Finding an Apartment Without Going Broke
Utilize technology to avoid scams
In the year 2019, you can do most of your p>
Watch out for pet fees and rent
If it seems like most apartments have started charging extra ldquo;rentrdquo; for pets in the last two or three years, yoursquo;re not imagining it. USA Today referred to pet rent as ldquo;the latest costly apartment fad.rdquo; Pet rent is not unreasonable by itself, but it can start to feel a bit much when combined with hundreds of dollars in pet fees and deposits. Paying several hundred dollars to move your cat into an apartment in the city is one thing, but for many people, paying an extra 30 or 40 a month on top of that is a bridge too far. You may feel like you donrsquo;t have a choice. But first, ask if therersquo;s any way to spread out the cost of a pet deposit. For instance, some landlords will let you pay out 600 in pet fees and deposits over a few months, while others will require you to pay everything upfront. Either way, therersquo;s no harm in asking.
Look for public transit options
Some apartments will advertise a unit as ldquo;close to the bus linerdquo; or ldquo;right by public transit.rdquo; If itrsquo;s not mentioned in the ad, feel free to ask when you tour the property. Better yet, you can pull up the address on Google Maps and search for nearby public transit options. Taking the bus or train can save you in a couple of ways. For starters, you donrsquo;t have to pay 50 or 100 a month for a parking spot. Even if your parking spot is free, you may still want to take the bus sometimes and save money on gas. Sure, going to the grocery store and buying a lot of food may require taking your personal vehicle, but not every errand or trip will. If yoursquo;re visiting a family member at an assisted living community in New Jersey, hopping on the bus or train will probably be less stressful than driving yourself there and attempting to find parking near the facility.
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The Role of iBuying in Todays Market
Large, institutional property investors traditionally focus on multi-family units. The great housing recession last decade, when the stock market was providing lack-luster returns, opened the door for big money to find its way into the single-family acquisition market. As hedge funds began buying large blocks of single-family homes, rehabilitating them with primarily cosmetic facelifts such as carpet and paint, and offering small investors shares in these behemoths, they created an investment vehicle that had the potential to beat Wall Street. If it could work in the ldquo;hold-and-rentrdquo; market, su>
Many fortunes have been made buying, renting, trading and selling real estate. Historically, real estate values trend up, making it a smart investment, so large firms jumping into the real estate investment game made perfect sense. Will it make sense long term? What about the newest entrants to the iBuying fray? How long will they find this practice attractive? Frankly, there is no reason that this approach cant co-exist along with more traditional real estate ownership. Take ERA Real Estatersquo;s "Sellers Security Plan.rdquo; It has been in place for decades and survived both housing booms and busts. Why? Because the price that anyone will pay for a property is based on economics 101: the law of supply and demand. Not only this, but ERA is doing what many iBuyers are not, and that is keeping the real estate agent at the center of the transaction. While iBuying is certainly a buzzworthy term in real estate these days, there are many consumers across the U.S. who still donrsquo;t know what it means and are intimidated by its unfamiliarity and at the prospect of gambling with one of the biggest transactions of their lives. The components that enable iBuyer programs to cut through the clutter: simplicity, convenience and efficiency.
So, as long as an institutional real estate buyer doesnt panic in the midst of a housing downturn and "dump" large blocks of homes on the market, driving prices down further, nor get too crazy when faced with a housing bubble and over-extend their financial resources, natural economic factors will drive prices up and down, allowing these new, large buyers to benefit from changing market values.
What do traditional real estate professionals need to consider when advising their clients about iBuyer options? Here are some questions to ask:
1. What is the clientrsquo;s motivation? MUST they sell by a particular date in order to move forward with their plans?
2. What repairs are needed to get the most money for the property? Does the client possess the financial resources to make the home marketable for top dollar?
3. Are home prices trending up, making waiting to sell a better option or is waiting simply costing the Seller time with little chance of bigger gain?
If the client needs to sell in a hurry, lacks the funds necessary to make the property marketable or wonrsquo;t benefit financially by holding out for a better price, it might be in the clientrsquo;s best interest to take advantage of the iBuyer option.
There is no doubt that there is risk. There is in most financial transactions. But isnt that where all big money is earned? As long as iBuyer companies are well-funded, take a long-term view of this business and focus on adding a measure of value to the end-user buyer and seller, there is no reason that this practice canrsquo;t be a permanent part of the new American real estate landscape.
Greg Martin is the president and managing broker of ERA Sunrise Realty in northern Metropolitan Atlanta, Georgia. Together with his business partner David Moody, they opened a new branch of ERA Sunrise Realty in 2002 and have since expanded the company to seven offices with more than 130 agents. He is very proud of the work ERA Sunrise Realty does, and of their recognition as the winner of the 2018 ERA ldquo;Jim Jackson Memorial Award for 1st in Service.rdquo; Greg has been in real estate since 1998, before which he served as a marketing and sales team leader for Union Pacific Railroad and Southern Pacific Railroad. Greg is also part owner of Sure Close Title Services LLC and is co-owner and school director for The Real Estate Productivity Center, a state-approved real estate school devoted to improving the knowledge and professionalism of real estate agents across Georgia.
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The 9 Best Tips on How to Find a Property for Profitable Investing
Tip 1: Buy a Property in a Top Real Estate Market
Anyone in the real estate industry will tell you that location is the first and foremost factor for a profitable investment. Where your rental property is located will determine the price you have to pay for it, the rental demand, the best rental strategy, the type of tenants you can expect, the rental rate, the occupancy rate and vacancy rate, and ultimately the return on investment. Thus, the first thing which any investor preparing to buy a property should do is to read about and research the best places for real estate investing in the US housing market. Donrsquo;t make the mistake of many beginners who focus on large cities only. Sometimes small towns and even villages offer a much higher return than major cities. For example, according to data from Mashvisor, a real estate data analytics company, the census-designated area with a population of about 7,000 people, Joshua Tree, has been one of the top locations for Airbnb rentals in the past few years.
