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Is Inventing in Airbnb Properties Still A Good Idea?

Inventing in Airbnb Properties

People who have invested in Airbnb have made a huge fortune with short-term rentals. But, it’s not all that easy – there are a ton of things that most real estate investors ignore, which results in loss of their money. Like any other investment, Airbnb also needs due diligence and a strategy.

If you’re planning to invest in Airbnb properties, then you’re in luck as we’ll be sharing some of the things that you should know about before you invest in Airbnb properties today.  

Don’t Jump Right Into It

Every real estate investor’s dream is to make millions overnight, but sadly, that’s not how it happens. The same is with Airbnb investment. Before deciding to invest in this particular market, ask yourself that do you really want to be a part of it at all? While we could help you in deciding but only you and you alone should answer that.

Just like any other business, you need to start small. Don’t jump right into it as that never turns out good for anyone. When making a business strategy, consider the pros and cons of investment in Airbnb properties. Doing the proper research before investing in this market will help you understand it better and make it easy for you to decide whether to invest or not.

There Are Regulations Involved

Yes, you heard us right – there are regulations involved, and we recommend you understand them before you invest in Airbnb properties. In some cities, it is restricted and even illegal to lease properties on a short-term basis. These cities include New York, San Francisco, and Santa Monica. In these cities, it is illegal to rent out properties unless the permanent tenant or the owner is residing in the property while it is being rented on Airbnb.

If you don’t comply, you might be subjected to harsh legal consequences that could ruin your future in the Airbnb market. We don’t say this because it could happen, we say this because it has happened to Airbnb investors and, as a result, they had to pay hefty amounts of cash in fines. So, be careful and understand the regulations before you plan to invest in Airbnb properties.

Tough Competition

If anyone has told you that investing in Airbnb is the easiest way to make insane money, then let us tell you that you’ve been fooled. The Airbnb market is very competitive, just having a rental property isn’t enough, you should know the art of marketing it as well.

Airbnb claims to operate in almost 65,000 cities with more than 3,000,000 listings. So, how could you make your property stand apart? Let us tell you a little secret. Airbnb market runs on reviews from people who’ve rented your property. In order to get a good review from them, you need to spend a little extra, like quality beddings, professional photography, welcome basket, bathroom accessories – all of this coupled with the right marketing will surely make your rental property stand apart from the rest.    

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Why Should You Hire an Investment Property Management Company?

Investment Property Management Company

Real estate property is a valuable asset, especially if you own rental property, with time the property’s value increases, and so do the monthly rent you get. But it’s not as easy as it sounds. Owning rental and commercial property is one thing, but managing it is another. You have to make sure that it’s utilized to its fullest extent, the property is maintained adequately, which includes repairs and upkeeps, and lastly, you’re marketing your rental property the right way to reap its full benefits.

If you feel overwhelmed by these tasks, then worry not as investment property management companies will take care of everything while you sit back, relax, and enjoy the additional income made off from these properties.

If you’re still unsure about how an investment property management company can help you, then continue reading as we’re going to mention a few reasons why you should hire such a company.

Investment Property Management – The Remedy For Tenant Trouble

If you’ve had tenants before, then you must be aware of how problematic it could be to deal with troublesome tenants. It’s like living on life support, you can’t throw them out because of the contract, and they are always getting on your nerves.

Hiring an investment property management company is the one solution for all your rental trouble. They have hands-on experience in reviewing tenant applications; this enables them to identify the good tenant qualities that you’re looking for, like taking care of the property, paying rent on time, and more. Property managers will also let you know the possible red flags, which could result in troublesome tenants.

Acting As The Bridge Between You And Your Tenants

Hiring an investment property management company becomes necessary when you own multiple units. Imagine something breaking at your rental property; you will have to drive all the way to your unit and inspect the incident yourself. This could be more time consuming if the property is in another state or town. Property managers will see all this personally and keep you in the loop. Even if you have tenants that complain a lot, your manager will be the ones receiving their calls so you could relax and take care of other important stuff.

Timely Rent Collection

You don’t pay investment property management companies out from your pocket; instead, they deduct their fees from the monthly rent collection, that’s why they are as much as motivated and concerned when it comes to rent collection.

Property managers will make sure that that rent collection is done consistently, and if payments aren’t made on time, then they will enforce lease policies, which could also mean issuing eviction notice if it comes to that. Rent collection is a common issue when it comes to managing rental properties, and property managers are well trained to handle this concern so that your cashflows aren’t affected.

