Real Estate Investing Strategies and the Economic Cycle

The Economic cycle plays an important role in real estate investing. The idea of an Economic cycle is simple. It states that what goes up must also come down. Although housing prices and real estate in general have had an overall increase in value for a great many years and there is confidence that the market will never crash completely. This has led many investors to consider real estate investment a secure thing, and their strategy is usually based on the long term potential of the investment. In other words, buy property and hold on to it until the profit you seek can be realized.

Although this strategy is not really bad for the long term investor, it will not enable him to realize the type of return that is possible when investing in certain profit rich areas such as Utah real estate. The cyclic nature of the Economic Cycle presents a danger that the market will be on a downswing when you are looking to unload your investment and the years taken to reach your goal might tie up your investment capital so that other opportunities are missed.

In an area such as Provo real estate, where profit potential is so great because of the attractiveness of the area for investing in properties that can be converted to rental units, the hold on to it strategy is a poor choice for the investor who wishes to make a solid return. There are other strategies that make much more sense. Even the Bargain Purchase strategy is better. In this concept, only properties that can be purchased at below 20% their true value are considered. The 20% figure allows the property to be returned to the market at once at its full value.

Another strategy that is related is the Increased Value strategy. This is going to be more likely in an area such as Provo real estate. It involves purchasing at the actual true value and making improvements within the first six months that increase the value by 20%, and then returning the property to the market at the increased value figure.

When rental property is the thrust of your real estate strategy, the Double Digit Cap Rate plan is a good investment choice. It limits your property purchases to those that can produce a capitalization rate of at least 10%. The capitalization rate is the net operating income of the property. The percentage figures in these strategies are guidelines for making the investment practical. If these minimum figures are not met, the investment capital should be invested in other low return investments and the real estate market avoided unless the hold on until it goes up strategy is used.

About the Author

Natalie Aranda is a freelance writer.

Real Estate Investing: How Long Will It Take To Rent My House?

How many times have I heard the question ?How long will it take to rent my house?? Every investor that brings us their property wants to know the answer to this question. So, being in the property management business for five years I pull out my crystal ball and give them the answer. It isn?t always what they want to hear, but it is the answer.

I tell them that renting a house is similar to selling a house. If an investor chooses to do it themselves typically the results match the efforts that are put into it. Certainly a sign is necessary, so they pick one up at the local home improvement store, but will the homeowner covenants allow rental signs? They can put an ad in the local paper, but it is expensive. Don?t all the gurus tell you that print ads are a thing of the past and that the internet is the way to go? Well maybe you put it on a free internet site, and wait.

If they choose to use a professional property management company, the Management Company should put the property on multiple internet sites that reach agents, other property managers, as well as individuals. Individuals know to look for property managers because they remember their signs and other marketing and the tenants know they have a wide variety of properties. The better tenants also feel more comfortable renting from company because they know that they have recourse if there is a problem.

We have had investors turn properties over to us that they have had on the market for six months and they are amazed when it rents so quickly with us. The professional property manager does the marketing and also the qualifying so the resident you get is typically a better caliber of tenant, better screened and managed. They also know landlord tenant law protecting you and your asset.

There are cycles to the real estate market whether buying, selling or renting. Spring and summer are the best times to be on the market. There is a big rush to get into a house over the summer before school starts. It typically slows down in the fall, and then picks up again at the end on the year. We find that at mid month people are looking for a place for an end of month move in. Very few tenants look more than one month in advance.

Currently the Atlanta market has good rental absorption. Finally, the apartments that we compete with are no longer offer three months free rent and a flat screen television just for moving in.

For the past several years we have seen rental properties sit on the market and rental rates drop. Rents have declined for the past three years in the Atlanta area, but we are now turning the corner. Now we are able to increase rents each time there is a renewal. Every 3-5% helps.

