Real Estate Business: Most Popular Articles
To calculate capitaliztion rate (cap rate) for an income property that sold recently, you would divide the net operating income by the sold price to determine the capitalization rate. This percentage number could then be used to determine the value of another property if you know it's net income.
Passing the test gets you the license, but it's far from enough knowledge to be successful in becoming a real estate agent for the long haul. Learn the top ten things you can do to help assure that you'll make the cut.
Gross Rent Multiplier or GRM is a tool used to assess the approximate value of a rental property by comparing its rental income with other like properties.
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Though most all real estate agents are independent contractors, the REMAX franchise was founded to advance the concept to the next level. Based on a 100% commission to the agent, the REMAX franchise and its brokers make their money via fees charged to the agents for office space and services.
Net operating income or NOI is the monetary result of subtracting operating expenses from Gross Operating Income. Gross operating income is that income after deductions for vacancy and credit loss for a rental real estate investment property.
Choosing a real estate career is a big step. Find out if you are suited to work independently and without a fixed salary, as well as if you're up to the task of building your own real estate business.
If the net operating income of a property is known, and it is divided by the capitalization rate for similar properties, the approximate current value of the property will be determined.
Many a wealthy person got that way with real estate. A smart buy on a rental property and good management can provide cash flow for other uses or investments. Here's a fourplex example.
If becoming a real estate agent is in your career plans, pick up some tips here about how to become a successful real estate agent, not just how to pass the test and get a license.
A spreadsheet real estate financial calculator solution. Set up to quickly calculate gross potential income, gross operating income, gross rent multiplier, net operating income, cash flow before taxes, cash flow after taxes, break-even ratio and return on equity.
Real estate property management is an area of specialization that involves four basic areas of responsibility. Marketing/Financial, Tenant and Occupancy, Facility, and Administrative are those four areas. Get more detail here on these four areas of real estate property management responsibility.
Find out the pros and cons of starting your career as a part time real estate agent. See what it takes to make the part-time strategy successful.
Free online real estate courses for new and experienced agents, brokers and real estate investors. Real estate math, expenses, income, investing, risk management and much more.
Assure your success in a real estate career by knowing the reasons others fail and taking action to overcome them. Competition, variable income commissions, burn-out, and unrealistic expectations are all important contributors to failure in the business.
Many believe that consistently better returns on investment can be realized in real estate investment rental property than can be gained in stocks or bonds investments. The start of the process is an accurate estimate of rental yield for a property. See how to calculate it here.
A common question is whether a person new to real estate should start out as a commercial real estate agent, or work into it from residential or another area of real estate. The decision requires an assessment of finances and abilities. A different skill set is required, and the first commission can be a long way in the future.
Far from just driving buyers around or placing for sale signs in yards, the daily routine of a real estate agent involves a great many interactions with title companies, other agents, brokers, attorneys, home inspectors, appraisers and more. Then there's the marketing and paperwork activity to top it off.
Real estate career benefits are many, and include the ability to be your own boss, set your working hours, build your own independent contractor business, create financial security and more. Pursuing a career in real estate has created many successful business people.
The vast majority of people who do not make it in real estate fail in their first two or three years in the business. These 3 secrets for new real estate agent success can get you started right and make real estate your lifelong career.
One of the advantages of owning rental real estate is tax deductions that can offset income from operations of that property as well as others in some cases. Here's how depreciation works on a rental property.
Beginning a new real estate agent career is exciting, but it is a business. Since it's a business, you need a new real estate agent business plan. What you do early on can make the difference between success and failure. Find out the most important first things to do. They involve education, marketing, budgeting, determining costs, prospecting, your sphere of influence and more.
When working with real estate clients, agents and brokers are frequently tasked to help buyers to determine what they can afford in a home. One of the factors is the size of the mortgage they can get. The loan to value ratio is the percentage of a property's value that is mortgaged. Lenders will make mortgages based on maximum loan to value for different types of properties.
Easements generally pass along with ownership changes in real estate. However, there are ways to terminate a real estate easement. Generally, this is not an automatic event, but will require some legal action. Learn about release, merger, non-use, adverse possession, destruction and quiet title action.
Successful business people know their costs as well as their projected income. To remain in your real estate business, you must cover your real estate agent expenses as well as personal costs.
