

Legitimate loan providers commonly charge origination fees, which are typically a small percentage of the approved loan balance requested. That said, these fees are almost always paid out of the loan amount, meaning, they deduct the fees from the full amount you borrowed. Investors don’t typically require an applicant to write the lender a check in order to receive funds.  Some scammers take advantage of the fact that not everyone is aware of this by requesting victims send in origination, application, or processing fee money prior to releasing funds to the applicant. The scammer take the loan victims money and simply disappear.

Unsolicited Loan Offers

Legitimate loan companies do send offers via mail, phone or email, but scammers often throw their letters into the mix, hoping you’ll mistake them for a legitimate company. Bold scammers may even show up at your front door to bully you into a deal that is often too good to be true.  No real loan company contacts prospects in these ways, so these methods are good indicator of a potential scam. Be careful of companies sending you links to fake websites, requests personal or financial information, high-pressure sales tactics, and grammatical and spelling errors in any documents you receive.

What To Do If You Discover A Potential Loan Scam

If a loan offer sounds too good to be true, it probably is. Never hand over funds or personal or financial information to the company until you’ve ensured the company’s reputation. You can check if the company is registered to do business in your state through your state attorney general’s office. The Federal Trade Commission requires legitimate lenders to be licensed in each state they conduct business in, so if it’s unlicensed in your state, that’s a good indicator you’re dealing with a scam. Additionally, all websites requesting financial information should be secured to prevent hackers from stealing it. You can tell if a site is legitimate by looking for “https” at the start of its URL. If the “s” is missing, that’s a sign the company isn’t taking steps to protect your financial information, and you should avoid them at all costs.  Perform a search of the company online and look for any negative reviews from other consumers. A missing address is another red flag. Some scammers pretend they work with a legitimate company, so compare the emails, websites, and phone numbers the scammer gives you with the ones that come up during your internet search.

If you confirm a scammer, you should report the company to your state attorney general’s office, the police in your area and the FTC. Try to provide as much information as you can about the scammer to help them track down the scammer and prevent future consumers from getting hurt.  If it is too late and you are already the victim of a scammer, you should pull your credit reports and look for any unusual accounts or activity you don’t recognize. If you see any, notify your financial institution and put a fraud alert on your account so lenders know to take extra steps to verify your identity before opening a new credit account in your name.

January 18, 2023

There are several different types of real estate investment projects, from rehabilitation to building new, each have their own potential risks as well as financial returns. For example, a rehab project has less risk because the structure already exists; therefore, overall the planning and workload are much less than with building a brand new property, however, the potential financial payoffs may ultimately be less.

There are many components to building new real estate that are unpredictable, which can greatly increase the risk factors. While every new real estate build is different, there are some consistent areas to consider in order to properly evaluate the investment potential when deciding whether or not to build a new real estate project.

Project Location

The physical location of a brand new project plays a significant role in determining the overall risk factors. Building new real estate in areas with higher prices and demand present far fewer risks than building in lower populated rural areas. Building in an area where there are buyers before a project is even finished further reduces the risk. You should look at data that indicates real estate demand, such as high employment levels, large-brand expansion in the area and the rate of adult population growth. While there is no perfect or foolproof formula, all of this data can be reviewed to help assess the overall risk level in a particular location.

Common Weather Patterns

Weather is one of the most important factors to consider when planning and budgeting a brand new construction project. Severe rain, snow and temperatures are just some weather factors that can lead to delays and add to additional costs and headaches.  If the project is located in an area that experiences extreme seasonal changes then you should factor into consideration when the project is suppose to start and how long it’s expected to take to finish. Coordinate this estimated timeline with the local weather and see if there are any potential concerns that you should account for before it’s too late.

Increased Material Costs

When first budgeting for a construction project, it’s important to accept that the cost estimates will often increase. A brand new project can take several months to over a year, depending on the project size, leaving plenty of time to see price increases on building materials.  It would be unwise to not expect increased material-related costs over the course of a build.  It is critical to have enough of a contingency built in to the project budget to absorb these increases with out killing the bottom line.  Thin margin deals can easily end up in the red at the end due simply to an increase in the cost of building materials.

