Articles by James Kobzeff on ArticleSnatch.com

What Is Cap Rate And How Is It Used For Real Estate Analysis?

Thu, 16 Jun 2011 15:00:05 -0400

Capitalization rate (also commonly known as cap rate) is one of the most well known measurements real estate analysts and investors use during the course of a real estate analysis. Why, because cap rate can disclose whether or not the value of one specific rental property measures up to the price of comparable income-producing properties in the local market. And also whether or not the investment property involved creates good enough profits to make it a successful investment. So what exactly is a cap rate? In technical terms, capitalization rate is considered the rate that the future income is discounted back to determine the present of those earnings . The thought being that every investment will be present value of its future gains. And with the capitalization method real estate experts can evaluate what the value of those future gains are worth today. Okay, but that description is going to mean little to those of us who are trying to make the calculation in the real world, so let me show what it all means in terms we are more familiar with. **End Summary** Topics: cap rate]]> capitalization rate]]> real estate analysis]]> rental property analysis]]> cash flow analysis]]> real estate investing analysis]]> real estate investment an]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - superior real estate investment software solutions nationwide since 2000. Create rental property cash flow, rate of return, and profitability analysis and marketing presentations in minutes! Computes cap rate automatically. Learn more => www.proapod.com

How To Compute Cash Flow Before Tax and Cash Flow After Tax Before Your Next Real Estate Analysis

Sat, 11 Jun 2011 14:47:07 -0400

Real estate investors and real estate investing experts generally aim to be aware of cash flow after tax (CFAT) when looking for the profitability of investment property during a real estate analysis since it includes the elements of tax shelter and shows the money an investor might receive from the property after the Government takes a bite out of it. Nevertheless, despite the recognition among real estate investors and many experts to understand the cash flow after tax (CFAT) generated by a property, you will find some who just determine the cash flow a property will generate before taxes. Fair enough. So exactly what is the difference between these two cash flows? Understanding Cash Flow Cash flow is that flow of funds that result from money coming in and money going out. In other words, cash flow is in effect all the income produced by a rental property less all of the expenses required to own the property. Whenever more money comes in from a property than goes out, the result, of course, means that you have a "positive cash flow" available to pocket and perhaps appropriate elsewhere. **End Summary** Topics: cash flow before tax]]> cash flow after tax]]> cfbt]]> cfat]]> real estate investing]]> real estate investors]]> cash flow analysis]]> real estate analysis]]> rental property]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - superior real estate investment analysis software solutions since 2000. Create a rental property cash flow, rate of return, and profitability analysis in minutes! Includes full consideration for the elements of tax shelter. Cash flow before taxes and cash flow after taxes are computed automatically! Learn more => www.proapod.com

How Rental Property Analysis Software Can Benefit Your Rental Property Analysis

Sat, 11 Jun 2011 10:35:11 -0400

No matter whether you are a real estate agent who works with income-producing properties, or an individual investor seeking to buy multifamily or commercial property, crunching the numbers to determine a rental property's profitability requires time and effort. This is why real estate investing software was developed. To make rental property cash flow, rates of return and profitability analysis fast, easy, and (most importantly) accurate for those engaged in rental property analysis. Naturally, there are still some who do not understand the benefit of using a third-party software program for investment analysis purposes, so permit me to point out what those of us engaged in real estate investment no longer have to face since the advent of software. 1) The Data - Back in the days many years prior to personal computers and any types of software programs, the numbers were crunched by hand. This presented two problems. Time had to be spent doing it, and even more, you had to make sure that the data was complete and correct enough for a purchaser or seller to make a wise investment decision. **End Summary** Topics: investment real estate software]]> real estate software]]> real estate investing software]]> real estate investment software]]> real estate analysis]]> rental proper]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - leading investment real estate software since 2000. Create cash flow, rates of return, and profitability analysis and marketing presentations for any-size rental property in minutes! Easy to use and very affordable. Learn more => http://www.proapod.com

What Is a Proforma Income Statement And Does It Really Help Make Good Real Estate Investment Decisio

