Property Investing in The 21st Century

Property investors are no different than other homeowners when it comes to a temporary inability to pay the mortgage. There are ways that you can avoid foreclosure whether this is your own residence or your investment property.

Use these tips to help you avoid foreclosure on investment property.

Call the Mortgage Company

The first step is always to call your mortgage company and let them know of your difficulty in making the monthly payment. Talk to the customer service department and ensure they record your call.

Don’t wait to make this call. The longer the problem goes on, the harder it will be to gain your mortgage holder’s cooperation in fixing it.

Next, make another call to the Loss Mitigation department. This representative may be reluctant to come up with a solution which presents the least cost to you, but they are required to do everything possible in the best interests of the bank. They are just as motivated to avoid foreclosure as you are. Some options are a short sale of the property or a renegotiation of the loan terms.

Only You Can Protect Yourself

Always keep this in mind. The lender is only looking out for their company.

Keep a record of every phone call you make. Take down the name, direct phone line, and all details of every conversation with each representative of the mortgage company.

When you have come to an agreement with the bank regarding resolution, be sure to ask for a Letter of Release. This will protect you from being the target of possible future collection efforts on any unpaid balance.

Remember that you are not the only one possibly facing foreclosure. You can, however, be proactive and realize an outcome that is beneficial to all parties involved.

Written by Clint Maher - 21st Century Academy
Complete Wealth Education P/L © 2008

Property is almost invariably a good investment, because land is all but guaranteed to go up in value. Even the USA’s housing crisis last year has not disproved this. Yet, smart property investment will earn you hundreds of thousands more annually than buying property thoughtlessly. When you buy and own property, you must constantly think about how you can maximize its wealth creation–i.e. how you can maximize the money it generates for you.

Tip: Land, not what’s built on it, goes up in value

When you’re buying property, remember that while land often goes up in value without you doing anything and what you build on it generally depreciates. Buildings do not go up in value; indeed, they depreciate as they get older and more run-down, and require maintenance from you to prevent this (or at least slow it down).

Buildings do, of course, create wealth for you when you rent them out. Yet, only land will reliably increase the total value of the property over time.

Consider Location for Optimal Wealth Creation

The quickest way to start earning money from your property right away is by renting it out. There is a market for rental houses and duplexes just about anywhere and location is key. You can get great results on rental houses, especially ones that are located close to busy areas filled with jobs. Thus, when buying property, research cities and neighbourhoods where jobs and populations appear to be going up and that will mean you’re more likely to get more renters.

A great location equates to your property being on the way to becoming a source of automatic wealth creation.

Tip: Don’t invest in property that’s so expensive that you won’t be able to charge affordable rent for the average person living in the neighbourhood your property is in.

Written by Clint Maher - 21st Century Academy
Complete Wealth Education P/L © 2008

People usually renovate homes to make them more pleasant to live in. However, did you know that systematic home purchase and renovation are actually very effective ways to make money? Many property investors seek out properties that need improvement. They renovate them, and selling them at great profits. If you do it right, renovating an old home that is in disrepair is very profitable. Yet, you have to do it right–otherwise, you won’t make enough money for it to have been worth the bother.

Good Homes for Renovation

The first step for successful home renovation is picking out the right property to buy.

Green Light Investment:

Look for investment properties that are in need of TLC but in good neighbourhoods. That way, once you renovate the house its price will go up fast.

Red Light Investment:

By contrast, avoid houses in poor neighbourhoods, no matter how low they’re selling for. Usually, in such neighbourhoods, the problem is the neighbourhood itself, not the condition of the house.

Unless you’re a very experienced renovator, or are willing to spend a lot of time learning, look for houses with problems that look bad to most buyers, yet are relatively inexpensive to repair. Such problems include extremely unkempt, untended yards and lawns; damaged paint jobs; broken doors and windows; and old or broken-down garage doors. You can repair these without too many problems.

If you personally know some housing contractors willing to give you a discount (or maybe are thinking about working as a contractor yourself), you can try tackling a house with bigger, costlier problems: non-working bathrooms, a roof that leaks, a kitchen that needs to be completely renovated, or broken electrical circuits. But a lot of consideration needs to be taken into account when dealing with heavy repairs instead of minor ones.

Bad Renovation Property Choices

When buying a home to fix and resell, avoid the ones that have permanent problems that can’t be fixed without dismantling the whole house: termite-ridden wood, asbestos insulation, basements that are prone to flooding, or problems of any kind with the foundation.

Need help learning more about investing in the 21st century? A 21st Century Academy Homestudy course could help you poise yourself for financial growth and security.

Written by Clint Maher - 21st Century Academy
Complete Wealth Education P/L © 2008

Property Prices

When you’re investing in property, it’s very important to know whether its price is going to go up or down in the foreseeable future. This much is clear. Yet, what if you’re no real estate expert? What if you’re simply an investor wanting to put money in something that has a very high chance of going up in value? You know that real estate tends to go up in value, but the question of, “By how much” depends on the individual neighbourhood, and on the individual property.

