First Rental Property

This week and next, I am having guest bloggers on First Rental Property.

Many of these bloggers contacted me upwards to about a year ago.  However, I am only now getting around to having them post their articles.

The first guest post in a series of guest posts comes from M.J.

M.J. covers the topic of mortgage modification.  This is a topic that I knew nothing about prior to reading M.J.’s blog post.

For a different perspective, here is M.J.’s article on mortgage modification.

Buying a rental property – Tips To Consider

By: M.J.

Owning your own real estate property certainly has various pros and cons. With time, the value of the property increases, and you may also be able to earn lots through the property. However, there are some cons too, with regards to owning a real estate property. This can seem to be even truer, if the current situation of the real estate market is considered. Most of the homes are said to have lost their value. So, there are various things that are to be kept in mind, if you are planning to buy a rental property for the first time. Other than attaining proper knowledge on rental properties, you should also be aware of the eligibility criteria with regards to obtaining a mortgage, and the requirements for getting a mortgage modification done (if and when required).

6 Tips On Buying Rental Property

If you are going to buy a rental property for the first time, you will have to consider the following:

• Price – It is important for you to consider the current price of rental properties. Know that it does not simply depend on the real estate market situation, but also on the place where the property is situated. So, compare the rates of other properties situated within that same locality.

• Location – Continuing from the first tip, it can be said that, the place matters a lot with regards to your investment in the rental property. Consider a place that is popular with people. Moreover, it is also wise of you to try and stay close to your own home. This will enable you to closely watch over the property.
  

• Get to know the neighborhood before buying – There is no point buying a rental property at a place which has not so good neighbors. This can pose as a problem to your investments. There is also the question of getting accepted, and that matters too. Check if the place is a hotbed of criminal activity. Nobody would like to live in such a place.

• Get to know the rental regulations of the place – It is also important for you to be aware of the rental regulations of the place, where you are going to buy the property. For, if you fail to stick to the regulations, you may get involved in legal feuds and problems.

• Beware of the condition of the property – Before buying a rental property, it is extremely crucial for you to consider the condition, which the property is in. For example, you will have to check the condition of the wiring and internal systems of the property such as the furnace and hot water tank.  The condition of these parts can have a direct impact on value of the property.

• Consider if there are any disputes on the property – Consider if there are any disputes on the property. If there are any, it is better to avoid buying that property. Otherwise, you will end up getting caught in complex problems and lawsuits.

The above 6 points you will have to keep in mind before finalizing the purchase of your rental property.

So here you have it.  A guest post from M.J. on mortgage modification and 6 Point to consider when buying a rental property.

What did you think of the guest post?  Would you like to see more guest posts?

Don’t forget that First Rental Property is a blog that is foccussed on helping people buy their first rental property.  If you need some help and guidance with buying a rental property, for some great tips be sure to check out my blog post:

REIN Live Events and REIN Home Study Courses Review

Happy Investing!

Regards,

Neil

Hi Everyone,

Today I have for you a light hearted post that will hopefully provide you with some good laughs.

*WARNING* – The content in today’s post is a departure from the usual, very educational content I provide on First Rental Property.

Translation = Don’t take offense because some of this content may be ‘over the line’ for some of you.

I got the idea for this post as I came across some funny funny real estate agent pictures while doing some research on other real estate blogs.

And now, here are the pictures…

…The Realtor’s sign above says, “We are on fire”

The First Rental Property Blog is geared toward helping people buy their first rental property.

If you need some help and guidance with buying your first rental property, be sure to check out my blog post called:

REIN Live Events and REIN Home Study Courses Review

Happy Investing!

-Neil Uttamsingh

Click here to GET BLOWN AWAY at Live REIN™ Events

I attended my first REIN event in April 2008.  I attended what was then called the REIN ‘Quick Start’ Event.  It was three days of real estate education.  I was totally skeptical of the event prior to attending.

I had read about Don R. Campbell in the Toronto Star Newspaper about a year prior to attending the event.  I was really into real estate at the time, and was reading whatever I could find about real estate in order to learn more.  I owned one rental property at the time and I wanted to find out how I could buy more rental properties.

