	Real Estate Investing Info

	Short vs. Long Term
	Turning a Profit
	Renting & Renters
	Finding Tenants
	Choosing Tenants
	Keeping Tenants
	Maintaining the Property
	Advantages & Disadvantages
	Your Investment Personality

For the majority of investors, Real Estate investment is a long term program. They buy a property, rent it and collect a monthly rent, and wait for the value of the property to rise enough that it makes sense to sell it. This may take 2 years, 5 years or 20 years, depending on the market and the investor's financial requirements.

Sounds simple, right? To some degree, it is. If the tenant pays the rent, the landlord investor either has good cash flow (it the property is owned outright), or the rent, hopefully, is at least covering the mortgage, insurance, and tax payments. There may even be some good tax advantages (consult your tax advisor).

Renting & Renters: Learning to Turn a Profit

Renting, though, can be a time consuming process, and the return is usually slow in coming--years instead of months. This is why a number of investors opt to turn a property quickly for a profit, rather than waiting for appreciation to take its natural course.

At the very least, you will need to become familiar with the tools and tricks related to finding tenants, choosing them, and keeping tenants if you want to be successful (and profitable).

Renting & Renters: Learning to Deal with Problems

In addition, just some of the problems you may--or probably will--have to deal with:

Late night or frequent phone calls for repairs or problems.
Deadbeats.
People who won't maintain the property--or worse, damage it.
General whiners.
Slow payers.

Still, if you are prepared, the long term prospects for investors who rent their properties look good. If you decide that it is the right course for you, get your hands on an excellent manual (a recommended selection is at the bottom of this page) and follow the suggestions as closely as possible. Learn from the successes--and mistakes--of others!

Leases

Legally, you will need some sort of rental agreement with your tenants, whether it is for a short term (month to month) or longer term (1 or more years) rental. Leases are important because, if they are properly written, will spell out exactly what the terms are, what you expect from the tenants, and what they should expect from you.

Be specific! You don't need page after page of legalese that no one understands, but you do need to clearly state the terms of the lease. It is far preferable to have it spelled out in advance rather than getting into an argument with a tenant when they expect something that you never intended.

Components of a standard lease agreement:

Who: Specifically who the tenants are and who the landlords are
When: The exact dates of the rental period. Policies regarding lease renewals.
How much: The amount of rent, stated in a total amount for the entire lease term, and how it is to be paid, for example $XXX per month, payable on the first of the month.
Security deposit: How much, how it is held, how it gets returned.
How: How rents are to be paid, to whom, and where.
What: What is included in the rental and what is not included in the rental. Be specific when it comes to utilities. Which maintenance and repair items are your responsibilities and which are the tenants.
Rules: Any special rules regarding the rental.
Pets: What your policy is. Spell it out clearly to avoid surprises.

It is important for you to have a custom lease that is specific to the laws of your city and state. To get you going, Smart Agreements offers their Real Estate Bundle to get your started. This is a complete set of agreements that are necessary for any Real Estate investor; the Bundle contains:

Commercial Lease
Landlord's Rules and Regulations
Residential House Agreement
Landlord Demand Letter
Tenant's Assignment of Lease
Landlord's Consent to Assignment
Termination of Lease
Landlord's Notice Term. Tenancy
Tenant's Notice Term. Tenancy
Much more...

More information

Although there are numerous books on Real Estate investment as it relates to rental property, if you only get one it should be Landlording : A Handy Manual for Scrupulous Landlords and Landladies Who Do It Themselves. It is probably the most extensive handbook available and covers virtually every aspect of long term Real Estate investment

Need expert help buying, selling or building a home in the Indianapolis area? Planning to relocate to Indy? For assistance from Indianapolis' premier Realtor, simply submit the form below, or if you prefer, call Kristie Smith at 317-805-7360 (toll free 800-360-5733), or send an email to Kristie.

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