Real Estate Investing Articles

When it comes to real estate investing those who are looking for unique methods of investment that are radical departures from traditional methods will be sorely disappointed. No, that does not mean that there are no new innovations present in real estate investing. Actually, new spins on traditional investment strategies are developed by innovative minds everyday. However, there are a finite number of basic methods of investing that have worked in the past, work today and will work in the future. Such is the case with the renovation of a downtrodden home in order to increase its value for resale.

This is a very simple concept: a home that has fallen in disrepair will be acquired at a cheaper rate than one that has been properly maintained. Then, the new owner fixes up the property which will increase the equity of the home. Hopefully, the costs of the repair will be below the equity value of the home making this a quick profit. Then again, a quick profit is not even necessary as long as the value of the home increases over time and this value exceeds all costs associated with the home.

Does this mean the process of repairing a home is easy? No, this can be an involved process depending on your personal situation. So, if you have never entered into this type of repair work then you probably would not want to swallow a project that will require tons of renovation work. Perhaps a home with a few renovation needs would be best to start with such as a home that needs a roof, new aluminum siding or a paint job as individually the costs of these repairs will be less than a collective of all these repairs.

Now, if you are able to perform the repairs yourself you are in a very strong position. For example, if you are able to paint a home yourself the costs associated with this venture will be the raw materials required for painting. If you hire a painting company not only will you have to pay for the raw materials but you will also have to pay for labor. Additionally, if someone else is performing the labor you are not in control of the amount of time required to finish the job. This statement is not designed to dissuade people who wish to outsource their repair needs it is simply designed to place the costs into their proper perspective. It is also designed as a way of motivating those who have the ability to do repair work themselves to get into the real estate investing game.

Many homes in need of renovation are not disaster areas. They simply are the result of benign neglect probably because of budgetary constraints, age of the owner, etc. But someone with the desire to renovate the home and restore its previous grander can do well in real estate investment. It has been done successfully before and it will continue to be done successfully in the future. Let that act as your inspiration.

A.M. Caro is a freelance writer from Southern California.

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Posted by RENVEST under house flipping & real estate investing | No Comments »

Before we look at the value of a number of late night real estate infomercials, it is important to stress that any source of information that is helpful should be commended. If it was not for presence of valuable resource information on a number of subjects then the ability to learn about a subject – and become successful – would not be possible. Now, there are those who say that those who sell seminar tickets, books, and CDs about real estate investing are frauds. The reason they are frauds is because if they were really “smart” about real estate then they would not need to sell books in order to make money. This is about as faulty as faulty logic can get. Well, a baseball player making $10 million a year does not “need” a raise to $35 million, but we have seen a precedent for that. So, it is not absurd to think someone with investing skill would cross collateralize by expanding their empire to informational products. Then again, if they were earning $500,000 a year with real estate and $1.5 million a year with informational products…well, do the math. There is really nothing wrong with informational products that offer significant value.

So, the real question that needs to be asked is the following: does the product that is being sold actually have value? In many cases, the answer is yes, but you don’t need to spend money for it. Much of the information found in a variety of infomercials is actually common knowledge in the real estate business and not really worth spending money on.

For example, there are tons of real estate infomercials that stress the concepts of buying foreclosed properties, flipping properties and renting properties out higher for more than their mortgage payments. All of these concepts are legitimate ones, but none of them are radical and most of this type of basic information can be found for free on the internet. Actually, IN DEPTH information on this subject can be found for free on the internet. But when a person comes across a sales pitch for this information via an infomercial and it is the first time they have come across the info they have a tendency to elevate the product sold on the infomercial to be a little more valuable than it actually is.

If there was one problem, however, with infomercials it would be the carnival hucksterism that many of them profess. For an infomercial to be successful it must convince you that its concepts are exclusive and unique and that you must act fast. Remember, they won’t be buying time on your local TV station forever so if you don’t act fast they are out of luck! And, of course, the infomercials promise a lot of money with little effort quickly. This is the one aspect of real estate infomercials that are especially egregious. You can make a lot of money in real estate, but only with a lot of effort over an extended period of time. That is the true secret to real estate success whether you pay for the truth or not.

