Does Location In Real Estate Really Matter?

Posted by neil on February 20, 2012
General / 14 Comments

 

I used to think that they were trying to make me mad…

Now when I look back, I realize that they were just trying to help me.

I used to have conversations with people who were investing in real estate.  These people were business owners and more experienced at investing in real estate than I was at the time.

I would ask them which cities they were purchasing properties in.   They would tell me right away.  It almost felt like they were showing off.  It felt like they knew something that the rest of the world did not know.  Now when I look back, I think they did know more than the average Joe.

After they told me where they were investing, I now felt that it was my turn.  On almost every occasion, as soon I would tell them where I was investing, I would get the same reaction…

It felt like they were disappointed!

The first few times I was confused by their feelings of disappointment, but as time went on my feeling changed.

I would no longer be confused, rather, I would get mad.

As soon as I told these experienced investors where I was investing, they would all pretty much tell me the same thing.

And this was….“Focus on location.”

None of these people ever directly came out and said, “Your City is not a good one, buy properties elsewhere”.  Rather, I would be told that, “The City probably won’t appreciate at the same levels when compared to other cities.

The cities that they were comparing things to were of course, the cities they they were investing in.

To date, I have invested in 3 different Cities.  2 of these Cities have been outstanding. The appreciation of the properties has been very good and the tenant profile has been reliable and low maintenance.

One of the cities however, has posed many challenges. In this city, I have dealt with numerous repairs and maintenance of properties, little to no appreciation over the past 3 years, dealt with one eviction and have had challenges finding quality tenants for a vacant property.

It took me about 3 years to realize that what some of these critical real estate investors were saying to me was true.  What they were saying was the city that I was investing in was… ‘No Good’.

So now, I have started the process of selling the properties that I have in this city.  I have one listed for sale, and based on the success or failure of the sale, will probably look at selling another 2 properties that I own in this city.

An experienced investor once told me that you have to sell your ‘dog properties’.  What he meant by this was the following:

If a property is not performing to your standards, you have to sell it and reinvest your money somewhere else.

For instance, if the property is not producing your desired cash flow, coupled with the fact that the property is not appreciating at a good level, you must consider selling it.

It never helps when you are incurring high repairs and maintenance costs on the property along with dealing with non paying tenants.

I used to think that during these tough times one should hang on and not give up.

What I have learned is that you get to a breaking point.  If you have properties that are not performing, some event in your life triggers you to take action.

Once you are triggered to take action, you can finally get rid of some properties that have not been performing to your standard.

At the end of the day, if you can maintain properties in your portfolio that are low maintenance, produce cash flow and have good appreciation, this is the best situation that you can have.

In summary, we all get to a point in time where we realize that we have to get rid of under performing properties.  If we hold on to these and never get rid of them, they will burn you out, and the probability would remain high that you would throw in the towel altogether as a real estate investor.

Be smart, and get rid of your garbage properties.

Until next time…

Neil.

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The #1 Thing You Need To Know When Buying A Rental Property

Posted by neil on August 11, 2011
General / 15 Comments

Hi Everyone,

It has been over 6 years since I purchased my first rental property.  When I bought the first property, I had no idea what I should be looking for in a rental property.  I thought that as long as the property increased in value, that was all the mattered.

Appreciation is a great thing  to have when it come to real estate, however, it is not the most important thing.

You hear so many people talk about ‘cash flow’, and that a rental property needs to have a positive ‘cash flow’.

This is true, cash flow is important!

However, as a real estate investor, and a new one at that, you have to be very careful when it come to calculating cash flow.

Miscalculating Cash Flow

When you are purchasing a rental property, you have to be certain to not miscalculate the cash flow generated from the property.  If you do this, you could end up purchasing a property with very limited cash flow, or even worse a property with a negative cash flow.

Be very careful, one error in your math could mean that you wind up owning a property that is costing you money each month, not earning you money!

Falsifying Cash Flow

Recently, and quite often I come across people who falsify cash flow on rental properties. I have seen a hand-full of realtors falsify the cash flow being generated on a rental property that they are trying to sell.  These realtors are few and far between, however, there are some bad apples out there falsifying cash flow.  They inflate the cash flow in order to make it seem that the property is generating a higher monthly positive cash flow.

