Complete Guide to Real Estate Investing and Management

Review-Stars-4-5 - LearnedGold.Com 4.8 (Rating) – This free guide is your comprehensive manual on “How To Become A Real Estate Pro”. Whether you’re a buyer, seller, or investor, this is your go-to guide. As you get into the Real Estate space (whether for personal or business use), there are many questions that you will need answers to. This is where we come in with our Complete Guide to Real Estate Investing and Management. Here is where you will get the answers you need. Enjoy.

Complete Guide to Real Estate Investing and Management - Guide Summary show

1. Purchasing (Buying) a Real Estate Property

Complete Guide to Real Estate Investing and ManagementHow to Find a Good Real Estate Agent?

  • You should always reach out to friends and family to get referrals and recommendations from them.
  • Start visiting and attending open houses to meet new Real Estate Agents.
  • Research potential candidates online and interview them over the phone or in person to weed out the bad ones.
  • Trust your instincts because you need to choose an agent you can trust and totally relate with.

How to Choose a Good Real Estate Lender?

  • If you have friends or family that own homes, chances are that they have a preferred lender that they have been working with. Not every financial/credit situation is going to be the same, but generally speaking a good lender will be able to either help you or point you in the right direction to a different lender that can assist with your particular case.
  • Make sure to check online reviews and listings for as many lenders as you possibly can. If you get recommendations from friends/family, still do your own DD (due diligence) to make sure that this individual lender makes sense for you.
  • Do your research and ask as many questions as possible.
  • Get pre-approved by as many lenders as possible. This is a good bargaining chip when trying to negotiate a better interest rate, money down etc.
  • Understand the fine prints of lenders (basic requirements and details). You should make sure that you become extremely versed in Real Estate lingo and laws in order to protect yourself.

How to Choose the Best Real Estate Loan for You?

  • Calculate how much mortgage loan you can actually really afford.
  • Find out the duration you’d like to pay the loan for, e.g., 15 years, 30 years.
  • Understand the interest rates and let that help determine which loan you choose.
  • Consider the requirements of each lender and choose the loan that suits you best.

Visit Open Houses and Look Around – Complete Guide to Real Estate Investing and Management Contd.

Open House - LearnedGold.ComVisiting open houses affords you the opportunity to look around and properly explore a house. You should try to visit as many houses as possible. Aside from seeing the house itself, open houses also give you access to realtors and real estate agents who could help sort out your real estate needs.

Home Inspections

  • You should always get a home inspection completed on a new home that you are looking to purchase. Home inspections are kind of like car inspections. They make sure that there are no issues with the property.
  • Home Inspections can potentially save you thousands (if not hundreds of thousands) of dollars in finding repairs that could end up being super costly.
  • A Home Inspection will typically cost you between $300-$500. It is well worth every penny to have a peace of mind.
  • Here are some of the things that home inspections cover: structural damage, roofing problems, electrical wiring issues, poor attic ventilation and insulation setup, plumbing issues, poor drainage and grading problems are the home and many more.

Making a Good & Proper Offer

  • Make sure to do your own research about the current market home prices. Also, do a good job of checking out the home itself for any issues that you could use as a bargaining chip.
  • Once you establish a good relationship with your Real Estate agent, have them communicate your offer-to-purchase with the seller of the property (or their real estate agent).
  • Once offer is received by the seller, they can then accept your offer, counteroffer, or decline your offer altogether.
  • After hearing the seller’s feedback, you can also counteroffer, accept, or decline their proposal.
  • Once both parties (you and the seller) reach an agreement, the deal is sealed. You sign all the necessary documents.

2. Selling a Real Estate Property

Interview & Select a Good Real Estate Agent

Choosing a real estate agent is a very crucial step in purchasing a home. Since you’ll be spending a considerable amount of time with a Real Estate agent, it is important that you choose the best one. Interviewing multiple real estate agents and asking the right questions would help you determine which one of them is the right match for your situation. 

