Real Estate Matters with Tim Bro
Helpful Tips for the Real Estate Investor Part 2 of 2
9. Personal property – what’s included:
There are many different types of personal property (appliances, furnishings, etc) involved in an investment sale. Make sure you know which personal property items convey with sale.
10. Have adequate insurance:
Consult with an insurance agent to make sure you are covered! Tenants and their guests bring liabilities!
11. Selecting qualified tenants from the start:
Check references from previous landlords, employers, bankers, and credit agencies. A little work up front can save a lot of your potential problems in the future.
12. Treat your tenants as customers:
Vacancies and turnovers are your largest expense! Charge fair rents and attend to realistic tenant needs immediately. Yes, immediately!
13. Not renting right:
Too low rent costs money, but it can reduce turnover and can decrease vacancies. High rent increases cash flow and the value of the building, but can increase the vacancy factor and turnover. Understand if there is rent control or if there is proposed rent control. This could severely inhibit financial performance.
14. Spending positive cash flow?
Apply your excess cash flow to the payment and speed up that amortization schedule. And/or keep a “reserves” account for maintenance and unexpected events.
15. Monitor & visit your property:
Do this yourself if the property is local. If located out of town and you have a property manager, have them visit, take pictures, and offer a write up. Frequently!!!
16. Future Plans:
As you develop a strong equity position and positive cash flow in your real estate holdings, it may be time to leverage it and buy another. Another idea would be to sell it in a 1031 Exchange and purchase a move up property. Or … well, the option and possibilities are limitless.
17. Exit Strategy:
When it’s time to liquidate properties, understand what options are available.
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”.