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Investing for Beginners: How to Invest in Real Estate (2019 Update)

If you are considering the opportunities for investing in real estate in place like North Dallas or Plano, it is a great time to do so. Financial experts have identified these areas as the top and hottest spots for real estate investments in 2017. Of course, there are many types of real estate investments, and those in the Dallas and Plano areas are both rental and rehab and flip types.

As a beginner or novice investor, it is helpful to understand the ways that investing in real estate can be done.

Real Estate Investment 101

So, investing in real estate is identical to investing in anything else. You use the capital or money you have right now towards a method that allows it to grow and increase over time. This growth is the return on the investment or the ROI. The return must be adequate to cover such issues as taxes, the costs of actually owning the real estate over the long or short term, and to cover the risks you have taken in the investment.

Now, that sounds complex, but it is not. Essentially, it is saying that your choices in real estate investment have to generate profits that are higher than all of the expenses associated with making that investment. If it were something like a paper investment, such as stocks, you would look at the price of the shares, the fees associated with making the purchase and/or future sales, and the tax issues associated with that investment. If, after doing the math, that investment generated the earnings you hoped to make, it is a sound investment.

This is precisely the same with real estate. You have to do a bit of unique research or due diligence, and work with totally different professionals and experts, the overall process and outcome is identical. And, just as traditional investment models have risk and even loss, so too do real estate investments. This is why you will need to really commit yourself to a learning process and to doing adequate research prior to investing.

How to Earn

How do you invest in real estate? There are four typical approaches to earning money on your investments. These are through appreciation of the property. For instance, you may find a chance at a multi-family property, you purchase and update it, add a coin-op laundry room (creating another income stream) and when you sell, it will be worth much more than when you purchased.

Investors also earn by cash flow methods. In other words, they purchase buildings with the intention of earning regular income from it. This could be rental payments, but not always residential rent. You can invest in storage, office buildings, and commercial property.

You can also earn related income through things like commissions off of buying, managing and selling real estate. Real estate related income can also result from ancillary investments, such as being a firm that operates coin-op laundries in an apartment complex or who manage the vending machines throughout a large business complex.

Most investors opt for the appreciation (buy low, sell high) or the cash flow (purchase and rent) approaches. Naturally, within this spectrum there exists a wide array of real estate investment options, and your choices come down to some basic issues:

  • Your available income
  • Your experience level

If you are eager to get involved in real estate investment in hot markets like North Dallas and Plano (both cited as top areas for 2017), you need to be realistic about your income and experience. Some experts insist that you must have a certain level of financial fitness before you invest in real estate, or that you at least have excellent credit. Many also say that a good tip for investors just getting started in real estate investment is to make your first investment in real estate that you will actually inhabit and/or rent before selling at a profit. Alternately, this can be your first investment that you rehab and then use for rental income in years to follow.

Where experience is concerned, the one thing that all professionals agree on is this: Fall in love with reading. The more you know about the process, the better you will be. Nothing can beat a solid understanding of real estate investing as a key to initial success.

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These 4 Real Estate Investment Myths May Be Why You Aren’t Successful (2019 Update)

Real estate investing is a strange business in many ways. While it’s incredibly popular and always growing, there exists a long list of myths and rumors about investing that make it hard for newcomers to get the courage to dive in. Instead of trying to clear up these misconceptions, many investors are content to allow these myths to continue to grow, and it’s easy to believe many of them because they often sound pretty reasonable at first glance.

If you haven’t been having much success with real estate investing, chances are that you’ve been letting one of these four common misconceptions guide your actions. Once you understand that these are totally false crutches hiding a fear of taking a risk, you’ll be able to move on and do what it takes to really succeed in investing.

Myth #1: The best real estate investors are the ones who have all the knowledge.

Real estate investing does require quite a lot of specialized knowledge. There are new and confusing tax laws, contracts, different types of deals, projected profitability, calculated risk factors, ways to identify good properties, marketing techniques, and so much more that go into being a great investor.

But here’s the secret that no one will ever tell you: You don’t have to be the person who knows all of these things. First, the market is constantly evolving, so there is no way to always be 100% in-the-know in every single market. Second, no one person could ever be an expert in all of the areas of knowledge necessary for investing. Instead, learn to surround yourself with people who are experts in specific areas that you can turn to for advice, and you’ll be just as armed with knowledge as any self-professed expert.

