Tips On Property Investment

Property investment is a major decision that can either see you reap rich rewards or lose out on a lot of money. We read how seasoned investors are rewarded with handsome returns and, naturally, would like to get a piece of the pie. But, property investment is not as easy as how the pros make it so it’s important to know how to choose properties and protect yourself against debt burden.

• Don’t go over your budget. You may be tempted to invest in property that’s sure to bring in money but unless you can afford it, leave it for later. First-timers, in their eagerness, tend to overspend on property whose value they know little of. The only way to learn the difference between a good and bad investment is to study the real estate market. How it fluctuates, factors influencing its state and so on.

• What type of property are you interested in investing? There’s residential, land, commercial and industrial property and under them you have single-family houses, apartments, restaurants, sites for factories etc. It’s a long list and you want property that provides income.

A point to remember is that property which brings in money in one area may not in another. For example, single-family houses located near industrial areas may not see many takers because families aren’t warm to the idea of living near polluting plants.

Then again, if a factory is providing plenty of employment opportunities to people living in an area, the place could see the housing market see a rise as people flock to seek employment. What this means is that every area is different and learning real estate trends in those areas is important.

• When calculating a budget, don’t factor in only the cost of the property. There are taxes to be paid which can significantly change your budget and you don’t want to find yourself unable to pay off loans.

• Even experienced investors rely on professionals like property managers to give them the best value of their property. They go one further by also educating clients about property law, rights of the landlord and the tenant.

You may be the owner but this doesn’t mean you have to take care of maintenance issues. The job can be managed by the property manager.

To avoid conflicts with tenants, always use the property manager as the middleman and under no circumstances, visit the property without giving a head’s up to the tenant. You could be violating the terms of the lease agreement.

• Before purchasing property, check its conditions especially the roofing system, flooring, plumbing and heating. Dilapidated property may be available for a very cheap price but if you’ll have to spend a lot on renovation, you’ll be better off looking for something else.

Assessing a piece of property requires professional help which can be availed from building inspectors. Likewise, renovation work requires full knowledge of construction, plumbing and other trades that only a licensed and experienced tradesman can carry out.

• It’s usually necessary to perform some renovation work even on buildings which are far from dilapidated. Areas to focus on are bathrooms and kitchens as these are the first places a buyer will check.

• Always think of the long term before investing in property. Unlike shares, you can’t sell property in parts so wrong investment choices will cost you. Once you learn the basics, you should have no trouble buying and renting/selling real estate for a profit.

Tips To Get The Perfect Tenant Mix for Your Retail Property

The ultimate goal for any landlord is to achieve maximum income from their retail property. However, that does not imply that they must lose focus on the bigger picture and let their space to any retailer who is interested in the property. Maintaining the perfect tenant mix in the property leads to increased foot traffic, greater spend, delighted tenants and ultimately more demand and better rates for the property.

Read on to find out the five ways to create the ultimate blend of tenants for a retail center.

Study the demographics of the environment

The demographics of the nearby locations play a vital role in determining what kind of retailers will best tick among the shoppers. Conduct surveys and collect information pertaining to what your target customers would like to see in the area around them. For instance, pharmacy stores may be a valuable addition for an aging population.

Talk to your existing tenants

Existing retail tenants may be a good source of providing insight into what brands and products can add more value to their own store and ultimately to the landlord. Analyze the performance of the stores and take a deeper look into their strengths and weakness and build ways to overcome or enhance them.

Mix brands and categories

A retail center that draws a balance between the big and the small brands and has a wider collection of product categories than simply focusing on part of the demographics enjoy better foot traffic. Choose tenants from various product categories and be sure to include local retailers who always have something new and fresh to offer. Look beyond the retail line up and set up service facilities like ATMs to optimize the time and effort spent on creating the perfect tenant mix.

Make market assessment a part of the responsibility

Tenants come and may go at the end of the lease. This may interrupt the existing interconnections within the retail space. For instance, men visiting your retail center to buy baby diapers in one outlet tend to grab a few drinks at the next one. Retail centers must continually invest time and effort to assess the market and ensure that their tenant mix is optimizing the overall performance.

Hire a good commercial real estate property company

Commercial real estate property management services have mastered the art of using several proven techniques in finding the right mix for any kind of retail property. They study the area around the property, analyze the geographical pros and cons of the place and have seasoned real estate experts to work on the tenant mix. They perform competitor analysis to check what products and services are missing in the area and also work towards acquiring high quality tenants for the property.

