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5 Tips to Improve Your First Real Estate Investment (2019 Update)

A lot of new real estate investors lack confidence in their decision-making skills, especially when it comes to their first investment properties. They are afraid to spend too much on renovations, and they shy away from making some of the most effective improvements to get more out of their properties. If you’ve acquired an income property, and you want to increase your rental rates, decrease tenant turnover, and generally improve the value of your property or properties, follow these five tips.

A Fresh Coat of Paint

You might be surprised at just how effective a fresh coat of paint can be for improving the value of your investment. You can buy a bucket of paint for between $20 and $30, and you won’t spend much more on brushes, rollers, tape, plastic sheets, and any other materials you need. Then, if you do the work yourself, you’ll have made a major improvement to your property’s value without taking up a lot of your liquid capital.

New Carpeting

When you walk into a house, you immediately notice if it has new, plush carpeting or if the carpets are starting to look and feel a little threadbare. Carpeting doesn’t cost a lot of money, and it can make your property look a lot better to your prospective tenants.

Bathroom and Kitchen Renovations

If you’re investing in a turnkey property, you won’t have to worry about this for at least the first few years. If, however, you’ve invested in an older or distressed property, you should have already allocated some funds for renovations. The kitchen and bathrooms (especially the master bath) are some of the best places in the house to spend your renovation budget. People spend time a lot of time in their kitchens, and they want to relax and recharge when they’re taking a shower or getting ready to go out on the town. That’s why kitchens and baths sell houses, and it is why quality tenants always opt for houses with updated kitchens and bathrooms.

Landscaping

If you’re looking for DIY improvements that won’t cost much, landscaping is a great place to start, as well. You don’t have to be a master gardener to add some attractive flowers and shrubberies around the front porch, along the front walk, and/or around the mailbox. And, if your lawn is looking patchy, you can spread some grass seed to fill it in and make it more attractive, too.

New Windows

A lot of new investment property owners leave the windows alone because replacing them can be somewhat expensive. However, with the improved energy efficiency and aesthetics of new windows, you can add upwards of $10,000 to the value of the house. Plus, they’re a huge selling point with tenants and future buyers because they improve the energy efficiency of the house and can result in much lower utility bills every month.

These improvements won’t be free, but you can make them more cost efficient by doing most of the work yourself. Window replacements and kitchen renovations may be jobs for the professionals, but even with these you can save some money by taking care of smaller jobs yourself, such as demolition and/or small fixture installations.

With these five tips, you can create a budget solution that will improve the value of your real estate investment so that you can get higher rental rates while reducing tenant turnover. Thus, you’ll have shorter vacancies and much more stable income form the property. A little bit of expense now could pay you back in a big way down the road.

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5 Lessons You Can Learn From Failed Real Estate Investments (2019 Update)

Whether you are new to the real estate investing world or you have been investing for some time, you should understand that failure can hold a number of valuable lessons. That doesn’t mean that you have to go through the trials of a failed investment to learn those lessons, though. Fortunately for you, many investors have come before you and learned those lessons the hard way so that you can learn from their mistakes and avoid them.

Stick to What You Know

If you are new to real estate investing, it pays to do some research and to familiarize yourself with the markets you’ll be investing in before you dive in. As you do this, you’ll start to find that you’re more interested in and more comfortable with certain types of investments over others. This doesn’t mean that – if your first investment was in medical real estate – that every investment you make in the future has to be in the medical field. However, it does mean that you should understand your strong points and find financial and real estate experts who can help you make informed decisions about your investments in the future.

If It Sounds Too Good to Be True, It Probably Is

You’ll see infomercials, paid seminars, books, and TV shows all promising that they have the key to help you make millions of dollars in no time at all with real estate investing. If their promises were true, you would see a lot more millionaire real estate investors walking around, wouldn’t you?

The fact is there is no single secret to getting rich with real estate investing. However, with the right financial advice and real estate investing opportunities, you can grow your wealth while diversifying and stabilizing your investment portfolio.

Following a Formula Doesn’t Guarantee Success

Some of the books, websites, and television shows you see out there will have some good advice. If you follow this advice and you find a great deal in the right market, you’ll likely see a positive ROI. However, simply following one of these formulas will not guarantee that you get positive returns on an investment. That’s why it’s much more important to have experts in your corner than it is to understand any particular real estate investing “guru’s” formula.

