Valuation Of Your Investment Property – How Does Your Asset Appreciate?

If you have invested in real estate, congratulations – you’ve made one of the best possible investments to secure your future. One of the natural questions for any investor would be about the value of the property they own and also about how that valuation has risen over time. The whole idea behind real estate investments is that the value appreciates over time and helps you create wealth. This not only secures your financial future but even that of your kids. There are several ways to find out about the value of your property…

What is your property worth?

The first inkling about the value of your property may come in the form of feelers that you may receive from local brokers and realtors. You may receive emails or messages asking whether you want to sell, possibly with offers from potential buyers. This tells you that your property is valuable and desirable. You may not want to sell just yet, but it is certainly useful to know the demand-supply situation in the market.

If you want an exact value of your property, you can always hire an assessor for the job. These are people trained in making valuations based on square footage, the number of bedrooms and bathrooms, the amenities of the home, and the area/location.  For those looking to refinance, this is a necessary requirement in any case. Banks and financial institutions will ask for a proper assessment of a property to secure their lending.

What is Zillow and how can they help?

Going online for valuation can also be a good idea. There are many very competent services out there, and while you may not get an exact valuation, you can get a good, reasonably accurate ballpark figure. One of the services I have found to be useful for this is Zillow. According to the Washington Post, this real estate marketplace company has a database of over 110 million American homes. The service has a very low error rate when it comes to valuations. They include off-market homes, which makes this an even more interesting proposition. The company offers to value a home and also offers aerial views, comparable prices in the area, etc.

Valuation services offered by companies such as Zillow is one of the topics that we are going to be discussing in our upcoming online real estate seminar. We will also be looking at other useful topics for investors such as property insurance, asset protection, and so on. Additionally, we’re going to be talking about filling out college applications such that you can secure more aid than you thought possible. You can register for our event for free. Check out the Events page to make sure you don’t miss out. 

Rental Property Inspection – To Do Or Not To Do, And Why?

Rental property inspections are something that a lot of our investors wonder about. Do you need them? Don’t you? When do you need them and who should perform these inspections? I get this question a lot – should I have my investment property inspected before I rent it out to a tenant? So I tell these people that this is not quite the question they should be asking, as I explain in this video.

When to get a rental property inspection.

There is no particular value in getting a property inspection of a home you’ve just bought. I'm going to go out on a limb and assume that you’ve done the smart thing and bought a brand new single family home. Since this is a new home, it comes complete with a new everything and there is nothing that really needs your attention.

However, if you asked me whether you should get a home inspection before buying a property, I would say that this idea has some merit. Getting a professional to inspect property before buying it could help identify any issues with it. If so, you could approach the builder/ seller with those issues to help rectify them. In this case, that property inspection would be a good idea.

To get a property inspection done after buying your investment home and before renting it out is a little superfluous in my opinion. It is also usually unnecessary to get your property inspected after one tenant leaves and before the next one takes over.

What kind of rental property inspection do you need?

As I said above, probably the most sensible time to get a property inspection is before buying your investment property. A professional will inspect the property for $300-$400, and that money could well be worth it, especially if it helps you detect issues and rectify them before you buy the house.

In a lot of cases, even this may not be necessary because the local broker will usually inspect the property on a walkthrough. With their trained eye they would be able to inspect the property more thoroughly and identify issues/ potential issues better than most buyers would. And later, when you're ready to hand over your property to the next tenant when your existing tenant vacates, your property manager will be able to assess the property for you. Again, here, their insight and experience will count for a lot. They will be able to tell you whether you need to make changes or repairs, or whether the place needs some paint or sprucing up before the next tenant moves in.

To conclude, there is no one size fits all solution when it comes to getting a rental property inspection for your investment home. There aren't too many scenarios that actually justify the spending of several hundred dollars for an inspection. However, if this is something that buys you peace of mind, go for it by all means!

Check out my video on this topic for more details. In fact if there are other questions you have about investing in real estate, our property expo may be just the thing for you – register for free and know more about our Remote Control Retirement Riches formula. 