Apart from these issues, there are also concerns like maintenance of the property, legal matters, and periods of vacancy. An investment property management company knows how to handle all such issues, and they will make sure that your property is managed in a productive and profitable way.  

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Understanding Self Directed IRA For Real Estate

Self Directed IRA For Real Estate

Individual Retirement account (IRA) allows individuals to save money for their retirement in a tax-advantaged way. When there is saving, there is the idea of investment as well, and one of the most misunderstood and least discussed is the self-directed IRA. People usually confuse self-directed IRA with other types of IRA, like SEP IRA and Roth IRA. But self-directed IRA is a category of its own and is completely different from other IRAs.

Before we dive deep into the technicalities of the IRA, let us first understand what does Self-directed IRA means.

What is the Self-Directed IRA?

The self-directed IRA is basically an “individual retirement account” in which the investor, which is you, will have complete control and responsibility for all the investments in your account. While typical IRAs that are offered through different financial institutions tend to limit your investment options – we are talking about bonds, mutual funds, and stocks. With a self-directed IRA, you can easily invest in a huge range of investment opportunities, such as real estate.  

Self-Directed IRA For Real Estate

Planning to invest in real estate? Wise move – but before you do that, we need to know a few things. First things first, you need to set up a self-directed IRA. Some reputable companies and firms offer individual investors the ability to set up their own self-directed retirement account. Because of the complex nature of the IRAs, we recommend that you have a custodian that will take care and provide you with all the information and guidance as you navigate yourself through the uncharted territory of the IRS tax code.

What Do You Need To Know About IRA Custodians?

Just like real estate agents, IRA custodians could also have complicated fee structures. Therefore, we advise you to do your research and understand all there is to (potential fees and expenses) before you contact a custodian as it could heavily impact your overall return on investment.

Benefits of Self-Directed IRA investment in Real Estate

You’re the one in-charge

The name says it’s all, “Self-directed” IRA makes you the one who is running the show. You’ll be solely responsible for handling your financial future. With some help from a trusted accountant and a real estate IRA, you will be able to make the right decision that will keep you happy in the later part of your life.

Higher ROI potential

When you invest in real estate through Self-directed IRA, you’ll have more flexibility regarding the overall amount that you want to invest, which means there is the potential for higher ROI.

Investing in real estate is a dream for everyone, and the self-directed IRA is the perfect route to do so. With financial freedom, you’ll be the one making decisions and controlling your own financial future so you could see a happy ever after.    

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What to Know Before Investing in Multi-Family Properties?

Investing in Multi-Family Properties

People often believe that investing in real estate and the stock market will reap the same benefits, but that isn’t the case. Make no mistake; the stock market is infamous for its volatility while the real estate market is known for its lucrative cash returns. People who like to have a role in growing their capital are ideal for the real estate market – they are the ones in charge of cash flows and investments, and best of all, they can come up with their own marketing strategy to give them an edge over their competition.

Investing in rental property is the preferred investment for investors who like to have an additional source of monthly income while also growing the value of their property. If you are planning to invest in residential property, then there are two types of properties you should know about; single-family (typical houses for rent) and multi-family properties (large residential complexes.)

Investors who are looking to take their real estate business to the next level could invest in multi-family properties as it’ll allow them to produce more income while building net worth much faster.

If you are planning to invest in multi-family properties, then these are the things you should know before you step into the market.

Location Matters

Like any other real estate investment, the location of the property matters, in fact, it is of the prime importance in multi-family properties. How is the neighborhood? Is the area close to the freeway or the subway? Does it provide quick access to downtown areas? It the area in itself popular? Is it close to educational institutions? Is it close to a park?

Also consider other demographics like the size of average houses, age of the residents, local economic activity (availability of new jobs in the area), and, most importantly, the crime rate of the area. All this should be taken into consideration before investing in multi-family properties, as tenants will make sure to consider everything mentioned above before moving into the building.  

Condition Of The Property

The physical condition of the multi-family property must also be assessed before investing in it as it can affect your tenants – becoming a liability for you in the future. If you’re planning to invest in an apartment building, then you should inspect a few things. Like the roof and its condition, the building’s central heating and air conditioning system, the plumbing and electrical works, the condition of the elevator, and most importantly, is the foundation of the building concrete?

You should also calculate the expected future repairs or renovations that you might incur in the long run. Everything should be considered before investing in a multi-family property as it can help you in negotiating the right deal when acquiring the property and also when you’re planning it for further investment.

Along with these factors, you should also consider the competition in the area along with the vacancy rates. Investing in multi-family properties could have huge monetary benefits if the planning is done flawlessly – making it the investment to take your real estate business to the next level.