As a realtor, you’re seen as a trusted advisor and often called upon to give advice on various aspects concerning the housing industry. What happens, though, when you get clients whose real estate interests – investors, for example -- are beyond your scope of knowledge?

You bone up. You ask fellow colleagues. You read everything you can get your hands on. And you learn. So in an effort to broaden your horizons and in honour of real estate investors everywhere, we put together this primer on mistakes to avoid when renting out properties.

As a real estate investor and landlord, Jarek Bucholc believes one of the biggest mistakes investors, especially green investors, make is miscalculating the expenses generated by their investment property. Landlords often overlook expenses such as property taxes, insurance, maintenance and the cost of having no rental income because their rental unit is vacant.

Bucholc advises investors to be prepared for such inevitabilities as a leaky roof or a tenant who skips town by thinking ahead. Landlords should plan or put aside two month’s rent for the yearly maintenance of their property, he says. Also, be aware that tenants tend to move on average about once a year so you could be faced with no income for a period of time.

He also recommends that landlords not subsidize their investments by using their own money or outside income to pay for the investment. The mortgage, maintenance costs and taxes should be covered by the rent.While doing that can be tough in markets with high and rising values, Bucholc says inexperienced investors will do so with the hope that their property rises in value. “Often, people want to rent out their properties out of desperation and then they get in trouble because they haven’t prepared for these expenses,” says Bucholc, a Calgary resident and founder of Canada Real Estate Investors Club (www.canadareic.com). A common mistake made by landlord is that they conduct sloppy or inappropriate screenings of potential tenants. Not only should you get a credit check and previous landlord check but to be extra safe think about getting a criminal check as well. To suss out whether a renter is serious or not, consider charging them a $20 fee for the credit check.“If they pay the $20 they are serious about renting,” Bucholc says. “If they don’t, they’re tire kickers.”

If you’re suspicious that the renter lied and has given you a friend’s phone number instead of a previous landlord’s try this tip, advises Bucholc. Call the number and ask if they have any properties or apartments for rent. That ought to trip up anyone who isn’t a legitimate landlord.

Landlords also need to be sticklers when it comes to drawing up contracts with their tenants. Will you charge late fees when a tenant is late paying their rent? Do you want your tenants to be responsible for taking their garbage to the curb side? Should you inform tenants of the need to obtain contents insurance? Again, Bucholc recommends investors prepare for any and all inevitabilities.“This is to avoid future conflicts, misunderstandings and possible court cases,” he says. “Try to cover every possible situation where the tenant can say I didn’t know about that or I didn’t think I had to do that.”

Hamilton realtor Robert Morrow, who specializes in buying and selling student housing (www.emailhomes.ca/studenthousing.php), says the lack of knowledge of the Landlord Tenant Act causes him great dismay.  He believes the Act is designed to favour the tenant but a good landlord--who follows the rules to the letter--will always be treated fairly both by the tenants and the legal system.“I see a lot of investors cutting corners to save money short term,” Morrow says. “In the long term, however, they usually lose money via unhappy and therefore transient tenants, or expensive repairs once ordered by the court.”

One big mistake landlords make is that they are tardy when responding to tenant concerns and building maintenance issues. Morrow recommends investors treat their property as if they were living in it and wanting to fully enjoy the space.“Does that make it harder to earn profit?” he asks. “Sometimes in the short term, yes. But long term, you won't have as much turnover and the quality of tenant will be superior. One conclusion to draw here is that short term rental investment is not a good idea. The investor should consider a 5 to 10 year investment minimal to be profitable.”

When it comes to student housing, aesthetics take a back seat to functionality. Meeting fire and safety codes is much more pressing than the colour of the living room. But often investors don’t recognize this and end up prettying up their investment property not for the 20-year-old student who will be renting there, but for themselves. That is a mistake, says Morrow.“As long as the stove top works, the fridge is large and relatively clean; the kitchen has utensils, dishes, and cookware supplied; the bathrooms are updated (to accommodate up to 8 people showering every day); and there is common space to put a TV for gaming--and of course, the internet is lightning fast-- then the student tenants are happy to pay top dollar rents.”

Oftentimes, parents purchase student homes for their own kids who are attending college or university and they upgrade the homes to their own living standards. This is also a mistake as professional investors see no value in the improvements and won’t pay extra for them. Unless they sell to another parent, chances are they will lose what they spent on renovations.

Other common errors made by real estate investors centre on inappropriate inspections. When it comes to assessing the damage to a rental unit it’s important to have clear evidence and nothing is better and more binding than photographs, says Bucholc. Make sure your tenant signs the inspection sheet, which in effect, means they’ve agreed to the damages found and any dents and scratches made subsequently will be on their tab.

Make sure your unit is rental ready when potential tenants are viewing it. Bucholc has actually seen a property that had dog poop on the floor. You want it to be clean and tidy otherwise how can you expect tenants to take pride in their home?

“If it’s dirty that builds bad karma,” he says, “and the tenant will not take care of the house and will not consider it as their own home.”When marketing your rental property, go outside of your immediate area to market it. Remember, says Bucholc, as a landlord, you’re in the relocation business.

Don’t overprice your rental unit as – surprise, surprise – no one will want it. And even if you do find a tenant, they won’t last. You’re driving them out with high-priced rents.Finally, says Bucholc, don’t rent to family or friends.“This is business,” he says. “If they have a problem and can’t pay the rent it’s hard to say no to family and friends.  Don’t mix business with pleasure.”