I have also witnessed some real estate investors (landlords) falsify the cash flow generated on their rental properties.  They do this for 2 reasons.

1) They want to impress other potential joint venture partners. They want to impress them that their subject rental property generates a high positive monthly cash flow.

2) They are trying to sell their property to a less experienced real estate investor, who will not take the necessary time to double check the cash flow calculations.

The Number One thing that you need to know when buying a rental property is:

You need to be concerned about the net income produced, not the ‘cash flow’

Net income refers to the money left over for you after all operational expenses have been subtracted.  The net income is your true profit from the property.

Here is an example to help illustrate:

Mortgage payments —> $450/month

Insurance —-> $20/month

Property Tax —-> $200/month

Property management fee (optional) –> $115/month

condo fees —> $300/month

Repairs/Maintenance (5% of gross rent)  –> $65/month

Vacancy (5% of gross rent)  –> $65/month

In the following example, all of the above items are operational expenses, and should be subtracted from the monthly rent amount in order to get your net income.

If the monthly rent amount is $1300/month, your calculation would look as follows:

$1300 (rent) – $450 (mtg payment) – $20 (insurance) – $200 (property tax) – $115 (property tax) – $300 condo fees – $65 (repairs and maintenance) – $65 (vacancy) = $85/month net income

If one wanted to make the overall net income higher, one could falsify the ‘cash flow’ of this property by not counting certain items. If they did not count the $65 repairs and maintenance and $65 vacancy allowance, they could increase the over all cash flow to… $85/month net income + $65 (repairs and maintenance) + $65 (vacancy) = $215/month positive cash flow.

When you look at the two figures, which one looks better?

$85/month

or

$215/month

Clearly, $215/month looks better.

As a new real estate investor, you have to be very careful!

Often ‘cash flow’ projections of rental properties are falsified in this manner.

Be careful and always calculate for yourself what the true net income is being generated from a property.

The number one thing you need to know when buying a rental property is to ALWAYS calculate and KNOW what the NET INCOME is.  Don’t be fooled!

Best Regards,

Neil Uttamsingh

ps: Sign up to The First Rental Property Newsletter if you want to learn how to buy your first rental property.  You will get advice from experienced real estate investors!

If it ain’t broke, don’t fix it

Posted by neil on July 10, 2011
General / 5 Comments

If I could share one piece of advice with aspiring real estate investors, it would be this:

Get a good handyman.

On the surface, this sounds like really useless advice.  However, it is probably the best advice that you will ever receive, and here is why…

I have witnessed with my own eyes many real estate investors come and go. Thee new investors get excited and buy a rental property, only to end up selling it a short time after.  They sell their property because they are overwhelmed with all of the work involved in order to maintain the property.  These novice investors are generally not handy people and cannot keep up with it takes in order to maintain their property

One secret that I have discovered over the years is that a very good, reliable and trustworthy handyman can help to keep you in the real estate investing game for the long haul.

They help to keep you in the game in the sense that, you can outsource all repairs and maintenance to them.

This essentially means that you are outsourcing all of your stress and worries to someone else.

By doing this, your level of anxiety decreases, and as such, the idea of owning a piece of investment real estate becomes more bearable.

This ultimately results in an investor being able to hold a rental property for many, many years.

Very recently, I was faced with a large amount of repairs and maintenance on a number of properties.  There were so many repairs to be completed on the properties, and there was no way that I could have done any of this work by myself.

I would not have been able to do this work because:

1) I am not handy

2) I would have had no idea where to begin.

Because I have an awesome handyman that I work with, I am able to call him whenever a property needs some work, and he gets to it right away.

In summary, I have realized the following.  In order to be a successful real estate investor over the long term, you need a good handyman, that you can outsource all of your repairs and maintenance to.

All the best,

Neil Uttamsingh

ps: If you want to invest in real estate and need some advice on how to get started, follow my blog today.  Type in your name and email address on the right side, and start getting educated about real estate today!

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The Secret To Managing Rental Properties

Posted by neil on April 26, 2011
General / 13 Comments

I wish I knew all of the answers 6 years ago.  If I did, my real estate investing journey would have been a smooth one.