Overpaying for Properties Is Always a Bad Idea

Whether you find yourself in a bidding war at an auction or someone tries to convince you that you should pay an inflated price on shares in an REIT that are “sure to appreciate”, you’re looking at a bad deal. Overpaying for a single-family property will result in losing your profit margin when you sell or rent. And overpaying for equity is just as disastrous, if not more so.

Never Bank on Appreciation – Cash Flow Is Essential

Finally, if you are looking at an investment property based on its potential appreciation rather than its current value in monthly or quarterly cash flow, you should probably walk away. Unless a property can bring you regular cash flow starting immediately or in the very near future, you are looking at an investment that will only tie your funds up and will not show you any significant returns until you can sell it. Even then, market values are never guaranteed, and you may end up taking a loss on the property in the long run.

Take these lessons and learn from real estate investors who’ve come before you. Many people have lost significant amounts of money by making very simple, understandable mistakes like these. Learn from those mistakes and enjoy more returns on your investments now and in the future.

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5 Tips for Investing in Commercial Real Estate (2019 Update)

If you’ve been researching different types of real estate investments, you likely already know that commercial real estate tends to yield larger returns in less time than single-family residential real estate. Whether you’re interested in investing in multi-unit residences, medical real estate, or retail real estate, you should know a few things before you commit.

Today’s Hottest Location Could Be Tomorrow’s Dud

We’ve all seen it happen. A new development goes in, and suddenly all of the most popular retailers and other businesses flock to open locations in it or near it. That’s great for a year or two, but then another new development begins just a few miles away. Suddenly, consumers are all intrigued by the latest shopping and dining area, and businesses in the first development start closing their doors. Before you know it, that area is completely unpopular and its investors find themselves looking for the fastest way to sell.

How can you avoid falling into this kind of trap? Look for areas that have catalysts for sustainable growth. Look for new schools, parks, rec centers, and shopping districts with longer leases on their units. All of these signs are indicators that an area will continue to be a good location for years to come, and that it’ll bring you good cash flow for as long as you choose to own a property (or equity in a property) there.

Beware – Properties Don’t Always Sell Quickly

Likewise, it’s a good idea to keep in mind that real estate is an illiquid asset. If you need liquidity in your portfolio, you should ensure that you have it with other investments (like stocks, bonds, precious metals, etc.) before you invest in real estate. If you think that you’ll need access to your investment capital quickly within the next few months or years, commercial real estate may not be the right investment for you at this time.

Cash Flow Is Not Guaranteed

You may be thinking, “But what about cash flow from the property’s rental fees?” If you have tenants who pay their rent on time every month, then you will have consistent, regular cash flow from your rental property or properties. If your property remains vacant for any length of time, however, you will need the liquid funds to pay the mortgage, property taxes, and any other fees or fines associated with it.

For most investors, this is worth the risk, as purchasing a good property in the right location will almost guarantee that you’ll have tenants willing to sign long-term leases. However, you do need to be aware that there may be some expenses associated with the property that you’ll need to take care of before you acquire tenants or between tenants when you have turnover.

Never Underestimate the Value of Good Accountants and Attorneys

Next, you may be tempted to try to do your own accounting, and you may not think that you need an attorney to be a real estate investor. However, these experts can save you a lot of money and legal trouble in the long run. Never underestimate their worth.

Turnkey Properties Are Great Investments

Finally, don’t turn your nose up at the slight premiums you see on turnkey investment properties. These properties are ready to rent as soon as you buy them, and many of them come with paying tenants from the beginning, as well as property management. When you consider the convenience and the lowered risk level of this kind of property, the slight premium on its initial market price becomes negligible.

Keep these tips in mind as you start to explore the world of commercial real estate investing.

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5 Common Mistakes Retirees Make With Real Estate (2019 Update)

Have you recently retired or are you planning to retire soon? Everyone wants to live a comfortable lifestyle after they quit working, but all too often people make a few simple mistakes that can create huge headaches and financial struggles for their retirement years. If you can avoid these real estate mistakes, you’ll have a much better chance of enjoying the kind of retirement you’ve always dreamed of.

Neglecting to Downsize

When your kids were young and lived with you, you needed a lot more space. Now they’ve all grown up and moved out, and you’re still living in that large house with all of those extra bedrooms. That house may have room for everyone to stay with you for the holidays, but it also comes with big utility bills and maintenance costs, too. Downsizing to a smaller home can greatly reduce your cost of living, which can make your retirement funds go a lot farther.

