Most homeowners finance their Big White real estate investment by renting out their property to visitors when they're not using it personally.
That's no secret, but the WAY in which they do it AND build an equitable business, is!
Tip #1 - Buy a Big White property with rental equity or high potential for it.
Rental equity is the established business value, customer list and goodwill attached to the property AND it can be transferred to new property owners.
A property with it means that:
you get the names and contact information of previous guests who stayed in the property, and
you have the right to contact them and rent to them directly.
You're not just purchasing a vacation rental home; you're getting established customers who are likely to re-book your home instead of having to start from scratch and find new customers.
This increases your property's value and competitive positioning in the Big White real estate market.
If you can't buy a property with rental equity, buy one with high potential for it; this type of property will give you complete control over the rental method, operators, terms and services used.
Tip #2 - Need help managing your property? Avoid traditional rental managers.
You'll pay them 40-60% of your gross annual rental income. You'll pay all the bills and assume the risks, while they get rich by skimming the creamy annual revenues.
You'll have no access to your customer list and the right to contact and deal with guests directly; so if you change managers, you give up your guests too.
Thus, your property will never have rental equity; instead, it is being used to build your manager's business.
With no control over your Big White investment, it'll be cheaper and less hassle for you to just rent, not own, in the long run.
Tip #3 - The smart alternatives: direct management or rental equity management
Using one of these two management methods will allow you to increase your net annual revenue and build your Big White property's rental equity.
Direct Management
This is the do-it-yourself (DIY) approach. You take control and manage the reservations.
Use an online reservation system to handle your bookings; list your property on web sites that do the marketing and advertising to bring you bookings.
When you sell your vacation property, having an online rental business makes it simple for buyers to assess your guest list and easily take over.
You own the property's guest list and control the rules and rates.
Rental Equity Management (REM)
Someone else handles the reservations but you always own the business and your property's guest list, even if you change managers. You have control over every aspect of your investment.
Have an open system with your manager with which you can view your reservations, without the responsibility of handling them and the daily maintenance of your unit.
Although direct management gives you maximum return on a Big White investment, you may not have the time, interest, or confidence to do it. The next best thing is using REM. This type of management will build YOUR rental equity, instead of using it for their own business.
Cory Olsen-Miller is a writer for AlluraDirect.com, a vacation rental website offering powerful search and instant booking features for owners and guests. Visit their website for more Big White real estate tips, or check out their Big White ski resort lodging directory and save money by booking directly with homeowners.
Article Source: http://EzineArticles.com/?expert=Cory_Olsen-Miller
Saturday, February 23, 2008
5 Simple Steps to Becoming a Successful Real Estate Investor
Many people love to be mystified. Art mystifies them, so they ooh and ahh and compliment the creator on his talent. They find science mystifying, and so they aren't even interested in what researchers are doing. Real estate mystifies them, and so they make the assumption that it's a big odds game and that certain people either are very lucky, or that they possess an inborn talent.
These people are unwilling to accept that succeeding in each of these disciplines is just a matter of formulating a series of steps and following your plan through to fruition. Anyone who reads the Rich Dad, Poor Dad book series by Robert Kiyosaki know that, in real estate investing, there are five important steps necessary to succeed. Investor should:
1. Understand the language of real estate investment. This means to have a working knowledge of basic accounting and finance and learn to read financial statements. These skills will give you the ability to distinguish between assets and potential drains. Also, it's important to learn about tax law, not only in order to avoid mistakes, but in addition to know where the great tax deductions for real estate are. Understanding the basics of these subjects will also make it possible for the investor to know what questions to ask his accountant and lawyers upon hiring them, and to understand the significance of what they tell him.
2. Surround himself with experts. A successful investor will network socially in order to study the people who may wind up on the team of real estate experts which he will hire to help him find and evaluate real estate. The smart investor will get to know the community of real estate experts in the city in which he is looking to invest his money, and thereby get to know the city.
