Real estate agents are faced with many obstacles, including the tough housing market, lower prices, and a lot of competition. Sure, you may have properties you’re selling, but are people buying them? One reason your properties may be sitting on the market is because they’re not getting the proper marketing. Holding open houses every weekend can be hit or miss. Listing your properties on third party real estate sites can only give your potential clients so much information. It’s time to take matters into your own hands and create your own website.

1. Buy your domain name: First things first, you need a domain name. Maybe you want to buy your first and last name, which is a good idea either way. If you’re an independent agent, you may want to purchase your business’ name. If the .com name isn’t available, try .net, .org, .biz, or .info. You can purchase the domain name from places like GoDaddy or NameCheap. Buying a domain name is more affordable than you may have thought.
2. Find a hosting site: Hosting is the service that houses your website. It’s not over once you buy the domain name. Hosting is affordable as well. I host my websites with Think Taylor for $10/month and it’s been great! If you have bigger needs, they also have a $25/month package for businesses as well. Hosts can provide you the space for your website, e-mail addresses to match your website, and the proper security to protect you from hackers.
3. Choose a content management system: A content management system, or CMS, is where and how you will build your website. There’s several different content management systems to choose from, but you simply can’t go wrong with WordPress. WordPress is the CMS of choice for millions of webmasters for a variety of different businesses and blogs. There are multiple plugins available, you can find thousands of free themes or layouts, and once you get the hang of it, it’s really easy to use. If you need help choosing, your hosting provider can steer you in the right direction, and may have a tech who can assist you in setting you up.
4. Design your website: Now here’s the fun part: the web design. If you’re not good at it or don’t know where to begin, you have 2 options: hiring a professional or finding a theme to implement online. If you chose WordPress, there are several different themes that will go great for a real estate agent. One is provided by Elegant Themes and it is titled Elegant Estate. Another is brought to you by WooThemes entitled Estate. Both of these themes offer multiple color options, a search function, and allows you to showcase your properties and include their features, making it easy for buyers to sift through your inventory.
5. Take pictures of your properties: The main reason you’re setting up a website as a real estate agent is so people can find your properties. I highly suggest that you take pictures of all of your properties, inside and out. On third party listing sites, the most popular properties are the ones that have multiple pictures. As a buyer, if your search begins online, you want to rule out houses you can’t see yourself in right away. The only way people can tell is if they see the inside, since you can’t judge a book by its cover. Grab a digital camera, or hire a photographer, and photograph every room. Post the pictures on your website and let the photos do the talking.
6. Write a great description of the house: Sell that house by using your gift of gab. Tell your customers what’s great about the house, what neighborhood it’s in, the conveniences nearby. Inform them why they’d be lucky to buy it. Add tags for your customers to find websites in their personal search, including the price, how many bedrooms and bathrooms, if there’s a garage, if there’s a guest house, etc. Don’t forget to include a map integration so they can see where the house is located.
7. Include your contact information: If people like what they see, they’re going to want to talk to you about either buying a house you listed or selling their house. Become available by offering your e-mail address, business phone number, and possibly even social media websites like LinkedIn, Facebook, and Twitter. Include your photograph and a brief bio to make the experience more personal. People may be searching online, but they’d still like human interaction.

By setting up your website, you will definitely see your leads increase. It’s very easy to do, so start today!

We’ve talked about how renting properties is a method of passive income, although it certainly takes some time. Even with a down economy, you can still be profitable by becoming a landlord to reliable tenants. However, the point of passive income is that you put in little to no work, yet still earn money. As a landlord, you’re responsible for handling repairs, safety concerns, and collecting rent. This can be a part time to full time job depending on how many units you own and the type of tenants you rent to. So how can you streamline the process and make your rental property truly passive income? You hire a property management company.

What is Property Management?

Property management is just what it sounds like: they manage your property on your behalf. A property management company acts as the liaison between yourself as the landlord and the renter. They do the work for you, including screening applicants by running background and credit checks, handling the legal documents including leasing agreements and rental insurance, and handling maintenance and upkeep of the property.

Property Management Companies vs. Property Management Software

Obviously, hiring a property manager is not going to be cheap, so it may dock some of your passive income if you hire a company to handle your rental properties for you. If you own a complex with several units, it makes sense to hire a company to handle the ins and outs for you, since there will be multiple tenants. It may also make sense if you have multiple commercial properties. However, if it’s not in your budget to hire a company with managers, sales associates, and other staff members, you may want to look into property management software.

