Managing A Portfolio Of Houses

When you think of a large real estate management company, you may think
of them managing high-rise office buildings, huge apartment complexes
and condominium homeowner associations. They do of course. But you may not think of owners of single-family homes as big management clients. But over the past years, those real estate investors who specialized exclusively in homes have increased greatly. Many people think this is the safest investment of all.
If you might think of this as a small investment, think of some investors
who own 100 or more homes in the $300,000 value range! Even if values
decreased some, owners like these are still multi-millionaires.
Many of these investors have had the enormous increase in value of these
homes that took place in the last decades. The houses are managed like any other real estate investment; they are like apartments that are in scattered locations, and are managed the same way but without an on-site manager.
Now might be the time to look into an investment in houses! Buy an extra
one for a rental – buy several scattered rental houses and you have the equivalent of scattered apartment units, or as one owner calls them, “horizontal apartments”.

An Investment For Anyone
The potential for higher returns is better in real estate than in some
alternatives, such as the stock market. Many investors are “stock
shy” after the stock market ups and downs of the last few years.
Investing in single-family homes can be particularly attractive, since
they will have little chance of taking any huge drop in value at one
time. Over the next few years, the values should have a steady
increase. Compared to the stock market, the amount of capital required
can be remarkably small. The leverage is better, with down
payments still as low as 10% of the value. You may be able to make an
investment in a significant property with just a down payment in the
$25,000 to $30,000 range (or even less). Someone else, either a lender
or maybe the seller of the property will put up the rest of the investment
capital. Real estate is always the perfect place for the use of borrowed money. Good loans are available if the borrower has good credit.
It might be smart to obtain a line of credit to cover any unexpected expenses that may occur. Since the idea is to have a “leveraged” investment, why not borrow as much of the needed cash as possible?
The Return On The Investment
If the increase in value in homes continues like it has been (and it will), the potential for capital gains on a leveraged OPM (other peoples money) investment can be significant. Remember, an increase in value affects the whole value of the property, not just your equity.
The Best Locations
Remember the old saying about the most important thing in value when searching for any kind of real estate. It is still location, always location. This will remain the same in homes as in any other real estate investment. What should you look for?
An owner-occupied community. You will probably be able to get higher rents in an area where the other houses are owner-occupied. Owner-occupied houses will usually be better maintained and the neighborhood will be more stable. We can check the neighborhood by looking at the property-tax register. Since the name and address of the owner is provided, simply see if the address of the owner is the same as the property address.
Since the objective in this investment is increase in value, we are looking for the possibility of the resale. We will always have greater appreciation in a neighborhood where people maintain their property with pride.
Be aware of the location of schools, churches, shopping – just as you would if you were purchasing the property for your own residence. Your ultimate buyer of the property will be doing the same. Make sure of the zoning of the neighborhood and any adjoining areas. This will insure that you will not have any sudden surprises after you make your purchase.