Category Archives: Real Estate

Types of Inspection You Should Conduct Before Purchasing a Property

The condition of a property directly affects its value. Unless you have at least some considerable experience, you may likely not fully understand what you are venturing into when it comes to evaluating the condition of the property you are interested in buying or renting.

You could get into muddy waters if you don’t conduct thorough property inspection before purchasing a property. It’s always important to conduct property inspection, even if the property is a brand new one.

Major Sources of Real Estate Property Valuation Information

Each property is only as good as its weakest link—if present, and a physically unsound property or its degrading/degraded environment is not always a good investment, unless you’re planning to make it good. This can require more resources, money, or effort than ever imagined.

An old or new property may look good from the outside and also on paper, but if you don’t conduct property inspection to confirm the actual status or condition of the property, you’d hardly be able to determine whether there are any potential legal or financial issues or concerns.

Before you eventually cash in on that property that you’re so hooked into, ask for permission to conduct a brief interior, exterior, and environmental inspection before deciding whether to make your offer.

A proper property inspection can reveal items in or aspects of a property that the seller of might not have noted or repaired/fixed, and items or aspects could have a greater or lesser value, depending on how much they cost or is required to repair them.

Regardless of how you feel about a property, it is not advisable to forego property inspection just to save money, time, or effort; neither is it advisable to cut corners nor allow your judgement to become tainted—just because you have some emotional attachment to a property.

There are generally three types of inspections you should be aware of, along with some major aspects of properties that require some level of inspection: (Alternatively, you can seek the services of an experienced real estate practitioner—but still focus on the following types of property inspection):

1. Physical or structural inspection

As a buyer or renter, it’s important to inspect all the physical features or aspects of the property you are interested in. You can request for the services of an architect or real estate practitioner who would not only conduct inspection to look for flaws or problems but also help to determine any changes or improvements that can enhance the outlook and value of the property. Learn to move on to another potential property or investment if you’re not convinced that your plans for a particular property aren’t fiscally or structurally feasible at the moment.

It is important to inspect the following physical/structural aspects of any property:

  • the overall physical condition or features.
  • the strength or structural integrity.
  • the floor, subflooring, foundation/slab, crawl space, basements, and decks.
  • the doorways, walls, and windows.
  • the roof and attic.
  • the plumbing systems, including the supply lines, fixtures, and drains.
  • the water-heating devices and electrical systems, including ground­fault circuit-interrupters (GFCI) and all service panels and generators.
  • the life safety systems, including intrusion alarms, smoke detectors, fire alarms or fire panels, carbon monoxide detectors, and radon detectors.
  • the air conditioning and heating systems.
  • the degree of moisture intrusion and insulation.
  • the landscaping, drainage, and irrigation of the environment.
  • the level of soil subsidence (sinking), land movement, flood risk, or degree of seismic activities—if present.
  • the extent of illegal additions or construction and zoning violations—if present.

The following signs indicate the likely presence of physical or structural issues which may require further investigation:

  • Imperfectly or badly aligned structure: You can use a handy laser level or any appropriate tool to assess whether any walls, floors, and ceilings are out of plumb or unevenly/improperly aligned. Doors and windows should be checked to ensure that they are not misaligned.
  • Cracks: Check the entire property for cracks—including the walls, ceilings, floor coverings, window and door frames, foundation, chimney, retaining walls, etc. Some cracks may indicate a more serious underlying issue that needs to be assessed by a qualified property inspector or other qualified professional.
  • Unlevelled or squishy floors: Check whether there is any unlevelled part of the floor or any slant or sloping of the floor which can be easily detected by using a level. Also, be on the lookout for any spongelike or soft spots in the flooring on all levels—ground or upper—if the property has a raised foundation with a basement or crawl space.
  • Moisture intrusion and plumbing leaks: Carefully look for any signs of water encroachment or intrusion which, if present, can cause serious health issues—the types that are linked to environmental toxins and mold. Search for indications of leaks such as stains and discoloration on walls, ceilings, and especially around door and window frames. Check for all possible sources of moisture or leaks: under sinks, toilets, supply lines for faucets, dishwashers, roofs, windows, sprinklers, and water supply lines and drainage that is away from the property or building. Ensure that the overflow drain in each sink and bathtub is neither clogged nor leaking, and all overflow drains are properly connected to the property’s general or overall sewer and drainage systems; furthermore, ensure that all drains are properly installed and maintained, and the property as a whole drains properly.
  • Soil issues: Any notable presence of excess groundwater, cracked/bulging retaining walls, or poor drainage can be a sign of soil issues such as ground subsidence or slope failure which may require further inspection by a soil, environmental, or civil engineer.

 2. Inspection to determine the extent of general property damage and required pest control

A thorough property damage inspection is needed to determine the damage caused by organisms that incessantly break down, infect, and destroy wood and other kinds of building materials. After determining any damage, effective pest control needs to be administered to eliminate pests and the damage they have caused.

Pest control firms may be most appropriate for this type of inspection, especially as they are capable of determining more than only the damage and presence of infestations by bedbugs, powder post beetles, termites, carpenter ants, and other kinds of wood-destroying insects that produce infestations or infections which have to be eradicated at once to protect the property from serious damage and structural deficiency that could endanger the property or occupants, if not corrected. Infestations and infections can cause problems that may even cost substantially more to repair in the future if they are not resolved at the moment—now!

3. Inspection to detect the presence or extent of environmental issues

The uncertainty around and potential problems that stem from properties located in environmentally challenged locations/areas is so significant that inspection of the environment should be conducted and considered before paying cash for a property.

Therefore, regardless of how cheap a property is, only purchase it if there is a clear environmental report that gives it a pass, especially from radioactivity, flooding, ground subsidence, and anything that degrades the environment, humans, and animals.

15 Essential Duties of a Real Estate Lawyer

Generally speaking, it’s not advisable for people who wish to engage in real estate transactions to do it alone, especially as individual real estate transactions differ greatly from each other, depending on the country, state, or city where each transaction takes place.

The value of non-legal service providers can hardly ever be compared with that of good real estate lawyers. In fact, no other legal professional offers the kinds of specialized skills that real estate lawyers offer.

Although some non-legal service providers claim to offer the same quality of legal services for lesser money than that requested by real estate lawyers or attorneys, it may be far better off to pay extra money to employ the services of a real estate lawyer.

Whether or not your country, state, or city legally demands that its citizens employ the services of a real estate lawyer in closing real estate or property deals, real estate lawyers can be invaluable during real estate buying and selling transactions.

Property transactions conducted through non-legal service providers or advisors may not be as secure as those conducted through real estate lawyers or attorneys who have stronger protections and more government or legal backing in place.

Because they have certain educational and licensing criteria that must be met, lawyers are held in higher regard and to higher standards and can provide insurance or security for any damages in the event of mistakes, accidents, or errors.

Who is a real estate lawyer?

A real estate lawyer (or real estate attorney) is anyone who is licensed to practice real estate law and qualified to legally handle or engage in real estate or property proceedings, cases, or transactions; they negotiate conditions and terms of real estate transactions, offer advice to entities or people involved in real estate deals, and can file a lawsuit against certain aspects of a real estate transaction.

Duties, responsibilities, or obligations of a real estate lawyer

Real estate lawyers are generally hired to address certain aspects of a real estate transaction or litigate real estate- or property-related lawsuits.

A real estate lawyer’s specific duties, responsibilities, or obligations would depend on what a client (seller or lender) hires them for, and what their country, state, or city laws permit or require to be done in order to get a real estate or property deal sealed.

Many countries, states, or cities require a real estate lawyer or attorney to be present when a real estate or property transaction is being closed or sealed. Specifically, these are 15 of the most essential duties, responsibilities, or obligations of a real estate lawyer or attorney:

1. Explain or interpret the meaning of regulations, laws, or rulings that concern real estate transactions.

2. Manage and resolve real estate disputes, define clear boundaries, and defend the rights of landlords or property owners and renters or tenants.

3. Evaluate the offer made by a buyer, and re-examine all legal paperwork regarding buying or exchanging of property. This is done to ensure that details are exact and the buyer’s or client’s utmost interest is defended.

Paperwork could include documents on titles, property transfers, home purchase agreements, title insurance policies, mortgages, and property taxes. When a client is buying a property or home, the real estate lawyer can:

  • Accurately interpret the purchase contract and ensure that documentation abides by the most current property regulations and laws.
  • Prepare or draft and file all essential legal documents, agreements, and leases, and review all paperwork that a buyer may be required to sign before collecting official identification.
  • Prepare title insurance after conducting a title search to protect a buyer from potential problems by ensuring that there are no existing claims to real property.
  • Transfer funds from buyer’s account to an escrow account, and handle mortgage loan and borrowing agreement paperwork whenever a mortgage lender is financing the purchase of a home.
  • Ensure that buyer obtains a valid title that is only subject to financial obligations or liabilities that the buyer themself accepts.
  • Identify any unpaid loans and ensure that no concordats, covenants, or claims are filed against properties that buyers are interested in.
  • Evaluate any modifications, including the cost of utilities and owed taxes—if any—before closing a real property deal.
  • Attend and represent buyers during closing.

4. Re-examine legal paperwork for selling of property, or evaluate any offers received by seller, in order to ensure that details are precise and seller’s or client’s best interest is guarded. When a client is selling a home or property, the real estate lawyer can:

  • Affirm that ownership is suitably vested in the seller of a home.
  • Prepare or review the sale and the negotiating terms and purchase agreements or documents that need to be signed by the parties involved, prior to receipt of official identification.
  • Ensure that documents are in line with the most current property laws and regulations.
  • Arrange security deposit transfer.
  • Arrange provision of insurance certificates, if required.
  • Redress any potential issues regarding the title.
  • Attend and represent sellers during closing.

5. Confirm that parties involved in a real estate deal fulfil their obligations under a contract agreement.

6. Manage foreclosure proceedings in certain circumstances in order to repossess collateral for defaulted loans, and protect assets.

7. Monitor transfer of documents and titles, access whether there is legal risk in real estate or property documentation, and advise clients when or where necessary.

8. Ensure that necessary approvals are established before real estate transactions are executed.

9. Supervise compliance-related and regulative services.

10. Represent real estate companies during purchases and sales of properties.

11. Provide general advice and support for legal needs that are linked with any large-scale real estate listing or portfolio.

12. Explore obligations like utility charges, taxes, and homeowners association fees and compute them on the basis of their allocation in a contract.

13. Prepare deeds, disclosures, and notes or mortgages to secure debt in compliance with a mortgage lender’s instructions.

14. Negotiate and review real estate contracts to ascertain how money can be properly allocated.

15. Prepare settlement statements that indicate funds from the buyer and charges to items such as title search fee, lawyer’s or attorney’s fee, loan discount points, agent commission, underwriting fee, etc.

Characteristics of a Valid Real Estate Contract

Usually, transactions that involve buying and selling real estate properties are always expressed in writing. The most vital document in/part of any transaction is the sales contract which, in the real estate field, is also known as the purchase agreement. Although contracts can be oral instead of written, it is advisable to avoid going into oral contracts.

After investing time and finding a property that is in line with your investment dreams, you need to prepare a real estate contract that should have at least a minimum number of characteristics, features, or elements to make it valid enough for presentation to the seller (of the property).

A valid real estate contract is a written agreement between two or more individuals, entities, or corporations; it is legally binding between them in regard to an exchange of property and money or services of any kind.

Any valid real estate contract is no joke: it contains a legally enforceable set of assurances that must be executed because it (the contract) is anchored on the basics of contract law.

We’ve now known what a valid real estate contract is, but what makes a real estate contract valid? A legally binding real estate contract on any activity is valid because it has all the most important and necessary characteristics, features, or elements that empower it and make it legally enforceable on a certain activity (or activities).

The following are nine main characteristics you have to be familiar with and ensure that your valid, enforceable, or legally binding real estate contract possesses them:

1. It (valid real estate contract) consists of individuals or entities that are legally competent

Each individual who is involved in a real estate transaction must be legally competent or have some legal capacity: in most countries and states, the legal capacity is defined as being at least the legal age (usually, 18 years) and mentally matured enough to understand the consequences of taking actions.

Some of the people who are mentally ill and criminals may not be legally competent or have the required legal capacity to engage in a contract. It may even be wise to avoid dealing with people, especially older persons if they appear to have difficulty in communicating or understanding terms or things that a contract has to be founded on.

In some cases, it is important to inquire (from the person you are dealing with) whether they have a representative or someone who can act legally on their behalf.

2. It consists of an offer

The individual or entity who is interested in a property has to make an offer in writing or through written communication to the current owner or seller of the property. The offer has to clearly express the buyer’s interest and willingness to purchase the property according to specific terms.

Nearly all offers have an expiry date or time. Except an expiry date or time is included, the seller may accept an offer at any time before it is revoked or canceled officially by the interested individual (or potential buyer). On the other hand, the seller is at liberty to continue considering the offer or continue to wait or look for a better offer.

3. It consists of information that proves acceptance (of the offer)

Not all offers are accepted. If an offer is accepted, it is expressed as a positive written response that is in agreement with the exact terms stated by the buyer/potential buyer. In cases where the seller proposes changes to the terms or conditions, he may make a counteroffer and notify the buyer.

4. It may consist of a counteroffer

A counteroffer can also be referred to as a “legally new offer”; it only comes into existence when the original offer is rejected or becomes void. Sometimes, counteroffers can go back and forth between seller and buyer until both (seller and buyer) come to an agreement. At this point, the final accepted offer becomes the binding agreement between the individuals or entities.

5. It consists of an exchange

The exchange part of a real estate deal is very important to most individuals or entities; the exchange aspect of a deal involved the substitution or transfer of property and money or services of any kind, between seller and buyer.

Usually, buyers offer money, services, or something of great value to sellers who, in return, hand over ownership of property to buyers. A real estate contract would not be enforceable if each individual or entity doesn’t offer at least some form of exchange to the other individual or entity.

6. It consists of information that clearly identifies a property

All property must be clearly and unambiguously identified in order to leave no surface scratched. Usually, a legal description is used for each property. Clear identification is necessary so as to erase any uncertainty about a property that is being exchanged, sold, or transferred from seller to buyer.

