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Property Management Blog

Published on Sunday, January 3, 2010

Start Investing With Residential Real Estate

Real property is a good investment tool especially at a time when the economic situation is in doldrums. Unlike stocks the valuation of real property is not that risky. While the stocks have the most volatility, real property and gold has the least and this is the reason why these had been the only forms of investment of the people of the past. When an ordinary man thinks of investing in real property he normally thinks on the line of residential real estate as it is easier for an ordinary person to acquire. So the demand for residential property is always there and even if you invest in one today the price will surely appreciate if you give time. The boost that was seen a few years back may not take place immediately but the cycle continues and over certain period of time it can come back.

By residential real estate one means the actual spaces where people live in. They may include anything from single family houses to multiple family houses, buildings and condos. Town houses and farms with residential arrangements also fall under this category. A thing unique to such properties is that unlike the commercial variety, people often use it for personal use even if they have more than one house. But investment is always an option. Whatever may be the purpose, it is the cost of such real property that makes it accessible to everybody and by real property investment a person generally means investing in residential property.

The point that makes a residential real estate acceptable to many who are investing in properties is that the concern for such properties once acquired is lower than the commercial properties. The return may be higher in the commercial sector but it has to deal with quite a number of people whereas in residential sector the person is usually not many. Actually it is true when the matter involves the tenants. During the matter of sale this hardly varies as the profit you make is the only deciding factor.

Since the money involved in residential real estate is not much and such property has the chance of changing hands faster than the commercial ones, the first acquisition can trigger a regular investment habit in a person. It is usually difficult to acquire the first property as the person needs to comply with several requirements for getting the finance of the first property. But once he gets it, he has this property to flaunt for his second loan and so on. So a person can venture into such investment easily and gain experience to make it big.

If any person thinks that he has the money but cannot take the risk of handling the residential or commercial property investment himself, or he thinks that finding the right property to start investing will be difficult, then he can always take the help of experienced property managing services offered both by individuals and firms. They can take care of finding the right property to suit your needs be it a piece of residential real estate or commercial. They can negotiate the deal and close the transaction and even arrange for the finances if you think of getting it through them. The maintenance of the property is vital as it helps in appreciation of the price and these agencies often have services to manage the property in the right way.

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Author: Web Master

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Landlord Knowledge Base

If you’ve ever considered investing in a few rental properties in Philadelphia or Bucks County, PA now might be a good time. Prices are still low in Philadelphia, but have been on the upswing. According to the National Association of Realtors, the median price of an existing home in a US metropolitan area grew 13.7% between July 2012 and July 2013, the latest in a 17-month streak of year-over-year price increases. 

New landlords can choose from properties that are likely to appreciate and a large pool of potential renters.Licensed realtor Pat Mueller cites a few reasons for this trend: “Many families have lost their homes to foreclosure and are entering the rentals market for the first time in years. Mortgages are also harder to get now, so fewer people are qualifying for a new one.”The more skills you bring to the table to get into Houses for Rent in Philadelphia Philadelphia or Bucks County, PA and the more time you have to devote to your properties, the faster you can make a return on your investment. 

But investing in rentals can also be disastrous (or too stressful to be worthwhile) without expertise. Here are three professionals you may consult about your new rental properties, and what you can do to mitigate how much they cost you:Handyman:  You may need to hire a specialist for some work on your rental. If you need new outlets or new pipes, for example, hire an electrician, plumber or licensed contractor. Handymen usually tackle smaller, more manageable tasks, like:

  • Painting and paint removal
  • Drywall repair
  • Minor appliance repairs (fixing a leaky toilet or faucet, among others)
  • Installing tiling or flooring, moldings, windows, doors
  • Refinishing decks, cabinets and other wood items

When You Could Skip It: You could do any (or all) of these projects yourself if you have the time and interest in learning. Of course, this only works if you live relatively close to your rentals and are flexible enough to service them on short notice. And if you’re willing to respond to the occasional 5 AM basement flooding.

Average Savings: Any base rates or costs-per-hour vary from location to location in Philadelphia or Bucks County, PA , but nationally, you can expect to spend an average of $60 to $85 per hour for repair costs. It general costs less to hire an individual handyman than a handyman employed by a company. Expect an additional charge if your job requires a trip to the store for materials.

Resident Property Manager As the owner of a handful of rental properties, you may be able to manage them yourself, but if you want help, a single resident manager would probably be more cost efficient than a property management company. Resident managers may:

  • Serve as a handyman
  • Advertise vacancies in your units
  • Show apartments to prospective tenants
  • Review rental applications
  • Collect rents

When You Could Skip It: Again, the closer you live to your properties and the more spare time you have, the less likely you are to need a manager. The obligations of being a boss will also cut into the time you save on maintenance.

Average Savings: The national median wage for residential managers is just over $25 per hour. Research the wages in your community and adjust according to how much responsibility your manager will take on. 

Real Estate Agent: Once you’ve gotten your financials in order and done your own research on the neighborhood(s) you’re considering, you might contact a realtor to show you potential properties. You can also arrange for a realtor in Philadelphia or Bucks County, PA to show rentals once they’re ready to rent.

When You Could Skip It: It depends. Even if you’re a local, or have thoroughly researched the neighborhood(s) you’re considering, a realtor is a great resource for a first-time rental buyer. Realtors have access to data and statistics not necessarily available to the general public and first-time buyers may not know all the right questions to ask. Using a realtor to fill your Houses for Rent vacancies is less of a no-brainer, depending on your other time commitments or whether you plan to hire a resident manager who could do the same thing.

Average Savings: As a buyer of rental properties, as when buying your own home, sellers typically pay most, if not all, of the buyer’s realtor fees. In this case, Mueller points out there’s little reason not to work with a realtor. For help in filling your units in Philadelphia or Bucks County, PA, the services of a realtor would set you back between 10-20% of the unit’s rent per month.  Mueller recommends interviewing with several brokers before making your final decision to invest into Houses for Rent .

The Bottom Line: As a new landlord, you can’t necessarily control the flexibility of your schedule or the amount (and cost) of unexpected repairs to your properties. Rentals are a long-term investment. However, to maximize profits from your Houses for Rent, new rentals, you can buy close to home and start small. It is best to begin with just one or two properties. This will allow you to maximize the time you spend on your properties’ needs, and minimize the amount you’ll have to pay anyone else.

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