Best Places For Real Estate Investment Could Be Across The Country

Are you nervous about taking the plunge into real estate investing? Well, you aren't alone. It can be intimidating to find the best places for real estate investment, make the decision to invest in something worth several hundred thousand of dollars, all the paperwork, and other variables. Further, the idea of investing in a home that is far from where you live – possibly thousands of miles away – can be even more nerve-racking. Again, feeling this way is normal, but largely unnecessary. In this short video, I explain why you don’t need to be nervous about buying a home far from where you live.

Considerations to keep in mind when investing.

It doesn’t matter where you live. What matters is where you invest. What matters is identifying the best places for real estate investment. What matters is the ratio of the value of the house to the rent it’s going to fetch. What matters is how well your rental income will help you repay the loan you’ve taken.

So, for instance, if I buy a property in the San Francisco Bay Area for about two and a half million dollars, I have to think of the rent this will fetch. If it is going to get only about $5700 or thereabouts, then it doesn’t make a lot of economic sense. Buying such an expensive property will also mean a huge loan and bigger down payment.

On the other hand, if you're paying about $280,000 for a house elsewhere and then you're being offered rent in the region of $1900 a month then this makes sound economic sense. This means that your loan isn't going to be as big, and your loan-to-rent income ratio is much more feasible. So, as I always advise investors, there should be considerations other than where you live that should decide where you should invest.

You can buy anywhere you choose among the best places for real estate investment.

You could live in one corner of the country and buy a home in a whole other corner of the country, and you would have nothing to be nervous about. While it is natural to be nervous about the whole process, this is only because you're doing it for the first time. I can tell you, I was nervous about my first home too! However, by the time a person buys their second, third, or seventh home, they will be almost bored with the whole process. Because now they know there was nothing to be nervous about in the first place. And not much to do either once it’s been rented out.

Now, the investor knows that the property manager will take care of the day-to-day overseeing of the property. The investor can choose to visit their property but they don’t have to. They can keep in touch with the property manager and get monthly updates – there is really very little for them to worry about. With the kind of communication technology we have at our disposal today, it really doesn’t matter how far away your investment property is from where you live.

If you have any other reservations about investing in real estate, you could reach out to us at ICGRE at any time. To know more about our Remote Control Retirement Riches formula that has guided thousands of investors, sign up for our quarterly real estate event.

Find Out How to Earn More From Your Investment Property

 

So you’ve bought a house as an investment to secure your financial future and now you lease it out. Now you have to safeguard your investment and do a whole lot of things to ensure that you maximize your investment property benefits. There is now so much to do: make sure the rent is paid on time, deal with the headaches of repairs and complaints, make sure your investment is in good shape, calculate inflation impact… right? Wrong! As an investor, you do precisely nothing! That is precisely what our Remote Control Retirement Riches formula does for you: it takes care of it all for you so you have complete peace of mind.

The Remote Control Retirement Riches formula.

The kind of investment that offers the best returns and the most peace of mind is the single-family home. This is what young professionals and families are looking for right now. So firstly, choose brand new, good quality, single-family homes. Opt for the large metropolitan areas in the Sunbelt states – this is where the economic activity is; where people are looking for homes to rent and live in.  

The other vitally important aspect of investing in real estate is to opt for the 30-year fixed-rate loan – this is the one instrument that will actually make you happy about inflation. No matter what the rate of inflation, your repayment amount is going to remain the same. It is quite amazing, and if an investor did not take advantage of this financial gift, I would question their judgment!

My team is at hand to show you the ropes, to advise you about the best markets in the US to invest in currently, to guide you through the loan and purchase processes. Now you simply lease out the brand new home to create a passive income source for you, and your property manager takes care of the rest.

It’s a difficult job, but someone's gotta do it!

And what is it that you have to do as the investor? Precisely nothing! Once these essential elements of your investment are in place, you sit back and do nothing. Yes, it is difficult to do nothing, but someone’s gotta do it! You don’t have to worry about the day-to-day management of the property. You don’t have to deal with the rent collection. You don’t have to deal with the cantankerous (hopefully not) tenant. You certainly don’t have to worry about inflation.

As you can see from the foregoing, maximizing the profit on your investment property is really a lot easier than you may have thought. With everything put in place and managed for you remotely, there is really nothing you need to bother your head about. You can be on the West Coast and have your investment property several states away with not a thing to worry about.