Myth #2: The best real estate investors are the ones who have plenty of capital.

This is one of the biggest myths that circulates in the investing world. Many people are under the misconception that in order to invest in real estate, you have to have hundreds of thousands of “extra” money hanging around to invest. Perhaps if you wanted to invest in a high-rise penthouse in New York or a horse ranch in California, you might; but the truth is that real, every-day investing that puts food on the table doesn’t look like that at all.

The bulk of real estate investment happens without really needing large sums of your own money. Investors rely on leverage instead, getting loans which are then paid off after the sale and reinvesting to make bigger profits. In many cases, a much smaller sum is all that is needed to get started.

Myth #3: The best real estate investors are investing in the right area.

Real estate is, after all, all about location. But beginner investors often don’t seem to realize that you don’t have to live in an area to invest in its real estate. Out-of-state investing may seem risky, but if you do the right research and take the time to find a good management company or contractor, the risks are really not any higher than investing in your local area.

When you branch out from your area, which may not be as booming as another market, you open the door for so many more investment opportunities. This also forces you to take a more passive role with management or rehabbing, which is great for those who have found themselves doing more than they wanted to in past investments.

Myth #4: The best real estate investors have more time than I do.

Perhaps because the market is so competitive, or perhaps because of the popularity of home flipping shows, many beginner investors believe that real estate investing is a full-time job. They worry about maintaining their day job, their family life, their other passions and hobbies, or whatever other responsibilities they have, while working towards an investment portfolio.

The truth is that there are many ways to make real estate investing work for your life. You can make it a part of other activities, or simply do it in your free time. No one else can tell you what your path to investment success looks like.

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3 Metrics Crucial for Finding Amazing Apartment Building Deals (2019 Update)

If you are a real estate investor in the areas of North Dallas, Plano, University Park, Southlake or this general region, you should know that this area has been touted as the hottest in the national real estate market for 2017. It is due to the cost of living and the prices for rentals, the diversity of industries and the strength of the job market.

What it means to an investor is simple: this is a perfect spot for real estate investing of any kind, but most especially rental properties. Common logic dictates that one of the safest investments in residential real estate is the multi-family property. This is due to a simple fact – it is rarely going to be at risk for 100% vacancy. With an apartment building, you can still count on solid monthly income with a few vacancies or tenants late with rent. With a single-family home, this same scenario (vacant or late on rent) means 100% vacancy.

Naturally, this does not mean that every single multi-family or apartment building is the best deal or choice for your investment goals. In fact, we have three metrics that are more likely to help you find amazing apartment building deals than just basic assessments.

The Cash on Cash Return

How much cash will you get back each month for your investment on the apartment building? This is the cash on cash return. It is the amount of money after every possible expense has been considered. You divide this by the total amount invested.

As a simple illustration: a property has annual cash flow of $30k. You invested $200k into the purchase. That means that you divided that $30k by $200k invested to find your cash on cash return is 15%.

What is a good return? Experts say that a property with 90% occupancy should yield a cash on cash return of nothing less than 12%.

The Risk Level of the Apartment Building

Typically, this is known as the debt service coverage ratio and it is going to often reveal whether or not you can get financing to make the investment. The debt service coverage ratio looks at the NOI or net operating income versus the annual debt service (interest and principal) you must pay.

As a simple example, you have a building with a net operating income of $40k, and its debt service each year is $30k. The debt service coverage ratio is figured by dividing the NOI by the debt services, and getting a 1.3 ratio. Most banks want to see at least a ratio of 1.25 to be comfortable with the amount of risk in such an investment. The safer level is 1.5.

The Cap Rate

Finally, you need to know the fair market value of the apartment building. That means knowing is NOI as well as the cap rate. The NOI, we already know is the amount of income after all expenses (but usually not including debt service). The cap rate is a multiplier used on the NOI to figure the value of the building.

It is a strange and bit confusing concept, and represents the return on the apartment building if you bought it with 100% cash. You calculate it as a ratio by dividing NOI by the value or price of the building. However, you might often receive the cap rate from your broker, and hear it in terms of the typical cap rate for buildings in a specific area of North Dallas or Plano.

