Property Management, Real Estate Investing
#1 - Thinking that ALL investments are comparable-
For example, stocks and bonds are not going to bring in the same return as real estate. People often say they want to buy real estate to get better returns than their stock, bond or bank account can provide. Real estate is an asset that can come with many stresses, such as, challenging tenants, annoying/opinionated neighbors, broken pipes, clogged toilets and much more.
An asset, like rental property does not allow you to just look at a statement of your account once a month, as with a stock or bond. Owning rental properties is a business, it can be time consuming and stressful. Make sure you think before you invest in a rental property.
#2 - Having the idea or belief that “flipping” properties is investing
Most real estate buyers see “flipping” homes as a constant speculation. In other words, they never know what will happen next when fixing and updating the property. Unfortunately, most of these buyers lose money. Sure, it looks easy on TV with reality shows or do-it-yourself shows, the internet makes everything look easy and profitable; but none of that media is realistic. The truth is, that not everything you see on TV or on the Internet is true!
#3 - Having the belief that real estate investing is low risk
Oh Boy! Buying, owning and maintaining real estate has many risks. Risks, such as, drop in real estate market or home values, having serious home improvement that may not have been foreseen, or ever rising interest rates with mortgages and insurance.
There are few smart and experienced investors that can maneuver their way through these risks. Most investors do not, leaving them exposed to countless items and issues that can and sometimes do become financially painful.
#4 - Believing it’s a “turn-key” real estate deal
Which means to earn money with almost no work on the you, the investor’s, part? As they say, LOL, or to be put more simply, not going to happen! If you believe getting into a real estate property as an investment is going to be easy then you need to re-think.
These are just a few of the many mistakes that investors can make when it comes to investing in real estate. Experience will teach you the most during your real estate investing time. Just try to avoid the big expensive mistakes that could beat you in the end and put a halt to your real estate investing all together. Be careful, do your own homework, but verify your own conclusions.
If you’re already a investment property owner and in need of the best Property Management Company in Denver, Aurora & surrounding areas, look no further than Legacy Properties-PM. Make sure your investment brings a less stressful return. We have helped hundreds of rental owners to ease the involvement of the investment. Call 720.989.1996 or contact us.
Facing retirement is a scary proposition for many living in Colorado who haven’t saved up. Fortunately, it’s never too late to get started building up a real estate portfolio of Denver investment properties to help fund retirement. Even having just one investment property often makes enough of a financial difference for retirees. According to a recent article by The Motley Fool, 3 scary retirement statistics point out just how far behind many people are in preparing for the future.
The personal savings rate is low at just 5.8 percent, but a greater challenge is what to do with your savings. Many prudent pre-retirees have rolled over money from a 401(k) into a self-directed IRA so they can multiply their retirement wealth with real estate properties. When you use a self-directed IRA, it’s easy to generate passive income. The IRS doesn’t allow you to manage your own rental property or live in it even for part of the year. A reputable residential property manager does all the work while your retirement account grows.
Another scary retirement statistic is the number of people who worry about retiring with debt. A study by the Employee Benefits Research Institute discovered almost half of retirees worry about debt with 17 percent of them having more debt than ever before. While credit card debt and student loan debt isn’t good to have in your 50s and 60s, a low-interest mortgage lets you leverage your money. Although you pay a slightly higher interest rate on an investment property compared to your primary residence, you will likely make money on your Denver rental property where the rental market is spectacular.
While some people are extremely healthy, experts say a retired couple needs almost a quarter of a million dollars to cover medical bills in retirement. Having several investment properties or several rentals are part of a retirement plan that addresses future needs for long-term care, nursing home and medications. Rental income can easily pay for long-term health insurance, for example.
At Legacy Properties-PM, we encourage our Aurora and Denver clients to look at different ways to diversify their income streams in retirement. We also work with many clients who are decades away from retiring, but want to build up a portfolio of investment properties in Denver that they don’t have to manage themselves. We are members of NARPM, the National Association of Residential Property Managers. For more information on how we screen and place tenants and enforce the lease, please call 720.989.1996 or contact us.
Real Estate Investing
Investing in real estate can yield profits, but what direction should you take?
If you’re thinking of investing in real estate, you may feel overwhelmed with the choices out there. Should you buy a single family house, or a condo? There are advantages to both, but what it usually comes down to is what renters are looking for. Maybe these thoughts will help you make a decision.
Investing in Real Estate: Condos
Condos are an attractive choice to many younger renters because it offers them lifestyle choices such as an on-site pool, tennis courts, and fitness facilities. Owners may also like the fact that outdoor maintenance is taken care of so there’s no concerns about who is shoveling snow or mowing the lawn. But you will have to pay a Condo association fee which cuts into profits, and some condos don’t allow renters so that’s something to look into before making a down payment.
Investing in Real Estate: Single Family House
Many investors find success in buying a single family house. Families with children enjoy having a private yard, as well as a little more space and privacy than a condo provides. While there is more maintenance, most tenants will agree to take care of upkeep on the yard and driveway. In the long run, these properties also usually appreciate more than a condo too.
It may seem like a house is the better choice, but things are never that simple. When you’re looking at the real estate market, you have to consider all the factors, including location and price. A rock bottom deal on a condo in a desired location in may be a better choice than a house in a questionable setting.
The best course of action is to get some input from someone familiar with your community who is an expert in reading the market, and finding a property that is a good choice based on price, location, and quality. If you’re in the Denver or Aurora area, Legacy Properties-PM is happy to help you get started with your Colorado real estate investment. For more information, call 720 989 1996 or contact us.
The Millennial generation makes up a large demographic of Colorado renters in Denver, Aurora, Centennial, Parker, and more, so those who own an investment property or are thinking of buying one would be smart to find out what they are looking for. These 18-33 year olds are opinionated and know what they want. You can make your property more marketable based on this information.
So why are there so many renters from this generation? Many are just getting out of school, and have student loans and other expenses to pay, so renting seems like the better option to them. Those on the older end of the spectrum may still be recovering from the economic slump, and a little shy to jump into home ownership just yet. Others just don’t want to have the responsibility, preferring to hold off on the burden of paying taxes and home maintenance for a little while.
But many of these millennials don’t want to compromise in what they want. For the most part, they want a place that is updated, stylish, and conducive to entertaining. Granite counters, stainless steel appliances, open concept, and an outdoor living space are just some of the things on the top of their list. A condo or townhouse that offers amenities such as a pool or fitness center is also attractive to many from this generation.
If you currently own an income property and are thinking of doing some upgrades, this type of information may steer your decisions in a way that will attract more renters. If you’re considering purchasing a property for the purpose of renting it out, you can look for something that checks off some of these things on a millennial’s “must-have” list.
Whether you’re a seasoned landlord or just starting out, owning an investment property is a great way to build a financial future for you and your family. If the day-to-day details such as filling a vacancy, collecting rent, or handling maintenance issues gets to be overwhelming, call 720.989.1996 or contact us. Legacy Properties-PM, property management company can help with these things while you continue to enjoy the financial benefits of your investment.