Can You Buy Property With No Money Down?

Although we do believe it’s possible to find a buyer who is so motivated that she’ll actually pay you to take a property off her  hands, the  reality is that the vast  majority of such properties don’t  prove to be profitable for you in the long run.  Ask yourself — why would  anyone give away a property unless it had  some really  serious problems?
http://www.buyingrentalproperty.org/buy-rental-property-with-no-money-down/

Can You Buy Property With No Money Down?
http://www.buyingrentalproperty.org/buy-rental-property-with-no-money-down/

Talking with tenants about renter’s insurance

Renter’s insurance is secured by and  paid  for by your  tenants and  covers losses to the  tenant’s personal or business property as a result of fire, theft, water damage, or other loss.  As a rental property owner, you benefit from renter’s insurance because it covers any claims in the  event that the  tenant starts a fire or flood. The tenant’s premiums go up rather than yours. This tenants insurance is in addition to the insurance for rental property discussed here:

http://www.buyingrentalproperty.org/rental-property-insurance/

Most commercial tenants have  this  coverage, but  residential tenants often think they  don’t  need renter’s insurance because they  have  few valuables. But renter’s insurance covers much more than just their personal possessions; it also protects against liability claims made by injured guests or visitors. The insurance also offers  supplemental living expenses if the  rental unit becomes uninhabitable due to fire or smoke damage. And it protects the  tenant in the event that the  tenant causes damage to another tenant’s property. You can suggest or even  require that your  tenants carry rental insurance, but  be aware that in some areas your  competitors may not follow your  lead and you may find that you’d have  trouble keeping your  rentals occupied if you insisted that your  tenants carry renter’s insurance.

Real Estate Cost of Capital

For prospective real estate investors who feel tenants and building maintenance are ongoing headaches, buying undeveloped land may appear attractive. If you buy land in an area that's expected to experience expanding demand in the years ahead, you should be able to make a tidy return on your investment. This is called buying in the path of progress, but of course the trick is to buy before everybody realizes that new development is moving in your direction.

When you buy undeveloped land your investment may take longer to be paid back and therefore you need to be especially aware of your real estate cost of capital.

Real Estate Cost of Capital

Types of Rental Properties

If you've been in the market for a home, you know that in addition to single- family homes, you can choose from numerous types of attached or shared housing including apartment buildings, condominiums, townhomes, and co- operatives. In this section, we provide an overview of each of these properties and show how they may make an attractive real estate investment for you.

From an investment perspective, our top recommendations are apartment buildings and single-family homes. We generally don't recommend attached-housing units. If you can afford a smaller single-family home or apartment building rather than a shared-housing unit, buy the single-family home or apartments.

Article Source: http://EzineArticles.com/6538706

Purchasing Rental Property with No Money Down

Purchasing Rental Property with No Money Down. If you’ve ever  had  insomnia and  turned on the  television in the  middle of the night,  you’ve likely seen the  late-night infomercial real estate gurus who claim to possess the  true secrets of buying real estate significantly below  market value  — and  they  don’t  even  use  their own money!  They  tell viewers that anyone can buy real estate tomorrow using  their no-money-down strategies. And it gets  even  better — they  tell you that you can actually receive money from the  seller to buy her  property.

SCAM - Buy Property With No Money Down Infomercial - SCAM

Buying Commercial Rental Property

Commercial real estate is a generic term that includes properties used for office, retail, and industrial purposes. You can also include self-storage and hospitality (hotels and motels) properties in this category. If you're a knowledgeable real estate investor and you like a challenge, you need to know two good reasons to invest in commercial real estate

Article Source: http://EzineArticles.com/6538709

http://ezinearticles.com/?Buying-Commercial-Rental-Property&id=6538709

Trulia brings its real estate expertise to Android with tablet, rentals apps

Online real estate finder Trulia is launching a big play on Android this morning with two new apps: an Android tablet app, and an app made specifically for renters.