Wed, 08 Jun 2011 04:59:07 -0400

A good solid report known as the proforma income statement (or proforma) is a real estate investments statement that property investors and analysts generally depend on when it comes to forecasting the revenues an income-producing real estate asset might produce for an investor in future years. The concept is straightforward. By projecting out over some number of years the revenues that a rental property would likely yield, real estate investors and analysts have the ability to carry out a cash flow analysis that will make it easier for them to evaluate the future capabilities of a property. Thus lending support to their investing decision-making process. There are no restrictions over the amount of years a person would like projected in the proforma income statement. I've spotted proformas (for example) that produce statements ranging from ten to twenty years; a few software companies in fact boast that their program provides thirty-year estimates. In spite of this, I personally think that these extended span projections can become too unfounded to generally be allocated very much weight. You will find just too many issues that can affect any sort of cash flow estimate (particularly for that many years). **End Summary** Topics: proforma income statement]]> real estate investment analysis software]]> real estate software]]> real estate investing]]> real estate investment]]> revenue projectio]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - superior real estate investment software solutions since 2000. Create rental property cash flow, rate of return, and profitability analysis and marketing presentations in minutes! Includes a 10-year Proforma Income Statement with tax consideration and appreciation projection staggering. Learn more => www.proapod.com

Why Real Estate Investing Might Be a Smarter Investment Than Stocks

Tue, 07 Jun 2011 08:08:06 -0400

In spite of the untold fortunes investors have created in the stock market, you'll find certain benefits to investing in real estate. The fact is that investing in real estate to make money is probably one of the most common methods of generating additional revenue in the United States today. In this particular write-up, we are going to consider merely a few examples in order to demonstrate the reasons why mindful and sensible real estate investment might make much better sense to an investor than stocks. Before we began, though, it really should be brought up that investing in real property just isn't a bed of roses without financial risk, and does involve several disadvantages well worth understanding. So we'll start there. Real Estate Investment Downside 1. Liquidity of Assets - Real property usually really can't be converted to hard cash in a single day. Whereas stocks could very well be sold with a telephone call, the process of liquidating collateral in a real estate investment normally takes months. 2. Slow Marketplace Reaction - Real property has a slower response time period compared to stocks and thus demands a lot more patience on the part of investors. **End Summary** Topics: real estate investing]]> real estate investment]]> real estate investors]]> investing in real estate]]> investment real estate]]> real-estate]]> real estate property]]> re]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - leading real estate investment software since 2000. Create cash flow, rate of return, and profitability analysis and marketing presentations for any-size rental property in minutes! Learn more => http://www.proapod.com

Why Some Make And Others Lose Money At Real Estate Investing!

Fri, 03 Jun 2011 21:28:02 -0400

Investing in real estate can pay you substantial dividends if you happen to be well aware of what real estate investing is and you are committed enough to do it according to the numbers. Foremost because there is virtually no such thing as some sort of "no-brainer" in real estate investing. Real estate investment is dependent on the numbers. Okay, it could be that the last rental property you invested in didn't lose you money, and in fact, possibly you are ready to shout that your previous investment acquisition perhaps even earned you a small amount of revenue. Fair enough. But consider yourself fortunate because investing is surely a three-edged sword. Indeed, you can win, you can lose, and when you make an investment with no more suitable preparation than by the seat of your pants, you quite possibly might not generate the sum of money you may have otherwise. Keep in mind that with investing, there is always a appropriate and absolutely wrong method of doing most things. Naturally, you can rely on chance if you're a risk-taker at heart and usually are not fearful to toss caution to the wind. **End Summary** Topics: real estate investor software]]> real estate investing]]> investment real estate]]> real estate investors]]> investing in real estate]]> buying rental properties]]> rea]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - superior real estate investor software solutions since 2000. Evaluate the cash flow, rate of return, and proftability on any-size rental property in minutes! Includes deep-analysis and formula learning center. Learn more => http://www.proapod.com

