Real Estate Investing: A Team Business

Working as a team when in investing in real estate has many advantages over going it alone. If you’re considering getting into the real estate investment market, you should take the time to decide if you can go it alone or if you should work with a team. Many small business owners are quick to think that it can be done alone, but realize when it is too late that they don’t know quite as much as they thought they did. There are only 24 hours in each day. No amount of knowledge can overcome a lack of time, which is why Jason Cohen Pittsburgh’s investments are always a team effort.

Because you’re building your team from the ground, you get to decide which roles will be represented and who will fill those roles. Some roles are necessary at an early point while other roles can wait until your business grows. Some of the essential roles are bookkeeper, assistant, and a communications specialist. All these positions can be filled by one person at the onset, but be sure to stay aware of when changes are necessary.

As a small business owner in the real estate investing industry, you need to know where you stand financially with every deal you make. You must know your budget. If you don’t know how much money is in your bank account, you can quickly add hundreds of dollars in overdraft fees. You also don’t want to be in the middle of a deal and have your credit turned off. It’s embarrassing and unnecessary. The function of a bookkeeper is to keep track of your finances, pay your bills, and help you stay on budget. If you are not ready to add staff just yet, you can look into hiring a service or a freelance bookkeeper.

Having an administrative assistant may sound like a luxury, but there may come a time when you realize that it is a necessity. If your list of phone calls to return is growing, if your voicemail is filling up on a regular basis, and if you’re forgetting to appointments, it may be time to hire an assistant. The main function of an administrative assistant is to answer calls, schedule appointments, type memos and reports, and assist with any other organizational tasks that arise.

A communications specialist will handle your marketing functions. The main function of this individual is to create your presence to build your reputation by telling the market all about you and your business. Online, a communications specialist will create your website and social media sites. Offline, a communications specialist will create your advertising campaign. Without a communications specialist your administrative assistant won’t have many appointments to schedule.

As your business grows, you’ll add more positions. You may hire a contractor to help with major repairs. A property manager and a handyman may become necessary if you are going to have tenants. You should also develop a close relationship with your insurance agent and loan officer.

When you have the perfect team, you as the investment business owner, can focus on what you do best while your employees and consultants do what they do best. You are the real estate investment brain. At Jason Cohen Pittsburgh, we know that with the right team, you can grow stronger in the field and have a better chance of success.

Renting Post-Recession

The fluctuations of the real estate market correlate to the national economy as a whole. The Great Recession has made this fact apparent due to its particularly close link to real estate. The economic downturn officially lasted from December 2007 to June 2009, kicked off by the burst of the housing bubble. The Recession affected millions of Americans regardless of their existing financial situation. Jobs were lost. Incomes froze and incomes dropped. Consumer spending decreased significantly. Houses lost value. Interest on some mortgages was variable, making monthly payments unaffordable. And, for those just starting out in their careers, priorities had to be separated by needs and wants. The changes that people had to make to survive through the economic downturn are now the new economic reality. At Jason Cohen Pittsburgh, we’ve seen owners turn to apartment residents and seen others reluctant to even enter the world of home buying. The Recession has changed the way many think about housing.

When it comes to homes, bigger is not always better. Large houses have many rooms that require expensive cooling and heating bills. These larger houses also tend to have proportionately larger yards that require maintenance, which eats away at a thin budget. The more that’s in a house means the more there is to repair, so large homes tend to have large price tags for maintenance as well. Many large homes are in the suburbs or rural areas, which allows solitude. However, solitude can feel like isolation when you have to cut spending.

Smaller living spaces are falling into favor with not only empty-nesting baby boomers, but also the younger generations. By moving to a more urban area, they cut the need for a car for every jaunt to grab a few groceries. Families that live in suburban areas spend about 24% of their budget on transportation. Compare this statistic to 12% for those living in urban areas with walk-able neighborhoods. Smaller living areas take less energy to heat. And, if the small space is drafty, it costs less to fix. Morning rush hour is much less stressful reading a book on the bus or getting a brisk walk in before sitting at a desk for 8 hours. Public transportation can also be cheaper than driving and paying to park.

While the suburbs have many great attributes, the cities and towns with a business district have many advantages in this new economy in addition to saving money. Being close to stores, entertainment, friends, and family can not only save money, but can add enjoyment. Cutting the car rides and more expensive bills in favor of a smaller, more convenient apartment has been a popular choice in this new economy.

The economy is recovering — slowly. The adjustments that many had made to survive during the Great Recession have become a part of daily life. These changes make sense economically and socially. Finding a great neighborhood in an affordable city, such as Pittsburgh, can help you enjoy life, save time, and save money. Jason Cohen Pittsburgh can help you find the perfect apartment that offers a full complement of nearby attractions without breaking the bank.