Logistics and Management

Anytime you are dealing with contractors, you need to account for delays. Delays are going to happen; from getting tied up at a previous location and arriving late or simply not showing up at all.  It’s not a matter of if the project will experience contractor problems but whether or not they will be a minor or major problem that leads to a domino effect of delays.  Brand new real estate projects have many moving pieces that all need to work together in order to stay on schedule. A scheduling mistake or a logistical disaster can not only cause delays but possibly result in a complete shutdown of the project while things are being sorted out.

Overall Costs

A brand new real estate project involves every aspect of construction from foundation to final finishes.  This reality provides ample opportunities to change the plans which can ultimately increase the time it takes to finish the project as well as the total costs.  While minor pivots and changes are expected, major changes and multiple occurrences can put the project far behind schedule and over budget, which are the two concerns investors dread above all else.

At the end of the day, when evaluating the risks of building a new real estate project, you should look closely at who you have available to manage the project and perform all of the required work to completion. Someone with lots of experience and a proven track record will greatly reduce the amount of pitfalls that claim so many construction projects. The exact same deal with different contractors can have drastically different outcomes and will ultimately make the difference of whether or not a new building project is a good investment opportunity overall.

January 11, 2023

When many people think about investing in real estate, they often assume they should buy a single-family home. More and more investors, however, are looking towards multifamily commercial real estate like apartment complexes instead as an alternative to invest in new and lucrative real estate properties.  Below we will discuss a few key reasons why you should consider investing in multifamily commercial real estate.

Let us begin with discussing what is multifamily commercial real estate or MFCR. Essentially, multifamily commercial real estate (MFCR) is used to describe residential properties with more than five units.  Often, this term refers to apartment buildings but there are also quite a few different property types within MFCR such as mid- and high-rise apartment complexes and garden apartments.  Included in these types of properties are residential housing units such as assisted living facilities and student housing.  Regardless of what type of multifamily commercial property you decide upon, you’ll have the following asset classes to choose from as an investor.

Class A properties: which are essentially luxury buildings offering high end amenities like fitness centers and pools. These properties bring in the highest rents but require a larger investment.

Class B properties: still offer a good quality value and are in desired locations but they may have less amenities than class A properties.

Class C properties: tend to be more outdated but are the most affordable rent-wise for tenants on a tight budget.

Now that we have discussed the different types of multifamily commercial real estate and how they are classified, lets look at the benefits of investing in these types of properties.

The Benefits of Investing in Multifamily Properties

One of the best benefits of investing in multifamily units is that they are often easier to secure financing for than single family homes if you are intending to utilize them as a rental properties. This is because multifamily homes often come with less risk to the lender.  Since there is more than one tenant in a multifamily building, there will be less impact on the bottom line if something goes wrong, a tenant is unable to pay or the property is unable to be occupied for a period of time.  Additionally, since multifamily housing typically comes with shorter leases, there is more opportunity to adjust the rental rate to current market demands and for inflation.

How to Invest in Multifamily Housing

If you are interested in investing in multifamily housing it is critical to understand your financing options so you can get the best deal possible for your situation. There are several different financing options you should look into before moving forward, but in general there are three main ways to finance these properties we will discuss below.

Government backed multifamily mortgage loans: are typically the best fit for investors who intend to live in one unit and rent out the other units. These loans are typically easier to qualify for than conventional financing and have lower credit requirements.

Portfolio Loans: are worth looking into if you do not qualify for federally backed loans because financial institutions set the requirements to qualify.  Financial institutions also set the interest rates on a case by case basis and keep these loans on the books instead of selling them on the secondary market.

Short term multifamily financing: typically come in the form of a bridge or hard money loan.  These loans are often a good fit for fix and flip investors wanting to rehab a property.