One thing that has helped is the rise in mortgage rates. With many lenders raising rates and becoming more stringent in lending guidelines, many would be homeowners are now being priced out of the market. Less and less people are qualifying to buy, so they must rent. Everyone wants a house with their own yard. This is good for you and for us.

In reality you never know how quickly the property will rent. Curb appeal, cleanliness and livability mean a whole lot, so make your place look good. Look at what price comparable houses are renting for and then keep your price in line.

Soon you will have a qualified resident moving in and then you will have that answer to that question ?How long will it take to rent my house??

About the Author:

Mark Lackey is a real estate investor in Atlanta and works with The REI Team at Solid Source Realty, Inc. http://www.theREIteam.com. He frequently helps other investors in their pursuit of financial freedom. In addition, he is the Vice President of Solid Source Property Management, Inc. http://www.solidsourcepm.com.

7 Tips For Real Estate Investing Success

1. Find out what you really want from your investments.

Set goals. Where do you want to be 5 years from now? Do you want a much larger nicer house for your family? How about waltzing into a car dealership and paying cash? Picture what you want.

Your investing needs to provide a living -and a lifestyle. You need to be able to look forward and enjoy your life and your family.

If you want to coach your children’s sports teams, your real estate needs to give you the time, not steal the time from those precious events.

With proper planning you can learn how to out-source but you’ve got to know where you want to go before you can get there.

2. Start simple and keep it simple

Sometimes it’s too easy to lose focus because of information overload. Our generation is being bombarded with more knowledge than any in history. And it’s only going to get worse.

Real estate is basic investing. Stick to the fundamentals. Go to the old gurus such as Tyler Hicks and read the old books. Markets come and go, but the basics never change.

3. Do your investing one small step at a time

Don’t try to compete with Donald Trump with your first property. Start small.

Get your first property going. Then move on to the second and the third. Don’t worry about what the stars and experts in online forums are doing. They’ve been at it for a long time. Naturally they can do more. And you will too if you don’t allow your investing to get too complicated.

4. Focus on one aspect of investing for six months

What are you really interested in? Foreclosures, Buy and Hold, Short Sales?

How is the market doing in your area of interest? Concentrate on one type of investment and soak up everything you can about it for six months. Not only will you become an expert but it will be almost second nature to you.

5. Design your investing around your strengths and weaknesses.

Okay, this is the challenging one.

We’ve been taught all our lives that winners do what they hate. It’s a conditioning process. In order to get it done, we’ve got to make ourselves do the dog work.

That’s okay for football or high school algebra, but real estate investing is different.

You need to like it. If there are parts of it you don’t like, don’t get bent out of shape about it. Sub those parts out. Out sourcing is one of the most valuable lessons you can teach yourself.

Don’t get upset about landlording if it’s not your thing. Out source that too. The most important point is to invest. That’s where the money is.

6.Stop analyzing and buy something

There are investors who paralyze themselves to death with market analysis. Another way of putting it is they are fearful of doing it. Jump in. Get your feet wet. Sure, you might make some mistakes but if you read the right real estate materials and study the right courses, as well as networking, you can cut those mistakes down to miniscule small potatoes.

7. Set aside some properties for your lifetime profits.

This is your own personal bank. Whether you’re a flipper, wholesaler, rehabber and you want to move those properties fast, this advice still applies to you.

It’s amazing to me how some investors let perfectly great properties get out of their hands because they want to make a quick profit. Occasionally, keep a few of them. Hold on and watch them appreciate. They may truly pay for your old age.

Real Estate Investing Strategies and the Economic Cycle

The Economic cycle plays an important role in real estate investing. The idea of an Economic cycle is simple. It states that what goes up must also come down. Although housing prices and real estate in general have had an overall increase in value for a great many years and there is confidence that the market will never crash completely. This has led many investors to consider real estate investment a secure thing, and their strategy is usually based on the long term potential of the investment. In other words, buy property and hold on to it until the profit you seek can be realized.