How to Determine a Reasonable Selling Price for your Home

  • Compare prices with neighboring homes.
  • Work out a pricing contingency plan. 
  • Consider the square footage of your house. 
  • Consider additional closing costs, such as inspection fees, title insurance, etc.
  • Consider your agent’s advice on pricing.

How to Prepare your Home for Sale

RE For Sale - LearnedGold

  • Ask your friends and family members for advice on what kind of improvements your house could use to help you entice the right buyer.
  • De-clutter and paint your house with neutral colors so the buyers can focus on the actual home and not the walls.
  • Improve and renovate where necessary.
  • Make your house look ‘homey’. Everyone becomes more relaxed when they are in comfortable surroundings.
  • If possible, improve and do things to help the special features of the house stand out more.
  • Lighten up your house. Try to have as much sunlight as possible when people come for a house viewing. Make sure your home has a nice smell to it, nothing too strong but pleasant.

How to Market your Home

  • Take good pictures and videos of strategic places in and around your house. Focus on the things that really stand out on your property. 
  • Advertise on social media platforms; you could even create a social media advertising campaign.
  • Put up the for – sale sign at your house. Your real estate agent tends to do this for you.
  • Ensure your house is featured on major online listings.
  • Advertise on other print media ad platforms e.g., newspapers, fliers, etc.

How to Negotiate with the Home Buyer on Price & Repair

  • Ask the buyer to help meet you in the middle somewhere to help with the repairs.
  • You could also ask for credit for the work to be done, and this might help your closing cost.
  • Suggest a small reduction in sale price if you are to handle the repairs.
  • Back out or move on with the deal, depending on the results of the final agreement.

To learn more tips and strategies about real estate, continue reading this Complete Guide to Real Estate Investing and Management.


3. Best Real Estate Listings Websites

Which Real Estate Websites have the Latest Listings?

Real Estate Websites LearnedGold

Here is a collection of a few pretty good websites that service Global as well as niche locales.

  • zillow.com
  • realtor.com
  • trulia.com
  • redfin.com
  • realestate.com.au
  • rightmove.co.uk
  • funda.nl
  • idealista.com
  • suumo.jp
  • cian.ru

Which Real Estate Websites To Use When Looking to Purchase a Home?

Here are some of the best website sites when looking to buy a home:

  • Zillow.com
  • Realtor.com
  • Redfin.com
  • Trulia.com
  • MLS.com
  • CENTURY 21 Real Estate
  • RE/MAX
  • Coldwell Banker Realtor
  • HomeFinder
  • Craigslist

Which Real Estate Websites are Best for Selling a Home?

Are you in the market to sell a home? Here is a nice list for you to look through. As you will have noticed by now, most of the well-established RE (Real Estate) websites out there are the go-to resource as they have the biggest viewership available. But, do not be scared to throw your ad on some of the smaller ones as well. You really never know if that buyer that wants to pay $100K above your asking price might come through there (instead of coming through the Zillow’s of the world).

  • Zillow.com
  • Realtor.com
  • Redfin.com
  • Trulia.com
  • Homefinder.com
  • Trulia.com
  • Homes.com
  • Realestate.com
  • Forsalebyowner.com

4. All About Real Estate Investing – On This Complete Guide to Real Estate Investing and Management

Is Real Estate Investing Right for you?

Real Estate Investing - LearnedGoldYes! Investing in real estate is one of the best investment options that one can choose, and it is also a great way to store away your money while building wealth. Real estate type of investing is really profitable since it utilizes long-term investment strategies. There is a very good probability that the value of your home(s) can increase subsequently. This in turn implies a consistent cash flow for you year-round. 

What are the Different Real Estate Investment Property Types?

  • Residential Real Estate 
  • Commercial Real Estate
  • Industrial Real Estate
  • Land

What are the Different Real Estate Investing Strategies?

  • Buy to rent (Rental properties)
  • Fix and Flip houses
  • Buy and Hold
  • Investing in REITs (Real Estate Investment Trusts)
  • Real Estate Wholesaling

What Type of Loans can you get for Real Estate Investing?