Once you have researched and have an idea of the best type of financing for your situation, you should see what options are available in the particular area you are interested in and work with a real estate agent to zero in on the best possible multifamily property available.

Since multifamily buildings allow you to manage multiple tenants at once, they can be a great way for investors to diversify their portfolios and increase their cash flow. As with any investment, it’s important to understand the market and know what you are getting into ahead of time. Hopefully this article can be a useful guide in deciding if purchasing multifamily commercial real estate is right for you.

January 6, 2023

Real estate investments are one of the safest and most effective ways to build wealth. The real estate market fluctuates but people will always need homes. Perhaps you’re just now getting your feet wet in real estate investment, or maybe you’ve already begun developing your portfolio. Either way, acquiring real estate is a valuable and proven strategy to earning passive income and becoming your own boss.

There is no “one-size-fits-all” approach to investing in real estate. Variables include access to capital, the shape of the local economy, and intensity of competition. While remaining open to adaptation for your local market. In this article, we will look at some of the best tips for starting or growing your real estate investment portfolio.

Buying your first property

It’s never too late to take the first step in building your real estate investment portfolio. Don’t rush when choosing your first property but it’s important to not over analyze either. Most likely, your first property purchase is going to be a learning experience no matter how good your decision. For your first purchase, consider acquiring a property where potential improvements are easy to spot. It’s smart to start with a less expensive property if possible to become more knowledgeable about how real estate investment works. Once you’ve had your first successful experience, you can more comfortably move on to larger deals.

Leverage your equity

After you’ve acquired your first property, speed up growth by leveraging the equity of your portfolio. For example, if you purchase a property for $250,000 and, after making improvements, the appraisal value comes back at $350,000. You now have $100,000 in equity. You can access this equity by selling the property and reinvesting the cash profit, or you can borrow money against the equity. Be aware that borrowing power is often capped at 80% of property value so be careful not to take on too much debt. You’ll need to maintain a positive cash flow to repay your equity loans.

Find off-market properties

“Off-market” is a real estate term referring to properties that are for sale but not advertised on the Multiple Listing Service (MLS) or other public resources. Brokers will occasionally try to create interest in a property through word of mouth or by listing it privately on their network. These homes can sometimes be undervalued with motivated sellers. Investors often find off-market properties by networking directly with real estate agents or attending real estate auctions.

Invest in rental properties

There are several ways to make money with a real estate portfolio. Buying, upgrading, and flipping homes relies on the time-tested truth that property values increase over time and with improvements. But what about a rental property? Monthly rental income can provide an additional passive income stream that you can reinvest into your real estate purchases. Passive monthly income also boosts your cash flow, enabling you to make improvements on properties in preparation for selling them later on.

Hire a property management team so you can keep closing new deals

As your real estate investment portfolio grows, so will the amount of time it takes to manage your properties. You may successfully manage your first property by yourself, but any ability to scale your business will be limited by hours in the day. At some point, it might be helpful to outsource some of your management labor.  Many real estate investors hire a team of property managers, attorneys, and/or accountants. These teams typically handle daily operations, which frees the investor up to conduct research, network, and close additional deals. Be sure to study up on the differences between in-house management staff and a commercial team before you make your outsourcing decisions.

Don’t hesitate to cut your losses

Sometimes, the single most important skill for growing your real estate investment portfolio is knowing when to walk away. If you acquired an investment that isn’t profitable or takes up too much of your time, it’s probably not worth keeping. Don’t hold onto investments to save face. Accept a disappointing outcome and spend your energy on opportunities that have a better chance of success.

If you’ve held back on investing in real estate or had a bad experience years ago, take another look at the opportunities available today. Advances in technology have removed many previous barriers to entering this market, greatly reduced research time chief among them. Investing still requires property management, but nowadays most of the legwork can be done right from your home.

