Property Investment Guidance

Real estate investors all face a very common challenge: locating appropriate and quality investment properties. While there’s a lot of online property websites that allow you to search for property, there appear to be just like many real estate investment clubs that want to market you their own holdings. How do you know what is a good deal? What in the event you look for in a great rental or investment property and where can you find them? Let us take a look at some basics that will be a great refresher for the experienced real estate investor and useful tips for the novice alike.

What are you currently buying? When you decide to buy an investment or apartment, figure out what your goals are in advance. Whether it’s a buy-and-hold, short-term flip, rehab-and-rent or purely a prime rental property, you’re less likely to be sidetracked by all the properties available out there. You’ll also be able to create a listing of targeted questions to provide on every property you’re looking at knowing neglect the goals specifically and in advance or purchase.
Who are you currently buying it from? When shopping for investment property, there are lots of investment clubs that masquerade as “clubs” simply to get you to join and then sell on you property exclusively of the club or any other members. Although this alone should not discount some of their holdings or member properties, you need to exercise exactly the same extensive research you’d if the property weren’t presented to you through the real estate investment club.
Do your research. When purchasing a good investment or rental property, the numbers and data have to make sense. A “good price” alone is not enough to move forward with a purchase. You need to research vacancy rates, average rents, annual property expenses, and also have a full inspection and appraisal done on any property you’re looking at.
Cash flow – know where you’re at. In the purchase price, will the income in the property on an annual basis fall below, meet or exceed its annual expenses? Are you prepared to income negative when the rentals are vacant or expenses exceed income? If you’ve clearly defined your goals for the property you are looking to acquire, you can determine your cash flow needs. In many cases, your money flow needs will dictate you buy the car goals too!
P/E Ratios – will they seem sensible? The P/E (price-to-earning) ratio of a property is an easy equation from the property’s cost versus earnings potential. If you’re considering a house in an area where purchase prices are rapidly escalating yet rents are remaining stable, you’re not as likely to earn money around the property like a rental. However, if you choose a property within an area where rents remain stable and favorable with regards to the value, you’re generally looking at a much better option as a rental property because of your ability to income onto it regardless of market conditions. Prices increase? Great, you make money whenever you sell. Prices go down and rents historically hold stable? You are always cash flowing. Your real estate agent can obtain rental data for the part of the property you’re looking at.
How are you going to hold the property? Decide prior to your search whether you’re going to be holding the home in a business entity for example an LLC or S-corp, in your name, inside a trust or perhaps in your self-directed or property IRA. This will ease the closing process.

Surrounding yourself having a team of professionals with the validated experience and data to help you achieve your goals, is crucial if you want to be a successful property investor. One of the professionals you’ll need on your team is an Accountant.

Here’s what I consider when searching for a good Accountant.

1. Someone who provides advice.

a cpa like a professional with extensive current knowledge in his/her area of expertise. I expect these phones provide me advice. This may sound obvious, however my experience has explained that some Accountants only provide information whenever you ask an issue. I don’t know what I have no idea… so if I don’t ask a question, I don’t get the answer.

A great Accountant is going to be forthcoming with the information you need that affects your property investment strategy.

2. Not somebody that just processes your tax return.

Previously, we have paid lots of money for an Accountant who really just processed our Taxes. I’ve discovered large variations within the rates Accountants charge. The variation could be justified depending on the depth from the service delivered. Some Accountants provide advice and develop strategy, however others purely process tax returns.

Make sure you are only paying for the service you are receiving, or else find another Accountant.

3. Somebody that understands property investing.

I only desire to take the advice of those that have previously achieved things i am planning to achieve. Find an Accountant who invests in property… who understands property. Somebody that doesn’t only give advice in theory, but bases the advice on actual experience and expertise.

4. Somebody that is obtainable.

I love working with a cpa who is accessible when I need information. Accountants have demanding schedules. It doesn’t mean I usually have to speak to the Accountant. It may mean they have excellent support staff, experienced in supporting client’s needs.

5. Someone with efficient systems.

I do not wish to pay an Accountant to examine my accounts and files. That’s something I’m able to do, for free. I was very excited after i found a cpa who provided me with data entry templates. He advised me to go in all of the accounts in to the templates and forward them to his office.

They created an efficient system they expected the client to follow. The client accounts for the business and data entry from the accounts… the Accountant accounts for advice, cash-flow management, growth strategies, compliance, etc.

6. Someone who works well with other professionals.

An Accountant is really a specialist within their area of expertise, however as a property investor I require other professional services. A cpa who has a network of experts who also purchase and understand property is best.

7. Someone that develops you.

I have caused some Accountants who complete my taxes every year, return my files and then I get the invoice. No further contact is made until next year’s tax return arrives.