You will usually want a cap rate of 8% or more. You can then use that to determine the fair market value for any apartment building. You do this by dividing the NOI by the cap rate. So, the building that has an NOI of $40k and a cap rate of 8% would be worth $500,000. If it is much lower or higher than area comparables, you need to understand why before making the investment.

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Where Is Real Estate Investing Most Profitable? (2019 Update)

It’s no secret that real estate investing is a wonderful way to diversify and stabilize your portfolio while you see regular monthly cash flow and steady increases to your net worth. However, if your area does not have a good market for rental real estate, house flipping, commercial rental real estate, or whatever real estate niche you want to invest in, then you could be looking at some very bad deals.

Fortunately, as a real estate investor, you do not absolutely have to invest in your own backyard. If you live in an area with a flat or declining market, you may want to consider looking at other areas of the country, where you can find the very best real estate investment deals and get the largest returns on your investments.

Austin, Texas

On a recent list of the best cities to own investment properties in the US, Austin ranked at number five. While Denver, Colorado was higher on the list, this may not be the case for very long. Denver’s property values have been skyrocketing for the past few years, and while those values may continue to rise, market prices are already astronomically high in the most attractive neighborhoods and areas of Denver and the surrounding suburbs.

This phenomenon is not uncommon, and it’s happening in numerous cities around the country. If, for example, you could go back in time to buy property in San Francisco or New York, you could make an incredible profit on your investment today. Without a time machine, investing is nearly impossible for most people in these areas and cities like Denver that have already seen a huge boom.

However, if you look at market trends over the past few months and years, you can see that Austin is primed to see major market value increases. Furthermore, with rental rates rising every year, it is the perfect time to invest in rental properties in this growing city as more and more people move here.

But why is Austin such a great place to invest? Employment in and around the city is on the rise and is currently four percent higher than it was last year. Population growth continues at a positive rate with an increase of just over two percent per year, and Austin homes’ values are experiencing significant annual increases, with roughly nine percent growth over the last year.

Dallas, TX

Just behind Austin and Reno, Nevada, Dallas is another incredible place to invest in real estate right now. As a growing metroplex, the Dallas-Fort Worth area’s population is seeing a huge boom right now. At the same time, the market values for homes have not yet caught up to the demand. There are numerous great deals on single-family and CRE (commercial real estate) properties all over Dallas.

Not only are market prices for those buying homes still good, but there also continues to be a major increase in demand for rental properties in and around Dallas. This means that investors have the potential to buy properties at relatively low rates and then rent them to long- or short-term tenants at very lucrative rental rates.

Texas Is the Place to Invest

Basically, if you are in the market to invest in real estate, Texas has a range of great markets with very profitable investments available. You could purchase single-family homes and turn them into rental properties. You could also invest in an REIT (real estate investment trust) or investment club, or you could opt for real estate crowdfunding. Basically, you can choose whether you want to have a more active or passive role in your real estate investment, and there are numerous properties available. Plus, even with all the developments and houses available, demand for rental properties is so high that it still outstrips supply by a great deal.

If your local real estate markets are not performing the way you would like, you do not have to feel stuck with them. Instead, why not invest in Dallas or Austin, two of the best cities in the entire country to own investment properties?

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Highly Effective Property Management Tips to Reduce Tenant Turnover (2019 Update)

In a perfect world, you would never have to find new tenants for your investment rental properties. You’d purchase the properties, make any upgrades and repairs necessary, find the perfect tenants, and then you’d be set for years to come.

While that usually isn’t the case in reality, there are a few things you (or your property manager) can do to help you retain great tenants. With less tenant turnover, your property will spend less time vacant, and you won’t have to spend as much time and money preparing it for new tenants every time your old tenants move out.

Choose Your Tenants Wisely

In addition to doing a background check on your tenants and ensuring that they should be able to pay rent each month, you may want to look into a few other things. For example, if you’re deciding between two tenants who seem equally good, look at their employers’ locations. Is your property nearby or is it going to be a long and inconvenient commute? Tenants who live near their workplaces are much more likely to renew their leases, whereas those who have a long commute are more likely to terminate their leases and move closer to work.