Traditionally, agents are sponsored by brokers and receive certain services from their broker. Commissions coming into the brokerage are split on a percentage basis between the broker and the agent. Learn more about how that split works here.
Can you have a full-featured real estate web site powered by Wordpress? You bet you can. And some of the great features you pick up from the thousands of Wordpress plugins and widgets can make your site an informative and lead generating powerhouse.
Too many new real estate agents think that to choose a real estate broker is primarily based on commission splits. It's not all about the split, as the final in-your-pocket income has to do with many variable services provided by brokers. What training and education do you need and they offer? Do you need lots of floor time and leads provided by the broker?
Every real estate agent has a sphere of influence, a group of people upon which they have some influence, if for no other reason than they know you. This group will be a future source of business. Increasing the size of your sphere of influence will bring you much business over time.
The triple net lease in commercial real estate is used extensively in industrial and retail multi-tenant properties. In this type of lease the tenant pays certain expenses directly in addition to their rent.
Many real estate investors, both new and very experienced, have made a lot of money using assigment contracts. Learn the basics here. Using little or none of your own money, make money assigning property contracts to other buyers.
Getting your license soon, or a new real estate agent? Here's a detailed plan for start-up success. Learn what you have to do for income and expense budgeting, choosing a broker, new agent marketing and more.
Real estate agency law says that a real estate agent who takes on the capacity of
An addendum should not be confused with an amendment. While an amendment modifies a previously accepted contract, an addendum is part of the original contract. It adds necessary information, requirements or explantory documents to the original contract or purchase agreement. Once an agreement is reached and the contract accepted, additional documents are not added as addendums.
Commercial real estate agents have unique work environments and income structures that may not be right for everybody. Additionally, those who want to become commercial real estate agents should consider the personal qualities and education levels that agents successful within the commercial real estate industry possess.
Many wonder if they should use their own Name as their real estate web site domain name. Though it can be one of the names that point to your site, it shouldn't be the primary. It doesn't have to include
A real estate listing agent will be involved in a myriad of details and activities. From checking the morning hot sheet, to doing comparative market analysis and making listing presentations, the listing agent is kept quite busy.
Commercial leases for real estate are quite varied in types and terms. Learn about Gross, Triple Net and Modified Net leases here.
Compound interest is interest on principal plus interest on the accumulated interest and is required knowledge for real estate investing.
The BPO, or Broker Price Opinion, is a tool used by lenders and mortgage companies to value properties in situations where they believe the expense and delay of an appraisal is not necessary. Learn here when a BPO might be used, the types of BPOs and more.
A step-by-step plan for any agent, but really great for new agents. Learn how to spend very little to realize a lot of real estate marketing clout.
Take care in assigning duties to an unlicensed real estate assistant, or if you are one, make sure you know what you are allowed to do according to your state's regulations. In most states, an un-licensed assistant cannot discuss property specifics, advise clients, or draft documents.
A commercial leasing agent works with landlords or tenants to secure a lease that is agreeable to both parties. A sales agent works with property owners or potential owners who are looking to buy, and attempts to close a deal between the two parties.
Basic description of the major types of real property as marketed by real estate agents and brokers. Vacant land, residential, commercial, and multi-family are included.
Gross Potential Real Estate Income - This is an easy calculation of the expected gross revenues from an income property. For rentals, the monthly or annual rents for all the units is totaled. No losses for vacancy or non-payment are considered. In other words, the property is considered fully occupied with all payments collected.
The capitalization rate, or cap rate, of a property is a percentage number applied to future income to determine current value. This formula is written as Cap Rate = Net Operating Income / Value.
Real estate investors can frequently make very profitable purchases of real estate through a short sale. Many short sales do not get approved or fall through for a variety of reasons. Learn here the step-by-step process to initiate a short sale, starting with the homeowner-borrower and moving through lender negotiations to the closing.
A real estate assistant, un-licensed or licensed, can be an excellent way to enter the business. Learn by assisting an agent or broker in tasks involved with listing properties, selling homes, creating marketing literature and brochures, and service buyers and sellers.
If you need to do a fast CMA and have three comparable properties, here's a CMA to make it easy and do the calculations for you.
A special warranty deed provides less protection for real estate buyer than a general warranty deed. The grantor warrants that they have legal title, and have not encumbered the property during the time they've held title.