Wait.

Let me take that back.

The journey would not have been ‘a smooth one’.  Rather, it would have been much ‘smoother’.

Is smoother even a word??  I am not sure.  It is late and I have been knocking on doors non stop for my friend Max these days.

What I am sure about is this…

If you are a new real estate investor, you need to read this article!

Without question, new real estate investors have false beliefs about the reality of managing rental property.

It has been my experience, speaking to countless new investors, that they all panic about the idea of managing their own rental property.

If you are a new real estate investor, and you are reading this, you may think that I am speaking directly to you.  The truth is that I am.  I am speaking to all new real estate investors.  So please listen up!

The Secret To Managing Rental Properties

My property manager friends and property manager readers are not going to like what I am about to say…

If you are a new real estate investor, and you have just bought your first rental property, you must manage your rental property on your own.  That’s right… on your own!

There is one caveat to this however.  If the property is too far away from where you live (several hours drive) then it is acceptable to use a property manager.  However, if the property is closeby to where you live, you must manage it yourself.

Too often I speak to new real estate investors who think that they can simply outsource the task of managing their property to a property manager.

If you do this at the very begining of your real estate investing career, you are in for some serious trouble.

Serious Trouble

The serious trouble I speak of occurs when you simply do not know how to manage your property.  When you are managing the property on your own you are in constant contact (or at least should be) with your tenants.  In addition, you periodically should be visiting your property as well, in order to monitor the upkeep of the property.  If you outsource these taks to someone else, like a property manager, you are making 2 big errors at the very begining of your real estate investing career.

Your Two Big Errors

Your first error is:

A non existent relationship with your tenant

Real estate investing is a misleading term for buying investment real estate.  The act of buying investment real estate should be called ‘tenant relationships’ or something to that effect. The faster you can learn that you have to have  great relationships with your tenants, the more successful you will be, and chances are the longer you will keep at it.  (investing in real estate)

Your second big error:

A lack of property inspections

Plain and simple:  No one will care for your rental property like you would.  This includes property managers.  As  a new real estate investor, it is YOU who has to take the responsibility of inspecting your properties now and then, and making sure that the property is being taken care of.

If you are not keeping your eyes on your property, the smallest maintenance issue can slowly become a major repair.

Example, after a recent inspection at one of my rental properties, my handyman and I noticed some water damage in one of the bathrooms.  We are being proactive and taking care of this issue by doing some repairs.  Had we not noticed this, and if this problem was left for too long…it would have turned into a major problem and a major repair, costing several thousands of dollars.

New Investors: Take Note

I am not writing this article for fun.  I am writing this article to hopefully help some new real estate investors understand one thing.

Manage your rental property yourself!

Do not rely on anyone else to do this.  Your life will be much less stressful if you manager your properties on your own.  How do you think I know this?

Onwards and Upwards,

Neil Uttamsingh

ps: New real estate investors, sign up to my blog today.  Through reading my blog you will get hints, tips and tricks to help you buy your first rental property.

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How To Increase Your Confidence

Posted by neil on April 08, 2011
General / 2 Comments

The mission statement of this blog is to, “provide knowledge and confidence to help you buy your first rental property.”

If you have been following this blog for some time, hopefully you are gaining the necessary confidence to help you take action toward buying your first rental property.

If you are still struggling with your confidence, I have the perfect solution for you.

Before I present you with this great solution, I am going to make a quick comment.

Neil’s Quick Comment

In all my years of investing in real estate, I have noticed that those individuals who DO NOT invest in real estate, however truly want to, fundamentally lack confidence.

There are of course other factors that come into play as well, however, if you are not confident, nothing else matters, and you will never end up investing in real estate.

My friend and fellow real estate investor Brian Persaud once planted a seed of thought in my head, that helped me to understand further the dynamic of people, real estate, and how people can increase their confidence with respect to real estate investing.

Brian said that sometimes people can increase their confidence by coming out of their comfort zone by doing things such as martial arts. (These are not his exact words, rather, I am interpreting and paraphrasing some of his dialogue)

His idea here was that martial arts generally gets people out of their regular routine, and provides them with something new and exciting that they have never done before.