7. It has a legal purpose

Most countries support legal acts and ban acts that are regarded as illegal. Your real estate contract must have a legal purpose and should not be used for illegal and immoral purposes that are against public policy. Some properties are used to carry out certain activities that violate the local prohibitions that are against operating businesses; for example, some people operate factories or similar types of businesses in residentially zoned areas that prohibit such actions.

8. Its information is stated in writing: it’s a written contract

A valid real estate contract has to be a written contract because that’s the requirement for all legally binding exchanges in real estate. All the conditions or terms surrounding the sales or purchase agreement must be done in writing, even if the contract contains minor items that don’t seem to be important.

Written contracts help to prevent or erase confusion surrounding the content that is used to describe its components or constituents. It is crucial that all relevant and consequential details be written or clearly specified in writing, and whatever is not for exchange or sale must be clearly written as well. In fact, if anything is not in writing, don’t regard it as part of the contract.

9. It is signed

A valid real estate contract must be signed by the individuals involved and have statements that describe all dates and times which are important and should not be ignored by any involved individual or entity without the written consent of the (individual or entity).

Whenever one individual’s consent is ignored or overlooked by the other individual, then the latter has breached the contract or contract terms. Once a breach of contract has occurred, the other individual or entity may be entitled to sue, claim monetary damages, or use the law to force the seller to agree to the contract terms.

Advice

Ensure that all agreements (for real estate sales) made between you and other individuals or entities are done in writing. Unless they are done in writing, do not regard them as being valid, legally binding, or enforceable real estate contracts. Without being written, they aren’t!

No matter how reasonable or convenient it may seem at the moment, never make an oral agreement of any kind on any real estate property. Most countries and laws require all exchanges in real estate to be in writing and enforceable in a court of law. They must include purchase agreements or sales contracts, and leases, and may include loans secured by mortgages or notes, commission agreements with agents, listing contracts, etc.

A contract can be declared invalid or void if it fails to possess the essential elements of a valid real estate contract. An invalid contract has no legal power and is thus unenforceable in a court of law.

Major Sources of Real Estate Property Valuation Information

Adequate and dependable real estate property and market information is crucial in the practice of professional and ethical real estate property valuation.

On the other hand, inadequate and flaky property market data or info has a high tendency to carry its users astray and produce inaccurate property valuations that can instigate worrying trends.

Incorrect or improper valuations can have a negative impact on investor confidence, property market performance, the economy, and generally derail investments in real properties.

For this reason, the availability of correct and reliable property market information should be taken seriously and consistently used to maintain or improve property valuation practices in:

  • the purchase, sale, and letting of properties
  • real estate insurance and taxation and insurance
  • real estate investment and management
  • real estate inheritance and settlement
  • asset allocation, re-allocation, and sharing, and
  • government privatization and divestiture programs

As an interested individual, investor, or prospective buyer, you may find that the following sources or practitioners have the kind of property market information that can be used to conduct proper property valuation and evaluate the worth of various kinds of properties:

1. Property sellers               

Sellers may have their own property market database, or they may represent property owners, public institutions, estate agents, estate developers, or even their own professional colleagues.

Many sellers actually go the extra mile to conduct their own “informal” research and obtain information concerning recent sales of properties that they are personally aware of in a locality or an area.

Good sellers are knowledgeable enough to evaluate properties and make critical decisions concerning the asking prices for properties. It’s important to point out that because property valuation has many variables, the pricing of income properties might not always be as highly precise or accurate as it could be.

2. Real estate brokers and agents

Brokers and agents can also have their own database. On the other hand, they may represent property owners, public institutions, or their professional colleagues.

Good brokers and agents have access to highly valuable competitive market analysis (CMA) or the “broker price opinion” (BPO) which is more in-depth; both represent estimates of market value for properties that exist in local areas.

Because brokers and agents periodically monitor the listing and sale of corresponding properties, they provide information about CMA and BPO to property owners with the aim of acquiring listings on various properties.

Based on property valuation information, brokers’ and agents’ property valuations can be reasonable or fair; however, it’s important for a buyer to note that valuations can rise higher if an agent or broker is aware that they would personally be given higher compensation if their valuation attracts a higher sales price.

3. Professional property appraisers

Like sellers, brokers, and agents, professional property appraisers can also have their own database, or they may represent property owners, public institutions, or their professional colleagues during property valuations.

In many instances, lenders and property owners hire professional property appraisers or valuation specialists to estimate the value of properties at/around a particular time.

Appraisers are rarely consulted by sellers who may only establish contact when the sale of a property is caused by litigation or probate will, or when the government is either the buyer or seller of a property.

Concluding remarks

Accurate property market information is not always easy to come by. As a result, over the years, countries—especially Western developed ones—have been assembling relevant information, formulating institutions, and creating and improving access to reliable property market information.

Quite a lot has been achieved because of the interest, concern, and care that some practitioners have shown towards property information/data collection and the administration of a property market databank to help provide reliable property market data.

Their unwavering dedication could suggest a need for property valuers or evaluators and estate agents to undergo regular and applicable training which can develop and enhance their valuation knowledge, capabilities, and skills.

Economic Concepts to Consider When Evaluating Real Estate Properties

It’s important to acknowledge and understand certain economic concepts when you are evaluating the present or future potential value of any real estate property or investment.

For various reasons, the demand for and value of different types of real estate properties is either low, medium, or high: a property can be relatively accessible or inaccessible, regardless of its location, the surrounding weather, and the complexity of local, national, or regional government requirements for ownership of properties.

So what leads to the differences or disparities in the values or prices of real estate properties? To be in a good position to answer this question, you have to consider various important economic concepts when evaluating the potential value or price of any property.

The basis for evaluating the value of any piece of real estate is anchored on the following economic concepts:

1. Demand

Demand is an economic concept that is influenced by the need or desire to possess or own a property or properties. People who have sufficient financial means or purchasing power also have the ability to satisfy their needs. Having both the desire and ability to purchase real estate is known as “effective demand”.

2. Scarcity

Scarcity is an economic concept that expresses the level of deficiency or inadequacy of the quantity or number of a specific type of property in comparison with the demand for the same type of property. In other words, scarcity refers to “the relative demand for” versus “the relative supply of” a specific type of property.

For instance, there could be high demand for and low supply of a specific type of property in one region; yet, in another region, there could be low demand for and abundant supply of the same type of property. Therefore, properties are scarce in regions that have high demand and low supply.

3. Substitution

The economic concept known as “substitution” refers to situations whereby investors decide not to pay more money for a property that is similar to another property which has a known price. Generally, properties are unique and limited and the economic concept of substitution only applies when another property can meet the same needs or desires of the investor who is linked to the property.

4. Utility

The economic concept known as utility refers to the ability of a property to be maximally used or utilized for an intended purpose; it can be defined as the ability of property to be put to practical use.

Various factors that influence utility are aesthetics (physical looks or attributes), location, government regulations, environmental limitations, etc. For instance, a location that is very inaccessible or difficult to access won’t be suitable for retail (selling of goods or services) purposes.

5. Transferability

This term/economic concept refers to comparative ease of transferring or exchanging ownership rights and control of a property from one person or party to another.

Transferability makes it possible for people or parties to acquire, own, and control real estate property. Transferability and the value of a property can be affected by constraints or restrictions, conditions, and formal agreements.

6. Conformity

Conformity is an economic concept that can guide against any form of waste created by over-improving a property. The value of a property is optimized if it “at least” conforms to the attributes of its surrounding or location.

On the other hand, the value of a property can be negatively impacted if it doesn’t conform to the attributes of its surrounding or location.

Optimized value or high value is what real estate investors seek when they purchase properties, especially distressed properties which need to be renovated to enhance their utility and appearance to such an extent that they can conform to the attributes of their surroundings or locations.

7. Regression

It’s important to consider regression when investing in properties: the value of a property can be negatively impacted if the attributes of its surrounding is of a substandard value, inferior value, low value, or in a worse or terrible condition.

In other words, it is advisable not to waste your time and money investing in good properties if they are located in deteriorating or bad neighborhoods.

8. Progression

This concept is very important—if not the most important—for people who wish to achieve long-term success. Progression is about constantly moving forward in terms of increasing the value of any property and making high profits which can both be accomplished by investing in and improving poorly maintained or neglected properties that are located in good neighborhoods.

The value of many types of properties can be significantly increased by maintaining, upgrading, and repairing them in order to raise their level to at least that of other properties in the same surrounding or vicinity.

Note

Most (if not all) real estate investors would like to invest in properties that are maximally productive or have the potential to be maximally productive. Maximum productivity is synonymous with the “highest and best use” (HBU) analysis.

The economic concepts of utility and substitution are the drivers of HBU analysis or assessment which is a concept in real estate appraisal that establishes how the highest value for a property is attained.

The highest and best use is always that purpose that would generate the highest value for a property, regardless of how it is currently being used.

The highest and best use of a property might not remain constant over time. In fact, zoning of a property can rule out some potential uses of a property during evaluation—i.e., when it is being evaluated.

At the end of the day, determining the possible, likely, or “fair market” value (the price that a buyer is willing to pay and a seller is willing to accept for a property at a given time) of a property is often baffling because—as they say—“beauty is in the eye of the beholder”!

The Importance of Evaluating a Lease: What You Should Watch Out For

Successful real estate investors know how important it is to sink into the depths of leases in order to assess the extent of opportunity and potential for higher income and/or stability of tenancy.

Researching, analyzing, and evaluating the leases of specific properties can help you to size up the properties and decide whether to investigate them further or move on to other properties.

But what is a lease? A lease is a binding legal agreement between a landlord and tenant or buyer, in which payment is made and rights are granted for the exclusive use or possession of a particular real property during a specified time.

Although a verbal lease can be used by the parties that are bound by a lease, it’s much more appropriate and even safer to have a written lease which clearly defines the rights and responsibilities of the landlord and the tenant or buyer.

It’s important to investigate leases even if you are so excited and overwhelmed by the possibility of owning an attractive or well-maintained rental property or building.

Regardless of the type of real estate property you are interested in buying or investing in, ensure that the seller provides the lease and it contains detailed and all relevant information pertaining to the property.

Don’t just accept a lease based only on a brief summary of it or what you see on the first page of the lease; insist on getting full and complete details along with any guarantees or modifications and written certification regarding the accuracy and validity of the lease/document.

Since you would be legally bound by all terms and conditions of a lease if you buy a property that it is associated with, make sure that you thoroughly understand all aspects of the lease.

A lease could contain a ton of opportunity which, on the other hand, may be detrimental to the property it is linked with and actually bring down its current and future value if it isn’t properly evaluated.

The most common examples of leases that could be detrimental are long-term leases that have below-market rental rates. Some leases could be far above current market conditions; it is advisable to consider or even discount the likelihood that such leases would be in place and legally enforceable in the future.

Also important to take note of is the fact that leases may or may not comply with current laws or issues relevant for specific tenants (or property buyers). In regard to tenants, if one is not careful enough to notice, there could even be charges for late payments, returned checks, or administrative fees; such terms, if present in a lease, may not be clearly defined, or may even be legally unenforceable.

Generally speaking, some leases may be associated with rules and regulations that aren’t be clearly defined, comprehensive, or enforceable. Therefore, in certain cases, one may need to change the onerous terms in a lease, especially upon its renewal in the future.

Tenants or buyers should ensure that they are dealing with property sellers who are honest and can easily disclose every material fact about the property they are interested in renting or buying.

The expiration dates of leases should be noted because leases that are about to expire may have to be evaluated on the basis of current market conditions. Future leases may not be at the same current rent level, and considerations for concessions or tenant improvements may be necessary in order to get leases renewed.

Even if a brief evaluation or analysis of any residential property lease may be fairly straightforward or clear enough, it doesn’t mean you shouldn’t dig a bit deeper and do your homework!

Therefore, review every lease, especially residential leases, to ensure that you understand each term it contains and there aren’t any hidden surprises that could spring up in the future.

Because some mischievous sellers of properties are aware that certain buyers don’t thoroughly review leases, they include future rent concessions in leases in exchange for higher rents upfront in order to make the financial statements of properties look more suitable.

Even if you have a broker, sales agent, or property investigation team that is assisting you to inspect a property and review its lease during a transaction, remember that you are the one who needs to show the most concern for your best interests.

The Value of Real Estate Cycles: Understanding Buyer’s & Seller’s Markets

As it happens in other fields, it also happens in real estate: some real estate investors don’t monitor real estate market conditions, locally or globally, and end up losing ground where they could have won it.

Some investors make the big mistake of not continuously conducting research that can update them with information about recent economics of the local or global real estate market.

Some investors are only concerned about the money aspect of real estate; as a result, they aren’t even aware that real estate cycles exist and the tides of any real estate market can change when they least expect.

Lack of awareness about any change can lead investors to failure after investing their time and money and making so-called “juicy” or “promising” investments.

The old news (for those who know) and new news (for those who don’t know) is one and the same: the real estate market and criteria that influence people’s decisions are dynamic and do fluctuate. And their value deserves people’s attention.

Therefore, even if you’ve been successful in the past, or you plan to buy and hold real estate, you need to pay attention to/be up-to-date with the real estate cycle or market conditions.

Intelligent real estate investors always find time to monitor their markets to look for signs of real estate cycles which can open opportunities for real estate businesses.

On the other hand, lack of awareness of real estate cycles can stunt or halt the growth of a real estate business.

The fact that real estate markets are cyclical—they have cycles—is one major reason why you need to keep track of real estate market conditions and the timing of buyer’s and seller’s markets.

What is buyer’s market?

In real estate, a buyer’s market situation occurs when property owners aren’t able to sell their properties quickly because supply is higher than demand—i.e., the demand for properties is lesser than the supply.

This condition makes sellers more flexible with their prices and gives buyers an advantage over sellers. It opens great opportunities for investors to seek seller financing.

What is seller’s market?

A seller’s market situation occurs when property owners are able to sell their real estate properties quickly because the demand for them is higher than the supply.

This condition makes it possible for property sellers to receive multiple offers in a short period of time and even sell properties higher than their respective asking prices.

Real estate cycles, influenced by demand and supply

A real estate market may have either more demand, or more supply, or a comparably equal level of both. More demand for properties causes shortage of supply, increases rents, and appreciates the value of properties.

This can expand real estate businesses and lead to building of more properties. It other cases, it can even lead to overbuilding—meaning, high or excess supply of properties—and subsequent decrease in rents and property valuation when the real estate cycle changes—supply becomes higher than demand.