Although this strategy is not really bad for the long term investor, it will not enable him to realize the type of return that is possible when investing in certain profit rich areas such as Utah real estate. The cyclic nature of the Economic Cycle presents a danger that the market will be on a downswing when you are looking to unload your investment and the years taken to reach your goal might tie up your investment capital so that other opportunities are missed.

In an area such as Provo real estate, where profit potential is so great because of the attractiveness of the area for investing in properties that can be converted to rental units, the hold on to it strategy is a poor choice for the investor who wishes to make a solid return. There are other strategies that make much more sense. Even the Bargain Purchase strategy is better. In this concept, only properties that can be purchased at below 20% their true value are considered. The 20% figure allows the property to be returned to the market at once at its full value.

Another strategy that is related is the Increased Value strategy. This is going to be more likely in an area such as Provo real estate. It involves purchasing at the actual true value and making improvements within the first six months that increase the value by 20%, and then returning the property to the market at the increased value figure.

When rental property is the thrust of your real estate strategy, the Double Digit Cap Rate plan is a good investment choice. It limits your property purchases to those that can produce a capitalization rate of at least 10%. The capitalization rate is the net operating income of the property. The percentage figures in these strategies are guidelines for making the investment practical. If these minimum figures are not met, the investment capital should be invested in other low return investments and the real estate market avoided unless the hold on until it goes up strategy is used.

About the Author

Natalie Aranda is a freelance writer.

Real Estate Investing Strategies and the Economic Cycle

The Economic cycle plays an important role in real estate investing. The idea of an Economic cycle is simple. It states that what goes up must also come down. Although housing prices and real estate in general have had an overall increase in value for a great many years and there is confidence that the market will never crash completely. This has led many investors to consider real estate investment a secure thing, and their strategy is usually based on the long term potential of the investment. In other words, buy property and hold on to it until the profit you seek can be realized.

Although this strategy is not really bad for the long term investor, it will not enable him to realize the type of return that is possible when investing in certain profit rich areas such as Utah real estate. The cyclic nature of the Economic Cycle presents a danger that the market will be on a downswing when you are looking to unload your investment and the years taken to reach your goal might tie up your investment capital so that other opportunities are missed.

In an area such as Provo real estate, where profit potential is so great because of the attractiveness of the area for investing in properties that can be converted to rental units, the hold on to it strategy is a poor choice for the investor who wishes to make a solid return. There are other strategies that make much more sense. Even the Bargain Purchase strategy is better. In this concept, only properties that can be purchased at below 20% their true value are considered. The 20% figure allows the property to be returned to the market at once at its full value.

Another strategy that is related is the Increased Value strategy. This is going to be more likely in an area such as Provo real estate. It involves purchasing at the actual true value and making improvements within the first six months that increase the value by 20%, and then returning the property to the market at the increased value figure.

When rental property is the thrust of your real estate strategy, the Double Digit Cap Rate plan is a good investment choice. It limits your property purchases to those that can produce a capitalization rate of at least 10%. The capitalization rate is the net operating income of the property. The percentage figures in these strategies are guidelines for making the investment practical. If these minimum figures are not met, the investment capital should be invested in other low return investments and the real estate market avoided unless the hold on until it goes up strategy is used.

About the Author

Natalie Aranda is a freelance writer.

7 Tips For Real Estate Investing Success

1. Find out what you really want from your investments.

Set goals. Where do you want to be 5 years from now? Do you want a much larger nicer house for your family? How about waltzing into a car dealership and paying cash? Picture what you want.

Your investing needs to provide a living -and a lifestyle. You need to be able to look forward and enjoy your life and your family.

If you want to coach your children’s sports teams, your real estate needs to give you the time, not steal the time from those precious events.

With proper planning you can learn how to out-source but you’ve got to know where you want to go before you can get there.

2. Start simple and keep it simple

Sometimes it’s too easy to lose focus because of information overload. Our generation is being bombarded with more knowledge than any in history. And it’s only going to get worse.

