Smart Investments: Four Ways to Avoid the Common Pitfalls of Investing in Real Estate

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“Persist—Do not take no for an answer. If you are happy to sit at your desk and not take any risk, you will be sitting at your desk for the next twenty years.” –David Rubenstein

Much like any other career or business in the world, real estate investment takes time, commitment and a little discipline to get good at. It does not only take a fortnight to be successful in your real estate endeavors—for some, but it can also even take years and years of trying, failing, learning and getting back at it again.

The trick here is never to give up and keep persisting. After all, every failure is a valuable lesson. Unfortunately, most novices and budding real estate investors would give up at the first brush of failure because they were under the misguided impression that a career in real estate would mean easy money. This could not be any farther from the reality of how things are. The truth is you will try, and you will fail, but this should not deter you. Study and learn as much as you can about the process and refine your techniques. Reevaluate your strategies and try to pinpoint where you have fallen short before. However, if you wish to mitigate the possibility of committing failures, here are some of the tried and tested ways to do exactly that. Whether you are planning to invest on properties in Avida Towers Centera, there are common strategies (proven by those who had already made a fortune in the industry) that would help you succeed with fewer mistakes.

When investing in real estate, here are the principles and concepts you should consider:

1.) Have an analysis spreadsheet that contains your prospective rental properties

A wise investor would not immediately close down on the first best deal he comes across. Instead, he would take note of that, find more deals, collate them and analyze them in a single spreadsheet. Commence your analysis with the Fair Market Value, money down the improvements done, the rental income, expenses and its prospective ROI figure. Weigh your options by subjecting every possible deal through your spreadsheet. This is crucial because it helps you pick out not only the best properties but the best deals as well.

2.) You are buying numbers

Do not make the mistake of envisioning yourself living in the property you are buying. Take note: You are not buying a home to live in; you are investing to buy yourself numbers. Getting far too attached to the property you are investing on can be a fatal mistake as it clouds your judgment. When you are emotionally involved, you will invest far too much time or capital than necessary which could be detrimental to your ROI. This is neither about what you want nor what you need. It is about how much you can make off the property. Remember, channeling most of your financial resources into one property so that you can bloat the rental rate is not always a feasible option. It might even backfire on you.

3.) Do your research

If you are going to be spending a significant amount on an investment property, research is not only recommended but paramount. Do your research and do it again. As stated above, do not buy the first property you see outright. Take your time and look for more properties. Weigh your options and enumerate the reasons that make a certain property great. Run it through your analysis spreadsheet and let the numbers speak for themselves.

4.) Buy local if possible

The operative word here is if possible. This means to buy local only if you can—not buying ONLY local. Do not get too focused on buying local just so you can check on the property. Quality rental properties are still superior to local ones that do not quite make the cut after all. However, if you are already lucky enough to be living in an area with a thriving rental market with proven returns on investment, then buying local should be your initial focus.

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Rental Investments: Five Excellent Tips to Prepare for A Rental

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“To stand out, you just need to do a few things others are not willing to do.” –Michael Hyatt

There has been no question that renting out one of your unused properties is an excellent avenue for real estate investment. However, with a myriad of rental properties in almost every nook and cranny in the city (from condo units in Avida Towers Centera to apartment units elsewhere), how do you ensure that your rental property makes the cut and gets selected? Remember, every single day that you have a vacancy at your rental property is considered a loss of potential profits. However, while tenancy is mostly a hit or miss thing and has more to do with your luck in finding tenants than anything else, there are ways of ensuring that your rental properties would entice tenants to rent it out.

Apart from being situated in proximity to schools, offices and entertainment hubs, it pays to prepare your rental properties for occupancy by tenants. So, if you have been thinking of renting out any of your properties, here are some tips that would not only help you navigate through the process but make it a bit easier as well.

1.) Start the process at least six weeks out

Of course, if you are getting ready for tenancy, a little work goes a long way to ensure that the home is ready for occupants. Apart from ensuring that the home is rental-ready, you would also want to present it at its best before you even start giving your prospective tenants a tour of the home. Take note; most tenants start scouring the neighborhood for potential homes at least a month prior to their move. So, start at the earliest possible time.

2.) Spruce it up

Of course, part of beautifying your rental properties as well as making an excellent first impression on your prospective tenants is to make sure that the unit you are presenting to them is clean. Apart from cleanliness, you should also invest a little in giving it a little touch-up. Spend some time and money in applying a fresh coat of paint on the walls, incorporate fresh flowers into the home, get rid of the clutter and organize. Remember, tenants, are more inclined to rent a unit that is not only well-prepared but clean as well.

3.) Change your insurance

Whatever existing policy you have might not be sufficient enough to cover you should you become a landlord. So, before signing a lease, it is best if you find time to down with your insurance agent and discuss what available coverage options you have. Ask them about their landlord’s policy which is also known as a dwelling policy and update your existing coverage.

4.) Do not overlook legal technicalities

Before drafting your lease contract, research the existing laws of your area first. Chances are you would be required to obtain licenses and permits. Furthermore, you would also need to undergo an inspection. In most areas, tenancy is considered a business which would inevitably require a license from you—regardless of whether it is only for a single property or a series of properties. Learn the requirements of being a landlord and tenancy before renting out your home to mitigate the risk of getting into legal snarls.

5.) Decide if you will accept pets

Know that even though you will have more prospective clients should you accept their furry friends as well, there will also be some tenants who would not be so receptive to sharing a roof with four-footed creatures. However, ensure that you and your tenant are on the same page when it comes to pet policies. It would not hurt to make sure that he or she is a responsible pet owner as well. Your pet policies should be in place in order to prevent costly damage, noise and other pet-related problems. Moreover, you can then decide whether you will charge pet rent or fees.

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