Landlords and real estate companies can use real estate property management services to manage tenant relationships from the start till the end while they focus on other core activities.

Property Management For Northern Virginia Real Estate – 10 Tips

Below are ten critical tips garnered from a property management company with over 15 years of experience in the Northern Virginia apartment leasing market. Of course, entire books have been written on the subject of property management, so think of the below as the start of your education as a property manager.

1) Research comparable rent prices. It is very important to do your due diligence when it comes to what price you’re going to advertise your property for. Price it too low and you’re going to lose out on extra rental income, too high and you might never schedule a showing of the property. Rent price is dependent on a number of factors including, the economy, whether people are buying versus renting, if local companies are hiring and moving people to the area, what current comparable listings you are competing with, and what prices have been obtained recently. For a list of comparable rent prices and average days on market it’s best to consult a local Realtor. In Northern Virginia be sure to research comps from NVAR’s metropolitan regional information system.

2) Clean and prep your rental property. First impressions can mean everything. If your rental property does not show well this can be devastating. You can be in the best area, across from a metro station, and with tons of companies hiring just around the corner, but if the walls are marked with crayon and you can’t pinpoint that certain smell (the not good one) then you’re likely not going to find a tenant. A reliable cleaning company in Northern Virginia is Maid Perfect.

3) List the property on the local MLS. The Multiple Listing Service (MLS) in many areas is going to be a solid source of leads for potential tenants. Real estate agents can list your property on the MLS and then the property is exposed to thousands of other agents who can show the property and find tenants for your unit. In Northern Virginia make sure your property is listed on MRIS.

4) Post your property on free listing websites. 70% or more potential tenants start their search for a rental on the internet. That being said, you want your listing to be posted on as many sites as possible. There are too many to list in this article, but a few Google searches will lead you to a ton of websites willing to host your listing and contact information free of charge. Use these sites to actively market your rental property. In Northern Virginia one of the key sites to be listed on is the Washington DC section of Craigslist.

5) Market your rental unit to local companies. One of the main reasons that people move is for a new job. Companies that are actively hiring are typically the largest source of new tenants in a given metropolitan area. Make best efforts to get in touch with the relocation departments of local companies so that they can actively source new hires to you. These new hires NEED to find a place to live and will be the best source for tenants that are ready to make a decision. In Northern VA, you can find a list of the largest businesses in your area by visiting Fairfax County’s government website.

6) Shoot a short video of the rental property. Pictures are nice, but video is better, especially when dealing with potential tenants that are relocating and can not see the property in person. You can use the video to qualify potential tenants for showings. Simply host the video on your favorite free video sharing site (YouTube, alo video, etc… ) and then point the potential tenant to the video to make sure they are interested in your unit. If they have further interest after the video showing, it might be worth setting up a showing in person. The average tenant looks at over 6 properties before they make a decision, so shooting this video can save you quite a bit of time when dealing with potential tenants that just want to take a look, but are not ready to make a decision. In Northern Virginia you will want to post your video to Fairfax TV.

7) Run a thorough credit check on the tenant. If we lived in a perfect world, everyone would pay their rent on time and there would be no evictions. The problem is we don’t live in a utopia. Have you tenant fill out a rental application which gives you permission to run a credit check on them. Make sure that you follow the latest FCRA (Fair Credit Reporting Act) rules and regulations and get a FICO score for the potential tenant. This score will give you a good idea of whether the tenant is going to pay the rent on time, late, or not at all. A bad score usually means a tenant that will give you problems. It’s better to leave the place vacant than take the risk. In Northern Virginia the you should provide the tenant with the FCRA rules and regulations after running their credit. Legalities are often state specific. Please consult your state’s landlord tenant act before running credit or other background checks on potential tenants.

8) Obtain a rock solid lease agreement. The lease dictates the relationship between the landlord and tenant. You want to obtain a fair lease agreement that protects you as the landlord. If things go well with the tenant, then you will probably never look at the lease again, however, at the first sign of trouble, this piece of paper is all you have to get you out of a bad situation. It may be worth having a leasing specialist or Realtor draft the lease for you, a lawyer might be too expensive, unless you have multiple properties and can reuse the same agreement. In Northern Virginia you’ll want to contact NVAR to obtain a rock solid lease.

