Monthly Archives: December 2014

December 26, 2014 · 9:35 am

Real Estate for Retirement

Looking for a way to diversify your income? Think real estate for retirement.

I am a big believer that everyone should have a little real estate mixed in to their retirement. For most of my clients that means somewhere between 2-4 rental properties.

MY AVERAGE CLIENT PROFILE
2-4 rental properties
$75,000 – $150,000 per year in income
Early 40’s

A couple things that stand out about the real estate investors that I work with. Many, many, many of them are from California. Most don’t start until they are in to their 40s. Part of that is because many people don’t move in to higher incomes and/or have sufficient savings for real estate investing until that point. Plus, let’s face it, you don’t (or, at least I didn’t) start thinking about retirement in your twenties and early thirties.

But to you twenty-somethings out there, why not build real estate in to your retirement with your first home? Buy a duplex, and rent half out. Or a smaller first home in a good neighborhood for renting? We can talk strategies for you on the whole thing if you give me a call.

Unless you are willing to own many, many properties and do your own full time property management you probably are not going to retire just by owning rental properties. But real estate is a very important asset to your retirement. Let’s meet. I’ll explain why. 913-568-1579.

Merry Christmas To All

I want to take a moment to wish each and every one of you a Merry Christmas.

To me, Christmas isn’t a time of getting and giving. It’s not a time of strife and argument. It’s not a time of drinking and carousing. It’s a time of renewed hope. A time when God sent to us a second chance.

It’s saddening to look around at our country right now. With so much we seem to be doing so little. I’m 49 years old. I have vague memories of the late 60’s and early 70’s. And it feels like we are heading back there. A country divided.

My Christmas hope is that we can all stop for a moment, catch our breath and think about what could be. How our lives, and those of the ones we love, can be better. And don’t forget to make an opportunity to reach out to someone you may not know, or only know superficially. Offer them hope. It’s good for them. And I think you’ll find it’s good for your soul, too.

More Real Life Numbers For Real Estate Investors

People need to know the truth about real estate investing. The truth is it takes money to make money. There is nothing for free. And that flipping isn’t investing, it’s a job. I’m not saying you shouldn’t scrap to achieve. But that is a whole other topic for a whole other time.

Back in September I did a post titled Investment Property Case Study. So here is the follow up.

That very same portfolio is wrapping up the year. So I thought I would show you the results of THIS YEAR only.

Gross Operating Income $525,869
Operating Expenses $182,330
Net Operating Income $343,539

That looks pretty good! But the Operating Expenses are not complete. This real estate investor group pays their own property taxes so I don’t have the exact number to enter. But I’m going to guess somewhere around $58,000. That would leave a real NOI of $285,539.

Based on their “all in” acquisition costs (only, not the “to-date” I used in the other post) that would leave them with an unadjusted Cap Rate of 10.2. That would also be their Cash on Cash return.

So, not too shabby. And let’s not forget that there has been a 36.3% increase in value of these properties since their acquisition.

Yes. Real estate investing can make you some serious dough. Now, you don’t have to be an investment fund to make this happen. If you bought one, and then another and were getting these returns, what would your retirement look like?

A “Retirement worth having” doesn’t happen by accident. Start today. Give me a call. 913-568-1579

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December 2, 2014 · 8:54 am

Maintenance and Your Investment Property

Maintenance can make or break your investment property. And yet it is one of the things as a professional property manager that I seem to fight with owners the most about Well, maybe fight isn’t the right word. But sometimes it can be like pulling teeth.

Look, if you are going to get top dollar for rent and top dollar when the time comes to sell your rental house isn’t it going to have to be in good to great condition? Or are you one of those sellers that thinks tenants should pay the highest rent for a house where maintenance isn’t kept up? Or that buyers won’t notice the overgrown shrubs rubbing against the house causing all that wood rot? Come on.

Whether you manage your own rental property or use a property manager keeping up with maintenance is a must. And if you keep up with it then it’s not so expensive when you do it all at once…and have to do more than you would have if you had just kept it up.

From our point of view as property managers, we spend more time on maintenance issues than any other category of our job. Heck, even leasing doesn’t take up as much time. Coordinating schedules and payments takes quite a bit of man power. Maybe that’s why so many others shy away and defer rather than just the money. But I implore you to keep up on the maintenance of your investment property. You will thank me later.

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