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5 Rental Property Investment Mistakes You Need to Avoid in 2021

5 Rental Property Investment Mistakes You Need to Avoid in 2021:

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Rental property investments can be a sound financial investment. However, there’s more to just purchasing a property and finding tenants to pay your monthly rents. New investors need to choose the right property to get proper benefits from their large investments. 

Often with their little to no experience of the market, new investors can make some severe mistakes with their rental property investments.

Here, we list five mistakes you can avoid when making investments in rental property in 2021.

1. Underestimating repair costs:

When trying to purchase a property to rent out, it is easy to underestimate the repair costs that need to be done. Watch out for rental properties that will need a lot of work before they can be rented out. Sometimes, properties with great deals often cover up its heavy repairs, which can add a lot to your time and budget. Such properties can take a lot of time to be repaired, which means they will stay vacant for longer periods, hitting hard on your profit and time.

2. Poor location choice:

Rental property investments thrive on location. Your location choice should be comfortable enough to travel from time to time and appealing to potential tenants. Be wary of undesirable places with “great deals.” Conduct your own research of the adjacent areas, and look out for aspects that will intrigue your prospective tenants. Consider investing in rental properties are closer to tech corridors; to facilitate working professionals and employed personnel.

3. Negative cash flow:

It is natural to be quite excited when you are purchasing your first rental property. However, there are some things you should watch out for to avoid negative cash flow. You should avoid investing in properties with a lot of vacant properties around. This will hurt the value of your property and will indicate a low demand. Also, when there’s less demand, be flexible with your rent. It is better to get paid something rather than nothing.

4. Extreme renovation:

Just like underestimating repair costs, you should not go overboard with renovations. While it is essential to renovate your rental property investments to make them look more enticing to the prospects, you should not over-renovate it. Over-renovation will cost you a lot of money and time, and the longer your property stays vacant, the longer will be your loss.

5. Failing to seek help:

New investors often head out into the property investments with little to no knowledge about the market. This can cause them to make a lot of mistakes, hurting their investments. When in doubt, seek the help of experts. These experts are veterans who have learned the market inside out and can help you out from challenging situations. They can even advise you on good deals and set you up perfectly. Seek help from experts when in need instead of being a lone ranger.

Conclusion:

With the new year only a couple of months away, you can start your journey into rental property investments by avoiding these mistakes. You can always come up to us at Perfect Real Estate Investments, and we can help you out through your investment journey. We have the right arsenal to set you up for years of success. Call us today.

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Ways Busy Professionals Can Invest in Real Estate and Generate Passive Income

Ways Busy Professionals Can Invest in Real Estate and Generate Passive Income:

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The majority of the millionaires will agree that they made their wealth from investing in real estate. Many of the busy professionals aren’t aspiring to be multi-million-dollar tycoons; however, many crave financial freedom, flexibility, and wealth generation. Although the path to generating oodles of money has broadened over the century, real estate investing is still a great avenue that offers financial freedom and wealth creation.

However, the concerns related to managing the tenants and property maintenance may have put off many of the aspiring real estate investors. Most people aren’t aware of the ways to invest in real estate without facing the hassle of becoming a landlord, flipper, or wholesaler. Here are three ways for busy professionals to earn passive income by investing in real estate:

1. REIT investments:

Real Estate Investment Trusts (REITs) publicly trade on the stock exchange and are one of the easiest ways to invest in real estate. Interested investors can purchase shares of large firms that build and develop their own properties. REITs are easy to find, have low minimums, and are relatively liquid investments. REITs invest in multiple properties; therefore, you won’t be able to review specific properties. However, you are investing in more of an index-fund across commercial real estate sectors.

2. Being the bank:

As an individual, you can lend private loans to real estate investors and hold promissory notes to generate passive returns. These loans are generally backed by real estate to provide assurance in case of default. Also, you can invest in existing long-term mortgages. Such type of investment is also known as real estate investing without property management. Investors buy notes, and borrowers simply make their monthly payments directly to the investor, instead of the bank.

3. Syndications:

With the help of a joint venture or real estate syndication, you can partner with other investors. Here, you will pool money together between active and passive investors to purchase commercial property. For example, instead of ten people purchasing ten separate properties worth $1,00,000 each, they can pool their money and buy a $1 million property.

These syndications have two groups – active and passive investors. Active investors are commonly known as general partners, and they handle all aspects of buying and managing the property. Passive investors, also known as limited

partners, invest equity and earn a return on their capital. Unlike REITs, investors have the ability to review specific deals before investing.

Conclusion:

These three options are great for busy professionals to generate passive income through commercial real estate investment. If you do not want to manage your properties actively, these passive investing strategies are perfect for you. For more information, you can always consult with us at Perfect Real Estate Investment and get the best deals to invest in real estate, thanks to our property investment professionals.

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Should you be Investing in Real Estate Market During a Recession?

Should you be Investing in Real Estate Market During a Recession?:

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Recessions are bad, but is it awful for the real estate market? We will say otherwise! Investing in the real estate market can be an effective strategy to stabilize your investment portfolio. 

When the stock market goes up, investors have more capital. And when it goes down, the investor will be looking for other investment opportunities. This is where real estate investments come in handy. Any property investment professionals will agree that it is an excellent option to buy real estate during an economic slowdown. 

Here are three good reasons why you should invest in real estate during a recession:

1. Production of stable income:

Real estate investments generate steady income at regular intervals. This is why property investments are such an intriguing opportunity when it comes to investing. Even during a recession, your rental properties will be generating income regularly; therefore, contributing to a consistent and stable income. Real estate investments are ideal because the owners can adjust the rents, making it a hedge against inflation and changing interest rates. Raising rents during lease renewals allow owners to stay in touch with the rising prices associated with inflation. 