Real estate is basic investing. Stick to the fundamentals. Go to the old gurus such as Tyler Hicks and read the old books. Markets come and go, but the basics never change.

3. Do your investing one small step at a time

Don’t try to compete with Donald Trump with your first property. Start small.

Get your first property going. Then move on to the second and the third. Don’t worry about what the stars and experts in online forums are doing. They’ve been at it for a long time. Naturally they can do more. And you will too if you don’t allow your investing to get too complicated.

4. Focus on one aspect of investing for six months

What are you really interested in? Foreclosures, Buy and Hold, Short Sales?

How is the market doing in your area of interest? Concentrate on one type of investment and soak up everything you can about it for six months. Not only will you become an expert but it will be almost second nature to you.

5. Design your investing around your strengths and weaknesses.

Okay, this is the challenging one.

We’ve been taught all our lives that winners do what they hate. It’s a conditioning process. In order to get it done, we’ve got to make ourselves do the dog work.

That’s okay for football or high school algebra, but real estate investing is different.

You need to like it. If there are parts of it you don’t like, don’t get bent out of shape about it. Sub those parts out. Out sourcing is one of the most valuable lessons you can teach yourself.

Don’t get upset about landlording if it’s not your thing. Out source that too. The most important point is to invest. That’s where the money is.

6.Stop analyzing and buy something

There are investors who paralyze themselves to death with market analysis. Another way of putting it is they are fearful of doing it. Jump in. Get your feet wet. Sure, you might make some mistakes but if you read the right real estate materials and study the right courses, as well as networking, you can cut those mistakes down to miniscule small potatoes.

7. Set aside some properties for your lifetime profits.

This is your own personal bank. Whether you’re a flipper, wholesaler, rehabber and you want to move those properties fast, this advice still applies to you.

It’s amazing to me how some investors let perfectly great properties get out of their hands because they want to make a quick profit. Occasionally, keep a few of them. Hold on and watch them appreciate. They may truly pay for your old age.

Real Estate Investing Strategies and the Economic Cycle

The Economic cycle plays an important role in real estate investing. The idea of an Economic cycle is simple. It states that what goes up must also come down. Although housing prices and real estate in general have had an overall increase in value for a great many years and there is confidence that the market will never crash completely. This has led many investors to consider real estate investment a secure thing, and their strategy is usually based on the long term potential of the investment. In other words, buy property and hold on to it until the profit you seek can be realized.

Although this strategy is not really bad for the long term investor, it will not enable him to realize the type of return that is possible when investing in certain profit rich areas such as Utah real estate. The cyclic nature of the Economic Cycle presents a danger that the market will be on a downswing when you are looking to unload your investment and the years taken to reach your goal might tie up your investment capital so that other opportunities are missed.

In an area such as Provo real estate, where profit potential is so great because of the attractiveness of the area for investing in properties that can be converted to rental units, the hold on to it strategy is a poor choice for the investor who wishes to make a solid return. There are other strategies that make much more sense. Even the Bargain Purchase strategy is better. In this concept, only properties that can be purchased at below 20% their true value are considered. The 20% figure allows the property to be returned to the market at once at its full value.

Another strategy that is related is the Increased Value strategy. This is going to be more likely in an area such as Provo real estate. It involves purchasing at the actual true value and making improvements within the first six months that increase the value by 20%, and then returning the property to the market at the increased value figure.

When rental property is the thrust of your real estate strategy, the Double Digit Cap Rate plan is a good investment choice. It limits your property purchases to those that can produce a capitalization rate of at least 10%. The capitalization rate is the net operating income of the property. The percentage figures in these strategies are guidelines for making the investment practical. If these minimum figures are not met, the investment capital should be invested in other low return investments and the real estate market avoided unless the hold on until it goes up strategy is used.

About the Author

Natalie Aranda is a freelance writer.