Some property investors believe that regardless of the economic situation or level of demand and supply, they don’t really need information concerning real estate cycles.

They believe they’ll be able to make it and expand their businesses, unhindered, because people will always search for places to buy or rent and live in.

Although this could be partially true, it is important to note that demand and supply fluctuate in different regions of the world, and the economic base of a region greatly impacts its rental rates, occupancy, and even tenant and buyer quality.

So, even if people are always going search for properties to live in, certainly, the same people would hardly ever demand for properties located in regions that are known or becoming known for issues such as fighting, wars, or being blown away by floods and earthquakes.

Various conditions can cause demand to be low or missing and create opportunities for investors to fall or rise, depending on the decisions they take.

Follow the path of knowledgeable and successful property investors who are aware that real estate has cycles and, with good timing, the real estate market can yield great dividends from wise decisions after tracking cycles and acquiring valuable information.

Important Questions You Should Consider Before Investing in Real Estate Properties

Real estate investing has a lot of benefits and anybody can succeed in it if they make up their mind, put in appreciable effort, and do their homework which would consists of some necessary tasks.

However, as is applicable to many other endeavors, an interested individual has to ask themself some important questions and provide reasonable or good answers before making a final decision about getting involved in real estate investing.

This article discusses the following important questions you should ask yourself in order to be in the best position to know whether you have what it takes to succeed if you make real estate investments which involve managing properties:

1. Do you have interest in real estate investing?

The best and most successful real estate investors have interest in real estate investing and are always striving to expand or maintain their businesses. If you don’t have interest in real estate—or anything—it will be difficult to succeed at doing it. Real estate investing, like many other ventures, is not for everybody; you have to be interested and feel comfortable with it so that you can be in a good position to make any progress or achievements.

2. Do you/will you have adequate time for real estate investing?

Acquiring real estate is often time-consuming: it usually takes considerable or even a lot of time to establish any type of real estate investing business; it takes time to find ethical and competent real estate practitioners; also, it takes time to investigate neighborhoods, zones, and properties to assess whether there are any issues that have to be resolved before investing.

From the onset, it’s not always possible to foreknow the amount of time that would be required to seal a deal; if you fail to do your homework properly before purchasing real estate properties, you may end up making mistakes and overpaying or purchasing properties that have issues.

Even if you hire a property manager to assist you in evaluating prospective tenants, managing your properties, solving problems in properties, and collecting the rent, you would need to create some amount of time while paying for the property manager’s services.

If you have many other responsibilities and don’t have enough time, it may be more preferable to look into the aspects of real estate investing that are less time-intensive or time-consuming.

3. Do you have what it takes to handle real estate investing issues or problems?

Issues, problems, or challenges are part of everyday life, and problems may inevitably occur in real estate investing, especially when you want to buy or invest in properties. At all times you have to be prepared beforehand for problems which could arise from anywhere during negotiations, purchases, or investigations that are tied to properties.

If you don’t have enough steel or guts, then you won’t be able to manage properties and the type of tenants who don’t take proper care of the properties that are entrusted to them. If issues or problems cause you to be out of sorts and unfocused, then you might not be able to succeed in real estate investing and may need the services of a property manager.

Financial rewards can come after all the headaches, but you really need to ask yourself whether you would feel comfortable owning and managing properties along with tenants and any unforeseen issues that could arise in the future.

4. Can you/will you be able to handle downturns in the real estate market or activities?

Real estate can be fun when prices and rents are rising, but not a whole lot of fun when real estate market downturns occur! Consider what happened when the prices of real estate properties in the market declined in most communities during the late 2000s.

Although many people experienced losses, other people who had cash and courage or guts, saw the decline as an opportunity and cashed in and reaped good benefits much later. Can you/will you be emotionally and financially balanced when the real estate market experiences rough times?

The truth is that real estate investing can face difficult times, especially when there are downturns or declines in real estate business activities and property prices. Do you/will you have the financial wherewithal to handle any possible downturn? Will you be able to handle your real estate investments when their values fall?

You probably don’t have the gift of clairvoyance to predict how prices may rise or fall, or how properties may appreciate or depreciate; so you need to be prepared to handle your property carefully, especially if property values drop, the real estate market goes haywire, or recessions occur and it becomes more difficult to find and keep quality tenants.

How to Analyze Rental Properties by Estimating Cash Flow

In order to consistently make wise investment decisions and attract good profits, you need to understand how to analyze rental properties by doing the maths that’s usually involved in analyzing rental properties.

If you don’t do your analysis properly or correctly from the onset before investing in any property, you could end up losing money when your expenditure/expenses on the property are higher than the expected income. Poor or incorrect analysis attracts losses.

On the other hand, if you do your analysis properly or correctly from the onset before investing in any property, you would end up earning good profit because the expected income would be higher than the expenses. Good or correct analysis earns profit.

Major Reasons Why Some People Fail at Rental Property Investing

Every real estate investor should understand how to analyze rental properties and know how much money they are going to make before they invest in any rental property. Analyzing a property involves making an estimate of the cash flow expected from the property after investing.

The formula for calculating cash flow after estimating the income and expenses is: cash flow = income ─ expenses. This implies that the cash flow from any property can be either positive (profit) or negative (loss), depending on whether the income is greater than the expenses, or vice-versa.

This article discusses how to analyze any rental property and estimate its cash flow or money-making potential which can help an investor to make a wise decision: whether to invest or not to invest in a particular rental property.

For each property, the income and expenses have to be evaluated before the cash flow can be calculated:

1. How to estimate income

A number of property characteristics are often considered when estimating the projected income that a rental property could possibly generate. To estimate a rental property’s projected income, an investor needs to have an idea of the rate of the average or fair market rent price for the rental property.

It would be fair to state that the average market rent price is at least a huge part of the income, if not equal to it. A rental property could be a commercial building, a large apartment building, a small multi-family property (duplex, triplex, and fourplex or quad), a single-family property, or a small apartment complex.

But, what is the “average market rent” price for a rental property? The average market rent price is the exact amount of money that a potential tenant is willing to pay in order to rent a property during a certain time period.

Property characteristics that are usually considered when determining the income of/average market rent price for a rental property

The nature of each local market influences and determines the average market rent price for different types of rental properties; each average market rent price is determined by the following property characteristics that are usually considered when investors are estimating or deciding the rent price for a property:

1. The area covered by the property: the size of the property.

2. The number of bedrooms and water closets/bathrooms in the property.

3. The presence or absence of modern facilities such as air conditioners, heating appliances, etc.

4. The location of the property.

The average market rent price of a property can also be evaluated by applying the following tips:

  • Asking about the average market rent price from landlords and real estate practitioners in your locality.
  • Reading the real estate property or market section of local/offline newspapers. Although newspapers are traditional or old school, you can still find valuable information in them.
  • Going through the listings in the market section of your local real estate companies’ websites. The listings usually show the areas/sizes of each property, the number of bedrooms and water closets/bathrooms in each property, the amenities or types of modern facilities—if present—in each property, and the location of each property.
  • Searching for the prices of available rental properties on your local MLS (Multiple Listing Service). Multiple listing service is a real estate marketing database that is updated by real estate professionals (agents, brokers, etc.) and provides clients with information about the renting, buying and selling prices of properties. In addition to MLS, you can search Craigslist.
  • Raising the rent price for your property and waiting to see whether people will actually pay despite the increase in price. You can employ this method when your property is vacant or when there are too many applicants or people interested in your property. If you don’t get a favorable response after a few weeks or so, you can gradually reduce the price until someone pays the rent price for the property. Regardless of what happens, you will eventually get someone who will be willing to pay the average market rent price.

After you are through estimating the income by applying any of the tips listed above or considering the general characteristics of properties listed earlier, you need to estimate the expenses that would be made on your rental property before you can eventually calculate the cash flow.

2. How to estimate expenses

Expenses could be a bit difficult to foresee and estimate, and they usually make many investors lose money, unexpectedly. Even if you know the actual expenses that have to be made on a property, unexpected situations can arise and incur more expenses, and reduce the amount of cash flow or profit you expect to make from the property.

Generally, a number of items are often considered when estimating the expenses that have to be made on a rental property. Some properties will require more expenses than others; not every item (for example, insurance, taxes, renovation, sewer, electricity bills, water bills, etc.) should be considered by an investor when estimating expenses because renters/tenants may pay for some items associated with certain expenses.

Items that are usually considered when estimating the expenses that would be made on a property

To estimate the expenses that would be made on a rental property, an investor has to consider some or all of the following items (Note: Depending on your locality or country, you may need to consider more items than the ones listed above; additional items may include flood insurance, lawn maintenance, snow removal, gas, etc.):

1. Renovation/repairs

2. Capital expenditures

3. Taxes

4. Property insurance

5. Property management

6. Vacancy rates

7. Sewer

8. Water

9. Electricity

10. Trash/garbage

To determine the expenses for each of the above items, apply the following tips:

  • Ask a contractor(s) to assess whether renovation/repairs would be required, and how much the expenses would cost.
  • Ask a contractor or consultant to assess whether a property would require long-term improvements or replacements (for example, plumbing systems, roofs, appliances, etc.); if it would, then any expenses due to such works should be included under “capital expenditures”.
  • Inquire about taxes from your local or state government parastatal that’s in charge of taxes.
  • Ask your insurance salesperson about the expense(s) for property insurance.
  • If you’re not managing your properties by yourself, inquire about property management expenses from a property manager.
  • Inquire about vacancy rates from local real estate practitioners or property management companies.
  • Inquire about sewer expenses from your local sewer company/department.
  • Inquire about water expenses from your local water company/department.
  • Inquire about electricity expenses from your local electricity distribution company.
  • Ask your local waste disposal or management company about the expenses for trash/garbage.

For any other items that aren’t listed above, but are applicable to your locality, inquire about their expense(s) from real estate practitioners and landlords in your locality.

3. How to estimate cash flow

After estimating the expected income and expenses by adding all the items on the list for the income, and all the items on the list for the expenses, you can then proceed to estimate the cash flow that would be generated from the property.

Remember, cash flow = income ─ expenses; therefore, to estimate the cash flow or return on investment (ROI), deduct the total expenses from the total income.

If the cash flow is positive, it means the property would generate profit; therefore, it would be wise to invest in it. On the other hand, if the cash flow is negative, it then means the property would incur a loss; therefore, it would be wise not to invest in it.

9 Important Members You Need on Your Real Estate Team

Although all successful businesses are often started and led by one person, they are mostly built around a team that consists of unified members who have a common vision and goal.

What is a “real estate team”? A real estate team is a group of people who work together with the aim of materializing a real estate dream and goal(s).

A real estate team is composed of people who play different roles to achieve success in the form of high returns on investment. A real estate team should consist of trustworthy and honest people who can rely on and cooperate with each other.

No matter how smart and hardworking a real estate team leader is, in terms of their output, they can only be as good as the sum of the output of the members of their team. But before you put together a real estate team, make sure you have justifiable reasons why you’re putting together a team.

Are you capable, accountable, and ready to be a leader? Can you lead by example? Are you educated and competent enough to handle a team and delegate tasks to team members? Do you have the right plans and systems in place to guide a team to success?

If your answer to these questions is “yes”, then you will likely succeed if you actually work and lead a real estate team in a manner similar to that of prototype real estate team leaders.

This article discusses the important members, especially professionals, which you need in your real estate team in order to create a level of output that would definitely attract success. The following are nine important members you need to have on your real estate team:

1. Mentor/Advisor

Almost everybody, if not everybody, needs someone who has more experience and whom they can look up to for advice in a particular area of life, most especially during challenging times or tricky situations.

During your career as a real estate team leader, especially if you have little or no experience, you will need advice from someone who has real estate experience and can provide you with valuable insight that can help to keep you in the right direction; this person will be your mentor or advisor!

If you don’t have a mentor and are wondering how to get one, you would have to create and establish relationships with real estate professionals or experts who are more experienced than you.

One way you to find a mentor or advisor is by associating with real estate professionals or joining a real estate club or association where you can interact with real estate owners, agents, or practitioners with whom you can start developing relationships, and giving them value while receiving value from them.

2. Real estate agent

Although would be possible to get deals without employing the services of a top real estate agent, there are a lot of benefits you can gain by having an agent on your real estate team.

An experienced and well-connected agent can evaluate the values and prices of properties, and give you valuable information such as the types of properties and locations that are most marketable in your local real estate market; the prices that different types of properties are being bought, sold, or rented; the comparable sales data of properties; the vacancy rates of properties; etc.

3. Lawyer/Attorney

You need to have a lawyer or attorney on your real estate team so that if certain threatening situations arise, they would use their knowledge of the law to create legal documents and invoke proceedings to protect your business.

A good lawyer can give you the best advice on what to do to protect your properties, evict tenants who don’t pay rents on time, handle challenges or situations that are tied to the laws of the land, etc.

The more you acquire properties during the course of your real estate business journey, the more likely your properties would be targeted by other people who may even sue you to court. This is the main reason why you need to have a lawyer or attorney on your real estate team.

4. Property manager

Regardless of whether you have sufficient time to manage your properties, or not, you need a property manager on your real estate team; someone who can manage your properties and tenants, especially if you are aware that your real estate business will have the potential to continue growing.

A property manager can publicize your vacant properties, show your properties to interested people, give and receive applications for your properties, supervise renovation or maintenance of your properties, choose the best tenants or clients for your properties, etc.

Having a property manager on your team can save much of your time and effort which can be employed in other important areas of your business.

5. Contractor(s)

Properties usually have aesthetic or structural issues that need to be addressed. Therefore, it’s important to have a contractor or contractors on your real estate team for different purposes (plumbing, tiling, roofing, etc.) because they are capable of providing solutions for various maintenance and renovation issues in properties.

6. Bookkeeper

Bookkeeping is crucial to the success of any business, particularly when huge amounts of money are involved. Therefore, you need a knowledgeable and honest bookkeeper on your team; someone who can keep a record of the expenses that are being made, the profits that are coming into your real estate business, and be able to reconcile all transactions on a periodical basis.

7. Certified public accountant (CPA)

Usually, different locations or parts of the world have their own laws that govern tax and other matters that are associated with real estate properties. A certified public accountant would provide you with tax recommendations and a plan that can prepare you for tax in the upcoming seasons; in addition, a CPA can prepare tax returns, produce financial reports, and help select the most beneficial tax-saving strategy for your real estate business.