How to Get Started with Real Estate Investing

Thu, 02 Jun 2011 12:41:01 -0400

Many people are turning to real estate investing with the expectation of establishing a new method by which to earn money. A few make an investment of because they are tired of their current livelihood and have set their sights entirely on becoming a full-time investor and founder of their own real estate investment enterprise; others only want to supplement their net income (perhaps in expectation of their golden years). Whatever the reason, thousands of people have become real estate investors in the past several years and are achieving their goals. If you want to take advantage of this industry, you should consider getting started today. Real estate investing success is not guaranteed, but at the same time, becoming an investor is not difficult to do if you develop a plan and stick to it. Obviously, you must decide on how money you're willing to risk on any investment, what types of properties you want to invest in, what rates of return you desire, is your plan to fix and flip property or are seeking to hold them as rentals, and so on. **End Summary** Topics: real estate investor software]]> real estate investing]]> real estate investors]]> start real estate investing]]> real estate beginner]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - superior real estate investor software solutions since 2000. Evaluate the cash flow, rate of return, and proftability on any-size rental property in minutes! Includes deep-analysis and formula learning center. Learn more => http://www.proapod.com

How To Develop Free Real Estate Analysis Software You Can Use When Real Estate Investing

Tue, 31 May 2011 01:49:02 -0400

If you would like to have a real estate analysis solution without having to invest in a third-party real estate analysis software program, then there is certainly a way for you to accomplish this. Rental property cash flow, rates of return, and profitability analysis and marketing presentations may very well be developed by anyone with a spreadsheet application and enough time and determination to achieve it manually. It's not easy, in fact it's a major undertaking, but it is free when you do it on your own (well sort of if you don't count your man-hours) . The Spreadsheet Application 1) To start with you must invest in a spreadsheet software program. In this case the obvious selection is going to be Microsoft Excel. Microsoft Excel comes with loads of built-in formulas and functionality which make it the most-widely used spreadsheet in the universe so you will not likely regret the investment. Microsoft Excel can be purchased on its own for about $100 but is routinely offered with Microsoft Office. MAC users will want to consider MS Office 4 or Office 2011 (Microsoft does not support MAC with Office 2008). 2) Get acquainted with the Excel application. **End Summary** Topics: free real estate analysis software]]> free rental property analysis software]]> spreadsheet software]]> real estate analysis]]> real estate evaluation]]> excel softw]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - superior real estate investment analysis software solutions nationwide since 2000. Create rental property cash flow, rate of return, and profitability analysis and marketing presentations in minutes! Easy-to-use and affordable. Learn more => www.proapod.com

The Financial Management Rate of Return (FMRR) And How to Compute It For Real Estate Investing

Mon, 30 May 2011 18:50:04 -0400

Amongst the many real estate investing returns used by investors to measure profitability of investment property, the financial management rate of return (or FMMR) has got to be one of the most unique yet lesser known returns. What I believe is exclusive to the Commercial Investment Real Estate Institute (or CIREA) because I have never encountered the return ever applied elsewhere, financial management rate of return is presented by CIREA on a regular basis to those that desire the designation Certified Commercial Investment Member (or CCIM). Fair enough. So what precisely can be described as the financial management rate of return, what does it suggest exactly, and how do you calculate it? Let's begin with why FMMR is even deemed necessary by the institute. Because those engaged in real estate investing are often challenged with having to choose among alternate investments which Internal Rate of Return (IRR) doesn't adequately address. Consequently it seemed imperative to introduce this return for investors who want to make evaluations between those investment opportunities on an "apples-to-apples" basis. To accomplish this, the CIREI implemented what it calls the "safe rate" and the "reinvestment rate" to the FMMR model. **End Summary** Topics: financial management rate of return]]> fmrr]]> real estate investing]]> real estate investment]]> real estate investors]]> cash flow analysis]]> investing in real estat]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - leading real estate investment analysis software solutions since 2000. Create rental property cash flow and rates of return analysis and marketing presentations in minutes! Includes Financial Management Rate of Return. Learn more => http://www.proapod.com