Once people partake in this new and exciting activity, their comfort zone will have expanded, and they may feel more inclined to do something now (invest in real estate) that they were once afraid of doing in the past.

Plain and simple, if you lack confidence and you want to increase confidence, you have to do something that is going to take you WAY out of your comfort zone.  You can do martial arts or you can do door to door canvasing for a political party…

Enter The 2011 Federal Election

If you are Canadian, you are reading this article in April 2011, and you are looking to improve upon your confidence, I highly recommend that you do door to door canvassing for a political party or candidate.

There is an upcoming Federal Election in Canada on May 2nd 2011.  Any candidate who is looking to run a good campaign and who is looking to win needs volunteers.

The quickest way you can get a crash course on how to improve your confidence is by becoming a door to door canvasser.

Speaking to people door to door is not an easy thing to do.  You will find that by doing this, your confidence level will automatically increase, the more you are speaking to people in this fashion.

The end goal of course is to increase your overall confidence level so that you can take action and not be afraid of doing other things such as investing in real estate.

Confidence is a funny thing.  It is funny in that when you increase your confidence levels in one area of your life (for instance through door to door canvassing), it can have a very positive effect on other areas of your life.  (for instance your comfort level with real estate investing)

In Summary

If you are looking to invest in real estate, however you are too afraid to take any action at this point, you need to improve upon your confidence.

If you are in Canada, get out and start volunteering for a political candidate or political party during this federal election.  You have just under a month left, so get out there right away!

You will be surprised how much confidence you will gain by speaking to complete strangers door to door.

Do something to increase you confidence today!

Best Regards,

Neil Uttamsingh

ps: If you want to buy your first rental property and don’t know where to begin, subscribe to my blog.  I will help to improve your confidence and knowledge so that you can buy your first rental property.

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What Everybody Ought To Know About The Canadian Real Estate Market

Posted by neil on April 06, 2011
General / No Comments

Every real estate investor has a TSN Turning Point. If you are Canadian, and if you are a sports fan, you may know what I am referring to when I say, ‘TSN Turning Point‘.

If you have no idea what I am talking about, not to worry.

Here is what I mean…

For many years TSN had been Canada’s leading sports network.

After each televised sports game on this network, the sports commentators covering the game would review the highlights of the game as well as what they called the ‘TSN Turning Point’.

The TSN Turning Point was the time in the game where the momentum shifted for the winning team.  It was a time in which the winning team took stride.

It was a point in which the winning team made a key play that helped them win the game.

All Real Estate Investors Have A TSN Turning Point

Every experienced real estate investor can tell you when their own personal TSN Turning Point occurred.

A TSN Turning point for a real estate investor is a time in which they gained momentum, confidence, and belief in themselves.

For myself and many other real estate investors that I know, The Real Estate Investment Network ACRE Event was The TSN Turning Point.

Today I have a treat for you. The Real Estate Investment Network and Don R. Campbell have a guest post for you. In the post Don and the Real Estate Investment Network refer to the real estate investing space in Canada as well as the upcoming Toronto REIN ACRES Event.

Enjoy the post and feel free to leave your comments for Don in the comments section below.

Best Regards,
Neil Uttamsingh

ps: Don’t forget to subscribe to my blog if you are a new to the world of real estate investing. You will find very valuable information on this blog that will help you to buy your first rental property.

—————————————————————————-

A Canadian
Real Estate Market

Doesn’t Exist in 2011,

So Don’t Be Fooled

What does 2011 hold for
Canadian Homeowners and Real Estate Investors?

Almost a quarter of the way into the new year, many
people are still looking for ‘predictions’ of what 2011 will hold. That’s why
you see so many pundits come out of the woodwork to share their insights. I do
find this a bit strange as nothing about the market really changed from December
2010 to January 2011 and through to March 2011, other than a few new pictures on
your kitchen calendar. Those who pay close attention to the underlying economic
fundamentals aren’t struggling with what is coming next.

But having said that, let’s take a look at what the next 12 to 18 months hold
for Canadian real estate.

Quick 2010 Overview – Multiple Levels of Confusion

In order to look forward, we do need a quick review of
2010. The year in real estate turned out to be exactly as predicted in January
2010. It was a year of turmoil and confusion (the big economic ‘W’) and those
who were unaware that we were riding this 2010 ‘W’ allowed themselves to be
shaken out of the market (right at the wrong time!)

