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How To Start A Real Estate Investment Group

Are you thinking of starting your own real estate investment company? Real estate investing has been around for thousands of years. In fact, it is one of the businesses that can never go out of existence. As far as humans continue to exist, real estate business will continue to thrive. This is why it makes so much sense to invest in the real estate industry. Donald Trump – the president of the United States, and tons of other millionaires around the world are known for their investment in this industry.

Perhaps, the great thing with the real estate investment is that it is an investment you can make today and it will continue to pay you for life. You can even pass down the business to your generation. Investors make money by buying low and selling high. You can also make money by putting up the property into the rental market. According to the recent report, the US real estate market is very favorable for investors at the moment. If you are thinking of starting a new business, think of starting a real estate investment group.

What is a Real Estate Investment Group?

Simply put, it involves bringing together professionals and experts from different backgrounds such as lawyers, accountants, investment analysts, to negotiate and close contracts for the purpose of making profits in the real estate industry.

Ways To Start a Real Estate Investment Group

You can start a real estate investment group in the following steps:

Research And Consult

The first thing you need to do is make your research and then consult with professionals to ensure that starting a real estate investment group is the right move for you. Ensure you meet with a financial expert to see if there are possibilities of meeting your financial requirements.

Work With Professionals

The best way to grow fast and minimize your risk is by working with professionals in this industry. Fortunately, there are companies that specialize in helping individuals as well as businesses to set up real estate investment groups. Professionals can help you take care of bureaucracies such as setting up LLC and getting funding. You will also receive valuable advice to minimize risk and increase profit.

Gather Your Members

You need to ensure that people on your investment group are as motivated as you are. You can find motivated members from various real estate investment networks. Don’t only go for those with lots of cash, look for people that are motivated to work with you.

Make Your Business a Legal Entity

It is important that you set your bylaws as early as possible. You should also go ahead and protect your investments and assets by incorporating your investment group once you begin to grow. This will help you avoid some risks and challenges later in the future. The type of business entity common to real estate investment groups is LLC since it has a fewer regulatory and reporting requirement.

Set Your Investment Strategy

You cannot just invest blindly. You need a guideline, it is important that you set an investment strategy that will guide your activities. This will make things transparent and help avoid problems in the future.

Get Financing

You probably need lots of money to start your investment. However, the amount of money you need will depend on how fast your group wants to grow. You should talk to financial experts to check the possibilities of getting funding from banks and other places.

Are You Cut Out To Be A Landlord In Singapore?

While looking out for a flat seems like an easy task, hard work needs to be poured behind the scenes. Ensure that you are prepared to be a landlord by analyzing some of the initial factors:

Are you familiar with the legal regulations?

Much like the systems imposed in many institutions in Singapore, rental property owners need to follow a set of regulations as mandated by the Law. Facets include leases, licenses, security deposits, maximum number of tenants, and eviction matters. These facets are examined by attorneys and other authorities in order to protect the interest of the landlords and the tenants.

It is important to be specific when it comes to written documents in order to have a strong support to your case, shall a dispute arise. Acknowledge the landlord-tenant rights as well as the eligibility standards for renting out a flat in Singapore. For starters, you have to be a Singaporean Citizen who has met the Minimum Occupation Period (MOP) to rent out an HDB flat.

Can you afford to become a landlord in Singapore?

Since your first property is the flat that you are occupying at the present, your investment will be considered as a “second property”. Just because you have a sufficient amount of money saved up for down-payment does not necessarily entail that you can afford to purchase a second property! Remember that you are living in Singapore – one of the most expensive cities in the world.

It will become your responsible to keep up with the ownership fees, maintenance costs, and mortgage. Familiarize yourself with these expenses before taking the significant plunge.

Do you consider yourself as a “people person”?

The media has portrayed landlords as people who exude unpleasant characteristics such as being slow in tenant assistance. If you really want to break this stereotype, you must determine if you are a genuine people person.

A “people person” finds delight when interacting with other people. Some landlords are naturally born with this trait. However, others have to bring extra effort when socializing. Ask yourself these questions:

a. Do you have the capacity to understand the tenants’ needs?
b. Are you willing to actively listen to your tenants’ concerns?
c. Will you tend to the property matters immediately?
d. Are you willing to make upgrades on your property regularly?

Answering these questions will help you determine if becoming a landlord is right for you. I cannot deny the fact that having good communication and interaction skills can help you to attract more tenants!

