Lee Morof's Real Estate Blog

Are you starting to grow bored of watching your money go nowhere sitting in a bank account? With today’s interest rates doing little to encourage saving, many individuals are looking elsewhere for new investment opportunities. In today’s blog post we’ll share four essential tips for buying a profitable rental property. Let’s get started.

Buy A Property With Year-Round Potential

Many real estate investors agree that the best rental properties are those that generate income every day of the year. The most straightforward situation to manage is one where you have stable, long-term tenants in place that aren’t going to move or change often. Browse local property listings around schools, colleges, and large employers to see if there are any suitable homes for sale.

Once you gain experience and invest in other properties, consider branching out into vacation or short-term stay homes. But to get started, aim for stability.

Predict Your Income And Expenses

Next, you will want to craft a budget. Have a look through rental listings in your target communities to see what renters are currently paying. This will give you some idea of your potential rental income for a similar-sized home. You can then compare this to your estimated monthly mortgage payment, taxes, utility costs, and repairs. It is impossible to predict precisely how much you will need, but this exercise can quickly prove whether this area is likely to be profitable.

Treat Your Rental Properties Like A Business

Since you have already taken the first steps with a budget, you might as well continue down the path to a full business structure. Most real estate investors set their portfolio up in an incorporated or limited-liability company, which reduces personal exposure. It can also be an efficient way to manage any legal issues that arise as your investments grow. Also, there will be significant tax advantages, including being able to write-off expenses such as repairs, contractor work, and renovations.

Work With Experienced Professionals

Speaking of contractors, it’s worth reminding to only work with experienced professionals who are licensed, certified and have references. Paying for quality work up-front ensures that you won’t have to deal with hefty repair bills due to shoddy workmanship.

When you are ready to invest in rental properties, give us a call. Our professional real estate team is happy to share listings that are perfect for investment and rental income generation.

Are you on the hunt for great deals on a local home? If so, you have probably heard about “short sale” homes, although it can take a bit of searching to find one. Let’s take a closer look at real estate short sales to learn how they work and when you might want to take advantage.

What Is A Real Estate Short Sale?

A real estate short sale takes place when a homeowner sells their home for less than they owe on it. This tends to take place in volatile real estate markets where a substantial price increase took place with a rapid price decrease following after.

Whatever the case, the homeowner is now facing a home with less value than their mortgage. They may approach their lender about a short sale, or the lender may force it on them. A short sale can take place even if a homeowner is still making their monthly mortgage payments on time, although that is somewhat rare.

Stick With The Pros When Buying A Short Sale

Without question, if you are considering buying a short sale home you will want to work with an experienced real estate agent. Short sales take place due to a variety of circumstances, few of which are positive. You will want a real estate professional who knows the ins-and-outs of the short sale process and will protect your interests. They can also help you understand what happens with the outstanding debt on the property.

Mistakes To Avoid When Buying A Short Sale Home

Unfortunately, there is no shortage of stories about short sale buyers who made a poor decision when trying to score a great deal. First, ensure that all of the necessary research is done on the home, its title and any liens against it. A home inspection is also critical as there may be structural or other issues which led to the decline in value. Finally, be sure to leave enough time for the closing process as it can take longer than with a traditional home purchase.

As you can see, short sales have their pros and cons. If you are the one selling the home, you have likely been forced into a short sale due to your circumstances. If you are the one buying the home, you may be able to swing a great deal on it. Again, due to the circumstances. Regardless, understanding how short sales work is a good idea. To learn more about local real estate short sales, give us a call today and we’ll be happy to help.

Investing in real estate is one of the oldest means of building and storing wealth. However, it is only just recently that “flipping” of houses – buying at a low price, renovating and selling at a higher price – became popular. For many, house flipping has become a full-time career and their primary source of income.

So, are you interested in learning what it takes to become a successful house flipper? Read on to learn more about this fun and exciting way to invest in real estate.

Research Local Regulations And Legal Requirements

The first thing you’ll want to do is start researching the local regulations and requirements for house flippers. You can either go online and read through the laws or call up an experienced real estate agent and ask them. Either way, you need to know the rules of the game you’re about to enter.

Gathering The Resources You’ll Need

Next, you’ll want to gather your resources – both financial and human. You will, of course, need to have some cash set aside for a down payment, or for buying houses outright. At minimum, you will also need a real estate agent, a mortgage professional and a real estate attorney. You may also need contractors to help you with renovations unless you have the skills and experience necessary for this.

