Buy and Hold Coming to an End Soon

I’ve talked to several people lately about different real estate strategies to use and the one that has been the most popular among smart real estate investors has been the buy and hold. NOT THE FLIP. People flip homes when the market is moving at a pace that allows them to get a house quickly and turn it for a profit. But the investors that are absolutely cleaning up right now are the ones who are buying homes and holding them. Why is that?
First, the interest rates have been low enough for so long that if people have money to put down they can get these low rates on properties. A man I work with in Las Vegas has been buying up plenty of 100k houses and getting them rented while having extremely low payments on those houses. Why is this a good idea? Plainly, even if the interest rates go up in the area he is in a spot where renters will always be able to afford his payment and if the area goes up in value with the economy then he is sure to really increase the equity in each property. It’s a win across the board for him now.
Second, interest rates have started to go back up. When interest rates go back up something interesting will happen that the country isn’t prepared for at the moment. The housing values will have to stay still or even drop. I say this because the average person owns a 3 bed/2 bath house in our country and if they can’t afford an average payment at a 6% interest rate or higher then the market will have to adjust so they can. By getting these homes now at low rates you are setting yourself up for the best long term success because you can afford the payment at the low rate and it isn’t going to adjust on you like it did during the serious downswing we had a couple years ago.
Real estate is a great way to make long term wealth. Each day I deal with great owners of homes or apartments and they really see things for how they are when it comes to our market. I get great advice from them daily and I love to pass it on to you.

Renting Authority Thanks You

When Renting Authority was started we had some great ideas on what we could do to really help people with rental properties. We think that over the years we have really been able to do a lot of those things and much of that success is attributed to the great people that we get to work with every day. In some cases we work with individuals who have one property and in others it is those with thousands of units that need to be taken care of and we always find a way to get those situations taken care and providing a stress free service for lots of amazing people.

So today the blog will be short and sweet. We love what we do and we love to interact with you on so many different levels. We are here to help and provide a needed service to anyone interested. Thank you.
Troy Boldt

Flipping Homes

August 9th, 2013

I love watching shows about flipping houses. People that go in and buy distressed properties, then fix them up and sell them. Problem is that I’ve never seen a show turn out bad for the homeowner and that isn’t always the case. TV can make the process seem easy and quick while they don’t mention some of the issues that come along with it.
1. Holding the property: Some homes just don’t sell right away once they are fixed up and beautiful. In reality, you will be making a payment on that house until it sells and that has to be taken into account. It is important to really study and know the real estate market in your area. If you know how long it will take to sell the home, on average, then just budget amount into your calculations.
2. Unplanned Expenses: Not every home that you are wanting to flip will give you the ability to know of every problem upfront. Meaning some people buy homes sight unseen in hopes that the ‘good location’ will make up for it. Sure, that can be the case sometimes but you are going to have to go into this with a budget and the reality that you will have some expenses that are now 100% your responsibility. These may include termites, water damage, electrical problems, plumbing problems or structural issues. Once you purchase the home you have to take the attitude that you will see the project through or you will just waste even more money on the process.
I owned several properties in Arizona when I was first getting started in real estate. One of the first homes I bought had a swimming pool and I thought that was so great. I didn’t know anything about pools or maintaining pools. Once I bought the home I found out the pool had a major issue with holding the water. Somewhere and somehow the integrity of the pool was compromised and couldn’t really hold water. I learned a valuable(and expensive) lesson that day in that when you are flipping homes you need to really understand what the average homeowner wants and can have, not what you want. The pool ended up costing us thousands of dollars and made that property a loss when we finally sold it.