5 Rental Property Evaluations You Should Make to See Whether It Is Worth the Purchase

Fri, 27 May 2011 09:09:13 -0400

Excellent, you at long last made up your mind to jump in and become a real estate investor and will purchase a rental property. Or maybe you happen to be a real estate adviser that subsequently made up your mind that you just should engage in real estate investing and service investment real estate. Whatever your personal main goal, kudos to you for understanding the way real estate investing can benefit you financially. Okay, now that you are literally face-to-face with your own first real estate investing opportunity, you have to figure out whether the real estate investment truly is money-making enough that you should carry out a purchase decision or simply a waste of your time and energy. The following are some helpful hints intended to help new investors to get underway before presenting an offer to purchase an income property (and maybe regretting it later). 1) Evaluate the price tag. Examine the APOD (i.e., annual property operating data) or any other selling data you were offered paying close attention to the property's cap rate. **End Summary** Topics: real estate investing]]> real estate investment]]> real estate investor]]> rental property evaluation]]> real estate evaluation]]> rental property analysis]]> real esta]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - superior real estate investment software solutions since 2000. Create cash flow, rate of return, and profitability analysis and marketing presentations for any-size rental property in minutes! Learn more => http://www.proapod.com

The Scoop About Internal Rate of Return in Layman's Terms

Sat, 21 May 2011 23:15:05 -0400

For all the numerous returns used for a rental property cash flow analysis, perhaps the internal rate of return (or IRR) is the most widely favored amongst analysts. This is because internal rate of return computes with a regard for time value of money. That is to say, IRR allows the real estate investor to take into account both the timing and also the scale of cash flows generated by the rental income investment property. Okay, that's a mouthful, but stay with me. In this short article I seriously will make an effort to describe exactly what internal rate of return is in a manner that others like us are more likely to understand it. Here's the concept. IRR is all about the yield the real estate investor should be able to anticipate on the investment capital he or she invested to purchase an ivestment property based upon the anticipated sum total of future income streams. Namely: the sum total of future income divided by initial investment equals rate of return. **End Summary** Topics: internal rate of return]]> irr]]> time value of money]]> present value]]> future value]]> real estate investing]]> calculations]]> computations]]> real estate analysis]]> ]]> About the Author: ]]> James Kobzeff is the developer of the ProAPOD - superior real estate investing software solutions. Create rental property cash flow, rates of return, and valuation analysis and marketing presentations easily! Includes automatic computations for Internal Rate of Return. Learn more => http://www.proapod.com

Are You Trying to Find Good Real Estate Investment Software?

Mon, 16 May 2011 15:44:06 -0400

Should you happen to be a real estate investor or maybe real estate agent seeking to create the cash flow, rates of return, and profitability relevant to rental real estate properties with your own Excel spread sheet and have grown to be frustrated by the specific process and as a consequence are wanting to acquire high-quality real estate investment software, then chances are you fall under one or more of several categories. **End Summary** Topics: real estate investment software]]> real estate investing]]> real estate analysis]]> real estate investment analysis software]]> real estate investor]]> cash flow ana]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - leading real estate investment software since 2000. Create cash flow, rate of return, and profitability analysis and marketing presentations for any-size rental property in minutes! Learn more => http://www.proapod.com

How to Buy and Budget for Rental Property Resale Profits

Sat, 03 Oct 2009 04:26:10 -0400

Since the point of real estate investing is to make money, real estate investors never lose sight of the fact that any rental property they purchase today must be able to produce a profitable gain when it is re-sold in the future. In this article, I want to show you a simple formula you can use to determine what price you should pay to acquire a property based on a budget you create that includes an eventual future re-sale price, your total investment up to the point of sale, and your desired profit. 1) Estimating Your Future Re-Sale Price When you plan for profits, start with a re-sale price that a reasonably well informed buyer will pay for the property. Remember, buyers dictate the price at which you can sell an income property, so avoid the temptation of estimating the property's future price by merely adding your dream profit or rehab costs to what you pay for the property. Start this way. Locate other properties similar to the subject property in configuration, condition, and location that have recently sold. **End Summary** Topics: real estate investing]]> real estate investment]]> real estate investor]]> rental property]]> rental properties]]> real estate investors]]> cap rates]]> income property]]> in]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - leading real estate software solutions for rental property analysis. Fast, easy, and concise. Create cash flow, rates of return, and profitability analysis presentations in minutes! Used by agents and investors. Learn more => http://www.proapod.com