A.M. Caro is a freelance writer from Southern California.

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Posted by RENVEST under Real estate investor resources | No Comments »

Real estate investing has always been considered a safe investing plan. Unless you were a “sucker” looking to purchase swampland in Florida, real estate investing was considered a winning strategy because barring unusual events the equity of a home would generally increase. But, the current subprime mortgage crisis has seriously impacted the current real estate investing landscape. However, this impact may actually be good for some people.

Some may wonder if the subprime mortgage fiasco has had a massive negative effect on the real estate investment market. Well, it would be foolish to assume that all the bad publicity generated by the subprime mortgage crisis has had a ripple effect on real estate investing. The prices of houses have fallen dramatically and loans have proven harder to secure. However, this can be considered a blessing as opposed to a negative.

First, let’s get something straight right off the bat: people are still buying and selling real estate. Yes, the subprime mortgage crisis has had a dramatic impact but it has not had such an impact that it has ended real estate transactions all together. So, as long as the real estate market has not completely collapsed and buying/selling real estate has become a thing of the past, you can always find an avenue for earning income in real estate. Barring something along the lines of the Bolshevik Revolution where the government seizes all land you will still have real estate investment options available. Therein, lay the key here: real estate prices will invariably rise in the future. If you are able to weather the storm until it reverses course you will be able to come out of the depreciation problem the subprime mortgage crisis created.

Here is a fact: if you currently do not have a subprime mortgage, and do not have a property that is being foreclosed upon, then you are not feeling the brunt of the crisis. If the equity of you home has fallen because of the ripple effect of the crisis but it is still more than what you paid for it, then you still are ahead of the game. In fact, when the real estate market eventually makes a comeback you will probably regain some if not all of your lost equity. In fact, you may even discover your equity increasing again depending on how much time passes. Patience here is the true key to success.

Additionally, you could even use the current subprime mortgage crisis to your advantage in the sense that this is currently a buyer’s market. This can give you the option of buying real estate in short sales, foreclosures or through other avenues which would provide a cheaper acquisition price. If you are able to purchase these homes on fair fixed interest rates, and not with interest only mortgages, no down payment loans and other such nonsense, you probably will avoid a host of problems that the subprime crisis has yielded. In a way, you could even airlift an old worn out cliché and apply it to this situation: “one door closes and another door opens.”

A.M. Caro is a freelance writer from Southern California.

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Posted by RENVEST under mortgages & real estate investing | No Comments »

You can put the blame for the concept of restricted land use and zoning laws directly on the Manhattan skyline. Almost a century ago, in 1915, when the Equitable Building’s 42-story shadow cast almost seven acres of land into perpetual gloom, New York City residents started complaining about property devaluation (and haven’t stopped since). A year later, the first zoning laws were enacted, and have since changed numerous times to accommodate an ever burgeoning populace.

The real estate investor who does not know or understand the zoning laws for the area in which the investment or rental property lies does so at his own risk. Laws vary broadly from city to city, even within the same county. The intention of zoning laws is to help property owners and their tenants to peacefully co-exist, with the full backing of the law.

But zoning laws can and do change over time, and an investor should understand that what a tenant may or may not legally do today, may not be the case in the future. In some instances, the misbehavior of your renters, especially if you are the owner of a multi-dwelling complex, can generate complaints to zoning officials, resulting in changes to the existing laws. You, as the property owner, have the obligation to ensure and enforce the applicable zoning laws.

What you can do:

First, be aware of the zoning laws yourself. Contact the local planning board, and get a copy of the statutes, even before you purchase a property for rental usage. Consider how possible changes to the zoning laws might affect you.

