I am going to invest in a apartment building using a loan.
Is it the noi-annual debt service-annual mortgage payments-the annual loan paybacks-income taxes?
If this isn’t right, then please provide the proper way of determining my actual annual profit after taxes or pre-tax.

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You need to calculate the after-tax rental income first, then after tax cash flow second.
First after-tax income from the property.
Income
a) gross income from the rentals
Expenses
b) mortgage interest
c) depreciation (assume 80% of the purchase price is depreciable building, thus annual depreciation is purchase price * 80% / 27.5 years or about 2.9% of the purchase price)
d) real estate taxes
e) rent loss due to vacancy, tenant
f) management fee
g) maintenance fee
h) insurance
Income – expense would give you roughtly taxable rental income from the property.
Assuming the rental bldg generates a (paper) loss, you can apply it towards your personal ordinary income and use it to reduce your ordinary income.
If you show a rental profit, then you would have to pay at your marginal tax rate.
Cash Flow:
Annual Rental income – annual mortgage payment -/+ tax liability or tax benefit from owning this property.

For people in all types of business, getting the right advice and guidance is vital to make sure your business runs as smoothly as possible. If you happen to be a Landlord or Property Owner this is equally important due to the numerous things you have to sort out. Here are some answers to just a few of those questions you will no doubt be asking:

What can I do to protect my property?

Insurance is available so that in the event of a loss (by an insured event) you will be protected and covered. In order to reduce the chances of a loss you can however take certain steps to help. These include:

- Make your property more secure by installing deadlocks on doors and locks on the windows.

- Install an alarm system. Many insurers will offer a lower premium because you have lowered the risk of loss through theft. For certain postal areas a minimum level of security will be required.

- Remove potential fire hazards from around the outside of the house as well as inside – particularly around the kitchen.

- Make sure you have working smoke detectors and a suitable fire extinguisher. Put the extinguisher somewhere handy and make sure members of your household know how to use it.

What should I insure my contents for?

As a landlord, it’s quite possible that the property that you are letting contains contents that you own. It is important to note these contents and ensure that you have provided adequate cover for them in your insurance policy. It might be worth doing a room by room inventory and working exactly what level of cover you require. Again though if you are in any doubt, just ask.

How can landlords minimize financial losses related to repairs and maintenance?

You can avoid many problems by maintaining the property in excellent condition. Here’s how:

- Use a written checklist to inspect the premises and fix any problems before new tenants move in.

- Encourage tenants to immediately report safety or security problems such as plumbing, heating, broken doors or steps – whether in the tenant’s unit or in common areas such as hallways and garages.

- Keep a written log of all tenant complaints and repair requests with details as to how and when problems were fixed.

- Handle urgent repairs as soon as possible – take care of any safety issues within 24 hours. Keep tenants informed as to when and how the repairs will be made.

- Twice a year, give tenants a checklist on which to report potential safety hazards or maintenance problems that might have been overlooked. Use the same checklist to personally inspect all rental units once a year.

Also, your commitment to repair and maintenance procedures should be clearly set out in the lease or rental agreement.

Owning a property or a portfolio of properties can be very rewarding so follow these simple tips and make sure you and your properties are protected at all times.

I’m living with my parents, saving and investing. I want to buy an apartment in full. I hate mortgages because of upfront fees and non-tax deductible interest.

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You do not need to buy the property with a loan to qualify for the FHOG. If you have not owned property before, and qualify for the grant, then yes, you will receive the grant. Appl;ication form and guidelines are available from:
www.osr.nsw.gov.au

Best Investment property? Multiunit apartments, Houses, Commercial?

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The best investment is going to be the one that brings you the most money in the end.
Single family homes can be very good. If you are able to buy low and lease for at least 30% over your debt service or sell it for a substancial profit in a short period of time.
Multi-units (1-4 family homes) can also be very good. Same concept though as the single family homes.
Commercial can be Multi-Unit as well. These include 2 Family and up or can be things like gas stations. These typically require a commercial loan and have higher down payment requirements and even sometimes come with higher interest rates. If you don’t have cash to put down…many times you will be stuck with a capital partner or equity partner which in turn makes the debt service to high for it to be profitable.
* You also have to look at the area you are looking to invest in. You don’t want to buy a house in a rental area that you plan on fixing and flipping. Same as you don’t want to buy a house to rent in an area that is not a typical rental income area.
Your best bet is to consult a good, seasoned agent or find a REIA (Real Estate Investment Association) in your area that you can join and learn as much as you can before you buy.

Property has always increased in value, usually far in excess of the inflation rate.

Buying property enables the investor to secure borrowing which can then be used to increase the magnitude of an investment; this cannot be said of most other types of investment.

