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”.
DRE# 01224576
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