Here in the U.S., carpet is by far the most popular choice in flooring, and for good reason.

Carpet warms a room, offers colors and designs that other flooring choices can’t, plus it quiets a room, cutting down on the echo that other flooring choices cause.

HOW POPULAR IS CARPET?

It covers roughly 70% all home floors.

It isn’t without its drawbacks though. Carpet has an average lifespan of about eight to ten years depending on traffic patterns and quality. In addition, carpet is the least durable choice in flooring when compared to ceramic tile and hardwood flooring.

So when choosing your flooring for your Fresno rental property, give consideration to the design effect you are looking to achieve and how soon you might need to replace the flooring.

Carpet has an average lifespan of about eight to ten years depending on traffic patterns and quality. If you are deciding on flooring for a Fresno rental property, keep in mind that renters might appreciate the look of more expensive flooring (like hardwood floors), but they will never treat it as their own.

Thus, making standard carpet the least expensive choice now and over the life of the investment.

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From 2000 – 2006, according to The Skinny on the Housing Crisis by attorney and business writer Jim Randel,

“Home prices across the United States increased by 15 percent per year and 3 million new households became new homeowners.

During that same period, mortgage debt rose from $6 trillion in 2000 to $13 trillion in 2006—premised on the belief that housing values would always go up.”

If anyone is shocked at where we are in the current housing market, I would have them read the above paragraph again.

Fifteen percent a year increase, every year from 2000 to 2006. How could that last?

At the same time, Americans were more than doubling the mortgage debt they were carrying (from $6,000,000,000,000 to $13,000,000,000,000).

Inflated property values + Inflated debt load = Our current housing market

WILL THE CURRENT REAL ESTATE MARKET LAST?

Just as the real estate bubble wasn’t capable of lasting, neither are the current market conditions. This market will balance supply and demand eventually.

Prices won’t naturally rise, of course, until demand exceeds supply. This supply and demand battle will be on a market to market basis. Some markets, like the San Diego housing market, are already experiencing price increases.

THE TAKE AWAY

The lesson to be learned from this? The housing market is, well, just that, a market. Markets are cyclical - they cycle, in and out of favor.

Up markets are inevitably followed by down markets. In the three years from mid-2006 to mid-2009, the median price of homes in the United States declined 30 percent and one in four homes with a mortgage were worth less than the amount of mortgage debt on the property.

Buy low, sell high.

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Personally, the buy, rehab and flip market right now seems a lot more difficult, especially after you factor in short-term capital gains taxes. But the buy and hold investors seem to be doing well.

The later theory is based upon buying a distressed Fresno property now, repairing what needs repaired, building in some curb appeal and renting the property until real estate prices return someday down the road before you sell. The investors are filling a niche and that it part of what makes a healthy market.

NPR

National Public Radio recently broadcast a story looking into the idea that these real estate investors are actually helping to prop up the real estate market.

If you missed the original broadcast, click the play button below.

Fresno foreclosures aren’t only affecting the families that own and occupy the property in question.

A recent study released by Tenants Together (a statewide NGO for renter rights) claims almost 37% of all residential property foreclosures in California involved a renter in the property.

NEWLY DISPLACED FRESNO RENTERS

For every 10 homes going into foreclosure, four had a renter in the property. A renter that is now out of shelter.

The owner of the property, in some cases, was collecting the monthly rent check and choosing to not pay the mortgage on the property.Alarming when you think about the number of the renters who were paying their rent on time and knew nothing of the coming foreclosure.

The renter(s) were living up to their lease agreement and made sure to pay their rents in full and on time, only to have a noticed taped to their door giving them 30 days to vacate the reprocessed  home.

* You may have a similar experience yourself or know of someone who has been through this as a renter. If so, feel free to share your story below in our comments section. Your story might just help someone else.

Fresno real estate has seen a wild ride over the past ten years.

If you’re a property owner now, you know this better than anyone.

The price swings Fresno property owners have seen in the past five years can be unsettling, especially since a home can be the most valuable asset on a family’s balance sheet.

We think we’ve come up with a solution to help alleviate some of the confusion behind current Fresno real estate prices.

HAS THE MARKET STABILIZED?