8. Lender

Regardless of the amount of money you have, you might not always have sufficient money to finance every real estate deal from your pocket. In some/many cases, you would need a lender to help you get deals financed.

The lender(s) on your real estate team can be either an individual, a group of individuals, an institution (for example, a small or large bank, mortgage broker, mortgage company, etc.), or many institutions that would have access to different types of loan programs which you can apply for

9. Insurance broker

Although it’s important to get your business insured by acquiring insurance, you need an insurance broker who can help you screen insurance companies, evaluate significant information about them, and select the company that can offer the best insurance coverage and rate.

A good insurance broker can effectively handle regional or state policies on any insurance that would likely be associated with your properties; help you tackle issues concerning change, expiration, and cancellation of insurance policies; and also help you switch your policy in a way that won’t affect the location of your business.

Major Reasons Why Some People Fail at Rental Property Investing

Some people who venture into rental property investing have so much hope to succeed in the future; they even acquire a rental portfolio that is good enough to make them succeed. However, they end up failing at rental property investing after losing most or all of their investments/properties to foreclosure, even to the point of filing for bankruptcy.

In other cases, after years of hard work, some rental property or real estate investors witness how all their investments come crashing down to such an extent that they aren’t able to recover and become active in rental property or real estate investing.

If rental property or real estate investing is a promising venture that has made many people wealthy, why do some people fail at it? What have successful rental property or real estate investors done and avoided in order to succeed at investing?

For a number of reasons, investors usually make mistakes and fail at rental property investing. To avoid wasting time and effort and also avoid experiencing failure after putting in hard work, investors have to pay attention to the following major reasons why some people fail at rental property investing:

1. They don’t have enough education

Anyone who is interested in venturing into any endeavor should have appreciable, sufficient, or—if possible—solid knowledge or education about it, especially before diving deep into it.

Apart from knowing the benefits of real estate as an investment, investors should be educated enough and have sufficient reasons for investing in rental or real estate properties.

Without much consideration, understanding, forethought or planning, some people assume that rental property investing is the right path for them; as a result, they make the grave mistake of jumping into rental property or real estate investing with little or no understanding about what they are doing or what they need to do to succeed.

Worst still, some investors lack enough education about real estate or rental properties, so they make wrong or detrimental decisions; for instance, they repeatedly buy wrong properties in wrong areas and finance them with wrong types of financing.

A lot of investors wrongly assume that they will succeed at rental property investing just because they are renting or leasing properties. Also, a lot of investors wrongly assume that they will succeed at real estate investing just because they are buying and selling properties.

Investors need an appreciable amount of education which should be adequate enough to help them succeed. Thousands, hundreds of thousands, or even millions of dollars don’t have to be spent in order to get adequate education.

Sometimes, getting knowledge and experience from the right person or people could provide enough education. Education can also be acquired by reading books and blog posts, attending offline or online forums, watching or listening to podcasts, and getting access to other low-cost educational resources.

2. They don’t make sufficient analysis

Some investors don’t analyze numbers and read between lines before buying or investing in properties: they make some big mistakes because they invest hastily or carelessly without carrying out sufficient analysis.

Without adequate analysis, it will be difficult for an investor to make an approximate or a precise estimate of the profit that could be generated from an investment. Although it’s not always possible to know future outcomes, it is much easier to predict outcomes or know what to expect if solid analyses are made.

3. They take too much risk

Although risks are inherent in every type of investment, there is always an extent or point at which risks can become too great, unbearable, and detrimental and lead to complete failure.

For example, it might be too risky to buy many properties, too fast, without forethought and adequate education, and also without making sufficient or thorough analysis.

There might be too much risk in deciding to over-leverage properties by getting involved in too many low-down deals that won’t be considered as deals at the end of the day. Also, it might be too risky to consistently refinance properties, pull out all equity, and invest in other properties.

Most failures are tied to risks which become evident reasons for failure when the chips are finally down. Investors should never forget that investing can be risky and any risk associated with investing is a powerful but dangerous tool that has to be used with caution.

Investors can avoid detrimental risks by investing only in properties or deals that can be regarded as 100% safe after analyzing them.

4. They don’t take their investing business seriously

Some investors don’t treat their business with the utmost seriousness that it requires—they don’t treat their business like a business; as a result, they fail at rental property investing because their approach to investing was faulty right from the very beginning. Failure from lack of seriousness shows in the end results they get after investing.

Some investors are not serious or disciplined enough to handle their business: they are late at doing everything; they don’t contact people enough, even when they have enough contacts; they don’t tie together well-known schemes that can help their businesses grow; they don’t have rules for getting good tenants; even when they do, they allow tenants to make late rent payments or deteriorate the condition of rented properties; etc.

Any investor who wants to avoid failing, should take their rental property business seriously by consistently monitoring every aspect of it, hiring the right people to do the right jobs, doing every necessary thing at the right time, and always looking for ways to improve in order to create a long-lasting rental property business.

Potential Challenges When Investing in Rental Properties

Rental properties are buildings or houses that are rented or leased out based on agreements made between investors or owners (landlords/landladies), and individuals often referred to as “renters” or “tenants”.

Rental properties may include anything between multi-unit apartments/houses, standalone single-family apartments/houses, single houses, condos (condominiums), mobiles houses, vacation houses, etc.

Although rental property investing is an interesting venture, it’s not always fun because of the challenges that rental property or real estate investors and owners are usually exposed to.

The potential challenges listed in this article are not discussed in order to discourage anyone from exploring rental property or real estate investing; rather, they are discussed to create awareness about potential challenges people need to know when investing in rental properties.

The following are the major potential challenges that could be experienced when investing in rental properties:

1. Investing in rental properties can be time-consuming

For many investors, lack of sufficient time can be a major challenge or issue when investing in rental properties. Depending on how deep an investor gets into it, rental property investing could take over their time and life, as much as any other passion.

While a rental property investor or owner is dining or sleeping, they can find themself unconsciously and consistently scheming on what next to do about one rental property or another.

In addition, problems can arise at any time and on any day, in the form of maintenance emergencies and unexpected rehabilitation works of various kinds which don’t usually have consideration or respect for an investor’s personal time.

However, an investor’s rental property business will run in the manner that it has been set up to operate. If an investor decides to be involved in everything that pertains to their rental properties, then they will likely run into challenges that would stem from lack of sufficient time.

Rental property investors should know how and when to outsource certain issues so that they can have sufficient time to focus only on fewer ones that border around the most important aspects of their rental property business.

2. Investors can lose their investments when investing in rental properties

Not all rental property investors or owners are successful at rental property investing. Like other types of investment, rental properties are a form of investment that could be lost, especially when investors or owners aren’t educated enough, or don’t have adequate networks or systems to run their rental property businesses as effectively as possible.

3. Investors can come across difficult people when investing in rental properties

When investing in rental properties, challenges arise from facing or dealing with difficult people and their characters which aren’t always easy to get along with.

Difficult people can range from contractors to tenants to bankers and other types of challenging individuals; worst still, investors might have to associate or interact with difficult people under extremely difficult circumstances.

In many cases, an investor can limit their exposure to difficult people; for example, in some situations, they may have to sack or change a contractor or evict a tenant in order to experience a smooth or smoother sail in their rental property business.

4. Investing in rental properties usually involves a lot or considerable amount of paperwork and bookkeeping

A lot of documentation in the form of paperwork and bookkeeping has to be done when investing in rental properties. In order to ensure that their businesses are on track, investors have to constantly keep accounts of their activities, expenditures, and profits; this can pose a great challenge, especially to investors who aren’t organized.

Usually, documents of taxes, leases, ROI/profits, expenditures, insurances, and activities have to be filed, re-opened, read, and even studied. A considerable amount of time has to be spent on doing necessary paperwork which needs attention because it is crucial to the success of rental property business.

5. When investing in rental properties, the total operating profit acquired might not always increase as desired

Especially during the early years of an investor’s rental property business, there might be little or no operating profit, except in cases where large down payments are made for rental property deals; even if the total operating profit is increased from deals, it might not always increase to the desired extent.

Depending on the local economy, an investor might not always be able to predict whether their total operating profit will rise or fall because expenses may rise or fall more quickly or slowly than rents. That’s why investors must ensure that they have some money left in the tank in order to be capable of making it through financially tough times which can appear unexpectedly.

When investing in rental properties, transaction costs (loan fees, agent fees, etc.) and taxes can affect the operating profit of a rental property business; in addition to transactions costs, federal and state governments have to receive tax from investors after investors make positive net returns from their investments.

6. When investing in rental properties, it can take a considerable amount of time to build wealth

Investing in rental properties is not a fast route to riches: it isn’t a get-rich-quick scheme. Although it’s true that some rental property owners and investors have successfully acquired wealth through their rental property businesses, their wealth wasn’t acquired overnight.

In order for any investor to generate wealth when investing in rental properties or real estate, they need to apply effective strategies and take consistent actions over a considerable or long period of time, even in the midst of the ups and the downs that usually come along with investing in rental properties.

Pros & Cons of Investing in Fixer Upper Houses

Fixer upper houses, or “fixer uppers”, are houses that need to undergo changes, renovation, or rehabilitation works before they can be rented or sold out: a fixer upper requires little, considerable, or much rehabilitation to make it more sellable or rentable for any desired purpose.

The amount of rehabilitation work or repairs that need to be carried out on a fixer upper may range from light to massive renovations on plumbing, electrical, roof, foundation, or any other aspects or parts of a house or building.

Is it advisable to go for fixer uppers if you’re interested in investing in real estate? You might be wondering whether you should invest in fixer uppers if you decide to venture into rental properties. The truth of the matter is that investing in fixer upper houses has its pros and cons.

Fixer upper houses can attract recurring dividends or tons of money after you fix them; on the other hand, they can also attract an appreciable or high degree of risk which can make you earn lesser ROI or lose money if you don’t play your cards right.

Now let’s take a look at the following pros and cons of investing in fixer upper houses:

The Pros of investing in fixer upper houses

1. Fixer upper houses can be fixed to appreciate in value and attract greater returns or cash flow

Fixer upper properties build immediate equity and always tend to gain value over time. It’s possible to shorten the time in which you can make immediate equity; you can do this by making some immediate changes in any fixer upper, thus raising their value and making dividends from the resulting appreciation due to the effected changes.

Because the nature of fixer uppers makes it easier for investors to buy them at far less rates than other properties, fixer uppers can attract greater returns or cash flow.

2. Fixer upper houses attract less competition

Most real estate investors don’t like investing in houses that have problems, especially many problems that fixer uppers usually have: most investors would rather invest in houses that are easy to handle and sell or rent out. As a result, there is less competition for investment in fixer uppers because the majority of investors simply don’t want to get involved in doing the necessary work required to fix fixer uppers and make them look better or offer better service(s).

3. Fixer upper houses can be fixed by using various financing options

The nature of fixer upper houses makes them open to many financing options or ideas; in fact, you could invest in fixer uppers in ways that would enable you to make money by investing little of your own cash. You could make use of financial options such as conventional loans, portfolio lenders, and private lenders; on the other hand, you could make use of financial creative ideas such as home equity, partnerships, seller financing, and house hacking.

The cons of investing in fixer upper houses

1. Fixer upper houses can be stressful to fix

It’s not always easy to rehabilitate a house that has a lot of problems or needs appreciable or lots of repairs. It can be stressful to deal with the drama associated with renovating or rehabbing fixer uppers: a lot of frustration could be involved when an investor is looking for different types of workers, hiring out work, chasing after contractors who miss deadlines or show up late for renovation works, etc.

2. Fixer upper houses can attract unexpected, unforeseen, or hidden expenses

Generally speaking, it isn’t easy for new investors to accurately estimate the amount of money they would need to fix or rehabilitate a fixer upper, because, when undertaking various aspects of rehabilitation works on fixer uppers, the more a wall, roof, floor, or any other covering is unveiled, the more likely one would come across other things that may need to be fixed.

For example, if an investor decides to replace old cabinets with new cabinets, they may suddenly realize that they need to also replace electrical works in the wall behind the cabinets, or repaint the wall behind the cabinets, etc.

Because of these reasons and many more, renovation works on fixer upper houses may require more money than an investor had initially planned to spend, and the duration for renovation may end up becoming longer than it was initially estimated.

Major Pillars for a Successful Rental Property Business

Every real estate investor has the required basics to develop or maintain a productive and positive mindset, take every important action, and succeed in managing and consistently making money from a rental property business.

Although building a real estate business requires a lot of know-how, there are some major pillars or ingredients you need to employ if you want to succeed at building a sustainable rental property business. The following major pillars are important components of any successful rental property business’s foundation, especially in the long run:

  • Positive thinking and belief in endless possibilities.
  • The best information from the most valuable sources.
  • A great plan that also includes effective schemes or strategies.
  • Activities focussed on the most profitable types of rental properties or assets.
  • Effective management of the most profitable types of rental properties or assets.

1. Positive thinking and belief in endless possibilities

Among the pillars or ingredients listed above, the most important one everybody needs in all areas of life is positive thinking and belief in endless possibilities.

Regardless of the life endeavor you’re engaged in and the challenges that are against you, find ways to always think positive thoughts and believe in endless possibilities!

In other words, you have to maintain a positive mindset which usually has the tendency to believe that success can be achieved no matter the odds or obstacles that may show up on the way to building a lasting rental property business.

Irrespective of the situation at hand, summon your inner powers and consistently tell yourself that you will never give up, and you will be able to achieve your objectives or goals, and succeed.

Make it a habit of consistently telling yourself that you will achieve whatever you set out to do, and in time, you will achieve what you want; also, you will make it easier to maintain a naturally positive mindset without much effort.

Whenever you’re faced with any challenge, ask yourself what you need to do in order to overcome it

If you believe you won’t be able to overcome challenges in rental property business, your mind and brain will automatically lose any motivation to think about solutions or what you need to do in order to overcome challenges.

On the other hand, if you ask yourself what you need to do to overcome challenges, a switch will go on in your mind and start putting your brain to work in order to find solutions to overcome challenges and help you accomplish your rental property business goals.

Instead of agreeing with disbelief and negativity by telling yourself “I won’t be able to succeed in rental property business”, develop or maintain a positive mindset and ask yourself “what should I do to succeed in rental property business”?