2. Less sensitive to volatility

The previous recessions saw stock prices fall dramatically. However, the home prices rose during those recession periods or remained fairly stable. During the Great Recession of 2008, the home prices saw a fall. This was before the recession, where home prices over-inflated due to subprime mortgage lending practices. It is also argued that property prices were simply being corrected to their true value. It is also noted that single-family rentals saw positive effects as a sector during the recession. 

Real estates have a low correlation with the stock market. So, it becomes a prime candidate for investment during a recession. Stock markets see a heavy dip during a recession. However, the real estate market is slow to move, and therefore, the recession hardly affects the property market. The real estate market isn’t really immune to the recession, but it is slow to react compared to other investment options. 

3. Better than stocks and bonds:

Due to the slow nature of houses’ production, the supply of housing has always remained tight. There needs to be a fundamentally dynamic change to alter the relationship between the housing supply and demand. 

It’s even harder to ascertain the supply shortages being reduced by a recession in a way that modified the prices. A spike in unemployment could negatively impact demand, but the Federal Reserve System is nearly bound to keep rates at near-record lows to balance the economy. The present rate on a 30-year fixed mortgage is at 4.83 percent, according to Bankrate. For perspective, rates reached highs of 18.5 percent in 1981, so even an increase above 5 percent would be historically quite low. 

Conclusion:

Yes, it is a good decision to invest in the real estate market during a recession. Speak with us PRI, and we can help you out with property investment professionals to set you up for years of success, even in difficult times like recessions,

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Things To Consider When Investing In Commercial Property Midway Through 2020

Things To Consider When Investing In Commercial Property Midway Through 2020:

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The pandemic has affected every market significantly. During the beginning of the pandemic, the commercial property values saw a drop in value due to the weakening economy. However, when investing in commercial property, you know you are here for the long-haul. Long term commercial real estate investors can weather the storm better than others. And such instances also open up opportunities for people to sift through the carnage and acquire a once-in-a-lifetime bargain.

When it comes to investing in commercial property halfway through 2020, there are certain things you should keep in mind. When you are in the driving seat of your investment, you should be prepared to face the worst! That investment perspective should depend on:

Significant importance to the location

When it comes to investing in commercial property, location really does matter. For example, in the office space market, it feels safe to target a highly-competitive urban market where you can find growth by outperforming your sophisticated and rich rivals. But you can also focus on well-trafficked corridors, which are in the fast-growing lane that has been largely overlooked by your competing investors. This strategy can land you a money-maker.

A margin of safety:

When investing in commercial real estate – or any real estate for that matter – you make your money go further. You should be looking at acquiring assets at 20% to 60% of their replacement cost. This serves as a hedge against the risks associated with new construction. Also, buying a quality property at discounted rates allows you to beat overburdened competitors on rental rates.

Cash management:

Markets can be unstable, which are pumped by low rates, high borrowing, and an influx of yield-chasing capital. Investments in commercial real estate have always been leveraged as asset play; however, it is necessary to have sufficient reserves and working capital to meet any demands that arise inadvertently. Cash is king during normal times. However, during distress, cash, and cash flow are considered to have a higher power.

Sustenance:

You might believe that investing in a premium-priced property with cash-rich tenants from top industries will be a dream come true for a commercial real estate investor. However, the real upside can be found by buying a quality property in the rough and proceeding to add value to it that acts as a multiplier effect. This also means targeting tenants of investment-grade who are here for the long-term, agreeing to lease that reflects your investment path.

Conclusion:

Commercial real estate investors can leverage opportunities by buying quality assets that are well-situated from distressed sellers and transforming them to accommodate a more technologically distributed way to conduct business. Disruptions are bound to bring opportunities; it’s just a matter of preparedness. To find amazing commercial properties to invest in, consult with us at Perfect Real Estate Investments, and we can help you find the best deals in the market. Call us today for investing in commercial property.

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What can you expect on Investment in Ohio real estate in 2021

What can you expect on Investment in Ohio real estate in 2021:

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With excellent investment opportunities and consistency, Ohio real estate has been bubbling over time. The state’s capital has also been at the top for being the best real estate destination last year. With that in mind, there will be a question – how will real estate in Ohio perform for the rest of 2020 and going into 2021? We are here to find out.

Four trends are set to influence Ohio’s real estate market heavily. These include:

1. Affordability:

This is a common fact for Midwest real estate market, and the same applies to Ohio real estate. Real estate investment in Ohio is exceptionally affordable. The average prices of properties begin at $220,000, making it considerably cheaper than the national average price of $300,000.

Along with lower property prices in Ohio, living in the state is relatively cheap. Compared to the other cities in the US, the state capital of Ohio, Columbus, comes in at 52nd place. This means the cost of living in Columbus is 14.5% lower than the national average. Combining it with the majority of people choosing to rent in this city, the real estate market is set to grow. Cheaper real estate and low cost of living are factors that can shoot up investment opportunities in the coming future.

2. Appreciation:

Ohio investment properties are set to benefit from the high real estate appreciation rate. Over the last decade, Ohio saw its real estate market in the top 30% for national appreciation, according to NeighborhoodScout. Pre-Covid, Ohio saw property prices increase by 6%.

For the first time in Central Ohio history, sales prices exceeded list prices in July 2020 as buyers were paying more for a home than it was listed for sale. The limited supply of homes assisted to increase the average sales price up 10.4% versus July 2019 and up 6% YTD. Check out the numbers.