Keeping Two Homes

Worse yet, a lot of retirees maintain summer and winter homes, sometimes in different states. Keeping two properties means paying two mortgages, paying at least double the property taxes, and paying to maintain both houses and properties. That’s a huge drain on your finances, and it can lead to a lot of problems for you financially.

If you really want to live part-time in one area and part-time in another, make sure that both properties are small and have low maintenance costs. You may even want to invest in a timeshare so that someone else pays for the property you’re not living in when you’re not there. In most cases, it makes more sense to save money by selling one of your properties or at using it as a rental investment property instead of keeping up two homes.

Failing to Invest Profits From Downsizing

When you sell a bigger home and buy a smaller one, you’re more than likely going to have some profits. That’s great, but you shouldn’t spend them on vacations or sundry items. Instead, invest them in real estate and/or other investments that will give you a positive return to continue funding your retirement.

Failing to Research Before You Relocate

If you’re like a lot of retirees, you probably dream of relocating to a beautiful, sunny area where you can enjoy all of your favorite leisure activities whenever you please. You may have been dreaming of living in California or southern Florida for years, but what do you really know about living in these places? Will you have access to doctors and caregivers in your insurance provider’s network? What about the cost of living in your chosen area? You should thoroughly research any new location before you commit to buying a house there and moving.

Continuing to Pay a Mortgage in Retirement

Finally, we’re not saying that you should just stop paying your mortgage. However, if you sell your larger home and buy a smaller one, you will likely be able to pay in cash. Even if you can’t, with the returns from your investments, you should be able to pay down your mortgage fairly quickly so that you can be free of it and enjoy your retirement income without worrying about how you’ll pay your bills.

These real estate mistakes can make life really hard on retirees, and they can result in major financial problems. If you want to enjoy your retirement instead of pinching pennies and worrying if you’ll make it until your next Social Security check comes, avoid these mistakes and diversify your investment portfolio with income properties that will continue to supplement your wealth throughout your retirement.

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4 Principles to Help Your Online Real Estate Investments (2019 Update)

Investing in real estate online may seem like a very simple venture at first, and it’s certainly a better means of increasing your passive income and diversifying your portfolio than other investment options. However, if you want to make successful investments and ensure that your investment capital is working for you, you should keep these four principles in mind.

Work With People Who Have an Intimate Understanding of the Market

Whether you’re investing through an REIT (real estate investment trust), a real estate crowdfunding platform, or any other online investment service, you need to know that you’re investing with a company that employs real estate and investing experts who know the market like the backs of their hands.

Essentially, you need to remember that you’re not just investing in a website. You’re investing in one or more income properties through a website that is backed by real estate agents and brokers, financial experts, and others who have an intimate knowledge of the market. These people will either use your capital to invest in a profitable development, as is the case with an REIT, or they will work with you to match you with the best investments to improve your portfolio’s performance.

Before deciding on a platform to invest in, look into their investment history and/or work with an investment firm that has a reputation for making great choices for their investors.

Diversify Your Investments for a More Stable Portfolio

This is one of the most exciting aspects of investing in real estate through REITs and/or real estate crowdfunding platforms. Instead of purchasing an entire property on your own, you have the opportunity to purchase a percentage of the equity in multiple properties. This gives you the ability to diversify your portfolio with a number of different investments, making it more stable should one of your investments fall short of your expectations.

Not only is real estate a great hedge against inflation for your investment capital, but spreading that capital across multiple properties also reduces your risk level while potentially increasing your rewards.

Communication Is Always Key

As we mentioned earlier, when you choose to invest in real estate online, you’ll be working with one or more investment firms. Years ago, this would have meant having regular in-person meetings and/or phone calls with your investment advisors. Today, it may mean regular emails, SMS messages, and live chats, as well as the occasional phone call when necessary or when you prefer. The modes by which you communicate with your investment firm may change, but the need to communicate openly with them remains the same. A quality investing firm will keep lines of communication open and will work with you so that you are always aware of what’s going on, where your capital is being invested, and how it benefits you.

Your Investments Make a Difference

You may never step foot in your investment properties. Many of them may be local, but they may also be out of town or out of state. The successful developments you fund with your investment capital will help to improve the property values and vibrancy of the areas and neighborhoods where they’re located. In addition to making your local communities and communities around the country better places to work and live, this also yields more and better investment opportunities for the future.

Keep these four principles in mind, and you’ll have the basic tools you need to begin investing in real estate online. The platforms and forms of communication with your financial advisors may be evolving, but the basic elements of investing in commercial real estate remain constant.