December 23, 2022

Most real estate investors spend a lot of time looking for creative ways to increase the income they receive on their rental properties.  While there are some obvious ways to increase the value of a property, like adding an extra room or upgrading the kitchen and bathrooms, there are also many ways to maximize your income on a rental investment without breaking the bank.  Below are just a couple of ways clever real estate investors can help ensure they are getting the most out of their rental property investments.

Allow Tenants to Have Pets

While many landlords have valid concerns and worry that allowing pets could damage their investment property, pet owners are becoming more and more frequent in this day and age. Pet owners are often limited in finding nice properties that allow pets and therefore will often settle for less desirable locations in order to live somewhere that will accommodate their fur babies.

Understanding this demand can easily add additional revenue to your monthly rental income if you are wise and know how to protect your asset accordingly.  Charging a nonrefundable pet deposit that will cover any deep cleaning and potential damages that a pet could cause is one smart way to create a win/win scenario for both you as a landlord as well as your prospective tenant.  Currently, a nonrefundable pet deposit of around $250 seems to be an industry standard in most real estate markets.  Additionally, many landlords will add on “pet rent” of around $25 to $50 per pet per month in order to offset any additional costs they may incur while increasing their overall rental income annually.

Consider Short Term Rentals

Considering lease terms shorter than 1 year can give you additional pricing power and a competitive edge over your competition.  Being flexible with tenants and offering them 6-month leases can easily add up to 10% additional monthly rental income compared to a 12-month annual lease.  Another often overlooked option is allowing for month to month leasing. Many renters who are in transition between housing or traveling for business are willing to pay top dollar for properties that do not tie them down to a long-term rental agreement.  Understanding the needs of your prospective tenants can help you secure the most out of your rental properties and set your place apart especially in a competitive market.

Supply Furniture

It is often the case, especially with short term rental agreements, that renters are looking for a place ready to go and set up with all of the furniture they need to move in and start living right away.  Whether a prospective tenant is needing to rent a place because they are traveling for business or they are a family in the process of building a new home, supplying furniture to your rental property is a need that many landlords overlook.  For those seeking furnished properties, the added convenience of a true turn key property adds a value that many are willing to pay top dollar for. Understanding the market you are in and being willing to offer a property furnished can set your property apart from the competition and secure you with happy renters for years to come.

Additional Amenities

There are plenty of creative ways you might be able to increase your property’s income potential if you are willing to think outside of the box.  For example, adding a doorbell or alarm system to a property in an urban setting can add additional security protection to your tenants and may significantly increase the amount a renter is willing to spend. Understanding exactly what your target audience is looking for and effectively delivering a desired amenity that other properties do not offer might leave you surprised as to how much additional rental income your property can bring in.

Understanding the growing demands of prospective tenants can be the difference of whether or not you are able to consistently rent out your investment property, especially in a competitive market. Allowing pets, agreeing to short term rentals, furnishing your rental property and adding additional security measures are only a few ways to set your property apart from the competition.  Regardless of what route you take to add additional value, researching the market you are in and being willing to step outside of the box will add the most potential income to your rental investment and leave your tenants happier and willing to spread the word to future prospects down the line.

December 16, 2022

Many investors feel that hiring a real estate agent is unnecessary and with the proper time and research they can acquire new properties all on their own. Whether they wish to simply save on commissions and fees or whether they have had previous experiences which left a bad taste in their mouth, investors need to step back and look at the larger picture. There are quite a few benefits of dealing with a real estate agent to maximize your investment opportunities. Below we will discuss a few of the many reasons why it is best to utilize a real estate agent when investing at a new property.

Access to Listings not on the Market

In one of the most competitive markets out there, seeking out listings through the local MLS (Multiple Listing Service) in your area will likely not yield the most lucrative investments. Seasoned real estate agents have spent years building a successful career by networking with other real estate agents, land owners, and investors.  Real estate agents often have inside access to listings that are off the market and never posted on the MLS.  These investment opportunities more times than not will offer a higher return and make the difference between whether or not it is worth the risk to invest your money in real estate.  Gaining access to all of the opportunities that occur off the market in real estate is one great reason to spend the added expenses involved in hiring a real estate agent.