The economic ‘W’ does have a real cleansing effect on the market as it always
chases out most of the speculators (those who profit only when market values
increase dramatically) and leaves the market to the real professional investors
and landlords.

This confusion was especially felt by those using housing market numbers to
analyze the market. Investors understand that:

If You Are Making Decision based
on Housing Market Numbers

… You are Driving By, Looking In The Rear-view Mirror, and are Bound To Crash!

Government Meddling Led To
Unsustainable Mini-Boom

More confusion was thrown into two very large markets
(BC and Ontario) with the announcement of the HST. Despite some limited efforts
by both provincial governments, how the HST was going to affect real estate
purchases and sales was not clear – into this vacuum sped confusion and an
almost breathless panic to get purchases done before July 1st. This caused a
higher percentage of purchases to be pushed into the first half of the year than
would normally be expected. Due to their sizes, these two markets hold such a
high percentage of the Canadian real estate transactions that this activity made
the Canadian average price and activity jump despite most other markets
underperforming.

This cursory analysis led some housing analysts to predict that a bubble was
forming. This, of course, turned out to be false as markets slowed down again
later in the year. Those of us who analyze the real estate market by looking at
underlying economic conditions knew this boom would be short lived and was a
product of desperation rather than true market sentiments.

A ‘Canadian’ Real Estate Market Does Not Exist

Overall, 2010 proved to investors and homeowners alike
that a ‘Canadian’ real estate market doesn’t exist in and of itself. The
Canadian real estate market is actually a series of very regional markets all
which perform relatively exclusive of each other.

In fact, in 2010 and in 2011 the market really will be a ‘Goldilocks’ story.
Some markets will be too hot (compared to underlying economics), others will be
too cold, and some will perform just right. As our regions continue to detach
from each other economically this trend will continue for many years to come and
will compel investors and homeowners to ignore national real estate numbers and
trends. They must focus on what is happening in their region.

2011 Market Predictions

To make it easier to predict what is going to occur in their
local real estate markets, investors can use the formula shown below. Long term
increasing prices of real estate stem from economic (GDP) growth. Without
economic growth, a real estate market is not sustainable. Sure there can be
upward and downward blips not attributed to economic growth (such as when the
governments meddle as in 2010), but these are just short-term unsupported blips.

Figure: The Long Term Real
Estate Formula

GDP Growth = Job Growth = (12 months later) Population
Growth = Increased Rental Demand = Decreased Vacancies = Increased Rents = (18
months later) Property Purchase Demand = Increase in Property Prices

This cycle works both ways, over roughly the same time lines. Sustainable real
estate price increases occur approximately 18 months after a region’s economy
begins to grow and they drop approximately 18 months after the economy in a
region begins to shrink.

We can use Alberta’s markets as the perfect illustration of this formula in
action. Alberta’s GDP grew so quickly for years in a row and the real estate
markets skyrocketed over that time and even after the economy began to slow
down. This set up a number of high expectations and assumptions by people not
understanding this formula and scared a lot of people out of the market. Even
today, despite the fact that Alberta is going to lead the nation in economic
growth in 2011, those who experienced the 20% annual increases in the past are
sitting on the sidelines waiting for the market to come back. Smart investors
who understand the inevitability of this formula are quietly picking up pieces
of Alberta cash-flowing real estate, positioning themselves for the inevitable
increase in demand 12 to 18 months from the start of the strong economic growth.

Because Canada’s 2011 market is going to be even more regionally fractured than
in 2010, it is imperative that investors and homeowners understand this formula
and they make their investment decisions based on it, rather than the
fluctuating housing market numbers.