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3 Tips for Investing in Real Estate for Retirement Income (2019 Update)

Whether you’re planning on retiring in a year, five years, or twenty years, you’re probably not looking forward to living on meager checks from the Social Security administration. Your job’s retirement plan may be good, but it’s likely not going to leave you living in the lap of luxury, either. That’s why it’s important to make the right investments now so that you can gain passive income and continue making money well after you’ve retired.

Real estate investments make sense for this because real estate is a brilliant hedge against inflation, and it’s a great source of passive income, as well. If you want to gain the most income with the least amount of effort, though, you’ll want to follow a few simple tips.

Find Truly Passive Income Streams

First of all, you may think that you want to buy, renovate, and flip houses to make more money and work on your own schedule. However, unless you put a lot of that money away and/or invest it in other areas, this is not a great way to create passive income, as you’ll need to continue flipping to keep making more money.

You may think, then, that fix-and-hold properties are the way to go because you can get great deals on distressed properties, renovate them on a budget, and then rent them out to tenants for monthly income. This is still a fairly active means of making income, at least at the beginning, but once you’ve established a relationship with a good property management firm, you can begin to relax and enjoy your monthly cash flow. A better method for a lot of people is to choose turnkey properties that require no work, often come with tenant acquisition and property management, and allow you to start collecting income from the beginning. Other good options include investing with REITs (real estate investment trusts) and/or crowdfunded real estate platforms.

Don’t Forget About Taxes

Now, whenever you sell a property at a profit, you will owe a substantial capital gains tax on that property. However, if you sell the property in order to buy another investment property, you can use a 1031 exchange to defer paying your capital gains tax indefinitely. This is something to consider when creating retirement income through real estate investments, as you cannot apply a 1031 exchange to REIT investments and some other equity investments. If you’re concerned about taxes – and you should be – talk with your financial advisors about the best options for your portfolio.

Work With Real Estate Experts and Financial Advisors

Finally, don’t try to do all of your investing on your own without any expert help or advice. First of all, you want to make sure that you’re investing in properties that have low risk levels and the kinds of rewards that will yield good monthly or quarterly cash flow now and into your retirement. This is harder than you might think if you’re new to investing and/or you don’t have a lot of experience in real estate. Plus, it’s sometimes difficult to determine how much of your assets to invest in one or more real estate developments to get the most from your capital.

When you work with a qualified real estate investing firm, you’ll have access to real estate brokers and agents, as well as financial and investment advisors who will take the time to understand your portfolio and your needs. With their help, you’ll have the best chance of making the right investments to continue making money long after you’ve retired.

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2019: A Promising Year for Rental Real Estate Investments (2019 Update)

Rental real estate has always been considered a lucrative and stable investment. Traditionally, real estate tends to appreciate over time, so it’s a great hedge against inflation. At the same time, rental properties – whether they appreciate or not – give investors regular income that they can use to pay down their mortgages, save for retirement, and/or invest in other properties.

As much as rental real estate has always been a good choice for most investors, this year looks particularly good for this investing sector. Why? Several factors point toward profits for investors getting into rental properties.

Rental Nation

As of last year, the United States gained a new nickname – Rental Nation. Before the housing collapse in 2008, renting was seen as a failure or a sign of financial struggle. If you were eligible to buy a house, you were expected to do so. After the housing bubble burst, though, a couple of things happened.

First, many people who were once eligible to purchase properties are now relegated to renting for several years because they were forced to go through short sales or file for bankruptcy. At the same time, thanks to the fluctuations in housing markets around the country, more and more people are seeing renting as a viable option that will not put them in as much financial danger as buying a house in a questionable market. Thus, there’s more demand for quality rental properties all over the United States.

Monthly Cash Flow

With an increased demand for rental properties, you can be sure that your property management company will have no problem acquiring quality tenants who will pay their rent on time every month and take good care of your property. This will result in monthly positive cash flow from the property. Thus, whether or not the property appreciates, you can gain passive income from it that you can use to grow your investment portfolio and your net worth.

Appreciation

While we have seen one significant crash and a lot of fluctuation over the past few years, over the long term property tends to appreciate. Thus, while you’re making monthly income from your rental property, you will also have a quality hedge against inflation with your initial investment. And, when you do decide to sell in the future, you’re likely to sell at a significant profit.

Leverage

Looking toward other, larger investments in the future? You can actually use your rental properties as leverage and collateral for those. Plus, when you decide to sell a property with the intent of buying another investment property within the next few months, you can apply a 1031 exchange to it and defer your capital gains tax for as long as you own that property. Then, when you eventually decide to sell that property you can do the same thing again if you intend to continue investing.