The article that I read about Don R. Campbell and his company, The Real Estate Investment Network, also known as REIN, peaked my interest.  I cut out the article from the newspaper and put it in a little real estate binder that I made which contained other real estate related newspaper clippings.  I decided that I would attend the next REIN Live Event the next time The Real Estate Investment Network was in Toronto.

I had never attended any real estate related seminar before so I really wasn’t sure what to expect.

I had no idea that over 4 years later, I would still be connected with REIN.

There are  3 major live events that REIN organizes.  They are:

• REIN Monthly Workshops
• REIN ACRE Weekends
• REIN All Day Western Canada Conference

What are the REIN Live Events?

I have attended both REIN Monthly Workshops as well as the REIN ACRE weekends.  I have not attended the All Day Western Canada Conference, so I cannot provide you with any insight on that.

What is the purpose of REIN Monthly Workshops?

REIN Monthly workshops are meetings that take place once a month in some major Canadian cities such as Toronto, Edmonton, Calgary and Vancouver.  There are usually about 200 t0 250 people that attend these events.  The people that attend these events are either new real estate investors, experienced real estate investors or people looking to buy their first rental property.

The purpose of these meeting is simply to learn about investment real estate.  Specifically, where to buy, what to buy, and how to finance your purchase.

What about the REIN ACRE Weekend?

I would compare the REIN ACRE Weekend to a 3 day intense crash course in real estate investing.  There are usually a lot more people that attend the REIN ACRE Weekend as this is one of The Real Estate Investment Network’s flag ship events.  At this event, I would say that there are about 500 people throughout the weekend.

Who else attends the REIN Monthly Workshops and the REIN ACRE Weekends?

In addition to aspiring and existing real estate investors, there are a wide array of other people that attend these events. There are often Real Estate agents, Mortgage brokers, Insurance reps, property managers, HVAC specialists, flooring specialists and contractors.

Are the REIN Live Events Valuable?

For the most part I would say yes.  However, I think that they are more valuable to people who are looking to get started with real estate investing than they are to people who are experienced investors already.

I found attending these REIN events helpful because I needed to learn from more experienced people that had accomplished something that I was trying to achieve.

As time went on though and the more experienced I became as a real estate investor, the less valuable I found the REIN Live Events, such as the Monthly Workshops.

What results did I get attending the REIN Live Events?

Throughout the 3 years or so that I was attending REIN Live Events I ended up purchasing 4 rental properties.  I would not have been able to purchase these properties if it were not for some of the great people that I met at these events.  In particular, my mortgage broker who was the individual who taught me how to finance multiple properties.

I made some great friends that are also real estate investors that I am still in touch with today.

Through a fellow real estate investor I also got introduced to an HVAC specialist who over the course of 3 years has replaced 2 furnaces and 1 air conditioner for me.  Through this one contact alone I have saved thousands of dollars in repairs.  This month he just installed a new furnace for me for $1700 (before tax), the next closest quote I got from a competing company was $3300.

What are the Negatives about REIN Live Events?

Like I mentioned earlier, I think these events are good for people that are just starting out with real estate investing.  The events can also be good for intermediate investors who need a little boost of confidence in order to get going.

One big negative that I noticed was that there were a lot of people that attended these events month after month after month, but did not invest in real estate.  For some of these people, attending the events was more of a social outing than anything else.

Another negative point, which seems kind of silly as I write this is how LATE the events went on into the night.  The REIN Monthly Workshop events always fell on a weekday night, and they would end pretty late, sometimes around 11:30pm or 12pm.  That does not too late, does it?  However if you factor in some schmoozing after the event with fellow investors and a 30 minute drive home, sometimes I was getting home around 1am or later.

What would I change or improve about the REIN Live Events?

For starters, if I could change one thing, I would end the events much earlier.  If I was in charge, I would end the REIN Monthly Workshops at 10am, so that people could get home at a decent time in order to wake up early the next morning and be refreshed for the work day.