3. Growing economy:

Cities in Ohio have been strong and diverse, and have been contributing well to the state’s economy. With popular industries being education, banking, defence, food, and health care, there has been constant growth. The capital city of Columbus ranked second-highest in Ohio in 2016 GDP and 29th amongst all US cities. With such a strong economy backed by young professionals, entrepreneurs, and start-ups, the state is set to grow further. The projections state that Ohio real estate is set to strengthen in the coming years and will become one of the best places to invest.

4. Airbnb’s success:

Airbnb saw phenomenal growth over the last couple of years, making it one of the prime reasons to invest in Ohio real estate. Columbus was one of Airbnb’s primary cities in 2018, generating millions of dollars of income and welcoming thousands of guests. With Airbnb’s success, real estate investors can invest fairly well in Ohio realty and set themselves for years of success.

Conclusion:

Ohio has always been a state to look out for when it comes to real estate investment, and in 2020, it’s no different. Cheaper investment options, a great standard of living, excellent opportunities, and a growing economy should tick all the boxes when it comes to investing in Ohio real estate. If you need any assistance with investing in real estate in Ohio, you can speak to us at Perfect RealEstate Investment. Our experts can guide you at every step and set you up for years of success. Book a consultation today!

The post What can you expect on Investment in Ohio real estate in 2021 appeared first on Perfect Real Estate Investments.

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Is multifamily commercial real estate investing for you?

Is multifamily commercial real estate investing for you?:

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Commercial real estate investment is perfect for the people who cannot withstand the stock market’s volatile nature. Also, this type of investment offers a better opportunity for investors to actively participate in growing their capital, rather than watching their money being passively managed by someone else. One magnetizing aspect of commercial real estate investment is that there’s more than one strategy to be successful.

Multifamily property investment has a lot of different facets that you need to consider. Investing in rental property is best for people who want an additional source of income along with a slow and steady appreciation of the portfolio’s value. There are two types of residential rental properties – single-family and multifamily. Single-family rental properties, as the name implies, are properties with one available unit to rent. In contrast, multi-family real estate is associated with large apartment complexes with multiple rentable spaces. While it is relatively easy to start with a small home portfolio, the advantages of multifamily investment properties are tremendous. These three reasons will help you know if you are ready to invest in multifamily commercial real estate.

1. Financing is no barrier for you

The cost to acquire a large apartment complex for multifamily property investment will be significantly larger than investing in a single-family rental property. For example, investing in a single-family rental property will cost you somewhere around $100,000 while the cost of multifamily rental properties can go into the millions.

Since multifamily properties generate a strong cashflow at the end of the month, it is fairly easy to finance too! Also, if a tenant in a single-family property moves out, the entire property becomes vacant. However, with multifamily properties, only that individual unit out of the many units will remain vacant while others keep generating revenues. That means, at the end of the month, your cashflow won’t be significantly affected.

2. Expect quicker growth

Multifamily commercial real estate investing is best suited for people who wish to build a large portfolio of rental units. Acquiring 15 individual single-family rental properties is comparatively difficult and harder to maintain, while a 15-unit apartment is much easier to maintain and quite time-efficient. The former option will require you to contact with different sellers and will need individual inspections at different addresses. With a multifamily investment, everything is in one place, and you can avoid a lot of headaches when acquiring the property.

3. Greater long-term appreciation

Apartment complexes age better over the course of many years when compared to single-family rentals or a bunch of small rental homes. Multifamily properties are known for their long-term appreciation. The properties gain value over time as the cost of living, and the cost of rent rises. When these properties are maintained well, they are less likely to lose value over the years, which tends to be a great way for you to hedge against inflation.

Conclusion:

So, are you ready to invest in multifamily commercial real estate? If yes, you can contact us at Perfect RealEstate Investments, and we will guide you through the entire process, offering our expertise every step of the way in order to ensure that you make the best decisions. Call us today!

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Apply These 6 Secret Techniques To Improve Your commercial property investment

Apply These 6 Secret Techniques To Improve Your commercial property investment:

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Commercial property investment or wealth building can be a strategy that is both exciting and lucrative if done right. The growth in developed and developing communities has increased the demand for more residential and commercial properties. And with that growth, real estate continues to attract more investments, improve capital appreciation, and demonstrate its intuitive appeal for the investment class.

However, you need to keep in mind these six techniques that can help improve your commercial property investments.

1. Know your market

Environmental, political, social, and broader economic forces have an influence on real estate, affecting the property value and people’s purchase and selling decisions. A commercial real estate market is shaped by the demand for the property, its rarity, utility, and transferability. Understanding these values is imperative to succeed in the commercial real estate market.

2. Find your focus:

When investing in commercial real estate, you either go the direct investment route where you are the landlord and owner of the property and you have a considerable amount of knowledge about the industry. Another route is to choose indirect investment where you are the owner of various market securities like real estate investment trusts (REITs). Commercial real estate investments also require you to understand the marketplace sectors like Retail, Office, Industrial, etc. and learn more about the different aspects of the market.

3. Research

Before making any investment, you should conduct thorough research on potential investment opportunities. This comprehensive study will help you learn about land surveys, building permits, zoning laws, impact on the surrounding environment, etc. These feasibility studies help you learn about land acquisition and development.

4. Network development

Real estate involves a network of professionals ranging from architects to designers, consultants, and more. Therefore, it is imperative to have a reliable network of people that work together. To avoid underestimating the maintenance cost, conduct a thorough survey. Compare those survey results with a network of specialists and suppliers and opt for the highest quality with the fastest turnaround at the lowest cost.

5. Technology

As a commercial real estate investor, you should learn to embrace technology. The rising tide of technology has engulfed most industries, and CREs are one of them. People expect their properties to be feature-rich with tech and offer innovative solutions, thereby increasing the property’s value. Adopt technologies that help people improve the prospect’s productivity.