  • Fix and Flip loans
  • Conventional mortgage loans
  • Private money loans
  • Commercial investment property loans
  • Home equity loans 

Taxes in Real Estate (Save, Delay, Avoid Paying Taxes Strategies)

There are two major types of tax you are expected to pay like a real estate investor, and they are:

  • Property tax
  • Capital Gains tax

To avoid having to pay these taxes, do the following:

  • Hold properties for more than a year.
  • Live in the property for two years.
  • Carry out an installment sale.
  • Depreciate your property.

Create a RE Investing Dream Team (For your Business)

You can’t do it alone as an investor; you need a team to make the whole process of investing easier for you. This team of professionals would help inform your decision on what to do or not to do. Professionals like a loan officer, an escrow officer, a real estate professional, etc. would provide you with top-notch information and insight to guide your final decision. 

Make an Offer on a Property (Short Sale, Foreclosures)

Make an offer - LearnedGoldA short sale involves you selling a home below the amount of money you owe on the mortgage. One possible reason as to why a seller would sell a house short, is because the house might have depreciated in value. Foreclosure on the other hand occurs when you stop making payments on your home, and after several months, your lender would file a notice of default to inform you that foreclosure proceedings have begun on your home. A house is basically taken away from the person that is no longer making payments and sold for a fraction of the total worth of the home.

When making an offer on a short sale or foreclosed property, it is extremely important that you understand the basic details of both processes because they are more complicated and exhausting than closing a deal on a property in the open market. 

Complete Guide to Real Estate Investing and Management contd.


5. Commercial Property Real Estate Investing

How is Commercial Real Estate Different?

Commercial Real Estate is different in a lot of ways because it offers more financial rewards, and unlike residential real estate, it is used for a broad range of businesses. Commercial real estate properties are usually used to generate a profit either from rentals or capital gain. Examples of Commercial real estate properties are medical centers, offices, hotels, churches, warehouses, etc.

What are the most Common Commercial Real Estate Types of Properties

  • Small Offices – urban or suburban
  • Retail Spaces – shopping centers, regional malls, community centers, etc.
  • Industrial Spaces – heavy manufacturing, warehouse, etc.
  • Multifamily Living Spaces – high-rise apartments (100 units and above), midrise apartments (30 – 110 units), garden apartments (50 – 400 units)
  • Hotels & Motels – limited service, full service, extended stay
  • Special purpose real estate – churches, amusement parks, bowling alleys, etc.

Why Invest in Commercial Real Estate?

Commercial Real Estate - LearnedGoldThere are many reasons as to why people invest in Commercial Real Estate. The main reason would be that most everyone out there wants to turn a profit and begin building wealth. A few more reasons you should invest in Commercial Real Estate are:

  • High appreciation of properties over time.
  • Reduced property risk.
  • Certain tax benefits.
  • Your investment also thrives during ‘inflation’ periods.

Some Important Commercial Real Estate Terms to Know

Always important to know a few terms when it comes to your investments. Please take a look at the terms that we included in our Complete Guide to Real Estate Investing and Management below.

  •     Usable Square Footage

The amount of space that is available for use in commercial real estate property. This has to do with the amount of working space you have

  •     Rentable Square Footage

This refers to the total amount of space, including any shared space.

  •     Sublease Clause

This permits or prevents a tenant from subleasing their space to another individual or business.

  •     Escalation Clause

This explains the amount at which the rent would increase annually.

  •     Right of First Refusal

With this, the tenant is able to accept or decline any additional space the landlord has for rent. 

How to Buy and Manage Commercial Real Estate Property Yourself

  • Ensure you are ready to invest and define your reasons for taking this step.
  • Research and locate many different types of commercial properties to ultimately figure out what types of commercial real estate you would like to start investing in.
  • Create a team that comprises of many different backgrounds (Real Estate backgrounds) to help you in your commercial real estate business journey.
  • Choose a suitable property in the market.
  • Make an offer and lock down the deal.
  • Understand every detail about managing a property before you decide to make a purchase.
  • Keep your tenants happy.

