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”.
DRE#
01224576
