San Francisco is a great place to live in as most people living here will tell you. But it is not a good place to invest in real estate! It never has been, as I explain categorically to people who come to me for advice. In fact in this short episode I explain why it has never really been a good real estate investment destination, for several reasons.
Think about rental incomes relative to property value.
Property prices in the SF area have appreciated over the decades. However, this is not the only criterion for wise real estate investments. Rental income is an important factor as well. Now it is true that rents are fairly high in San Francisco if we speak in absolute terms. However, the rent is not high relative to the value of the property here.(In this short video I explain and illustrate with some numbers. In order for your real estate investment to make sense, your rental income has to be commensurate with the value of the property you buy. Otherwise it doesn’t make sense for you as an investor.
Keep local laws in mind.
Another thing to keep in mind is state laws and rental regulations. California laws tend to be fairly anti-landlord. In my experience, a recalcitrant tenant who doesn’t pay and also refuses to vacate can turn into a very big headache for a long time. This is another reason it doesn’t make sense to invest in real estate in San Francisco. In this regard, the Sun Belt states are a lot more investment friendly.
In this short videoI explain how one of our investors recently closed a very favorable property deal. You too can learn how to make savvy real estate investments to secure your financial future! Check outupcoming events to learn more about creating retirement riches for you and your family.
One of the questions that often come up in the investment expos I address is that of where to buy property in a way that offers the best ROI(return on investment). Is Austin a good place to invest in, they ask me. Elon Musk was spotted there, so it must be cool or hip, they tell me. They are very wrong. Let me explain.
Austin is a sellers’ market right now.
In the past, I have invested in Austin and helped people do the same. In fact Austin was one of my favorite markets and investing there was a good option then. Past tense! Right now, the Austin real estate market is among the craziest in the country. Property owners here should be looking to sell or to hold – not buy. There may be a lot of buzz, and thanks to the pandemic, there is even more turmoil in the market, but Austin is not where you want to buy real estate right now.
Your purchase criteria.
There are a few things you need to keep in mind when you're investing in real estate. You have to choose the type of property you buy. For instance – a single family home or a condo? What makes more sense in this scenario of the COVID pandemic when people are scared of shared spaces? There you have your answer.
You also have to choose carefully when to make the investment. Austin is not good right now, but there are areas that have loads of growth potential. So where and when you buy also matters greatly. Another aspect you want to look at carefully is rental incomes. A buyer’s market doesn’t necessarily mean that rental incomes are good in the area.
All this market insight isn't simple or straightforward. Luckily for you, our quarterly real estate investment expos can help. These events are designed to guide you to make purchases based on several criteria such as type of property, location, future appreciation, current rental prices and so on. Check out this short video(under 3 minutes) where I explain how this works.
When is too early to start investing in my future? Am I really ready to start investing in real estate? Do I have the time and the experience to do it? What if I make a mistake?
These are some of the questions I am asked all the time by potential clients. There are some who are hesitant about taking the plunge, so to speak, while others have a spouse or a family member who is averse to the idea. So how do you get around that? When should you start investing and how to know if you are truly ready for it? Find out here.
Investing doesn’t need you to be an expert.
Much of the hesitancy comes from diffidence and a simple lack of experience. People believe that one has to be really clued into the real estate scene to make informed choices and decisions. They also – erroneously – believe that as a homeowner they have to be hands on and that this will take up a lot of time. Fortunately, these are all misconceptions. You don’t need to be an expert and nor do you need to invest a lot of time and effort into your real estate investment. Check out this short video where I crunch a few numbers and explain the Fannie Mae rules among other things.
At ICG we offer expert guidance for you – whether you want to buy one or one hundred homes. We put you in touch with developers, reliable property managers and guide you through the loan process. At no extra cost to you, you have access to our carefully cultivated network of professionals who will save you time and help to safeguard your investment. So really, when you think about it, investing in real estate is not at all the daunting proposition that many think of it as.
You are never too young to start investing in your future.
For those who think they are too young to start investing for their retirement, let me disabuse them of the notion. The fact is, one is never too young to start investing in one’s future and financial security. It is also never too late! I have had people in their 20s and 30s approach me for real estate investments, and I have also had people start investing in their 60s and 70s!
Still have doubts? Are you wondering if you are financially ready to make the commitment? Or perhaps you are sure and a spouse or other family member is the one that needs some convincing? Well this is also something that I frequently help people out with. Check out this short episodewhere I answer some of the questions I am frequently asked. I explain how to take the next step towards your future financial security, and how you can ensure that you make the best choices for yourself and your family.
Peter believes that when he started investing in real estate at age 65, ICG helped save him from a life of poverty. Derek is so satisfied with his financial future that he makes it a point to gift my book to people he meets. Niva Lev has the peace of mind that when she is no longer able to work as a physiotherapist, the properties ICG helped her invest in will take care of her. These are just a few of the stories of the ICG Advantage – which comes at no extra cost. I explain more here.
The history of ICG.
It all began when I was a young engineer in Silicon Valley back in the early 80s. I would look at my clever, hard working colleagues – with not a lot to show for their hard work and talent in terms of finances. I decided I wanted more! That was the time when I invested in homes in the Las Vegas area. To begin with, those colleagues laughed at me. But soon they joined me, and before long I was heading a consortium of investors buying homes in the region.
This is when I realized the power of the concept. It isn't just the fact that real estate is probably the one genuinely recession-proof investment there is. It is also the fact that there is power in numbers. And that is why ICG has the power to really help change lives.
Get the ICG Advantage for you.