CREA & Competition Bureau
Settlement Leads to Unintended Consequences in 2011

As with any structural changes to an industry, the settlement
imposed by the Competition Bureau on Canadian Real Estate Association’s MLS
website will have many unintended consequences on the health of the Canadian
real estate market. We are currently completing a full report and analysis of
these consequences (some of which are OK and some of which are not good news).
Here are some preliminary conclusions that will affect the overall market:

  1. Housing metrics will indicate incorrect readings of the
    health of the market, leading to inaccurate analysis by some market
    commentators during the year
  2. Often used metrics such as ‘sales to listings ratio’,
    ‘days on market’, and ‘overall number of listings’ will be impossible to use
    as comparisons to previous year’s performance. This is because under the new
    rules, there will be many more listings being posted by people just fishing
    the market at very little cost (many poorly priced, poorly managed listings
    left in the system too long).
  3. These additional listings will lead to average price
    increases being softened more than the underlying economics would usually
    lead to.

The complete Unintended Consequences of the CREA
Settlement with the Competition Bureau report will be publically distributed to
all who are subscribed to
www.myREINspace.com.

Finally, the distinction between real estate “investors” and real estate
“speculators” is created by one thing – a sound and unbiased education in real
estate fundamentals. Done properly, real estate investing produces results in
any market conditions because it incorporates economic fundamentals, proven
business practices, and a long-term vision. On the other hand, real estate
speculation requires perfect timing, lots of hope, and a strong enough stomach
to ride out the cycles in the market!

By far the quickest, least expensive and most engaging way to become a
sophisticated real estate investor is to set April 16th and 17th aside to attend
the

2011 Toronto ACRE™ Live event. Now in it’s 19th year, the ACRE™ system
continues to be where Canadians go to receive an unbiased real estate investing
education that works – not because if focuses on the “Canadian” market, but
because it teaches investors to drill down into the economic fundamentals that
drive regional real estate markets.

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5 Items To Consider When Purchasing Rental Property

Posted by neil on March 27, 2011
General / 1 Comment

Due to popular demand, guest posts have returned back to First Rental Property.  It has been a while since our last guest post, however, the wait has been well worth it.

Today I have for you a very well written article compliments of Phil Wiper of Family Lending.

In today’s article, Phil discusses 5 important factors that every new real estate investor needs to consider when they are buying their first rental property.

Enjoy the article, and please leave your comments in the comments section below.

Also, don’t forget to check out the article I wrote for The Family Lending Blog titled, Here Is A Method That Is Helping Home Owners Save Thousands On Their Mortgage.

Best Regards,

Neil Uttamsingh

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5 Items to Consider When Purchasing Rental Property

If you are ready to purchase your first rental property or still sitting on the fence wondering if you are making the right decision, I am here to tell you that the decision to purchase your first rental property is never an easy one but once you have done so, you will never turn back.
You’re probably wondering why should you listen to me, but I have bought and sold over 10 rentals in the last couple of years. I am here to say that if I just looked out for these 5 items that I am going to share with you, I would have been a much happier camper. Instead, I had to learn the hard way, one building, and one tenant at a time.
These 5 important items include:


1. What is the expected cash flow from the rental property?
•    First lets say that you are looking at a duplex for $200,000
•    Through your market research and the information you obtained from your appraiser, you have determined that the market rents for your area are X.
•    Next you should have been given a pro-forma of expense for the property which includes the mortgage, insurance estimate, property tax amount, utilities (if the tenant is not paying them) and the property management costs.
•    Your objective is to have this property putting POSITIVE CASH FLOW in your pocket from day ONE.
•    Not all areas of the city can support the rent required to cover the mortgage and the expenses. My suggestion, do not purchase in the areas where you know that this will not work. You are looking for areas where you can have positive cash flow, after all you are in this to make money right?


2. Pick a neighborhood with low vacancy rates in comparison to the rest of the city.
•    From my personal experience, it is best if you look to purchase a rental home in a healthier neighborhood. There are a couple of reasons for this; one is that you will be looking at a higher rental payment and two, the vacancy rates tend to be lower.


3. Take your time in picking a qualified tenant.

–  Taking your time to select the right tenant will help you reduce risks in the future. A better qualified tenant also means lower costs and problems down the road for you, the owner.

4. For your 1st rental property or two, the home that you purchase should be in move-in condition.
•    Since you will be busy making sure the home is fully rented out when you take over, the best thing that you can do is buy a unit that is move-in ready. Now I am not including the minor jobs including making cosmetic changes such as cleaning or maybe painting a room or two but the changes should not include major repairs.


