Tuesday, August 18, 2015 / by Extreme Home Selling Team
It doesn't mean that you can make a quick, easy buck flipping properties in a week or two. "Land Sharks" are swimming through EVERY Neighborhood, even the run-down ones, attempting to steal the profit from the very people they claim to be helping!
Sarasota has had its (un)fair share of scammers, schemers, frauds and cheats which is why you need to be diligent when aligning yourself and your finances with a person who will have a hand in your future investments. Like the saying goes, "If it sounds too good to be true, it is..." Read the Market News and be aware of what is happening. Don't bet more than you can afford to lose. Look at the person's background: where did they come from, education, professions, arrest record, etc. Don't be afraid to ask for their information. In this Age of Information, you can discover anybody's background for less than $100. Don't be cheap when it comes to protecting your hundred thousand or million dollar bank account!
You need the guidance of an Industry Expert, someone who has been Buying, Selling, Marketing and successfully Navigating the Dynamics of the marketplace thoroughly professionally AND personally. After all, why would you trust a mechanic who doesn't work on his own car? Chip Deacon has more than 30 years in the Real Estate Industry both in Colorado and Florida. He is an Active Investor who is always searching for a good fit for our Sellers, Buyers and his portfolio. This is how he stays sharp, knowledgeable and on top: by investing his own resources in our market!
Chip Deacon, Certified Negotiator
30 Year Veteran of the Real Estate Industry
With that said, I'll assume you own your primary home. So let's look at the next step: First Investment may be a single family home within a mile or two of your home or within a specific budget. You determine the parameters that will define your purchase. Generally speaking...
- Close Proximity (ease of management),
- Within Budget (low payments),
- Strong Rental Market (positive cash flow), and
- Property Condition (move-in ready).
BUDGET: The Budget is easy: You want to be able to afford it! A general Rule of Thumb is count on only ten months' rent each year as income. The other two months' should cover expenses such as vacancies, emergencies, etc.
MARKET: Always buy in a good neighborhood, preferably one with A-Rated Schools because that is where you will attract Families who pay rent on time and in full! You're running a shelter nor a flop house. If they don't pay, use your state law to move them along to their next best step and out of your income property.
CONDITION: Unless you want to start spending money, look for properties that are in or near to move-in condition, but prepared to pay retail prices. Finding properties that are tired looking may just need paint and carpet cleaning can cost little to buy, little to dress up and rent out for full market price in the end!
Consider buying a Duplex, Triplex or Fourplex also, because the more doors in one building, the lower your overall costs will be! One exterior to paint... One lawn to maintain... and so on. The rent from two units could pay for the vacancies of the third (e.g. the Triplex).
Set each Tenant up on auto-pay via Paypal or similar so you don't have to physically collect rent. Accept First Month, Last Month and a Security Deposit upfront to protect yourself and your property. If they don't make the full month's rent payment at any time in the future, you both know that is their notice that they intend to vacate. Re-iterate it in writing, thank them for their business and begin advertising for the next Tenant. (P.S. NEVER accept a partial payment of rent. It's all or nothing. They will fall behind and you will not be able to evict them for non-payment.)
No Fuss, No Muss, No Head-Aches!*
Adding a Little SHARISMA to Your LIfe...!
*Miss Shepard acknowledges that Property Management is a bit more complicated than stated requiring a written contract and complete understanding between intelligent adults.