Property Investing – Cash Flow is what you should go for!
Property Investing – Cash Flow is what you should go for!
Posted 17 hours ago

  Property Investing – Cash Flow is what you should go for We often hear in real estate investments that there are three important words in this industry they are location, location, location. And these “3L” properties are one of the most prestigious and finest looking properties to own, however…

Housing Issues: Can you afford to be a Renter?
Housing Issues: Can you afford to be a Renter?
Posted 18 hours ago

  Housing Issues As 2015 begins, affordable housing is not looking very promising. According to the National Association of Realtors, it’s tough to be a renter these days. From the Harvard Joint Centre for Housing Study, it is reported that over the past decade, the affordability issues for renters have…

Housing Issues: Can you afford to be a Renter?
Points to think over before buying the Rental Property
Points to think over before buying the Rental Property
Posted 3 days ago

  Think Before Buying The Rental Property Have you always thought of becoming the landlord and is going to purchase your first property or thinking about expanding your portfolio? Surely, the process is as simple as buying the property and giving it on the rent but everything is a waste…

Points to think over before buying the Rental Property
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Property Investing – Cash Flow is what you should go for!

by Property Management Software on July 7, 2015


Property Investing – Cash Flow is what you should go for
 
Property Investing – Cash Flow is what you should go for

We often hear in real estate investments that there are three important words in this industry they are location, location, location. And these “3L” properties are one of the most prestigious and finest looking properties to own, however the real scenario is that they are a very poor investment choice. Typically, the investment returns on these properties are generally very low; and to compensate for the risks one should look for better investment returns. Because of the very high prices for the rental incomes and the generation of cash flows, the returns on these A+ locations are poor.

So what should the investors pursue for better cash flow? The property that generates higher investment returns and cash flows are actually the non-descript, moderately priced and boring location properties, whether the apartments are commercial properties or single units. An investor’s primary goal should be higher returns for same risks. Because excess cash flow accumulates in the bank account and it is the cash flow that pays bills.

Let’s go through a few numbers herein.

Moderately Priced Property
– If we take a look at the average price of an apartment, say in Southern California with a realistic 6% capitalization rate; that means one would earn 60,000 USD per year on the investment of 1,000,000 USD with a return of 6.0%. With that money, one can save money in reserves, pays bills and make arrangements for other investments, so it’s just a fair deal.

Fancy 3L Property – With the 3L properties, beach area properties, fancy town areas, prize properties, the Cap Rates are low maybe 2.5% to 3.0%. That means in a cash flow, one will get 25,000 to 30,000 USD per year on an investment of 1,000,000 USD, which is only half as compared to moderately priced properties

It is advised to review property listings and better to do some research, if one believes in the above information. You might wonder why this poor cash flow investment is even considered.

There comes many reasons: Without even considering the cash flows, and not knowing the fact of how bad the deal is or in the hopes of growing value of the property, the buyer considers it better. Also it does not even come into the mind to consider that cash flows can be affected based on the property’s location. Or, they may be considering it so that they can brag about it like – “I own this property and the fancy car, big house etc.”

So there are plenty of reasons why an investor while buying a property would make less than optimal decisions.

To know more how SimplifyEm Property Management Software can help you, visit this link: http://www.simplifyem.com/property-management-software

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Housing Issues: Can you afford to be a Renter?

by Property Management Software on July 7, 2015


Housing Issues
 
Housing Issues

As 2015 begins, affordable housing is not looking very promising. According to the National Association of Realtors, it’s tough to be a renter these days.

From the Harvard Joint Centre for Housing Study, it is reported that over the past decade, the affordability issues for renters have increased both in number and the share of renters experiencing them. The direct impact is on the health and well-being of the U.S. renters, this inability of finding affordable housing is a headache. Indirectly, this is influencing a cut back on food, savings, and healthcare just to keep up with the living expenses.

It is reported that more than half of U.S renters pay more of their income on rent, approximately 30 percent or more, which was used to be 12 percent. Renters with severe financial burdens are more in this category. It was already an alarming concern when a decade ago the percentage of renters paying half or more of their income on rent was 19 percent.

From 2004 to 2005, the share of Americans that rent increased from was 31 percent to 35 percent, the rental affordability problems have increased as well. The strongest growth in the last fifty years in renter households was marked in the 2000s. From 2007-2011, there was a fall in ownership rate, the increased demand of single family rentals adjusted along with the fallen ownership rates, with a switching of home owners to rental occupancy of about three millions.

At local fair market rent levels, most of those houses were rented and the number has risen in the last two years. So are you keeping up in your area with the rental affordability problems, as Property Managers? Will your vacancies start over in other direction, and how early are your vacancies are filled?

Let your owners know what is going on both nationally and regionally, and be ready to speak with them. Perhaps we will all face the need for not so permanent rent reductions, if the current cost of renting an apartment or a house is affordable by fewer Americans. Another thing to remember: Are you and your owners ready to rent your apartment to many couples, and are you ready to share your unfilled vacancies by singles to help the affordability challenge?

In the year ahead, hopefully a hike in employment and a gain in the economic conditions of the average American will unfold. But if it is delayed, then a back-up, contingency plan is needed by a Property manager. Are you communicating with your clients and what is yours? Create one, if you don’t have one. Then to let them know your ideas, schedule individual meetings with owners or a seminar regarding client- appreciation.

To know more how SimplifyEm Property Management Software can help you, visit this link: http://www.simplifyem.com/property-management-software

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Drive your Cash Flow with Electronic Rental Payment

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Points to think over before buying the Rental Property

July 5, 2015

  Think Before Buying The Rental Property Have you always thought of becoming the landlord and is going to purchase your first property or thinking about expanding your portfolio? Surely, the process is as simple as buying the property and giving it on the rent but everything is a waste if you buy the property […]

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Reasons for everyone to invest money in real estate

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  Invest Money in Real Estate Today people from all over the world are primarily searching the ways to invest their money in the real estate for gaining the profits. Not people but even the successful entrepreneurs also love to invest their profits in rental real estate specifically. But due to the recent downturns in […]

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Importance of Tenant Screening for the Landlords

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  Importance of Tenant Screening Assessing the potential tenant without running a thorough background check on it can be a recipe for the disaster. Effective screening services and background check reports will help you in getting a detailed report on the tenant’s history including the criminal records, credit history, eviction history and many more. Following […]

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How Property Management Software Can Save Your Money?

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  Save Money Using Property Management Software Any good business man knows that being successful in business means not only having decent profits but also managing the expenses as well. The math is very simple – the lower the cost of your expenses the more the profit. But behind this simple math lies whole new […]

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  Digital Payments Help Tenants to make rent payment Property managers including the self-establish landlords, all of them get busy in the beginning of the month because it is the time to collect the rent from the tenants and we do everything in our power to make sure that the tenant pays the rent before […]

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