5. Buy low and sell HIGH – always be on the look out for homes that are priced under the current market value.
•    Low sale price does not mean low value or low rents
•    How do you find these deals? Ask. Ask everyone you know. Take the time to get to know the area you are looking for.
•    Be on the look out for pre-foreclosures, foreclosures, and homes that have been on the market for a year.
Now what do you do? Go buy a rental unit of course. Still need help calculating what you can afford? Try our handy mortgage calculator canada which can help you calculate payment options, schedule of payments and much more. Also, follow FamilyLending.ca on Facebook and Twitter!

Check out the folks at Family Lending today!

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First Rental Property Announces Ebook Launch

Posted by neil on March 15, 2011
General / No Comments

First Rental Property is creating it’s first every Ebook!!!

The Ebook is going to be on the topic of ‘How to Buy Your First Rental Property’

We will be creating the Ebook based on feedback that we receive in our survey. Click here to take survey

If you are looking to buy your first rental property, please take a quick moment to fill out this survey.

There are 10 questions that will take you about 6 or 7 minutes to complete.

If you know anyone else that is looking to buy their first rental property, please forward this blog post  to them.

Thank you very much.  Keep on checking back in with the blog regarding updates on the Ebook as well as the launch date!

Thank you very much.

Neil Uttamsingh.

Click here to take survey

ps: If you are looking to buy your first rental property, subscribe to my blog today for helpful insights that will help you to buy your first rental property.

[youtube]http://www.youtube.com/watch?v=xlyFEXfrAoY[/youtube]

How to Evict a Tenant – Part Seven

Posted by neil on March 08, 2011
General / 1 Comment

The most important thing that you can do while you are dealing with an eviction, is to actually  know the process.

Not only do you need to know the eviction process well, you need to know it better than anyone else.

I can’t stress these words enough.

Know the Process!

You need to know the process better than your tenants and better than your property manager if you are working with one.

If you do not know the process better than everyone else, you are going to be in for trouble.

You are going to be in for trouble because this means that someone else, other than you knows the eviction process better.  This could be your tenant, or this could be your property manager.

So what if they know the eviction process better?

You better be concerned if you do not know the process better than others.  Having a misunderstanding of or having a lack of knowledge concerning the eviction process is what causes a lot of pain and suffering.

This pain and suffering is felt by you, the real estate investor.

The pain and suffering manifests itself in the form of missed deadlines and misinterpretations of the eviction process.

Missed Deadlines

As we have covered in previous posts, the ruling body responsible for overseeing your hearing requires you to submit documentation at different times throughout the eviction process.  Paperwork needs to be submitted either to the tenants directly, or straight to the ruling body itself.  Keeping in mind that rules and regulations concerning evictions vary between jurisdictions.

You have to have an in depth understanding of when all of the deadlines are.    This is important as failing to submit documentation by a certain date can delay the eviction process and in some cases void the eviction process altogether.

If you do not have a good understanding of these deadlines, plain and simple, it is going to be very easy to miss them.

If you lack knowledge with regards to these deadlines, you may depend on information provided to you by other people as to when these deadlines are.  For instance, you may ask a friend or your property manager when a certain deadline is.  Your property manager or your friend give you the information and you do not question it whatsoever.

Now consider this…

What happens if the information that someone gave you  is wrong regarding the eviction process?   For instance, someone can give you the wrong time frame in which you are supposed to submit paperwork to your tenant.

Here is what happens as a result…

What happens in most cases is that people will take the information at face value and not question the information at all.

This is dangerous as this can result in a delayed eviction process.

For example, there are certain time lines imposed by the ruling body in your jurisdiction.

You may get a certain amount of days in which you have to serve your tenants with specific paperwork.  If you fail to serve the required paperwork to your tenants during the necessary timeline, this can cause the eviction process to be delayed.

Time is of the essence during the eviction process.

If your tenants are not paying, as a real estate investor and landlord, it is in your best interest to get non-paying tenants out of there as quickly as you possibly can.

In the next installment of How to Evict a Tenant, I am going to talk about a secret weapon that every landlord should have with them, as they battle their way through the eviction process.