The Market and Property Data Required for Wise Real Estate Investment Decisions

Fri, 25 Sep 2009 16:52:14 -0400

The investment decision as to whether or not to purchase a rental property always requires the real estate investor to measure the rental property's financial performance with some serious number crunching inside a good cash flow and rate of return analysis. But even prudent calculations without first collecting some raw data related to the market (to shape an offer) and then about the property itself (once an offer is written) will not guarantee that the investor is making the most prudent investment decision. In this article, we'll briefly discuss both the market and property data investors must consider before and during the investment process. The Market Data Before a real estate investor can decide on how much to offer for a rental property, he or she must understand as much as possible about the conditions of the real estate market surrounding the property in order to structure a meaningful offer. We recommend that investors survey and collect data on at least these three market indicators. 1) Comparable Sales Conducting a survey to see what other similar income properties have recently sold for is a proven way to evaluate whether a seller's asking price is in line with realistic property value. **End Summary** Topics: rental property]]> rental properties]]> real estate investing]]> real estate investment]]> real estate investor]]> real estate investors]]> comparable sales]]> investing i]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - leading real estate software solutions for rental property analysis. Fast, easy, and concise. Create cash flow, rates of return, and profitability analysis presentations in minutes! Used by agents and investors. Learn more => http://www.proapod.com

How to Project Rental Property Revenues to Determine Long-term Profitability

Tue, 22 Sep 2009 07:11:10 -0400

The most common method real estate investors and analysts use when they want to determine whether a rental property is profitable and might offer a good investment opportunity is to evaluate the property's projected future revenues. The idea is to estimate the cash flows and rates of return a rental property may produce for future years by projecting its income, operating expenses, and loan payment out for maybe ten years based upon some assumptions. The concept is straightforward. Increase the income and operating expenses annually by some estimated percentage rate to arrive at a net operating income (income less expenses), then deduct the mortgage balance owed for that particular year to compute the property's cash flow and subsequent rates of return. The proforma income statement (or proforma) is generally the report used to project these revenues, and in this article, we'll discuss some simple basics to give you the idea. Please visit my website if you care to see a completed sample proforma. How to Create a Proforma You can choose one of two methods. **End Summary** Topics: proforma]]> sample proforma]]> rental property]]> rental properties]]> beginners investing in rental properties]]> investing in rental property]]> owning rental propert]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - leading real estate investment software since 2000. Fast, easy, and concise. Create cash flow, rate of return, and profitability analysis presentations for rental properties in minutes! Proforma automatically created. Learn more => http://www.proapod.com

How Real Estate Investors Add Value to Investment Real Estate

Wed, 16 Sep 2009 04:08:54 -0400

It's highly unlikely to ever meet someone who invests in real estate doing it just for the fun of it. Not unlike most of us, real estate investors would regard real fun as taking a family vacation in Tahiti, perhaps embarking on a trip to New Orleans during Mardi Gras, or maybe racing down the freeway in a red Ferrari; they never purchase rental property on the flip of a coin. No, real estate investors are not frivolous about real estate investing, they invest in real estate to make money, and when value can be added to their rental property investment then they make real money. In this article, I want to show you six ways that have proven to add value to investment property, some voluntarily and others involuntarily. 1) Inflation- Inflation increases rental property value solely due to the increased cost of replacing the property. The increased cost for land, materials, or actual construction typically adds value to properties already in operation because the cost to replace the property goes up. 2) Improved infrastructure- This is the effect due to development or expansion of any infrastructure within the community surrounding the property. **End Summary** Topics: rental property]]> rental properties]]> real estate investing]]> real estate investment]]> investment real estate]]> real estate investor]]> real estate investors]]>]]> About the Author: ]]> James Kobzeff is the developer of the ProAPOD - superior real estate investing software solutions. Create rental property cash flow, rates of return, and valuation analysis presentations in minutes! Learn more at => http://www.proapod.com