Second, clearly understand the demarcation of zones; as urban sprawl continues to spread, you may find that a potential rental property complex is actually in a zone designated for commercial use. That may be a risky investment; if it was brought to the attention of the Planning Board they have every right to deny its continued use as a residential property. While you might think you can apply for a variance after the fact, the big “what if” should be foremost among your considerations.

Third, advise your tenants, in writing, that the property is zoned for residential occupancy, and a home-based business may not comply with the zoning requirements. All tenants should seek permission from you first, and not just assume that because they’re “quiet or won’t bother anyone,” that it wouldn’t be a problem.

Fourth, zoning laws are not written in stone; there are circumstances which may warrant a variance, which is an exception to the existing law, or for an application for zoning change. The approval of a variance to existing zoning laws is generally simpler to obtain, usually requiring only a statutory review of the specified criteria. On the other hand, a zoning change application is a lengthy procedure, since you are suggesting that the highest and best use of the property is other than the one it’s designated for. The appeal for re-designation may test the resources of the property owner, both in terms of time and money. Under either the request for variance or the zoning change, a property owner should be prepared to argue his point in front of a public hearing of the planning board, and be ready to refute any opposition.

Residential zoning laws can be a major obstacle for property owners and investors, but provided that you’re aware, up front, of what you can and can’t do with your property, you won’t be caught in a property zoning nightmare. Property owners must be proactive with respect to the zoning laws, and should bear in mind that what they assume to be the legal permitted use of a particular, potential investment property, may in actuality be an illegal use of the property. That wonderful duplex you visited at an open house, and have your eyes (and hopes) set on, may be zoned for single family dwelling. The onus is on you to verify that information before you buy. “I didn’t know,” won’t carry much any weight, with the local zoning board.

Barb Zigah is a freelance writer covering real estate and business topics.

If you are interested in reprinting this article on your website, newsletter, forum, printed publication or other communication medium, please consult our article licensing policy.

Posted by Barb Zigah under due diligence & real estate investing | 1 Comment »

The typical real estate investor may be a “jack of all trades,” but that doesn’t necessarily make him successful, it just makes him tired. The successful investor knows that in order to succeed, he has to surround himself with people who are smarter than he – those individuals very knowledgeable in the business and with a good track record. That’s a proven concept, employed by successful businessmen as well as politicians (though not necessarily “good” politicians, just successfully elected ones).

The key to establishing a great team is to put together players who are successful in their own right or have the potential to succeed. Your real estate investment team can have as few or as many individuals as you need – unlike a sports team where you can’t exist without your pitcher, power forward or wide receiver, you can get along with only a couple of players and still succeed.

First String Team Members

Investment Advisor or Certified Financial Consultant – This individual is going to manage your entire investment portfolio, ensuring that the retirement goal that you’ve set remains in focus at all times, and makes recommendations towards achieving that goal. He should always have your best interests at heart.

Real Estate Attorney – A good attorney is invaluable for reading, drafting and understanding legal contracts, knowing the legality of your property deals, and understanding the laws in the state or community in which you own the property.

Certified Public Accountant – Your number cruncher should be well versed in real estate-related accounting transactions. He’s going to be your go-to guy when tax time comes around, and you’re wondering about your deductions and write-offs. This individual may also be an excellent source of referrals for property acquisition.

Real Estate Agent – Unless you have access to the latest MLS updates, your realtor will be your best asset, alerting you to new properties coming onto the market; a realtor with BPO (broker price opinion) experience, provides even more of a benefit.

Traditional Lender or Mortgage Broker – Face it, you can’t do anything without financing; you need to know where or who to turn to for the amount you need, at a competitive interest rate as soon as you find a property.

Insurance Agent – For an investor with a good number of properties, your agent can help you set up policies, advise you to ensure that you have adequate protection at all times, and help you through the red tape of filing a claim.

Title or Escrow Agent – This individual will make your property closings infinitely smoother and relatively stress-free. A competent agent will ensure that your transactional information is accurately recorded, and that you pay only the appropriate fees. They should be looking out for your best interests.

