May The 4th Be With You

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Hi Folks,

There is an old real estate saying that goes something like this…

“It’s time in the market, not timing the market that counts”

Today is May 4th.  Star Wars Day.  This is the day that fans celebrate Star Wars created by George Lucas.

You might be wondering what Star Wars and rental property have in common…

The truth is, they don’t have much in common.

However… since it is the most important day of the year for Star Wars fans, let’s have a little bit of fun.

Imagine this…

It is May 25th 1977.

This is the date the movie Star Wars was first released…

You excitedly travel to the movie theatre with your friends to watch this epic film for the first time, expensive (and salty) popcorn and soda in hand…

That very same afternoon, you also closed on your very first rental property.

Fast forward to today’s date…

It is May 4th 2016.

39 years have passed since the day you watched Star Wars for the first time, and since the afternoon you closed on your first rental property.

You still own that property today… 39 years later.

Not to mention, you have also successfully rented out the property over this period, and you have become an effective landlord over the years.

How much would your property be worth today?

Let’s assume that you purchased the property for:

$100,000 on May 25th 1977.

You purchased the property in a relatively decent real estate market (major North American City) that has experienced approximately 5% appreciation annually.

The value of your property today (May 4th 2016 – Star Wars Day), 39 years later would be…

$670,475.12

Imagine you bought more than one rental property back in 1977….

Happy Investing!

Neil

 

PS: Do you have, or know someone that needs to sell a  property?

Sell your house to us!  Get an offer from a Direct Buyer!

We look at ALL property in ANY condition. Whether your house is pretty or ugly, old or new, in good or poor condition, we’re here to help you get an accurate evaluation for your home.

CLICK HERE for an offer from a Direct Buyer.

 

 

 

 

 

5 Great Tips for Struggling Real Estate Investors

book on head

Hi There,

If you are looking to purchase your first rental property, the location where you buy it is extremely important.

I recently had a conversation with an aspiring real estate investor who was interested in purchasing his first rental property.

He was asking my for my opinion on a location that he had heard about that was a good place to “buy” a rental property.

I had a lot of advice for him.  Here are 5 GREAT tips I gave them:

 

TENANT PROFILE

I asked him how WELL he knew the city he was interested in investing in.  His answer to me, as “not very well”.  This is one of the first questions I ask aspiring real estate investors because I want to get a sense of if they are being realistic or if they are living in “FANTASY LAND.”

The reason I ask this questions is because I want to gain an understanding from them if they know anything about the types of people in the particular city they are interested investing in.

In this potential investors’s case, he was not familiar with the area at all.  As such, I explained to him that the City that he was looking to invest in was very different from the city that he was currently living in.

The city that he was living in has high demand for rental properties, and there is a large tenant pool of young professional tenants, with excellent credit, and high paying jobs.

The city that he was interested in investing in, has a large population of multi-generation renters with poor credit and lower paying jobs.

He had no clue that there actually was a difference in the tenant profile from his city versus the city he was interested investing in.

This is one of THE most important factors when you are looking to buy your first rental property.  You have to have a very good understanding of the tenant profile that will be renting from you.

 

CHEAP HOUSE VERSUS EXPENSIVE HOUSE

This aspiring investor was attracted to the city he wanted to invest in because the prices of houses were CHEAPER than the city that he lived in where the prices of rental properties were more EXPENSIVE.

I told this new investor that just because the price of homes are lower, does not mean that they are a good investment.

There are other thing to consider, such as:

a) What is the future potential for property appreciation for the rental property

b) Why is is so cheap?  Is the property location in an undesirable area, or is the property in poor physically condition?

c) Does the property cash flow on a monthly basis, despite it being lower in price?

 

BEING ON A BUDGET

Everybody is a on a budget, no matter what it is that you are buying.  Purchasing a rental property is no different.  You are also on a budget.  However, you have to be realistic with your budget.

