Improve Your Investment Home’s Value

home improvement tools

home improvement toolsAs a real estate investor, your primary goal is to seek ways to maximize your profits. If you ever watch HGTV, you most likely know that some home remodels can bring terrific return on investment.

While there is no guarantee that any renovation project will affect resale value, certain home improvements have been shown to provide a higher financial return than others. When planning renovations, keep this in mind: To add the most value to your home, changes should conform with the neighborhood and flow with the rest of the house.

The good news is that you don’t have to spend a small fortune on extravagant upgrades to boost your home’s value, which is why setting a budget is key.

Set a Budget

This is likely the most important step when taking up a remodel of any magnitude. Many people envision lofty home improvement projects only to get stuck halfway because they couldn’t meet their financial commitments.

Be sure to track every expense no matter how small or large and factor in costs such as legal fees and permits. By recording your spending and allowing some breathing room in your budget, you will be setting yourself up for success.

Some Home Improvements Projects to Try:

Kitchen Updates: Kitchen upgrades that include new cabinets and updated finishes are sometimes all that is needed to impress sellers and increase your investment home’s value. If your budget allows, replacing dated appliances with top-notch ones will definitely help you close a winning deal.

HVAC System: Giving the HVAC system an energy-efficient upgrade can provide an 85% return. Buyers will love the idea of a lower energy bill and be ready to pay extra for a new system.

Vinyl Siding – Curb appeal is the best way to lure in homebuyers. By giving your vinyl siding a facelift, you can expect a return of around 63%.

Fresh Coat of Paint: Painting the interior or exterior of your house is one of the most effective ways to increase the value of your property and enhance its curb appeal. When painting your walls, choose neutral colors that appeal to a wider range of people.

Would you like to speak with a member of the RLG team to discuss the value of your current investment real estate portfolio and determine areas for improvement? Give us a call today! We would love to help you with the properties you currently have and multiply your investment portfolio.

Getting Started in Real Estate Investing

real estate investing

real estate investingReal estate investing can be a profitable business and, for many, a path to financial freedom. But as with any venture, there can be a number of pitfalls and risks beginners should be aware of. To help mitigate these risks, it is important to lay out goals and draw up a financial plan that takes into account everything from the costs you expect to incur to the size mortgage you will be taking out.

Once you have a strategy mapped out as well as a clear understanding of your risk tolerance, you should be able to focus on the different assets and options to invest in with confidence.

Get into Wholesaling

For your first purchase, consider starting with less expensive wholesale properties. Wholesaling is the process through which the wholesaler contracts a home—often one that is distressed—with a seller, shops that home around to potential buyers, and then assigns the contract to one of them. It is a less risky method for new investors as it does not require a significant amount of capital to get started. Having a solid list of potential buyers prior to making an initial offer to the seller is a good idea to counter risks.

Buy a Rental Home

Rentals are the most common way to get started in real estate investing. Renting an investment property will generate passive income over a long period of time and provide the means for you to reinvest into additional real estate purchases and expand your portfolio.

For new investors, residential rentals are much more straightforward than renting out commercial properties. Just be sure you have the time to commit to the upkeep of the property as well as to handle potential complaints from tenants.

When it comes to choosing a property type, make sure it aligns with your goals. For example, though duplexes and triplexes tend to generate higher rental income with lower relative expenses, appreciation is usually lower as compared to single-family homes.

Look into Real Estate Investment Trusts

A real estate investment trust (REIT) is a publicly traded entity that owns, operates, or finances income-generating real estate. By putting your money into a REIT, you are essentially buying a tiny piece of a portfolio owned by a corporation (or trust). As their portfolio appreciates, the trust pays out dividends to the investors. Relative to other investment options, REITs are far less time-consuming and labor-intensive and may generate steady income stream for investors. On the flipside, they offer little in the way of capital appreciation.

At Ridge Lending Group, we believe investment education is key. Call RLG today to continue this discussion and to learn how our financial experts can help grow your business

What to Know About Multifamily Properties

Multifamily PropertiesMultifamily properties come in many shapes and forms – duplexes, townhouses, semi-detached houses, and apartment buildings, to name a few. Billionaires and millionaires have seen their wealth grow by developing residential and commercial multifamily properties.

Although these types of properties can multiply your income with little additional cost, they are more complex investments that demand special attention. Following are some important factors to consider when contemplating a multifamily property investment:

Building from Scratch or Buying Pre-Built?

As a real estate investor, you are responsible for the building’s structural integrity and safety. If you are looking to buy an existing multifamily property, it is important to thoroughly evaluate the building for any major issues. If you go down this route, make sure to enlist the help of an inspector or engineer to check everything from its foundation and roofing to plumbing and electrical as well as any previous repairs done on the property. The upside about pre-built multifamily properties is the possibility to begin making profits quicker.