Tip 2: Donrsquo;t Spend More Than What You Can Afford
As a beginner investor, you should always start with a small, cheap, easy-to-manage property. After all, the best investment property is the one which you can afford and which you can manage. To find such a property, you should prepare a budget. On the one hand, factor in your savings, the income from your full-time job and other sources, and the money you expect to make from your rental property. On the other hand, make a list of all the one-time and recurrent costs associated with buying, owning, and managing an investment property such as the property price, appraisal cost, home inspection fee, closing fees, fixes and repairs, monthly mortgage payments, property tax, insurance, property management, maintenance, and others. In this way you will be able to figure out exactly how much you can afford to spend on a property without risking a foreclosure.
Tip 3: Find the Best Financing Method
One of the great things about real estate investing is that you have many financing options to choose from. You can go for a conventional mortgage, a hard money loan, a private money loan, a syndication, or a partnership, to mention a few possible choices. You should study each option carefully and decide on the best one for your particular case, based on their pros and cons and your specific situation.
Most probably, as a first-time investor, you will end up taking a mortgage loan. In this case, it is advisable to make the down payment as big as possible, without overspending on it of course. The higher your down payment is, the faster you will be able to repay your loan and the less money you will end up spending on repayment. Figuring out the best financing method is crucially important for profitable real estate investing.
Tip 4: Use Different Sources for Your Property Search
To find a property for profitable investing, you should put efforts into searching for properties for sale far and wide. Now that you know where you want to buy an investment property and how much you can afford to spend on it, start checking out local newspapers and real estate websites with both MLS listings and off market properties, talk to your friends and acquaintances, network with other investors in the area who might be selling a property, and connect with a local real estate agent. Each one of these sources will have access to a different kind of properties, and you should check them all out before deciding on the best type of investment property for you and narrowing down your choice.
Tip 5: Consider Investing in a Foreclosure
The most lucrative investments in real estate are those properties which you can buy below market value. Thus, you should consider investing in a foreclosed property. Forget the popular myth that foreclosures are always houses in a dire situation which makes them bad real estate investments. To the contrary, it is feasible to find a foreclosed property in a good shape which will bring you high return on investment. The reason is that you will most likely pay only a fraction of the fair market value of the property as the bank or other financial institution is trying to get rid of it quickly, while you can still charge full market value rental rate.
To find foreclosed properties to invest in, talk to the banks in the area, search for specialized real estate websites with foreclosed property listings including government agenciesrsquo; websites, and look for agents who work with foreclosures.
Tip 6: Hire a Real Estate Agent
Avoid the mistake of many first-time real estate investors who think they can manage the whole process of finding and buying a property on their own. It is recommended to look for an agent who works mostly with property investors and hire him/her to help you along. Your agent will be able to help you find lucrative properties for sale, connect you with lenders, prepare the offer, negotiate the best price, and close the deal quickly and smoothly. Moreover, you donrsquo;t have to worry about inflating your budget as agent fees are usually covered by the property seller and not the property buyer.
Tip 7: Conduct Thorough Property Analysis
An indispensable step in the process of making the most profitable real estate investments is performing an investment property analysis. Once you have narrowed down your choice to a few top properties, you should study them in detail to calculate exactly how much return on investment you can expect from them, based on your preferred rental strategy. Find out the cash flow, the cash on cash return, and the capitalization rate which you can expect. To beat the competition in the local real estate market and find the best property for profitable investing, make sure to use real estate investment tools such as a rental property calculator. This will save you a lot of time in analyzing properties and allow you to make an offer before the other investors in the area.
Tip 8: Choose the Best Rental Strategy
You can rent out your investment property on short-term basis as an Airbnb rental or long-term basis as a traditional rental. The optimal strategy in each case depends on the location, the demand, the rental rates, and other factors. So, in your investment property analysis you should see which rental strategy will bring you a higher return on investment. If you decide to go for a short-term rental, donrsquo;t forget to study the local regulations carefully as many places have adopted major restrictions on this type of rentals in recent years. Ideally, you should look for a location where both owner-occupied and non-owner occupied properties can be rented out on short-term basis in all residential neighborhoods. For example, the Dallas real estate market is one of the major cities with the least Airbnb legal issues in the US at the moment.
Tip 9: Select the Best Property Management Strategy
Profitable investing in real estate doesnrsquo;t end with finding and buying a property with a high potential for return. Afterwards, you have to manage your rental property in the best possible way. If you invest in your local housing market, have some free time, and exhibit the right personality welcoming and kind but also assertive, you can become a landlord and deal with a rental property and tenants on your own. However, before you decide to manage your property by yourself, you should know that this can take a lot of time and efforts and can turn into a real headache.
If, on the other hand, you invest out of state, have a busy job and a family to take care of, and/or are simply not fit to be a landlord, you can hire a property management company to deal with your investment property. You should be prepared to pay them a monthly rate, but it will be worth it as they will be able to maximize your profit while you can enjoy the positive cash flow in your free time.
How to find a profitable investment property is the first thing you have to learn as a real estate investor in order to make money. The good news is that it is absolutely feasible and doable if you follow our 9 tips above.
Daniela Andreevska is Marketing Director at Mashvisor, a real estate analytics tool which helps real estate investors quickly find traditional and Airbnb investment properties. A research process thatrsquo;s usually 3 months now can take 15 minutes. We provide all the real estate information in easy to understand visualizations.
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