If you have, or are writing, a will, then you have a choice in what happens to your estate. A will is always advisable, as it lets you choose who receives what, such as your valuable property, as well as determining who has the right to become your personal representatives or Executors, otherwise known as Grant of Probate.

Without a will

When there is no will, however, then the estate is divided in accordance to intestacy rules. This determines who receives what, as well as who is given the legal responsibility of overseeing your estate. These personal representatives aren’t given Grant of Probate, but Letters Of Administration allow them the same right; again, this is often decided by rules of intestacy. The important aspects you need to know are:

• A spouse is given priority when it comes to your estate, as the most direct relative. However, it should be noted that only married or civil partners are considered for this. Live-in partners that aren’t legally registered, for example, will not be counted.
• Likewise, the rules don’t give everything to the spouse. In many situations, there is a certain limit to which the spouse or partner is allowed. Given the amount your properties may be worth, this is something worth looking into, and another important reason to draft up a will.
• Only property you solely own will be considered as your estate. In most cases where there is joint ownership, possession is given to the remaining owner(s).
• After the spouse, the closest-most next of kin, such as children, siblings and parents, are considered. After this are further removed ‘classes’ of kin. It should also be noted that intestacy rules have a very strict and direct order in when it comes to determining who receives your estate.
• If no kin can be identified, your estate (including any and all properties) are given to the Crown.

Hopefully, this should encourage you to write a will, leaving specific instructions as to who gets what. Given the nature of your property as a landlord, it’s arguably you have a specific receptive in mind.

But whether you’re a returning customer or perhaps are buying an Apple product for the first time, a new computer is a serious purchase. With this in mind here is a look at the top Apple computers on the market, and a guide to which one is right for you.

MacBook

The classic MacBook model offers a range of benefits for anyone looking for their next computer. Only 1.8″ thick, this is an incredibly light machine making it perfect for portable working and travel. Because it’s an older model, it’s also very reasonably priced, and you still get a lot of computer for your money.

The hard drive availability ranges from around 80-120GB and it boasts extremely fast processing time. This is arguably the most basic in the Apple range but it’s an excellent choice of computer that suits a wide cross-section of customers, from businesspeople to students.

MacBook Pro

If you’re looking for the Macbook, but prefer a model with that little bit extra, the MacBook Pro is the computer for you.

It features the latest in graphics cards, great resolution and 2.33 GHz processors. In terms of aesthetics, there is also greater choice when it comes to your preferred screen size. You can opt for either the 15″ or a 17″ screen, making it a better choice for people who like to watch TV shows or films.

This is a more expensive model than the standard MacBook, but if you’re on a budget there are outlets that sell Macbook Pro models second hand  and you can always go online to trade your own model in and generate cash for a new purchase or upgrade.

Mac Air

If you’re looking for a portable solution that offers the speed of a regular computer but the ease of a tablet, the Mac Air could be right for you. This is the lightest and slimmest in the Apple computer range but with a sturdy aluminium body it still manages to be rock solid and durable. It comes with an excellent range of built in apps and functions alongside access to the comprehensive App Store. It also runs OSX Mountain Lion, meaning it’s super quick to operate. You can choose from the 11” or the 13” in the Mac Air range.

iMac

The iMac is the comprehensive at-home computer choice on the market, featuring NVIDEA graphics and a superb quality LCD wide screen. With 75% less reflectivity than other screens, it’s a perfect home theatre solution as well as a functioning computer.

The OSX Mountain Lion Operating System makes it both lightning fast and simple to use. The choice of an iCloud app means it’s easy to link you iMac up with your other Apple products, like your iPhone, iPad and iPod for greater connectivity and portability.

Karen Hoyle is a dedicated technology blogger with a keen interest in Apple products. Having owned many of them herself, she understands the benefits of going online to sell Macbook pro models and other unwanted pieces of technology.

