Memphis Real Estate Investing with MemphisInvest.com

Why Use Remote Property Management? There are many reasons but the biggest may be the advent of technology that can help an investor know the exact status of their property from 5,000 miles away.  Generally speaking, technology takes many forms. Technology, like water, fills whatever container it finds itself in. Recently, technology has been placed in a new container known as remote property management. Remote property management is the use of technology, specifically the web and mobile devices, to track and manage investment property regardless of its geographic location.  Over the years, Premier Property Management of Memphis has been implementing technology to help not only investors but also tenants, contractors and field agents to stay connected with up-to-date an up-to-the-minute information.

Remote Property Management Defined

The basics are approachable to even the most ardent technophobes. Remote property management is a set of tools that allows you to perform landlord-like functions from anywhere. It allows an investor in Florida to manage property in Memphis, TN. Remote property management can be a combination of accounting, document management, maintenance tracking, etc. but available securely on laptops, desktops, and mobile devices. The information is always at your fingertips whether you're in the office, on the beach, or relaxing with a good book in the park. The technology has been around in large commercial markets for years but has only recently transcended to the investment property market. As a result, trying to implement such a system as an individual could be difficult and expensive.  That is an advantge a company like Premier Property Management has when it comes to implementation.  Managing 1,020+ single-family homes gives Premier the leverage to put large scale and often expensive platforms in place that provide great access for remote investors.

Advantages of Remote Property Management

As I stated, the use of technology has been a tremendous asset for Premier Property Management and its implementation has been a fantastic benefit to the clients of Memphis Invest. This is possible because of the economy of scale (the exact same principle that makes buying multiple discount investment properties profitable!). Where it would be potentially unprofitable for an investor that owned 5 or 6 properties to implement such a system, a property investment company with dozens or even hundreds of clients owning multiple properties each has an advantage. This is why remote property management is important; Memphis Invest makes these services available to its clients who wouldn't otherwise have access to this technology. Additionally, it expands the concept of remote property management beyond the technology. This additional power comes from the fact that the software not only allows you to interact with the landlord-like features, but also interact with your property investment company more closely. It expands the scope by allowing investors the confidence to expand beyond their home geographic areas. Currently, Memphis Invest uses this technology to offer, manage, and maintain properties on their client's behalf in a nationwide scope while keeping the client involved in the process. As the technology matures within this new container the possibilities may very well be limitless. But today, remote property management offers a significant advantage over the competition and increases efficiency while decreasing overall cost of ownership. Image credit: svilen001

Recognizing market shifts

Imagine if there was a market shift in the technology sector that caused all technology stocks to temporarily drop. However, looking at the role technology plays in our modern lives, one could be confident that the prices would soon rebound. The situation just described is an example of undervaluation; or discounted property. It is analogous to the current state of the real estate property market in the United State.

Using Leverage in Property Investment

One of the most underestimated principles in property investment is that of leverage. A brilliantly simple way of understanding leverage was put forth by Eugene F. Brigham in Fundamentals of Financial Management (1995): "In finance, leverage is a general term for any technique to multiply gains and losses." This applies to Property Investment via the fixed asset nature of property. Lazymanandmoney.comcites one example of how this can be accomplished: "If one were to lock in the gains of real estate at year 8 (around $125K), the person could use the gains to buy three more $200K homes, getting more and more leverage." This is a very simple, yet effective approach to gaining leverage using real estate as a fixed asset.

Transparency in Real Estate vs. the Stock Market

One common observation in the last few years has been one that takes issue with transparency. Until recently, the commonly held knowledge was that stock investments were more transparent than other investment opportunities. There were several reasons for this belief: finance professionals such as traders were closely following the company practices, independent audits by accounting firms verified corporate claims, and the whole market is federally regulated. Once these protections were skirted by WorldCom, Tyco and Enron, transparency began to be examined more closely. Investment properties began to be seen as a stronger investment within the context of transparency. CNN Moneyput it this way: "Real estate, on the other hand, is tangible. You can check the basement, consult a termite inspector and make sure that nobody is building a pig farm next door....You can verify the property taxes, the cost of utilities and everything else about the property."