How Landlords Curb Property Maintenance and Repair Costs

Tue, 15 Sep 2009 16:14:08 -0400

The acquisition, holding, and sale of rights in real property to generate enough cash inflows so cash outflows are covered and the investor enjoys a favorable rate of return on his or her investment is what real estate investing is about. In other words, successful real estate investing is all about owning rental properties that ultimately make the investor a profit. It's one thing to collect substantial rents. All landlords, of course, would welcome favorable rents in order to amp up the inflow of cash. But investors who turn a blind eye to maintenance and repair costs can also discover that, despite abundant income streams, their cash flow is surprisingly lower than expected and the profitability of their real estate investment bitterly disappointing. In this article, I want focus on the need for real estate investors to reduce and eliminate money-wasting property maintenance and repair expenses by showing you five ways that you can get that accomplished. 1) Buy Low-maintenance Properties This seems obvious, but it's not. Of course, you wouldn't knowingly buy a money pit, but investors commonly fall victim to the siren call of price or curb appeal and totally disregard the issue of maintenance. **End Summary** Topics: real estate investing]]> rental property]]> rental properties]]> real estate investors]]> real estate investor]]> property maintenance]]> real property]]> real estate inve]]>]]> About the Author: ]]> James Kobzeff is the developer of the ProAPOD - superior real estate investing software solutions. Fast, easy, and concise. Create cash flow, rates of return, and valuation analysis presentations for any-size rental property in minutes! Used by agents and investors. Learn more => http://www.proapod.com

Using the Maximum Price Calculation to Avoid Negative Cash Flow

Mon, 14 Sep 2009 04:00:09 -0400

Real estate investors invest in rental properties with the expectation that it will produce a positive cash flow, and usually avoid properties producing a negative cash flow. In this article, I want to acquaint you with a formula you can use in your real estate analysis the next time you're considering an investment that will ascertain the maximum price you can pay for a rental property to break-even, thus avoiding a negative cash flow. Before we get started, let's consider what cash flow is and how a rental property produces it. It should be pointed out that throughout this article we are referring to cash flow before taxes, not cash flow after taxes; a very important distinction to real estate investors during a real estate analysis but fine for our purposes. Cash flow Simply put, cash flow is the amount of money remaining after all the money that goes out is deducted from all the money that comes in. The rental income less operating expenses and mortgage payment equals cash flow. A negative cash flow, of course, occurs when the rental property isn't generating enough income to cover all of the operating expenses and mortgage payment; **End Summary** Topics: rental property]]> rental properties]]> real estate investor]]> real estate investors]]> real estate investing]]> real estate investment]]> cash flow]]> cash flow analysis]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - leading real estate investment software since 2000. Fast, easy, and concise. Create cash flow, rate of return, and profitability analysis presentations for any-size rental property in minutes! Used by agents and investors. Learn more => http://www.proapod.com

Does Cap Rate or GRM Best Estimate a Rental Property's Value?

Tue, 01 Sep 2009 05:37:03 -0400

Cap rate and GRM (or gross rent multiplier) are both real estate investment measures popular amongst real estate agents and individual investors trying to determine whether a rental property is priced correctly and might offer a good investment opportunity. Both measures only provide an estimate of rental property value, and alone neither provide a true picture of a property's profitability. But they can provide a quick first-glance look at a property's ability to pay its own way and because they are easy to compute, they are a popular way to determine whether a property is in line with similar, other recently sold or listed rental properties. As a result, cap rate and GRM are used by sellers to set a selling price for rental properties, and by buyers trying to determine what price to offer. So which is better? At the end of the day, which method of estimating a rental property's value best measures the property's financial performance and therein promotes a smarter investment decision? In this article, we'll consider both, and then decide. **End Summary** Topics: cap rate]]> cap rates]]> capitalization rate]]> rental property]]> rental properties]]> gross scheduled income]]> cap rate definition]]> cap rate calculation]]> grm]]> ]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - leading rental property real estate software since 2000. Create cash flow, rates of return, and other real estate analysis presentations in minutes! Cap rates and GRM automatically calculated. Learn more at => http://www.proapod.com