Alternatively, some investors choose to build from scratch and avoid dealing with things such as dated layouts, aging infrastructure, and other potential concerns. In addition, when constructing a new multifamily property, investors are able to cherry-pick the location of the development. New constructions in attractive, gentrifying neighborhoods can earn investors top dollar as growing demand sends prices up.

Reduced Risk and Easier to Finance

Contrary to common sense, million-dollar multifamily properties are oftentimes more likely to be approved by a lender than the average single-family rental home, as the former typically generate solid cash flow on a monthly basis from numerous tenants. This helps balance out the risks involved with potential vacancies and equates to a more desirable investment in the eyes of lending institutions.

Options Galore

Multifamily housing may include triplexes, townhouses, high-rise apartments, and more. Additionally, these developments tend to have a range of size units and even serve specific demographics such as low-income, age-restricted, and student housing. These myriad options make multifamily units an alluring investment type that enables investors to specialize in niche markets.

Be sure to carefully consider the type of occupant and the relationship you are willing to have with your target audience. Remember that is it also important to analyze your competition. With multifamily unit rentals, the competition can be fierce and entry barriers high, so you should be prepared and do your due diligence as you hit the ground running.

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more.

Why Choose Real Estate Over Stock Investments?

There are many reasons why real estate investments can be a lucrative alternative to stocks. For one, the stock market is highly unpredictable. Even though this volatility can sometimes produce hefty gains, the risks can be too high for many people.

If you are averse to the wild swings of the market, fret not. Luckily, there are much more reliable, lower-risk investments options available. Let’s look at why investing in real estate can be a great strategy for those seeking to reduce risks while reaping solid returns.

Resilience to Economic Turmoil

The stock market can experience dramatic highs and lows throughout the years based on current interest rates, government policies, economic trends, and investors’ beliefs. Real estate, on the other hand, has been historically much less susceptible to some of these factors.

Tangibility

Real estate is a tangible good and, for many investors, feels more “real.” With a stock, you are essentially buying a tiny piece of a particular company that you are otherwise unable to use. Conversely, real estate is an asset that can be utilized and controlled, with an added benefit of diversification.

Diversification

There are numerous ways you can diversify your real estate investments from property types to location to investment strategies. Let’s drill down on some of these modes of investments.

  • Property type: one of the most common ways of diversifying a portfolio is by property type. Some popular investment property types include single-family, duplex/triplex, condos, raw land, commercial, REITs, and large apartment buildings.
  • Rental vs. Flipping: while flipping houses provides quicker returns on your investment, renting an investment property can provide passive income over a long period of time. Creating a mixed portfolio of rentals and fixer-uppers can be a smart strategy to protect against risks.
  • Location: with so many up-and-coming neighborhoods and cities to choose from, real estate investors can hedge their bets and set themselves up for success by purchasing properties in multiple states, cities and areas of town. Consider attributes such as higher-than-average population growth rates, job growth rates, rental growth rates as well as low unemployment rates when deciding for a particular area.

Are you ready to plunge into investing in real estate? RLG has the tools and resources at its disposal to get you on your way and not waste a moment of your time. Call us today to learn more and experience firsthand the dedicated, personalized customer service and undivided attention that RLG has to offer!

What to Know About Solar Power for Your Investment Home

Solar Power, Investment Property, Solar Panels

Solar Power, Solar Panels, Solar ElectricityAs more people start taking action to counter climate change and reduce dependence on nonrenewable energy sources, residential solar power has become increasingly popular. With more than a million solar installations across the country, the benefits of switching to this form of green energy are numerous.

First and foremost, solar panels are considered an upgrade that will likely increase your investment home’s value in the same way a renovated kitchen or bathroom would. In fact, many eco-conscious buyers are willing to pay a premium for a solar home. In addition to reducing greenhouse gas emissions and other pollutants, a solar system may lower your electric bill, provide tax credits on federal income taxes as well as state taxes, and even allow you to earn money with SREC (solar renewable energy certificates).

But before you invest in solar power for your investment home, there are a number of steps you will need to follow and consider.

Examine Your Property

Homeowners should first assess their energy use by conducting a home energy audit to identify areas of improvement. Oftentimes, huge savings can be made on electricity costs by simply switching your light bulbs to LED ones, replacing dated appliances with energy-efficient ones, and weatherizing the property.

Because installing solar panels requires ideal roof conditions to work at full capacity, make sure your roof is up to scratch. Consider the age of your roof and how long until it needs to be replaced. If your roof is old or in any way damaged, you’ll want to address these issues before going any further.