Real Estate Investing - The Pipeline To Your Financial Freedom

If you need to get water from one place to another, it seems to be common sense that you would build a pipeline to get the most water for the least amount of work, using technology. But the reality is, most people are taught to overlook the obvious in favor of the most familiar approach.

Consider this story, told by Robert Kiyosaki in his book, ?Cash Flow Quadrant.?

There once was a village that had to wait for the rain in order to have water. This was a major problem for the village, and so the chief asked for bids from anyone who thought they could solve the water problem. Two men stepped forward. Thinking that competition would be good for the village’s economy, the chief put both of them to work solving the problem.

The First Man immediately disappeared. This made the Second Man very happy. He set to work immediately, hauling buckets of water from the river to dump into the village reservoir. The villagers were very happy with the new situation, as they no longer had to wait for the rain. The Second Man didn’t mind working day and night hauling water, because he was making money on the deal.

After six months, however, the First Man returned. He had with him a construction crew and an engineer. In no time at all, there was a pipeline to run water from the river to the even bigger reservoir he had his crew build for the villagers. What’s more, he offered his greater quantity of water to them for much less than Second Man could offer his for. But Second Man was not to be daunted. He redoubled his efforts and even put his sons to work hauling water, but he could never match the First Man’s output. The First Man eventually offered his services to nearby villages and became a rich man, while the Second Man worked hard all his life for a modest income.

Now, consider Kiyosaki’s words: ?I’ve always asked myself if I am building a pipeline or hauling buckets of water.?

Most people are taught to haul buckets of water, because they are taught that they should get a good job, which they will depend on for their income. It is common sense to get a job if you are in need of money, right? Yes, it is. But the common sense approach isn’t always the best approach, simply because what may seem to be the answer at the outset often involves overlooking alternative methods of making money. Those alternative methods may seem to be indirect methods.

Not that there is anything wrong with a more direct approach. Indeed, if all you need is a modest amount of ?water,? then hauling buckets, or working a job, may be fine for you. But it won’t make you rich. You will not become rich until you figure out how to get the most ?water? for the least amount of work. This is because there are only so many hours in the day you can work. Most jobs won’t make you rich even if you could work at top efficiency for 24 hours a day, seven days a week. The system just isn’t set up to work that way.

What you need to do, is build a pipeline. Real estate investing is your financial pipeline. It is a way to get the most money to flow your way with the least amount of work.

How long do you really want to haul buckets?

About the Author:

Investment Property Specialist - Alex Anderson Connects Real Estate Investors With High-Quality Investment Properties. Get A Free Copy Of, “The Investor’s Rental Guide” at: www.GreatInvestmentProperty.com

Real Estate Investing Strategies and the Economic Cycle

The Economic cycle plays an important role in real estate investing. The idea of an Economic cycle is simple. It states that what goes up must also come down. Although housing prices and real estate in general have had an overall increase in value for a great many years and there is confidence that the market will never crash completely. This has led many investors to consider real estate investment a secure thing, and their strategy is usually based on the long term potential of the investment. In other words, buy property and hold on to it until the profit you seek can be realized.

Although this strategy is not really bad for the long term investor, it will not enable him to realize the type of return that is possible when investing in certain profit rich areas such as Utah real estate. The cyclic nature of the Economic Cycle presents a danger that the market will be on a downswing when you are looking to unload your investment and the years taken to reach your goal might tie up your investment capital so that other opportunities are missed.

In an area such as Provo real estate, where profit potential is so great because of the attractiveness of the area for investing in properties that can be converted to rental units, the hold on to it strategy is a poor choice for the investor who wishes to make a solid return. There are other strategies that make much more sense. Even the Bargain Purchase strategy is better. In this concept, only properties that can be purchased at below 20% their true value are considered. The 20% figure allows the property to be returned to the market at once at its full value.

Another strategy that is related is the Increased Value strategy. This is going to be more likely in an area such as Provo real estate. It involves purchasing at the actual true value and making improvements within the first six months that increase the value by 20%, and then returning the property to the market at the increased value figure.