I would also change things such that there would be more direct networking time with key people.  I would like to set up ‘booths’ or ‘stations’ where knowledgeable mortgage brokers, real estate agents, lawyers, etc. could sit at and be available to speak to participants.  If you were interested in speaking to a particular person, you could visit them at their booth.  This booth system that I speak of is done at the REIN ACRE Weekend, but is not done during the REIN Monthly Workshops.  I would implement the booths at the Workshops as well.

What is the URL?

You can access more information on these events by following this link.

How Much Do The Events Cost?

The 3 events range in price from $199 to $587 with the Guest Passes for REIN Monthly Workshops costing $199.

What is the best part about REIN Live Events?

The best part about REIN Live Events is that you are able to learn financing strategies directly from mortgage brokers.  These mortgage brokers are able to not only help you buy your first rental property, but even multiple rental properties.  Not only that, REIN also recommends which cities and neighbourhoods are the best places to buy rental properties.  At the event, you are able to speak  directly to individuals who own properties already in these particular cities and neighbourhoods, and thus you are able to get from them first hand information on their experiences. 

This was exactly the situation I found myself in.  At the Live Events I met a mortage broker who I am still in touch with today.  He was able to help me finance multiple rental properties which enabled me to buy 4 properties in 3 years.  I also networked and made friends with people who were investing in a number of different cities.  I was able to hear directly from them their experiences (good and bad), which in turn helped me to decide what city I wanted to invest in. 

What Alternatives are there to the REIN Live Events?

People are busy and not everyone wants to attend live events.  Further to that, not everyone is an extroverted person, and interacting directly with people is quite uncomfortable to some.  For those people that don’t want to attend live events or don’t have the time, I would recommend to them some of the REIN Home Study Courses.  The home study courses available are:

• ACRE System Home Study
• Joint Venture Secrets
• Multi Family Investing Secrets

How much do these courses cost?

The REIN Home Study courses range in price from $587 to $987.  The best value I would say is the ACRE System Home Study course which is the cheapest at $587.  Unless you are more of an advanced real estate investor, I would not recommend the Joint Venture Secrets or Multi Family Investing Secrets. If you are an intermediate or advanced investor then the later 2 courses would be right up your alley.

What is the URL?

You can access more information on these events by following this link.

Which is more affordable, the REIN Live Events or the REIN Home Study Course?

In terms of value and affordability, I personally believe the guest pass for the REIN Monthly Workshop makes the most sense.  By attending the Workshop, you get a sense and a flavour of what you can expect from REIN without over committing and overspending right out of the gates.  If you have a limited budget, this is smartest route to take.

Can the REIN Live Events and/or REIN Home Study Courses Make You Money?

The simple answer to this is YES.

If you are motivated and you put what you learn about real estate investing to use, you will earn a great return on your investment.  I personally have made thousands of dollars by implementing what I learned about real estate investing through the REIN Live Events.  Then again, there are those people who have not made any money after purchasing these products.  Just like with any aspect of life, you have those people who succeed and those people who fail…

How to ensure you are Successful!

If you are new to real estate investing and you want to buy your first rental property the Live Events will guide you on which areas to buy properties in as well as give you an education on the type of mortgage brokers you need to utilize in order to obtain financing on your rental properties.

Even if you already own a property or maybe two, the Live Events are a great way to become connected with a good support group of fellow real estate investors, who can provide you with support when the going gets tough with your real estate investments.

If you have the resources to attend one of the events or take one of the courses, it is money well spent.  I am glad that I spent the money myself because I would not be where I am today as a successful real estate investor, had I not.

When you do decide to go to one of the upcoming Live Events or study one of the courses, it is a smart move to involve your spouse or a close friend.

Learning about real estate investing together is more fun and it ensures that you are on the same page with those people that you care about the most.

REIN Money Back Guarantee

The best part here is that REIN has a money back guarantee.  If you are not satisfied with their products, you can return them and get your money back.

Happy Investing!