Instead of agreeing with disbelief and negativity by telling yourself “I won’t be able to make a good rental property deal”, develop or maintain a positive mindset and ask yourself “what should I do to make a good rental property deal”?

Even if you are in the darkest moment, you can inspire yourself by focussing on positivity and believing you will overcome; as a result, your mind can suddenly become inspired, and you may even realize that a puzzle has been solved or an unexpected solution has come from where you never expected it to come from.

2. The best information from the most valuable sources

After—or preferably before—you decide to venture into rental property business, you have to take the important step of acquiring information or knowledge, and thereafter, continuously updating or educating yourself with extra information from the most valuable sources you can be able to access.

If you can access the most valuable sources, concentrate on the specific areas of rental properties that interest you, especially the most promising ones; doing so would help you avoid too much information which is oftentimes unnecessary and could confuse you and slow down your pace when building your rental property business.

There are lots of sources you can get the most valuable information or knowledge about rental properties and the types of business that are linked with them. Generally, information can be acquired from the following sources:

  • Books: Books are genuinely great sources for learning, especially if they are written by talented people. Reading valuable books about rental properties can have a positive impact on your psyche, belief, mentality, and skills, and greatly influence the decisions you make and the way you think and act during practice.
  • Online journals or blogs: There are a lot of rental property and real estate blogs that have educated and developed many people on the internet, and equipped individuals with knowledge and strategies which have been used to achieve results and build successful rental property businesses.
  • Online or offline forums: Forums, which can either be online or offline, are public meeting places where open discussions take place. Great real estate forums provide valuable information and insight from experienced or knowledgeable people and can educate novices and inexperienced people in ways that help to achieve success in rental property businesses.
  • Podcasts: A number of online platforms have podcasts or multimedia, video, and audio files that contain useful information about real estate/rental properties which people can access by using their phones and laptops, and watch or listen to discussions about various subjects or topics that could help them achieve their goals.
  • Mentoring or coaching programs: No matter where they exist, either online or offline, counseling or mentoring rental property/real estate programs provide knowledge and motivation to students or mentees, and in many cases have helped them achieve their rental property/real estate goals.

3. A great plan that also includes effective schemes or strategies

From the get-go, it’s crucial to have a plan in place to support your rental property vision and goals and show you where you’re heading to. You need to have an idea about the most promising type of rental properties that require attention and are worth investing in; also, it’s important to have milestones and ideas about what you would like to achieve after each milestone has been covered in your plan.

For instance, your plan could include the following:

  • your goals, and aim or objective.
  • what you want to achieve, and what you will confront or avoid in order to achieve your desire(s).
  • the schemes or strategies you will employ to accomplish your goals.
  • the type of promising rental properties that interest you and can possibly help you achieve your goals.
  • how frequently you will invest in rental properties.
  • how you’re going to finance or invest in the rental property properties of your choice.

Although your initial plan might not have all the important pieces and strategies from the onset, or it might not provide immediate answers to your future concerns or queries, it will be able to guide and motivate you along the way and help you remain positive while you continue to think, strategize and work with your initial plan which you can always alter along the way.

Your initial plan doesn’t necessarily have to be your final plan; you can always alter it along the way

Your initial plan is a guide or map which can be changed over time, depending on unexpected conditions or circumstances that may arise: your initial plan will unlikely be your final plan; for example, you might start building your rental property business by investing in small multi-family buildings, but later decide to switch to large commercial buildings or other types of rental properties. No matter what may happen in the future, it’s important to have a plan and strategies in place from the onset and start working from there, even if they will be altered later.

4. Activities focussed on the most profitable types of rental properties or assets

Focus on the most profitable types of property and avoid “risky” properties or properties that have the potential to become liabilities and waste your money or time. Anything that distracts you from your goal is a liability, and anything that helps you achieve or at least draws you nearer your goal is an asset.

Concentrate on properties that have the potential to draw you nearer to your goal and can actually help you achieve it; at the same time, avoid properties that have the potential to distract you from achieving success in your rental property business.

Generally speaking, if you want to tread an easier path to success in regard to rental property business, align your interest(s) with your plan, focus on the most promising or profitable properties or assets, and avoid all properties that are liabilities.

5. Effective management of the most profitable types of rental properties or assets

At the end of the day, or after you succeed in your rental property business, the first four pillars would amount to nothing if you can’t or don’t manage your rental property business effectively, especially the ones you’ve invested a lot of money in, and time on.

Because rental properties generally appreciate as time passes by, the most profitable types of rental properties or assets have to be effectively managed or maintained if their owners want to consistently make profits from them in the future. If rental any rental property is not managed effectively, its market value could depreciate, and this would make it become more of a liability than an asset.

6 Common Myths that can Prevent Real Estate Agents from Achieving Success

Many past “beliefs” that were regarded as “truths”, were actually “myths” and later proven to be “false”. Even in this age, the same old skeletons still exist in many closets: what some people regard as “truths” are actually “myths” and have been proven to be false by those who discovered something new or succeeded where others failed or hadn’t yet succeeded.

Any real estate agent who wants to achieve success should base their beliefs on truths instead of myths; if they do so, their actions would have a strong foundation and be more capable of producing satisfying results and success. Some real estate myths—which some real estate agents regard as half or complete truths—usually tend to create unfounded fears and a life of unnecessary limitations during real estate practice.

Before we look at six common real estate myths that have prevented and can still prevent some real estate agents from achieving success, it’s important to be reminded or informed that history books are filled with many examples of myths that held people back and prevented them from knowing the reality of certain things.

During a period of time in the past, it was widely believed that the Earth was the center of the Solar System; Galileo was imprisoned for declaring that the Earth and other planets in the solar system revolve around the Sun and, instead of the Earth, the Sun was the center of the Solar System.

Until Christopher Columbus made some arguments to prove the Earth was round, many people were ignorant and held to their ignorant belief that the Earth was flat; his proof forced his audience to accept reality instead of continuing to believe in a myth that was far from reality.

The stories of Galileo and Columbus are two examples that show how people could ignorantly believe in myths, falsehood or false statements until the truth sets them free: for thousands of years, many people believed in false myths regarding the Solar System and Earth until the bravery of Galileo and Christopher Columbus set them free from their ignorance which could have even lasted much longer.

“Fears are educated into us, and can if we wish, be educated out”—Dr. Karl Menninger.

Some myths can stand in the way between any individual who believes in “myths”, and the type of success they are looking for. The following are six common real estate myths that have prevented and can still prevent some real estate agents from achieving success:

1. “I have a genuine aim but realize it’s negative”

Contrary to this real estate myth, the truth is that what should be realized as negative is having an aim without ever making any efforts or attempts to achieve it. Every genuine aim in real estate is positive, except if a real estate agent turns it into a myth and makes it become negative.

When any real estate agent who initially had a genuine or positive aim encounters the first failure, a challenge, or a few failures, they could mistakenly assume that in order to succeed, they have to avoid challenges or failure(s); as a result, they create a myth that their original aim is negative.

The problem with this type of myth is that it could make a real estate agent develop a habit of actively avoiding failure(s) and challenges. In most instances in life, no one will be able to acquire consistent success if they always avoid failures. Usually, a person becomes a failure by consistently avoiding failure; on the other hand, a person becomes a success by facing failure head-on until they conquer it.

Change your perspective on failure: the only time you can fail is when you actually quit

Many people have to change their perspective about failure before they can succeed. Every successful person usually experiences failure(s) before they ultimately succeed. Some people let their failures stop them from trying again and again, while other people decide to view failure as a learning experience rather than defeat; for them, failure provides another chance to experience success and their achievements or outcomes are determined by what they believe in

Each time you try to achieve a dream but fail, you would have learned a lesson on how to alter or eliminate an approach to doing something the next time you try it. Failures serve as stepping stones. Always remember this: the history of successes has proven that each person will likely fail one or a few times before they succeed.

If Abraham Lincoln had quit in 1858 after previously failing in business and legislature, and suffering a nervous breakdown and several defeats at the polls, he wouldn’t have become President of the U.S.A. in 1860 and be remembered as an honored statesman.

Lincoln kept on trying despite having experienced many tough defeats. One important message history always tells us is that failure almost always occurs before success. There too many examples that prove this; one popular example is Mark Victor Hansen whose book “Chicken Soup for the Soul” sold more than 500 million copies worldwide—over the course of many years—after it was rejected by more than 30 publishers.

Another popular example is Thomas Edison who failed a thousand times before successfully inventing the electric lightbulb; what would have happened if he had stopped after the 999th failure? Probably, the lightbulb wouldn’t have been invented if he had decided to quit. Dr. Seuss’s (real name “Theodore Geisel”) work was rejected 27 times before he finally found a publisher.

2. “I will lose something or everything because it’s too risky”

In many cases, this real estate myth is a barrier to climb some steps for success in real estate investing. The truth is that the risk an individual or real estate agent faces is usually proportional to their ability to ensure that each additive or incremental cost they incur produces a corresponding additive result before they incur more costs to continue making long-term profits.

Top real estate agents know how to handle risk when the end result of any investment strategy is unclear or uncertain; also, they know how to hold their investments or costs accountable for results or profits, and massively minimize risks because they understand when to halt and when to continue, or when to increase their investment or expenses to accomplish goals.

Instead of throwing everything in at a go and complicating the whole real estate investing process, agents should safely make investments in bits, scrutinize the results they get, weigh their returns, and not spend a second time until they’re sure the first expenditure has produced profits or results! A real estate agent can greatly reduce the risk associated with incurring costs or expenses if they understand when it’s time to halt and continue.

3. “It will take my freedom and require too much of my time and effort to achieve it”

This is one of the greatest flawed real estate myths that people usually fall for; the truth is that freedom, time, and effort are not the determinants of success. Some real estate agents believe that to become more successful, they have to lose part or all of their freedom, waste a lot of their time, and make more effort than usual.

Except an individual decides to lose all their freedom and waste their time and effort, it’s not necessary to do so to succeed. Many highly successful individuals and real estate agents have proven that one doesn’t have to lose their freedom and waste their time and effort before they can be able to achieve success.

Depending on the strategy employed, an individual can put in sixty hours each week and make $100,000 per year. Another individual can put in the same sixty hours each week and make $500,000 or even a million dollars per year; still yet, another individual can put in the same sixty hours or less each week and earn several millions per year and experience no limit to their earning potential.

A real estate agent should always do the best they can with their time, and be devoted to their business; however, when they get to their limits, they have to add leverage in order to progress to higher levels of achievement. In many cases, they may have to employ more people or delegate authority and responsibilities to other staff or colleagues so that delivery and profits can be ensured, and standards can be maintained or raised.

4. “I won’t be able to achieve it”

This real estate myth is widely accepted by real estate agents who feel that it’s unrealistic to think or talk about achieving some high or outstanding levels of success. The truth is that until you try to achieve something, you can’t possibly know whether you would or won’t achieve it; even if you aren’t able to achieve it at the moment, you could be able to achieve it if you find out how to address any challenge or failure.

Except you hear personally from your Creator, it’s not even advisable to entertain any myth or thought that tries to persuade you into believing that you “won’t be able to achieve it”; this myth should never ever be considered.

“Whether you think you can or think you can’t, you’re right”—Henry Ford.

Whenever you say you won’t be able to achieve something, you’re automatically directing your energy to start limiting your potential. No matter what challenges or unfortunate circumstances you are facing at any moment in time, whenever you are setting out to do any activity, always have the belief that you might just be able to succeed in doing it.

Top real estate agents who achieve outstanding levels of success understand that the very first step to achieving something is by trying instead of quitting or ducking. The truth is that, until you try and don’t give up, you can’t really know what you’re capable of doing or achieving.

Don’t assume that the worst thing in the world has happened just because you made one or a couple of attempts but didn’t achieve your goal; the worst thing happens when you don’t try or make any attempt to achieve your goal. Many people have given up and not realized their dreams because a myth—“I won’t be able to achieve it”—made them to be unaware of how close they were to success. Always try, keep trying, and never giving up!

5. “It cannot be done in my own real estate market”

This myth has held many real estate agents hostage and is false because it can be done in your own real estate market if you try another approach that’s different from the one that has failed in your market but is surprisingly achieving results in another market or other markets.

Based only on assumptions, some real estate agents believe that certain things can only work elsewhere—in other markets—but cannot work in their local market. The truth is that once something has been done in a market that’s different from yours—no matter where—you can model around its success and find out how it can be applied in your market to get desired results.

Even if it hasn’t been done elsewhere, no myth should be used as an excuse that “it cannot be done” when in reality, no one has found the right way to make it work. Your real estate market could actually be waiting for someone to make the first step and try any new approach, or any old approach that has proven to be successful somewhere else.

Although it is true that each market could have different determinants and variables, how a real estate agent implements their scheme or strategy will always be the key determining factor for success.

Some real estate agents either cannot do certain things in their market or cannot do much more than they are capable of doing because their strategies or plans are stuck to one or a few things—like listing, deals, etc.—instead of diversifying into many more.

6. “I’m the only real estate agent my clients will work with”

This real estate myth is far from the truth, especially when some real estate agents who believe in it lack standards. The truth is that clients just don’t stick around an agent without having strong reasons for doing so; usually, clients are loyal to agents who have lofty and admirable standards.

Each real estate agent has a way or manner that they use to deliver their services; their way or manner represents their brand, while their services are by-products of their standards—i.e., the standards they represent.

No matter what services an agent provides—whether it is by acquiring information about properties, scheduling interviews with buyers or sellers of properties, or carrying out any major duties of a real estate agent—the way it is organized and executed should be at a high level and have high standards that will make clients satisfied.

Lead Generation: an Essential Tool for any Real Estate Agent’s Success

One of the fundamental aspects of research and learning (acquiring knowledge) is building from the past or present successes of other people, especially those who have been/are regarded as movers and shakers of the world in their respective fields of study, or professions.

Past successes leave clues that point to facts that the sources of all outstanding results are “actions”, and people who achieve outstanding results usually take “certain actions” to achieve such outstanding results.

One very important process that can help you succeed as a real estate agent is “lead generation”—“client lead generation”. To succeed as a real estate agent, you need to generate client leads: generating client leads is essential to achieving success as a real estate agent.