Remember to take into account nearby shade trees that can block the sun and diminish your home’s solar potential. Though most roofing materials are compatible, the ideal roof will face south with a tilt between 15 to 40 degrees.

Work with Your Installer

Installing a solar power system involves numerous steps, including preparing the roof for mounting panels, wiring the panels to a power grid, obtaining permits, and testing. The timeline for the installation will range from one to three days, depending on the size of the system you are installing.

Be sure to find qualified and insured professionals with the proper certification and request at least three bids based on the same metrics. Bids should state the maximum generating capacity of the system measured in Watts or kilowatts, an estimate of the amount of energy produced on a monthly or yearly basis, and the total cost of installation (including hardware, labor, permitting, sales taxes and warranty).

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more!

Attracting High-Quality Tenants to Your Rental Property

Rental PropertyRental properties are a tried-and-true investment strategy that provides passive income while giving you the option to sell when the time is right. Additionally, owning a rental property allows you to diversify your portfolio. That said, any real estate investment comes with risks, and your profitability is contingent on being able to attract and retain high-quality, dependable tenants.

To mitigate vacancy losses, bolster new tenant applications, and keep good tenants, make sure you follow some of these tips:

Pick the Right Neighborhood

Most tenants will look for areas that have low crimes and good schools as well as easy access to shopping, dining, and parks. If your rental property is located in a desired neighborhood, chances are you won’t run short of prospective tenants.

Upgrade the Kitchen

Updating appliances will not only catch the eye of potential tenants, but also increase your investment home’s value when the time comes to sell it. Alternatively, kitchen upgrades that include new cabinets and modern finishes are sometimes all that is needed to impress sellers and regain some of the original investment.

Invest in Curb Appeal

Curb appeal is vital to making a great first impression on prospective tenants. In addition, home landscape upgrades can offer homeowners over 100% returns on their investments when it comes time to sell. A lawn service, fresh mulch, planted flowers, and clean edges will all help to wow tenants.

Add Amenities

Adding in new amenities and conveniences can help close the deal. Consider things that can make the tenant’s life easier, such as including utilities in the cost of rent, providing extra parking or storage spaces, furnishing in-unit washer and dryer, and installing smart home features.

Show It Off

Once you’ve put in the work to spruce up your rental property, you’ll want to market it right. Having quality photos in a home listing is crucial to that listing’s success. When photographing a home for a listing, make the most of what you have by staging, utilizing natural light, and working angles to your advantage. A professional photographer with experience in real estate should be able to produce beautiful imagery that highlights the aesthetic of the house.

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more.

When Is It Best to Sell a Rental Property?

One of the biggest challenges in real estate investing is figuring out how to maximize revenue. While the decision to offload a rental property shouldn’t be taken lightly, in some instances hanging on to a property may not be in your best interest. Here are some signs that you should sell your real estate investment.

Asset Diversification

If your portfolio isn’t diverse enough, it might be a good idea to sell one of your properties to experiment with different investment types. Asset diversification helps to minimize an investor’s overall risk and offset losses in the event that a particular area performs poorly.

Having said that, focusing your investment property strategy on a niche market can bring many benefits.

Appreciation

There’s no doubt that rental properties are great sources of passive income. But if your rental property has significantly appreciated due to improvements or the area’s growth, it is possible that it may have reached peak value. In this case, it might make sense to sell the property while prices are high.

You can then use the money to reinvest in other up-and-coming real estate markets and expand your portfolio further.

Negative Cash Flow

When assessing the value of your portfolio, consider each property individually. There are several metrics available to help you measure the success of your portfolio, including net cash flow. It may be that the cost of taxes, utilities, and insurance have risen while rents stagnated or dropped. Whatever the reason, if your rental property is not providing a positive cash flow, you should seriously consider cutting your losses and selling it off.

Would you like to speak with a member of the RLG team to discuss the value of your current investment property portfolio and determine areas for improvement? Give us a call today! We would love to help you work with the properties you currently have and multiply your investment portfolio.

Picking the Right Neighborhood for Your Investment Property

Neighborhood for real estate investment propertyKnowing well the area of town or neighborhood for your investment property plays a big part in a sound financial decision. While factors such as your investment goals and price range can help you winnow out some neighborhoods right off the bat, there will likely be hundreds of cities and neighborhoods that may pass muster – each with its cons and pros.

To make sure you pick the best neighborhood for your investing dollars, you may want to consider the following additional factors.

Safety

Lower crime rates are at the top of real estate investors and homebuyers’ must-have lists. Luckily, there is a wealth of online tools out there to help you research a neighborhood’s safety levels, such as ADT Crime, Neighborhood Scout, and SpotCrime.