How To Assess Potential Investment Properties

Successful house flippers develop an eye for undervalued properties. Your goal is to find a home that is listed low but has a lot of room for improvement. The fundamentals of the property, its location, the size of the land, the home’s foundation, etc. – should be good.

You will also want to get good at sourcing out homeowners that are willing to sell but haven’t listed their home yet. If you can secure a private sale, you’re going to save money and avoid having to bid against other flippers.

Making Your First Flip

You’ve built your team, learned the rules and have started to hunt for listings. Now, you need to decide and make your move. As foreclosure rates have trended down recently, it can be hard to find the perfect opportunity. However, as this is your first flip, your goals should be centered on learning the flipping process without losing any money. Keep an open mind and don’t worry about trying to score big. Instead, buy the right home, renovate to add value and relist quickly so you can move on.

When you’re ready to start your search for flip-ready properties, we’re here to help. Contact your local real estate professional and we’ll share a variety of local home listings that will be able to provide a healthy return.

Are you interested in expanding your investment portfolio with hard, long-term assets that are almost certain to grow in value? If so, you will want to consider investing in real estate. Let’s take a look at how you can get started with real estate investing in just three easy steps.

Start By Budgeting Your Time And Money

Real estate investing is just that – investing! Moreover, this, of course, means that you’ll need to commit both money and time to see results. The great news is that if you’re just getting started with real estate investing, you don’t need to start with much of either. There are fund and other investment opportunities that will allow you to get started with as little as $1,000. Once you’re more familiar with investing in real estate, you can commit larger and larger sums, expanding your portfolio.

Figure Out Which Investment Option Suits You Best

If you’re new to the game or are investing smaller amounts, you may be interested in a Real Estate Investment Trust or “REIT.” REITs are essentially investment companies which own or finance income-producing real estate. For example, you may buy into a REIT that invests in commercial buildings, like office buildings or warehouses. The REIT will take care of all of the maintenance, leasing and other upkeep while offering a return to you as a shareholder.

If you’re starting with deeper pockets, another option is to simply buy your own properties and rent or lease them out. To be successful, you will need to find houses or apartments that are of good value and will see a decent amount of rental return each month.

Start Networking And Meeting Other Investors

Now that you’re ready to get started take some time to meet and network with other local investors who are active in your community. Check on Facebook to see if there are real estate investment groups for your city, or give a few quick Google searches to see if there are any meetups. You might be surprised at how friendly and ready to share information other investors are.

Be Ready To Experience Challenges And Setbacks

One important thing to keep in mind is that you are likely to experience challenges or setbacks along the way. You’re learning about a new form of investment – one which takes some skill to master. Stay positive and accept that as you gain experience, it will get easier.

Real estate investment is an excellent way to diversify your financial portfolio and grow your personal or family wealth. For more information about local real estate opportunities, contact your local real estate professional. We will be happy to show you some investment-ready local properties.

The idea of purchasing a property and having renters can be an exciting business venture that offers lucrative financial rewards. However, there’s a lot involved in being a successful landlord and it’s important to be aware of what’s required before making the commitment. Whether you’re investing in one rental property or five, here are some questions you should ask yourself before getting involved.

Can You Do-It-Yourself?

There’s a lot more to being a landlord than taking the rental check, and one of these things is being there for the tenant when push comes to shove. If there are issues with the heating or the fridge breaks down, you’re going to be the one who has to facilitate or complete the repair, so you’ll need to have the wherewithal to fix problems effectively. While there are many situations where a repairperson can help, having some DIY skills goes a long way towards turning a better profit.

Do You Have The Time?

Weeks and even months may go by where your tenant requires little to nothing from you, but if you own an older property or have several renters, even maintaining the place can get to be quite a bit of a chore. It can be a good expenditure to have a contractor take care of these issues, but you’ll still have to use your time to find the right person and oversee the budget. If you already have a pretty full schedule, being a landlord will add a lot more to the pile.

Can You Deal With The Risk?

It can be easy to turn a profit if you have a renter, but if you happen to own property in a vacation area or a community on a downturn, it may be more difficult to find renters consistently. There may be periods of time where tenants are scarce, and this means that you’ll have to be comfortable with financial instability in order to weather the storm. While the moneymaking months can make up for the off-season, if you doubt your ability to take on the financial risk, this may not be the right choice.

