The real estate market continues to be on a red hot tear. Bank accounts are fat, vacancies are low, and demand is still sky high for rental units. Fat, Low, and High. Happy Dance times. Three market conditions that always, always, always, lead investors and landlords down the path of asking this #1 Asked Question: “Should I continue to rent my property or should I Sell it?” It’s a Simple question with a sometimes Difficult answer. Emotions come into play. Emotions like fear, greed, regret, anxiety. “What if I sell it and the market goes up another 10% next year?” “What if I keep renting it and the market goes to Hell-in-a-Handbasket?” The harder answer to conjure up for most of my landlord and investor clients are the logical ones, like this all-encompassing question you should be asking: “How do I determine, OBJECTIVELY and with FINANCIAL NUMBERS, if Selling […]
The Backstory to Now…. Clients who hire me to coach them before and during their first investment property transaction ask how and when and where all the money came from Wall Street to buy so many thousands of rental homes. Answering them takes patience and detailed explanations as this is the first time in history such a platform of investment has occurred on such a massive scale. This WSJ article does a solid job of discussing the backstory, the history, and leads with some hints about where the industry of property leasing is headed. After all, big investors have plopped $40,000,000,000 into buying 200,000 houses as rentals. Some questions for you to ponder as you read the article: As a small, private investor: How can you compete with these powerhouse-landlords on pricing, marketing, and profit margins? As a property manager: What lessons can you take away from the article on […]
The phone call or email or text exchange always happens this time of year. It’s more predictable than what happens if you eat that Free gas station sushi and your digestive system. It always starts out with the landlord-angry-frustrated-pissed off-incredulous-beside themselves after they have sat down with their accountant or CPA and gotten the news about how much in taxes they have to pay on their total income for the past year. They’re heads are about to explode like a Super Nova. Finally the question gets asked to me,”Should I keep renting this house or sell it?” It’s at this point that the serious, logical dialogue starts and it usually covers the full gamut of financial calculations, emotional reasons for each action plan, and finally a projection of the results for each. Ultimately, each landlord has to make that decision themselves. But assembling the critical data to make an informed […]
If you own or are considering owning high end apartments as rental properties, do yourself a favor and check out this article from the WSJ. When a reporter uses vocabulary including “rough conditions” and “slash rents” and “deep concessions” and “glut of supply” ALL in the same sentence, that’s a not-so-subtle hint of the valuable information in the news article. Luxury Apartment Boom Looks Set to Fizzle in 2017 – WSJ Certainly, every market segment from first-time renters to move-up renters to empty-nesters has an ebb and flow to it. It’s capitalism and the forces Adam Smith described centuries ago. What you do with this information is the critical point and take away. Depending on your current interests, this could also be a buying opportunity for some savvy investors to pick up units from distressed landlords. As always, here’s to your pursuit of Financial Freedom!
Why do sooooo many investors lose money on real estate? ….Because They Buy: The Wrong Real Estate At the Wrong Time For the Wrong Reasons In the Wrong Way From the Wrong People In the Wrong Location Using the Wrong money/financing The investors who have epic failures typically combine more than one of these reasons. Don’t be an epic failure. Be an Epic Success by getting educated and being disciplined.
ARGGHHHHH!!!!! Economic uncertainty is nobody’s friend but lately, if you watch the talking heads and read the mass media pundits, you would think the world is coming to an end and the rapture is here. I’m not so certain these folks are using the correct lens to look through for their prophesies…. This article by David Lynn, Ph.D., covers some of the flight and self-preservation concepts very nicely. He also reminds the reader that business is a cycle with repeatable stages of peaks, contractions, troughs, and expansions. “So where are we now?” is the BILLION dollar question, isn’t it? Here’s Dr. Lynn’s conclusion for those of you who don’t care to read the entire article: We are in a very unusual situation in that the normal pattern of oversupply has not occurred in this real estate recovery. This bodes very well for the real estate market. Over-supply has always killed […]
Forbes recently published a concise article on how real estate investing can help you become a Millionaire. Yes, there are plenty of folks making this claim, but I do like how this author augments it with counterarguments that it’s not for everyone. In other words, it is not easy. Doable, but not easy. Here’s the link to the article: http://www.forbes.com/sites/brandonturner/2016/10/18/4-things-you-need-to-become-a-millionaire-through-real-estate-investing/#119bf80732b8 (Sidenote: If you’ve been a student in any of my courses for the Indiana Association of REALTORS (IAR) continuing education classes, MANY of his bullet points will look extremely familiar as we covered these in granular detail.)
Kids like bubbles. Even dogs like bubbles. Real Estate Investors typically don’t like bubbles. But it doesn’t have to be that way if you think about it…. A recent article on CNBC highlights the possible statistics pointing to another Housing Bubble for specific States and Cities in the US. However, unlike the last major bubble, the underlying forces causing this bubble are distinctively different. Here’s the full article link: http://www.cnbc.com/2016/08/29/were-in-a-new-housing-bubble-why-its-less-scary-this-time.html My favorite Take-Away paragraph from the entire article is this…. “Rental demand, especially for single-family homes, is very strong and is an attractive income stream for individual investors and current homeowners. As millennials age into their prime homebuying years, more than ever before they are choosing to rent single family-homes, because they either don’t meet mortgage credit requirements or are unable to save for a down payment because rents are so high.” So, if you’re worried how the housing […]
You’ve heard of Crowdfunding for all kinds of funky new products and companies, but real estate? No, you’re not doing a double take. Yup. It’s here. Check out this article about crowdfunding and how it can impact your Retirement Plans. http://money.usnews.com/investing/articles/2016-08-23/pros-and-cons-of-real-estate-crowdfunding-for-retirement
“The U.S. Treasury’s Office of Financial Research noted this week that stocks have reached today’s valuations “only ahead of the three largest equity market declines in the last century.” Certainly NOT what I wanted to read while sipping my first cup of coffee this morning. WTF??? But….as in all good thought-provoking pieces it’s valuable. Yes, a bit of a butt-puckering scary article but still valuable. Here’s why I think it’s valuable: If asset prices plummet, we will see opportunities to pick up new properties from distress situations. So perhaps keep some of your powder dry to seize these rare market fluctuations. It’s time to re-evaluate each of the properties in your portfolio in a kind of stress-test scenario. For example, do you know what the Break Even rent value is for each of your properties? (Hint: If you don’t know how to calculate this, send me a message and I’ll walk you […]