Subagency refers to a relationship between the listing and the selling agents in a real estate transaction.
Types of deeds used to convey real estate. Learn types of deeds and what each conveys from grantor to grantee.
The bundle of rights that the owner of real property has are those legal rights of ownership including, enjoyment, exclusion, disposition, possession and control.
The WordPress for Real Estate Category Plan
Before you start investing in real estate, know the math to identify good opportunities and manage them for profit. Understand the issues landlords face. Understand leverage, mortgage options, property suitability evaluation, and repairs and maintenance issues.
Real estate agents need to be sure that they know the difference between an amendment and an addendum to a real estate contract or purchase agreement. In real estate contract law, using the wrong document could lead to more than just a red face. An amendment changes an already-executed agreement, while an addendum is an additional document included in the original agreement.
Using an example fourplex rental property, we analyze how it cash flows and the tax advantages of ownership.
A General warranty deed legally binds the grantor with certain covenants or warranties. Covenant of seisin, covenant against encumbrances, covenant of quiet enjoyment, covenant of further assurance, covenant of warranty forever.
Before you get in front of that listing prospect, be sure you have your ducks in a row. You're presenting your experience, expertise, marketing and transactions services.
During the real estate purchase process, the title company will search the public records, and issue what is called a title insurance commitment or a title insurance binder. This document binds the title company to issue the insurance policy subject to the requirements being met. The list of exceptions are those items that will not be covered by the insurance policy.
A comparative market analysis or CMA in real estate is normally done to determine the current market value of a property to list it for the seller, or to help a buyer to determine what they would like to offer for the purchase.
As a real estate agent or broker, you're an independent contractor. Expenses and income for your business should be estimated carefully and a plan put in place to create the income to surpass expenses. With spreadsheets and the sales funnel process, it's not difficult and well worth a couple of hours of your time.
C.L.U.E. (Comprehensive Loss Underwriting Exchange) Reports give the insurance claim and loss history for a residential property. Insurers regularly report property losses to a company that compiles the C.L.U.E. Report to a homeowner. Only the homeowner or a prospective insurer can order it.
A condominium is one of a group of housing units where each homeowner owns their individual unit space, and all the dwelling share ownership of areas of common use.
Broker and agent commission split, 100% commission, referral fees, and other real estate agent compensation models explained.
Real estate investing frequently involves the purchase of a property in need of work, getting it repaired or remodeled and then selling or flipping it at a profit. This requires the ability to determine approximate repair and remodel costs and the value of the property after completion. This value is the ARV or After Repair Value
A contingency, or condition, is written into a real estate contract to specify an event that, if it happens, the contract would cease to exist. An example would be a purchase contingent upon the buyer obtaining a loan at a specified interest rate or lower. Should the buyer be unable to do this, the contract would end.
A fee simple estate in land is the highest form of ownership recognized by law. The property owner is entitled to the full enjoyment and use of the property subject only to limitations such as deed restrictions or zoning.
Planning real estate income is accomplished by determining your needed income, planning behaviors and activities, knowing the approximate results of these activities and behaviors, and developing a plan. You can determine precisely what you need to do each day to fill your sales funnel. A lot goes in the top and the sales dribble out the bottom. Knowing the ratio of what goes into the top of the funnel to what comes out the bottom tells you what you need to do.
So you've got your license and you're settling into your new office space. You need to make sure that you meet the experienced agents and listen more than you talk. Whether they're bragging or complaining, things that might help you slip out in conversations.
Rental vacancy and credit loss is the estimated dollar amount of lost rental income due to vacant units and non-payment of rent.
Lenders use the break-even ratio as one of their analysis methods when considering providing financing. Here's how to calculate it.
The commercial gross lease is sometimes also called a full service lease. The landlord generally agrees to pay all expenses in this type of lease, including taxes, insurance and maintenance.
Learn the types of encumbrances on real estate properties, including liens, deed restrictions, easements, encroachments and licenses. Real estate encumbrances can adversely impact the sale of a property.
Which of our qualities and skills do our clients value the most? This is a bit different from which services they value. Learn what they want most in personal qualities and job skills.
Real estate consulting combines some of the practices of fee for service with an hourly fee delivery for services. The consumer, buyer or seller, can select services individually at flat rates, services in pre-packaged bundles at flat rates, or elect to have their needs met via an hourly rate.