The biggest question I get now about Fresno real estate is, “Has the market stabilized?” It is the most asked question I’ve heard from buyers since January 1, 2010.

With this in mind, we are proud to announce a solution geared towards giving Fresno home owners more information on their neighborhood.

My Fresno Home Value is now live and free to use.

Visit My Fresno Home Value and get a free digital report on exactly what is going on in your specific neighborhood.

You will be amazed at the detail you get for free in this digital report and we would love to hear your opinion of what you think.

Ask for the report and then leave a comment below as to your thoughts.

Realtor Magazine is reporting on a new study out from the National Apartment Association that states 76% of people surveyed say they would prefer to rent a home than buy one in today’s real estate market.

Three out of four people would rather rent a home, possibly your Fresno rental property, than buy a property of their own to live in. That’s amazing news if you own Fresno rental properties today.

MORE GOOD NEWS

Want more?

The 76% figure is up 5% from the 2009 survey results. More people would rather rent a property and pay your mortgage for you than last year at this time.

HOW LONG WILL THIS LAST?

If you have been thinking of purchasing a Fresno rental property there are plenty of reasons to back up your decision.

1. Adding an investment property to the asset side of your balance sheet might be a great move to diversify outside of the traditional stocks, bonds, and mutual funds that you might currently be heavily weighted in.
2. Fresno real estate prices have declined across the country in the past few years and you might be buying into an asset class during a dip – remember, buy low and sell high? Same rule applies to real estate.
3. Interest rates are near record lows. If you don’t have the cash liquid to buy the entire property yourself, borrowing money won’t cost you much when compared to historical interest rate levels.

THE TREND IS YOUR FRIEND WITH FRESNO REAL ESTATE

The same survey I mentioned above also states that 60% of current renters say they have no interest to change their current rental plans and will continue renting in 2011. Screen your renters well now, and you may have a steady stream of nice income for 2010 and 2011.

Only 12% of those surveyed plan on buying a home within the next 12 months. Now that the first-time home buyer tax credit is expiring, if your renters didn’t get into a home then they might just be your renters for months to come.

WHY RENTERS ARE HAPPY RENTING

Some 64% of renters that were surveyed reported that having no responsibility for major repairs or maintenance was the primary reason they prefer to rent instead of own their own home. You take away the responsibility for the repairs and maintenance from your renters and charge them a premium for that worry-free luxury.

The real estate market dip also has many Americans scared of owning property. The study reported that 33% did not like being impacted by an unpredictable real estate market or susceptible to foreclosure as a reason they prefer to rent vs. own.

By owning the property and renting it, you have taken away a major life fear from those who have been shocked by the last few years. Comfort breeds loyalty and this loyalty will be what pays your mortgage loan and then some.

The reasons for adding an investment property to your balance sheet are numerous and this study adds more.

To discuss adding a Fresno investment property to your portfolio, contact Fresno Realtor, Joseph Hollak at Keller Williams Realty Fresno.

Joseph has worked with investors all of his professional life and can help you with adding an investment property to your balance sheet.

Joseph can be reached at (559) 399-0006.

Feel free to leave your comments below.

GET USED TO IT

Here’s why:

“We start 2010 with some early signs of stabilization in the housing market, with house prices and home sales likely nearing the bottom sometime in 2010.

We expect that low mortgage rates, relatively high affordability and the homebuyer tax credit will help continue to fuel the recovery.

Still, the housing recovery remains fragile, with significant downside risk posed by high unemployment and a potential large wave of foreclosures.”

Freddie Mac Chief Executive Officer Charles E. Haldeman, Jr.

Yep.

Straight from Freddie Mac’s CEO.

THE GOOD NEWS?

We really know what we’re doing, and our clients love how we help them solve problems.

We can help you too. Really.

The main goal of investing a piece of real estate (other than your primary residence or a private vacation home) is to either create positive monthly cash flow, build equity or both.

BUY AND HOLD

One proven method for creating positive cash and building equity at the same time is to buy and hold.

With this strategy you simply buy the property and lease it out. It can work with commercial, residential and raw land property. You own it, but someone else pays you monthly for the right to occupy the property and / or use the space.

In some instances you can purchase the investment property that already has a tenant who have signed a lease agreement with the previous owner. This puts rental income in your pocket on day one.

