Make no mistake property management is a business and managing income property is done to make money. You must pay attention to your return on investment and make sure that your real-estate-investments are paying their own bills, and that the real estate you own has a decent upward potential in its relative value.
All too often, income property real estate investors which are highly leveraged get into situations where they are cash poor, not maintaining or covering costs and falling down on their return on investment estimates; becoming upside down in the properties, while they are not maintaining any sense of reality with regards to actual cash flow. What seemed like a good investment strategy turns into a nightmare.
Worse, if they let the properties run down they become unsellable, and they attract city code enforcement. Nowadays, cities and county governments are looking for ways to make money on fees and fines to offset the drastic budget cuts they’ve had during the economic turbulence. This becomes a double whammy for property owners and although they may be able to have their properties reassessed to save on property taxes it seems that the local government will find other ways to charge them to make up the difference on their end.
When real estate values are constantly climbing during the upward business cycle all real-estate-investors look brilliant. But real-estate has cycles just like the business cycles ride their roller coaster, and what looks good today may not be a good value tomorrow. And more than one real-estate-investor who was living high on the hog has lost everything and filed bankruptcy, losing all the properties and destroying any future income potential in that sector.
With credit markets tight many of the real estate commercial investors are upside down in their property values and they cannot borrow their way out of this, and even if the bank is reluctant to take back the properties because they don’t want them either, the owners are stuck. Looking at no ROI, no cash flow and a complete drain on whatever little they have left. Please consider all this.
Lance Winslow is a retired franchisor – Lance Winslow’s Bio. Lance Winslow is formerly the CEO of WashGuys family of franchises for instance one of Lance Winslow’s favorite companies on the team; http://www.windowwashguys.com/links.shtml /.
comments (0)