Contact Carla Barnes for a free rental market analysis at 678.548.9466
Contact Carla Barnes for a free rental market analysis at 678.548.9466
Call EOTM Real Estate Group, Doc… They make life much easier…
Investment property management is fast emerging as one of the vital aspects of a successful realty investment. In spite of the currently dull phase of the housing market, investing in properties is still considered one of the most profitable and stable activities. To keep all realty investments profitable, it is important to ensure efficient assets management.
Managing a property that includes managing of any type of tenants can be a daunting task. While purchasing realty is one thing, effective management is another. This is especially true if the owner or the investor does not possess management skills like the management professionals have. These experts can help to maintain the investments in the apartments or homes efficiently and also to manage good tenant relationships.
While management of properties such as apartments, single family homes and commercial properties does include screening prospective tenants and handpicking the suitable ones, it does not necessarily stop there. The property has to be well maintained and there has to be an impeccable system of accountability related to all financial transactions of its equity growth as well as the cash flow generated by renting it out to tenants.
What Makes Management Professionals Indispensable
Most property owners who stress on saving money usually end up hiring a single professional for investment management. Whether it is a house or a small apartment community, it is not possible for a single individual even a qualified one to attend to all the responsibilities associated with management or apartments and commercial investsments, supervise its maintenance and turn it into a profitable investment. This is why the primary concern of an owner or an investor must be to hire an established company that can offer outstanding services to keep all kinds of properties functioning at the highest possible levels.
A good management company will connect the investor with an experienced manager who will handle all matters related to the property. The professional responsible for investment property management will also act as the intermediary between the investor, tenants and the management company. The manager will also make sure that the investor receives accurate financial statements regarding the income generated from the property regularly.
A person who has invested in an single family home, duplexes or something on a more larger scale would definitely require a professional who is an expert is in his field and is aware of the financial goals of the investor. Since all properties are able to generate profits, a property manager must treat all properties as serious business. Therefore, before actually hiring an agency for investment management, the investor must create a great business plan with the management company. If the company seems to treat each investment as real business, they are likely to handle properties efficiently by enhancing their value and lowering potential risks.
Obviously, there is a lot at stake while choosing a company to manage realty investments and keep it running profitably. Therefore, it is important that the company and their overall business ethics inspire confidence and trust in the investor so that he is completely comfortable in assigning the property to the company handling investment property management.
Making the right decision regarding the company selected for managing properties and evaluating the experience of this company can directly influence the success of a realty investment. As long as owners or investors choose the best management professionals, they can create a profitable realty business.
Our goal is to help maximize your most prized investments. Contact Carla Barnes of EOTM Properties today to receive a free rental analysis of your most prized investment(s).
Direct line – 678-548-9466
Email – email@example.com
Website – www.eotmrealestategroup.com
Real Estate Blog – http://activerain.com/blogs/mortgage_diva
EOTM Real Estate Group specializes in providing our clients with a proactive management style which maximizes your bottom line.
And because we’re local professionals – experienced and knowledgeable – we will maximize your investment while putting dollars back in your pocket.
EOTM Real Estate Group was created for the express purpose of providing turn-key management services to our investor clients of single-family, multi-family, retail, and commercial rental properties. From marketing to on-site staff management, collections, and monthly P & L reporting, our goal always is twofold: to maximize our client’s return on investment, and to preserve and/or enhance the quality of their asset.
We take pride in the fact that our size allows us to deliver hands-on site management at all levels; from our leasing agents and region managers to our managing partner.
Call us today and we’ll tell you how we will put more dollars on your bottom line through expense control, volume purchasing and receivables management.
We look forward to hearing from you.
or Contact Carla Barnes today and get a FREE confidential rental analysis of your most prized investment.
Is the U.S. housing market truly at a turning point, as real estate investors seem to increasingly believe? Or is this actually a false dawn, meaning that there are problems ahead for those who turned bullish too soon?
New home sales jumped almost 10% in July, while the Case-Shiller home price index rose for the second successive month. Yet luxury home builder Toll Brothers lost $493 million in the quarter ending July 31, considerably worse than analysts had expected.