Property management software still keeps things in your control, but puts everything on your computer. There’s different programs for sale or available to download that will allow you to control your leases, bill your tenants, track your expenses, set your budget, and even manage your properties on the go. You can allow your tenants to pay you online as opposed to writing you a check, a convenience for both you and your renters. The programs can even help you stay organized come tax time.

What to Look for in a Property Management Company

If you’re still interested in hiring a firm to handle your property management, there’s a few different things to look for:

• Costs: How much will it cost to have the company manage for you? What are the monthly fees?
• Reputation: Property management companies get a bad reputation sometimes. You want your tenants to feel absolutely comfortable living on your property. Does the company have a good track record?
• Experience: Whether you’re choosing an individual or a company, how much experience do they have? More than likely you’re choosing a property management company because of your lack of experience or lack of time. How long have they done this? Do they know what they’re doing?

Before Choosing an Online Program

Before you go the online route, you should check out reviews, see if they have a free trial, and decide if you would rather have a desktop based or online/cloud based program. Give several softwares a try before deciding on one right away. This will probably be the most cost efficient option for you, and can still yield you passive income while remaining in control.

Many people rent apartments, condos, and townhouses before they decide to purchase their first home. You may not be ready for the commitment of home ownership, either because you haven’t found an area you want to live long term, you plan on switching locations often, or because you don’t have your finances prepared for a huge purchase like a house. Whatever the case may be, millions of people are renting. While some consider it “throwing your money away”, as long as you’re paying for a roof over your head, it’s not. So how do you find an apartment in your community?

• Look around: You can usually find a place for rent just by looking around an area. Landlords and property management companies are constantly advertising rental properties with signs detailing the types of properties available. Look for signs that say “for rent”, “apartment available”, and “looking for roommates”.
• Ask around: Chances are, you know someone who knows of a housing community with units for rent, or someone who is renting out their property. My husband and I found our current townhouse rental through a coworker who was moving. In many cases when you personally know someone renting a place out, you can work out a discount for your rent. At our previous apartment, if we referred others to the complex and they signed a lease, we would receive a referral bonus which discounted our rent.
• Look through apartment books: There are hundreds of apartment complexes that advertise their vacancies in free booklets like Apartment Finder. I grabbed a copy from our local juice bar, and found a lot of different communities that I may have otherwise overlooked. I was able to find out their amenities as well as where their prices begin.
• Check online: The first apartment I ever moved in, I found online. You can usually type in rentals in your area in your search engine and find a lot of places of interest. What I like about searching online is that you can do an advance search with your criteria. You can narrow down the search results by choosing your maximum desired rent, number of bedrooms and bathrooms, whether you need a pet friendly property and more. You can even find floor plans, pictures, and virtual tours for many of the properties.
• Classifieds: There are still plenty of rental listings in classifieds. For college students, your school newspaper or magazine usually has a classifieds section that advertises places for rent that you may not find in any other place because they’re looking for a specific type of person, such as a student or a roommate instead of a sole renter. Websites such as Craigslist will also have a section for rentals, but always beware of scams.

Looking for an apartment or other rental in your community is fairly simple. Once you find a place that you like, prepare by asking questions like how long is a lease term, how many visitors are allowed, when rent is due, and what are the community rules. Don’t forget to bring money for an application fee as well as a security deposit, and be ready for a credit check as well. Happy hunting!

You may have heard that the housing bubble has burst and there is little to no hope for investors, but that’s not true. If it’s a buyer’s market, it can easily be an investor’s market. What better way to start securing your financial future than to start investing young? The odds are in your favor more than you think. The banks have so much inventory, they’re almost willing to let foreclosures and short sales go without much of a fight. Home prices and interest rates are at historic lows. Young investors should take advantage of this opportunity and buy their first investment property. So what are the steps?

Find Your Investment Style

Real estate investors usually have a style that they prefer. You can be a landlord and have rental properties where your tenant pays the rent and you profit from that. There are investors who like to flip houses, meaning you buy a property, fix it up a bit, and sell it for a profit. You can specialize in apartment buildings, duplexes triplexes and fourplexes. Maybe you prefer commercial real estate, where businesses can open. Decide what you prefer, and go for it!

Find Your Partner

Since you’ll be a young investor, you’ll want to partner with someone who knows the market and can help you get started. Find a real estate agent or broker who is familiar with the area you’re interested in, and will want to work with you in the future. There are some investors who work with the same agent time and time again. You don’t have to, but it can be profitable for both of you. The agent or broker will help you find properties, and will give you the details and information you need for purchasing them.