While you’re reviewing your tenants’ applications, you should also take a look at how much they paid in rent at their last residence. If their rental rate was significantly lower than yours, you may want to consider a different tenant, as they may soon be looking for more affordable housing to fit their budget again.

Keep a Regular Maintenance Schedule

Next, instead of waiting on things to break around the house, you should keep a regular maintenance schedule. This will show your tenants that you care about the property and its upkeep, and it’ll ensure that fewer things break or fail while your tenants are living at the property. With fewer hassles like this, your tenants will be more likely to stay.

Make Sure Your Tenants Know Their Responsibilities

While you’re keeping up your end of the property maintenance deal, it’s important that you clearly inform your tenants about their responsibilities, as well. If you expect them to do basic upkeep on the landscaping, as well as mowing the lawn, you need to make sure that this is clear. If your tenants know what they’re responsible for doing around the property, they’ll be more likely to keep up with these tasks and chores, and they won’t think that you’re letting the house fall into disrepair.

Always Answer the Phone

Emergencies happen, and they often happen in the middle of the night or at other inconvenient times. Don’t turn your phone off at night and do make sure that your tenants have a number where they can reach you for emergencies, even if you’re out of town or it’s late in the evening. You can stress that this number is only to be used for emergencies, but you absolutely must answer the phone when your tenants call you. And you must take care of their problems as quickly as possible.

If you can handle problems that occur at inconvenient hours, and you can do it quickly and efficiently, your tenants will know that they have a great landlord and that they’re going to be taken care of if anything else happens while they live in your house.

Consider Hiring a Property Management Company

Finally, when it comes to finding and retaining great tenants, no one does it better than a professional. Property management firms are equipped to handle those late-night calls, to deal with maintenance and repairs, and to respond to your tenants’ needs whenever they arise. If you aren’t sure you can do all this on your own, you may want to hire a professional property manager to do it for you.

Remember these tips and you might be surprised at how much your tenant turnover rate drops!

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The Holiday Debate: How Much Time Should Investors Take Off This Season? (2019 Update)

The holiday season arrives in what seems like a long and slow build-up to just a few days of furious celebrating. It is, however, a period of time that lasts longer and has much more to it than real estate investors realize. Beginning almost immediately after Halloween, those holiday decorations, sales, advertisements and products begin to appear. This can often send most people into a slow-down mode or a distracted phase as they begin to focus more on the upcoming season.

After all, why not? There is Thanksgiving to plan for as well as the weeks in which Christmas, Kwanzaa, Chanukah and other annual festivities occur. This is the time to meet with friends, do lots of shopping and dining out, and taking stock of the year just coming to a close. It is a wonderful time to enjoy the benefits of some downtime with the family and with your friends. And it occurs in almost any industry.

If you doubt this to be true, you need only consider the patterns of behavior you see in many companies and businesses. They start to slow down operations in many areas. Their investments in marketing, branding and even employee overtime decrease or disappear altogether. Company leadership may go on holiday for weeks on end and it can seem like many segments of business and industry have just hit the proverbial “pause” button while the holidays arrive, occur and transition into the New Year.

Even as we enter this new year you may see a lot less competition and activity, and this means that the answer to the holiday debate, (“how much time should investors take off this season?”) is actually simple.

What is the answer? It is: As little as possible.

Not a Grinch Move

Though it sounds like a pretty “grinchy” attitude to take about the holiday season, it is not a permanent step in your investment strategy. As a real estate investor, you have a lot more control over your schedule than many other workers in the modern world. You can enjoy the option of working while the rest of the world sleeps and take meetings or do business in small bursts throughout the day. While this may not be the greatest or most consistent approach, it is one way to keep up the pace during the holidays.

There are, in fact, some returns for just hitting the “stop” button altogether. While you won’t see any losses if you take a day or two off of the computer, not checking messages or emails, a savvy real estate investor in thriving markets, like those in North Dallas and its surrounding neighborhoods, should dial back on time out of the office.

Why? The advantages of working while your competition is sleeping off its turkey dinners, days on the slopes or hours of sale shopping are quite substantial. Your business, real estate investment, operates on taking opportunities before the competition and on making the most of the smallest advantage, fact or bit of information about a property.

