Helpful Tips for the Real Estate Investor Part 1

Blog Post Image
Real Estate

Real Estate Matters with Tim Bro

Helpful Tips for the Real Estate Investor Part 1 of 2

1.     Know what your goals are:

Talk to your real estate consultant about cash flow, capital appreciation, tax benefits, management methods, equity pay down, and pride of ownership.

2.     Knowing/checking income and expenses:

Check everything: rent income, taxes, expenses, deposits, lease expirations, etc.  Hype is an epidemic in investment real estate.  Also, factor in reserves for maintenance and unplanned events/issues.

3.     You’re buying a business:

Owning an investment property carries with it great responsibility and potential, along with some very difficult decisions – evicting tenants, who to rent to, whether or not to make certain improvements, etc.  Remember it’s a “hands-on” investment.

4.     Being emotional:

An emotional purchase is not your best investment strategy.  Pay attention to the numbers, not necessarily your heart.

5.     Negative vs positive cash flow:

Understand the cash flow position of each investment property. Are you looking to have a positive cash flow … understand what that entails.  Is a negative cash flow ok … if so, how much is allowable in your budget.  Reminder, factor the up side … depreciation, tax write offs, and appreciation.  Understand your numbers and goals.

6.     Ideal loan for your investment:

Here is a stress inducer – long-term investment goals financed with short-term instruments: a classic investment mistake.  My opinion, you should own real estate for the long term; utilizing long-term financing.

7.     Inspections:

Look at every inch!  Hire a professional inspector and ask the tenants questions about the property.  Don’t get lazy on this one!

8.     Read, approve, and confirm all documents during escrow:

Review zoning laws, rental applications and leases, by-laws, easements, title policy, inspection reports, purchase contract, insurance, rules and regulations, trust deed, mortgage, etc.

To discuss and review your current holdings and future real estate goals, call Tim Brodowski at 858-354-2354, “The Right Choice in Real Estate”.