If you still have questions about how to maximize your investment property profits, you can reach out to us at ICGRE. Better still you can sign up for our free quarterly event, our Real Estate Expo where we will be discussing ways to maximize profits, and other aspects of real estate investing. You have nothing to lose and everything to gain!

Why Property Taxes Are Not a Dominant Factor, But Still Important For Investors

 

There are a lot of factors that investors will take into account when deciding on where to buy a home as an investment to secure their financial future. Which area has a sufficient supply of homes vis-à-vis demand? Which regions are saturated and which regions are more likely to grow, and hence experience an increase in real estate valuations? What are the urban centers that investors are likely to get the best rental income from? Another aspect to keep in mind is property tax, which is something that is a recurring expense for homeowners.

Property tax varies across the country.

According to USA Today, Hawaii has the lowest average property tax rate at just 0.3% of the total property value. The national average is 1.1% of the average home value. Alabama, South Carolina, and several other states also have low property taxes at 1% or less of the home value. So this means that you are paying less to the tax agencies vis-à-vis the value of your home. On the other hand, states such as Texas have much higher rates of property tax, in some cases close to 3% of property value.
While your principal and interest repayment amounts are not going to change, this property tax component is subject to change as valuations rise. It is an expense that investors should keep in mind when choosing where to invest. While it is far from the most important factor, it can be a countervailing aspect to keep in mind, particularly when making a choice between two otherwise equally good options.

Be a smart investor. Here’s how…

A lot of times, I see investors being carried away by trends, celebrity endorsements, and so on. If X celebrity bought property in a particular city or area, suddenly that place becomes attractive and desirable. You know how Elon Musk can make or break the fortunes of cryptocurrencies with just a tweet? Well, people like Musk have the power to sway public opinion in the real estate investment arena as well. Investors, however, would do well to make choices based not on social media chatter and what is ‘trendy’, but on market projections, and likely fiscal outcomes.
Now here’s a likely scenario – Elon Musk was seen doing business or even just grabbing a bite in Austin, and people decided that this is the place to invest in property. This is not the best idea. This is because in the state of Texas property taxes can hover as high as 2.5% to 3% of the property value. It can vary from zone to zone, but it is generally high. In some Dallas suburbs, it can be close to 3%. On the other hand, in neighboring states like Oklahoma property taxes are much lower.
So given high property taxes, some states are not ideal investment options. This is something that we will be discussing more in detail in our next quarterly event – a free online expo where we discuss all the issues relevant for real estate investors. We will have experts in attendance who will offer specialized insight into property tax as well as asset protection, home insurance, and more. Don’t miss it. 
You Don’t Need To Offer More than Asking Price for a Home

When demand outstrips supply, typically, the seller is in a position to quote their price. Also typically there are more people vying for limited goods and services, which means that they are tempted to offer more than the asking price. This is something that investors ask me as well – should they offer more than the asking price? The short answer is no – this is very rarely necessary. I will explain why.

The Remote Control Retirement Riches formula.

I have four words for you: Remote Control Retirement Riches. My team and I have everything in place for investors. Firstly, I suggest that you use the 30-year fixed-rate loan – it is a simply unbeatable tool for creating future financial security if not actual wealth. Secondly, invest in brand new single-family homes in the larger metro areas where couples and families are looking to live. Our team has created networks with all the relevant contacts: brokers, builders, property managers, financers, and other agencies that would be involved in a real estate purchase.
So, even when demand outstrips supply, we are able to negotiate the best prices. This is because we have the sheer force of numbers with us – quite simply we have a far better bargaining position. As an investor, you don’t have to deal with the hassle of negotiating or asking for more inclusions and so on. With our network and contacts, all this is done for you. Your job is the most difficult one – you do nothing!

Why is the scenario a little different right now?