It doesn’t matter whether you have a doctorate degree in real estate, can outdo other professionals in contract negotiations, and appraise properties better than everyone else, it will be difficult to succeed as a real estate agent if you don’t get and click well with strangers or clients. To succeed, you just need to be good at getting client leads.

Generally speaking, every professional—inside and outside real estate practice or profession—needs lead generation to succeed; nobody can make it without helping strangers or clients. It’s that simple! In most cases, each person in the world has two jobs: their business (i.e., professional practice), and the outreach it makes to other people (i.e., lead generation).

A lead is an entity (company, group of people, or person) that is potentially interested in the services or products offered by a person, group of persons, or company.

“Lead generation” is the process of attracting, convincing, and converting strangers into prospects or clients (actual customers) who would have interests in the services or products offered by a business.

Acquiring leads should be one of the main aims of any real estate agent and any business in general

Generally, companies dedicate a lot of time and resources to generate leads. One of your major ambitions as a real estate agent should be to consistently acquire leads; if you’re not consistent in going after leads and acquiring them, your ambitions might suffer or fail when your prospects don’t patronize the services or products your real estate business offers.

Simply put: you need to either be skilled or sharpen your skills in acquiring leads; usually leads would consist of information regarding each stranger or entity’s name, job title, location, contact details/company name, etc.

Successful real estate agents usually have good or high-quality leads which are tied to prospects who are interested in the products or services that the real successful real estate agents offer. High-quality leads can attract success because they have the potential to boost returns on investments (ROIs).

Conclusion

Don’t assume that because you have a professional certificate and know your duties as a real estate agent, then you just have to sit down and wait for the world to find you. The four walls of a university or higher institution might not teach you the value of lead generation or mention it too many times, but the truth is that if you’re not good at lead generation, many people or nobody would know you and how much your intelligence can provide solutions to their problems. Therefore, regardless of how exceptional you are, look for ways to generate client leads if you want to succeed as a real estate agent.

18 Reasons Why You Should Invest in Real Estate Properties

There are people who invested in real estate properties in the past and made millions of dollars, pounds, or other currencies; in fact, they made so much money that they could literally have stopped working if they wanted to and consistently relaxed on any beautiful beach, or in any part of the world. If you have an opportunity to meet such people today, you would come to realize some obvious reasons why you should invest in real estate properties.

Are you willing to acquire knowledge, create time, commit yourself, and take action by performing major real estate duties in order to achieve big goals when investing in rental properties? Are you willing to take some necessary steps to achieve success in real estate investing? Are you willing to invest your time or money—whether borrowed or not borrowed—to realize your real estate dreams? If your answer to these questions is “yes”, then you can get there and surpass many people who have reached there before.

It’s possible for you to achieve even more than the greatest ones have; however, if you are looking for a fast and easy path to riches, then investing in real estate properties might not be the best path for you. On the other hand, if you are willing to do what is necessary to find success, even if it requires passing through a difficult pathway, then you would appreciate the content of this article which discusses the following 18 reasons why you should invest in real estate properties:

1. Countless people have made a living from real estate properties

It’s much easier to have faith to achieve something if there is evidence that countless people have achieved it before and continue to achieve it today. From the distant past, not-too-distant past, and presently, there is proof that landlords have built and continue to build wealth by owning and renting land and properties.

Because countless people have succeeded before and are succeeding today, you can also take some important steps to achieve success by investing in real estate properties. Andrew Carnegie once said: “Ninety-nine percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests their (sic) money in real estate”.

2. Dealing in real estate properties is a simple and straightforward process

Although an appreciable amount of time and effort would be required to succeed when you invest in real estate properties, all things being equal, the processes and activities involved are simple and straightforward. The schemes or strategies for success won’t be difficult to learn, practice, and master if you’re really interested and dedicated enough. Along your real estate investing journey, every skill you acquire will become second nature if you’re truly interested in investing in real estate properties.

3. Investing in real estate properties requires little or no money for start-up

Because people are always looking for properties to live in, there will always be countless opportunities to invest either your money or time and start making money by getting involved in real estate property deals. Contrary to the belief held by certain people, you don’t need millions to invest in real estate properties.

You can start with no money by working as an agent and getting commissions when you connect clients to properties; in so doing, you can make consistent amounts of cash from each deal. On the other hand, you can invest with your own money, but this depends on the amount of money you have in your pocket.

Even if you don’t have any money, you can take a loan or borrow money from banks, private lenders, etc., and invest in real estate properties. Loans are easier to get if your proposals can convince lenders that you would be able to invest in real estate properties and make money for both yourself and the lender.

4. The real estate property market is reasonably predictable and stable

If you take time and pay close attention to the real estate market and its defining characteristics, you could be able to predict when it would be fair to make investments for long-term gains; also, you would be able to predict quite fairly when it wouldn’t be so necessary to make investments for short-term gains that could make you lose your investments like some investors unfortunately did when the real estate market crashed in 2007.

Although the real estate market crashed in 2007, it was stable enough at the time for investors who had invested for long-term gains; they didn’t lose as much as those who were impatient and tried to be too greedy by focussing on short-term gains. Generally, real estate markets are predictable and stable for those who are attentive and have a long-term perspective.

5. Real estate properties can be managed directly

Because real estate properties can be managed or controlled directly, you can be your own boss and have direct control over the future and outcome of any deals you could be involved in. When you’re in full control, it would be up to you to decide whether or not properties should be in good or better shape and have the best possible outlook before you sell or rent them: you wouldn’t have to depend or wait on anyone else to determine the shape and outlook which would automatically determine the amount of money you could make from properties.

6. Investing in real estate properties makes it possible to create wealth without owning or managing any properties

It’s possible for you to make money by investing in real estate properties without owning and managing any properties; you can do so by getting involved in real estate investment trusts (REITs) and buying and selling publicly-traded REITs on major stock exchanges which usually trade under high volumes. One great advantage of REITs is that they pay 90% of income to investors and generally offer higher dividends than many other stocks.

7. Real estate properties always provide “multiple opportunities” which you could use to maximize value and profit

In comparison with other “non-real estate” businesses and real estate niches and schemes/strategies, if you invest in real estate properties, you would have opportunities to make profits through four major sources: cash flow, appreciation, tax benefits, and loan paydown.

Cash flow is the profit your properties could make after you’ve made initial investments. Appreciation is the extra money your properties could make over time as a result of an increase in their value; property that is $200,000 today could be worth $400,000 in 2 years’ time.

Depending on the country, there are usually tax benefits for real estate investors who provide housing for citizens and enhance stability in an economy. Loan paydown is a process whereby returns from investments are used to “pay loans down” after making profits by obtaining loans and investing in properties.

8. The real estate market is ever-present because people are always looking for real estate properties to buy, sell, or rent

No matter what happens in the world—regardless of how and when things go right or wrong—you will find people who are always looking for real estate properties to live in: the demand for properties will never come to an end because people will continue searching for houses or properties to live in. As a result, the rental property market will always be alive; instead of ceasing, it would only continue to grow over time as the world’s population increases at a steady rate.

9. Real estate properties have the potential to help you acquire leverages that can be used to make returns that are higher than initial investments

Generally, the nature of real estate properties makes it possible for investors to acquire leverages and invest in large properties for an amount of money that is less or lesser than the amount they would need to acquire other types of investments such as stocks. You can use real estate properties to acquire leverages and amplify your gains if you succeed in making returns on investments that are higher than the initial investments.

Leverage is an investment scheme or strategy used in real estate investing to borrow money or capital in order to increase the potential return on investment: it can also be defined as the amount of debt a business uses to manage and finance its asset in order to make profits. Leverages are the proceeds from borrowed capital that has been invested—in this case, in real estate properties—in order to grow a business’ assets or initial investment, and make higher returns.

10. If you don’t amend real estate properties, they still have the potential to attract returns that are higher than initial investments

No matter the method you employ in investing in real estate properties—whether it’s by using your own money, or borrowed money from a bank or private lender—the properties you invest in have the potential to attract returns (ROIs) that are higher than the amount of money invested, even when you don’t make any amendments on the properties in order to make them look more attractive or marketable.

11. If you amend real estate properties, their flexibility provides opportunities to make returns that are much higher than initial investments

Real estate properties are flexible because they are capable of being altered, structurally or functionally; by amending them, you can increase your profits much more than usual. This simply implies that you can make magic happen by rehabilitating or altering the outlook or structure of a property in order to maximize your profits or make better deals that can even attract greater returns.

12. You can focus on one, a few, or various types or classes of real estate properties

If you invest in real estate properties, you won’t be restricted to focus on only one or a few types and classes of properties: because properties are of various types and classes, you have options to focus on a few or many varieties of properties: commercial properties, large apartment properties, small multi-family properties (duplexes, triplexes, and fourplexes or quads), single-family properties, small multifamily properties, large multifamily properties, mobile properties or homes, empty land and occupied land, etc.

Within each type of property, you can still find those that are either small or large, old or new, short or tall, bad (ugly) or good (beautiful), etc.; in fact, the possibilities are endless.

13. Real estate properties are always associated with secret/hidden but legal information which you can use to benefit your investment

In the real estate world, there is always secret, hidden, or “insider” information that you can use to make profit which can benefit your investments because you are in the right place and have access or “connections” at the right time.

If you are aware that the government plans to lease out commercial buildings or large apartment complexes in a new city, you can hop in much earlier and connect with deals—that are tied to the properties—before the information leaks out. If you are aware that an industry is vacating from an area, and you perceive that it would be bad for your business, you can get your business out of that area before the industry leaves and the remaining associated businesses start declining.

14. In many instances, you can purchase real estate properties below their market value

Since negotiations, and sometimes intense arguments, are normal in the real estate world, if you are an intelligent negotiator and know how to win people over, there are many instances you can use to get great deals and buy properties below their approximate or actual market value. You can actually buy properties for thousands of dollars less than their actual worth in the market.

15. Real estate properties provide opportunities for you to make money without always being present

Although real estate investing can time-demanding, you don’t always have to be present before deals go through: because real estate has the potential to help create connections that can be used to make contracts, and outsource deals and landlording processes, in many instances when you don’t have sufficient time on your hands, you can still be involved in deals and make money without being physically present.

16. Investing in real estate properties can enable you to help your economy provide more hedge against inflation

As populations continue to increase and the economies of many countries expand, the demand for real estate properties continues to increase and drive rents higher; this, in turn, attracts higher capital and enhances GDP growth in each country. Therefore, if you are a big and influential investor in your country, you could help provide more hedge against inflation and stabilize the economy by using capital appreciation to minimize some of the inflationary pressure on the economy.

17. Investing in real estate properties can help diversify your portfolio and stabilize your income during rough times

If you’ve invested a lot of money in many other opportunities besides real estate properties, one way you can reduce the risk of losing much or all your total income when unfortunate circumstances arise is by diversifying your portfolio; you can diversify a bit more by investing some of your total income in real estate properties and reduce the risk of losing all or substantial amounts of your total income when investments in other “non-real estate” opportunities fail to yield the financial returns you expect.

18. Investing in real estate properties could eventually inspire and help you afford the house of your dreams

Although you might not be able to afford your dream house at the moment, you can buy or invest in a more affordable house and use real estate investment schemes or strategies to build profit or equity from it; if you do so over a period of time, you could be able to build a net-worth that would provide you with enough money to buy your own dream house.

Benefits & Challenges of Acquiring a Real Estate License

A real estate license is used for certain purposes by different types of real estate professionals. In order to be distinguished from the crowd, some real estate professionals—especially real estate agents—add certifications and titles after their names; no matter who they are or in what capacity they work—whether as real estate associates, brokers, salespersons, or consultants—they can be able to acquire a license to buy and sell real estate.

There is a subtle difference though: real estate agents cannot function in the capacity of real estate brokers, except they have a real estate broker’s license; on the other hand, real estate brokers can function in the capacity of real estate agents.

Although there are benefits gained from acquiring a real estate license, if a licensed real estate professional is not geared up for the duties associated with having a license, they might not appreciate the luxury or benefits of acquiring a license. It’s possible for a real estate professional to succeed with a license, and also possible to succeed without acquiring a license.

But why is it common for most real estate professionals to go the extra mile and fulfill all necessary requirements to acquire a license? Actually, there are benefits, but there are also challenges associated with acquiring a license. This article provides insight into the benefits and challenges—pros and cons—associated with acquiring a real estate license.

Benefits

1. Earning unlimited commissions by buying or selling properties for one’s self

Usually, when an unlicensed real estate professional—say, a real estate agent—buys a house that has been placed on the MLS (Multiple Listing Service), the commission is split equally (50%/50%) between the buyer’s agent and the agent who placed the house or deal on the MLS.

But each time a licensed real estate professional buys or sells any property by themself, they can earn up to 50% of the commission for themself and may decide to use the money for closing costs, to make down payment, or channel it to other avenues that can grow their real estate business.

2. Earning unlimited commissions by buying or selling properties for others

A licensed real estate professional can earn unlimited commissions each time they help other individuals buy or sell properties; the commissions, which could amount to a lot of cash, can be used to achieve success in real estate investing when applying a particular scheme or strategy.

3. Establishing connections or create strong relationships

Within a body of licensed real estate professionals—locally or internationally—each licensed real estate professional has the potential to establish connections or create relationships with other professionals (attorneys, appraisers, contractors, lenders, appraisers, title companies, etc.), expand their business or reach, and enhance their potential to multiply their income.

4. Managing any deal directly

A licensed real estate professional doesn’t need the service(s) of a third party to manage any deal; they can do it directly—by themself—regardless of whether they are buying or selling any property. Generally, they can be able to influence any decisions and control the outcome of any choices they make.

5. Having direct and limitless access to the MLS

One major benefit real estate professionals stand to get is direct and limitless access to the MLS; such level of access doesn’t require the connection of an agent to access listings on the MLS. Having direct and limitless access to the MLS helps to get and close deals faster.

6. Having direct access to view properties

A licensed real estate professional doesn’t need to pass through an agent before checking or assessing any house or opening its door for inspection: the possession of a license makes it easier for properties to be searched for and accessed without waiting for the presence of another professional—especially an agent.

Challenges

1. Getting education—and likely more education

It’s not quite easy to acquire a license; it’s even less easy to acquire more education when a license had to be renewed or maintained. Generally, a significant level of education has to be acquired regardless of the stage a real estate professional has reached during their professional practice.

