Rental Housing Journal Metro
November 2015
3. Americans Think Homeownership is a Sound Investment
6. Ask the Secret Shopper
4. 9 Tips For Getting Started in Real Estate Investing
9. Selecting a Contractor
13. Find Your Life Path and Navigate it Carefully
10. Transitioning from T12 to T8, T5 or LED Lighting for Commercial Buildings
17. Portland City Council Acts to Stall Evictions and Rent Increases
5. Our Voice Can Be a Call to Make Changes
www.rentalhousingjournal.com • Professional Publishing, Inc
15. Is It Really Rent Control?
Portland/Vancouver
Published in association with: METRO Multi-Family Housing Association; Rental Housing Association of Oregon; IREM & Clark County Association
Five Real Estate Investing Fundamentals By – Jeff Watson, The Jeffery S. Watson Law Firm LTD, General Counsel National REIA
O
ne of my favorite movie moments is when Ernest Borgnine, portraying the legendary football coach Vince Lombardi, stood in front of the world champion Green Bay Packers at the beginning of training camp and held aloft an oblong object proclaiming, “Gentlemen, this is a football.” What Vince Lombardi taught the Green Bay Packers then applies to real estate investing today.
Master The Basics Practice them over and over again. Consistently do the fundamental things that make you a successful real estate investor. Repeat Your Successes And Keep Repeating Them The vast majority of “investors” today suffer from what I call “squirrel or shiny-object syndrome.” They have a little success in one area, but then they are suddenly distracted by something else and go to another area, and then another, and then another. The bottom line is they lose their focus and intensity, and they don’t continue to practice the same thing over and over again. Let me remind you, slow and steady wins the race! Establish Your Parameters In addition to becoming good at the basics, I urge real estate investors to establish their investment parameters.
Long-term Hold Investing For Owner/Managers
T
he rental property investing strategy for a hold time of 15+ years is significantly different, than a short term real estate investment strategy. This is even more critical for owners who plan to do their own property management. Owning and managing a property for 1520 years is similar to raising a child, from birth through high school. Price is always important when buying any property. If you are planning to own a property for decades, do not consider purchasing a potential “problem child”, because it is cheap. Bad purchases are often made when investors feel they must purchase quickly. Adapt the motto that “I can always spend my money” and keep shopping to you find the “right” deal. Investors need to seriously consider the location, quality of construction, target tenants and financing for a long term hold rental property:
Location Properties should be located within 30 minutes of where you reside. Anything longer than an hour round trip drive will become cumbersome over time. It is al-
priced at a lower capitalization rate, than rental properties in less desirable areas. Over time, the quality of tenant, ease of leasing, and appreciation potential will compensate for the initial lower return. Buying in a neighborhood, that you feel may decline, is a big mistake. You can change many things about a property, but you cannot change its location.
...continued on page 8
Are You Leaving Money on the Table? By Cliff Hockley CCIM President, Bluestone & Hockley Real Estate Services
M
ost real estate investors tend to operate their properties with a • What kind of investments or deals do simple rule in mind: If money you want to do? Are you going to do appears in their checking account by the loans? Are you going to use options? end of the month, their property is healthy. Are you going to buy rentals or tax liens? As long as they see the same amount every Are you going to invest in commercial month they’re happy. properties? Pick two or three (no more However this rule inevitably leaves than that) of these things and get very money on the table. Sophisticated invesgood at doing them. Do them over and tors know that they need to plan for their properties to be successfully operated. ...continued on page 8 They need to buy the right property and Professional Publishing Inc., PO Box 6244 Beaverton, OR 97007
ways a wise idea to geographically diversify your rental portfolio. Therefore, owning properties in different neighborhoods. Within 30 minutes of your home, is preferable to owning all your properties, in one neighborhood. Target property purchases in desirable residential neighborhoods with a low percentage of rental properties. Initially, the annual cash and cash return will probably be less, than what could be bought in less desirable locations. Rental properties in more desirable locations usually are
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operate it with a vision in mind. That vision should include an annual focus on rent increases and tenant relations.
Rent Increases Residential: Multifamily or single family investors have the opportunity to increase rental income at least once a year through the annual budgeting process.
This process starts with an annual inspection, followed by a local area renewal rate review (rental comparison survey). Keeping your property well maintained is the key to managing long term rental increases. Tenants will not be as hesitant to pay more if you treat them with re...continued on page 12
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