In real estate investment, we want to estimate the income of a property with a realistic estimate of losses due to vacancy and bad credit. This is called gross operating income or GOI. We subtract those estimated amounts from Gross Projected Income to arrive at Gross Operating Income.
Prioritizing your study subjects, and getting reliable resources and information are key to successfully passing the real estate license test. Real estate license exam tips are outlined here.
If you're considering investing in real estate rental property, be sure that you understand the way that expenses and income are calculated and discussed. Operating expenses is one area of misunderstanding.
Best practice tips for studying for the real estate agent licensing exam. Helpful advice for taking and passing the test.
Appraisers and real estate investors use the income method to value properties that produce rental income in some form. The net income a property generates is used to determine its fair market value. Primarily, capitalization rate and gross rent multiplier are calculations used in this method.
A licensed real estate assistant will add additional abilities, as most real estate licensing boards limit what an un-licensed assistant can do. These include document preparation, advice and interpretation, delivery of financial and title documents. attending closings and telephone marketing.
There are three main office building classes available on the market today. Which one your client chooses will depend on her business needs and financial abilities.
Get experienced advice and specific plans for setting a real estate agent marketing budget for your new real estate agent business the first year or so.
A good comparative market analysis, or CMA, is simply defined as one that helps to yield an accurate and reasonable listing price for a property. However, easily defined and easily produced are not the same. A good CMA requires attention to detail, mathematical skills, experience and a bit of creative thinking.
I am almost totally online now, operating in the cloud for my real estate business. Learn here about my top ten real estate technology tools, and most are free. The rest are cheap, costing a grand total of only about $10/month to use them all.
An estate for years, or estate for term, is one type of leasehold estate in real estate. This type is a lease for a specific period, with a beginning and an ending date. No notice to vacate is required, as there is a definite date for the lease to end and the tenant to vacate.
Buyers frequently deposit earnest money in a real estate transaction. Learn how real estate earnest money is accounted for, handled, and refunded in the real estate purchase transaction.
One of the first things every new real estate agent should learn is the HUD-1 Settlement Statement inside and out. After all, you'll be going over it with clients and frequently be asked to explain items or how they're calculated. Here's a completed example HUD-1 on a .pdf with live links to instructional quick tips for the items.
You'll be able to access free forms code here to place a display of current MLS inventory for homes and land on your website. Easy entry of the data in one form, and in five minutes there are statstics on your website. Embed code included.
MLS only listing is generally the practice of charging a set low fee to place a seller's property on the Multiple Listing Service, but not providing any other services to the seller. This means that there is not agent/broker who will be advising the seller or helping them with the contract or closing process.
I can always generate an argument when other real estate people hear me saying that real estate isn't
The amount of the outstanding mortgage divided by the property's value is the LTV or loan to value ratio. The value is normally either the appraised value or the selling price, whichever is less. This is used in regular owner occupied mortages as well as properties purchased as real estate investments.
Thinking small in starting a real estate agent career is all about recognizing that you're an independent
The annual price to be featured in this program was $468. I'm going to show you the results for leads right out of my report from Zillow as of May 27, 2011.
The modified net lease is so-named because it is a modified version of the triple net lease. Rather than paying all expenses, the tenant may pay taxes and insurance but share maintenance expenses with the landlord.
Capitalization rate is a common method used in the process of arriving at the value of an income property, such as rental units, commercial rental space, etc. Learn the calculations you'll need as a real estate agent to work with your investor clients.
Easements are the right of someone to utilize the real estate owned by another. Real estate easements can be created by written agreement of the parties, a deed conveying a property, condemnation, court order, prescription or by necessity.
There is a myriad of factors that can affect whether or not a borrower can obtain a commercial loan. Those who fit within the strict parameters set out by most commercial banks usually enjoy a lower interest rate and a few other perks. However, those who do not can still successfully secure financing, often with more freedom but higher interest rates, from private lenders.
The real estate referral agent is one of the highest paid non-entertainment jobs on the planet. Where's the value in this antiquated procedure?
There is an allure to commercial real estate. Many a residential real estate agent has considered the switch. However, know what's required first, and try to plan for your success.