Commercial Real Estate Taxes

Commercial Real Estate Tax TipsAs you have come to find out so far via this complete guide to real estate investing and management, keeping good finances is really important when dealing with real estate. This applies to both commercial and personal real estate. For commercial real estate properties, you only pay taxes on the profits, not on the gross income (as you can see, a bit different from the personal real estate finances). The following are the different types of taxes concerning commercial properties:

  • Property tax
  • Federal income tax
  • State income tax – not always applicable
  • Local income tax – not always applicable

6. Real Estate Rental Property Self-Management 

Best Ways to Enhance your Property

  • Paint the house neutral colors.
  • Do basic repairs and fixtures.
  • De-clutter and get rid of unnecessary furniture merely occupying space.
  • Renovate where necessary.

How to Determine the Best Price for your Property

  • Make use of online evaluation tools like Zillow etc.
  • Seek the opinion of your realtor or real estate agent.
  • Compare and contrast the prices of neighboring properties.
  • Enlist the services of a professional appraiser.

All about Property Marketing and Locating Tenants or Buyers

  • Effectively maximize the publicity of social media platforms like Facebook.
  • Put up your ‘Rent” sign – Basically, put up any sign that indicates that the property is available for rentals. 
  • Follow up your advertisement efforts through your newspaper, internet and flier ad.
  • Do a video tour of the property and include this video in your advertising campaigns.
  • Host an event in the property in order to subtly sell the idea of renting the space to people.

What are the Best ways of Maintaining your property?How To Collect Payments For Real Estate Properties - LearnedGold

  • Keep the property clean and utilize a landscaping service.
  • Fumigate constantly in order to keep the pests and bugs out.
  • Regularly inspect the house thoroughly in order to check for leaks or anything that needs repairs.
  • Make sure to always immediately perform repairs and fixes as soon as they are reported.
  • Maintain the rental property’s HVAC system consistently.

How to Collect Payments for Your Property?

  • Make the payments completely Automatic.
  • Make sure to choose your tenants wisely and cautiously.
  • Always exercise a “no cash” policy. You don’t want the types of tenants that pay rent with cash.
  • Make sure there is a policy in place that enforce rent collection.
  • If your tenants are late on rent, be nice about it but make sure that they get back on track.
  • Make sure the tenants are aware of the consequences in case of rent payment failure.
  • You want to show your tenants that you appreciate them being responsible. Offer them some type of reward after a prolonged period of time where rent is paid on time.

How to Deal with a Breach of Contract on your Property

  • Weigh the facts and ensure that there is truly a breach of contract.
  • Seek legal counsel from a lawyer or attorney. 
  • If it makes sense, terminate the contract with the tenant.
  • If necessary, pursue eviction of the tenant.
  • Sue the tenant involved for any damages.

7. Real Estate Rental Property Outsourced Management

Real Estate Property Management - Personal and Commercial - LearnedGold.comWhat is a Property Manager?

A property manager is responsible for the operation, control, and maintenance of a property. A property manager is saddled with the responsibility of ensuring that every property he is in charge of, operates smoothly and its appearance is maintained. Property managers are also responsible for showing off a property to prospective buyers, managing complaints on properties, collecting money for rent, etc. 

Should you hire a property manager?

Absolutely! You should hire a property manager to help you control and manage your properties, especially if these properties are more than you can handle and if you hope to expand your business. Hiring a property manager prevents you from going through the hassles of setting rental rates, collecting monthly rates, managing tenants, etc. 

What to look for in a Management Agreement?

  • A good selection of services offered by the property manager
  • Low Management Fees
  • Duration of agreement
  • Liability
  • Termination clause

Best Way to Terminate a Property Management Contract?

  • Properly understand the termination clause in your management contract.
  • Make known your termination notice through writing and keep records of this.
  • Inform your tenants of the termination.
  • Be professional during the termination process.

We have come to the end of this Complete Guide to Real Estate Investing and Management. I hope that you have found the above information both useful and entertaining. Please send us a note on our Contact Page if you have any questions.

 

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