With the pandemic disrupting supply chains, creating labor problems and delays, there was an actual shortage of availability of new homes in the market. Since lumber and other building supplies have also become more expensive, I have seen instances of builders revising the asking price in some cases. Builders have been facing difficult times and they end up having to do this. To be fair they do also offer a refund of the deposit amount to those investors who are unwilling or unable to agree to the higher revised price.
However, in all my 40 years as an investor, I have never or very rarely seen this happen. My team would typically do all of the negotiations and have everything in place for investors. Right now, with interest rates much higher, these phenomena are subsiding considerably. 
If you would like to know more about the Remote Control Retirement Riches formula, drop us a line. We will also be discussing the market situation that we see right now, where demand is higher than supply, and what prudent investors should be doing, in our upcoming expo. You can register for free here for our online property expo which is designed for savvy investors looking to secure their financial future. 

How the Remote Control Retirement Riches Formula Is Ideal For Investors

For first-time investors and property owners, the idea of giving out their property on rent can be an intimidating one. How does one draft a lease or rent agreement? What are the terms that must be included? How does one protect one’s interests as a property owner? What are the loopholes that tenants can take advantage of? What are the local laws and regulations? And if one gets a draft agreement from a friend or from the internet, what does all the legalese even mean? All this can be confusing and a lot of investors have a lot of very worrying questions for me. When they ask me, how do I create a lease, I tell them, you don’t.

This is the job of the property management firm.

These are contractors who manage residential, commercial, or industrial real estate. It is the job of these firms or individuals to manage properties – homes, condos, apartments, etc. They supervise and look after the property, deal with tenants, and help the property owner navigate the whole process. So what does a property management firm do? They not only collect rent but also oversee and manage the day-to-day requirements of managing a property. They help find tenants for your property and then are the liaison point for the tenant – for maintenance issues, repairs, and so on. Basically, they do the heavy lifting so that property owners have a more hands-off approach to all the nitty gritty that comes with being a landlord of any property.
And yes, they help with creating the lease as well. The property manager is there to see that your interests as a property owner are protected and that this is taken care of in the terms of the lease as well. They have local know-how and they are conversant with the local regulations and state laws. Since they work in the local markets they have valuable insight to share with property owners. They can help avoid legal issues, assist in finding a new tenant at the end of a lease, and more. They are basically the local presence managing your property while you could be living all the way across the country.

Remote Control Retirement Riches.

All of this can be very valuable indeed – particularly if you live in San Francisco and own property in Oklahoma that is to be let out to a tenant. This is all a part of our formula; something we call Remote Control Retirement Riches. After you’ve taken the plunge and invested in property, you need to do nothing! As I always say, doing nothing is the toughest job in the world, but that is what you need to do while your property earns you a passive income and appreciates in value over the years.
Legal and other experts will be guests for our next real estate investment event. They will be sharing their insight and guidance about the dos and don'ts of investing and all that goes with it. You are welcome to register for our next event for free.

Timely Rental Property Investments Can Finance Your Kids' College

A lot of our investors seem to think that an expensive college education is and will remain out of reach for them and their kids. I explain why this is not necessarily so. Taking that all-important step to start investing in real estate has been life-changing for thousands of our clients and can be for you as well. Single-family homes, bought with the help of the 30-year fixed-rate loan can indeed be life-changing for you, as I explain in this podcast.

The life-changing investment.

For a lot of people, the idea of putting a kid through Harvard can sound improbable, even completely out of reach. However, if you plan well and in advance, this is very doable. Suppose you're someone that has just been blessed with a baby. If you decide to take action now you can really have that college fund in place when the kid turns 17 or 18.
Say an investor bought a home with a 30-year fixed-rate loan when their kid was about a year old. As the years go by, that loan amount will seem smaller and easier to repay. By the time that kid is ready for college, you could sell or refinance the home and there you have it: your kid’s ticket to a top college education! I have done this myself; financed my son’s education at Stanford with the help of savvy real estate investments I've made.

How many houses do you need to invest in?

So now that you know it can be done, maybe aim a little higher? Do you want a college education for your kid and a Porsche? Now, I am rather fond of making a lame little joke; I would say, to send your kid to Harvard, you buy one house. To send your kid to Harvard and buy a Porsche, buy two houses! People do laugh at that joke, but actually, that isn't even accurate. Just one home could be enough for that fancy car and the college education, as I explain in this video.
Getting aid in the form of FAFSA (Free Application for Federal Student Aid) is actually much more accessible than you may think. A good and knowledgeable expert can help you fill out that form in such a way that you could become eligible for more aid than you previously thought.
If you have more questions about this, we are here to answer them. Reach out to us at icgre.com or better still, sign up for our quarterly event. This time around, we are going to have an expert – this one is from Stanford, by the way – who is going to speak about FAFSA among other things. Registration is free. Don’t miss it!