Property Negotiations

Another great reason to work with a real estate agent when purchasing a new investment property is their ability to negotiate the deal on your behalf. The negotiation process can be one of the most stressful aspects of acquiring a new property. Having a third party negotiate the terms of an investment often results in a better deal in the end for all parties involved. Established real estate agents are well versed on the local real estate codes, market values, and numerous legal hiccups that can save you a lot of time and money down the road and ensure that you are making a sound investment before you sign on the dotted line. Additionally, removing the “personal” element from the negotiation process helps to focus all parties involved.  A good real estate agent knows when to hold firm on an offer and what to give in on during the negotiation process to help you get the results you are looking for.

Saving Time

Perhaps the largest benefit of hiring a real estate agent is the amount of time and hassle they will save you.  Acquiring a property requires a ton of paperwork and many hours of scheduling and viewing potential opportunities. When you hire a good agent, all you need to do is let them know the type of properties you are interested in and what your budget is and they will do all of the leg work on your behalf. They can weed through all of the properties that do not fit your criteria and schedule viewings when they are most convenient to your schedule.  Once they find a property you wish to move forward on, they will gather all of the necessary paperwork, negotiate the terms of the deal, and ensure that you check off all of the legal requirements in the properties area.

As the saying goes, “Time is money” and hiring a good real estate agent is one of the best ways to maximize both your time and money not to mention setting your mind at ease. From accessing listings which are off the market, negotiating the terms of an agreement, or saving you countless hours. Hiring a real estate agent is more than worth the added commissions you will pay and will helps you to make the best decision when investing in a new property.

December 8, 2022

For many, a rental property is the first major investment they make which they must also manage diligently. Many new real estate owners don’t move past a couple of properties, while others successfully grow their real estate portfolios into multiple individual properties. Each person has their own unique goals, and like all investments, rental property management is not for everyone. For investors who do prefer real estate as a way to build their wealth, below are some helpful tips for managing real estate accounting.

Typically, if you only have one rental property you can handle most of your accounting at year-end when you or your accountant are doing taxes. That said, as your portfolio of rental properties expands, there will be increasingly complex tax issues to consider, as well as more hands-on accounting for each unique property. While it may seem easier to group all rental costs into one bank account, this will likely create headaches down the line.

It’s worth noting that regular business expenses, tax liabilities and accounting for rental properties often span multiple years. From the time you buy the property to the time you sell it; you need to take advantage of all of the available real estate tax codes to reduce your liabilities. To accomplish this, it’s very important to keep clear records of the total money spent on each rental property separately.  Follow the steps below to keep track of each property, and you will eliminate many potential headaches for you and your tax professionals down the road.

Keep separate bank account for deposits/expenses for each property

Use a separate bank account to collect rent payments. It is unwise to let all of your tenants know your bank account number. A separate account will also let you easily track who has paid rent each month and who may still owe you money. As a general rule, you shouldn’t accept cash; but if someone needs to pay in cash, have them purchase a money order instead. As a general rule, cash is hard to track and easy to lose.

Independently track expenses for each rental property so you can properly disclose them on your tax returns. Ideally, you should maintain a separate bank account for each rental. If that’s too complicated to manage, group some properties into the same account. It’s important to keep in mind that at the end of each year, you’ll need to separate all the expenses by each property regardless of how many accounts you have set up, so it’s best to do it on the front end instead of waiting until the end of the year to divide out all of your property’s expenses.

Track improvements separately from repairs

It’s important to understand the difference between repairs versus capital improvements. This is very important because repairs are deductible when you pay for them, but improvements have to be depreciated over time. Typically, repairs won’t improve the value of your property, but rather simply bring it back to being useful. Capital improvements, on the other hand, will often increase the property value or prolong its useful life.