Meaning that, if you are looking to purchase a rental property in City A, and the average cost to purchase a rental property is $100,000, however, you have only been approved for a mortgage of $50,000, and all you are willing to spend is $50,000, how are you going to buy a property in City A?  The answer is, you are not going to buy a property in City A, because you are not being realistic with your expectations.

If you budget is $50,000, and the average cost of rental properties in City B is $50,000, you will have to re-shift you focus and look at buying a rental property is City B, where you can afford it.

 

WINNING THE APPRECIATION GAME

In a number of cities across the country (not all) there has been good property appreciation.  Who doesn’t like it when you buy a rental property and it appreciates in value from the moment you purchase it, to the moment you sell it?  That is fun and exciting and a great way to make money.  No one wants to buy a rental property that will depreciate from the moment they purchase it, lose value, and that sell it for a loss. That is not fun at all…

My point here is that no one has a “Crystal Ball” as to how much a rental property is going to appreciate from the time you purchase it to the time you sell it.

If people could predict the future, they would not be purchasing rental properties, they would be buying lottery tickets.  (Buy One Lottery Ticket, Get One FREE! Buy Now!)

This leads nicely to my next point…

 

BUY FOR CASH FLOW

The truth is that most new investors have no idea what they are doing.  The fellow I was speaking with, simply wanted to buy a property to rent out, in a City that people (with no real estate investing experience) had told him was a great place to buy.  So far, he was unrealistic with his expectations in what he could purchase in that City.  His budget was $50,000, however, the average price of rental properties in the city was $100,000.

Having said all of this, even if he could afford the $100,000, he did not even know whether the property, once rented out to a tenant would Cash Flow or not.

Take a minute and stop and think.

Why would anyone buy a rental property, that does not cash flow?

For the property appreciation maybe?

But what if you cannot predict how much a property is going to appreciate?

What then is the purpose of buying a rental property?

Here is a hint…

Actually, here is the answer:

CASH FLOW

As a new investor, if you act on impulse and purchase a rental property in a City that people have told you is a great place to buy, you are unfamiliar with the tenant profile, do you think you are making a wise decision?

Let’s say you get lucky and you obtain a tenant that is paying you on time every month.

If you have not done the numbers in advance, and if your rental property is NOT cash flowing (property expenses are greater than monthly rent provided by the tenant), how long do you think you are going to be able to sustain this, and continue to keep this rental property by providing money out of your own pocket in order to pay for the monthly expenses?

The reality is for many, not very long.  I see a lot of new investors make this mistake, and then find themselves in a position where they are forced to sell their rental property within a year’s time.

SUMMARY

If you are looking to purchase a property, but don’t have enough money, or if you have bad credit, you should consider The H.O.P.E. Program.  The H.O.P.E. Program has assisted more than 12,000 people get homes who NEVER thought they would be able to to.  The Program has even helped those with BAD credit get qualified.  It is one of the best Rent To Own programs as it gives access to thousands of listings for Rent To Own homes.  CLICK HERE to enrol in The H.O.P.E. Program or to get your credit fixed.

 

Happy Investing!

Neil

How To Make Money Fast

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Hi There,

I have been speaking to a lot of you recently who live in “rising real estate markets”.

When I say “rising” market, I am referring to a real estate market in which the value of properties are going up in value.

Depending upon where you live, values could be rising due to a number of different factors.  These factors are not something that we are going to get into with this post.

What we are going to cover, is “How To Make Money Fast” in a rising real estate market.

The way to do this is to simply, ACT, and BUY real estate, during a “rising market”.

If you have been waiting on the sidelines to buy your first rental property, and you are watching prices of homes go up, continuing to sit on the sidelines will do you no good, you need to take action.

Over the years, I have spoken to countless people who have sat on the sidelines while the prices of homes in their city skyrocketed.  As a result, I have witnessed people lose hundreds of thousands of dollars in property appreciation, simply because they did not ACT.

If you sit on the sidelines, and take no action, you will lost out.

So remember, in a rising market, you need to BUY.

Don’t remain on the sidelines.

Get in the game and purchase your first rental property before prices rise to a point in which you can no longer afford to purchase a property.

Happy Investing!