Second String Team Members

Property Manager – When you can’t be everywhere at once, and find the day-to-day tasks of numerous property ownership overwhelming, a qualified property manager will be the best option to run the operation on your behalf, leaving you time to pursue other opportunities.

Property Handyman – A handyman kept on retainer may be a good alternative to a property manager; however, they should have a basic knowledge of what makes a home tick and be available to fix minor repair needs. Your goal is to hire a Ty Pennington or Bob Vila, not a “Tim ‘the Toolman’ Taylor” from the old television comedy, Home Improvement.

Contractors – If you are beyond the need for basic home repairs, and intend to buy and flip properties that may need some “updating,” you need a reputable contractor to assist you with ongoing and new projects. Finding a contractor that contains costs, works to specs, and finishes within the agreed time, is crucial.

Finally, though not officially part of your team, they are the ones who are your real support: your family, friends and mentor. Without their encouragement, would you really be where you are today?

Putting a successful team together may take some time, and it’s important enough a concept that you don’t rush or “settle” for just anyone. Where do you find your team players? Some you may already know, but see them in a different light – as a member of your community, swim club or religious affiliation. You need to ask around, pass around your business cards, get referrals and then interview your candidates.

It’s important to remember the immortal words of the great philosopher-cum-basketball player, Kareem Abdul-Jabbar, “One man can be a crucial ingredient on a team, but one man cannot make a team.”

Barb Zigah is a freelance writer covering real estate and business topics.

If you are interested in reprinting this article on your website, newsletter, forum, printed publication or other communication medium, please consult our article licensing policy.

Posted by Barb Zigah under Real estate investor resources & due diligence & real estate investing | No Comments »

Real estate investors may, like many others, believe in the adage, “if you want something done right, then you’ve got to do it yourself.” Generally, that’s true, but at some point, a real estate investor may have too many properties that make the efficient and profitable overseeing of those properties, without the use of a property manager, next to impossible.

The twelve sure-fire signs that you need to hire a property manager to care for your investment properties are:

1. You’ve brought an exterminator to the property on Peterson Street to fix an electric ceiling fan, and you’ve brought an electrician to the property on Peterson Avenue to eliminate a pest problem. Your little mental mix-up resulted in two relatively happy contractors, each of whom charged you for two house calls, and two bewildered tenants, wondering what happened?

2. You’ve been so busy that you forgot to collect the rent in one of the properties you own, and now the tenant informs you that they’ve spent the money and will be late getting it to you.

3. You don’t schedule the new delivery of home heating oil in preparation for the upcoming winter and your tenants are calling to ask you how to light a fire in their fireplace… their faux fireplace.

4. You forgot to run a background check on a potential tenant, and they turn out to be serial evictees with a page full of judgments against them on their credit reports.

5. You don’t panic when the phone rings at 2:00 in the morning, worrying that it’s a family emergency; instead, you mutter an expletive before you answer the call, knowing it’s a tenant with a property-related issue (and not necessarily an emergency).

6. You feel bad about raising the rent, and guiltier still if you have to perform an eviction, because you allowed yourself to get caught up in the drama that is your tenants’ lives.

7. You don’t have the time to inspect your properties on a quarterly basis, much less a monthly one, and the majority of the properties are less than an hour’s drive from your office.

8. Your spouse and/or your kids are complaining that your tenants see you more than they do, and you’re neglecting the maintenance of your own property, because you’re exhausted from your handy-man duties.

9. Several of your properties are vacant, and the word-of-mouth marketing scheme and the FSBO signs you planted on the front lawns are just not working.

10. You have no idea what your local, state or federal landlord/tenancy laws require and whether or not you’re in compliance (“Tenancy law? What tenancy law?” and “Fair Housing Act? What’s that?”). Ignorance of the law is not an excuse.

11. You’ve kept your repair receipts, invoices, insurance policies, tenant application forms and all property related documentation in a big box underneath your desk; at the end of the year, when you need your financial statements prepared, you hand the box to your CPA and he starts to cry.