One of the calculations lenders use to determine whether they'll do a mortgage on a commercial property, and how much they'll loan, is the DSCR, or Debt Service Coverage Ratio. Learn how to use the DSCR.
Return on equity, as calculated in the first year of a real estate investment, is the cash return after taxes divided by the cash invested in the property.
Many highly successful real estate agents and brokers get that way by concentrating on one real estate marketing niche and serving it well. Learn some of the best niche market opportunities here for real estate. Commercial properties, FSBO's, resort and vacation properties, minorities, first time buyers, singles,luxury homes and condominiums are included.
Real estate investment property provides numerous advantages over other types of investments. This is primarily due to the different ways in which the real estate investor can realize returns on their property investments. These include mortgage payoff, appreciation, tax advantages, gains from inflation, and more.
RESPA, the Real Estate Settlement Procedures Act, covers the vast majority of residential loans. Learn the loan types not covered by RESPA and why.
An encumbrance is a claim or liability against real estate. This can include liens, deed restrictions, easements encroachments or licenses.
Create the rule to tell Outlook which messages you want to have automatically sent to your cell phone as sms text messages. This could be several rules, possibly for clients or with certain words in the subject or body of the email. Page 2.
There are ways in which to make money in real estate investing without cash out of pocket. If you want to get started in real estate investing, these are strategies that work.
Appraisers will report and lenders will use the land to building ratio in many commercial and industrial valuations, and in some residential ones as well. Learn how to calculate.
Cash flow is all the in and out flows of cash through a business, without regard to tax considerations. All money in or out is considered. This is Cash Flow Before Taxes or CFBT. The cash flow of a real estate investment is an important part of its viability as an investment. Rental properties are expected to cash flow more than mortgage payments and expenses to generate a profit.
The most basic of the interest calculations, the accumulation of simple interest will be of interest to many real estate investor’s clients.
There are three basic types of real estate listing agreements, Open, Exclusive Agency, and Exclusive Right to Sell.
Many an agent has built their new career on contacting expired listings and impressing them with their ability to do better than the last real estate agent or broker. The consultive approach, with straight-forward information and a formula to help you introduce hard facts about property condition and pricing is presented in this hard-hitting flyer.
Definition - Referral fees in real estate are fees charged by one agent or broker to another for a client referred. They are most common when a seller client is leaving the area and their agent refers them to an agent or broker in the new area to which they're moving. Generally this fee is a percentage of the final commission received by the agent who accepts the referral.
The vast majority of independent real estate agents are statutory independent contractors. This is a statutory status rather than common-law. The right of control and the 20 tests of the Internal Revenue Service to determine if one is an employee or independent contractor do not apply.
In most real estate deals involving a lender, the lender has their own source for getting a flood certification on a property before making the loan. A third party provider produces a report certifying the flood zone status of the property based on the most current FEMA flood maps. If your client is doing a cash deal, you might want to get them to do their own flood cert, or you can get it for them inexpensively.
In our series examining a fourplex rental property's income and taxes, we're now looking at the mortgage interest deduction. This is frequently one of the largest write-offs for the owner.
Rate of return is a measure of profitability; it measures the cash that a project will generate vs. the cash that you have to put into the project. Page 4.
Using lease option strategies, a real estate investor can control a property and rent it out for positive cash flow. Using sandwich leases, the investor can get the cash flow and a profit on the sale at the end of the lease period. Page 4.
Whether you're a new, or an established agent, keeping up with income, expenses, and mileage shouldn't take up large amounts of your time. Learn how to do it with your voice and be up-to-the-minute with your records.
Unimproved land in real estate is defined as land that does not have certain basic required services necessary to utilize it for other purposes. These include electricity, telephone, street access, or water available.
Real estate property management requires a high level of detail as regards record-keeping. With financial, government regulation and risk factors involved, the more detailed and organized the records are the better. This is important not only for tenant management, but also for employees and subcontractors.
Periodic tenancy, or estate from period to period, is one type of leasehold estate in real estate. There is no defined ending date for this type of lease, but usually a defined period of tenancy, such as month-to-month. Proper notice of termination must be given according to the agreement.
From this article, you are linked to detailed explanations of the sections in an example real estate brokerage office policy manual.
Certain elements are required to make a real estate contract valid legally. These are that it be for a legal purpose, voluntary, there be agreement as an offer and acceptance, the parties must be legally competent to enter into the agreement, and there be valid consideration or exchange of value.