Both apps show the increasing importance of mobile for Trulia, which the company says accounts for 25 percent of its overall traffic. It’s also a sign that companies are finally beginning to take Android tablets seriously, after they failed to get much traction last year.

How to Buy Rental Properties in Foreclosure

Would you rather buy real estate at retail or at wholesale prices? Obviously the answer is "wholesale!" Just like in the stock market, the concept of buy low, sell high also applies to real estate.

One of the best ways to maximize your chances of earning a good return on your investment is to buy a property at foreclosure or as an REO. Such invest- ments are generally a better value than a conventional purchase (but not with- out some increased risk)!

And of course, other real estate investors are also scouring your local real estate market for great deals. Clearly, real estate investors flush with cash aren't going to miss this opportunity. As an individual looking to buy just one or two foreclosure homes in your local market, you may be surprised to find that you're competing with very large and sophisticated Wall Street venture funds with tens of millions of dollars that are buying pools of bad loans or foreclosed properties.

http://ezinearticles.com/?How-to-Buy-Rental-Properties-in-Foreclosure&id=6538723

Rentals on the move

The current housing market is suffering from too many homes available for sale and too few serious, qualified buyers.

So rather than try and sell, some sellers are opting to rent their homes in hopes the market will improve in a few years and they can sell.

“A lot of houses have come on the (rental) market recently,” said Cindy Hoppe with Bray Property Management.

Normally, a large supply tends to reduce the demand, but because people have lost homes due to foreclosure or been unable to purchase a home because of higher credit standards, the demand for rental property has kept up with the supply.

http://www.gjsentinel.com/special_sections/articles/for_rent_rentals_on_the_move/

Buy (REO) Real Estate Owned Properties

Because titles to the majority of foreclosed properties end up with the lender, you may find that your next opportunity to purchase the property is from the lender's real estate owned (REO) department that specializes in handling foreclosed properties. Some investors have found that this is one of the best times to buy a property because they're not dealing with an emotional or unreliable owner. Discovering the ins and outs of the lenders' policies and procedures of disposing of these foreclosed properties can be invaluable to your goal of buying real estate at below market prices.

Article Source: http://ezinearticles.com/?Buy-%28REO%29-Real-Estate-Owned-Properties&id=6539290

Is It Time to Buy Rental Property in Culver City?

In 2007 the average price for an investment property—two to four units—was approximately $952,000 ($443.00 per square foot); today the average sold price is $781,000 ($272.00 per square foot). This represents an 18 percent drop in price since 2007, but a 39 percent drop in price per square foot. In other words, investment property buyers are buying much more living/rental space for their money today than they were in 2007.

http://culvercity.patch.com/articles/is-it-time-to-buy-rental-property-in-culver-city

Tenants in Common Agreement

Be aware that tenants in common sponsors often provide attractive teaser rates of return that are guaranteed only for the first couple of years. For example, a review of the private placement offering may indicate that investors will receive a 7 percent cash distribution per year for the first two years only. This rate may potentially entice investors who have built up significant equity in their real estate holdings but haven't seen their cash flow increase as fast.

Article Source: http://EzineArticles.com/6539448

Depreciation Can Let You Pocket Tax-Free Cash

Foreclosures are up, mortgage approvals are down. Since the housing market tanked, home ownership is giving way to home renting.

The number of renters swelled by 3.9 million from 2004 to 2010, according to Harvard's Joint Center for Housing Studies. About 38 million households are now renters.

http://www.investors.com/NewsAndAnalysis/Article/586594/201109301732/Tax-Benefits-Of-Rental-Property.htm

How To Be A Landlord

Reminding ourselves on how to be a landlord is like asking a fish on how to swim. Becoming a landlordis an easy task, what keeps is hard is how landlords improperly use their authority to their tenants. Before you became a landlord here are the things you need to know:

How To Be A Landlord - The Basics

Have something that the people will rent. A landlord won't become a landlord if he/she is not in control of something. Buying a property and renting it to someone is the start of your landlord career. Buy a property that has a high market rate, strategically located near offices, schools, or town centers, and has a lowest selling price.  This technique will help you afford your monthly mortgage payment, cover costs for maintenance, renovation or repair, and earn profit.