When rental property is the thrust of your real estate strategy, the Double Digit Cap Rate plan is a good investment choice. It limits your property purchases to those that can produce a capitalization rate of at least 10%. The capitalization rate is the net operating income of the property. The percentage figures in these strategies are guidelines for making the investment practical. If these minimum figures are not met, the investment capital should be invested in other low return investments and the real estate market avoided unless the hold on until it goes up strategy is used.

About the Author

Natalie Aranda is a freelance writer.

Tips On How To Get Started In Real Estate Investing Without Losing Your Shirt

It’s often been asserted that Real Estate investing might be the best and effortless ways to create wealth. In some ways that is true since, with a humble monetary outlay and a reasonable supply of sweat equity, real estate can be purchased and resold for a hefty gain and the opportunity still looks excellent.

While Real Estate investing can be easier than other forms of reaping a good return on investment you should not assume that it is easy.

The largest obstacle to being successful in real estate investing, for those starting out, is the sharp learning curve. Real Estate investing is a complex industry and it does not matter where your real estate is located. You can lose large sums of cash faster than you can say ’stock market crash’. This is especially true if you haven’t done proper investigation ahead of time.

Let?s examine the procedure by exploring various things to think about before jumping in to real estate investing.

Before investing cash, invest a little time. Consider what your monetary goals are that you want to accomplish and how soon do you want to arrive there.

It is easy to dream about what we want to accomplish but we must bring these dreams down to earth. Sure you say but how? Housing prices have been going up for a number of years and they still are going up. Real estate is just like all commodities, real estate values vary and may go down, and when they do it could be a sharp, steep decline. If history is any guide, the most likely scenario is a sharp decline.

Writing out your monetary and time commitments is a good and practical exercise. A one year to five year business plan is indispensable and does it in as much detail as you can. A review of your business plan on a regular basis is needed to see how you are coming along and to tweak it as needed from time to time. A good rule of thumb is to check it after six months and again after two years.

Be sure to include an approximation of how much money you have to invest. Since you might choose to use your own house that you are living in as your first investment this financial cost can vary widely among individual investors.

If you plan to operate with less than $10,000 to start with then you are going to need to be looking at either using your primary home or purchasing a ‘fixer-upper’ to be your first investment.

You can buy a secondary property with no cash down and a few of thousand dollars in closing costs if you have good credit. But the housing market would have to go fast, and you would need to sell quickly.

The problems and risks involved have severe tax and legal penalties. The substitute would be to take on larger monthly payments and maybe extra expenses on repairs. Here again you can this can be dangerous and possibly costly. You have a greater possibility of losing more than your beginning outlay, even if you only interject a small sum of cash, you’re going to be legally responsible for the complete undertaking.

An unwise move for the newbie:

Back to your business plan, you need to indicate the level of risk you are ready to take. The level of personal risk one has can be calculated by past experience. If you have not had any past dealings with large sums of capitol on the line then you will have to do some introspection of your personality. Ask someone close to you what they think about your risk level. Some people can deal with an outstanding balance of hundreds of thousands of dollars floating in the balance while others could not sleep with having $10,000 on the line.

Many people invest with a leaning toward capital preservation, others investors want maximum dollar return in the fastest time. Many folks differ widely in their tolerance for risk. Know your limits or you could be in over your head quickly.

How much time do you have to dedicate to your new venture? You will have to create a association with a lender, study all about your individual market, contracts involved, required insurance, your legal rights, other party legal rights and requirements, various tax consequences, and various other facets of real estate investing.

If you find this all to be an interesting challenge and all the above sounds ok, then Real estate investment might be just for you! You can generate a substantial additional income, or a full time living if you want to since real estate investing continues to be one of the soundest investment opportunities obtainable. Although you can generate a pile of money ? it’s a great adventure too!

Next Page »