Rental Income from the property can then be used repay the loan which in time also increases the value of the investment. As property prices increase, so to does the investment and the increased equity can therefore be used to secure more funds and increase investments in property.

It could be said that property prices do go down, and this does sometimes happen in the short term but history has shown that property prices always recover and for the best part, substantial increases are evident.

If you own property which has increased in value, or the loan is diminished you can release equity against your property. Many “buy to let investors” have successfully used their borrowing ability to increase their property investments and generate substantial wealth for themselves.

Whilst there can be no guarantee that property prices will increase over say, a one year period it is generally accepted that a well maintained property in a reasonable area will appreciate in value.

People have also increased their gains by investing in up and coming areas or by making improvements to properties. One does not have to be a major property developer benefit from that type of gain.

The following statistics make interesting reading:

• 50% of individuals mentioned on “The Sunday Times Rich List” made their money through investing in property.

• A property worth just €10,000 some 30 years ago would be today worth around half a million Euros.

• Between 5th October and 6th November 1987 the FTSE share index fell by a massive 32.1%. (Published Bank of England Statistics)

Whatever type of investor you are, property should always be the best long term investment. It you are “buy to let” investor you can focus the mind on buying a property as a money making vehicle and concentrate on generating a reliable rental income as well as capital appreciation.

If you are purchasing that place in the sun you can still benefit from the same investment opportunities but perhaps with the advantage of an increased income from holiday letting.

Buying an off plan property can be a lucrative investment because Developers usually sell the opportunities at less than the market value in order to attract investors. The reason for this is that Developer will benefit commercially by the Investor funding the development cost.

It is not unusual for Investors to make 20 per cent profit by the time they get the keys. The Investor benefits from the enhanced inflationary value of the property during the construction period because the price is fixed before construction. Some Investors are able to sell the property on before it is even finished.

There are always opportunities for the solo investor in the property market!

Prices are probably lower now than they have been in real terms for some time so now is a good time to invest.

We have many bargain properties on our website, if you need any help deciding on the best opportunities why not contact us for advice.

the Expedia Property website.

Hello fellow real estate investors and entrepreneurs.

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I wanted to provide you with a checklist of “buy signals” that experienced pre-foreclosure investors look for and find when evaluating an investment property. These are sure signs that you’re on your way to buying your next income property at a substantial discount.

You don’t need to have all seven in place, but when you find one, the others are usually close by.

Buy Signal #1: Homeowner Is Behind On The Mortgage Payment
This is an obvious one, but I thought it needed to be included in the list. Most homeowners who fall behind on the mortgage payment cannot catch up and usually lose the property at foreclosure auction.
When homeowners can’t affored to pay the mortgage, they cannot afford to maintain the house or the grounds either.

Buy Signal #2: Grass Is Overgrown
After many years of running the streets as a pre-foreclosure investor, I learned to pick out (in an instant) the house in foreclosure as soon as I turned onto the street.
Overgrown grass is a sign of neglect.

Buy Signal #3: Windows Are Busted Out
Busted out windows are usually found in vacant or abandoned properties.
When the owner moves out, sometimes the neighborhood kids like to get together and pull out their personal rock collections and proceed to work on their throwing motions. This usually involves picking out the right target.

Buy Signal #4: Rotten And Exposed Wood
A house that has extensive rotten wood on the exterior has probably been neglected for many years. It’s shocking sometimes what people will put up with when it comes to sub-standard living conditions.

One time I met with a seller who had a gigantic hole in his kitchen ceiling. The whole was so big that you could see clear up to the sky. I met with the seller for an extended period of time discussing the situation with the house.

Not one time did the homeowner say anything about the huge hole in the roof. This was a very strange exchange.

Buy Signal #5: No Garden Hose
I have found this one item in the list to be more telling than any of the others.
For some reason, whether or not the house had a garden hose connected to the outside faucet told me if it was occupied or vacant.

If the green garden hose was still connected, the house was usually occupied. If the hose was missing, 9 times out of 10, the house ended up being vacant.

Buy Signal #6: No Furniture
Usually when you suspect that a house is vacant, you peer into the nearest window to confirm your gut instinct.
You’ll know in an instant that the seller has moved on if the furniture has been removed.

Buy Signal #7: Neighbors Haven’t Seen Them
Usually there will be a neighbor or two that can tell you something about the seller.
If the homeowner could not fix the problem with the mortgage, the neighbors usually knew all about it. They are sometimes a very good source of information

By: Shaun Steckler

Article Directory: http://www.articledashboard.com

Shaun Steckler became financially independent by investing in houses and small apartment buildings in south Louisiana. Shaun now controls an investment portfolio that generates a five figure a month income for him today. You can learn more about Shaun’s real estate investing strategies and business models at RealEstate-Entrepreneur.com

Article: Three Fun Ideas to Boost Winter Real Estate Sales!

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