6. Agile

An investor needs to be agile when it comes to grabbing new opportunities in the market, especially in this tech-enabled ecosystem. There is a need to adapt to new demands as per priorities. CREs should constantly innovate to improve the fluidity and rate in the market. An agile investor will be keen on building good relations with the customer.

Conclusion:

Commercial real estate investing has a set of keys that need to be pressed in the right order to unlock its full potential and benefits. If the market still overwhelms you, consider consulting with us at Perfect Real Estate Investments, and we can help you guide through the maze called commercial real estate investments!

The post Apply These 6 Secret Techniques To Improve Your commercial property investment appeared first on Perfect Real Estate Investments.

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Wealth Building Through Commercial Real Estate Investing

Wealth Building Through Commercial Real Estate Investing:

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If you have looked at wealth building through commercial real estate investing and you’ve looked at commercial real estate listings in the past and felt overwhelmed at the options, you’re not alone.

Every type of commercial property is different. For example, buying or selling a home is much different than buying or selling commercial property. They require different areas of knowledge and expertise.

Simply put, investing in commercial real estate is a numbers game. At Perfect ReaEstate Investments (PRI), We take a look at the numbers and evaluate the location to determine if it’s the right property that meets your specific needs.

What does Perfect ReaEstate Investments sell?

We sell building wealth through Commercial Real Estate investing.

We also sell a dream, luxury, and a better future. There are many who may be unable to start investing right away but have the desire to. Our goal at Perfect ReaEstate Investments is to retain your interest and position you to become an investor when you can afford it.

Why do people want to build wealth?

– Have a comfortable retirement.

– Secure a future for family/kids.

– Have a reserve for family emergencies.

– Do things on your bucket list.

– Pursue your passions

– Tired of living paycheck to paycheck while trying to maintain a lifestyle.

– Get rid of personal liabilities like student loans and credit cards

– Philanthropy/give back to the community.

How?

When it comes to maximizing your resources and meeting financial goals, commercial real estate investing is an incredible opportunity. However, the key is doing it right.

When?

Buying real estate can be a profitable long-term venture that can create income well into the future. The sooner you start, the better off you’ll be.

What?

Most Common Commercial Investment Properties:

Retail

From strip malls, regional malls, or lifestyle centers, retail commercial spaces are a great option for both local Ohio investors as well as out-of-state investors. Learn more about the various types of retail spaces and work with a team who understands the process.

Office

Office spaces can include the typical office with desks, chairs, and conference rooms, but also includes medical offices and flex spaces that have different features and demands. There are also different types of commercial office buildings, including Class A, B, and C buildings. Find out which type of commercial investment property is right for you.

Industrial

Do you want to invest in a warehouse space? A showroom? Depending on your budget and future goals, the team at Perfect RealEstate Investments can help you determine which size industrial property is right for your investment goals. We will be there to provide guidance throughout your journey.

Multi-Family

There are several types of multi-family investment properties, including high-rises, walk-ups, student housing, apartment complexes, and more. Which property is right for you, and which class of building, will depend on whether you want to manage the property yourself if you need to hire professional property managers, and other factors. Learn more here.

Hospitality

These commercial properties can include hotels, golf courses, and restaurants. If you’re ready to get started on your investment property, get help, and support from Perfect RealEstate Investments. We can provide insight and guidance to help you make informed decisions on your commercial property.

Where?

Ohio, Ohio, Ohio!

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Commercial Real Estate Investing For Beginners – Investment Guide 2020

Commercial Real Estate Investing For Beginners – Investment Guide 2020:

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If you are keeping up with what is happening in the economy these days you would have realized that with the right investment guide, you could make a comfortable living with commercial real estate investing even in these difficult times. This type of investment has the power to enrich your financial portfolio with consistent returns, passive income, and growth potential.

Commercial real estate can bring better returns for niche investors! These commercial properties can be leased to businesses on contracts for several years, which provides you with ample time to pay back your financial loans. However, investing in commercial real estate should be done with utmost care. Making all the smart moves can get you excellent capital appreciation along with consistent cash flow. Here’s a step-by-step guide on commercial real estate investing for beginners:

Step 1: Choosing the commercial property

Be absolutely crystal clear on the type of commercial property you prefer to invest in. The commercial property space has a broad range of options, like office spaces, industrial factories, retail outlets, warehouses, multi-family accommodations, data centers, hospitals, hotels, sports stadiums, special purpose units, etc.

Step 2: Choosing the right location

Apart from the type of commercial property you choose to invest in, you should also be cognizant of the property’s location. Locations are also one of the decisive factors in commercial real estate investment. Conduct research of the local economy to pinpoint financial hotspots and business hubs. Take note of the average rental rates, business occupancy periods, customer traction, etc. Speak with previous property owners to verify the potential of income-generation.

Step 3: Financing

You can finance your commercial real estate in many ways. One of them is creating a cash capital. Here, you put in 100% of the money required out of your own pocket. You become the sole owner, and you are free to find a suitable business that can rent your property.

You can also choose for a commercial real estate loan. These have shorter repayment terms than residential loans. 

You can go for a private lender if you do not qualify for a bank loan. This depends on the personal relationship between the borrower and the lender. 

Choosing an online broker can help you find commercial real estate properties through your desktop or smartphone. It is also a way to crowdfund your real estate investment.

Step 4: Maintenance

Business cycles have an effect on occupancy rates of commercial real estate. Hiring a property manager and maintenance staff can help you to look after the property during vacant periods. This staff will also help to keep your tenants happy and satisfied.