How do you ascertain how likely an individual piece of property is going to go up in value? Do you visit the neighbourhood and rely on your own, inexpert subjective opinion? What if the property you’re buying is in another country?

Property Gurus Inform You of Property Values

When trying to get a sense of a property’s value, don’t ask the owner; don’t ask your lender; instead, ask a property investment specialist such as an estate agent that deals with properties in that neighbourhood. Better yet, ask several agents working in that same neighbourhood.

This is not hyperbole: real estate agents have been known to determine the fates of entire neighbourhoods. The real estate agents, not lenders, or property owners, are the ones telling home buyers what to believe about homes and neighbourhoods. They are the ones to whom the writers of newspaper “real estate” sections turn, when researching new articles.

In short, if most of the real estate agents working in the same neighbourhood agree that the value of a given property in that neighbourhood is likely to go up, it will almost certainly go up. If they say that neighbourhood or property is doomed, don’t expect a good return on your investment.

Get A Property Investment Mentor

And, talk to other property investors who are having success. Someone who’s a property investment success such as Jamie McIntyre could provide you with a wealth of information and mentoring.

Written by Clint Maher - 21st Century Academy
Complete Wealth Education P/L © 2008

Invest In Waterfront Property

If you’re investing in property, you’re probably on the lookout for the next hot area so that you can buy now for cheap and flip it for a big profit later. You already know that the best type of property to buy is one that will bring you a profit and if you want to make big profits, you should seriously consider buying waterfront property.

Why are waterfront property investments sizzling hot?

For the most part, no more water front property is being made. Unless there are new man-made lakes going in somewhere, there are a limited number of waterfront homes and land parcels available so it stands to reason that the property investment will be a good one, eventually. You might need to bide your time a little but those scenarios tend to be the most profitable because the costs are low now which may even mean you can buy multiple pieces or buy a large piece of land that can be severed later on.

People love waterfront cottages or vacation homes and developers are regularly buying large areas up and making communities out of them. As areas outside of major cities get populated for vacationers, new area pricing starts to climb. If you can buy a piece of lakefront property in an underdeveloped area that’s not too far from a HOT area, you could be laughing all the way to the bank in a few years. Maybe it’s time you seriously thought to invest in a waterfront property.

Written by Clint Maher - 21st Century Academy
Complete Wealth Education P/L © 2008

Mortgage Free Retirement

A lot of people want to be mortgage free by retirement. In many cases, the timing works just right and the major monthly mortgage payment frees up significant amounts of their money. If you time your mortgage being paid off with your leaving your job for retirement, you’ll have more money to spend on retirement.

But how much better would it be to free up that big chunk of money MUCH sooner?

Here are some ways you can increase your monthly income NOW by paying off your mortgage sooner. That way you can grow your retirement income and do MORE in your golden years. (And maybe even retire sooner than planned!)

* Move to weekly, bi-weekly, or accelerated bi-weekly mortgage payments. Instead of paying a monthly fee, you’ll have your mortgage paid off years sooner.
* Invest in a second piece of property that can bring you rental income AND pay off the mortgage on that property. Flip the property in a few years for a profit and pay your mortgage off PLUS have money left over.
* Rent out a room (or convert your basement into an apartment) and use the rental income to pay your mortgage off sooner.
* Downsize to a smaller home with a smaller mortgage payment now. Pay the same monthly or weekly fee you’re paying today so that you get debt free sooner. If you’re an empty nester, you’ve probably got plenty of spare room that you don’t need.

The mortgage payment is probably your biggest expense so the sooner you can free up that money, the sooner you can either put more towards investing for your retirement OR be more financially carefree!

Written by Clint Maher - 21st Century Academy
Complete Wealth Education P/L © 2008

Great Investment Property

Once you start investing in property it can become addictive. It can make you a lot of money and leave you feeling very secure about your financial future. It is almost like opening a bag of potato chips and trying to eat just one. Or, like playing the game Monopoly which can be addictive as you watch your portfolio and the pile of money in your possession both increase.

You might start off with one piece of property and once it’s either paid off, flipped, or generating income for you, you might get ready to purchase another. Some property investors buy up property in one area and others diversify and buy rental properties, vacation properties, commercial properties and purchase land as well.

How do you find great properties to invest in?

Here is some help:

1. Subscribe to mailing lists. There are a lot of them out there and you can subscribe to blogs or to information about specific areas and specific types of property or about learning about investing in general. Subscribe to this blog here.

2.Google alerts. If you have a Google account, you can create an alert that will send you an email based on particular phrases turning up in search engine results so you can, in effect, scope the search engine for new property listings.

3.Find a guru. Find property investment gurus / mentors so that you can follow their advice. Some may have blogs or mailing lists that you can subscribe to.