Texas Is a Market to Watch

The rental markets throughout Texas, and especially in the Dallas-Fort Worth area, are showing consistent and significant growth. With numerous major corporations calling Dallas home, new residents are moving to the area all the time, and they need quality apartments and houses to rent. Thus, the market is in the perfect place to yield great returns for investors buying rental homes.

You can see, now, how 2019 is an exciting year for rental real estate investments in Dallas. Whether you’re interested in purchasing single-family homes, apartment buildings, or equity in larger commercial residential properties, now is the time to get on board with Dallas rental investments. Talk with a trusted financial advisor today to determine the best investment(s) for your portfolio.

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How to Get the Best Possible Rental Property Appraisal (2019 Update)

Whether you’re looking into refinancing a rental property to get a better interest rate and/or mortgage payment or you’re trying to figure out exactly how much you can charge in rental fees for the property, an appraisal is a must. Even if you’re already renting the property to tenants and you aren’t looking at refinancing, though, if you haven’t gotten your property appraised, you should. It’s an important part of getting an accurate look at your investment portfolio and Of course, there’s just one problem with getting a rental property appraisal – it’s not an exact science. In fact, it’s based far more on the opinion of the appraiser than most landlords would like, and it can feel very much like you’re putting your portfolio, your hopes of refinancing, and/or your property’s profitability in the hands of someone who’s just going to say, “This property is worth $15,000 less than you estimated. Have a nice day.”

Fortunately, though, if you know what appraisers look for, you can make the right improvements to the home to get the best rental property appraisal possible.

What Appraisers Look For

For the most part, your appraiser is going to be interested in the structure of the house and the size and quality of the property. They’re going to inspect the roof, the foundation, the quality of construction materials, and functional home systems. They’ll also be interested in the size of the house and the size of the property. Issues like cracks, holes, and leaks will affect your appraisal negatively, and you’ll want to ensure that your home is up to code, as well.

What Appraisers Don’t Care About

You may think that the tool shed in the backyard is a plus for your property, but it won’t actually affect your appraisal, as it’s a temporary structure. Your above ground pool won’t help your appraisal, either, but an in-ground pool or a permanent sprinkler system will improve your appraisal (if they’re functional and maintained).

Furthermore, your appraiser is not going to spend a lot of time looking at your interior design choices. They won’t care whether there’s clutter in the kitchen or you’ve put in a lot of work creating a whole new decorating scheme. However, they will care about your HVAC system, fireplace, home security system, doors and windows, and smoke detectors. Basically, when preparing a rental property for an appraiser, think about function and permanence.

Help Your Appraiser Help You

Getting the best appraisal essentially involves making sure that your property is in good shape and that all of the permanent, functional aspects of the house and property are in good working order. You will want to make sure that the exterior of the house looks its best, and you’ll want to see to it that your appraiser can easily get to all of the things that he or she needs to see to properly evaluate the house and property.

Follow this advice and supply any remodeling documents you have, as well as documentation on your appliances and upgrades, as well, and you’ll be in good shape to get the best appraisal for your rental property.

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Your Personal Guide to Choosing the Finest Medical Properties (2019 Update)

As you no doubt already know, medical real estate is one of the most lucrative sectors in real estate investment right now. Thanks to the Affordable Care Act, medical offices and other facilities are in incredibly high demand all over Dallas and the rest of the United States, as well. With millions of Americans getting health insurance, sometimes for the first time in their lives, people are eager to seek medical attention and improve their health. As a result, physicians are overbooked, and there’s plenty of room in the market for new practices. In fact, there’s a huge demand for them.

So, with all of that in mind, how do you choose the finest medical properties to ensure the best returns on your investment? If you follow a few simple tips, you’ll be able to spot the best deals and the best properties to diversify your portfolio and grow your wealth while you improve your area with more of the medical properties that local patients want and need.

Research Local Demographics

First of all, what is the average age of the population in the area where you want to invest? And what’s the median age? What percentage of the population are single, married, young, old, male, and female? The more you know about the demographics of the people who live in your area, the better you’ll be able to understand their medical needs.

For example, if you are investing in a location that’s mostly made up of young couples and families just starting out, your best medical real estate investments will likely be OB/GYNs, pediatricians, and family practices. On the other hand, if your area is primarily made up of retirees and senior citizens, a senior care center, nursing home, or senior living community might be the better investment. If you know where you want to invest, you can do just a bit of research to find out what kinds of medical properties are in demand and which ones will make the best investment opportunities.