Housing stocks are certainly acting as if a recovery must be on the way. Pulte Homes Inc. has more than doubled from its low. Toll Brothers Inc. is up around 70% from its bottom. D.R. Horton Enterprises is up almost four times from its bottom. Lennar Corp. is up about 4.5 times from its low. Finally, Hovnanian Enterprises Inc. is up almost tenfold from its low after a flirtation with bankruptcy. Yet all of these companies are still racking up quarterly losses, according to their most recent earnings reports.
In terms of house prices, it would seem unlikely that a bear market bottom has been reached. Yes, the average house price is now back down around its long-term average of about 3.2 times average earnings, or only a little above it. But history suggests that markets don’t bottom at their average valuation: In fact, after such a huge excess to the upside, they overshoot on the downside.
The Case-Shiller 20-cities index is still 42% above its January 2000 level, having outpaced inflation during the last 9.5 years. Yet January 2000 was not the bottom of a housing depression — far from it, in fact. That was actually close to the top of the dot-com bubble, when valuations of all assets were at all-time highs. So an average price over the whole country that — even now — remains 42% above the average price recorded at the very top of a huge economic boom does not seem like a market bottom to me.
You also have to remember that the U.S. federal government is hugely subsidizing the market. Interest rates are artificially low, and the U.S. Federal Reserve has bought more than $1 trillion worth of housing debt. Fannie Mae and Freddie Mac have been rescued by the government, and provided with more than $100 billion of taxpayer capital. And Ginnie Mae (the Government National Mortgage Association), directly a government agency, has provided almost $1 trillion of mortgages that require a 3% down payment.
And that’s not all…
The government is spending additional billions helping homeowners avoid foreclosure. First-time buyers are given a tax credit of $8,000 towards the down payment on their house — this credit currently runs out on December 1. So the current overall market bottom is propped up artificially. Even if the proposed tax-credit extension is approved, at some point, those props will be removed.
In individual cities, the picture is somewhat brighter. Phoenix and Las Vegas prices are less than 10% above their 2000 levels, having been halved from their respective peaks. In those markets, house prices may truly be reaching a bottom, although the overhang of foreclosures after such a huge drop may make recovery slow. At the other extreme, Detroit housing is 30% cheaper than in 2000, a testimony to the awful economic environment there, with the bankruptcies of General Motors Corp. and Chrysler Group LLC.
Again, with the government bailouts of both companies, there may be something of a recovery in those local housing markets.
Probably the best prospects, however, are in Denver and Dallas, where prices are about 20% above their 2000 level, roughly in line with the increase in consumer prices during that same period. However, the local economies are strongly based on natural resources, particularly oil, whose price is triple its 2000 level. With prices in Dallas and Denver down only about 10% from their 2000 peaks, a true recovery in those cities may be near.
At the opposite extreme are the metropolitan “Big Three” of Los Angeles, New York and Washington, where prices are 61%, 71% and 74% above their 2000 levels, respectively.
Washington will be fine, of course: The Obama administration’s spending-and-legislation plans have attracted yet another huge influx of bureaucrats, lobbyists and lawyers, all of which will boost the housing market to new highs. With New York you have to worry about all the financial-services jobs being lost as a result of the worst financial crisis since the Great Depression.
From a nationwide standpoint, the most likely path for the housing market is for a modest recovery, with some later slippage as subsidies are removed. Housing is likely destined to once again become a highly regional market, as it always was prior to the 2001-2006 market boom, with the cycles in each market being very different.
What do you think local housing markets will do over the next 12 months?
Turn-key Investment Properties available at 75% of current market value!
Cash flow positive, Tenant Occupied, with Property Management in place!
Our company simplifies Real Estate Investing for the hands-off investor. As you have probably heard by now, what we are experiencing in the current market is one of the best opportunities for wealth creation of our lifetime! Don’t sit on the sidelines. Take control of your future and start building wealth NOW.
We have been investing in single family rental homes for over 10 years. During this time, we have built the necessary relationships with bankers, REO agents, Brokers, Insurance agents, contractors, title co.s., etc. After building a sizable portfolio of homes for ourselves (we put our money where our mouth is), we are now making this product available to outside investors.