Regards,

Neil Uttamsingh

Click here to GET BLOWN AWAY at Live REIN™ Events

Tenant turnover is a killer.  Especially for the small real estate investor. Every good landlord wants to find out how to keep tenants longer.  When you have a tenant move out of your rental property, if that property sits vacant you have to pay money out of your own pocket for the monthly expenses of that property.  If your tenant is paying you $1,000/month in rent, and your monthly carrying costs for the property including mortgage, insurance and taxes are $850/month, you have to personally come up with that $850 each and every month until your rental property is rented again.

The fewer units that a real estate investor owns, the more severe are the effects of tenant turnover, and thus the impact to the pocket book.

For example, let’s assume that you own one rental property, and that the property is a single family home consisting of one unit.  If this one unit becomes vacant due to the tenant moving out, you just lost 100% of your rental income for that month.

Let’s say now that you own 10 rental properties, that are all single family homes.  If one unit becomes vacant due  to the tenant moving out you now only lose one tenth (1/10)  or 10% of your rental income.

Generally speaking, when you lose 10% of your monthly rental income, this is a much better scenario than losing 100% of the rental income.

All experienced real estate investors know that they name of the game with real estate investing is cash flow management.  What I mean by “cash flow management” is knowing how to maximize your revenues an minimize your expenses.

As a real estate investor, if you are able to ensure that there is less tenant turnover, you are doing a fantastic job of lowering your expenses.

One of the biggest, hidden expenses that a real estate investor can face is tenant turnover.

From my experience thus far with real estate investing, I have learned that one can minimize tenant turnover by NOT increasing rents.

When you raise rents, tenants in many instances become unhappy and start to look for rental accommodation  elsewhere.

Personally, I would rather roll the dice and only increase rents once my tenants have moved out of my rental property.

Once the tenants have moved out of the property, I would re-rent the unit for the new market rent to a new set of tenants.

What do you think about this post? Do you agree with this strategy to keep tenants longer?  Do you think it will work?

Don’t forget to sign up for The First Rental Property Newsletter at the top right hand corner of the blog.

If you do this, I will send you tips and tricks from experienced real estate investors on how to buy your first rental property.

Regards,

Neil.

Any real estate investor with experience in managing tenants knows that non-payment of rent is an issue that has to be dealt with from time to time.

If you are thinking about buying your first rental property, good for you!

Owning a rental property is a lot of hard work, and the experience may not be as glamorous as what you see on TV. However, if you have the discipline and stamina to deal with the issues that come up, you will be well on your way to success.

As a new real estate investor first starting out, you should know that at one point in time, you will encounter problems with collecting rent.

Non payment of rent can come in different forms.  Here are some of the different ways…

1) The rent is due on the 1st of the month, and your tenant is late in providing you the rent. (cash, cheque, or electronic transfer)

2) You deposit a rent cheque on the first of the month and the rent cheque bounces (is returned by the financial institution due to non sufficient funds)

3) Your tenant does not have the money to pay rent, and does not provide you with the rent money for that particular month. 

There are so many factors as to why tenants sometimes don’t pay their rent on time.  Some are real, legitimate reasons, where as other times, the reasons are not sound and in fact are very flaky.

As a new real estate investor you must know that you have to…

“Prepare For The Worst”

Meaning…

Be ready for the first time that you do not receive your rent on time from one of your tenants.  It will happen to you at some point.  The only question is when.

We all learn our lessons from different life experiences.  Some of us learn faster than others.  Whether you learn slow or fast doesn’t matter.  What matters is that  you learn, and evolve and make changes in your real estate business so that you are prepared for the next time when one of your tenants does not pay rent on time.

How to prepare for late rent payments

Get familiar with your local Landlord and Tenant Governing body.  In each City, State, Province and Country the legislation regarding how Landlords and Tenants can interact with one another differs.

Get familiar with the forms you need to serve to your tenant when non payment of rent occurs.

The point that I am trying to make is that you need to become familiar with these forms before a non payment of rent issue ever happens to you.