Two alternative methods are used frequently for dispute resolution with regards to real estate transactions. These are mediation and arbitration. Real estate agents and brokers need to know the differences, appropriateness of each, costs, and whether the contract binds the parties to either or both.
A bargain and sale deed does not warrant against encumbrances. It only implies that the grantor holds title and possession of the property. Real estate deeds. Types of real estate deeds.
I have used a Point2Agent website for a number of years, and this review will give you the pros and cons of whether to go with Point2Agent for your web presence.
Whether you're trying to decide if an iPad is worth the investment for your real estate business, or you have one and you're trying to get the most out of it. These are tips and tricks to make it a replacement for your notebook most of the time.
Facility or physical maintenance is an important function of real estate property management. Regular preventive maintenance, as well as repairs when things go wrong, are quite important to tenant retention, higher occupancy and greater return on investment.
Keller Williams Real Estate, founded in 1983, has experienced steady growth in franchises and now has more than 600 offices and more than 80,000 agents. Using innovative profit sharing for agents who bring in agent recruits for up to seven down levels, this company has experienced excellent agent retention. The Keller Williams University provides extensive training and the technology resources provided to agents are highly valued.
Learn the basics of real estate brokerage office management. An introduction to insurance, risk management, marketing, purchasing, sales and lead management, office and staff considerations.
The 1031 Exchange is named after section 1031 of the Internal Revenue Code. Using the 1031 exchange, an investor can exchange real estate and defer capital gains taxes on the profits from the sale. As the investor realizes appreciation, they can continue to trade up to more valuable properties, deferring capital gains taxes at each step.
Taking the step from buying and selling real estate properties to buy-and-hold strategies and landlord status is a large one. Be sure that you examine your capabilities and desires, plan for management, and that you're capable of dealing with tenants, managing rents, repairs and vendors. This landlord guide will help.
Anyone who has been in real estate or wanted to become a real estate agent has heard the saying that
What is a buyer database or "buyer book?": If one or more of your real estate investment strategies involves
RESPA, or the Real Estate Settlement Procedures Act, regulates certain marketing and business relationships of real estate settlement service providers. Learn what can get you into trouble.
Bird Dogging in real estate investing refers to bringing investment deals to real estate investors who pay a fee to the bird dog for finding profitable deals. It requires on cash investment by the bird dogger. Page 2.
Using the asking price of an income producing property and the capitalization rates of other similar properties in the area, one can calculate the income necessary to justify the asking price.
Using the lease-to-own strategy, a real estate investor can create monthly positive cash flow while locking up a home for future purchase. Learn how it works here.
A search engine is a web site that collects and organizes content from all over the internet. Those wishing to locate something would enter a query about what they'd like to find and the engine provides links to content that matches what they want.
Successful real estate investors have a pipeline of resources that provides leads for locating deals. One component of their pipeline is a buyer list. Learn here how to build one that will provide you with buyers for deals.
Using Evernote to make your business life more productive is as easy as setting up some automated systems and getting into data saving habits. Never lose anything again, including notes you used to put on yellow stickies. Evernote is a very useful tool for real estate.
Buyer agency or buyer representation has been increasing in importance and use for a number of years. Even if a real estate agent works with both buyers and sellers, this description of some of the responsibilities of the real estate buyer agent will apply to how they work with real estate buyers.
My absolutely two most favorite tech tools came together today to solve a problem I've been fighting for two years. Learn how to use Gmail and Evernote to print multiple Gmail email messages.
Net operating income, or NOI, is rental income of a property after operating expenses. These expenses would include all operating expenses, including maintenance, insurance, janitorial, supplies, management, accounting, etc.
: The legal definition of procuring cause would be "the cause that results in the attainment of a stated
REITs, or real estate investment trusts, allow the normal investor to own the commercial real estate. Whether its office space, a skyscraper, or apartments, an investor who purchases shares in a REIT will share ownership, as well as operational profits as dividends. Good earnings, predictability of income and expense, and low correlation with other asset classes, make REITs a good investment for many.
Real Estate agency law says that agency is a representational status that defines the duties of the agent and the rights of the client. An agent has fiduciary duties to the client evolved in common and statutory law. There are two ways to create agency, express and implied.