Image Credits: pixabay.com

Rental property ownership is one of the most profitable investments for your retirement portfolio. It is also an excellent source of passive income. To know whether you are cut out for the job or not, you must initially analyze the factors above.

Sources: 1 & 2

4 Must-Read Books On Real Estate Investing

Books will always serve as a clever investment. Books will offer you the chance to learn new strategies to become a better real estate investor. Furthermore, you can save a substantial amount of money by avoiding the expensive mistakes of other authors.

On that note, here are the must-read publications if you are looking for ways to make the most of your property investments:

1. REAL ESTATE INVESTING FOR DUMMIES BY ERIC TYSON AND ROBERT GRISWOLD

Buy it here.

The preconceive notion of purchasing a “For Dummies” guide is that you are utterly clueless about a certain topic. Do not mind this! This book is a good resource for newbies in the Real Estate scene, especially made for those who have no prior experience. It elaborates difficult concepts in simpler terms.

The authors do not promise an overnight success story. Instead, they offer practical and realistic advice for its readers. These advice will help you conquer the challenges and take advantage of the opportunities ahead.

2. LANDLORD ON AUTOPILOT BY MIKE BUTLER

Buy it here.

The rich wisdom of this book grew from the author’s experiences after he managed 75 rental properties while he still committed to a full-time job as a police detective. It may seem impossible to juggle the two worlds but, it is doable.

Landlording on AutoPilot features useful information on dealing with the dynamics between the tenants and the landlord. It can dramatically improve your rental business and its surrounding relationships. If you are afraid to jump in this field or if you are struggling as a landlord, you must give this book a shot!

3. RICH DAD POOR DAD BY ROBERT KIYOSAKI

Buy it here.

As you dive in the world of investments, feed your mind with the philosophy of the renowned author and lecturer Robert Kiyosaki. I was intrigued about his teachings after I watched the book summary video by Evan Carmichael. See it for yourself.

What you can expect from this book is a lot of motivational talk. It is one of the library staples among investors because it contains a massive amount of thought-provoking content. He created two unique perspectives about money that emerged from two of his fathers – the rich and the poor. While the poor dad will tell you to work for your money, the rich dad will tell you to let the money work for you. The author did a great job in encapsulating the what I had been feeling for a long time.

4. THE ULTIMATE GUIDE TO REAL ESTATE INVESTMENT IN SINGAPORE BY ISMAIL GAFOOR

Buy it here.

When it comes to the big players in the Singapore real estate industry, Ismail Gafoor leads the wolf-pack. This book is the culmination of his passion and hardwork. Let us begin with his inspiring life story.

Mr. Gafoor and his family struggled with money when he was young. At the prime age of 7, he was tasked to deliver newspapers with his dad. This means that he was constantly late for school. As a young adult, he began a career with the Singapore Armed Forces. His cumulative salary led to his brave decision to buy his first property at Normanton Park. Because he saw the potential of real estate investments as a decade passed, he decided to open his own property agency with his wife. Nowadays, we know this leading agency by the name of PropNex Pte Ltd.

Image Credits: pixabay.com

Enclosed in this book are answers to various questions that investors ask. It is hard to go wrong with this book knowing that its contents came straight from the workings of a top real estate pioneer.

Sources: 1 & 2

4 Don’ts Of Real Estate Investing

Since land is scarce in our country, properties had always been a go-to investment option for many. The majority of these investors have strategies limited to purchasing, reselling, and renting flats or condominiums. While others consider other options such as the Real Estate Investment Trust (REIT).

REITs allow the investor to have a professionally managed portfolio of properties by purchasing a publicly traded investment product. Investors of REITs purchase units of the trust similar to shares of a common stock.

But no matter what type of property you purchase, here are 4 Don’ts Of Real Estate Investing to help you on your journey…

1. DO NOT FORGET TO IDENTIFY YOUR GOALS

Before committing to a property or even a property visit, it is important to understand what you want to achieve from investing on real estate. Be on a peaceful place where you can think carefully about your goals for the long-run.

You must have a transparent idea of your existing income, current expenses, and outstanding loans before diving into another complex route. Also, you must identify your budget and type of risk you are comfortable with.

2. DO NOT GO WITHOUT RESEARCHING

After identifying your financial circumstance and your investment goals, you must do your research on real estate investments in order to be sure that it is worth your money. For example, a two-bedroom HDB flat can cost about S$250,000. That is a huge sum of money you may be willing to risk if you are serious in property investing. The risks only increase when the investor does not understand how the property market works or when and where to invest. Hurrying up without analyzing the situation thoroughly can only bring about more damage (e.g., bankruptcy) than good.