2. Paying certain costs

It’s not free to acquire and maintain or renew a license. Generally, a few thousands of dollars have to be spent upfront before anyone can get a  license, and several thousands of dollars have to be spent each year to renew, maintain, or hold on to a license; however, this won’t be much of an issue if a real estate professional is making money from their practice.

3. Doing paperwork

A licensed real estate professional usually has a lot of paperwork to do and manage; this can be challenging if one is not consistently organized, especially to an appreciably high degree. Even if a professional has a secretary or typist, from time to time they may need to dive into paperwork to get to the root of some things or issues.

4. Maintaining focus

As it is with any endeavor in life, maintaining focus can be difficult if an individual isn’t self-motivated or lacks interest in performing professional duties because of their inability to make considerable or high gains from the effort and time used in an endeavor.

It takes a significant amount of time for a typical licensed real estate professional to successfully supply what would be required to tackle the demands placed on their license; the stress involved could make any licensed real estate professional incapable of maintaining a minimum amount of focus needed to carry out their real estate duties.

10 Important Steps for Success in Real Estate Investing

The world of real estate investing can be very intimidating and challenging, especially for people who have either little or no experience, or are just getting started in real estate investing.

Each real estate practitioner or professional has their own level of experience and goals: some people who are at the beginning of their real estate investing career would like to know how to invest in real estate, and others who haven’t started practicing would like to know how to start investing in real estate.

Download PDF: 12 Major Qualities of a Top Real Estate Agent

Although the content of this article might not be all-encompassing, it provides relevant information that can enlighten you on how to get into real estate investing and increase your chances of building your career and wealth, and minimizing losses or failure.

The 10 steps that will be discussed are:

1. Make a firm decision to start real estate investing

2. Get some education in real estate investing

3. Decide the real estate investing niches and schemes to focus on

4. Make your own real estate investing plan

5. Look for real estate properties to invest in

6. Choose the methods you would employ in financing your real estate deals

7. Choose how you would market your real estate investing business

8. Know when to utilize your exit schemes in real estate deals

9. Get adequate insurance for your real estate properties

10. Manage your real estate properties effectively

Now let’s discuss these 10 important steps for success in real estate investing:

1. Make a firm decision to start real estate investing

Apart from real estate, there are many other professions you can concentrate on; but if you are really interested in real estate investing, then you must make a firm decision and be prepared to face any obstacles or challenges that may come across your path in the future.

You have to make up your mind before getting into real estate investing; this is the first step you have to take in order to remain consistently motivated on your journey in real estate investing. One of the most popular reasons people give for investing in real estate is to acquire financial freedom.

Generally, each person who is interested in buying or selling real estate properties has their own personal reasons why they want to start or get into real estate investing. However, it is pertinent to note that any reason—including making money—might not always give you all the satisfaction you need; so you have to weigh every desire and intention and make a firm decision.

2. Get some education in real estate investing

Some people think that the education aspect of real estate investing is not important because they already know the basics; so they think that they know everything. It would be much easier for you to increase your chances of failure if you don’t have either a basic, substantial, or solid understanding of real estate investing principles.

Generally, a solid foundation is key to succeeding in real estate investing, and sustaining your success in the long run. Getting some education in real estate investing is one of the most important steps you should take because it can provide you with detailed information that can help you move forward in your real estate investing career.

So, how can you get some real estate investing education? You can get it by: going to a good school; reading information-rich books; getting and learning from a sound mentor; in addition, since the internet has a lot of valuable information, you can read articles on blogs or sites, and listen to real estate investing podcasts.

Even after consistently learning from many sources, there would always be room for you to keep learning, educating, and improving yourself.

3. Decide the real estate investing niches and schemes to focus on

You might have the impression that you need to know much about every real estate investing niche and scheme (strategy); however, the truth is that you don’t need to: you can concentrate on some niches and schemes before building on your experience and concentrating on more niches and schemes.

At the start of your real estate investing career, you might waste your time and wear yourself out if you try to be a jack of all trades or an expert in all niches and schemes/strategies. It is advisable that you conduct proper research and choose some niches and schemes (strategies) to get the best results and achieve your goals.

There are different real estate investing niches you can focus on: real estate investment trusts (REITs); commercial buildings; large apartment buildings (which usually need on-site management); small multi-family properties (duplexes, triplexes, and fourplexes or quads); single-family properties; small apartment complexes; mobile properties or homes; empty land and occupied land; tax liens; and notes (paper mortgages).

Also, there are different real estate investing schemes or strategies you can focus on: wholesale real estate; buy and hold; and fixers (flipping homes/real estate). Wholesale real estate is an easy investing strategy that usually involves low start-up costs. The “buy and hold” scheme of investing involves renting property and collecting cash periodically, or holding property and selling it for a higher price in the future. Flipping property (fixers) involves buying properties at reduced prices, renovating or improving their features, and selling them at higher prices.

4. Make your own real estate investing plan

The reason why you need a map or plan is that real estate investing is not always predictable; if you face some unforeseen circumstances in the future without a plan, the aftermath can be disastrous.

With an effective plan in place, you would be in a better position to know where you stand, and what to do at a particular point in time without getting lost. Your plan should include your goals and mission statement which have to be associated with the real estate investing schemes or strategies of your choice.

Although you should have goals, keep in mind that goals can be modified or changed a bit after a period of time, and this could affect your overall investing plan—but this is normal.

Therefore, you might be better off being flexible by having both short- and long-term goals so that at any point in time, there would always be a type of goal for you to look forward to.

Your plan should also include the real estate market or areas (for example: commercial areas, high-income areas, or low-income areas) you want to focus on, and expect to become an expert in.

It would be important to include the type(s) of financing deals you expect to use for real estate financing. Do you plan to use your own money to finance deals, or do you plan to loan money from private lenders, banks, equity partners, and other investors, or employ some other creative methods to finance deals?

Your plan should include every clearly defined step you would like to use in making profit; also, include how and where you would keep records of your profits and expenses so you can be in a better position to gauge your finances when the unexpected happens.

Things don’t always happen as expected; therefore, it is extremely important that you have backup plans and exit strategies in place to help you close good deals, and opt out of deals if they aren’t moving in the right direction.

Because you can’t succeed in real estate investing by yourself, be prepared to have a team of professional colleagues to whom you would assign tasks. It is very certain that you would need the services of a mentor, a contractor, a plumber, an attorney, an insurance agent, an accountant, a property manager, and maybe a realtor. 

You need to have a plan for employing the services of professionals who can help you achieve your goals; with every important piece of information included in your plan or roadmap, write down a timeframe in which you expect you achieve your goals.

5. Look for real estate properties to invest in

Before you can start investing in real estate or get involved in a deal, you have to look for a real estate property or some properties, use your schemes to invest at the lowest possible price(s), and do all you can to sell them at the highest possible price(s).

Your profit potential can be negatively impacted if you invest in/buy properties at prices that are too high, and sell them at prices that are not guaranteed to bring good profit.

Therefore, when looking for properties to invest in, look for the ones that would make it easy for you to execute your exit strategies, especially if you notice along the line that you won’t be able to make your desired profits.

Before looking for properties to invest in, have selection criterion in place, and if a property doesn’t make any sense in terms of appreciation, don’t invest in it. Your selection criteria for properties would help to keep you focused on properties that are associated with your niche and investing schemes or strategies.

Examples of a criteria list or selection criteria include: areas or neighborhoods in a town; size and condition of a property; the number of housing units; appreciation potential; cap rate; etc.

For the sake of illustrating selection criteria: let’s say you want to employ the “buy and hold” scheme on only new small apartment complexes, then you may decide to exclude old large apartment buildings and other types of properties from your selection criteria.

Your selection criteria should also include where you would look for information regarding properties: you could look at popular avenues such as newspapers, MLS (Multiple Listing Service), Craigslist, people and real estate agents (word of mouth), Loopnet.com, outbound marketing, LinkedIn Investor Groups, etc.

6. Choose the methods you would employ in financing your real estate deals

It would be difficult to succeed in real estate investing without a financing method in place. If you don’t have your own money, there are other options you can always explore to invest in real estate.

Generally, the types of financing methods that exist are: hard money, owner money, private money, all cash, portfolio lenders, 203k loans, FHA loans, home equity loans & lines of credit, commercial loans, conventional mortgages, partnerships, and other creative methods.

Regardless of the method you chose, only go for deals that make sense financially. To help you decide which deals make sense, you have to know or evaluate the income, cash flow, and return on investment for each deal.

7. Choose how you would market your real estate properties 

In real estate investing, the most important asset you can market is the combination of yourself and your brand or real estate investing business. To market yourself effectively, you need to be a true professional, exude a high level of integrity and some other major qualities.

Apart from marketing yourself, you need to network with other professionals on a consistent basis and build healthy relationships targeted at achieving success in real estate investing. Avenues for networking include local, national or international organizations, social media, and forums on blogs or websites.

You can also market your real estate investing business by direct mail which can be used to send ads to your target audience; however, it is crucial that you have a constant supply of leads to make direct mail as effective as it can be for your business.

By paying for ads and acquiring advertising space on Google and Facebook ads, it would be possible to reach potential renters, buyers, sellers, and professionals from other types of businesses, and keep them as repeat customers.

8. Know when to utilize your exit schemes during real estate deals

Real estate can be a very demanding profession. In order to manage deals involving properties, you need to know when to use the best scheme or strategy to exit deals or investments and achieve your goals which should be targeted at making good profit.

One of the most popular exit schemes is traditional selling: you sign an agreement with a real estate agent and close a deal by paying the real estate agent a commission after they succeed in selling a property you list with them.

It isn’t necessary to use a real estate agent to seal and close deals; if you know how to do it by yourself, then you could use the “for sale by owner” exit scheme and save the fee that would normally go into an agent’s pocket if you employ their services.

If you sell a property to a buyer but decide to continue carrying the mortgage instead of asking the buyer to apply for their own mortgage, then you can use “seller financing” as an exit scheme.

Under seller financing, the seller acts as a bank and puts out a type of loan to the buyer who would make a down payment and continue to make payment to cover the mortgage for the duration of the loan.

Another exit scheme is the lease & purchase option. You can use this option to reach an agreement with a tenant: ask them to make usual monthly payments for a leased or rented property, but let them have an option to buy the apartment at an agreed price and within a certain time period.

9. Get adequate insurance for your real estate properties

Life is unpredictable, and unfortunate things like water leakage, wildfires, and floods could happen and destroy or deteriorate real estate properties. Fortunately, we live in societies that have created platforms to provide insurance and protect people from bankruptcy and losses as a result of unforeseen circumstances. 

Before you close a deal on your rental property, ensure that you’ve ordered for insurance and gotten adequate insurance coverage. Good insurance can help you avoid so many situations you would likely never see coming. 

Get a knowledgeable insurance agent on your team, discuss your options with them, and ensure that they get you the right insurance—and enough of it. A knowledgeable insurance agent would help you secure the best insurance policy.

10. Manage your real estate properties effectively

No matter the amount of effort and time you use to achieve success in real estate investing, you have to manage your properties properly in order to preserve them; if you mismanage them, you could lose them within a short period of time.

When it comes to managing your real estate properties, should you manage it by yourself, or hire a property manager? The simple answer is this: “it depends on whether you have the skills and time to properly manage your properties”. 

Among people who practice real estate investing, some are skilled enough and have enough time to manage their own properties, while some others are skilled enough but lack enough time; yet, some others aren’t skilled enough, but have enough time; so generally, managing properties depends on each individual. 

If you are not competent enough or don’t have enough time to manage your own properties, hire a good and selfless property manager because they can save you a lot of time, keep you away from a lot of stress, and help you focus on your real estate investing business. 

12 Major Qualities of a Top Real Estate Agent

To succeed in any type of work or profession, one needs to have certain qualities or demonstrate certain traits; to succeed in real estate practice, real estate agents need to provide valuable services to all types of clients while performing various professional duties; in addition to offering services, that have to exude certain qualities that would place them at the top of their game and make them a top real estate agent.

One of the reasons why most clients look for trustworthy realtors is because trustworthy realtors know what it takes to be at the top of their game, and how to be great real estate agents. No two real estate agents are the same, and each real estate agent might not be able to meet every client’s need(s). Clients know this; as a result, they look for certain subtle or obvious qualities in real estate agents before placing their trust in them.

Download PDF: 10 Important Steps for Success in Real Estate Investing

Some real estate agents exude qualities that show everyone in their profession how to be a great real estate agent, even if they can’t be the best. Although many top real estate agents exhibit qualities that make them outshine others in the same industry, they still look for ways to improve their qualities because they understand that there can always be room for improvement.

But what makes a top or great real estate agent: what differentiates a top or great real estate agent from the average real estate agent? What qualities do clients look for when they meet a real estate agent in the hope that the meeting would result in great benefits? Well, let’s dive right into it: the following are 12 major qualities of a top real estate agent:

1. Sound Communication & Listening Skills

In the field of real estate, sound communication is essential, and top real estate agents know how to communicate clearly and efficiently; in addition, they always create time to communicate with clients or people with whom they have a working relationship.

Usually, people are very emotional and want to be sure they are being listened to; without sound communication, listening could be difficult and lead to misunderstanding, lack of complete trust, and even failed transactions.

Without a top real estate agent who has sound communication skills, many real estate deals would never be sealed. A top real estate agent has sound communication and listening skills.

2. Great Understanding & Interpretation Skills

It’s one thing to communicate clearly and efficiently, and an entirely different thing to understand what has been/is being communicated. Top real estate agents usually ask themselves questions in order to find out the motivation, need, and investment goals of each client, or colleague.

A top real estate agent is detail-oriented, understands the basics of appreciation, return on investment, how to deal with foreclosures, and always digs deeper to understand why clients are buying or selling properties, or why each client has taken a certain decision or acted in a certain way regarding property.

3. Open & Responsive

Today’s world is a fast-paced one. In the field of real estate, the speed at which activities are carried out greatly determines whether a deal would be accepted, sealed, and closed. A top real estate agent is highly responsive and can be contacted most or all of the time.

A top real estate agent is very accessible even if they aren’t available for 24 hours of each day. A real estate agent would find it hard to succeed if they aren’t open/accessible and able to focus on real estate activities with at least a required level of urgency.