How Much Should You As A Rental Home Owner Raise The Rent?

The rental income from your investment property is very much a part of the Remote Control Retirement Riches formula. So, raising the rent on your investment property can seem like a no-brainer. Higher rent means more income, right? Well, it isn’t quite as straightforward as all that. You need to assess the situation on a case-to-case basis and examine whether upping the rent is justified or whether it will be counterproductive. The advice of your property manager is going to be very valuable when making a decision, as I explain in my podcast.

Pros and cons of raising the rent.

In many cases, bumping up rent to the market rate can make sense. It can make sense when one tenant is leaving and another tenant is going to move in. Then, offering your property up for rent at the market rate to a new tenant absolutely makes sense. That rental income is going to help you repay the loan, so this is certainly a good idea.
However, this is not a one size fits all type of rule. If, say, you have the ideal tenant: your tenant of several years is someone who pays their rent on time each month, is pleasant and looks after your home well…such a tenant is valuable – perhaps more valuable than a few more bucks in the bank. Rather than bump up the rent and risk this nice and ideal tenant leaving, consider leaving rent a little below market levels. You buy yourself goodwill and peace of mind here when you forego the increase in rent. It is a good bargain!

What does the property manager say?

This is an important rule of thumb – don’t micromanage your property manager. Remember, you hired them for a reason, and that reason is their expertise and experience in the business of renting out and looking after properties. Very often, your property manager will have the best advice on the matter of when to raise rents and how much. They will be able to gauge whether raising rent is justified at any given time.
Sometimes it doesn’t make sense to raise the rent if it means your very good tenant is going to leave. Not only do you lose a good tenant, but you also incur expenses in terms of repairs and sprucing up the place before you let it out again.
So, to recap, there is no one fixed rule when it comes to raising the rent on your rental property. Examine the pros and cons of raising the rent of your rental property before deciding. Definitely factor in the advice of your property manager because their insight and experience are valuable. To know more about this, sign up for our upcoming quarterly real estate expo (it’s free).

Why Interest Rates May Rise Further But May Not Be a Cause for Concern

Interest rates on home loans have gone up rather quickly in the recent past. In the past, high rates have also been seen on a downward trajectory. It is the nature of the beast – market forces, inflation, government policy, events such as the pandemic – all of these things impact rates. I had predicted that inflation is coming and higher rates were only to be expected. Given that interest rates tend to rise and fall, should you wait to invest? Is it wise to wait for interest rates to fall before investing in real estate?

Interest rates are up but so is a lot else.

With inflation currently being in the region of 8.5% loan rates have gone up to around 5% for homeowners and about 6% for investors. When the cost of living goes up, so do rents. So, landlords aren't really missing out – their investments are fetching rents that are commensurate with the cost of living; give or take. And even though rents are going up, they are still low in my view.
To get back to the issue at hand: are interest rates going to fall? If so, should you wait to invest? Taking all the factors into consideration, if I were to make an educated guess, I would say that rates may go up further in the short term. They may go up to 7% or 8% in times to come. Of course, they could fall, but chances of this happening are lower.

Why you shouldn’t wait to invest.

To be clear, I cannot predict the future. If I could, I would be the richest person on Earth, and the likes of Elon Musk, Jeff Bezos, and Bill Gates would have been asking me for advice and maybe even a loan! Though I cannot predict the future, I can offer you insight based on my past experiences. In the 80s or thereabouts there were times when interest rates were really, really high – 10%, 12%, and even 14% at one point. So, the slightly higher interest rates that we are seeing now ought not to be a deterrent for your plans to invest.
I'm going to be talking about rising interest rates, the best regions to invest, long-term investment outlooks and more in our upcoming quarterly expo. You are free to join in and experience our online investment event – all the details are available at our website. You can also reach us at info@icgre.com about any questions you may have or if you wish to schedule a consultation.
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