Renting in Retirement

We talk a lot at Jason Cohen Pittsburgh about the benefits of renting for college students or recent grads. But that’s because Pittsburgh has a huge college presence and is a city that’s getting younger. We don’t talk a lot about the benefits of renting a home for retirees.

You usually think of retirement as a time when you’re slowing down, when life is about relaxing and enjoying what you’ve earned in your years of working. But, things are changing. People are living longer, and they are often working well into their golden years. The current economy may not allow for the leisurely retirement of yesteryears. With this climate in mind, renting a home instead of buying can have several benefits for retirees.

Buying a home can give a sense of security. It’s permanent and yours. However, it also comes with additional responsibilities that can offset that peace of mind.

If you’re weighing buying vs. renting in retirement, ask yourself the following questions:

Do you want to use retirement plan money to buy a home?

Unless you sold a previous home for a profit, you may have to withdraw retirement money to use as the downpayment. This cuts into your budget.

Do you want a permanent residence?

Some people retire in their hometown while others want to use their years off the job as a time to explore. Renting allows you the freedom of exploring different areas whereas buying requires more surety. Unless you are absolutely certain of where you want to retire, it may be best to rent first, at least until you’ve done a bit of exploring.

Do you really want a 30-year mortgage to start when you’re 65?

Let’s say you do get to retire at a traditional age — you’ll still have a mortgage until you’re 95.

Do you want to deal with banks and loans and all the other tedium that accompanies a mortgage?

You probably didn’t want to deal with this the first time around.

Above all, isn’t it time to enjoy retirement? That means, do you want a mortgage hanging over your head? Do you want to be responsible for unexpected expenses and unwanted repairs?

Basically, the question of owning vs. renting in retirement comes down to how much work you want to do at this time in your life. At Jason Cohen Pittsburgh, we try to take our residents’ minds off their apartments. That’s the major benefit of renting. It may cost a bit more per month, but that cost is consistent and the burden of maintenance is on us, not you. Ask yourself if that is something you value in retirement.

Millennials as Perpetual Renters: What this Means for Multifamily Real Estate Investors

The Millennials, aka. Generation Y, graduated college with $1 trillion in student loan debt. They graduated into an economy where jobs were scarce, lay-offs routine, and competition high. They are aware that spending their entire career with one company is likely an archaic notion. They remain single for longer. The get a job, get married, buy a house, raise a family, and retire from the company  template doesn’t apply anymore.

Amongst other names, they have been called Generation Rent. They are a viable demographic for multifamily real estate investors like Jason Cohen Pittsburgh to target when repositioning real estate as apartments.

Jason Cohen Pittsburgh apartment

Why Millennials Are Renting:
They may rent forever. Already saddled with debt and often working lower-paying jobs, Millennials are reluctant to take on more loans, like a mortgage.

Jobs are few and far between and the competition is high. And, many employers haven’t exactly proven themselves to be stable or loyal. Gen-Y’ers may need to move frequently to find employment. They can’t be tied down to a house. So they rent.

They also know that a start-up may quickly be brought down, the corporation may lay off a floor of employees, or their job will just be outsourced overseas to save money. Jobs are volatile and Millennials don’t want to worry about paying a mortgage, and possibly facing foreclosure, during the next bout of unemployment.

They also entered the workforce either just prior to in the middle of the housing collapse. They heard the horror stories of burst bubbles, foreclosures, toxic loans. It just doesn’t seem worth it to many when they can rent for a set cost per month without getting hit with unexpected home improvement expenses that they haven’t budgeted for (with obligations like repaying student loans). They’ve also seen houses sit on the market for prolonged periods of time. They can’t wait indefinitely for a home to sell that if they have to relocate for work.

Take note multifamily real estate investors — this young generation may already be too jaded as a whole to do anything but rent.

What Millenials Want in an Apartment:
Millenials are often willing to sacrifice space for convenience when it comes to apartments. When targeting this market, multifamily real estate investors would be wise to reposition buildings in prime locations into hip apartments. An often itinerant generation, Millennials don’t have the amount of stuff of other generations. They will take a smaller apartment if they city can be their living space.

Their unwillingness to take on more debt often extends to cars, and many Millennials choose public transportation, biking, or walking. Smaller apartments within walking distance or on bus lines are often preferable than expansive units that require a car for accessibility to work and their social lives. Also, a place to store their bicycles is a huge plus.

This is also a generation almost defined by its technology. Millennials are responsible for many tech start-ups and are known for never being without their devices. Wireless Internet is huge for this population. Many Millennials drop cable because everything they want is accessible online.

The major competition to multifamily real estate investors when aiming rental properties to Millennials comes from an unexpected source. Parents.  Sometimes, the rent is too damn high, and Millennials have demonstrated a willingness to move back in with their folks.