Step 5: Rent collection

Your commercial real estate investments will be producing rent every month for you to collect it. Most leasing contracts last more than a couple of years at the minimum, so you can simply sit back and relax while your investment assets grow your wealth slowly and steadily.

Conclusion:

With that investment guide, you are now ready to invest in commercial real estate. However, consulting with Perfect Real Estate Investments will help solidify your journey into commercial real estate investing. You can leverage our decades of experience in finding the best investment properties! Call us to learn more.

The post Commercial Real Estate Investing For Beginners – Investment Guide 2020 appeared first on Perfect Real Estate Investments.

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Commercial Real Estate And The 11 Green Building Certifications You Should Know

Commercial Real Estate And The 11 Green Building Certifications You Should Know:

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Sustainability should be one of the significant concerns for anyone into commercial real estate. Studies suggest that tenants are willing to pay around 9% more if the building has sustainable features. Also, having a strong focus on sustainable features can help you keep up with your competition and also increase your property values by a significant margin.

Green building certifications are a great way to showcase your focus on sustainability. Here are 11 Green building certifications you should know:

1. LEED:

Leadership in Energy and Environmental Design (LEED) is one of the most easily recognized sustainable building certifications, issued by the US Green Buildings Council. It has nine certification programs including ones for commercial, retail, new construction and existing building, etc. Each program has a points-based rating system. The points received for your building will determine whether you’re LEED Certified, LEED Silver, LEED Gold, or LEED Platinum.

2. Energy Star

Another well-known green building certification is Energy Star. This certification is offered through the Department of Energy and the Environmental Protection Agency. Your building should be at least 15% more energy efficient than traditional properties to qualify for this certification. These certifications are valid for one year.

3. BREEAM

BREEAM (the Building Research Establishment Environmental Assessment Method) recognizes sustainable buildings and infrastructure projects. The buildings receive a star rating and a designation of Pass, Good, Very Good, Excellent or Outstanding

4. Green Globes

This certification is offered through the Green Building Initiative. It has three categories – new construction, existing buildings, and interiors. To qualify, you must pass an online survey, a third-party assessment, and a post-assessment where you need to score 35% out of the 1000 available points.

5. Living Building Challenge

This certification is based on your building’s sustainability performance for over 12 months. To qualify, you need to earn all seven “petals” which include materials, site, water, health, equity, beauty, and energy.

6. National Green Building Standard

This certification is for residential properties only, including single-family, multifamily and mixed-use developments. This certification has different levels of certification, ranging from Bronze to the much-coveted Emerald.

7. GreenGuard

The GreenGuard certification focuses on air quality and low-emission building materials, mould prevention, moisture protection, etc. The application process requires various planning meetings, reviews, test groups, compliance testing, and a final certification package.

8. WELL Building Standard

This certification focuses on seven core concepts, including air, water, nourishment, light, movement, and more. The certificate is issued by the International WELL Building Institute and focuses on the impact of building on human health and wellbeing.

9. NABERS

This green building certification is available to Australian projects only. The buildings are rated on a six-star scale, which is based on energy use, waste production, water use, and indoor environment.

10. Green Star

Green Star is another Australia-based option that certifies interiors, building designs, energy performance, and even entire communities.

11. CASBEE

The Comprehensive Assessment System for Built Environment Efficiency (CASBEE) is a green building certification in Japan, though it’s currently being piloted for international use. The application process includes various assessments and certifies residential and commercial buildings.

Conclusion:

Having a green eye for your buildings is good for the environment, the wellbeing of people and also a significant investment. If you need assistance with green building initiatives in commercial real estate, come to us at Perfect Real Estate Investment, and we can help you out with the best deals.

The post Commercial Real Estate And The 11 Green Building Certifications You Should Know appeared first on Perfect Real Estate Investments.

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The new normal in commercial real estate investment

The new normal in commercial real estate investment:

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The pandemic has accelerated social and economic changes that were underway before the outbreak. This led to consumers, workers, and employees to adapt to new preferences and behaviors. Collectively, commercial real estate investments will require to adapt to new norms, design, customer relations, and business operations to function successfully in the future. It is said that this pandemic will reshape demand for commercial real estate, and specific steps should be taken to remain competitive in the market.

A buyer’s mind will be plagued with the pandemic’s effects on the buildings’ revenue and expenses when thinking of how to get into real estate investing. Potential issues from infections and many other reasons may cause buyers not to secure any favorable financing for an acquisition. There is uncertainty for sellers where they wonder whether they should sell now or wait out the pandemic. They are unsure whether they will have good options for investing the proceeds from the sale.

The pandemic is affecting economic growth, and that, in turn, has changed everything else. Even with low demand for most real estate types, the commercial estate is deemed to play an essential role in economic recovery. Such crises have been faced before, and even during that phase, the real estate industry has emerged as one of the pivotal drivers of financial and economic revival. 

There will be a change in demand for each sector of commercial real estate. Digitization of office spaces will reduce the need for space from tenants, with half of the workforce is expected to work remotely by 2025. This will lead to repurposing the retail space over the coming years when investing in office space. Retails centers will need to be reconfigured to facilitate curbside pickup and to support delivery services.

With the increasing tendency for residents to work from home, multifamily building owners can respond by providing enhanced connectivity options. Property owners can augment common areas with sensors, smart walls, and voice assistants to modernize their current properties. In the future, tenants may also expect onsite emergency equipment and health certifications for onsite personnel and common areas. Multifamily real estate developers should consider updating their designs to include spaces for delivery services within the buildings and drop-off zones in parking lots.