Turnkey Property Investment

Lastly is the question of ease of investment. There are companies everywhere willing and capable of helping investors choose, purchase, and manage their stock investments. A widely held misconception is that there aren't investment property companies offering similar services. Memphis Invest provides a variety of such services. Memphis Invest assists investors in identifying and acquiring undervalued properties, leveraging existing properties and holdings, and will ensure all the knowable factors are available to the investor in a clear, concise way. Image credit: Bubbels

Owning investment property can betime consuming. So much so that it can encroach and even eclipse other aspects of life. It can, at times, feel like a huge time-suck, compromising family time, leisure time, as well as time to extend and grow wealth. It doesn't have to be that way. There are ways to own investment properties, manage them effectively, and maintain their profitability, while preserving time to have a gratifying life.

Dealing with Maintenance

Maintenance is arguably the most intrusive. This is due to the nature of maintenance, which is a twofold obligation. Preventative and ongoing maintenance can be scheduled and executed by an individual or outsourced. This requires either setting time aside to do the maintenance or time working with the provider to schedule maintenance, ensuring the maintenance has been completed correctly and in a timely manner, then tracking and processing the accounting; be it to yourself or a provider. But no matter how efficient your preventative maintenance plan and accounting procedures, the second maintenance obligation is unavoidable. Emergency maintenance can surface for any property at any time. A good preventative maintenance plan can mitigate some of this, but nothing can keep lightening from blowing out a breaker panel, or a hailstorm from damaging siding. The tragic flooding in Memphis, TN in 2010 illustrate this point in striking detail.  Having a great property management team on your side to keep you informed of the condition of your property and alert you to any possible problems is another part of that preventative maintenance plan.  The flooding did not effect a single investment property of Memphis Invest clients, but they were kept up to date and aware of the conditions daily and that updating meant a great deal to clients in far away locations.

Managing Tenants

Tenants offer another opportunity for your investment properties to encroach on the normal course of your life. Keeping property occupied is an obstacle course not for the faint of heart. Placing ads, showing the property, doing background checks on potential tenants, keeping rental agreements current to ever-changing laws, and intelligently handling deposits are some of the initial burdens. This doesn't even take into account inspections at the end of the rental terms, hiring a cleaning crew, and returning deposits in part or whole. The monthly obligations build up quietly and slice out bits of time in small increments. Collecting rent, applying late fees as necessary, and depositing checks are unavoidable necessities for investment properties. But that doesn't mean it has to be your time that is consumed in getting these things done. Still more unfortunate circumstances occasionally arise such as eviction, removal of possessions, or the untimely demise of an otherwise perfect tenant.

Time and Property Management

What has been described here is somewhat minimal in that it does little more than keep investment properties profitable. There are other opportunity costs in doing business as described above. For example, if your time is spent keeping existing properties profitable the opportunity cost is that there is no time to expand holdings, and therefore, no time to expand wealth. Additionally, this situation implies a physical limit as to how many investment properties that can be owned and maintained. The problems may seem exasperating, but the solution is simple: engage a real estate investing company such as Memphis Invest to relieve you of these obligations so you can better pursue your lifestyle goals such as building wealth and spending more time with family. Image credit: bizior

Planning for Success Takes Preparation and Time

Real Estate investors should treat their investment properties just like a business and with every business there needs to be time set aside for planning.  The entire staff of MemphisInvest.com came together last week to present our plans for 2012 and the owners presented our plan to the staff of new programs, new cities, new hires, new promotions and the exact steps we were going to implement to grow over 60% for the second year in a row!  Spending five days together was fantastic for the entire team even though it really shook up our normal routines.  Planning for success and sharing as well as involving the entire team was by far the best thing we could have done to start 2012 with a bang!

Real estate is increasingly being added to the investment portfolios of Americans and more and more are looking for real estate to provide a passive income stream in their retirement years.  

Real estate ownership sometimes gets a bad rap from investment advisers.  They often prefer REIT's and other exotic forms of investing in real estate because it's easy for them to track and control their clients portfolios.  I don't begrudge them for that attitude, I just think it short changes an investor and eliminates a very powerful source of income when investors will need it most...retirement.