We had great response to our real estate investing overview, so we’re going to do an entire column! It will be broken into several sections and provide an overview to real estate investing as a whole. There are many different ways to approach property investment, and this is my personal opinion on the matters! As Always if you have additional question, please give me a call! I have been investing in real estate for years and have great knowledge of the Coeur d’Alene market.
Before we launch in to the investment column, I wanted to lay out some “ground rules.” When your writing a blog, you have to generalize most processes to compensate for most people. Fact is no real estate transactions are ever the same. Each time you research an investment property, it is a new experience! The changes, nuances, and differences between each deal make the industry very engaging for new investors. With generalization in mind, the our advice isn’t for everyone in every situation. Each different person will have specific needs and goals to accomplish. That is what makes your real estate agent invaluable! I have so much knowledge of the intricacies of real estate deals that I can provide invaluable advice to your specific investment needs.
Investing always carries risk. Real estate investing has been long established as a very safe and successful way to grow your wealth, yet it is still an investment. Before we jump into the world of real estate investing, we will need to assess your ability to take on additional risk.
With these basic rules in mind, we will start to cover preparation, research, down payments, management, and long term growth! Wow, that was a mouthful. Jumping in to the exciting world of real estate investing will be incredibly rewarding! So sit back, relax, and get ready for the CDA Real Estate Investment & Property Management Investors Guide! It will be quite a trip!
Follow up on last weeks post, This weeks real estate investing step is Investment Types. There are two different ways to invest in real estate you will want to consider. Depending on your money down, earnings requirement, and cash liquidity, either of these options can be great for you! If you have any questions, feel free to contact me for more information. Together we can create the best investment plan for your family!
- REIT (Real Estate Investment Trust). If you are “cash strapped,” you can start real estate investing with a trust. This is not true real estate investment, but its helps get your foot in the door! With REIT there are three different levels of value: The property itself, the management and cashflow of the trust, and the trust fund itself. Unlike traditional direct ownership, a trust has much smaller margins and is more like owning stocks. If you don’t have a lot of cash to start up, REIT does help warm you up to the real estate investment market.
- Direct Ownership. The big one. With direct ownership, you have complete control over the property and rights to all of the revenue. Direct ownership is the ultimate desire for any real estate investor. While it requires a larger up front investment (you will need the down payment), direct ownership immediately starts generating income. Any projections that we create always include the cost of professional management, and tenant placement. With basic math, a 200k investment with a renter and normal real estate appreciation (3% is average for the industry) your looking at a conservative investment value of 290k. Your renters will pay off your mortgage, and you will be 300k closer to financial independence! Direct ownership allows you to start planning for the future with steady, sure income for the lifetime of your investment.
Next week we will introduce some great research tools before we jump into finding the property! See you next week!
Its summer already!
Summertime in Coeur d’Alene brings great weather, outdoor activities, and fun. With summer, real estate season really starts to kick off and rental season explodes! One of the questions we get asked all the time is proper rental unit cleaning. Many times, people decide to treat their deposit as “last months rent.” It is unfortunate because we follow very strict policies regarding the return of security deposits! When it comes to cleaning, it really does pay! Here are a few great tips to remember as you prepare to get your hands dirty!
- Don’t forget under the stove and fridge. Many people forget to clean out under the stove and fridge (usually the stove has a drawer. Under there gets pretty dirty). We always check to make sure its clean and doesn’t have any leftover kitchen smell!
- Dust out the cabinets. Mostly as a courtesy to the new renters, take a rag and quickly clean out the drawers and cabinets. The next renters will thank you!
- Washer/dryer space cleaning. Its sometimes amazing how dirty around our laundry gets! Make sure there isn’t any grime stuck on the machines or the floor in front of the units!
- Base heaters. For apartments and homes with electric heat, clean off the tops and sides of the units! They will often get super dusty and gross.
- Clean the blinds. We know everyone hates cleaning blinds, but its a necessary evil. Trust us, its not THAT hard. CAREFULLY remove the blinds, making sure they are fully extended. Fill up your bathtub with water (pre cleaning, its about to get dirty). CAREFULLY let the blinds soak for a few minutes in slightly soapy water. GENTLY wash them off with a soapy rag, moving from side to side. Rinse them off, and hang up on window. After drying, take a windex covered paper towel and clean off the water spots. If you did it right (just follow our instructions) they will be cleaner then when you moved in! On average you will save yourself 50.00 per blind we have to clean! Its almost free money!
- Wipe down the trim. Around the edges of the wall gets super dusty. Windex and paper towels will do the trick.
Those are the biggest ones that folks forget about. In general, just do what your mom taught you: spray, wipe, dry, repeat! Most of the time with a little bit of effort you can walk away with your deposit and no troubles! Spend it on some summer fun, you earned it!