If you are looking to make the best offers, find the best deals, get a lot of attention, leads and even visibility on your properties, the holiday season is a peak time for doing so. Whether it is a home you want to grab at a good price in Plano, a sale you hope to make in University Park or some lead generation throughout the North Dallas area, the holidays are the right moment to strike. Eager sellers, fewer buyers, simpler negotiations…these are but a few things to enjoy during a holiday season dedicated to growing your real estate investments.

If you found this article helpful, please share it with friends and visit our blog for more free tips. You can also get in touch with us at info@investmentclub360.com

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How to Make Extra Cash for the Holidays by Renting Out Your House (2019 Update)

Are you someone who finds themselves always traveling during the holiday season? Whether that season means Christmas, Thanksgiving or any other time of year, you may be missing out on a major financial opportunity if you are not renting out your home while you are away.
Before you hold up a hand and say, “no way” at the thought of vacating your home during an extended holiday visit elsewhere, think about what it might mean. There are, quite accurately, millions of people traveling, booking hotels and staying in somewhat unwelcoming settings during their holidays. The option for booking a private home is a wildly popular concept that is supported by dedicated websites. You can use what you know about real estate in your area to get a great rate for renting your home, and this can underwrite your travels or even your future investment plans.

A Single Example

If your home is in one of the major metropolitan areas, such as North Dallas or Plano, TX, you have thousands of potential customers eager to rent a cozy and private home for their holiday getaway. You can take a bit of time to calculate the best rate for the market, and for your expenses, and enjoy a nice profit.
Keep in mind that this is unlike a dedicated, furnished rental. This is your home, and as such, you’ll want to have a few contingency plans for such issues as family heirlooms or costly valuables that might be lost or damaged when renting to strangers. You are not actually a certain victim to any such catastrophes, but when you gauge the different issues that will help you choose the right pricing, it is something to consider.

For example, installing a secure and dead-bolt locked room for your special belongings, or paying rental on a storage facility is a cost to add to the mix. Also keep in mind that most travelers are not conscientious about energy consumption and may dial up the heating or air conditioning, use multiple devices and gadgets, leave lights on at all times and not feel worried about the expense. Calculate for the worst case scenario.
If you, yourself, are not traveling but simply monetizing your property’s rental value, you have to pay for an alternative accommodation for yourself and/or family and pets. Here too, you have to calculate costs for pet accommodations if you are traveling but not bringing them with you. A kennel or a pet sitter is also an expense you must calculate, and seek to pass on to the renters if possible.

Also, keep in mind that someone renting your home is going to be doing so as a “turnkey” property. They won’t bring linens or kitchen gear. This can be a costly venture if you don’t also calculate the costs of the added wear and tear on your household items or the costs for purchasing replacements to be used whenever renting.
Once you have looked online at the other homes available for rental in your area, the prices charged and the amenities included, you can then add in the extras and figure out if it is a viable choice for you. For most homeowners, it is a great concept if they intend to implement it on a regular basis.

Points to Consider

Do keep in mind that there is some disruption to your lifestyle if you are going to make this decision. You’ll want to consider your valuables and pets, you also have to consider items that cannot be removed but which may be liabilities. High priced entertainment systems, large antiques, and even wall art are costly things, consider them as you prepare your home for renters.

More significantly, be sure your insurance allows for a rental situation and replacement for any damages. If you are in a housing authority or cooperative, be sure your neighborhood allows these arrangements and what sort of laws apply.

You can make a fantastic profit by renting out a home during any holiday season. If your town does an amazing Fourth of July celebration a winter wonderland event or any sort of seasonal activity that draws lots of travelers, why not take in some profits?

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How to Prevent Tenants From Damaging Your Rental Property (2019 Update)

As a real estate investor and landlord, you should know that your property will always need some maintenance, repairs, or upgrades whenever tenants move out. There’s a difference, however, between normal wear and tear that comes from everyday use and actual property damage, which tenants should pay for and which you want to avoid whenever possible.

Before we get into the best ways to prevent tenants from damaging your rental property, it’s important to understand this difference. For example, when you enter a property for inspection when a tenant is moving out, you should expect to see worn carpet, scuffs on the walls, some small holes (from nails or tacks) in the walls, and other normal wear and tear. Likewise, the stovetop and appliances will look like they’ve been used, but they shouldn’t be significantly damaged.

