Image by nancyarora2020 via Flickr

3 Reasons to Hire a Property Management Company to Run Your Real Estate Investment Property

The recent downturn of the global stock market saw millions of 'every day' investors having their fingers badly burned. Overnight life savings were eaten away, retirement funds went into decline and the economic forecast for all of us who had any money invested in stocks and shares was gloomy to say the very least.

Real Estate Investment sounds like a cool thing to do during the weekend but the problem arises when you start having to many properties to handle. The solution to your real estate investment problem would be to hire a property manager who can then run your property for you and deal with any problems that may arise. The key is to get a reliable person who can then do any repairs or maintenance work for you.

This article will highlight three additional reasons why you might want to hire a property management company to look after your real estate investment property for you.

The Time Element

Firstly, you might be a busy professional or business person during the weekdays and you do not want to run around looking for a plumber or roof repairer sometime during the week. Time is valuable also if you have several properties that you own and it does not make sense to baby sit your properties.

Opportunity Cost

Thus you would do well to remember that your monthly income is dependent on the number of deals that you can find to add to your real estate investment portfolio. Get your focus right and you will make more money from your real estate investments.

Proximity Is A Key Issue

Secondly, proximity is a key issue. One real estate investment author states that he does not own property unless it is within one mile from his own residence. If you want to look after your own properties it is fine but you must be able to go down and take a look if there is any issue arising from your properties.

Note that returns from both offshore rentals and capital appreciation currently in places like Dubai might prove more lucrative so if you are looking into offshore real estate investment, hiring a property management company is a must. Similarly, if you are looking at investing in property outside the state that you reside in, it will be necessary for you to hire a property management company to look after your property.

Familiarity With The Documentation, The Procedures

Thirdly, if you are new to the type of property class, you might want to consider employing the services of a property management company. For example if you have been involved in residential real estate for a long time and you decide to expand to commercial real estate, you might not be familiar with the documentation, the procedures and the possible problems that may arise from such real estate. Hiring a property management company therefore may help you solve some of your transition problems and like mentioned earlier free you to explore other real estate investments.

In conclusion, real estate investment property when done on a small scale in your locality may be okay for a while but when your investments start getting numerous and unwieldy, you might want to tap on the services of a property management company to help you manage your properties thus freeing you to look for more property deals.

Joel Teo is the owner of several websites and takes a keen interest in real estate investment.
Learn more about real estate investment at http://www.realestateinvestment101.info

Article Source: http://EzineArticles.com/?expert=Joel_Teo
http://EzineArticles.com/?3-Reasons-to-Hire-a-Property-Management-Company-to-Run-Your-Real-Estate-Investment-Property&id=197571

Image by thinkpanama via Flickr

Cross Collateralization - there is a better way

Does It help or hinder you?

Cross collateralization occurs when the bank uses the security for one loan to secure another loan.

What you want to aim for is to have any property you own, investment or otherwise, financed with free standing finance.

How Can It Help You

For property investors just starting out, using your home equity can help you get your first investment property most easily. The advantage of using cross collateralization is that you can borrow 100% or more of the price of your next property plus the costs of purchasing (usually about 5% - 6%).

How Can It Hinder You

The biggest disadvantage of crossing your collateralization is that it ties you to one financial institution.

I'm not saying your current bank is a bad bank, they may have served you faithfully and well for many years, but you are embarking on a new business venture here and your current bank may not be able or willing to meet your needs going forward.

Yes you heard me right, every piece of investment real estate you buy is like a new business venture. It works for you producing a cash flow week in week out and will produce long term capital gains profits that are reliable, rock solid and way beyond what you could earn by working or saving.

However cross collateralisation can bring your real estate investment financing plans to a standstill.

For example it is usually mandatory that the properties being cross collateralized be in the same state. If you want to be free of restrictive banks lending rules then use a line of credit to borrow the funds you need instead.

When you are planning to purchase a real estate investment and you approach the bank to get a loan amount pre approval, the bank will usually assume that you are going to cross collateralize your home to purchase the investment property.

Why Should You Avoid It

For most property investors this is not what you want. By asking that the equity you have in your home or other real assets be made available to you as a LINE OF CREDIT you are put in a much more flexible position.

If you are sure that you only want to purchase one investment property, cross collateralizing your home may serve your purpose.

No Money Down property Investment

This is usually achieved by using a cross collateralization. But using the techniques on discussed on the REFINANCEING REAL ESTATE INVESTMENT and HOME EQUITY LINE OF CREDIT pages you can use more advanced techniques to buy investment property with no money down.

Remember, what you are aiming for is to have any property you own, investment or otherwise, financed with free standing finance. This is achieved by making use of a line of credit secured against your home initially. As the value of your property investment portfolio increases you can set up more lines of credit to access the available equity you have in your real estate investment portfolio.

See these related related articles in
Wikipedia and EzineArticles for more information

Return From
Cross Collateralization
To Real Estate Financing Tips

Or go to Freedom Steps With Property Investing

Steps to Freedom

Wednesday, November 25, 2009