How to Raise Rents and Not Empty the Building

Wed, 26 Aug 2009 00:35:50 -0400

The idea of having to raise rents on tenants is dreaded by real estate investors because landlords understand that tenants balk at the idea of having to pay more rent next month for a unit they have been paying less for last month. As a matter of fact, perhaps one of the most difficult challenges facing real estate investors during investment property ownership is having to cope with the sensitive issue of raising rents. For some rental property owners, especially the small Mom and Pop investor with just a couple of rentals, the issue is closeness to the tenants. Over time, small investment operations tend to become overly friendly with their tenants, making the job of raising rents much tougher. For the majority of real estate investors, however, raising rents is not as personal but the fear that raising rents might cause the tenants to move out, leaving the landlord with a building full of unwanted vacancies. A fear that is certainly justifiable and undoubtedly haunts every landlord. At the end of the day, no property owner, tenant friendships or not, wants to be left with an empty building. **End Summary** Topics: real estate investing]]> real estate investment]]> rental property]]> rental properties]]> real estate investor]]> real estate investors]]> landlord and tenant]]> becoming]]>]]> About the Author: ]]> James Kobzeff is the developer of the ProAPOD - superior real estate investment software solutions. Create rental property cash flow, rates of return, and valuation analysis presentations in minutes! Learn more at => http://www.proapod.com

How You Can Legally Evict Your Deadbeat Tenants

Fri, 17 Jul 2009 00:00:00 -0400

One of the biggest issues you might face when you own rental income property concerns tenants. It is simply not possible to always fill your rental properties with tenants that pay their rent on time and act in an orderly fashion. Sadly, there are times when you will need to evict a deadbeat tenant. In this article, we'll examine what might be considered as the tenant's responsibility and then look at what most states regard as legal grounds for tenant evictions. Tenant Responsibility 1) Tenants should keep the unit clean and safe. A tenant should be expected to have some cleaning capabilities and garbage they generate taken to the appropriate receptacles or designated location for trash pickup. The idea is to make the tenant responsible to maintain clean living conditions in and around his or her rental property unit both, for cleanliness sake and to prevent infestations. 2) Tenants must use fixtures and appliances in the unit properly. Tenants are not permitted to abuse fixtures and appliances in the rental unit, must exercise reasonable care not to overload electrical outlets, and should not flush large objects down a toilet in the unit. **End Summary** Topics: real estate investing]]> income property management]]> investment property]]> tenant evictions]]> how to evict a tenant]]> rental property tenant issues]]> legal evicti]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - superior real estate investor software solutions since 2000. Create cash flow, rates of return, and other real estate analysis presentations in minutes! Learn how at => http://www.proapod.com

What Real Estate Investors Should Understand About Time Value of Money

Fri, 10 Jul 2009 00:00:00 -0400

Real estate investors purchase investment real estate for the financial benefits of owning the property: they want to make money, which mostly takes the form of future annual cash flows along with a nifty profit once the income property is sold. The wisest investors, however, understand that the timing of those money receipts might be more important than the amount received. That's why time value of money is crucial to real estate investment analysis, and explains why we try so desperately to measure and solve for those changes. Internal rate of return, net present value, and financial management rate of return for example are all used to measure an investor's rate of return with a consideration for the time value money. It's beyond the scope of this article to cover more then the basic elements of TVM, but it should prove helpful if you're new to real estate investing and have little to no experience. Time value of money is the concept of measuring the value of money over time and is needful because money never remains static and over time changes value. **End Summary** Topics: time value of money]]> present value]]> future value]]> discounting]]> compounding]]> discounting cash flows]]> compounding cash flows]]> what is time value money]]> what is]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - leading real estate agent software solutions since 2000. Work with rental property today. Create APODs, proformas, and other rental property analysis presentations in minutes. Time value calculations made automatically! Learn more at => http://www.proapod.com