9) Find a good contractor. When the plumbing goes out, or the HVAC does not work, who are you going to call? If you’re an expert in these areas then you have nothing to worry about… most of us aren’t. It’s a good idea to get to know an honest, reliable and timely plumber, electrician and general contractor. Timeliness is of supreme importance. Make sure to develop a good enough relationship with your contractor such that they take care of your tenants in a timely and professional manner. If the contractor isn’t contentious, it will hurt the relationship with your tenant. In Northern VA you can obtain a good list of contractors by going to the Washington DC section of ServiceMagic.

10) Consider using a Realtor, property manager or leasing specialist. Hiring the right help can make your life a lot easier. These folks will do all of the above and more for you. However, be sure to do your research. Not all property managers are created equal. Use someone local who has expertise in your community.

Tips On Picking "Sleeper" Real Estate Property

Real estate investing is all about perception. Your perception of where the market is going, in conjunction with where it’s actually going. The aim, as always is to buy low and sell high.

You want to buy a cheap tract of dirt and sell it as a high priced piece of developed real estate, after it’s appreciated enough to turn a tidy profit. Selling the property is an art in and of itself.

Buying an initial tract of dirt lends itself to some solid, rational guidelines:

First, look at trend lines for housing prices in your area. While most housing markets are in decline (and the housing markets in Florida and California are adjusting from more than a decade of over-valuation), there are markets where the housing prices are going up. This is a decent leading indicator that there’s a market for expansion.

Second, look for job related news. Home purchases require a steady source of income. New employers moving into a city, or a government branch office opening up are a strong indicator that good, well paying jobs are likely to come up. Where well paying jobs roost, home purchases follow.

Related to this, talk to your local city planning office. Are there recent purchases of “right of ways” to lay down sewer lines? Is the local telephone cable making plans to run out fiber optic lines – a “must have” trend in new home construction. These things point to areas where home growth is immanent. Other big tip offs are school bond issues (found in your local news paper) and new parks being opened up.

Before you look at the land, check out the adjacent commercial real estate usage. Look for “family friendly” or “residential friendly” commercial properties: Houses that are close to grocery and clothes shopping tend to fetch a higher price than ones that are farther away. If there’s a movie theater nearby, or plans for an elementary or middle school, factor that into the size of the homes you build, and what their amenities will be; buyers looking for those features are looking for “mover upper” homes – with a bit more floor space, and two (or three) bedrooms for the kids. Other spots to look for are anchor stores, like Wal-Mart and Best Buy. These companies spend millions on surveys of purchasing patterns before buying a store location; if they’re buying a plot of land, you’ve got about a year to a year and a half window to look into nearby real estate for single family residential and rental residential properties.

You can even flip this on its side – if you can talk to a group of commercial real estate investors, building a shopping center as the nucleus for home development is also a viable combined strategy. This also applies to highly urban areas. Many downtown areas that have been abandoned by businesses can be converted to apartment buildings, and some of the older housing projects are being torn down for mixed-use spaces with combined commercial and residential areas. In particular, you can often get block grants to help with the financing on projects like this, and there are programs from HUD that can help out a great deal with “urban renovations”.

Another source to investigate is the demographics in your area. Look at the US Census figures (and local county figures) for median age, and median birth rate per capita. You want to invest in areas where the population is growing already. High skews in the ’40s and ’50s indicate that you’ve got a bunch of people who are going to retire soon, and retirees are highly prone to selling properties off. Places to watch carefully are most of the urban parts of California, and great swaths of the rural Midwest, where demographic trends have been changing entire towns since the 1950s as the country’s population has shifted to urban areas.

If there’s a local planning council, or urban development council, make it a point to get the minutes of all the meetings from the past year. The city council offices will have them on file as a matter of public record. Also try to get into the next range of meetings as an observer. Discuss with the city and county managers where they see housing and construction trends moving. What you’re looking for is real estate that will be desirable in two to three years; look at road planning atlases, and look for all the data you can find. Also look for real estate that will be scenic – lake front property is as close to a guaranteed bet as you can get in real estate investing, particularly if there’s a lake that’s at the “far end” of a development axis. Likewise, if there’s land that the city council is looking to acquire for parks, buying the adjacent lots now means you’ll be able to sell them later.

Lastly, talk to the professionals in your communities. Talk to architects who can tell you if they’re busy or not. Maintain professional contacts with engineers, bankers and attorneys. They will usually know about projects well before the general public. Also make a habit of reading the local newspaper’s business section. Often times, the first clue that a business may move in to your area is buried at the bottom of a column on page 8.

Using the guidelines suggested above will help you to find “sleeper” raw land properties. These “sleeper” properties are perfect for the buy low, sell high strategy used by successful commercial real estate investors.