Apartment Investing - The Magic of Interest Rates and a Bad Economy

"The first and the best victory is to conquer self." -- Plato

For several months now you have been hearing me harp on the fact that you better be getting into some well located apartments or commercial properties...NOW! What I am seeing in the marketplace are some of the best buying opportunities I have found in the past 18 years. I am not exaggerating.

Why? One of the reasons is the tough economic conditions going on right now.

How can that create some great buying opportunities?

What I am finding is a number of well-located, great apartment properties and commercial buildings that are running just fine...BUT THE OWNERS are having problems with their jobs, businesses, or other areas of their "financial lives". What this equates to is a need for quick cash - and some great buying opportunities.

Now there is even a better reason. Interest rates are remaining at their lowest point in a number of years. The big question in investors' minds is, "Will interest rates remain low, or are they going to go up?"

Let me give you a little insight into why it could be a good thing regardless of which direction interest rates go.

USUALLY when rates go down property values go up. This is because the cheaper it is borrow, the more one can afford to pay for a property in terms of the property cash flowing. The lower the rate, the lower the payment, and thus, higher monthly cash flow. This is great news for buyers.

This is USUALLY the case...but it will not be the case NOW though...and this is GREAT NEWS for us investors...

Why?

In general, owners will not be aggressive in raising their prices because of the perceived problems in the real estate market and the economy in general. I say perceived because there are many owners that the current economic crisis is NOT effecting, BUT, they think it is. Thus they will be reluctant to raise prices because "the current economic problem" will prevent people from actually paying MORE for their property...

This is where you come in. Start talking to your lenders NOW and locking in those interest rates. Start working with those owners to lock in those lower sales prices. Now is the best time in YEARS to be an investor. Make sure that you do not miss what could possibly be the opportunity of a lifetime!

Article Source: http://EzineArticles.com/?expert=Darin_Garman

The Very First Decision You Should Make Before You Purchase Your Next Commercial Property

"The only discipline that lasts is self-discipline." -- Bum Phillips

One of the most frequently asked questions I get is, "Where do I start to invest in commercial real estate? What is the best way to invest in apartments and commercial properties?" Or rather, "What do I do first?"

I am going to tell you what you should be asking yourself - and it has nothing to do with money, down payment, rate of return or occupancy.

Here it is...

Realistically, can you take on the management of the property yourself? Do you want to and or can you? Do you have enough time??

OK. That was more than one question.

One of the biggest mistakes I see is that owners that think they have enough time, energy, and resources to manage a property effectively - only to find out they are way over their heads. Usually they find this out when they have a significant problem at the property with turnover, vacancy, or tenant problems.

Then...

They want to sell their property as quickly as possible to get rid of this "headache." Needless to say, this is not exactly the best time to sell your property.

One of the things that I discuss with investors is how to make more money from your apartments or commercial property by NOT managing them. I spend a lot of time on this because it is truly that important. There are two points I would like to make about hiring a professional property manager:

1. Hiring a property manager frees up your time.

Time is the most valuable thing we all have. As you have likely heard - unlike money, we cannot get time back once it is gone.

2. Hiring a property manager allows you to work "on" your investment.

Because someone else is handling the day-to-day operations, you can focus on the most important aspect of investing - being an "Asset Manager."

An "Asset Manager" can clearly focus on how to increase income, reduce expenses, and ultimately increase the property value. THIS is where you should be spending most of your time and effort vs. handling the day-to-day management.

Before you purchase your next property, search yourself for the property management answer. There are very good property managers out there that can do a great job and allow you to work on the property vs. working IN the property. By far, the best money is made when you work "on" the property.

Article Source: http://EzineArticles.com/?expert=Darin_Garman