12. You’ve got no back-bone when it comes to confronting your tenants about NSF checks, noise related complaints from the neighbors and/or police, late rental payments and poor property upkeep. You put off the confrontation until you’ve mustered up enough courage, and then begin your conversations with, “Umm. I really hate to bother you…”

It’s true that no one will love your properties as you do, certainly not your tenant and probably not your property manager, but it is in your property manager’s best interests (after all, he does get paid to do this) to keep your interests at heart. Trust them to know the best way to maximize the income that your property can generate, while minimizing the risks of vacancies, non-paying tenants, property damage and loss of property values.

Let your property manager handle the (sometimes unreasonable) demands of the tenants, the middle of the night phone calls, the confrontations and the evictions. Your property manager will also have the responsibility of preserving and even enhancing your properties, through regularly schedule maintenance and landscaping , alerting you to potential problems before they become serious and costly, and handling the day-to-day minutiae that is so time consuming, such as collecting the rents, and paying the bills, utilities and taxes. When and if your property becomes vacant, the property manager’s role is to market your vacancies, help you to set your rental prices reasonably and fairly for the market environment, and run the background check on all potential tenants.

What’s your responsibility, as the property owner? Ultimately, everything is your responsibility; it is, after all, your property. Provided that you’ve chosen a competent, qualified and responsible property manager, though, you’ll spend less time involved in your properties, leaving you more leisure time to spend pursuing the things that you love. Really, wasn’t that the reason that you got involved in real estate investing in the first place, to have time to enjoy life?

Barb Zigah is a freelance writer covering real estate and business topics.

If you are interested in reprinting this article on your website, newsletter, forum, printed publication or other communication medium, please consult our article licensing policy.

Posted by Barb Zigah under Real estate investor resources & real estate marketing & rentals | No Comments »

It’s a statistical fact that almost 90% of potential home buyers start their search for their “dream home” on the Internet, and 72% of those Internet users drive past a home that they first saw online. According to Realtor.com, virtual tour listings get “hit” 40% more than ordinary listings. All of that leads to one conclusion, and the savvy real estate investor understands that they need to move beyond the traditional still (ho hum) photographs of the house and property, and create dynamic video that really conveys a property’s potential. These “virtual tours” are an ideal medium to draw that buyer to you, from anywhere in the world. Though still a rarity, it is not unheard of for a home to be bought entirely over the Internet, (physically) sight unseen, usually by individuals or families relocating from another area of the country, or even from another country.

Selling property the old fashioned way, via print media and weekend scheduled “Open Houses,” were fine in their day. But newspaper classified advertisements, and listings in the “Take One Free” brochures invariably found at bus and train stations, as well as 24- hour convenience store magazine racks, had a very limited (i.e. local) reach. Even in seller-favorable market environments, the period from listing to closing could take several weeks and even months.

The real estate investor, as the property seller, can benefit tremendously from virtual tours. The primary advantage is exposure — your property is available for viewing all day, every day, to people in your neighborhood as well as half way across the globe. For the vast majority of home buyers, the time factor, coupled with the ever rising cost of gas, is enough to keep them home sitting behind a desk and exploring the available real estate listings online. The virtual tour eliminates those buyers who aren’t serious – you’ve probably heard of them, they’re “professional” Open House visitors, who do it just for sport (and the cookies), and who relish the opportunity to inspect every nook and cranny (and kitchen junk drawer) of a potential new home.

Another advantage, arguably more important than exposure, is that listed homes with virtual tours sell for more money than comparable properties with only static pictures, sometimes by as much as ten percent.

Having access to a video camera, video editing software and a You Tube account doesn’t necessarily give you license to create your own virtual tour. Nor should you attempt to create your own virtual tour just to save a few bucks. That’s not to suggest you couldn’t do this, but any attempt to do so should be objectively judged, by you – because it will be, and perhaps harshly, by the visitors who view it and immediately click out of it. There are several do-it-yourself kits and packages that will help you create a successful virtual tour.