Location, Location, Location

You wouldn’t buy a home in just any neighborhood if you were going to live there, right? The same goes for an investment property. Location is very important, so you should do your research ahead of time. This will match up with your style as well. If you’re going to be a landlord, you’ll want to find a property near places people will want to rent, maybe near colleges, a thriving business area, or entertainment. If you’re looking into commercial property, you don’t want to have a restaurant in a location no one is going to want to eat, or a business front all by itself. You can research online as well as going out and seeing for yourself.

Get Your Finances Together

Investing is still going to cause you to come out of pocket, even though it will be a method of passive income. You can’t buy a property without the necessary capital. You may want to meet up with a Certified Financial Planner before seeing a lender to make sure you’re ready to handle the ups and downs that come with being an investor. As a real estate investor, you’ll certainly experience your share of lows, including vacancies on your rental property, your property staying on the market longer than you’d like, and tenants no longer being able to pay the rent. Prepare for the worst situation. Also, ask about the different options for financing the property, including conforming mortgages.

Do Your Research

When you’re searching for your perfect investment property, you’ll want to know what other properties are going for in the area. You don’t want to pay a price that’s much higher than a similar building is going for. You can do this research on your own online at websites like Zillow and Redfin, or you can ask your experience realtor partner what they think. You’ll also want to know the history of the property, including what to expect in case of construction.

Don’t Fall in Love With the First Property

It’s going to take a lot of time and patience before you find the best investment property, so don’t fall in love with the first one. You’ll want to look at a variety of properties in different areas and different price ranges. The cheapest property is not always the best, and neither is the most expensive. Don’t make your decision in haste; take your time to weigh your options. An investment is a big deal and should not be taken lightly.

So are you ready to buy your first investment property? Find a CFP, a lender, and a broker, then you’ll be on your way to becoming a young real estate investor.

Home ownership is one of the biggest parts of the American dream. Sure, today it’s a buyer’s market, but that doesn’t mean you should rush to the bank to get your pre-approval and go house shopping this weekend. You may have heard renting is throwing your money away, but that isn’t true at all. You’re still paying for a roof over your head, and you get the benefits of maintenance, and even some utilities free of charge. There’s a lot of time, work, and money that goes into being a homeowner. The entire process can be exhausting and is a lot more complicated than it’s made out to be. Even if you’re mature and have enough money for a down payment and closing cost, it’s still wise for you to wait until you’re ready to settle down before taking that plunge. But why?

• Your future spouse will want a say: When you buy a house before you get married, you’re going to mainly go off of things that you like. It’ll be your inputs and your requirements and your taste. If you buy a house and then get married, your significant other may feel as if they didn’t have a say in the home that the two of you will be living in. Sure, you can always allow them to decorate how they like, but what if you didn’t need a backyard and your husband brings a dog? What if a downstairs laundry was fine for you but an upstairs laundry was something your wife always wanted? Housing prices may be at historic lows, but they’re not cheap enough to where you just buy a new one if someone doesn’t like something in it.
• You may soon outgrow your living area: I see it all the time on House Hunters. There’s a family that started off in a 2 bedroom house, then they find their family balloons to more kids than there are rooms. I don’t suggest buying a home until you know how large you would like your family to be. Children are a blessing, but parents need their own space and kids need their own space too. Rent a one bedroom while you’re single, then seek out a family home when you begin to build one.
• Give yourself more time to save: There seems to be such a rush and pressure to buy a home, but the days of 0% down payment is long gone. Saving up 10% of your purchase price can be really tough on one income, especially if you have other things to pay for. If you wait until you have someone to share your life with, you’ll also have someone to save your down payment with. A combined effort can help you reach your goal faster.
• You may change your mind about what you want in a neighborhood: What you look for in a neighborhood when you’re single will more than likely change when you settle down. When you’re single, you’ll probably look for somewhere close to work, a thriving nightlife, and maybe in the city. When you settle down and prepare for a family, you may choose suburbs over the city, and you’ll want to be close to good schools instead of fancy restaurants.

You may have the house buying itch, but you should slow down and take your time. When you’re ready to settle down, then you’ll be ready to take the next step and buy a house. Even then, you don’t have to become a first time home buyer right away.