The growth in e-commerce space will contribute to the demand for more space. Tenants related to the e-commerce industry will expect their area to be equipped with improved air ventilation systems, antimicrobial technologies, and motion detectors that can replace frequent touchpoints.

There is a need to strategize a post-pandemic plan that will allow businesses to thrive in these new contexts. Being proactive and adapting rapidly to the changing environment will help you succeed in this ever-competitive industry. There is a need for structural reorganization and embrace new communication methods, remote workspace, and compliance with technologies that help welcome the new normal.  

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The Right Way to Start Investing – Get Out of Debt

The Right Way to Start Investing – Get Out of Debt:

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OK, so you’ve decided that you want to jump in and start investing in real estate. The Right Way to start investing – get out of debt

Working as a Commercial Real Estate Investment Advisor in Ohio, I meet a lot of people who want to invest in commercial real estate. Unfortunately, many people are unable to even qualify for a loan to purchase their first investment property due to their credit. Most of the time it is a classic case of “saving at the spigot and wasting at the bung-hole”

Looking at my clients’ financial situations, I realized that most people lacked even the most essential financial knowledge. Things that I thought were so basic and necessary to qualify for a good loan, like having a good credit score, paying bills on time, or not carrying a lot of credit card debt relative to your income to most people were revelations.

I will never forget a couple that came into my office looking to buy their first investment property.

Tim and Mary (not their real names) wanted to buy investment properties that could give them a passive income and help them in retirement. Although they had two jobs each, they had a hard time coming up with meeting their expenses. Tim even told me that he was considering looking for a third job that he could do for a few hours a week, but he couldn’t find one that could fit his already tight schedule. They had 4 kids and a ton of credit card debt.

Before kerosene oil was discovered or thought of, one might stop at any farmer’s house and get a very good supper, but after supper, he might attempt to read in the living room and would find it impossible with the insufficient light from one candle. The hostess, seeing his dilemma, would say: “It is rather difficult to read here after dark; a proverb says ‘you must have a ship at sea in order to be able to burn two candles at once; we never have an extra candle except on special occasions.” These special occasions occur, perhaps, twice a year. In this way the family would save five, six, or ten dollars in that time: but the information which might be derived from having the extra light would, of course, far outweigh a ton of candles.

Another couple I met wanted to buy a $650,000 banquet hall. They had a combined income of $100,000 a year. They were both driving brand new cars, (they had paid $60,000 for those cars only a few months earlier) and their monthly car payments were just under $1200. On top of that, they also had $49,000 in credit card debt. Their mortgage monthly payment would have been $3,450. Incredibly, they couldn’t understand why they could not get approved for a commercial loan.

A lady who came to me for advice admitted that the previous month she had been so upset with her husband for buying himself a new truck that she went to the dealership and bought herself a brand-new car. Now they are having trouble paying for both cars.

These and many similar situations made me realize that most people were not taking credit seriously. And the main reason was that they did not know exactly how credit works. But that is only one part of the equation. The other part is that we live in such a consumerist society that no matter what you do or where you go, you are constantly exposed to advertisements. Whether you are watching TV, browsing the web, reading the paper or just driving around town, you are being bombarded with ads. And most importantly, many of those ads are targeting kids, so they grow up constantly thinking about spending money. And how many ads do you see about saving money? None.

Here is a plan that I recommend: When you find that you have no money left at the end of the year in spite of having a good income, I advise you to take a few sheets of paper and pin them up somewhere very visible and markdown every expense. Post it every day or week in two columns, one headed “necessaries” or even “comforts”, and the other headed “luxuries,” and you will find that the latter column will frequently be ten times greater than the former. The real comforts of life cost but a small portion of what most of us can earn. It is the eyes of others and not our own eyes that ruin us.

If all the world were blind except me l should not care for fine clothes or furniture.” In America, we like to say, “we are all free and equal,” but it is a great mistake in more senses than one.

That we are born “free and equal” is a glorious truth in one sense, yet we are not all born equally rich, and we never shall be.

One may say; “there is a man who has an income of two hundred and fifty thousand dollars per year, while I have but fifty thousand dollars; I knew that fellow when he was poor like myself; now he is rich and thinks he is better than I; I will show him that I am as good as he is; I will go and buy a fancy car; perhaps I cannot geta a bank loan to buy that BMW, but I can lease one and thus prove to him that I am as good as he is.”

My friend, you need not take that trouble; you can easily prove that you are “as good as he is;” you have only to behave as well as he does, but you cannot make anybody believe that you are rich as he is. Besides, if you put on these “airs,” add waste your time and spend your money, you will never build wealth. Keeping up with the Joneses is never a good strategy instead change your mindset and your beliefs about money. This is, in my opinion, the best way to get out of debt, stay out of debt forever, and start accumulating the wealth that you and your family so deserve.

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Manage Your Exposure

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Managing the risk associated with investing in real estate is the key to protecting yourself from loss. The most important aspect of risk management in real estate is to know the law. It’s essential that you have a working knowledge of the real estate legal structure and requirements. Here are some tips to manage your exposure

After you’ve researched property availability, cost, and buyer interest, you’ll need to hypothesize about what the future holds for your market. Will prices go up or down?

When considering your risk, keep the following points in mind:

Think about the local economy. Are there jobs available or are most companies in the area losing jobs? Are new homes being built more or less than over the past 5 years?

 Make wise financing choices. When picking your funding source, think about how long you plan to keep the property. Adjustable Rate Mortgages (ARMs) are attractive because of their lower down payments and lower rates. You can pick the duration of the loan – typically either 1,5, or 7-year ARMs – and your rate will be adjusted to the prevailing rates after this period of time. If you plan to hold onto a property longer than the ARM, ARMs can cost you more because of the higher interest rates. It may be more prudent to opt for a fixed-rate mortgage with the shortest length you can handle financially.