Many people avoid integrating real estate into their retirement plan because it scares them. Maybe because it is uncharted territory, or perhaps because they don’t want to be a landlord. Despite other people’s reluctance, there are many great aspects of real estate investing that make it a great part of anyone’s portfolio. As Fox business mentions, people are living longer so young adults can use every little bit of help to save for retirement.

Why Real Estate Can Help You In Retirement

There are many reasons why real estate investing can help your retirement:

Build Wealth Faster

One of the great aspects to real estate investing is the ability to finance 80-97.5% of the value of a home. This means that you only need a small amount of money to acquire an asset that is worth more. This is also known as leveraging your money and is extremely important because it allows you to build wealth faster. Think of it this way. Why not buy a home worth $100,000 with $10k down. If the property value increases at a rate of 4%, you get that four percent on the entire home – not just your initial $10k. As long as you can have someone pay the mortgage and most of the expenses, you are coming out ahead. By the time you reach retirement, you can have the mortgage paid off and have a nice little cash flow.

Rent Increases Each Year

If you are a smart investor, you will increase rent each and every year. This not only means that your income will raise with or more than inflation, but it means that your profit is higher each year. If you don’t need the money right now, why not put it towards upcoming maintenance or to pay off the mortgage that much faster.

Landlord is a Nice Part-Time Gig as Retiree

While most people hate the idea of being a landlord, I love it. Sure, I don’t look forward to any weekend calls when a toilet is running or any of the other popular maintenance issues. But, what I do know is that I like to keep busy. What better activity to feel like you are still active than be a landlord. I would hate to be a greeter at Walmart. What I don’t mind doing is maintaining one of the few assets that I own. In a way, you can see it as a high-income job. Since the mortgage will be paid, you most likely have a high income from your rental property. Spending a couple hours a month to get hundreds or thousand(s) of dollars? Yes, please!

While most people forget how important real estate is in any retirement plan, I am not committing the same error. Funding your future can be confusing and real estate can make the calculations even more complicated, but the benefits are too good to ignore.

Paying Cash

The first alternative to buying a rental property is to pay all cash.  This requires having a large sum of money, because most rental properties are more expensive than traditional homes.  However, if you have the cash, this could be a good option.  If you are going to use all cash, you should look at the return you’re going to get on your investment.

For example, if you pay $500,000 in cash, and the free cash flow after paying expenses is $50,000, you would effectively earn a 10% return, which is great.  However, if you only are earning a free cash flow of, say, $5,000, putting your money in a CD is probably a better investment.

Hard Money

Hard money lending is a form of lending where you as the buyer get a private lender (or hard money) up front, and then pay all cash for the property.  Typically, hard money lenders require several points up front, as well as higher interest rates than traditional mortgages.  If you are planning on holding the property for a long time, this probably isn’t the best option.

Using an Existing Property

If you already own a property, like a single family home, and have a lot of equity in it, you may consider taking out a home equity line of credit, or even a mortgage against it, and then use the proceeds to buy the rental property. This will let you take advantage of the low rates, while using the money for a rental.

Mortgage Financing

Finally, you can always get a mortgage on your property.  Since it is an investment property, you usually can’t get the lowest rates in the market – you will usually be about 1% higher than the best rate – which still isn’t a bad interest rate.  If you are planning on getting a mortgage, you must be a very qualified buyer:

• You must put at least 20% down payment, but most likely 25% or more down
• You will most likely need a credit score higher than 750
• Your lender may require you to get mortgage insurance unless you are putting 30% down (and the mortgage insurance premium may be more like 3%, instead of 1% like a owner-occupied home)
• You must maintain a least 6 months reserves for all properties, including the one you are looking to purchase
• If you have any other rental properties, you must provide at least two years of documented tax returns proving the income

While difficult, it is not impossible to get a loan for an investment property – you will just need to work hard at securing it.

Don't Miss a Step!