Being a landlord is a considerable responsibility that will require you to take on financial risk and serve your tenants effectively and efficiently. If you’re thinking of becoming a landlord and are looking for a rental property, you may want to contact one of our real estate professionals for more information.

It’s great news if you have enough financial capital that you have the option of investing in a rental property, but being able to afford it is only half the battle. Since you’ll need to find and keep the right renters in order to make a profit, here are some ways that you can ensure your property will be a financial benefit.

Price It Right

It’s important to turn a profit, but overpricing your property may mean that you’ll have limited options. Instead of making it a guessing game, take a look at the rent in the neighborhood and read through the listings to determine a potential price. This will enable you to find the ideal tenant who knows your apartment is worth what you’re charging without pricing yourself out of the market.

Keep It Clean

A lived-in home can be quite time consuming to show well, but it’s very important to clean up before potential renters see it. While a spick-and-span space that is clutter free will give viewers the sense that you’re a responsible landlord, a disorganized area full of stuff will probably lead them to look elsewhere.

Go With Your Gut

It may be one thing for a potential tenant to have good references and ample income, but it’s important to think about more than what a person looks like on paper when choosing a tenant. Instead of going for the sure bet, choose a tenant that you feel you can trust as they might just be the least likely to let you down.

Deal With The Details

There are numerous stories about bad landlords, but it’s important to attend to the needs of your tenants so that you can avoid a high turnover rate. While the wrong tenant can be difficult to deal with, the right tenant will be someone that will behave responsibly and will expect the same from you. This means you’ll have to fix minor repairs and replace leaking faucets in a timely manner, and you’ll be able to expect the same courtesy when it comes to paying on time.

Having a rental property can be a very beneficial investment, but it’s important to be a good landlord and set the right rental price so that you can retain good tenants. If you’re currently searching for an investment property, contact your local real estate professional for more information.

Making a home purchase in a neighborhood that is sure to boom in the coming years can be a great real estate investment, but guessing on the next trendy locale may seem fraught with risk. If you’re trying to determine which area will be up and coming down the road, here are some telltale signs that buying may be a benefit to your bank account.

Full Of Creative Energy

Many bohemian areas are popular because of their lower rental and purchase prices, but a locale with plenty of artists and cultural vibrancy is probably going to be on the upswing soon with the interest it will attract. While an investment may be economical in the short-term, it may see a significant spike in the years to come.

Community Restoration In Progress

There’s a good sign, whether it’s parkland or buildings, that if restorations and renovations are occurring in a community, it’s going to see an increase in purchasing prices soon. With a nicer area and better amenities, it won’t take long for people to flock to a revived area.

Close Proximity To Cool Locales

When development of one neighborhood has left little room for further changes, there’s a good chance that prospects will move into surrounding communities to capitalize on the popularity of the area. If you’re considering a neighborhood that’s close to somewhere trendy, it’s almost a sure thing it will see its star rise.

College Kids And Young Professionals?

Restaurants and bars tend to pop up in areas where students and young professionals abound, and as the area becomes more popular it will likely see a spike in its real estate value. With the establishment of many cool places, you can bet that an area full of young people will become the place to be.

Ask A Real Estate Agent!

There are few people that will be more informed about upcoming building projects in their city than a trusted, local real estate agent, so you may want to check in with one to determine the economic viability of an area you’re considering. An agent you can trust should be able to give you an honest answer about your potential investment.

From young people to community restorations, there are many telltale signs of a community that is likely to see a real estate boom in the coming years. If you’re looking to purchase in a new neighborhood and are curious about your options, you may want to contact one of our real estate professionals for more information.

When delving into the world of real estate and investment property, there are many terms that will come up that require further explanation. Whether you’ve never heard the phrase ‘home equity’ before or you have a little familiarity, here are the ins and out of what it means and how this asset can help your financial outlook.

All About Home Equity

Essentially, home equity refers to your portion of the value of your home, and the amount of this figure is important because it is included among your assets when determining your net worth. If this sounds confusing, think of it this way: if you have completely paid off the cost of your home, the value of your home equity is this total amount. Of course, because most people seek a lender to borrow money from when they purchase a home, their home equity would consist of their down payment and whatever amount they’ve paid down on the mortgage since purchase.