A neighborhood that ranks high for safety not only provides peace of mind to buyers and tenants, but it can also keep property values high.

Convenience and Amenities

Convenience and amenities are valuable attractions for homebuyers. A convenient neighborhood is reasonably walkable and located in close proximity to schools, shopping areas, parks, gym, public transport, and more.

When it comes to amenities, consider neighborhoods that boast facilities such as swimming pools, play fields, tennis courts, club houses, community docks, and lakes. Other outside features that can pique homebuyers’ interest are nearby parks, open play meadows, and direct access to water bodies.

Growth

The expectation that the value of the property will continue to appreciate over time should inform investors’ decision when purchasing a home, hence the importance of market dynamics and macroeconomic factors. Look for neighborhoods that display attributes such as higher-than-average population growth rates, job growth rates, rental growth rates as well as low unemployment rates.

More broadly, the tax environment has been a key factor driving investments in the country, as seen in places such as Austin, TX and South Florida.

Are you ready to plunge into investing in real estate? RLG has the tools and resources at its disposal to get you on your way and not waste a moment of your time. Call us today to learn more and experience firsthand the dedicated, personalized customer service and undivided attention that RLG has to offer!

4 Must-Have Apps for Real Estate Investors

Real estate investor on smartphone using real esate appWhile the real estate business still involves quite a bit of networking and word of mouth, it would be unwise to discount the use of technology in this day and age. But with such a wide range of apps available, real estate investors can often become overwhelmed. To help you save treasured time, we narrowed down the extensive list to four apps that every real estate investor should check out. Have a look!

Foreclosure Home Search by USHUD.com

USHUD.com is a totally free list of foreclosures that includes properties owned by the government and all major banks. If you are looking to find homes that sell under the estimated value, make sure to filter out conventional homes and only search for foreclosure homes. The filtering system not only allows you to search by foreclosure or conventional properties, but also by price range as well as the number of beds and baths you want in your future house. Download for GooglePlay or Apple.

Property Fixer

Property Fixer is the ultimate tool for real estate investors who are flipping properties. After entering some information about the property, you can view a flip analysis that shows your profit and return on investment for the flip.

Property Fixer is really helpful when you’re driving around to scout properties. Instead of going back to the office to crunch the numbers on a spreadsheet, you can do your property analysis on-site in a few minutes. Download for Apple.

Rentometer Express

Rentometer Express is a fast and easy way to check rents for apartments and houses anywhere in the U.S. Enter your address and select 1-4 bedrooms to get an instant rent range for that area. To compare your rent, simply add the rent amount to see how it compares with the average rent in your area. Download for Apple.

Zillow

As the most-visited real estate website in the country, Zillow gives you the tools to find millions of listings, some of which may include immersive photos and virtual tours. What’s more, you will find resources such as Zestimate®, Zillow’s home valuation tool, and neighborhood details. Download for GooglePlay or Apple.

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more!

Home Improvement Tips to Boost Your Investment Property’s Value

Home Improvement

Home ImprovementHome improvement projects can be an effective way to boost your investment home’s value and attract high-quality tenants while you put your creative spirit to work. The greatest thing about home upgrades is that they can fit every budget and timeline. Here are some tips to enhance your home’s value in a cost-efficient fashion.

Set a Budget

As a real estate investor, you want to maximize your profits or break even, at worst. Setting a budget from the get-go not only helps to keep you from overspending, but it can also help you cut costs. In addition, sticking to a budget will put you in a better position to make sound financial decisions and allow you to complete the project on time.

Home Improvement Ideas

Whether you are planning to list your home soon or simply considering what home projects to do next, it is important to know which ones will add the most value to your property. Following are some cost-effective projects to consider that have a high return on investment:

Kitchen Upgrades – Updating appliances will not only catch the eye of potential tenants, but also increase your investment home’s value when the time comes to sell it. Alternatively, minor kitchen upgrades that include new cabinets and modern finishes are sometimes all that is needed to impress sellers and regain some of the original investment.

Hardwood Flooring – Adding new hardwood flooring to your home can provide an average return of 106%. Homebuyers know that hardwood flooring is sturdy and timeless, making it an appealing feature.

Vinyl Siding – Curb appeal is the best way to lure in homebuyers. By giving your vinyl siding a facelift, you can expect a return of around 63%.

Hire a Home Improvement Company

Hiring a contractor to manage and execute a home improvement project can oftentimes be your best decision, especially if you are taking on bigger projects. Check your local business directory or search the internet for competent and affordable house improvement companies and contractors in your area.

Make sure to get at least three quotes from different companies and contractors. And remember to do your due diligence on their track record and experience.

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more!