Get your property an insurance and fortify your lease. Consult a professional about the necessary insurance for your property. The landlord must have insurance for the property in case a fire, flood, or natural disaster hit the property.

Strengthen the right of  the price of your lease by seeking advise from a lawyer. While you're at it impose rules and regulations in your rented space and have it fortified by the lawyer too.

Attract Tenants and Select The Best One. Advertise your property, let them know of your price, additional offers, and the features of the property you are going to rent. Once you've gained their attention, screen these tenants and look for a fit candidate who has the right to stay in your place. As a landlord, you should be looking for a tenant that has the capability to pay, can pay on time, and is neighbor friendly.

When you have chosen the proper candidate, carefully remind your tenant about your property's rules and regulations, the lease and how the payments should be made. If the tenant agrees have him/her sign your contract. Give her his copy and file yours along with his monthly paying record.

 http://www.youtube.com/watch?feature=player_detailpage&v=ghOBzPraZwY

How to be a landlord that is adored by many?

A common misconception of being a landlord is that you are obnoxious, greedy, very annoying, and fat(well..usually). Let's try to be a good landlord by following these steps:

1.      Greet your tenants when you see them. Do not just ignore them if they pass by you. This gives you an impression that you are approachable and kind.

2.      Kindly ask for the monthly rent. Reminding the tenants of their monthly rent a day or a week before may look rude. You are like telling to them that they cannot pay on time. Ask for it on the exact day first thing in the morning. Accept apologies if they can't pay on time then ask for a specific date that they will pay. Impose a 2-3 day grace period then charge a fine to those that exceeds the grace period. A reasonable fine is 5% of the tenant's rent.

3.      Do not forget to smile always. It keeps a happy heart and a gentle atmosphere to you as a landlord.

http://www.buyingrentalproperty.org/how-to-be-a-landlord/

Tips to Buy a Short Sale

Many real estate investors find that buying foreclosures or REO properties can be challenging. With foreclosures, the public sale is published and readily known to all interested real estate investors, but there is limited information and rarely an adequate opportunity to conduct proper due diligence. Foreclosure properties can be full of surprises!

http://ezinearticles.com/?Buying-a-Short-Sale---Tips&id=6539307

Execute Your Rental Property Strategies

Real estate investment is one investment opportunity for investors. Real estates can either be rented or profitably sold. If you plan to purchase real estate with the purpose of leasing it, good rental property strategies should be well executed. Rental property investing has a lot of benefits since it usually appreciates over time.

Here are some ways on how to invest in rental real estate.

http://waynelambert16.articlealley.com/execute-your-rental-property-strategies-2356238.html

House price whirlwind is spinning out of control

THE bond on a Moranbah house could buy you a brand new car.

With skyrocketing rents throughout the Bowen Basin in the midst of the resource boom, housing prices are spiralling out of control.

http://www.cqnews.com.au/story/2011/09/28/house-price-whirlwind-is-spinning-out-of-control/

Rental Property Insurance for Mold and Asbestos

One rental property insurance coverage that’s becoming much more difficult to obtain is a type of environmental insurance that specifically covers mold, fungus, and related issues. The number and magnitude of mold claims by tenants of both residential and commercial type properties have become a real challenge to the insurance industry, with some highly publicized lawsuits claiming huge property damage and severe  personal injury claims. Although certain insurance companies still offer limited coverage for mold and related causes, specifically inquire as to the exact protection included in your policy. Some policies don’t cover actual damages for property and personal injury but do offer a legal defense.

