Try a different kind of tenant.

By
Nats
Published: January 9, 2009Posted in: Landlords, Letting agents, Property letting, Real Estate InvestingTags: , , , ,

Some investors are having no difficulty whatsoever in finding tenants for their rental properties, but some are losing tenants occasionally due to the credit crunch or simply not finding tenants willing to pay the rent they require.

Property investors in that situation should perhaps consider renting out their property in different ways.There is the option to specifically target businesses or business men who need self-catering accommodation when they travel.This method will have stresses unique to it and you will have to be very hands on.There will be a high turnover of people in your rental and you need to clean up, check them out ;etc, each time someone new arrives.You do however have the possibility of making a bit more money as daily rates are usually quite a bit higher than monthly rates.Keep in mind though you will probably need to advertise your property on a regular basis and build up an emergency fund for the months that are slow.

Another option open to certain investors, depending on the location of their property, is to rent out to students.It would be best if the property were then close to a university or other higher learning institution.Again you are likely to have a higher than normal tenant turnover but you also stand to make a little more money out of it.There are usually two or more students sharing a property and this usually allows them to pay more than a single tenant.In alot of cases their parents will be paying their bills and this is probably slightly more reliable than having the students themselves pay the bills as they can usually only manage part-time jobs on top of their studies.

Most people who rent out to students have one complaint in common though, they receive frequent noise complaints about those properties.Many will remember their students days as being rowdy and partying quite alot, so you know what I am talking about. Another common complaint is alcohol abuse and students letting the property get dirty.This will not always be the case though and if you feel you are up for what might become a challenge then go for it.

So consider alternative forms of letting your property but consult people with some experience in the matter.Find out about all the positive and negative aspects of what you choose to follow.Maybe you get lucky and have a neat,non-drinker for a a student tenant.

What you should look for in a tenant.

By
Nats
Published: January 7, 2009Posted in: Landlords, Property letting, Real Estate InvestingTags: , , , ,

There are always risks when taking on a new tenant, will they pay their rent ,will they keep the property in a good condition, will they give you suitable notice of their intention to vacate the property.

Here are three main points to check thoroughly:

The prospective tenants work situation.This is so that you have a good idea of their stability and their ability to pay you the rent.It is extremely difficult to evict a tenant these days and you would be better off selecting a professional with a job who has a steady income.

The prospective tenants rental history.Insist on at least one rental reference if possible and use that information.Phone their former landlord and ask them if they paid on time, ask if they where ever in breach of their lease agreement and if so find out why.

The prospective tenants credit history.This will give you an immediate indication of their reliability to pay their rent on time and in full.

As I said before it is very difficult to evict a tenant so make sure ,as far as you can ,that you are choosing the best possible tenant, it can only be beneficial to you.

Homeowners may have to wait even longer for relief.

By
Nats
Published: January 7, 2009Posted in: Real Estate InvestingTags: , , ,

We were all expecting some positive news for South African homeowners at least mid-way through 2009.Apparently we will not see any improvement in house price growth until 2010.This was the prediction put forward by FNB property strategist John Loos,speaking from Johannesburg.

He made this prediction because although rate cuts have and will still improve the situation this will be completely outweighed by general negative economic growth.

Many homeowners have formulated rescue plans for themselves under the assumption that the market would start to improve far sooner than the end of 2009.While many individuals may find that the interest rate cuts to come are enough to improve their own situation many more will still face the prospect of selling into negative equity or having their home taken into possession by the lender if they can’t make their payments.

What many people haven’t realised is that it is far better to formulate an exit plan well in advance than to see the crash coming and have no parachute.If you foresee your future happiness slipping away because of the current market slump do something about it now.We all know how long anything to do with property takes,it could be months before you even get the right advice.

If you are the parent of older children, and it’s a realistic option, why not ask them to move back in with you for a while.The combined finances would surely lessen the strain on all parties.Provided you get on well with your kids.

If you suspect you may face financial problems in the future, whatever you do, don’t wait until the last minute to review your options.Start thinking out of the box and may find a great solution.

Stick to your price.

By
doublef
Published: January 7, 2009Posted in: Buying property, Real Estate InvestingTags: , , , , ,

When it comes to buying investment property you need to be on your guard and confident. Know the area, where the schools, shopping etc. are and decide on your price, and stick to it.

Most “newbie” investors make the mistake of changing their minds regarding the price they should pay when buying their first real estate investment. It is understandable because the excitement and hype can overcome you. The key here is to plan before hand so you are prepared for anything.

A few things you could do:

  • Research the area you want to buy in before you start looking for property. Find out what the growth trends are, do people like to rent in the area, where are the schools, shopping etc.
  • As soon as you have an idea of the area and you find a potential investment property find out what the value of the properties in the immediate are is, this will give you a good benchmark to set the price you want to pay.
  • Now you need to do the math. Is the property a viable investment at the price you want to pay. If not, walk away.
  • If the property is a good investment you can start by making an offer to the seller at around 10 – 20% less than you wanted to pay (this is directly related to the market you are buying in). If you are lucky, the seller might actually agree, especially in the current market. Most of the time you will probably get a counter offer. This is what you want, to get an idea of the “real” price the seller is after.
  • If the seller does not want to accept your offer, when you reach your maximum price you are willing to pay, you need to be strong and walk away. There will be other properties.

You need to remember that there are always other deals out there and never let your emotions drive your property investments.

Please feel free to comment. It’s always nice to get other people’s feedback.

Make money with real estate.

By
doublef
Published: January 6, 2009Posted in: Real Estate InvestingTags: , , , , , , , , , , , , ,

Land, apartment buildings, commercial buildings, residential property, flats and security complexes are all part of the real estate investing game. The type of investment choice is usually your own preference but all real estate investments make their money in one of the following ways:

  1. Buy low.
    If you can get real estate below market value you will instantly have equity that can be converted into profit when the property is sold.
  2. Sell high.
    You can sell real estate for a decent price if you buy “fixer-uppers” and convert them quickly into money makers. This does take a lot of planning and experience to get this one right.
  3. Appreciation.
    If you buy real estate in areas that have good potential for growth, and where rental demand is high (high demand and short supply), you could make huge amounts of cash. If you are able to hold on to a property for a number of years you could see a return on investment that is second to none.
  4. Positive cash flow.
    This is definitely one of my favorites. If you can own positive cash flow property you are on your way to becoming financially free, which means you do not have to work. This method takes some work in the beginning, but if you have the patience, you could pull it off.
  5. New development.
    This way of making money in real estate is definitely one for the more experienced property investor. You would need to get your hands on some descent land, at a good price, and then hold on to it. Successful developers also have the ability to predict area trends, will people want to live there etc. But I am sure everyone knows Donald Trump, one of the most well known property developers out there.

At the end of the day, it does not matter how you make money in real estate just as long as you do.

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