You need to be armed with knowledge for when you do encounter a situation in which one of your tenants is not paying their rent. You need to be comfortable with the forms, you need to be able to understand them, and be able to navigate them easily.  You need to know how to fill them out properly.  You also need to know the rules surrounding when you are allowed to submit the forms to the tenant if they are late with their rent.  You need to know how many copies you need to retain and how many copies you need to present to your Landlord and Tenant Governing body.

Practices that I have Incorporated

It has taken me over 6 years as a real estate investor to learn one very important rule. This rule is to always have printed out and on hand the necessary forms and paperwork that needs to be served to a tenant in the event that they do not pay rent on time.

I have these forms printed out and I keep them in my ‘real estate’ binder, so that I can quickly access them.

I have learned with experience that I have to do this because I have been involved in multiple situations in which rent was not paid on time.

When I look back, the longer that I waited to collect the rent that was owed, the more problems occurred as a result.

As such, I have learned from my own experience to be proactive and to be prepared.  That is why I now carry these forms with me.

I have learned to prepare for the worst.

In preparing for the worst, I am becoming a better real estate investor.

How have your experiences been with collecting late rent payments? If you do not own a rental property yet, what scares you the most about non payment of rent?  Leave your comments below.

Best Regards,

Neil Uttamsingh.

All smart real estate investors use leverage to purchase rental properties.  In Part One of this article series, Real Estate Investor and  GTA Property Manager Todor Yordanov of Proact Investments gave his take on how real estate investors should use leverage when buying rental properties.

The H.O.P.E. Program is also a great way to help you find the money to buy a property.  H.O.P.E. has helped more than 12,000 people get homes who never thought they would be able to.  The Program has helped even those people with BAD credit get approved.  It is one of the best Rent To Own Programs out there as it gives access to thousands of property listings for Rent To Own homes.  CLICK HERE to enrol in The H.O.P.E. Program or to have your credit fixed.

In Part Two of this article series, Real Estate Investment Specialist and Mortgage Agent, Aneta Zimnicki of My Mortgage Sherpa gives her opinion on how leverage should be utilized by real estate investors when buying investment real estate.

If you missed Part One, a reader of First Rental Property asked the following question:

Neil

PS: The H.O.P.E. Program has helped more than 12,000 people get homes who never thought they could, helping even those people with POOR credit get approved.  This is one of the best Rent To Own Programs out there as it gives access to thousands of property listings for Rent To Own Homes.  CLICK HERE to enrol in The H.O.P.E. Program or to have your credit fixed.

Over the past several years, I have met a number of real estate investors who have owned real estate for a long time.  A long time in real estate terms can be 25 to 30 years.  During this time span, it is very possible that the mortgage for the rental property has been pay off in full.

The one commonality that these long time investors have, is that they have created cash flow for themselves.  Now, because their mortgage is paid down, they are able to reinvest the cash flow from their rental property as they so chose.

The smartest real estate investors in my mind are the ones who held onto their rental properties over the long term, and did not sell their investments, no matter how tough things got.

They are the smartest investors because they have created an income stream for themselves that will always be there, just as long as their rental properties stay rented.

Here lies the greatest problem that most real estate investors face.  Most people don’t stick it our for 25 to 30 years with their rental properties.  Most people in fact sell their properties when the going gets tough.

Any experienced real estate investor will tell you that the going can get very tough.  There will be times in which you wonder why you ever became a landlord.  There will be times in which you might be losing money in the thousands of dollars, due to repairs, maintenance and vacancy.  Things may seems like they will never improve and that you will continue to lose money as you maintain your rental property.

Most people break and throw in the towel by selling off their rental property.  This is the biggest mistake that you will make as a real estate investor.  You can never give up.  You must be committed for the long haul.  If you are committed and you stay the course for those 25 to 30 years, you will have won the real estate investing game.

You will have an asset free and clear of a mortgage that will have gone up in value and that will be providing you with cash flow.

So if you are a novice real estate investor, you must consider the following….

When you buy your first rental property, never sell it.  Keep it for the long term and enjoy the cash flow that you earn each month when your mortgage has been paid off in full.

Best Regards,

Neil