The best  way to avoid claims of property damage and personal injury from mold is to properly maintain your property and only turn over possession  to the rental unit or suite in good condition that’s documented in writing. The challenge with most mold claims is that water intrusion and the subsequent  concerns about mold typically occur within the tenant’s space in areas where the owner has no access or control. Or the tenant can even be the cause of the source of moisture through negligence or inadequate cleaning.

Thus, the rental property owner must rely on the tenant to minimize the likelihood of mold as well as report any concerns immediately. Many owners now use a lease addendum advising tenants  of their responsibilities in this area. Rental property owners should respond to all tenant concerns  promptly and professionally while routinely inspecting accessible areas.

Buy Rental Property With No Money Down

The popularity of buying rental property with no money down peaked in the early-1980s when most real estate loans were  assumable  — the buyer of the property essentially took over or assumed the payments on the current loan from the seller. Properties weren’t appreciating that quickly in that time frame, so many owners didn’t have significant equity in their homes and were willing to take small down payments or carry seller financing as part of the transaction. The advent of the due on sale clause in many mortgages virtually eliminated the  ability of buyers  to assume the sellers current loan.

http://www.buyingrentalproperty.org/buy-rental-property-with-no-money-down/

the conflicts of interest you may be subjected to when working with a financial advisor

Here are a couple of stories that highlight the conflicts of interest you may be subjected to when working with a financial advisor.

✓ While serving as an expert real estate wit- ness, Robert had a case  where a retired couple was given some self-serving advice by their financial planner.  This couple owned their principal residence plus three other rental homes valued at $1 million.  All of their real estate was owned free and clear,
and the rentals were in great condition with good long-term tenants. The properties pro- vided a nice monthly income stream that was mostly tax-free due to their deprecia- tion deduction (see Chapter 18). Although the real estate  was clearly their largest asset  and completely debt-free, they also had nearly $500,000 in liquid assets such as stocks, bonds, and IRAs and seemed to be fairly set. That was, until their new financial advisor told them that their retirement was at risk because they had too much invested in real estate. The planner’s recommenda- tion was to keep their own home as their real estate  investment, but sell the three highly appreciated  rental properties and invest the proceeds  in mutual funds and other financial products from companies affiliated with the planner.

The planner failed to disclose his relationship with the sponsors of the new investments and also failed to warn them about the significant capital gains taxes that would be due upon sale. By the time they met with their accoun- tant, it was too late — two of the three rental properties had been sold and over $200,000 in taxes was due. The accountant advised the couple to contact an attorney and file a law- suit against the financial advisor. Although

the couple prevailed, they recovered only a small portion of what they paid in taxes. Even worse — they lost the benefits of cash flow and appreciation on their real estate  while now owning fully taxable investments.

✓ In Eric’s previous work as an hourly-based financial advisor, he  often  had  clients come to him who were disappointed with the biased and confusing advice they got from various so-called financial planners. In one typical case, a widow had been told by an advisor to sell her two investment
properties because  he believed that the stock market would produce better returns. She set the wheels in motion to unload the properties but put the brakes on at the last minute after deciding she needed a second opinion. She met with Eric. The first thing that she noticed working with him was that he was far more thorough in examining her overall financial situation, including all of her investments, insurance, and resources for retirement. She also realized that she was happy with her real estate  holdings and really didn’t have any motivation to sell them. Furthermore, she found out from Eric that over the long-term, the returns from stocks and real estate  were quite com- parable. She thus decided to keep her life simple and stable and hold onto her nicely performing rental properties.

Don’t get us wrong, selling real estate  can make sense  at times. However, you must ask a lot of questions and run any proposed invest- ment strategies by good independent advisors before you make the decision to liquidate your real estate and shift your investments to other opportunities

Should I Buy Rental Property with a Lender or Mortgage Broker?