Written by Clint Maher - 21st Century Academy
Complete Wealth Education P/L © 2008

Investment Property Made Easy

If you’ve decided to invest in property, renting it out is a great way to ensure that the property is paying for itself. And, if you’ve made a great investment, chances are there will be some income on top of that monthly mortgage payment.

When you own an investment property that has a mortgage payment, you want to be sure that you aren’t going to be left in the cold with tenants who don’t pay on time. You’ll also want to be prepared in case the unit is vacant for a while so it’s important to:

1. Have several months of mortgage payments set aside and
2. Find the right tenants

Saving some money for emergencies such as repairs and covering payments if the property remains vacant for some time is part of good financial planning but:

How do you find the right tenants?

* Have prospective renters fill out an application
* Do an interview and get to know the tenants
* Do a credit check
* Look at debt ratio of the tenant to see if paying on time might be a problem
* Check references
* Ask for a deposit (check local laws about requirement)
* Sign a lease that clearly outlines roles and responsibilities in keeping the property in good condition and other matters related to the property
* Be a good landlord and chances are, the tenants will be better tenants

Be a good landlord

Being a good landlord can facilitate a great relationship with tenants.

Once your unit is rented, do regular inspections (within legal requirements for that area) to see that the property is well cared for and if possible be on friendly terms with the tenants. Make repairs promptly and consider incenting the tenants to keep the property in good shape by offering to pay for paint, wallpaper and reimbursing them for improvements done. Having a good relationship with their landlord will increase the possibility of keeping them there long term. Being approachable about potential problems will work in your favour as well. Problems can happen but if a tenant likes you, they’ll notify you of issues such as financial problems or giving plenty of notice before they vacate. Investments always have a certain element of risk but careful planning will minimise the risk of financial loss.

Written by Clint Maher - 21st Century Academy
Complete Wealth Education P/L © 2008

Investing In Foreclosed Property

When you look at investing in a property that needs some renovating before it’s rentable or flippable, it’s really important to ascertain the degree of fixing required before buying.

Very often, you can get a great deal on a foreclosure but in many cases the family who previously lived there suffered hardship for some time so things may have been neglected. It’s worthwhile to do a thorough inspection to check to ensure that it’s not just fresh paint and cleaning that the home needs.

Here are some possible repairs that might be needed and these are listed in reverse order of importance/expense/hassle. The first few items on the list really aren’t typically that expensive or costly to deal with. But, as you get down the list, you’ll want to really consider whether or not this investment really is worthwhile. Some of these items, if present, could make the costs and hassles counterproductive for you so you may decide to either: lower your offer or even decline to make an offer on the property. Before making an offer, you also want to be sure you’ll get financing and / or insurance and certain repairs could make this difficult.

1. Cosmetics. Things like wallpapering, painting and basic cosmetics are easy and inexpensive to deal with and don’t impact the home too much.
2. Replacing flooring, fixing walls, replacing tiles and carpeting usually aren’t too expensive to worry about.
3. Electrical and plumbing issues can be a little more expensive. You want to be sure the home is up to code and some upgrades could get a bit costly.
4. Structural. Worries about the roof and the foundation could be a concern and will require careful assessment for safety and expense
5. Serious concerns such as asbestos or getting permission to renovate due to building status in terms of heritage status and zoning are worth getting professional advice about.

A little research into a potential investment property or foreclosed property will go a long way in helping you make wise investments so you can make money on your property investments.

Written by Clint Maher - 21st Century Academy
Complete Wealth Education P/L © 2008

Vacation Property Investing

If you’re thinking about investing in property in another country, that could be a very wise decision. Investing in a hot vacation property could be a really smart move with very favourable results.

Profit Margins in Overseas Properties

If you’re thinking about investing in a hot tourist area and you have great timing, you could get in for cheap but with a high ROI. Some areas are still really reasonably priced for buyers while being really profitable from a tourism perspective and many successful investors are finding themselves with a properties that make three or four times the mortgage payment in profits each and every month. This can enable you to pay the property off quickly. You might decide to flip it for a profit in the near future or keep it and have it pay for itself and pay you dividends on a monthly basis. There are a lot of property management firms around that will manage the day to day management of the property locally for you so it can become quite lucrative passive income for you.

There’s a second great reason for investment in property overseas and that’s self-indulgence! Who wouldn’t want a nice place to holiday on a regular basis? If the vacation property is doing really well and is in a hot spot you can book it for yourself and your family for a week or two a year and get use out of it yourself!

Before investing in overseas property, especially as a vacation rental you’ll want to learn about:

-how the local economy is doing

-how healthy the tourism for that area is

-how much the going rate for rentals is

-what resources are available locally for you

-what do the local laws entail regarding overseas investors in terms of taxes, etc?

At times you can buy a great property that doesn’t even need much renovating to make it ready to become an income generating machine. Do your due diligence before taking the plunge! The good news is that there are a lot of resources that can help you make wise financial decisions that could be extremely lucrative for you.

Written by Clint Maher - 21st Century Academy
Complete Wealth Education P/L © 2008