4. Up-to-date & Adequately Knowledgeable

Whether prices of properties are rising or falling, or new/undeveloped areas have the potential to be developed, a top real estate would eventually find out what is going on in the real estate market because their ears always on the ground when it comes to seeking information and being up-to-date.

Generally, a top real estate agent has adequate knowledge or experience, and has firm knowledge about the current situation of their local real estate market, and consistently updates themself with information concerning trends in the general real estate market and profession.

5. Morally Sound, Trustworthy & Honest

Generally, people love anybody who is trustworthy, honest, and has good morals. A top real estate agent has a reputation for being morally sound and honest; coupled with other qualities, such qualities attract people to top agents.

Many dishonest real estate agents encourage clients to invest in bad deals so they can achieve their own selfish goals; on the other hand, a top real estate agent has integrity and can be trusted because of their reputation for placing clients’ interests above their own interest.

6. Strong Persuasive & Negotiation Skills

One quality that distinguishes a top real estate agent from the crowd of agents is their ability to negotiate ethically and selflessly, and in ways that are aimed at helping clients.

During negotiations, a resourceful top real estate agent considers every possible angle or option and persuades the involved parties to agree on a decision that can benefit everyone involved, and help them realize their goals without having to settle for anything unsatisfying.

7. Ambitious, Persistent & Hungry

The practice of real estate is demanding, and the real estate market is kind of like a battleground where only the fittest succeed because they have what it takes to hustle enough to stand tall and run the real estate game.

A top real estate agent usually works harder and smarter than many or most of their peers in the real estate profession; they have the quality of being consistently ambitious, scrappy, and hungry to get deals continuously and succeed on a long-term basis. The work ethic of top real estate agents is one quality that separates them from the crowd of agents.

8. Sound Tech Application Skills

A top real estate agent is usually tech-savvy to a certain extent and knows how to use modern technology, computers, and the internet to process and market real estate information in ways that help to achieve goals on time.

Nowadays, although most real estate agents have at least some knowledge about technology, many still hold on to their old ways which are slow when compared with new ways which are mostly driven by technology.

Because top real estate agents are tech-savvy, they generally have a competitive edge over real estate agents who still use older or more traditional methods in current real estate practice.

9. Well-connected—to an Appreciable or Great Extent

A top real estate agent knows people with whom they can connect clients so that problems regarding properties can be solved: usually, they know the best contractors that can renovate properties at modest rates; they know the best attorneys or lenders in town and can be able to recommend professionals who have a good reputation for outstanding work.

10. Solution Provider or Problem Solver

During real estate practice, a typical real estate agent is usually wearing a different coat on different days: they could be a consultant on one day and a salesperson on another, a buyer’s or seller’s advocate on one day and a marketer on another; and an analyst on one day and a negotiator on another; etc.

Regardless of the coat they wear on a particular day, a top real estate agent has one outstanding quality that runs through all the coats: they can provide solutions or solve problems for clients.

11. Highly Organized

Real estate agents have various professional duties which, when placed together under the same umbrella of “real estate practice”, can somewhat be compared to “project management”: activities involved in real estate, along with buying and selling of properties, form a big project which needs to be properly managed by someone that is highly organized.

A top real estate is highly organized enough to handle all the stress, circumstances, individuals, emotions, etc., that are involved in every plan or desire for each estate endeavor to be successful.

12. Professional in Dressing or Appearance

It would be hard to argue against the notion that a professional who dresses shabbily emits negative vibes which could make questions linger in the hearts of clients or colleagues who have odd feelings about shabby dressing.

A real estate agent who dresses shabbily will likely not be taken seriously by clients and colleagues; on the other hand, a real estate agent who dresses impeccably will be taken seriously! A top real estate agent makes it a priority to dress well and dress right because they are not only selling real estate or property, but they are also selling their personality—their self.

A top real estate agent usually cares about how they look in the eyes of a person, a few people, and the general public; so they dress properly because they know that most people would consider their appearance before considering what they have to offer.

15 Major Duties of a Real Estate Agent

Although the term “real estate agent” generally refers to anyone who is licensed to facilitate the buying, selling, or renting of properties (land, buildings, houses, etc.), it still doesn’t define the variety of duties a typical real estate agent actually performs when practicing their profession.

A real estate agent’s role is not only to facilitate deals (buy, sell, and rent) but it is also to help their clients get the best deals from which the real estate agent is compensated with a commission (percentage of the amount of money used to close a deal on each property).

Download PDF: 10 Important Steps for Success in Real Estate Investing

Download PDF: 12 Major Qualities of a Top Real Estate Agent

Many duties are performed before agreements are made, deals are sealed and closed. Each day presents real estate agents with different challenges and opportunities that require actions to be taken, and various duties to be performed. So, what is the role of a real estate agent? What does a real estate agent do? What is a real estate agent’s job description?

These are questions that anyone interested in becoming a real estate agent should have answers to before studying real estate, finding out how to become a real estate agent or getting a real estate license, and practicing real estate as a profession.

This article contains a list of 15 major duties real estate agents perform; the list has much in common with many job descriptions of real estate agents. After reading the list below, you’ll have a broad or general idea of the duties a real estate agent could actually perform on a typical working day.

15 Major Duties of a real estate agent are—but might not be limited to—the following:

1. To visit properties, inspect and appraise them, and present the same to clients or customers.

2. To advise property owners on how to make their properties gain attention or admiration, or become more appealing to potential customers.

3. To inquire from each client or customer what their expectation(s) is/are in regard to property.

4. To ensure that each property is in good or acceptable condition and appealing to clients or customers before scheduling property showings, and making presentations of properties to current or prospective clients or customers.

5. To find out about property on open listings, and update property listings for buying, selling, or renting on the local MLS (Multiple Listing Service), and ensure that property listings have photographs (inside/outside) and details about their location and features.

6. To draft and produce documents/paperwork for offers, closed deals, contracts, purchase agreements, or closing statements.

7. To network with real estate businesses (contractors, home inspectors, appraisers, mortgage lenders, attorneys, etc.) and potential clients, and schedule or organize meetings between customers (clients: buyers or sellers) when negotiations need to be made.

8. To work together with home inspectors, pest control inspectors, title companies, and escrow companies to ensure that properties are in good or acceptable condition before deals are sealed and closed.

9. To serve as an intermediary or negotiator in real estate negotiation processes which usually involve two or more parties.

10. To be current with real estate trends, best practices, and markets, and consult other professionals to inquire about the nature of real estate market conditions such as property prices, legal requirements, mortgages, and any other related matters.

11. To find or identify undeveloped land or areas and evaluate whether they have investment potentials or opportunities.

12. To produce and circulate promotional material or advertising campaigns on clients’ properties.

13. To organize closings on real estate property deals, and ensure that documents are signed and funds are disbursed.

14. To help negotiate the final buying, selling, or renting prices of properties.

15. To ensure that each real estate deal is conducted in a fair, ethical, and honest manner.

Necessary Steps Required to Become a Real Estate Agent

The job of a real estate agent would interest you if you like getting involved in deals on houses, property, or general real estate. Although there are investment benefits in real estate, the job and duties of a real estate agent are not for everybody. In fact, you have to get a real estate license before you can become a practicing real estate agent. This article discusses (1) general steps required to become a real estate agent in many parts of the world, and (2) steps required to become a real estate agent in the USA.

Download PDF: 10 Important Steps for Success in Real Estate Investing

Download PDF: 12 Major Qualities of a Top Real Estate Agent

Benefits & Challenges of Acquiring a Real Estate License

The steps required to become a real estate agent differ from country to country; within the USA it differs from state to state. Generally, to become a real estate agent, you have to gain some level of education, attain a certain age, and get a real estate license; in addition, you may even be required to gain experience under a certified real estate broker.

Necessary Steps Required to Become a Real Estate Agent

(1) General steps required to become a real estate agent in many parts of the world

You have to satisfy the following conditions:

  • be proficient in the local or adopted language(s) used by the citizens of the government under which you are interested in becoming a real estate agent.
  • reach at least a certain age which, in many parts of the world, is usually 18 years.
  • be able to study and work legally in the part of the world (country, state, etc.) where you are interested in becoming a real estate agent.
  • have a government-issued identification (ID) from the government under which you are interested in becoming a real estate agent.
  • have a minimum level of education, or take courses that are related to real estate; this depends on the requirements of the government under which you are interested in becoming a real estate agent.
  • undergo the licensing process and get a license: the licenser may have to consider or assess whether you have ongoing legal proceedings, past criminal records, bankruptcies, among other things—if there are any, and you could be required to complete certain pre-licensing courses before applying for a license; when taking pre-licensing courses, you have to get a minimum score in the exams and pass. (Note that in some parts of the world, a negative assessment could prevent you from becoming a licensee or real estate agent.)
  • also be required to present re-licensing educational requirements for your license to be maintained in a specific practice area such as property management, residential real estate, rural real estate, or commercial real estate. In some parts of the world, re-licensing educational requirements help to ensure that real estate licensees are up-to-date and competent enough to continue serving the public in the best possible way.
  • may be required to get employment in a licensed real estate brokerage firm after completing your education. After getting employed, your broker would have to assist you in completing any licensing process you had applied for.

(2) Steps required to become a real estate agent in the USA

Each state in the USA has real estate licensing requirements that you need to fulfill to become a real estate agent: most states require that:

  • you should be at least 18 years old. Generally, all the states require that you should be either 18 or 19 years old, depending on the age requirement of the state.
  • you should acquire a certain level of education. In the USA, it isn’t necessary to have a bachelor’s degree before getting a real estate license and becoming a real estate agent; however, in many cases, you need to acquire either a high school diploma or general education diploma (GED).
  • you should know/find out what your state’s real estate licensing requirements are: you can do so by visiting your state’s real estate commission website and checking the official pre-licensing requirements.
  • you should register for a real estate pre-licensing education course, and take the classes. Make sure that you enroll in a school that offers high-quality instructions and produces exceptional students. Most states request that participants take up a minimum number of hours of instruction time. Depending on each state, participants could take as few as 40 hours, or as much as 300; usually, the instruction time is somewhere between 60 and 90 hours, and within three and six months.
  • you should pass the real estate license exam. After taking pre-license courses, you will be required to take a real estate license exam. Each state has its own minimum score which participants have to pass. Most states allow participants to retake the exam if they don’t pass it the first time.
  • you should find a real estate broker after passing the exam. Passing the exam doesn’t guarantee that you will get a real estate license. The real estate broker will assist you in completing licensing paperwork with your state. Consider looking for a real estate broker early on/during your licensing process.

Once your paperwork is accepted, you will be issued a license and become a certified real estate agent; thereafter, you may decide to practice real estate under the broker, or another broker.

Conclusion 

The steps required to become a real estate agent have been established to ensure that each society benefits greatly from the services of the real estate profession. Generally, it takes considerable effort, time, and money to become a real estate agent, but the dividends can help you excel in the real estate industry.

The Benefits of Real Estate as an Investment

Real estate is a great form of investment that has high growth and income-generating potential. Most people who invest in real estate, but don’t make money from it, are those who make easy mistakes that could have been easily avoided.

In life, it’s never too early or too late to devise a comprehensive plan to build wealth by investing in real estate. A good plan or strategy can help many people live a comfortable life and take care of many priorities.

Although one of the major challenges of real estate indeed is that it could take arduous planning to get started, acquiring your first rental property and buying general property isn’t all that difficult.

When compared with other investments, it can be concluded that real estate has a high potential to excel at attracting periodic, monthly, or yearly cash flow to its owners. In addition to any real estate’s long-term appreciation potential, a real estate owner can also earn income or profits, year in and year out.

All you need to benefit immensely from real estate investment is a good financial/real estate investment plan, a lot of forbearances, and willingness to do the necessary hard work required for you to succeed.

When a good real estate plan or strategy is put in place, the following are the major benefits that result from real estate as an investment:

1. Real Estate Investment can Attract Regular Cash Flow, High Returns on Investment, Financial Freedom, Wealth, and Security

If you rent out your real estate property—all things being equal—you will attract income every month. Certain properties, like big multi-unit complexes, have characteristics that can make them attract more dividends than smaller properties. The more property a real estate owner acquires and rents, the more cash flow, return on investment, wealth, security, and financial freedom they would acquire, and be more capable of preserving their increasing capital and making profit.

Although the owners of real estate investments should expect to incur expenses—which could include insurance, maintenance, mortgage payment, property taxes—how they handle the income coming in, and expenses that make money leave their pockets, will inform them whether they are realizing good profit or running at a loss.

2. Real Estate Investment can lead to Socio-economic Development and Enhancement of Social Status

Depending on the services or benefits offered, residential properties or buildings may be regarded as goods or services that help people meet their social and economic needs. Generally, the use of various types of properties actually helps people meet their primary needs and achieve their goals at homes, in workplaces, in industries, etc. The more a real estate owner can help people meet their needs, the more they enhance their social status.

Many investors are often looked upon in high regard if they are capable of providing homes for people to rent or buy, especially at fairly good prices or rates. Although every person needs a roof over their head, not everyone has the money to buy a home, and so they may need to rent one. Meeting these needs enhances a real estate investor’s social status in society.

3. Real Estate Investment can Attract Reduced Income Tax Bills

When it comes to income tax, in many cases real estate investors have many advantages that could help them make claims for their expenses, or costs called “depreciation”. It’s very likely that every real estate investor will make an expense, or spend money in one way or another: there will be an expenditure or a form of cost or depreciation. This depreciation helps the owners of real estate investments make claims and reduce their income tax bill, thereby increasing the cash flow they make from their properties.

4. Real Estate Investment can Appreciate Property

All things being equal, the value of any real estate property will be worth much more in many years from now; this is the reason why many real estate investors are in real estate investment for the long run. If a real estate investor goes into real estate investment with a long-term picture, they will experience an appreciation of their capital assets—such as land and property—over time.

Appreciation of properties also ensures that people with real estate investments won’t pay for the profits gained from appreciation until they sell their property. This implies that people with investments can continue to use their profits to invest in new/other properties, and avoid paying taxes.

5. Real Estate Investment can Minimize or Eliminate Inflation

Real estate investors help minimize or eliminate inflation because, as the cost of living and prices associated with properties price goes up, so does the income investors get from their property and its value. This implies that real estate investments protect real estate investors from the effects of inflation, regardless of whether the effects are current or long-term.