Before looking  at buying rental properties, you need a budget. And because your  budget for real estate purchases is largely a function of how much you can borrow (in addition to your  cash available for a down  payment), you need to determine the  limits  on your  borrowing power. If you can’t afford  a property, it doesn’t matter what  a great deal it is.

Postpone making  an appointment to look at investment properties until after you examine the  loans available. You have  two resources to consult:

Lender is a generic term for any firm, public or private, that directly loan you the cash you need to purchase your  property. This type  of lender is often  referred to as a direct lender. Most often,  your  list of possible lenders includes banks, credit unions, and private lenders (including property sellers). Lenders tend to specialize in certain types of loans.

A mortgage broker is a service provider that presents your  request for a loan to a variety of different lenders in order to find the  best financing for your  particular needs. Just  like real estate or insurance brokers, a good mortgage broker can be a real asset to your  team

http://buyingrentalproperties.posterous.com/

Buy Rental Property Fix and Refinance Strategy

With the  buy rental property, fix, and refinance strategy, you invest in properties where value can be added to the  property through repairs, upgrades, and  improvements that take  a distressed property and  turn it into a solid  and  well-maintained property. Over the  years, with increased equity in the  property and  as long as interest rates are attractive, you could refinance the  property if you so choose and  use  some of your  equity towards other real estate investments.

We strongly prefer this  method because it has  proven throughout the  years to be the  lowest risk, highest probability way to make money in real estate. You can think  of it as the  tortoise in the  old tortoise-and-the-hare story, where the  hare is the  fast-money, high-risk, high-return strategy. The tortoise may be slow and  steady, but  he ends up winning  in the  long run.  As an example, Robert is a conservative person by nature, yet he has  acquired a significant real estate portfolio by simply  purchasing well-located-but-distressed properties and  renovating, filling them up, and  then refinancing.

http://buyrentalproperty.hubpages.com/

owning rental property or buy and flip

But what  if there are some additional problems with the  property when  Joe opens up the  walls to replumb his new investment gem? Maybe  there are termites or roof leaks  or problems with the  foundation. What if the  demand for this  property diminishes and  he has  to hold  the  property for 12 months? (Some  folks got burned in the  late-2000s when  the  demand for housing sud- denly  evaporated.) Even in the  best scenario, where Joe has  accurately esti- mated the  repair and  upgrade costs and  there are no surprises, he finds  that just  owning  the  property for six months longer than he expected doubles the holding costs from $8,000 to $16,000, reducing the  pre-tax profit to $4,000. By the  time he is done paying  30 percent of that in taxes, Joe has  just  $2,800 to show  for his efforts. Owning rental property.

You may be located in a market that has  experienced rapid housing price increases, but be careful. If there is too much excess demand for new housing in the area, real estate speculators — not long-term investors or homeowners — can make up the majority of the purchasers. This tendency can be dangerous when  the majority of buyers in the market are looking  for the quick  profit rather than a long-term, stable real estate investment. When enough of these specula- tors head for the exits (as happened in some areas in the late-2000s real estate market decline) and don’t return, prices can quickly  turn tail. The speculators are then forced to mitigate their losses by renting out their properties (some- times for years) until the real estate market rebounds and they’re able to sell
the property to break even.

But we’re pragmatists — we know that lightning may strike and you may run into a property that turns out to be a buy-and-flip candidate.

Investing in Rental Property vs Flipping

The buy-and-flip strategy can also  work with existing homes that the  investor can purchase from a motivated seller at a wholesale price that is below  the market value.  The investor may not  even  have  to close escrow before finding a buyer willing to pay a retail price. There may be some minor cosmetic work or simple improvements needed before reselling, but  typically, buy-and-flip investors really  make their money when  they  buy at a discount and  then locate a buyer at full market value.  This approach is risky,  but  investing in rental property can also  be rewarding.