An Example Of Home Equity

To provide further clarification, let’s use the example of a house that has been purchased for $300,000. In the case that a down payment of 20% has been provided at the time of purchase, the equity in the home would be $60,000. Since this amount is the percentage and cost of the house that’s been paid down, this is the amount of the house that is actually owned and this will be figured among an individual’s assets.

How Home Equity Works

As you pay the amount that you owe on your home each month, you are paying off your total debt and thereby increasing your equity. Since this amount of money is considered an asset that belongs to you, it can be used down the road to buy another home or invest in other important things like education or retirement. While paying off the amount owed on a home is a considerable investment, if the value of your home increases, this means that you’ll still owe the same on it but your home equity will have automatically increased.

As an asset that is part of your financial net worth and can be used down the road to fund other investments, home equity is a very useful term to know when it comes to purchasing a home. If you’re on the market for a home and are considering your options, you may want to contact one of our local real estate professionals for more information.

There can be many downsides to both renting and buying, depending on what side of the coin you are on, but if you’re leaning towards purchasing a home it can have added benefits for your bank account that renting does not. While renting can certainly alleviate many of the costs that go along with property ownership, here’s why purchasing a home can have positive monetary affects in the long run.

The Good Impacts of Inflation

While inflation is often seen as a dirty word, a real estate purchase can see the positive side of inflation with how your home purchase investment will grow over the years. Putting money into rent will mean that money is gone and out the window once you’ve paid for the month, but investing into a property will come back to you in future gains that are made in the real estate market. While buying a home will be more expensive in the short term, it can also provide you with greater financial flexibility and equity in the future.

Renovations Will Increase Home Value

While changing up the bathroom or the paint on the wall in your apartment isn’t going to add any extra lining to your wallet when you move out, making upgrades to a home that you own will have the very opposite effect! Renovations can certainly be unpopular while they’re taking place, but no matter how small or large, they can mean an easier sell and a higher profit when the home finally goes on the market.

The Opportunity For Rental Property

An apartment you rent won’t offer opportunity for investment if you’re away from your home for an extended period of time, but a home you own may serve as an ideal investment property at some point in the future. With the success of Airbnb and unique modern housing needs that may only require a home rental for a short period of time, being able to use your house as a rental property can be a significant boon for earning money you would have otherwise been without.

Buying a home can require a lot of number crunching in the beginning that rent does not, but it can also provide significant financial benefits down the road that might not exist without such a purchase. If you’re considering purchasing a home in the near future, you may want to contact your local real estate professional for more information.

While making a real estate purchase can be a matter rife with many questions, buying to invest in a long-term property can be even more confusing. If you’re looking into investing in real estate and wondering what variables to consider, here are a few tips that you’ll want to keep in mind before deciding on a fruitful investment property.

Be Aware Of The Market You’re Buying Into

Since you’ll need to be aware of what other people are looking for in a property if you’re diving into real estate to invest, you’ll want to carefully consider the neighborhood and city that you’re buying in and think about what the future holds. While becoming knowledgeable about home prices in the area you’re thinking of buying is a must, you’ll also want to think about market projections, trendy new neighborhoods and what the appeal will be to renters or buyers of the home you’re contemplating.

Consider A Diamond In The Rough

It might seem like a home that is a little rough around the edges is going to be a high-maintenance endeavor that doesn’t balance out in the end, but a fixer upper of a place may be end up being the best option. While you may need to renovate a little here and there to unearth some of its natural features, improvements to a home with a good structure in a good neighborhood can be more economical than spending more on a home that instantly appeals. It can also provide a better return on your investment in the long-term.

Stay Within Your Spending Means

When considering an investment property, it can be quite easy to get derailed and think about what you’ll be making instead of the expenditure of the initial investment. However, it’s important to determine beforehand that what you’re choosing to afford is going to be manageable in case you have to swing it on your own. By determining whether or not it’s an affordable expense, you can have a successful investment that will balance out in your favor at the end of the day without having to worry about sinking beneath the cost.

There are many questions that can come along with choosing to invest in real estate, but by carefully considering the market and keeping your purchase at a reasonable price point, you may have a long-term moneymaker on your hands. If you’re interested in other tips for real estate purchasing success, you may want to contact your local real estate expert for more information.