Although the housing market is a lot different than it was a few years ago, flipping properties is still a great way for passive income. You can do maybe 1 flip per month or even less, depending on your goals. While some people want to put minimum work and money into a flipped home, your best bet is to get a rehab property. That’s where the gold is! A run down house is going to be full of opportunity and be the property you’re most proud of flipping, and here’s why:

• You can negotiate the price: There’s a reason that torn down home has been sitting on the market forever: no one wants it. But you should! Houses that are in desperate need of rehab are also in desperate need of a buyer, so banks will be willing to let them go for less, just to get them off their hands. You can haggle down the price, and get a bargain or steal, compared to a home that has a few interested buyers.
• Big lots, small properties: Some of these homes are on a big lot but the square footage doesn’t fit with the home. If needed, you have the chance and the room to expand. Add on extra bedrooms or common spaces, and you’ll get more people interested in a home that can accommodate their entire family.
• Old houses have character: While a lot of people are choosing newer homes with open concepts, older houses have character that isn’t found in newly built houses. Take advantage of the character of these older homes, and bring in some new concepts to make it a unique property that your buyers won’t be able to forget.
• Rehab properties have primarily cosmetic issues: Rehab properties sit on the market because of their appearance. A lot of the issues are purely cosmetic, and can be fixed with simple solutions like a fresh coat of paint, a bit of landscaping, new flooring and some fixture changes. You’d be surprised what lighting and some decorations will bring out of a home. When you hold your open house, other investors and agents will be wondering why they didn’t see all that the house had in store.
• You can inspire change: Run down properties are often in run down areas. If you start to remodel a home you’re about to flip, you can inspire neighbors to change their houses too. The problem is people hate change, but they also hate being shown up. If they see the property you bought is looking better than theirs, you may light the fire under them to cut the grass, finally renovate their kitchen, or do some work in their backyard to make it more comfortable for their family. You’ll essentially bring up the value of the neighborhood one flip at a time.
• Appeal to all buyers: Everyone has their preference in a home, but it’ll be hard to find someone who wouldn’t appreciate a home that has been completely updated throughout. Use that as a selling point, and it will not be ignored. If you include before and after pictures, people will really be able to see why your property is an awesome buy. From first time home buyers, to seniors who may be moving elsewhere, your rehabbed property can appeal to all buyers.

So what are you still waiting on? You know you have a property in mind that just needs a bit of TLC. Why haven’t you bought it yet? Get out there and make it into a dream home.

Property management firms are an interesting topic that I wanted to look into again. This time I wanted to look at some of the negatives of using a property management firm to aide your passive income. Why would I want to look at the bad side of something? There’s actually a back story to it. I was thinking about renting out my condo. I also considered the potential for me being out of town for an extended period of time next year. This is when I considered hiring a property management firm. Therefore, I shared this idea with a fellow young investor. We conducted some research together and we collectively came up with many negatives behind hiring a property management firm.

Monthly fees.

We called a few companies. The standard monthly rate was anywhere from $80-100+ depending on the property and the amount of work involved. Monthly fees tied in with maintenance costs alone could eat up the majority of your profit. Are you willing to give up that much money every single month?

Lack of education.

When you’re a first time real estate investor using a property management firm, you miss out on many valuable learning experiences. You’ll have to deal with credit checks, employment verification, and various other scenarios. You’ll also encounter some rather harsh situations. You could have all kinds of tenant horror stories. This can be an amazing experience. Everything from screening potential tenants to having to evict a tenant, can teach you all about real estate investing. Sometimes you simply need to go through the school of hard knocks.

Credibility.

It can be difficult at times to find a reputable property management firm to deal with. Since you’ve invested so much money into your rental property, you really shouldn’t settle for how you decide to have the property managed.

It’s YOUR property.

Ultimately nobody will care as much about your property as you ever will. Do you really want to release the responsibility of managing your real estate investment? Do you see anyone else caring about who stays in your property as much as you care?

Deciding on whether or not to hire a property management firm is a really important decision. My goal here was to show you the negative side of hiring a property management firm.

The topic of refinancing has become increasingly popular with the low interest rates as of late. Why is home refinancing so popular? Can you even save money from home refinancing? First let’s look at all of the factors involved with saving money by refinancing your home mortgage:

Lower interest rates.

At the moment, you can pick up a 15-year fixed mortgage at 4.02%. That’s a steal when you think about how high interest rates were a few years ago alone. A whole percentage or even a piece of percentage can save you thousands of dollars over the life of the mortgage. Think about how much 1% of $200,000. That is some major savings in the long run. This is why home mortgage refinancing is so popular at the moment.

Costs of home refinancing.

You must remember that the ultimate end goal of refinancing your mortgage is to save money on interest/your mortgage over the years. One aspect that many people often overlook is the actual cost of refinancing process (application, appraisal, lawyer, and home inspection costs). Will the lowered interest rate justify the cost of the process? This is one thing that you must strongly consider. You don’t want to go through the whole refinancing process only to find out that you saved yourself a few bucks here and there.