Pay a large down payment to reduce your risk. If you can put down 25%, you’ll have instant equity in the property, and most likely get a better interest rate.

Be creative with your mortgage payments. Make larger monthly payments then require, or make one extra payment a year you’ll reduce your principle.

Know the Real Estate Law

Every part of real estate involves the law. There are many complicated legal pieces and many different people are involved in any real estate transaction.

First and foremost, the contract is the most important part of buying and selling property. The primary purpose of a contract is to show mutual assent – the agreement by both parties to the exchange- in writing. Verbal agreements are not binding. To be valid a contract, it must include the following:

• Identification of the parties involved and the agreed-upon price

• Specific “consideration” must be stated – something of value that’s being exchanged, usually money

• Signatures of each party involved

There are checks-and-balances to protect people in every situation and to protect the overall system. Appraisals are used to ensure that the property is worth what the lender and seller have purported. The appraisal prevents shady deals from being stuck between investors and mortgage brokers. Commercial property has its own laws regarding use and sale. If there are tenants living in the property, there are specific laws to protect the landlord and tenants. Lenders are held to the law by how much they can loan, what documents and insurance are required, and even how they market their financing programs.

It’s important to know about tax law, or get advice from a professional since it greatly impacts your success in real estate investing. Mistakes are costly, and by protecting yourself you can make decisions that will help your bottom line rather than take away your profits.

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Tips for Avoiding Discrimination and Ensuring Fair Housing

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Avoiding discrimination is imperative when you own investment rental property. The Fair Housing Act regulates this and you could find yourself in legal trouble if you do not adhere to these regulations. Here are some tips for avoiding discrimination and ensuring fair housing

First, you must make sure that the property is available to be shown to all individuals who are interested in renting it. Generally, interested parties will call to inquire about the property before they actually see it. When you answer questions about the property you must make sure that you are providing the same information to everyone who calls. If you venture into offering different conditions, terms, and/or information to different individuals who call to inquire about the property, you could be liable for discrimination. Basically, you need to make sure that you are covering all of the specifics of the property without necessarily trying to deter applicants away from the property based on any of the areas which are protected under the Fair Housing Act. Areas that need to be covered when applicants call include amenities of the property, property size, location, etc.

In addition, you need to make sure that your rental application is also designed with fair housing standards in mind. The best way to do this is to have an attorney review your rental application and then provide the same documents to all prospective renters. Also, make sure that the process is the same for everyone. Ultimately, when you deny or accept a rental application your decision should be based on valid requirements and not personal opinions.

Beyond the application, you will also need to give some thought to occupancy restrictions for your property. It is not uncommon for many people to restrict the number of people who are allowed to live in their rental units. There can be many different justifications for occupancy restrictions and standards. When establishing occupancy restrictions and standards; however, you need to be certain that your standards are fair and do not effectively discriminate against families with children. This is one of the more common complaints filed as many prospective tenants feel as though an overly restrictive standard regarding maximum occupancy discriminates against them and their children.

Different laws regarding occupancy standards and restrictions apply in different states. The key in most states is to ensure that you are using good reason and common sense. For example, if you have a 1,000 square foot two-bedroom home, then it would obviously be excessive to have seven people in the home.

There are no prohibitions regarding restrictions on the number of people who are allowed to occupy a residence under the Federal Fair Housing Act. It is critical; however, that any restrictions which are adopted be reasonable and apply to all occupants. You must discriminate on the basis of race, color, national origin, family status, gender, religion, or handicap.

The most common standard adopted by most property managers is two people per bedroom. This standard is considered to be fair and reasonable by most. If; however, the residence in question is particularly large or it could easily accommodate more persons, it is important to keep in mind that such a policy could be challenged and a complaint filed so it is imperative to be sure that standards are flexible when the need calls for it based on available space within the dwelling.

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How to Flip a House

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If you haven’t seen the many shows on television advertising and explaining how to flip a house this should help you find yourself well on your way to real estate investing riches through the process of flipping houses. While there are some negative connotations attached to flipping houses because of shoddy deals and shoddy workmanship in the past, you can create a positive reputation by doing things the right way if you follow the advice on how to flip a house below.

1) Find a suitable house in a suitable location. This is probably the most important aspect of flipping a house. There is no way a flip could be successful if you do not get an absolutely great deal on a house that is in good shape, needing only cosmetic repairs and touches, that also happens to be in a neighborhood where houses move and will get the price you are setting as your goal. While it seems like a little more than a mouthful each of these things is important to the success of your flip. 2) Have an inspection. This is also essential because your inspection should clue you into any unforeseen problems that may arise. You can either adjust your bid in order to cover the costs of those repairs or you can pull out of the project altogether if discovered and unanticipated repairs would eliminate the profit you potential you need in order to make the house flip worth your time. 3) Decide what must be done. It is best to salvage as much of the original structure as possible and make mostly cosmetic repairs to the house. The goal of a flip is to spend little and make a lot. Plan projects that can be completed quickly (carrying costs are the bane of the house flipper) and with little expense. Flooring, paint, and fixtures are a great way to make a large impact without spending too much money. 4) Get the work done. Whether you are doing the work yourself or hiring experts you need to get the work done as quickly as possible in order to maximize your profits. Plan projects to move quickly and avoid projects that rely on the entire property being useless while they are being performed as they risk putting other projects behind if they are delayed for some reason. 5) Be flexible with the price. If you stick to your budget you should be able to go with your original target asking price. You do not want to price the property more than the neighborhood will be able to support and you definitely want to avoid turning off potential buyers by turning down a fair offer too quickly. It is better to take a lower offer and sell the house quickly than hold out for a larger offer that never comes (all the while paying costly carrying costs).