You may buy just one home – or you may decide to buy dozens. However, you can still avail the ICG advantage. It is simple – you have access to the same developers, property managers and financial resources that I use when I invest in real estate. When you come through ICG, you have the clout that comes from belonging to a large group. We at ICG are people with industry experience so the developers and managers are happy to sweeten the deal for you. They are eager to please me, and by extension, they want to please you!
Know more about the ICG advantage and about securing your retirement riches today(no matter how young you think you are, it is never too early to start planning for your future). Find out how you can secure your future at zero extra cost to yourself. And since there are professionals in charge of everything, you don’t have to take time out of your busy life either. Check out this short video to start planning for your financial future and creating a passive income for you today!
Recessions are terrible for property owners, right? This is when people go out of business or lose their jobs, stock markets crash and property prices plummet! The media would have us believe that there is only doom and gloom everywhere. However there is a silver lining to this situation as well, as I have found over the decades of personally investing in real estate and helping thousands of others do the same. So here’s how I answer when they ask me, what do I do if there is a recession?
The seen and unseen impacts of recession.
Let’s talk about the terrible recession of 2008 which went on for a few years. Just previous to that recession, there had been a couple of years of boom time. This was when property prices had appreciated significantly. So in the years from say 2004 to about 2006 or so, property values in areas such as Phoenix were nearly doubling in just two to three years! During recession, however, those valuations were seen to plummet. So those were the seen and distressing aspects of recession.(Check out this short episodewhere I crunch some numbers and explain what I mean).
However, recession is also the time when property rentals go up. This is a time when people are unsure about their jobs and future earnings. They don’t want to buy property and run the risk of being unable to pay for it. So they play it safe and opt to continue to rent. This is the hidden benefit of recession for property owners.
Why you must learn the art of doing nothing.
So as I always tell my clients, you have to learn to do that most difficult of things during the recession: do nothing! When valuations plummet, one can feel a lot of pressure to just sell and cut one’s losses. I have seen this in new investors, this tendency to panic-sell. If you ride out the recession, you will see the valuations of your homes going up again.
I created a video to explain the importance of doing nothing. I also outline the basics to keep in mind about investing in real estate and why this is the one truly recession-proof investment you can make. Check out this short video now– it will be the best return you can get on a five-minute investment today!
Real Estate Investments - When to Do Something and When to Do Nothing
If you're someone who wants to secure their future, especially the retirement years, let me tell you two simple facts: there is a time to do something and there is a time to do absolutely nothing! This is what I have learned over the decades since I first facilitated real estate investments in Las Vegas for a group of Silicon Valley engineers back in 1983. There are some mistakes one simply cannot afford to make in real estate investments, and yet those are the mistakes I see repeated most often. Find out what they are.
Where to buy.
This is one of the widely believed myths in real estate: that you have to be close to the property you're buying. There is somehow this misconception that landlords have to be within easy driving distance of the properties they invest in. Somehow investors feel – mistakenly – that they will have to be at the beck and call of their renters for every leaky faucet and broken door hinge. So many Silicon Valley investors, for instance, will insist upon buying, say in Sacramento, even though cheaper properties with better future returns are available elsewhere in the country.
So, the number one mistake that people make – and which you as an investor should avoid – is to insist on buying close to where they are. Let me tell you – a big proportion of my investors actually live overseas! They aren't even in the country! Why worry about finding renters, and managing the upkeep and repairs of your investment when there are experienced, well-equipped professionals to do this for you?
When to do nothing and when to do something.
Once you’ve bought the house and have your renters in place, this is when you do nothing! When you have experienced professionals and a well-connected network of developers, realtors, property managers and lending sources to assist you, why would you want to exert yourself and risk making expensive mistakes? Masterly inactivity! That is the only thing required of you.
So when do you have to do something? Well this is something that I will explain in this short video where I speak about another common real estate investment mistake that so many people make. I share one of my common experiences of two friends who approach me for their investment needs – one takes the right action at the right time and the other doesn’t. Ten years down the line, the two end up in very different places, financially speaking.
Listen in – this may be the most lucrative five minutes you spend all day!
Should you buy a secondhand home or a brand new home? As a keynote speaker and an investment adviser who has been helping people invest in real estate since 1983, this is a question I get asked a lot. There is a widely held view that brand new homes are more expensive, but this is a misconception. My advice is to opt for a new home for the simple reason that this could actually turn out to be the less expensive option for real estate investors. I explain why here.
Everything is new in a new home.
This advice is based on my own insight gained over the decades. I have personally bought hundreds of homes as part of my own investment inventory, and have facilitated thousands of other real estate sales all over the United States. My personal and professional experiences have demonstrated why buying new homes is a better deal. When you buy homes as an investment, you do this so that these homes will fetch you a passive income by way of rent. You don’t want to have to bother about breakage and repairs and other hassles as a landlord. This is more likely to happen in a secondhand home.
On the other hand with a new home everything is new: the roof, the flooring, the heating and cooling system, the appliances. There is a much lower chance of things breaking down or needing repairs and replacements: ergo fewer expenses and far fewer headaches for you as a landlord!
The ICG advantage can push down the price.
Buying directly from the developer is a better option for yet another reason: the ICG Advantage. ICG is a real estate investment company that has the knowhow and the kind of contacts that have empowered and enabled thousands of investors to build a safe, financially secure future. When a developer is dealing with ICG, that developer has the incentive to offer our investors a better deal, as I explain in this video.
My point is that brand new homes being more expensive than preowned homes is a bit of a myth. In well over three decades of my experience, I have found that they turn out to be less expensive in many ways. Watch a short episode to know exactly why – spending a few minutes now could mean saving yourself a lot of money! Watch it here.
ICG uses single-family home investments, bought in advantageous locations and the best U.S. markets. We enable you to enjoy the clout that comes from purchasing a multitude of houses, even if you only buy one.
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