Some individuals have no picture taking skills whatsoever; they are generally the ones who tend to decapitate their subject, and wouldn’t know an F-stop from an O-spot. For those people, the answer is a professionally created virtual tour. Prices vary, but generally the package is well worth the investment. A professionally created virtual tour should also provide you with the ability to link to external sites, such as search engines, blogs, real estate portals, etc. Furthermore, your virtual tour should offer tracking options and site meters, so that you can see which room or features appears to be most relevant to your site visitors.

At a bare minimum, a virtual tour should have these components:

• Simple navigation – is it easy for your visitors to “walk around” the property, find a specific room or zoom in on something special?

• 360º Images – Some rooms and exteriors warrant a panoramic view, just to capture its innate beauty; you don’t want this for every room, just for the ones that you feel can best “sell” the property, perhaps because of their size or their unique qualities.

• Narration, Audio and Sound Track – You don’t need hokey background music, but you should have compelling voice-over dialogue written, so that you can walk your visitor through the rooms, and point out features and modifications that might otherwise be missed. A word about voice-over, if you’re creating your own virtual tour, listen to yourself on audio tape before you take on the role of narrator; the voice you hear is the voice everyone else does, and it may not be as melodic as you think.

• Load time – Internet users love speed, and if your virtual tour takes forever to load, you’ve lost a potential home buyer.

The virtual tour is a win-win situation for both the real estate investor and the home buyer. Think of it as a “Cyber Open House,” minus the refreshments, of course.

Barb Zigah is a freelance writer covering real estate and business topics.

If you are interested in reprinting this article on your website, newsletter, forum, printed publication or other communication medium, please consult our article licensing policy.

Posted by Barb Zigah under real estate agents & real estate marketing | 1 Comment »

Your potential buyer has just pulled up in the realtor’s car. Quick! You only have one chance to make a good first impression, and a potential buyer makes the decision as to whether or not they’re interested in the house within the first 8 seconds of seeing it. So, what do they see when they pull up to the curb in front of your house, even before they alight from the car? Is it a (curb) appealing view? Or do they see window shutters with peeling paint, chipped wrought iron railings, dirt encrusted aluminum siding, patchy brown grass, the remnants of a vegetable garden and the kids’ bicycles and skateboards lying scattered in the driveway? If your answer is yes, then you’ve just lost a sale.

Staging your home for sale is a two part job: inside and outside. Your outside has to be as inviting as your home, because it’s a part of your home. So stand back, and open your eyes. What it will take is probably no more than a pressure washing, a little painting or touch-ups here and there, and a weekend’s worth of landscaping. Your destination should probably be your local home improvement center, where you can get everything you need complete the task.

Let’s look at some of the basics to getting your yard and the outside of your house, properly staged.

Declutter the yard – Remove all trash cans, bikes, building materials, garden fertilizer and the like and stow them neatly in your garage.

Eliminate unnecessary junk – Put away the plastic lawn chairs and tables, the kiddy pool and even the barbecue grill if it’s greasy and nasty looking. If you’ve got a car on your property waiting for rehab, now is not the time to leave it languishing – garage it, donate it or junk it.

Cut back the jungle – Prune or pare down all shrubs, trees and plants, especially those situated directly in front of your house. They should enhance the look of your house, not block a potential buyer from looking at it.

Basic yard maintenance – Depending on the season or need, ensure that your lawn always stays well mowed, weed-wacked or raked, and that your flower or vegetable gardens are well tended and neat. Mulch or fertilize to encourage healthy, vital looking plants.

Clean up the property – Pressure wash dirty aluminum siding or even sooty brick, as well as driveways, decks and patios.

Fix or replace damage – Take a good look at your driveway and walkway. Are there cracks or holes, oil stains, patches of grass coming up between the pavers? If they are beyond the need of a little patch work or a lot of scrubbing, consider having them replaced.