Flipping a house is a trying ordeal and during the middle, it is likely you will decide that you aren’t asking for nearly enough money out of the deal. The hours are long and the work is difficult but if you stick to it and don’t get greedy you will find that the profits can be quite attractive by real estate investing standards and fairly quick to come. While the work is difficult the payoff is wonderful.

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Risks of Real Estate Investing

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All good things carry with them some degree of risk. The same holds true with real estate investing. Despite the promise of high rewards, you should temper those ambitions with the reality that the risks involved are more often than not just as high as the potential rewards. For this reason, you need to take every possible precaution in order to ensure that you minimize your exposure to risk whenever possible or at the very least are prepared, financially, and mentally to accept the consequences of those risks if the time comes. Here are some risks of real estate investing

The most obvious risk when it comes to real estate investing is the immediate risk of losing your investment. This risk can be a huge blow depending on how large your investment was, to begin with, but isn’t the worst thing that can happen during the course of a real estate investment gone wrong. While I’m certainly not trying to talk you out of investing in real estate all together it is a good idea to have a realistic view of the risks and the potential rewards.

If you are flipping houses as your real estate investment you have the potential to lose a little more as you can become injured during the course of your work. The sad truth is that many who are attempting to break into the business of flipping houses have neither adequate insurance coverage (this is true of themselves and the property in general and others that may be working on the property), the money, nor the time that a serious injury might require.

Another risk common to real estate investing is the fact that stuff happens. Market trends tumble, companies go out of business leaving towns and the local real estate market in shambles, accidents happen during the course of the work, natural disasters occur, and buyers change their minds and pull out at the last minute. Each of these things can have devastating consequences and are almost always events that are completely beyond your control as a real estate investor.

If that wasn’t enough many investors fail to have a proper inspection and find out when it is really too late that there are serious structural problems and other sorts of things wrong with the property. These things cost money to repair and cut into profits, occasionally resulting in a loss. The thing is that once you find out something is wrong with the property you are honor-bound to either reveal the problem to potential buyers or fix the problems before selling the house. In the case of a flip, many major problems will undo the work that has already be done. If this doesn’t remind you of the importance of a thorough inspection I have no idea exactly what will but inspections are important for many reasons and can save a lot of time and money if you have one done ahead of time.

Do not allow the risks of real estate investing to prevent you from taking the plunge. They are spelled out here to remind you that prudence and caution are wise when investing in real estate not to talk you out of this potentially lucrative field of investing. If you are interested in real estate investing there is no reason on earth you shouldn’t take the time and make the effort to learn more about its potential.

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Make the Most Money Possible in Real Estate

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To make the most money possible in real estate, the standard philosophy is to “buy low, sell high”. Most people try to do this, and many do not succeed because it’s hard to do. When trying to get the highest return possible, keep your costs down, and do everything possible to draw in the highest bidders.

Once you own the property, do as much of the repair work yourself, as long as it is of a professional level. Shoddy work and inferior materials will cost more to correct later. With difficult projects, hire a trained professional from a small scale operation. Large contractors with several employees have to factor their large overhead into their prices.

When looking to maximize your profits, try to save money with your lender. Look around for cheaper loans with the less popular lenders. The large banks and financing companies usually have high fees and rates. Don’t accept overpriced fees. For example, your lender is charging $75 to deliver a few papers a short distance, ask for it to be reduced.

By educating yourself on the legal and accounting aspects of real estate transactions, you can save yourself thousands of dollars. If you learn the basics of these two areas you will know when to ask for a professional’s help.

When negotiating, be firm but flexible. Attempt to find a win-win situation where both you and the other party walk away from the table happy. Be clear on what you want, and what you can be flexible on. If the other party walks away angry and feeling cheated, they might try to sabotage your attempt to make a profit.

If you are selling your property, it’s important to also shop around and negotiate for the best prices on high priced items like closing costs.

“Staging” is setting the scene by making your property look its best. You will get the highest price for a property that has been properly prepared.

Actively market your property and you’ll get the largest pool of potential buyers possible. It is a benefit to the seller if there are several interested parties in your property.

Buy and Sell at the Right Time

Timing is important in all investments, but unlike other investments – bonds, stocks, and mutual funds to name a few – there are two characteristics specific to real estate investing.

1. Real estate transactions take a long time.

2. Each piece of real estate is unique.

In order to buy or sell property, it takes a long time, and while the transaction is taking place, the market is constantly changing. This makes timing the purchase or sale of real estate tricky. When you are investing in real estate, you are trying to sell high and then jump back into the market by buying low. Timing the market in such a way is a challenge.

Look for a property that is a “fixer-upper” to get a good deal. If you have an aptitude for home repair or you know an inexpensive worker, you can increase the value of a home by over 10%. Search for foreclosure auctions and Notice of Default alerts in the area newspapers and online. Find a good deal on the property by anticipating positive change in depressed areas. Up-and-coming neighborhoods, in areas where people have been leaving, tend to have lower prices. Find areas where the government is involved in development efforts.

The key to employing any of these strategies is access to capital. This doesn’t mean having an account with a large sum of money in it. Instead, you need to have access to money. By maintaining a high credit score, nurturing an efficient relationship with your lender for quick approval for financing, and having access to liquid assets, you’ll be prepared to jump when the right deal comes along.

Even in a slow market, the chance to make a profit investing in real estate is still likely. To do this, however, you’ll need to do your homework, have a long-term outlook, and be able to walk away from any deal.

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