Before you start the home mortgage refinancing process, you must cover the following bases to ensure that the process will even work out for you:

Strong credit.

If your credit score is over 700, you’ll have a higher chance of being approved for refinancing. Before you go in to look into home refinancing, you must know where your credit score stands. If you go in with a poor credit score, you’ll not only be turned down but lots of your time will be consumed by the whole process.

Built up equity.

A mortgage that’s underwater will be impossible to refinance. It’s ideal to have at least 20% equity built up in your home. If not, the lender is going to give you a hard time and you likely won’t receive the mortgage refinancing that you applied for. This usually means that new home owners may have a difficult time with getting approved.

Cash flow.

What’s your income like? If you can prove that you have a steady paycheck, you’ll have a higher chanced of mitigating some of the risk for the lender. If you are currently self-employed, you might want to wait a little bit before you go out trying to refinance.

Have you considered refinancing your home mortgage? How did it go?

Investment property management. This is pretty much as close to passive income as it gets. You purchase a piece of real estate that you intend to use as a rental properly and you subcontract the actual management duties. Is it really the simple? Let’s break the concept of investment property management down a little bit.

Why would anyone look into hiring investment property management?

1. Create passive income.

Your income from the real estate investment will truly become passive if you outsource the management aspect of it. Managing an investment property can consume a large portion of your time (not to mention the late night calls when a home appliance stops working).

2. Hands-off management.

Some of us have more money than time. There’s nothing wrong with that. Some investors have plenty of capital and don’t want to deal with any additional stress. If you fall under this category, then property management could work out for you. The property management company will literally take care of everything on your behalf (collecting rent, finding tenants, replacing tenants, legal issue, etc.).

Now let’s answer the big question– Are the services going to be worth the property management cost?

1. What are your monthly cash flows? If you own a few rental properties you may not feel like managing all of them. Unfortunately, after you factor in monthly mortgage payments along with maintenance fees, you might just barely break even when you decide to hire a property management firm. Are you willing to cut back on your profits? How much are you going to charge for rent? All of these calculations must be completed prior to outsourcing your property management.

2. Are you knowledgeable in the field? For first time real estate investors it might be wise to attempt to learn the process instead of outsourcing it immediately. There are lots of tricks to the trade that we all need to grasp. There’s nothing worse than being financially ripped off simply because we didn’t know other wise.

3. How reputable is the firm? You need to look for a property management firm that has a strong reputation. Whether you need to conduct research online or call upon references, get it done. You’re trusting these people with one of your greatest investments. You need to ensure that they’re reliable and that they won’t put any schmuck into your unit.

At the end of the day, the decision to hire an investment property management team is going to take lots of research. When you’re prepared, I hope that you make a well-informed decision that allows you to sleep easily at night. If you have to take out short term loans cover the management costs, then you’re better off managing your own properties.

Good luck.

I received an interesting email from ING Direct the other day. I was notified of the lowest mortgage interest rates in years. The exact offer was a 5 year fixed term at 3.89%. The 20-something crowd today is probably to remember the astronomical mortgage interest rates of the 1980s. Today’s mortgage interest rates are FAR lower. Many real estate investors are jumping at this amazing opportunity.

Instead of promoting real estate investing, I wanted to throw out some words of caution when seeing some of the low mortgage interest rates:

Compare mortgage interest rates.

Shop around. Just because mortgage interest rates are low it doesn’t mean that they can’t get lower. If you already have a mortgage, then now could be the perfect time to consider refinancing your home loan. It has worked for many people and it could work top save you thousands of dollars.

Make sure you have sufficient capital.

You can technically use leverage and today’s mortgage interest rates to your advantage, in order to pick up an extra rental property. This could really work out for you. Unfortunately, things could also go wrong. The typical real estate problems could pop up and you could be stuck without a tenant. This is why you need to ensure that you have a sufficient amount of money saved up for this endeavor and that it’s not fully levered.

Don’t purchase a home thinking it will be a wise real estate investment.

Today’s low mortgage rates are a viable reason for a well established real estate investor to pick up an extra piece of property. But, low mortgage interest rates aren’t a good enough reason to purchase your first piece of real estate, if you’re simply not ready financially and emotionally. Buying your first piece of real estate should be done when you find the perfect home, and YOU have the money saved up. By having money saved up, I’m referring to money to cover all of the costs associated with real estate.