Make it colorful – Consider buying vibrant colorful annuals, and plant them in decorative planters, window boxes or along walkways, or flanking an entryway. A new mailbox, house numbers of hardware are inexpensive touches that translate well.

Scrape and repaint – Freshen up anything that looks dingy or has peeling paint, such as wooden shutters, window trim and railings, and most especially, the entrance way door — it needs to be inviting and welcoming.

Brighten up – Buy and install some solar lighting for night time showings; solar lights are more efficient than ever, easy to install, reposition and remove.

Decorate for the season – Don’t hesitate to pull out a couple of seasonal or holiday trimmings, but nothing should be garish or overwhelming. A holiday wreath or trim on the front door, white lights, a jack-o-lantern, they’re to be expected – you don’t want to create a haunted house or Santa’s workshop.

Real estate agents estimate that, with landscape staging, a seller’s return on investment is between 300 and 400%, depending on the area of the country your property is situated in. That $300 or $400 you “invest” at the home improvement center translates into more than $1,200 on your return. That’s a nice net profit.

If you don’t take it upon yourself to make this kind of “investment,” one of two things will happen. Either your potential buyer will reject your house outright or counter offer your asking price. And it won’t be just $300 or $400 less; no, they’re going to shave a few thousand dollars off of your asking price.

In any economy, especially one that favors a home buyer, you need to add the little touches that will make a house a home, even before your buyer signs the contract.

Barb Zigah is a freelance writer covering real estate and business topics.

If you are interested in reprinting this article on your website, newsletter, forum, printed publication or other communication medium, please consult our article licensing policy.

Posted by Barb Zigah under Real estate investor resources & real estate marketing | 1 Comment »

It doesn’t matter what you call it — “a little sprucing up,” “adding some curb appeal” or “home staging” – the numbers don’t lie. A home that’s been “staged” sells, on average, within one month, while an unstaged house, takes almost 6 months to sell. And if that wasn’t enough to convince you, a staged home often sells for the asking price. In any economy, especially one that’s experiencing a downturn, that’s not too shabby.

So, what is staging? On a very elementary level, a staged house is one that is de-cluttered, with furniture rearranged for easy access and pass-through, and simply but elegantly accessorized. Staging is a way of decorating your home so that when your potential buyer first enters, they immediately get the sense, subliminally, that this house, above all others, is the one.

Every seller wants to show their home in the best possible light. Only a decade or so ago, that simply meant keeping the house and yard clean, neat and presentable at all times, just in case the house was being shown to potential buyers. Now, homeowners are recognizing that their “comfortable, lived-in” look doesn’t sell. And professional stagers are cashing in on that recognition, big time. In North America alone, there are over 20,000 professionals belonging to the Real Estate Staging Association, and that doesn’t take into account Realtors who have certification in staging.

Professional stagers are not simply interior decorators; they are trained to create a warm and welcoming atmosphere, by minimizing a home’s flaws, through depersonalizing and de-cluttering the evidence of human existence, while emphasizing improvements to the property and landscape as a means of adding value. Excuse me? In simple language, they get rid of the junk, and make the most of what you’ve got. If you’ve got nothing or an empty house, they can take care of that, too. Many stagers have access to furniture, rugs, accessories and all manner of decorative household item, and for a fee (of course), can strategically place them in your empty home.

Staging doesn’t have to be expensive; you can get a basic consultation from a professional, who will charge by the hour, and make recommendations that you implement. Fees start at $75 per hour and upwards. For a pull-out-all-the-stops home staging, including provision of furniture and accessories, it might run as high as $4,000. But before you roll your eyes and close this tab, consider this, the return on your staging investment can be as high as 300%, but is almost never less than the initial cost.

It’s possible to stage your home yourself, provided you can be totally objective. The best way to do this is to take pictures of the rooms in your house, both during daylight hours and at night time, and take a good, honest look. Pretend that it’s not your property at all. What would and could you do differently? If you’ve got a friend whose decorating style you’ve always admired, why not ask for their help, as well?