While you own the property and employ a buy and hold strategy, your investment property is paying you a return in two ways. First, it pays you monthly income while you have a renter or tenant leasing the property. Second, as you hold (own) the property and collect lease income (cash flow), over time you stand the chance of the property increasing in value (build equity), thus allowing you to potentially sell the property at a later date for more than you invested initially.

BUY, IMPROVE & HOLD

A variation of the ‘buy and hold’ strategy is the ‘buy, improve and hold’ strategy. The only difference between the two is that the later might take more capital and work in the beginning but has the potential to earn you more in the future. Let me explain.

A ‘buy, improve and hold’ strategy looks just like the ‘buy and hold’ strategy from above, except in the fact that some improvements can be made or must be made on the front-end of owning the property. With these improvements you must see a return on your investment or else why do it?

With the ‘buy, improve and hold’ strategy you stand a chance of increased rental income than compared with the rental income from the unimproved property. In addition to greater cash flow, the improved property stands the chance of an increased sales price down the road.

Some of the improvements can be physical in nature such as structural repairs, adding additional square footage or adding amenities. Other improvements can be made through use or zoning changes.

REINVEST YOUR INCOME

Regardless of the approach you take with your Fresno area investment property, your goal should be to sell the property in the future for more than you purchased it, thus creating a profit. It is this profit that is a result of increased equity.

You can realize your goal of increased equity in the property, in one of two ways. Market conditions can raise the value of the property over time, thus creating equity in the property while you own it. And second, you can increase your equity by reinvesting the cash flow you receive from your renter back into the property by paying down the loan.

BE A DEMANDING OWNER / INVESTOR

If you are going to invest in Fresno area real estate be demanding in the sense that you will not violate the most important rule: Create positive cash flow and build equity.

Joseph Hollak is a Realtor living in Fresno California and working for Keller Williams Realty Fresno. He blogs and tweets frequently about real estate related topics in the San Joaquin Valley of California.

If you are a real estate investor in and around Fresno and you have turned to us to help you find, evaluate and acquire a piece of real estate investment property, then this book should be very familiar to you.

Every real estate investor we work with automatically gets a free copy of this book to add to their real estate library — If you’re a Fresno area real estate investor and you haven’t yet worked with us, we ask you . . . WHY NOT?

GET THE BOOK

We think owning this book and working the ideas presented inside are a must for Fresno area real estate investors.

In fact, don’t wait for us to give you a copy of the book; pick up a copy for yourself from Amazon and give it a read. You can find used copies and paperback copies that will make your purchase even more affordable.

VALUABLE INFORMATION

The book is full of valuable and usable information for the real estate investor. And, you don’t need an MBA in real estate to understand the concepts outlined in the book. But at the same time, this is not one of those “get rich quick with real estate” books that get peddled on a 3:00 am TV info-mercial.

The advice is practical, easy to understand and easy to execute. For example:

Buy It Right — Pay It Down — Pay It Off

This is how I want you to build your financial wealth through real estate.

When you “buy it right,” you make your money going in — you assure yourself of achieving the best of Equity Buildup and Cash Flow Growth.

When you “pay it down,” you will be adding even more to your Equity Buildup.

When you “pay it off” and continue to own it and rent it, you will bring more and more Net Cash Flow into your financial life.

AN ADDED PERK

The Millionaire Real Estate Investor is a great book with good information for the real estate investor and once you choose to work with us, expect a brand new copy of your own.

GET CONNECTED

Fresno real estate can’t operate in a vacuum. It takes the cooperation of buyers, sellers, investors and many industry professionals.

Because of this, it often pays dividends to connect professionally with others in the same industry, or others who have an interest in selling or buying real estate in and around the Fresno California area.

FRESNO REAL ESTATE COMMUNITY

If you have an interest in Fresno real estate or if you are connected to the Fresno real estate industry in some way or maybe you are a past client that we have helped, we invite you to reach out and connect with us in the digital realm.

Joseph is a licensed Realtor with Keller Williams and is quite active in the Fresno area helping real estate buyers and investors with their real estate needs.

You can view Joseph Hollak’s LinkedIn profile online and be sure to take a second to extend a LinkedIn invitation if you care to connect with him online.