Don’t track depreciation

Although depreciation can be easy to calculate, don’t try to do so on your own; let your tax preparer calculate it. This is not a cash expense, so it won’t affect your bank account. The current tax code makes it simple, but if you have older properties or have made significant capital improvements, there may be other implications to consider. It’s likely best to leave depreciation calculations to a hired tax professional to handle it for you.

Simplify your accounting

Have a system for tracking income and expenses for each property. Don’t overcomplicate things.  Often times, jotting things down on a piece of paper can be just as effective as a spreadsheet or other more complicated accounting system. You are likely not tracking many transactions, so use whichever method you feel most comfortable with. The key take away here is to ensure you are tracking monthly, and don’t wait until year-end to do everything.

As you grow your rental income, you’ll likely have to expand your accounting system and it is critical to keep solid records. Accounting for your rental properties does not have to be a headache during tax season. Follow the instructions above to ensure you don’t miss any deductions and have detailed records when you eventually sell the property. No matter what system you decide to use, the main accounting objective for successful property ownership is to keep the best records possible and to keep everything organized!

December 1, 2022

If you’ve invested in a rental property hoping to make money, you may find it hard to get a high return if you don’t have the right help. Selling your rental property requires proper timing, pricing, and marketing to the right audience.  Here are several tips to help you sell your rental property quickly and for the highest return on your investment.

Include Your Tenants

Having a tenant in the property could be an important factor in how much money you may make when it comes time to sell your rental property. You need to decide whether or not it’s best to wait until the lease expires, pay to relocate the tenant, or sell the property with the tenant still living in the home. These decisions can make a huge difference in how you sell your property. If you must wait until the current lease expires, you’ll be more at the mercy of whatever current market situations you face when it comes time to sell. If the market is hot, but your lease doesn’t expire for six months, you will likely have to wait to sell unless the tenant is willing to work with you. On the flipside, you won’t need the tenant’s help if you wait until the lease expires. When the tenant vacates the property, you can make any necessary repairs or renovations and get the home ready to sell. Without tenants in the house, you are free to market it as a primary residence or investment property.  If you’re selling the home with a tenant in place, you can sell when the market is hot, but you’ll need the tenant’s help.

Depending on the relationship, its often at least worth asking the tenant politely to allow scheduled contractors in to fix up issues the home may need repaired. If the tenant is staying until their lease ends, they likely wont mind someone enhancing the home.  Staging the home is also important to discuss with the current tenant.  Since you will likely need to market the property to other renters down the road, it’s worth trying to stage the home in a way that wont disrupt the tenant too much but also will enhance the appeal of the home.  Dont forget to work on the curb appeal as well. While you don’t want to ask your tenant for too much assistance to sell the property, having their help is valuable, especially when it’s time for the inspection and appraisal.

Know The Home’s Value

It’s easy to think a home is worth a lot more than it is without researching the current market trends. Researching the market value of newly sold homes in the area will help you understand how much you can make on the sell of your property.  Often, if you inflate the price because you believe your home is more valuable, lenders often wont approve the loan. Therefore, unless the buyer is paying all cash, you won’t likely get more than the home is worth.  You should look at several properties in the area that sold within the last six months and are similar to the home you’re selling.  It’s important to compare not only your properties size and location but also all of its features. Your property may have more or fewer features than the comparable properties, in which case, you’ll need to adjust accordingly.

Take Professional Photos

This seems minor, but bad pictures can often break a deal. The better the pictures you take of the home, the more potential buyers will look at your property, and the more interest you have in your home, the faster it will sell.  The majority of buyers nowadays will only see properties online because it’s more convenient or they do not live close to the property. Furthermore, investors often look to invest in other areas where real estate is cheaper or where home prices are increasing to get the best deal.  Needless to say, high quality pictures are an important part of the selling process.