Neil

ps: I mentioned earlier in this post that we would not get into the factors which influence prices of homes to rise in certain areas.  I take that back.  Here are some factors that cause the values of homes to go up…

  • Population Growth
  • An increase in housing formation
  • Immigration
  • Migration to the region
  • Job Creation

Can you think of any other factors?  Comment, and share!

 

A Special Announcement From First Rental Property

Hi Folks,

It’s Neil from First Rental Property.

I wanted to send you all a quick reminder.

Not only am I the owner and creator of First Rental Property,

I am also a Realtor with RE/MAX, and I specialize in the Greater Toronto Area.

If you are someone who is looking to purchase your first rental property in the Greater Toronto Area (Residential or Commercial), or if you are someone who is looking to buy or sell any real estate in the Greater Toronto Area, I can help you.

Here is my email address:

NEIL@FIRSTRENTALPROPERTY.COM

Don’t be shy.  Get in touch, and let me help you with the purchase or sale of real estate in the Greater Toronto Area.

Happy Investing!

Neil Uttamsingh

RE/MAX Aboutowne | 1235 North Service Road West | Unit 100 | Oakville, ON | L6M 2W2

 

5 Reasons You Will Never Buy A Rental Property

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Hi Folks,

I hope you are doing well.

Over the years I have been asked a lot of questions from new real estate investors.

One of the most popular questions that newbie investors ask me, is:

“How many rental properties do I need to buy?”

In my mind, the anwser to this is simple.

 

Most new real estate investors don’t realize that all they need to purchase is ONE rental property.

At the beginning of a real estate investor’s “investing career”, it is easy to get caught up with aspirations of buying multiple properties.

Few real estate investors will be able to do this successfully.  Most will only end up buying one property.

Over the years I have observed some limiting factors that have prevented investors from buying more than one rental property.  Here they are in no particular order:

1.Limited Capital

The reality is that most people who purchase their first rental property, will only have the capital to buy one property.  There is always the exception, and a select amount of investors are able to purchase more properties.  These investors utilize their cash savings, or they leverage existing real estate, in order to buy multiple properties.

2.  Lack of Ambition

Lots of people do not want to own multiple properties.  They are content with what they have.  They have no desire to take on joint venture partners.  Life is easier for them with only one property, and they want to keep life that way…Easy.

3.  Lack of Knowledge of The Real Estate Market

People might be interested in buying more than one rental property, however, they may not know much about the market they are interested in investing in.  As a result of the lack of knowledge of the market place, people decide to pass up on the opportunity to buy another rental property.

4. Tenants win the battle

Being a good landlord is not easy.  Anyone who has been a Landlord for over 10 years, knows that there are many ups and downs, many great tenants and many horrible tenants.  When a landlord encounters a horrible tenant, it can be enough to break that landlord’s spirits.  Landlords have to deal with non payment of rent, damage to their rental property, just to name a few things.

Having dealt with these difficult situations myself, I have seen first hand how it can take the ‘wind’ out of a landlord’s ‘sails’.  Investors can become ‘deflated’ and nervous to buy another rental property, due to their difficult challenges dealing with a problem tenant.

5. Limited Cash Flow

An investor needs to have cash flow generated from their rental property, in order to make it over the long term.  If an investor owns a rental property that is generating a positive cash flow (Rent is greater than expenses), then this investor is putting themself in a strong position to succeed.

If a property is generating ‘cash flow’, this cash can be used towards paying for:

  • Repairs on the property
  • Paying for vacancy when there is no tenant
  • Carrying the property when a tenant is late on rent, or stops paying

Investors get into trouble when they have limited ‘cash flow’.  Meaning that they do not have enough funds to pay for repairs, vacancy, or paying the expenses when a tenant is late on rent or stops paying.

If an investor’s cash flow is tight, and they are struggling with their first rental property, chances are, they won’t be too thrilled to take on another headache and buy a second rental property.

Having said all of this, do investors successfully buy more than one rental property?

Absolutely.  Many investors do this, all the time.