3. Study the real estate markets consistently. He should study up on various cities and see what the experts say about them, but he should additionally evaluate them personally. He should do this double time in his own city, if that is the he is planning on investing there. The investor should get to know economic factors and which areas are more and less profitable. He should study what the rents in his marker and determine if a property in that part of town would help him reach his goals. He should and walk through as many pieces of property as he can with his team of experts, regardless of whether or not he is actually prepared to buy.
4. He should know the right and wrong way to negotiate . Many people have misconceptions about negotiation. These people believe that the purpose of every negotiation is reach a closing by any means necessary, and to strong-arm the seller into ceding to his demands. If it turns out that the purchaser can work the relevant numbers to his advantage, and the seller agrees to his terms of sale, that is the point at which the purchaser should go ahead with the purchase . If not, the {investor should refrain from closing on the deal. According to Ken McElroy, writer of "The ABCs of Real Estate Investing," the investor should go into every negotiation assuming he will walk away in the end.
5. Nurture your properties. This comprises just what you would expect. Make the required repairs and improvements on the property and get the vacant units filled. Make sure the renters' needs are addressed.
This description represents a simplification of the process, however these five simple steps show that real estate investment is a process which can be learned by anyone. Nothing about it is really magical or mystical about it.
Alex Anderson Specializes In MN Investment Property And Helping People Locate Real Estate In Minneapolis. Download A Free Copy Of "The Investors' Rental Guide" At http://www.GreatInvestmentProperty.com
Article Source: http://EzineArticles.com/?expert=Alexandria_Anderson
These people are unwilling to accept that succeeding in each of these disciplines is just a matter of formulating a series of steps and following your plan through to fruition. Anyone who reads the Rich Dad, Poor Dad book series by Robert Kiyosaki know that, in real estate investing, there are five important steps necessary to succeed. Investor should:
1. Understand the language of real estate investment. This means to have a working knowledge of basic accounting and finance and learn to read financial statements. These skills will give you the ability to distinguish between assets and potential drains. Also, it's important to learn about tax law, not only in order to avoid mistakes, but in addition to know where the great tax deductions for real estate are. Understanding the basics of these subjects will also make it possible for the investor to know what questions to ask his accountant and lawyers upon hiring them, and to understand the significance of what they tell him.
2. Surround himself with experts. A successful investor will network socially in order to study the people who may wind up on the team of real estate experts which he will hire to help him find and evaluate real estate. The smart investor will get to know the community of real estate experts in the city in which he is looking to invest his money, and thereby get to know the city.
3. Study the real estate markets consistently. He should study up on various cities and see what the experts say about them, but he should additionally evaluate them personally. He should do this double time in his own city, if that is the he is planning on investing there. The investor should get to know economic factors and which areas are more and less profitable. He should study what the rents in his marker and determine if a property in that part of town would help him reach his goals. He should and walk through as many pieces of property as he can with his team of experts, regardless of whether or not he is actually prepared to buy.
4. He should know the right and wrong way to negotiate . Many people have misconceptions about negotiation. These people believe that the purpose of every negotiation is reach a closing by any means necessary, and to strong-arm the seller into ceding to his demands. If it turns out that the purchaser can work the relevant numbers to his advantage, and the seller agrees to his terms of sale, that is the point at which the purchaser should go ahead with the purchase . If not, the {investor should refrain from closing on the deal. According to Ken McElroy, writer of "The ABCs of Real Estate Investing," the investor should go into every negotiation assuming he will walk away in the end.
5. Nurture your properties. This comprises just what you would expect. Make the required repairs and improvements on the property and get the vacant units filled. Make sure the renters' needs are addressed.
This description represents a simplification of the process, however these five simple steps show that real estate investment is a process which can be learned by anyone. Nothing about it is really magical or mystical about it.
Alex Anderson Specializes In MN Investment Property And Helping People Locate Real Estate In Minneapolis. Download A Free Copy Of "The Investors' Rental Guide" At http://www.GreatInvestmentProperty.com
Article Source: http://EzineArticles.com/?expert=Alexandria_Anderson
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