Assess Why You Want To Buy It

The first thing need to do is figure out really why you want to buy it – beyond just the fact that “all rich people seem to own real estate”.  It is important to remember that real estate is a cash flow investment – it is designed to provide free cash flow and it has some tax benefits that can improve the tax treatment of that cash flow.  If there is any price appreciation, it should be considered a side benefit from the cash flow of the property.

If you don’t want a cash flow investment that requires some management, real estate might not be for you.

Figuring Out Financing

The next thing you need to do is figure out how you’re going to finance or pay for the property.  Since the Great Recession, lending standards have become much more strict, and it can be hard to get a loan for a rental or investment property.  Make sure that you have a way to finance the property before you make an offer.

Understand Local Laws

You need to also figure out and understand any local, state, and federal laws that could apply to you as a landlord.  Every location varies, and you need to know exactly what it will take to be a landlord.  For example, some places have rent control in place, which could put a limit on what you could charge for rent.  Other places require all landlords to register with the county, and some places even require landlords to get special permits or even put a deposit down with the county.

You also need to stay up to speed with federal law, especially if you have an older building that you plan to rent.  For example, the EPA requires that landlords disclose any lead that may be present in the pain in the rental.  This is just one example of laws you need to comply with.

Watch Your Cash Flow

Finally, you need to calculate out your cash flow.  You should look at what you could possibly rent the property for, and the subtract out all your expenses – mortgage, insurance, taxes, maintenance, and more.  You also need to consider vacancy expenses, in case you have to go a month without a tenant.  That is the only way you will know if your property will be cash flow positive or cash flow negative.   You should also plan out multiple rent scenarios before you buy so you have a good idea of what you are getting into.

My Ideal Plan – Leveraging Your Money

If you have read my previous post, you will know that my ideal plan would be to buy a property and take out 80-85% of the capital in order to put it towards the next investment. I would then be able to buy the next property as soon as I can raise another 15-20% to buy it in cash. Depending on how large of prices I am dealing with, this could happen in just a matter of months. The idea is that once you get a renter in one property paying for the mortgage, taxes, fees, etc, you are able to go out and buy the next property. It requires a little bit of supervision and management of your properties, but it’s minimal in the grand scheme of things.

The clear advantages are as follows:

1. You can buy properties much faster as you don’t have to wait until a property is paid off.
2. Even though you have more debt, you have more assets that are susceptible to inflation

The only disadvantage to this path is that you are putting yourself at more risk. There is a chance that you have to evict a tenant or pay large maintenance fees all in one month. If you extend too far, you can put yourself in a compromising situation. There is also the risk of lenders no lending to you anymore because you are too risky of an investor. As far as I see it, as long as you have a steady flow of income from rent for your properties, it shouldn’t be that much of an issue.

‘Pay as You Go’ Route

The alternative to this route is trying to minimize your risk as much as possible. This involves trying to hold no more than one mortgage at a time. My friend is currently trying to pay off his mortgage years ahead of schedule. With the money that he would normally be putting toward his mortgage, he plans to buy an additional property and rent it out. Not only would the tenant be paying rent that would be put towards the mortgage, but my friend would be paying a large sum each month to this new property (again, since he has no mortgage payment of his own). This would effectively pay off his second property’s mortgage within just a few years.

The truly remarkable thing is that once he has two properties, one of which has a renter, he would be able to pay off the third (which would again have another tenant) EVEN FASTER.

The benefits of this approach are as follows:

1. Minimizing your risk, and making sure that you can always afford the mortgage payment no matter what happens
2. This route also minimizes the interest that you would pay, as you are only holding the mortgage for a fraction of the traditional length

The major disadvantage is that it delays growth. Instead of buying a property every year or so, you are buying properties once every 4-5 years, at least at the beginning. While this could have an inherent benefit, at worst it forces you pay an inflated cost of the future properties. I tend to think it would be better to buy the property now and lock in the price and mortgage payment now.

What do you think? Which route is better for you?