Before taking photos, make sure the property is properly staged and decluttered. If you have tenants living there, ask them politely for their assistance to showcase the home properly. It’s also important that the photos are honest and realistic. There are many programs like Photoshop that will make it easy to manipulate photos, but this practice should be avoided. It is normal to utilize a wide-angle lens which allows you to capture more room in a picture without inflating its  true size. You should also use the sun to your advantage. Wait until the sun is behind your home to take exterior photos. You should also try to avoid shadows by taking photos at an angle.  It’s recommended to take interior photos mid-day, not too early, but not too late. Try to aim for around noon when the sun is the highest.

Learn The Market

As described above, it’s important to learn everything you can about the current market before posting your property for sell. Understanding what buyers want makes all the difference. If you’ve owned the property many years, it’s likely the market has changed. Knowing the latest trends will help you get the most for your home.  Don’t worry to much about making the necessary renovations.  You’ll make it back when you sell the home for more than you would have otherwise. If, for example, the kitchen or bathroom in the house is outdated, you may want to fix those areas now. Knowing what buyers/renters want will help you make the home more attractive for investors willing to pay more money for a property they plan to keep for a long time.

Making top dollar for your rental property requires that you do your research, price the house correctly for the area, and renovate and repair things before you place it on the market. It may take a little time to sell your rental property, but with the above tips, hopefully you will make the most profit possible and sell it faster than you would otherwise.

November 18, 2022

Before entering into a new relationship with someone, it is not uncommon to ask yourself a series of questions first. Does this person’s values align with mine? Etc. It is no different when making a serious financial commitment like borrowing money from a potential new lender. There are some important questions you should always ask yourself and questions to ask the potential future lender before agreeing to anything in writing.  Below we will discuss several questions you should ask yourself before acquiring a new loan.

How Is Your Credit?

Make sure you have reviewed and understand your credit history as well as your credit score. The better your credit score, the lower the interest rate you will likely qualify for. Interest rate matters. If, for example, you were to borrow $25,000 for 60 months, the difference between how much you could pay with an excellent credit score and how much you might pay with a fair score, could be night and day. While a 100-point difference in credit score may not seem huge, it can be costly. With a fair score, your monthly payment could be hundreds of dollars higher, and you might end up paying thousands more for the loan over five years. Before taking out a loan, try to increase your credit score if you feel it is not where it needs to be. While it will take some time and effort, it is likely to pay off in a big way.

What’s Your Actual Budget?

The fact that you’re approved for a loan doesn’t mean you can actually afford it, particularly if you have lots of financial obligations that don’t show up on your credit report. For example, if you’re paying for your children’s education, monthly memberships, vacations, and several different hobbies, you may have trouble repaying the loan as agreed.  Even if you’ve been approved for a personal loan, take a hard look at your budget, including how much you spend on the things you enjoy each month. That way, you can make sure you can easily afford the monthly payments. In doing so, you may find you need to cut certain expenses in order to make way for a new financial obligation.

Is A Loan The Best Long Term Option?

We often spend money on things which provide great experiences and memories but no financial return. A great meal at a fancy new restaurant may be worth the price in terms of experience, but in terms of finances, you won’t likely see a return on this type of investment.  On the other hand, If you’re considering taking out a loan to remodel your bathroom or to install some new landscaping features, you could recoup your entire investment and then some. Before contacting a loan lender, determine whether or not you will likely see a return on your investment.  Now that you have a better idea of what you’re looking for in a loan, here are some more questions to inquire about with potential lenders:

What’s The Best Interest Rate Offered?

As the above scenario shows, monthly interest payments matter. A difference of 1%-2% can save you a lot of money long term. This is why it’s important to get comparative quotes from several lenders before settling on one.  The great thing about most loan lenders is that they will typically only run a “soft” credit check before letting you know if you qualify for a loan, and if so, what your interest rate will be. A soft check does not impact your credit score. It’s only when you decide to proceed with a loan that the lender runs a “hard” credit check that may ding your credit score a bit. Don’t worry, though. As long as you make regular payments on the loan, your credit score should rebound relatively quickly.