Joseph Hollak can also be found online tweeting about Fresno real estate on twitter. Follow him on twitter and he may just follow you back.

It was a pleasure working with this husband and wife because they knew exactly what they wanted and what it meant to buy into a condo complex.

Not everyone has their real estate experience and that’s ok too.

CONDOMINIUM DEFINED

A condominium owner legally owns a single unit in a multi-unit building or complex.

In addition to owning that single unit, the owner also has a share and a right to use common property inside and outside the building (e.g. swimming pool, club house, gym, etc.).

For the right to use the shared amenities, the owner will usually be responsible for sharing the costs as well. The costs associated with keeping the common areas up and in good working order are shared and paid through monthly or quarterly Home Ownership Association (H.O.A.) fees.

H.O.A. fees can and will vary from complex to complex depending on expenses.

If you would like to discuss adding a condo to your real estate portfolio, Joseph Hollak can be reached at (559) 399-0004.

You’re probably here because you’re thinking about purchasing a rental property, and you need an investment property quick formula to help you evaluate if the property is a good investment or not.

First, congratulations on working to better your personal balance sheet with passive rental income. If you’re in Fresno County, we want to help you reach Fresno millionaire real estate investor status.

Second, let’s get to work.

GET CASH FLOW POSITIVE

A “cash flow positive” rental income property can be a great way to add annual income to your personal financial situation.

If you’re new to evaluating potential investment property deals, the process can be confusing and intimidating.

When working with a client to evaluate whether a property will make a solid, income-producing investment, there are a number of financial ratios and spreadsheets I run through before allowing the client to make an offer.

Sometimes the formulas say to move forward and sometimes the numbers just don’t add up and we pass on the property for a more lucrative deal.

Sometimes you can come across a piece of property for sale, you’re out in the field and don’t have all of the figures you need in order to evaluate the property, or you want a quick formula to run on your own before asking me to step in. I have that quick, first-step formula for you here.

THE QUICK FORMULA

As a general rule of thumb, a real estate investment property is considered a “good buy” if it can be purchased at 100 times the property’s monthly rental number.

100 (x) monthly rental rate = quick formula value

For example, if a property expects to earn you $1,500 a month in rental income, a purchase price of $150,000 or less for the property is considered a potentially favorable investment.

100 (X) $1,500 = $150,000

Is this the only formula for evaluating a potential investment property? Definitely NO.

This is a quick formula, a first-step evaluation that can be done in your head and on-the-fly and by no means a complete investment property evaluation. For that, you bring us in to complete our full-service property eval to help you to decide if you should proceed with the deal.

THE QUICK FORMULA REVERSED

This also works in reverse as a quick formula for evaluating what a property can potentially earn you in rental income, in order to be consider a good investment.

If the property is selling for $150,000 and you are wondering what a decent amount of rental income would be, simply divide the purchase price ($150,000) by 100 to arrive at a monthly rental rate ($1,500 or more) that you would hope to get. Of course there are a multiple of other real-world issues to take into account, such as actual neighborhood rents, quality and condition of the property, housing trends for the neighborhood and city, etc.

$150,000 (purchase price) / 100 = $1,500 (potential monthly rent)

THE BOTTOM LINE

Now you have an investment property quick formula you can use to evaluate rental property deals without being in front of your finance calculator or spreadsheet.

If you are in Fresno County and you’re considering an investment property, fill out the form below and give us permission to e-mail you a list of the best looking investment property opportunities. And yes, we’ll do this absolutely free.

DECEMBER 10th, 5 PM

The first installment of your annual property tax bill was due back on November 1st. If you haven’t paid this first installment yet, then you have until December 10th (that’s today) at 5PM to get it paid or else the state will consider this payment delinquent.

THE FIRST INSTALLMENT

Officially the first installment for half of the taxes on the property becomes due on November 1st and is delinquent after 5 PM on December 10th.

THE SECOND INSTALLMENT

The second installment (for the second half of your annual property tax bill) is due February 1st and is considered delinquent if not paid by 5 PM on April 10th.

For additional information on property taxes, visit with your trusted tax advisor.

“Real estate cannot be lost or stolen, nor can it be carried away.

Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”

- Franklin Delano Roosevelt