With some discipline, and running your first rental property like a ‘business’, you too can also manage to buy more than one rental property.

Happy Investing!

Neil

ps: For tips on how to buy your first rental property, please sign up for my First Rental Property email newsletter.

 

 

How To Make Money In Real Estate

Hi There,

If you are remotely interested in real estate, this article is for you…

Many new real estate investors when they buy a rental property feel that they will make a lot of money.

When you buy a rental property, If you do things the right way, you will prosper in the long run.

Unfortunately, many new real estate investors do not get off to a good start when they buy their first rental property.

When your real estate investment is not profitable, it is important to be able to identify this.  If it is not turning a profit, you need to cut ties and sell your rental property.

There are a lot of variables to consider when buying your first rental property.

To learn more about how to make money in real estate, you can listen to my PODCAT called “Dollars and Cents”.  Click on the link below to listen to the PODCAST.

 

CLICK HERE TO LISTEN ———>  Dollars and Cents  <———CLICK HERE TO LISTEN

 

Happy Investing!

Neil Uttamsingh

 

ps: If you are serious about buying your first rental property, I recommend that you read, How To Buy Your First Rental Property Step One

4 Reasons Why You Need A Property Manager

Hi There,

If you are new to real estate investing, one question that you will face is:

Do you manage your rental property yourself or do you hire a property manager.

Valid arguments can be made for both sides.

However, you should know that most real estate investors, are not very good landlords.  As such, if you are not good at being a landlord, you need to get the help of a professional property manager.

Here are 4 Reasons Why You Need A Property Manager.

1) Your Tenant Is Behind In Rent

If your tenant does not pay you on time once, there is a high probability that they will repeat this behaviour again and again.  If they are repeatedly not paying you on time, you are not doing your job effectively as a landlord, bottom line.  As a landlord, you must collect your rent on time.  If you are having trouble with this you need to hire a property manager who will step in and ensure that your tenant pays you on time.  Timely rent collection is an essential skill that you require.

2)  You Have Not Raised The Rent

Many landlords once they have a tenant move in, never raise their monthly rent.  Depending upon where you reside, in most places you can raise the monthly rent  on a periodic basis (often annually).  If you have tenants that have lived at your rental property for several years, and who have not had their rental amount raised, that is not good for business.

As a real estate investor, you are a business operator.  In business, your objective should always be to maximize revenue.  What better way can you maximize your revenue than by increasing your rent?  Increase your rents…bottom line.

If you are afraid to raise your tenant’s monthly rent, step out of the way and let a professional property manager take over as the landlord.  They will be able to give your tenant the proper notice and have them pay the increased amount in rent, guaranteed.

3) You Don’t Like Confrontation

If you are not good at dealing with conflict, you will struggle as a landlord.  Whenever a problem arises with your tenant, you will have to be communicating directly with them.  It may be a problem that is not your fault, however, you have to come up with the solution to it…that is the job of the landlord…

For example, your tenant may call you frustrated and let you know that their washing machine has not been working for 2 weeks.  Further, the washing machine has broken down with a full load of clothes in the wash and that the machine has water in it and is not draining.  Further, they might also tell you that they need the washing machine fixed today, because they are all out of clean clothes and they need to have access to the washing machine to wash all of the clothes for their new born baby.

This is a situation that you have to deal with immediately.  The longer you leave this situation unresolved, the further frustrated your tenant might become.  If you don’t like dealing with frustrating circumstances like this one, you need to have a property manager step in and handle situations like this.  They will be able to communicate with the tenant directly and co-ordinate any maintenance people that may be required to come and fix the washing machine in a timely manner.

4)  You Are Not Good At Keeping Records

Keeping records is actually a very important skill to have as a landlord.  Depending upon how many rental properties you end up buying and depending upon how involved you are with your tenants, you will likely have to keep very detailed records.

Detailed records are required when a tenant has not paid rent.  The tenant is now behind with the rent payment.  A few days from now, they may make a partial payment of rent.  A week later, they may make another partial payment of rent.  Simultaneously, you will have to file the paperwork with your local governing body that deals with Landlord and Tenant Issues.