Is A Secured Loan Better?

Say you are interested in making several upgrades to your home to add to its overall value. If you’re trying to get the lowest possible interest rate, it pays to determine how much that rate would be if you opted for a secured loan rather than an unsecured loan. Most personal loans are unsecured, meaning you don’t put anything of value up as collateral.  On the other hand, a secured loan requires you to put up some form of collateral like a home or car in return for a lower interest rate. As long as its value is enough to pay off the loan if you fail to make the required payments, a lender may be interested.  Although a secured loan is likely to save you money, it’s worth remembering that If you don’t make payments as agreed, the lender has the legal right to repossess the collateral, sell it, and recoup their losses.

Are There Extra Charges?

With an excellent credit score there is no reason to pay for extras like an origination fee or an early payoff penalty. If your credit score makes you appealing to potential lenders, make sure to ask about fees. The difference between making a financial decision that works for you and one you may grow to regret is in asking questions before signing your name to a contract. Use the above guide to help make the right decision before you move forward on your next loan.

November 11, 2022

If you are considering to invest in property, you may be like so many others and asking yourself whether it is better to buy an existing property or build a new one in today’s current real estate market. Both scenarios have pros and cons, and the best decision for your will ultimately come down to your individual circumstances. To help you decide, here are some pros and cons to keep in mind when deciding whether it is best to build or buy your next investment property.

More and more people are choosing to buy existing properties as an investment, and there are several reasons why this can be a wise decision. Here are some of the key benefits:

Buying Advantages

You will know what you are getting. When you buy an existing property, you can inspect it thoroughly before deciding. It means there will hopefully not be any nasty surprises down the line.  It is usually cheaper.  Not only will you save money, but existing properties come with established finishes and landscaping. Therefore, it saves you money on landscaping costs.  It is easier to finance. Banks are often more willing to lend money for an existing property than for a new build, as they can use the property as collateral if you default on the loan.

As you start looking at existing properties, keep the following tips in mind:

Find a good real estate agent. An excellent real estate agent will deeply understand the local market. They help to find properties that match your investment criteria. Do your due diligence.  When you have found a property, you are interested in, be sure to do your research. Check out the surrounding area, speak to the neighbors, and get a feel for the community. You should also hire someone to conduct an in-depth home inspection to check for structural issues.  Have realistic expectations.  It is important to remember that property investment is a long-term play. Do not expect to make a quick profit. Rather, focus on building equity and generating rental income long term.

Building Advantages

Many people are put off by the idea of building an investment property, but there are several advantages to this approach. Here are some things to keep in mind.  When you build a new property, you can design it specifically for your needs. You also want to ensure you get the right mix of bedrooms and bathrooms. Also, enough living space to make your tenants comfortable.  A brand-new property will likely have fewer maintenance issues than an older one. It means you will save money on repairs down the line. Plus, it should come with a builder’s warranty to help with your peace of mind. Because new properties are in high demand, they often appreciate value more quickly. This means your investment could grow faster if you choose to sell in the future.

Now that we have looked at the advantages of building a new property, let us look at a few tips to help you get started:

When you are planning to build a new property, it is important to get expert help. A builder broker can connect you with the right builder for your project and help you get the best possible price.  The location of your property is one of the most critical factors in its success. So, make sure to choose an area that is growing in popularity and has good infrastructure.  It is important to remember that quality counts when you are building a new property. Do not cut corners on materials or construction as it will only come back to bite you down the line.

There is no easy answer when deciding whether to buy or build investment property. It ultimately comes down to your circumstances and what is important to you as an investor. Buying an existing property is probably your best bet if you are looking for a low hassle investment.  However, if you are looking for an investment that you can customize and that has the potential to appreciate, then building new might be the way to go. Whichever approach you choose, be sure to research and seek professional advice before making any decisions-because regardless of what you ultimately decide is best for you, investing in property is a big commitment.