This high-risk strategy requires a rapidly rising  real estate market with higher than normal appreciation rates to allow for profits on short term investments. Not only do you have  to have  excessive demand driving up the  prices of real estate, but  you also have  to cover all of the  costs of real estate. With online stock trading firms, you can buy shares of your  favorite company in minutes with relatively low transaction costs. But with real estate, the  costs of buying, holding, and selling  a property are much higher and unknown, and generally include

• Acquisition costs: Due diligence and  inspection fees plus  loan fees/costs and  points
• Transaction costs: Closing  and  escrow fees
• Repair or upgrade costs: Costs to renovate or fix property to make it more desirable and  generate the  highest resale price (unless the  property  is brand-new)
• Holding costs: Property taxes, insurance, and  any negative cash flow while the  property sits  vacant or if the  rental income doesn’t cover the carrying costs
• Sales costs: Commissions and title insurance from the sale of the property

http://investinginrentalproperty.tumblr.com/

4 Ways To Increase Your Chances of Getting Money For Buying Rental Properites

Some ways you can alter your approach to getting money for buying rental properties without having  to find money elsewhere are as follows:

1. Seek low money down  loans  with private  mortgage insurance: Some lend- ers may offer you a mortgage even though you may be able to put down only 10 percent of the purchase price. These lenders will likely require you to purchase private  mortgage insurance (PMI) for your  loan. This insur- ance generally costs several hundred dollars per year  and protects the lender if you default on your  loan. (When  you do have  at least 20 percent or higher equity in the property, you can generally eliminate the PMI.)
2. Delay  your gratification: If you don’t  want  the  cost and  strain of extra fees and  bad  mortgage terms, postpone your  purchase. Boost your  sav- ings rate. Examine  your  current spending habits and  plan  to build  up a nest egg to use  to invest in your  first rental. Often real estate investors get started by actually buying a new home and  simply  keeping their old home as a rental. For more information, see  the  section “Make saving  a habit” later in the  chapter.
3. Think smaller:  Consider lower-priced properties. Smaller  properties and ones that need some work can help  keep  down  the  purchase price and the required down  payment. For example, a duplex where you live is one unit and  rent out  the  other is also  a cost-effective way to get started.
4. Turn to low entry cost options: For the  ultimate in low entry costs, real estate  investment trusts (REITs) are best. These stock exchange traded securities (which can also  be bought through REIT-focused  mutual funds) can be bought into for several thousand dollars or less.  REIT mutual funds can often  be purchased for $1000 or less  inside retirement accounts. (See Chapter 4 for more on investing in REITs.)

How to Save Money To Afford Buying Rental Properties

Here are two tips to help you be able to afford buying rental properties

Boost your income: To increase your  take-home pay, working  moremay be a possibility, or you may be able  to take  a more lucrative career path. Our main  advice on this  topic is to keep  your  priorities in order. You shouldn’t put  your  personal health and  relationships on the  back burner for a workaholic schedule. We also  believe in investing in your education. A solid  education is the  path to greater financial rewards and leads to all of the  great goals  we discuss here. Education is key not  only for your  chosen profession but  also  for real estate investing. Consider getting a real estate license or learn to be an appraiser or property man- ager  — skills that not  only help  you with your  property investing but that also  may allow you to take  on part-time work to supplement your income.

Reduce your spending: For most people, this  is the  path to increased savings. We have  both routinely generated cash flow for investments by living well beneath our  means. Start  by analyzing how much you expend on different areas (for instance, food, clothing, insurance) each month. After you’ve got the  data, decide where and  how you want  to
cut back.  Would you rather eat out  less  or have  a maid  come less  often? How about driving a less  expensive (but not  less  safe)  car versus taking lower  cost vacations? Although the  possibilities to reduce your  spend- ing are many,  you and  only you can decide which options you’re  willing and  able  to implement.