Please contact us if you would like to discuss opportunities for wealth creation. We would be happy to speak with you.
How do you know if you are getting a good return on your real estate investment? Calculating the ROI on your investment property is critical to knowing how your investment is performing, or when comparing one investment to another.
In order to successfully decide whether a property is worth buying, an investor must run the numbers to calculate two types of returns: Cash-on-cash return on investment, and total return on investment.
Cash on Cash Return on Investment
The cash on cash return on investment is the before-tax cash flow (BTCF) divided by your initial cash investment. The formula looks like this:
Cash on Cash Return on Investment = BTCF / Initial Cash Investment
Your before-tax cash flow is calculated by subtracting your annual mortgage payment from your net operating income (NOI). The net operating income is simply the total income from the property minus the total expenses.
Let’s take a look at an example using a $150,000 income property purchased with a 20% down payment of $30,000. Let’s assume your mortgage of $120,000 is fixed for 30 years at a 7 percent interest rate.
Let’s assume your BTCF is $3,000 per year ($250 per month):
Cash on Cash ROI = $3,000 / $30,000 = 10.0%
Through the “magic” of leverage using financing to purchase your property, you have created a cash on cash ROI of 10%. This would be quite attractive to most investors in today’s market.
The cash on cash ROI is a good measure of a property’s first year financial performance. However, it does not include the additional benefits achieved through real estate such as the amortization of the mortgage and any future appreciation. The total return on investment addresses that.
Total Return on Investment
The total return on investment (TROI) provides a better and more complete measure of a property’s financial performance. That is because it factors in amortization and appreciation gained over time.
Total ROI = (BTCF + Net Sales Proceeds – Initial Cash Investment) / Initial Cash Investment
In order to calculate the total return on investment, one must project the BTCF for each year of expected ownership as well as the net sales proceeds from the sale of the property.
Let’s take our example above and assume that we plan to sell it in five years with an average annual appreciation rate of 4% per year. After five years our $150,000 property would be worth $182,498, and our mortgage balance would be $111,665. Let’s also assume that our selling expenses total 5% of the sales price, or $9,125.
Using the figures above, our net sales proceeds from the sale of the property in year five would be $61,708 ($182,498 – $111,665 – $9,125). Additionally, our before tax cash flow after five years would total $15,000 assuming no annual increase in rents or cash flow. Now our formula looks like this:
Total Return on Investment = ($15,000 + $61,708 – $30,000) / $30,000 = 156%
Note that some investors calculate their TROI using their after-tax cash flow (ATCF) instead of the BTCF. This can provide a deeper “bottom line” measure of the return on investment; however, it does not provide a good measure to compare one investment to another since tax liabilities will vary between individual investors. Calculating the TROI using ATCF is best suited for investor specific use.
By projecting a property’s future cash flows and appreciation, you can calculate the potential gains on your initial cash invested (down payment). Assuming the property is not declining in value, the TROI should increase in each successive year.
However, total return on investment can be a little shortsighted when used in isolation. This is because total return on investment does not measure of the property’s financial performance as it relates to its equity. For this we must calculate the property’s return on equity (ROE). Similar to the TROI, the return on equity calculation replaces the initial cash invested with the properties equity in a given year.
Please feel free to submit all mortgage and real estate related questions directly to me via email @ firstname.lastname@example.org.
YOUR KEY TO THE CITY
We Currently Manage Homes In
ALL CASH DEALS
Ask about New Investment Properties Under $30,000!
Buying Real Estate With All Cash
In an up and down market there are those investors that will dig up opportunities regardless of the state of the economy. These types of individuals are known as the “Warren Buffets” of Real Estate. They understand that in the current climate banks are holding on to their cash with a wait and see attitude. Savvy investors are finding that buying with “All-cash” works as a viable strategy for acquiring residential and commercial bank owned properties. The investors with a wait and see attitude for institutional lending and financing are missing a great opportunity to buy while everything is on sale. Rock bottom prices in the residential and commercial markets in part have been driven down by the scarce availability of credit. Stop waiting and start taking advantage of the Investors Buyers Market in Atlanta. Contact Carla Barnes of EOTM to get started!