While I don’t have time to cover all of the ways to finance a home, there is a simple calculation that every investor must perform to make sure they are putting the right amount of money down for the down payment. Investing too much in your down payment can limit how fast you can grow as a real estate investor and put your money to waste. On the other side of the equation, investing too little in your down payment can put you at risk of not having a positive cash flow. So, it’s important to find a happy balance.

Best Way to Calculate Down Payment

There are three things that you need to consider when calculating how much to invest as a down payment for financing. Unless you are buying the property in cash (which would limit your leverage), this is something you need to know. The first is how much money in reserves that you have. Do you have enough money to weather a storm? Investing too much without an appropriately-sized emergency fund can cripple even the most cautious real estate investor.

The last two things you need to consider are the cash flow and leverage. On the one hand you need to make sure that you have a positive cash flow, but you also need to want to invest as little as possible so that you can leverage your money and grow your investments at a faster rate (why use your own capital to grow investment when you can use someone else’s?).

The best way to figure out the sweet spot is to first figure our what your income to expenses looks like. Add up what your monthly income (rent) will be from this property. Then, subtract the expected fees (maintenance, taxes, property manager, etc.). Once you find the difference, you now know how much income you have left to pay a mortgage. Then, use this number to calculate how much you would need to invest to keep your payment under this number. In other words, how much do you need to invest to keep a positive cash flow. Here’s an example for a better understanding.

Property Price/Value: $100,000

Monthly Income (Rent): $800
Monthly Expenses w/out Mortgage: $300

Cash Flow w/out Mortgage: $500

Approximate Down Payment for Positive Cash Flow: ??

20% Down ($20,000), Monthly Payment = $429 | Positive Cash Flow = $71

While everyone’s comfort area is going to differ, I prefer to have a little bit larger of a cash flow from a rental property because I know there will be some initial maintenance issues at the beginning. So, I might put a few more thousand down to lower the monthly payment. It is important to remember that rent will increase with time, while your mortgage payment will stay the same, so your cash flow will increase as time goes on.

There was a two-family property listed on my street a couple months ago. I looked at the price of the house and it was literally 1/2 of single family homes in the same neighborhood. I did the math and even with high taxes and expected maintenance on a property that old, it would be profitable. The only problem, is that it was listed as “needs a lot of TLC (Tender Loving Care)”. You know it’s bad when people make it clear from the beginning that it’s a project. As someone who is looking to get into real estate investing for the first time, it kind of scared me away. Too many thoughts of “what if this went wrong…?” or “Am I failing to consider a maintenance expense?” kept me from acting on my entrepreneurial spirit. It did, however, get me thinking about whether you should buy a fixer-upper as a real estate investor.

If you are a real estate investor, looking to maximize your cash flow, you may be tempted to buy a property that needs a little work. This can be a great way to lower your monthly mortgage (i.e. your expenses) and earn a larger profit each month. But, before you jump on board, you need to consider the pros and cons of such a choice. It’s not always fun and games and as we always say, it’s important to do your homework before investing.

Is the fixer-upper too big of a project for you?

The Lure – Why You Should Buy a Fixer-Upper

Buying a property with a lot of required maintenance at the beginning can have a lot of potential for a new investor. Often times, the previous owner will be selling for a few reasons: 1) it is their personal home and are moving, 2) they are using it as an investment, but are tired of managing it, or 3) want to liquidate some of their assets, or 4) they are losing money on their investment and want to cut their losses. Most of these reasons are beneficial for you, if you are willing to put in the time to manage it.

If a property needs work, you may be able to save a lot of money in the repairs by either doing it yourself or through some connection that you have. If you are handy, why not do some of the repairs yourself if you have the time? The true benefit of finding a fixer-upper is to offer low, knowing that the seller understands the time commitment that is required to bring it up to par, and be able to save some money on the repairs.