Why Real Estate Experts are Important

The most effective research is done with the assistance of real estate professionals to give you the advice and information you need to make an intelligent decision. This pre-offer period is critical; it’s the one real opportunity for a prospective buyer to investigate a property while retaining the ability to terminate the transaction without a significant monetary loss. You may invest time and several hundred to several thousand dollars to perform the necessary due diligence, but this  is a small amount compared to the potential losses from the purchase of a bad  property. This is why a rental property expert is important

http://twitter.com/monroeproperty

Real Estate Limited Partnership Tax Advantages

Limited partnerships have been available for many years. Prior to the extensive overhaul of the federal taxation of real estate investments in the 1980s, they were a common method of real estate  investing. Up until that time, all losses from real estate  were fully deductible, and these loopholes created opportunities for aggressive tax management to avoid legal tax liabilities. To learn more about the real estate limited partnership visit
http://buyrentalproperty.hubpages.com/hub/real-estate-limited-partnership

In 1986, Congress passed new tax regulations that eliminated the favorable tax treatment of most losses unless the real estate investor was an active participant. To qualify as an active participant, an individual must be involved in direct management decisions of the property, although the day-to-day rental activities of collecting rent, overseeing repairs, and paying bills can be delegated to a property manager.

Further, the federal tax code limits the deductibility of your passive  losses  against  your earned  income (salary, dividends, and interest) to a maximum of $25,000, as long as your adjusted gross income doesn’t exceed $100,000. The maximum $25,000  passive  loss  deduction phases out at a ratio of $1 for every $2 in adjusted gross income between $100,000 and $150,000. For real estate owners with adjusted gross income exceeding $150,000, any passive losses are carried forward to future years or until the property is sold.

How Much Cash Do You Need to Buy a Rental Property?

Determining how much cash you need to close on a rental property  is largely a function of the  estimated purchase price. Suppose you’re  looking  to buy some modest residential housing for $100,000. For a 25 percent down  payment you need $25,000, and  adding in another 5 percent for closing costs brings you to $30,000. If you have  your  heart set  on buying a property that costs three times as much ($300,000 sticker price), you need to triple these amounts to a total of about $90,000 for the  best financing options.

Real Estate Notes

The safest approach to making  secured loans on property is to thoroughly evaluate the  pledged collateral to protect your  investment and  determine the fair market value  if you had  to foreclose. Never  make a loan on a property that you wouldn’t be willing to own if that becomes your  best way to protect your  investment. Some lenders actually hope that the  borrower does default so they  can obtain the  property for a fraction of its market value.

Real Estate Notes for Sale

However, don’t  forget that you’re  responsible for legal fees and  foreclosure costs in addition to the  unpaid balance of your  loan and  accrued interest in the  event that the  borrower defaults.

http://buyrentalproperty.hubpages.com/hub/Real-Estate-Notes-for-Sale

Triple Net Lease Properties Warning

On a triple net lease property the owner should regularly inspect the  property under any type  of net lease that isn’t a bond lease because she  retains ultimate control — and  thus the liability — if the  tenant fails to properly maintain the  building. Robert has seen a litany  of litigation between the  owner and  tenant over  issues of exactly what  type  of net lease exists, with the  key dispute being  an interpretation of who is responsible for the  repair and  maintenance of building components. These lawsuits often  result from third-party injuries, with the  landlord and the  tenant each accusing the  other of failing to properly inspect, maintain, and/or repair the triple net properties.
http://www.buyingrentalproperty.org/triple-net-lease/

REIT Mutual Fund Performance

So what  about performance? Over the  long term, REIT Mutual Funds have  produced total returns comparable to stocks in general. In fact, over  the  past 35 years, REIT returns have  actually been higher. In the  context of an overall investment portfolio, REITs add  diversification because their values don’t  always move in tandem with other investments.

For investments that move  perfectly in lock step, their beta or correlation
to the  overall stock market is 1. For investments always moving in opposite directions, the  correlation is 0. Over the  long term, the  correlation between stocks and REITs has  been about 0.6 (which is about the  level of correlation between foreign  stocks and U.S. stocks).