Look for Positive NOIs and Cash Flow

Medical properties fall under the heading of commercial real estate, and the net operating income (NOI) of any commercial property is the difference between the income on the property from rent and the cost to maintain and manage the property, not including income tax or loans. This number needs to be positive if you want to make a profit when you decide to sell.

While your NOI determines the value of the property and will help you understand its resale value, you should also take into account any mortgage or loan payments, as well as your income and property taxes. Does the rental income from the property more than make up for these costs? If not, you’re not looking at a profitable medical property, and you should consider a different location, type of practice, and/or developer.

Consider Market Trends in the Surrounding Area

While commercial properties’ market values are based on their potential rental income rather than the value of comparable properties in the area (as is the case with residential properties), you should still look at the market trends and property values in the surrounding area. Essentially, you want to know if you’re investing in a medical property in a growing neighborhood or a community that’s slowly dying.

To determine this, look at the property values for both commercial and residential properties in the area over the last 18 months. What kind of trend do you see? If the trend is steady with a slight tendency toward positive growth, you’re looking at a good area to invest in. If it’s been steadily declining, you should move on to your next investment opportunity. If it has been rapidly increasing, you may want to be wary. This could be a sign that the area is growing and thriving, but that rapid rise in property values could either level off or crash. Be wary of volatile markets.

With this information, you should have everything you need to find the finest medical properties for the best real estate investments for your portfolio.

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Why Do Apartments Attract More and More Visitors? (2019 Update)

It’s no secret that Dallas has an incredibly popular rental market, especially for apartments and condos. This is both good and bad news for property owners and real estate investors. On the one hand, purchasing turnkey rental properties has never been more lucrative than it is right now. With corporate businesses booming all over Dallas, bringing in more new talent every day, the demand for rental apartments is astronomical, which means you’re almost guaranteed to make a profit on any turnkey rental apartment you purchase.

At the same time, apartments can involve a great deal of maintenance and can undergo a lot of wear and tear from one tenant to the next. This is made even worse when apartments seem to attract more and more visitors. With people coming and going all the time, floors get more traffic and appliances and fixtures get more use and abuse. So why are there so many visitors in these apartments, and can you control the flow of people in and out of your property?

Weekend Sublets Can Be a Problem

According to the New York Post, one landlord is suing his tenant for subletting her apartment on AirBnB for $190 per night. While subletting might seem harmless, when you have a turnkey property, it can turn into a nightmare. Not only does it increase foot traffic through the property, but it can also result in major property damage.

Time Magazine reported on a house that was completely trashed after a single weekend. That’s bad enough if you are renting your own home out for a period of a few days at a time, but what do you do if your tenants sublet their apartment and come back to find serious damage and toxic waste? Fortunately, your rental agreement should have a clause regarding sublets, and you should be protected against this kind of problem. If you have any questions about the risk of tenants subletting your property to unvetted guests, talk with your property management company to ensure that you are covered and that your risk is minimized.

More Visitors Can Mean New Tenants and Investment Opportunities

Now, obviously not all AirBnB and subletting guests are the kinds of people who will ruin a property in just a few days. In fact, many of these people are actually visiting Dallas because they may want to move here for work or school. If we look at the root of the issue, apartments are attracting more and more visitors because Dallas has a lot of great job opportunities, great quality of life, and the cost of living is not astronomical, either.

So what does that mean for you as a real estate investor? How can you improve your investment portfolio while decreasing your risks of property damage and liability? If you are concerned about a situation like the one that Time reported, you may want to opt to invest in a real estate investment trust (REIT) instead of purchasing a single unit in a commercial residential building.

This solution comes with a number of potential benefits. If you purchase equity in a building or complex, you will not be dependent on a single tenant to continue to see monthly or quarterly income. Instead, you will own a share of the property’s equity, which means you will get a percentage of the profits on the property on a regular basis, usually paid quarterly.

If you invest in an REIT, you will not be responsible for finding tenants for your property, and all property management responsibilities will be taken care of for you. This kind of property is much less likely to have problems with subletting, and if the complex has 100 units, a few vacant units will not hurt your profits in any significant way. Thus, if something does happen due to subletting or abusive visitors putting wear and tear on the unit, you will not have to worry about losing a lot of capital.

All in all, increased numbers of visitors to Dallas apartments should be a good thing for real estate investors because those numbers represent a continued high demand for rental properties in the area.