At the same time, if you walk in and you see visible stains or rips in the carpet, larger holes or scrapes in the walls or unprofessional wall touchups, or significant damage to kitchen and bathroom appliances, you’re looking at property damage. And, while there are ways to deal with property damage and to get your tenants to pay for it, the best cure is always prevention. So how do you keep your tenants from doing this kind of damage to your property?

Screen Your Tenants

The first and best way to avoid property damage is to properly screen your tenants. We generally recommend letting your property management team take care of the tenant application and screening process, as they have the experience and tools to ensure that they find the best tenants for your property. However, if you plan on acting as your own property manager and/or screening your own tenants, be sure to do a background check and look for a few key red flags, like:

  • Prior evictions
  • A criminal record
  • A history of belated payments
  • Poor credit score

Be sure to get references and a rental history, as well, and follow up with their previous landlords. Ask about any damage they may have done to previous properties they lived in, if they owe any money, or if they appeared to have unauthorized individuals living in or subletting the property.

Of course, even the best tenants won’t always keep up with your property as well as you would like sometimes. So, in addition to finding good tenants who will be less likely to cause harm to your property, there are also a few things you can do to the property itself to prevent damage.

Fill in the Pool

Pools are attractive features, but they’re also expensive to maintain. And, when a pool is unmaintained, it can quickly fall into disrepair and cost you a lot of money to fix. In most cases, it’s better to get rid of the pool entirely than to take this risk. Alternatively, you could include a pool maintenance and upkeep fee in the rental agreement with regular inspections and cleanings to keep the pool in great shape.

Stick With Low-Maintenance Landscaping

Do you think that your tenants are going to go out and trim the hedges, weed the gardens, and/or do anything beyond basic lawn care? If so, you may be living in a dream world. Most tenants are good about mowing the lawn and doing basic yard maintenance, but if you have high-maintenance landscaping features, you might want to get rid of them because they’re most likely going to be neglected.

Say Goodbye to Carpet

Yes, carpet is one of the cheaper flooring options, but you can almost guarantee that you’re going to need to replace it or at least have it professional cleaned every time you get new tenants. You don’t have to go with expensive hardwood floors, though. Instead, go with laminate flooring. There are a lot of attractive laminate options that are durable, will hold up against moisture, scratches, and other damage, and won’t cost you a fortune to install. Plus, tenants prefer floors that look and feel like hardwood. It’s a win-win situation.

Follow these tips, and you’ll see a lot less damage to your investment rental properties.

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3 Dallas Suburbs for Real Estate Investors to Watch (2019 Update)

It’s no secret that Dallas has one of the very best investment rental markets in the US today. With so many people moving to the Dallas-Fort Worth area, rentals are in high demand, and investors are enjoying great ROIs with their investment property purchases. But which areas are the best places to look for those properties?

While downtown Dallas has a lucrative market, it is not the only rental market around, and some Dallas suburbs are showing major growth and opportunities for real estate investors.

Grapevine

Grapevine is an excellent location for investors looking to purchase mid- to high-end rental properties. Currently, the mean listing in this area is just under $370,000, and the mean rate for monthly rent is $2300. With rental rates increasing at a steady rate each year, purchasing properties now gives you a great opportunity to see a lot of positive cash flow.

Grapevine is especially attractive to tenants moving to the Dallas area for work, as it is conveniently located to the northwest of Dallas and is nestled on the shores of Grapevine Lake. The suburb offers numerous attractions, amenities, and culture, including museums, nightlife, and more, making it a great place for individuals, couples, and families to live.

Plano

Plano offers another great opportunity for real estate investors, with average market values at just over $500,000 and average rental rates at nearly $2000 per month. While these numbers may not be quite as attractive as the ones you’ll find in Grapevine, Plano is definitely a suburb to consider, as rental rates and property values are likely to increase in the next few years.

Within an easy commute of DFW International Airport, downtown Dallas, and Dallas Love Field, Plano is in a prime location. Not only that, but Plano is also served by the DART light rail line, making it easy to get around town, even if you don’t have a car or you don’t want to deal with traffic. These details make Plano a serious contender for tenants looking to move to the Dallas area, but they’re not the only attractions by far.

