While flipping real estate has the potential for quick returns, buy and hold is normally the best strategy, offering tax benefits, lifetime income and even greater profit for those who self-manage. Co-author with Dr. David Schumacher on Buy and Hold Forever: How to Build Wealth for the 21st Century, Steve Dexter offers common sense advice on determining value, choosing tenants and managing property. See the following article from JasonHartman.com for more on this.
Real estate expert and writer Steve Dexter, who shares author credit for “Buy and Hold Forever: How to Build Wealth for the 21st Century“ with long-time mentor, the late Dr. David Schumacher discusses why in the arena of real estate investing, owner landlords ultimately triumph, although quick income earned from riskier flipping can finance purchase of income-producing property. Investors can’t afford to ignore the advantage real estate offers as the best legal shelter for taxpayers.
Assessing Future Value Of Real Estate
Dexter defines value as “the contemplation of anticipated benefits” with neighborhoods the “storehouses of value” key to investment potential. While middle-class neighborhoods tend to suffer blight with age, the reverse can also occur, and blighted areas like inner cities can undergo re-gentrification, regaining value as demographics shift.
Dealing With Tenants
Dexter is currently working on a book that includes strategies for achieving zero vacancy and eliminating rental income gaps. When screening renters, be alert to signs of trouble, including attitudes of entitlement and helplessness. Avoid the common mistake of inexpert landlords who start out as softies and only get tough after it’s already too late. Wise landlords adopt a no-nonsense stance upfront, warming up to tenants only once they demonstrate their merit.
Consider Being Your Own Property Manager
Self-management of property is feasible, even from a distance, and it doesn’t have to be an all-consuming job if you have a system in place for billing, upkeep, and the like. Recognizing that “tenants are on-site property managers,” it pays to develop the right relationship. And don’t be afraid to invest in potentially profitable Section 8 property.
With mounting delinquencies adding to the millions already in the foreclosure pipeline, and bankers reluctant to release a flood of REO properties on a distressed market, Dexter predicts that credit is going to be tighter and demand weaker. Rents won’t see growth in the period just ahead due to record vacancies and supply excess. But there remain hot markets like San Antonio, ripe for fast flipping to bankroll buy and hold real estate investments.
What’s In Store For The US Economy?
Dexter wonders if – like Japan in the ’90s – America might be in the midst of its own “lost decade.” But “demographics are destiny,” especially in real estate, where growth translates into a greater need for housing and a larger pool of renters. Our expanding population makes the US market less vulnerable in contrast to the shrinking Japanese populace.
This article is based on Episode 176 of Jason Hartman’s Creating Wealth Show. You can listen to the full podcast at JasonHartman.com, an investment property and wealth creation site.