What advice do you offer your clients who want to invest in real estate? Do you have any pointers that we missed? Please share them.

Source: propertywire.ca

Networking is an important skill in any business if the goal is a profitable business. The same holds true for real estate investing, at least on behalf of those who are serious about pursuing real estate investing as a business rather than a part time hobby. Either way, in all honesty, the ability to network for potential business partners, investors, and join ventures along the way can be critical to providing the type of diversity your real estate portfolio needs in order to be solid in a market that is nothing short of volatile.

 With the current situation of  lending market, networking has become more essential than ever before for real estate investors. Networking can not only lead you to potential properties that might prove profitable but also to people who need your specific specialty or may be looking for a property you have access to. Even if you share your profits, as long as you are also sharing the workload, you can find a very favorable working environment when you join someone else in a venture such as wholesaling properties, offering lease options, or even working together on a quick flip situation (though caution and clearly defined parameters are best in any of these situations it is critical when flipping a property).

Whenever you have the opportunity to network with other real estate investors it is in your best interest to do so. Don't limit yourself to only networking with those who engage in the same sort of investing you are most comfortable with as diversity is important to all real estate portfolios and you never know when an ideal flip will come across your desk that you can pass along, while making a bit of a profit from the transaction of course (to a flipper) or a perfect buy and hold unit will catch the eye of someone who generally purchases properties with the intent of flipping. Contacts work both ways and you can all stand to profit from the eyes and ears of others, whether as a joint venture, equity sharing project, or simply acting as business partners on specific projects for quicker results and an extra set of hands and eyes on the job.

If you aren't a part of a real estate investors networking group in your area, take the time to find them and join. The contacts you will make are invaluable if you intend to make real estate investing your primary business now or hope to make it your primary source of income in the future. Join as many groups as possible today (locally and within a reasonable driving distance) and see what a difference they make in the volume and scope of your real estate investing business.

How can a buyer get interest for purchasing your house? Impression is the keyword. You just need to get your house ready to sell by doing some preparation. Get inspected by a professional if you want to pay a little effort for maximum results, or if you don't want to spend much money by paying professional you can do by yourself for getting your house ready to sell. Like the old saying goes: "If you want something done right, do it yourself!"

Now that become a question, how to get your house impressed a buyer? Those are the steps for getting your house ready to sell to a buyer.

Beautify Your Exterior

What you do is just beautifying. The goal is to make your exterior look pretty and fresh to impress your buyer. Just to inform you that the exterior becomes the first impression to overlook a house. There are two sensory organs of a buyer you must impress. Those are eyes and nose. By bringing the garden homelike condition to your house exterior, making it looked pretty and freshening it up. The steps you can do are:

- Get the grass, trees, flowers, and plants tidy and fresh by mowing and watering it
- Clean up the curb and entering path and put the potted flower in the sides.
- Freshen up the smells by put scented potpourri.
- Clean up all of windows and entering doors.
- Get rid of equipments out of sights.
- Paint the walls if necessary.

Make the Interior Cosy

The general rule-of-thumb here is to keep it simple and short. This is where a complete marketing plan comes into play.

Almost 80% of homes are purchased by people who currently live or work in the area. In addition to the internet, these buyers check the real estate section of the local newspapers and they read flyers posted at the local supermarket. This is where a complete marketing plan comes into play.
The general rule-of-thumb here is to keep it simple and short. Stay with the main facts and features (number of bathroom and bedrooms, close to schools, etc.) and remember to keep descriptions short and concise. Using one marketing method to back-up another is effective and efficient use of your marketing budget. More bang for the Buck!
Research other listings for attention grabbing headlines like "Below Market Price" or "Close to Schools and Shops" to get that initial response. Then, follow the tips below and you'll be on your way to selling your property fast.
Your effective ad should have three primary sections;

1. An Attention grabbing headline.
2. Key features and highlights.
3. A closing statement that motivates a potential buyer to make the call.

1. Headline. Find something that's unique to your property and peaks the initial interest to read or look further. Headlines even have different categories, choose one that best describes the positive points of your property. Capitalize only the first letter for more effectiveness.
Use terms like (sorted by category);

Features

• Change Your Life!
• Close to Schools and Shopping
• Buy a lifestyle!
• Renovated
• No Steps!
• Room to Romp
• Close to Lake
• The Sound of Silence
• Tucked Away Retreat
• Privacy Plus More

Value

• BIG HOME, Little Budget
• Try to Beat It
• Save Dollars and Make Sense
• Save Your Money
• This Price Is Right

Other

Let's take a brief look at credit scores, credit reports, and how these items affect your home buying power, plus your long-term financial strength. Three companies provide this information to potential lenders, and others who deem this information necessary;  TransUnion, and Equifax. Also, it is a federal law that you be provided a copy of your credit report from these three companies once a year.

 First, your credit report is a compilation of your credit history related to things like credit cards, revolving charge accounts (gas card or Sears card), previous mortgages, student loans, car payments, etc. It contains detailed information on your payment history, whether or not you have any negative items affecting your credit, plus details of your personal information known by the credit reporting company. It is very import

ant you immediately dispute any negative reports in these credit reports if they are incorrect, or take whatever steps necessary to correct the negatives if they are correct.