One final attribute of REITs we want  to highlight is the  fairly substantial  divi- dends that REITs usually pay. Because these dividends are generally fully tax- able  (and thus not  subject to the  lower  stock dividend tax rate), you should generally avoid  holding REITs outside of retirement accounts if you’re  in a high tax bracket (for instance, during your  working  years).

In case you care, and  you may well not,  the  reason for the  high dividends is the legal requirement in REIT charters that they  have  to distribute 95 percent of their income. In other words, REITs can legally only retain a maximum of 5 percent of their net income; they  must distribute everything else to the shareholders.

http://buyrentalproperty.hubpages.com/hub/REIT-Mutual-Funds

Buying a Short Sale

The short-sale concept has received a lot of notoriety, and late-night gurus promote semi- nars touting that they can teach  you every- thing you need to know about short sales. Even Donald Trump has gotten into the game. Trump made the headlines when he proposed a short sale to help retired TV host Ed McMahon and his wife from losing their home in Beverly Hills. The McMahons  were  apparently  $643,597 behind in payments on their $4.8 million loan. The Donald offered to buy the house,  with Countrywide Home Loans taking a discounted payoff, and allow the McMahons to continue to live in the property as renters. Ultimately, the parties reached another solution, but this was a well-known example of how the short sale process works.

If you want to learn more about buying a short sale visit http://www.buyingrentalproperty.org/buying-a-short-sale/

Simple Rental Property Repairs Yield High ROI

Here are some easy fixes that will help with your rental properties ROI. Avoid shared housing units in suburban areas with substantial undeveloped land that enables building many more units. Attached housing prices tend to perform best in fully developed or built-out urban environments.

For higher returns, look for property where relatively simple cosmetic and other fixes may allow you to increase rents and, therefore, the market value of the property. Examples of such improvements may include but not be limited to

1. Adding fresh paint and flooring
2. Improving the landscaping
3. Upgrading the kitchen with new appliances and new cabinet/drawer hardware that can totally change the look
4. Converting five-unit apartment buildings into four-unit buildings to qualify for more favor- able mortgage terms

Look for property with a great location and good physical condition but some minor deferred maintenance. Then you can develop the punch list of items with maximum results for minimum dollars — for example, a property with a large yard but dead grass, a two- or three-car garage but peeling paint or a broken garage door. You can also add a garage door opener to jazz up the property for minimum cost. You can also really add value to a property with a burnt-out, absentee, or totally disinterested owner who is tired of the property.
http://www.buyingrentalproperty.org/

Buying Timeshare Rental Properties

From an investment standpoint, the  fundamental problem with timeshares is that they’re overpriced, and  like a condominium, you own no land  (which is what  generally appreciates well over  time). For example, suppose that a particular unit would  cost $150,000 to buy. When this  unit is carved up into weekly ownership units, the  total cost of all those units can easily  approach four to five times that amount!

To add  insult to injury,  investors find that another problem with timeshares is the  high maintenance or annual service fees. Is it worth buying a slice of real estate at a 400 to 500 percent premium to its fair market value  and  pay high fees on top  of that? We don’t  think  so.

Many owners of timeshares find that they  want  to vacation at a different location or time of year  than what  they  originally purchased. To meet this need, several companies offer to broker or sell timeshare slots. However, timeshare availability and  desirability have  so many  variables — including location, time of year,  and  quality of the  particular resort — that it has  been difficult  to fairly value  and  trade timeshares. As a result, resort rating sys- tems have  been developed (Resorts Condominiums International and  Interval International are two of the  most well known) to compare resort location, amenities, and  quality.

The developers and  operators of condo hotels love the  concept because
one of the  most consistently successful principles of real estate is increasing value  by fractionalizing interests in real estate. As with timeshares, the  devel- opers are able  to sell each individual hotel room for much more than they could get for the  entire project.