The Down Side – Extra Time Involved

The obvious down side to buying a fixer-upper is that it significantly increases the time involved. Even if you don’t do the maintenance yourself, you still need to get quotes, manage and deal with the carpenters/repair individuals, and most likely live without a tenant for a little bit while maintenance is being done. This extra commitment may be too much for the ordinary person. If you are working full-time and trying to investing in real estate on the weekends, it may be too much to handle. It’s less expensive for a reason!

Ultimately, I think it comes down to what you expect your time commitment to be. If you enjoy this type of stuff and want to spend your free time improving a home and getting it ready to rent, you might as well save some pennies and invest in a fixer-upper. If you are just looking for a nice passive income stream, you might want to re-think your choice. There are better ways to spend your time.

I recently read an article on the Wall Street Journal about the details of building high-end properties for the wealthy. While there are perhaps too many details to bore any “normal” person, it did get me thinking about the fastest way to build wealth via real estate. As I see it, there are several advantages that high-end real estate investors have over average guys like me.

Large Capital – While I am not using this as an excuse for my slow start, it is much easier to create a cash flow or wealth with a lot of money to start with. The old saying, ‘you need money to make money’ remains true in this instance. To buy a high-end real estate property, you need the capital to even be considered. If you don’t have any money or wealth to start with, it will be a long way to the top (if it’s even possible).

Better Market – The best secret in any business is providing a service or item that markets to people who don’t care about how much they spend. While marketing to the rich is obviously one of these situations, it doesn’t have to be. Think about the time you went on vacation. I bet you found yourself giving in to those urges to splurge more frequently when you were on vacation. It’s the mentality that “it’s okay to splurge on this or that” that is extremely profitable. High end real estate investors capitalize on the wealthy’s desire for fame. The selling point is something along these lines:

You need this expensive condo if you are going to entertain people in your field. Which will lead to more opportunities down the road…

Without having to say it explicitly, real estate investors are able to sell an over-priced property to an ambitious person with money.

Investing money is all about leveraging your money. The more leverage, the faster rate of growth. While it is not impossible to move you way up the socio-economic ladder, it is the fast track to success.

Increase Your Cash Flow

Location, Location, Location

The first and most important factor in determining if your rental property will be profitable is location.   But location has many facets, including neighborhood, schools, crime, jobs, amount of available rentals nearby, area rents, and more.  Each of these plays a role in determining profitability, but you should look for a property that has the best of as many as possible.

For example, rental demand plays a huge role.  So, think about neighborhoods that are near areas where there are lots of renters – colleges, universities, and urban areas.  Then, look for the amount of vacancies in an area – the lower the better.  Finally, look at what the rents that nearby rentals are charging.  If this rent covers all your expenses and more, then you’re in a good place.

The best areas for non-college area rentals are then areas where there are lots of jobs, but transient populations.  Near large military bases, near large corporate headquarters, or other areas of similar job markets.  These are typically areas where individuals get assignments for several years, and want to rent versus buy.  In these areas, schools and crime play a big role, as well as the home’s amenities.

Amenities

Amenities play a huge part in whether a rental property will be mediocre or very profitable.  However, they are definitely secondary to location, because in some locations, demand is so high that amenities play no part.   But as demand for rentals drops off, amenities play a bigger role in whether your property is enticing or not.

Some key amenities that are the most important for renters include laundry and covered or garaged parking.  The reason is convenience.  No renter wants to have to go somewhere else with their laundry, or pay a service to do it for them.  The same is true for parking – after a long day at work, renters hate having to find a parking spot and then walking to their unit.

Other amenities that could make a difference is common areas, pools and spas, gyms, and even lush landscaping.  Some tenants also look for utilities to be included so that they can pay an overall flat rent that includes everything.  And finally, some renters are even looking for furnished apartments, which can really raise the rents.

General Condition

Finally, the general condition of the property matters.  It matters not just from an expense standpoint, but renters don’t want to live in filth and non-maintained units.  As a landlord, you need to make sure that you keep your units up, keep them clean, and maintain an appearance of a modern apartment.  This will help you maintain good rents in your area, and improve profitability.