How Real Estate Investment Software Benefits Serious Investors

Sat, 04 Jul 2009 00:00:00 -0400

In this article we'll consider why individual investors who are seriously seeking to achieve the highest returns possible use real estate investment software to evaluate each investment opportunity. 1) It's fast. Good real estate investing software makes it possible to analyze cash flows, rates of return, and profitability of rental properties in minutes. This allows individual investors to quickly and easily collect the data required for smart decision-making. 2) It's precise. Good investment evaluation software makes accurate calculations for a wide-range of returns and measures deemed crucial to sound real estate analysis. Faulty math is the last thing an analyst should have to worry about. 3) The reports are informative. Good real estate investment software creates professional-quality reports investors can confidently pass on to colleagues, partners, and lenders. 4) It knows what data is required. Quality investment software provides specially designed forms that gather the appropriate facts and figures about a property. This is particularly helpful to investors with little or no real estate analysis experience because they just fill in the forms and print. 5) It keeps the seller's data honest. **End Summary** Topics: real estate investment software]]> real estate investing software]]> real estate analysis]]> rental property analysis]]> investment property evaluation]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - leading real estate investment software since 2000. Discover how to create rental property cash flow, rate of return, and profitability analysis presentations in minutes! Go to => http://www.proapod.com

Using Scenario Analysis to Evaluate Rental Property Risk

Thu, 02 Jul 2009 00:00:00 -0400

The scenario analysis method is favored amongst real estate investors and investment property specialists because it provides a good way to measure risk during the process of evaluating real estate investments. What Scenario Analysis Is Scenario analysis involves estimating a range of variables that will have the greatest impact upon the likelihood of an investment performing according to an investor's minimum expectations with typically three scenarios: worst-case, most likely and best-case scenario. Rental income, for instance, is subjected to scenario analysis because the real estate analyst wants to see the outcome on cash flow, rates of return, and profitability for various income scenarios as a gauge to measure the potential investment property performance. For example, say you're looking at an apartment complex selling at a 6.23% cap rate and a gross scheduled income of $54,000 generated from five units each renting for $900 per month. But it's your opinion that the cap rate is too low (meaning the price is too high) and you have been told that the seller will not budge on the price. **End Summary** Topics: scenario analysis]]> rent scenarios]]> real estate analysis]]> real estate investing]]> rental property analysis]]> cash flow analysis]]> real estate valuation]]> real est]]>]]> About the Author: ]]> James Kobzeff is the developer of ProAPOD - leading real estate investment software since 2000. Create rental property cash flow, rate of return, and profitability analysis presentations in minutes! Includes scenario and sensitivity analysis. Go to => http://www.proapod.com

What Internal Rate of Return Means to a Real Estate Analysis

Tue, 30 Jun 2009 00:00:00 -0400

There's good reason why internal rate of return (IRR) is one of the rate of return measurements more widely used during a real estate analysis: The time value of money aspect associated with internal rate of return considers that the timing of receipts from the investment property can be as important as the amount received. Unlike some other popular returns used by investors to analyze the performance and profitability of rental income properties that don't account for the time value of money such as capitalization rate and cash on cash, IRR does. As a result, because it calculates for time value of money and provides a linkage between present value (PV) and future (FV) of any benefit stream, internal rate of return is generally more popular amongst real estate investors than other rates of return. The idea is straightforward. Because a dollar in the hand today is preferable to one a year or five years from now, real estate investors want to take into account both the timing and the scale of cash flows generated by the income-producing property to determine what that rental income stream is worth today. **End Summary** Topics: real estate investing]]> real estate investment]]> rental property]]> irr]]> internal rate of return]]> cash flow analysis]]> real estate analysis]]> rate of return]]> time v]]>]]> About the Author: ]]> James Kobzeff is the developer of the ProAPOD - superior real estate investing software solutions. Create rental property cash flow, rates of return, and valuation analysis presentations in minutes. IRR and other returns made automatically! Learn more at => http://www.proapod.com