Plano is home to numerous top schools, including Haun and Andrews Elementary Schools, CM Rice Middle School, and Jasper High School, all of which are highly ranked. And, whether tenants have kids or not, there are numerous things to see and do in Plano, making it a great place to live.

Frisco

Last but certainly not least, Frisco is a highly popular suburb for families. In addition to great schools, this area boasts numerous art exhibits, spas, and other amenities, luxuries, and features. The property values are in line with Plano, at just under $513,000 on average, but rental rates are a bit more profitable at $2100 per month.

In addition to having slightly better rental rates than Plano, Frisco also typically has more houses on the market for sale than Plano, making it easier for investors to find properties to purchase. Also, the 42 schools in Frisco are some of the highest ranked in the state, and the suburb offers a number of activities and events for kids throughout the year.

Frisco has recently undergone significant growth, but the boom seems to be just beginning. In the next few months and years, we can expect to see property values increase and rental rates soar, as well. This lively, family-oriented suburb is definitely a place to consider when buying rental properties now and in 2017.

Each of these three Dallas suburbs has its own unique style and feel, and they’re each very attractive to high quality tenants who are moving to the Dallas area to work for large corporations. In addition to being set to become the next investment property hotspots in the Dallas area, these suburbs command impressive rental rates, and you can expect to see both rates and property values increase steadily over the coming years.

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5 Things DIY Landlords Should Know Before Managing Their Own Rental Properties (2019 Update)

If you’ve recently purchased an investment rental property – or if you’re just starting to think about becoming a landlord – you’re probably thinking about your bottom line. You’re looking at how much you can charge in rent, how much you’ll have to pay on your mortgage and property taxes, and how much you’ll need to set aside for repairs and maintenance. When you look at all that, it’s easy to think, “Well, maybe I should be my own property manager to save some cash…”

Before you commit to managing your own property, though, there are a few factors you should know about. Understanding these could make a property management firm’s fees look much more attractive.

How Will You Get and Retain Tenants?

First, you’re going to need to attract good tenants to your property if you want to start collecting regular cash flow. Are you familiar with all of the appropriate listings where you can advertise your property? Do you know how much it will cost you to advertise and how much ROI you’ll get from that cost? If you don’t have a good advertising plan and the tools to gather appropriate data analytics, you could very easily spend a lot of money on advertising that isn’t actually doing much to find you quality tenants.

Then, once you’ve found great tenants, how are you going to keep them? Lack of maintenance, delayed responses, and other factors on your part could make good tenants less likely to renew their lease, and tenant turnover can be a real problem for your investment, especially if you have trouble finding new tenants to take your old ones’ place.

You’re Going to Be on Call 24/7

You already know from personal experience that home emergencies don’t always happen during business hours. When something happens at your home in the middle of the night or early in the morning, you call the appropriate specialist and have it taken care of ASAP. When something happens at your rental property, your tenants are going to call you. And you’ll need to be available to answer their calls at all times of the day or night. Are you prepared to deal with a plumbing emergency at 4:00 AM?

How Will You Deal With Security Deposits?

When your tenants sign the lease and hand you a check for the first month’s rent, they’ll also hand you a separate check for the security deposit. You must have a separate account set up to hold tenants’ deposits. In fact, it’s not just a bad idea to put the deposit in your personal or business account with the rent check – it’s actually illegal. So, are you ready to deal with security deposits and how you’ll collect them, disburse them back to tenants, and/or use them to make repairs when tenants move out?

How Will You Handle Late Rent Payments?

In addition to having separate accounts for rent and deposits, you’ll also need to have a system and policy in place to handle late rent payments. How much will you charge in late fees? How will you collect late payments? Do you know the legal proceedings if you have to evict a tenant?

Dealing With Insurance Companies

When disaster strikes, you will need to deal with your homeowners’ insurance company to get repairs and damages paid for. You’ll need to do this in a timely manner so that your tenants have a safe and secure place to live. If you don’t, you could be dealing with a lot more issues. At the least, your tenants might choose to move out, leaving you with no cash flow from the property, or in a more severe case, they might even decide to sue you for damages.

All of the scenarios and factors we’ve mentioned here may sound like a nightmare, but they don’t have to be. Some people have the background, talent, and skills to take on these tasks and duties, but if you don’t want to deal with them, your property management company can help you out and make your job as a real estate investor much easier.