There are some basic steps to staging your home, and getting it ready for sale. Most of them are do-it-yourself jobs, requiring little money, and a little more time.

Reduce clutter – Clear your house of “almost” everything that’s unnecessary; box it and pack or give it away… you’re moving anyway, right? You needn’t pack it all, though, this is still a home, and a “few” personal pictures or a couple of stand-out pieces of a favorite collection will add warmth.

Streamline – Keep only your “essentials” in your essential rooms, such as your kitchen and bathrooms. A potential buyer doesn’t need to know your preferred brand of deodorant.

Reorganize – Move furniture around, if necessary, to create a natural flow or walk through. Too much furniture in a room tends to make the room look smaller, so if you’ve got excess, stash it elsewhere.

Refurbish – Scrub, clean, paint, patch or polish your walls, floors, ceilings and windows. A bucket of soapy water, a can of white paint and some elbow grease may be all you need to revitalize a room.

Let the sun shine in – Open up the drapes and blinds during the day, and be sure you’ve turned on all of your ambient lights whenever the house is being shown in the evening.

Setting the mood – A couple of lightly scented candles (don’t overdo it, it’s a shrine) and music playing softly on your stereo (no hip-hop, rap or opera); if appropriate, light a fire in the fireplace. All of these are subtle but welcoming touches.

Individually, all of these are small, easily attainable improvements. Combined, they’re powerful enough to send the subliminal message that you want to convey: That this is your dream home.

Barb Zigah is a freelance writer covering real estate and business topics.

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Posted by Barb Zigah under Real estate investor resources & Uncategorized | 2 Comments »

A private REIT offers investors the opportunity to gain large profits in non liquid real estate investment trust.

A REIT is a solid vehicle for allowing those with limited capital to invest in real estate. REITs are essentially mutual funds that invest in the purchases, management or even financial lending for real estate investing. There are two further categories of REITs. The first is a publicly traded REIT which is available on the stock exchange and then there are private REITs that are not publicly traded. While most people have a clear idea of what a publicly traded REIT entails their understanding of a privately traded REIT may be very limited. This is why a clearer understanding of what a private REIT entails is needed so as to know whether or not this is the right type of investment for you.

A private investment, whether it is a REIT or some other type of investment, is an investment into a business for an extended period of time. The payments to the investors will be dividends over a period of time based upon either the profits or gross revenue of the investment. Here is an example of how a private REIT works: you are required to invest a minimum of $35,000 into the REIT and this will cover the “life” of the REIT which is, say, seven years. Your dividend residual income will be 3.5% gross over the course of seven years. That means the REIT must turn a profit of $1 million dollars in seven years for the investment to break even. If it earns a $3 million dollar profit in three years then you have tripled your initial investment in seven years which would be a colossal investment. However, if seven years go by and it becomes obvious this is a money losing venture…you are stuck. Since it is a private REIT you can not sell your shares in the manner of a publicly traded REIT.

This is not, however, a scam. When you invest in a business the business can not allow you to pull your money out because that would tank a business. If you promised a small child $1000 to run a lemonade stand for a year and asked for your money back after three months the lemonade stand would likely have to close shop. A private REIT follows the same logic. If you make an investment you are locked into it because providing the ability to pull out the investment would de-fund the business. This makes it an unsuitable investment for anyone that needs short term liquidity of their investment funds. But, it is also what makes a REIT a potentially huge investment as a successful private REIT could yield a huge windfall profit.

Let it be known the main benefit of a private REIT is the fact that it may end up paying a far higher interest rate than a publicly traded REIT. However, it is a far, far riskier venture. You can think of a private REIT investment as an investment in a real estate business. A private business is generally riskier than a publicly traded stock, but also offers a greater opportunity for gain.

A.M. Caro is a freelance writer from Southern California.

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Posted by A.M. Caro under REITs | No Comments »