Best Regards,

Neil Uttamsingh

ps: Spread the word about First Rental Property.  Sign up for The First Rental Property Newsletter to get great tips on how to become a successful real estate investor!

pps: Don’t be afraid of the eviction process.  Keep positive and you will get through it!

How to Evict a Tenant Part One

How to Evict a Tenant Part Two

How to Evict a Tenant Part Three

How to Evict a Tenant Part Four

How to Evict a Tenant Part Five

How to Evict a Tenant Part Six

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How to Evict a Tenant – Part Six

Posted by neil on March 07, 2011
General / 3 Comments

Forming alliances is an important thing to do when you are evicting tenants.  In How to Evict a Tenant Part Five, I spoke of the importance of forming an alliance with your tenant.  By doing this, you are demonstrating to the ruling body overseeing the hearing that you are willing to work cooperatively.

During my recent court hearing, I made an attempt at forming 3 alliances in total.  One of the alliances I attempted to form was with my tenant.  The second alliance was an attempted alliance with a mediator and the third alliance was with a fellow landlord.

The Mediator

As I patiently waited in the court room for my hearing to begin, I would glance back on occasion and peer through the frosted windows.  You can read about the frosted windows in How to Evict a Tenant Part Three.

As I looked through the windows, I saw a group of tenants waiting outside. Standing with the tenants was a lady holding a clip board.  I deducted that she was a representative of the government body overseeing the hearings.

A few minutes later, this official entered into the court room with clip board in hand and made a few announcements to those of us sitting in the room.

This confirmed my initial thought. She was indeed a representative of the ruling body.

I had been keeping an eye out for my tenant, and up until this point I had noticed that they had not arrived yet.

While I waited in my chair in the court room, I realized that in the event that my tenant showed up, I would have to form an alliance with the mediator.

I knew that this was an important thing to do because, being cooperative with others as well as being respectful, is the easiest way to influence someone.  Being confrontation and condescending is the fastest way to get their back up, thus putting them on the defensive.

I wanted to align myself with the mediator, not against them.

At this point, time had elapsed and my tenants had still not arrived.  It became clear at this point that they were probably not showing up.  As a result, I did not get an opportunity to solidify any type of alliance with the mediator, however, I was prepared and more than willing to.

The Landlord

The other landlord that I spoke of was the only other person in the courtroom with me, other than a property manager.  The alliance that I formed with this landlord was out of necessity.  It was out of necessity because I was nervous.

Since I had no entourage with me, I felt that it was necessary to form an entourage, right there and then to help me get over my nerves. By forming this mini-entourage, I felt much more confident, as I felt that I had an ally with me.

I sat down next to this landlord and we started to share stories.  Here are some of the interesting things I took away from our conversation:

  • He had been investing for 40 years
  • He was originally from Cyprus
  • He was now in his mid 60s.
  • During the first 5 years of his investing career, he bought 2 houses, valued at approximately $40,000 each.  In these 5 years, he paid off both of the mortgages.
  • He was a very unhappy real estate investor.
  • He owned 4 houses, that were all free and clear
  • He was a very unhappy real estate investor.
  • He had attended court hearings many times in the past
  • He often argued with his tenants over non-payment of rent
  • Did I mention that he was a very unhappy real estate investor???
  • His tenants did not like him.  One of them out of spite, left all of the taps running in the house for one week straight, so that he would have en enormous utility bill.
  • He did have an enormous bill.  He described to me that when he got the bill, he did a calculation of how much water was used.  It was enough to fill up a small house he told me, from top to bottom!
  • When he found out about his tenant leaving the taps on for one week straight, he called the Police.
  • He and his tenant are now in court fighting over who is going to pay the massive utility bill.

In my next installment of How to Evict a Tenant, I am going to talk about the most important thing you need to do when you are evicting a tenant.  Stay tuned.  The next post is going to be a good one!

Best Regards,

Neil Uttamsingh

ps: Are you scared out of your mind about buying your first rental property?  Don’t be!  Shatter all of your fears by following my blog.  Gain knowledge and confidence so you can buy your first rental property.  Subscribe today!

pps: Here is “The Landlord with Will Ferrell”

[youtube]http://www.youtube.com/watch?v=pedpJ6PdkCE[/youtube]

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