There is a lot to keep track of when things go wrong with your tenant.  As the landlord, the onus is on you to keep flawless records.  If you are not good at doing this, give up the job as manager of your rental property to a professional property manager.

These are just 4 reasons why someone would need a property manager.  There are many other reasons why you should hire a property manager.  We will leave that discussion for another day!

Happy Investing!

Neil

ps: If you are new to real estate investing and are looking to buy your first rental property, you might also be in search of the money to do this.  Finding money to buy a rental property can sometimes be hard.

The quickest way to find some money so that you can purchase a rental property might be through finding a joint venture partner.

Presenting to a Joint Venture partner is a challenge to a lot of investors.  But when you discover there are only 3 powerful ingredients that influence people to say “YES” to your deals, it’s not so hard anymore.

My friend and fellow real estate investor, Joey Ragona just released a video on this, and it’s awesome: https://rl163.isrefer.com/go/JVPF-intro-direct/SBA45/email

He really simplifies and breaks it down, and explains why MOST investors are wasting their time chasing people who will NEVER give them money. You’ll learn:

  •  Why people say “NO” to your deals
  • The 3 HUGE mistakes investors make when they’re looking for JVs
  • Joey’s 3-Step Presentation Formula ingredients
  • How the 1-Page JV Presentation filters out people who will waste your time

Joey shows you in this video, so check it out before he pulls it down.https://rl163.isrefer.com/go/JVPF-intro-direct/SBA45/email

Enjoy the video.  And take some notes. Don’t worry, there’s no opt-in required.

 

How Much Money Should Your Rental Property Make You?

Hi There,

If you are new to real estate investing you have probably wondered the following:

“How Much Money Should My Rental Property Make Me?”

Do you have any idea?

If you do… good.

If you do not, don’t worry.  I will help you figure this out…

I have a new PODCAST called:

How Much Money Should Your Rental Property Make You?  <——(click here to listen to PODCAST)

You need to listen to this PODCAST if you are new to real estate investing and if you are looking to purchase your first rental property.

Even experienced real estate investors can benefit from listing to this PODCAST.

Be sure to listen…and….

Happy Investing!

Neil Uttamsingh

ps: Please share this post with any family, friends or co-workers who you think will benefit from this information.

pps: If you are truly serious about buying your first rental property, read the most popular article on this blog called, How To Buy Your First Rental Property

When Should You Sell Your Rental Property?

Hi There,

If you are new to real estate investing, I think that you should read this…
Buying your first rental property is a great way to create wealth.
Holding your rental property for the long term is the best way to generate this wealth.
However, as we all know… sometimes things don’t always go as planned.
Some real estate investors who buy a rental property need to sell the property down the road…
I am not an advocate of selling your property just because it is hard work to manage it.
Owning and managing real estate is hard work and you should not give up when the going gets tough…
However, there are a couple of reasons (or situations) in which it makes sense to sell your rental property.
To find out what these 2 scenarios are, you can listen to my PODCAST called:
Happy Investing!
Neil Uttamsingh
ps: please share this post with your friends, family or co-workers who are interested in buying their first rental property.
pps: If you are serious about buying your first rental property, you can read the most popular article on this blog called, How To Buy Your First Rental Property

How Much Money Can A Property Manager Save You?

Hi There,

Recently, I have been speaking a lot about the benefit of using property managers to manage your rental property.  In this post, I will continue with the same.  In my new PODCAST I talk about how a Property Manager can specifically save you both:

TIME

and…

MONEY

Listen to this PODCAST if you are interested in saving time and money and you want to buy your first rental property.  The PODCAST is called:

How Much Money Can A Property Manager Save You?    < —–  (click on the link to listen)

Happy Investing!

-Neil Uttamsingh

ps: please share this post with any friends, family or co-workers who you think will benefit from this information.  Thank you!

pps: If you are serious about buying your first rental property, read the most popular article on the blog called: How To Buy Your First Rental Property