So if you lack sufficient knowledge, seek advice from a financial consultant or other professional advisers. And when you find the “right property”, ensure that you keep your expectations realistic and keep your finances in tact.

3. DO NOT EXPECT TO BE A MILLIONAIRE QUICKLY

Do not fall into the trap that some real estate investors set – offering you properties for small amounts of cash with higher returns. These “undervalued assets or profitable investment opportunities” are mostly likely unsold overseas property projects. You see, real estate investors usually do not offer “jackpot” properties to complete strangers. They only invest with the people they know well.

There are no shortcuts to success on real estate investments! In fact, you must allot a long period of time on finding a property in a decent location, building a good relationship with the tenants, and maintaining the condition of the property. Time that may not be in the good side of most.

Image Credits: pixabay.com (CC0 Public Domain)

4. DO NOT PURCHASE A PROPERTY WITHOUT VISITING IT

In support of your in-depth research, you must drive to the property itself before signing any contracts. There are a number of reputable realtors and agents who can give you feedback about certain properties but you must follow your own instinct in the end.
There are no shortcuts to success on real estate investments! In fact, you must allot a long period of time on finding a property in a decent location, building a good relationship with the tenants, and maintaining the condition of the property. Time that may not be in the good side of most.

Sources: 1, 2, 3, & 4

Work Smart: 4 Passive Income Strategies to Try

How many hours do you work in a day? Eight hours? Nine hours? More than that? We Singaporeans are normally tied to our jobs in the hopes we can earn some good income. But do you know there’s a way to work smart—that is, earn additional income with little to no effort? I am talking about passive income.

What is passive income?

There are two kinds of income: active and passive. Active income is the one you earn if you use resources such as time, talent, and even money. Your wages are a form of active income, and so are the commissions, bonuses, and allowances, to name a few.

On the other hand, passive income is how many get richer since it doesn’t require the same amount of effort and resources from you. In fact, many require only a minimum investment—that’s it! You just wait for your money to grow.

But where exactly can you get passive income?

1. Savings Account

Remember when finance experts tell you that it’s better to place your money in the bank than under your bed or anywhere else in the home? Well, here’s the reason why: it’s the quickest and easiest way to start earning passively. A typical savings account is interest bearing, the rate of which can differ among banks, so do your research well. But the more you put money in there, the bigger the interest income is.

Bank savings are also safe, investment wise, especially since these institutions are regulated and protected by insurance. However, it also offers the lowest return, which may not be enough to beat inflation. Needless to say, it’s a great start.

2. Real Estate

As a small country, Singapore has a very limited but highly valuable resource: land. So when something is scarce but the demand is high, you have a pretty good leverage. Properties can be either sold or rented.

Currently, the real estate market in the country is grim, but it’s also cyclical. In fact, you can use this to your advantage by buying a property when it’s still cheap. But remember, real estate is the hardest investment to liquidate. It can take months or even years before properties turn into cash unlike the other passive income options.

Meanwhile, if you don’t want to own a property, you can still invest through real estate investment trusts (REIT).

3. Stocks

Fancy owning some of the biggest companies in Singapore? Try your hand at investing in the stock market. Stocks come in two forms: common and preferred. Some of the stocks also give you dividends, which means you earn a profit from a sale or buy, plus get income from simply owning the stock.

So far, more than 600 companies are part of the Singapore Stock Exchange (SGX). As a start, place your money on blue chips, of which there are 30 of them. They are more expensive than the other stocks, but you’re assured of the company’s stability and reputation.

4. Mutual Funds

What if you don’t like to work personally with stock? Or perhaps you want to access other forms of investment but don’t know how? Then perhaps mutual fund is for you.

It works like a financial pool: people contribute to a certain fund, and an experienced fund manager with deep knowledge and understanding of markets determine where the money is going to be invested. Depending on the fund you’ve chosen, the manager can put it in many investment choices including real estate and bonds.

Hold Up!

Passive income is great for earning a side income, but it wouldn’t be if you allowed your other financial choices to ruin its good impact on you. A perfectly good example is unwise spending complemented by poor credit card features. A simple but powerful way to also protect passive income is to select the best credit card deals in Singapore.

(This article is brought to you by SingSaver.com.sg)

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