Asset Protection Category
I’ve talked to several people lately about different real estate strategies to use and the one that has been the most popular among smart real estate investors has been the buy and hold. NOT THE FLIP. People flip homes when the market is moving at a pace that allows them to get a house quickly and turn it for a profit. But the investors that are absolutely cleaning up right now are the ones who are buying homes and holding them. Why is that?
First, the interest rates have been low enough for so long that if people have money to put down they can get these low rates on properties. A man I work with in Las Vegas has been buying up plenty of 100k houses and getting them rented while having extremely low payments on those houses. Why is this a good idea? Plainly, even if the interest rates go up in the area he is in a spot where renters will always be able to afford his payment and if the area goes up in value with the economy then he is sure to really increase the equity in each property. It’s a win across the board for him now.
Second, interest rates have started to go back up. When interest rates go back up something interesting will happen that the country isn’t prepared for at the moment. The housing values will have to stay still or even drop. I say this because the average person owns a 3 bed/2 bath house in our country and if they can’t afford an average payment at a 6% interest rate or higher then the market will have to adjust so they can. By getting these homes now at low rates you are setting yourself up for the best long term success because you can afford the payment at the low rate and it isn’t going to adjust on you like it did during the serious downswing we had a couple years ago.
Real estate is a great way to make long term wealth. Each day I deal with great owners of homes or apartments and they really see things for how they are when it comes to our market. I get great advice from them daily and I love to pass it on to you.
My wife watches all sorts of TV shows with one of her favorites being with Scott McGillvray. He has a great show about cash flowing properties and at the end of each one he shows how much money the person will be pocketing each month and I just have to laugh. That number is always assuming that nothing goes wrong.
Lets look at our own housing situation. How many months have you had nothing go wrong with your house? Just last month we had a broken door, broken door handle, broken garbage disposal and some plumbing problems as a result. Other months it is always something else and we are no different. When you buy a cash flow property you are buying the good and the bad so sure you will have some months when you make money, but you’ll also have months where you lose money. In the end you are banking on the appreciation of the home while having good renters or leasers who take care of the place. It just isn’t as easy as a half hour show makes it out to be.
Thank you Tyler, you were great help and I don’t know how I would of done without you, This has been a great experience and one I will tell everyone how well I was treated.
Thanks for your time.
Thank you for the valuable information!
Vadim and Veronique
This week I had some great conversations with many of you. A couple of issues were brought up that you should all know about.
The applicant doesn’t want me to run his credit because he doesn’t want his credit score affected. What should I do?
When you as a landlord check a person’s credit, it is called a soft hit on their credit. This means it will only stay on their credit report for 2 to 3 months. Their credit score will not be affected long term when you check their credit.
I have found often that a person who does not want you to check their credit has credit issues that they are hiding from. You need to establish your own rule that you check everyone’s credit.
Another thing to consider is if an applicant is trying to dictate how you run your business now, they will continue to cause you issues in the future.
My tenant wants to pay cash. What should I do?
Cash is king, but not in the landlord business. This is big red flag. Why? People often want to pay cash because they do not have a checking account and they have money gotten from illegal means. Drug dealers are some of the biggest offenders of this. Now this does not mean that everyone who wants to pay with cash is doing something illegal nor is a drug dealer. It is better to be safe that sorry.
Last week I received an email from a landlord who rented to a person who seemed to be a great applicant and wanted to only pay in cash. The tenant paid the deposit and first month’s rent in cash. That was all he ever paid. The landlord is now going through the eviction process.
In summary, screen your applicants and don’t take cash.
Visit our new site at http://www.RentingAuthority.com
We can’t thank you enough for your help today!
Our property managers use Renting Authority for our other rentals but this is the first time I personally have used Renting Authority for a screening for one of our properties. You went above and beyond what you had to do and we can tell you’re passionate about what you do and you enjoy it, that’s great! We will definitely be long time Renting Authority customers and I will definitely be recommending you guys to all the other investors in our network!
Tyler – thank you for processing the refund.
…the good news is that we will be renting to the respective candidate from the last report. We have been very empathetic to our applicants who have found themselves in the midst of job eliminations and bankruptcies. The credit and background checks provided through your organization make it easy to make an informed decision. We have not been disappointed by our two previous renters whose reports were provided by Renting Authority. We appreciate the reduction in exposure to financial risk that your services provide.
Thanks again for understanding my error and assisting to honor my request.
This is a very funny video. I hope there are not any Renting Authority customers who have the same mind set as this landlord.
Watch this Video