Real Estate – Rock Solid

The value of American housing sales in 2007 was $1.15 trillion with a total volume of some 5.85 million homes. More than 28 percent of these houses were purchased by average Americans for the explicit purpose of renting the home to a tenant. These investors defy the popular notion of a real estate investor as a slumlord or TV huckster. Most real estate investors are average Americans looking for an investment alternative to the Wall Street roller coaster ride. ACCIDENTAL MAJORITY Wall Street has been selling trust, reliability, and predictability. Blue chip stocks and bonds bought from reputable brokers were considered the safest and most potentially profitable. Recent actions by formerly respectable firms and individuals have changed this forever. Many investors are moving away from Wall Street and into real estate and discovering real estate’s numerous advantages. Real estate has intrinsic value. No one can live in a stock portfolio. Even if property values drop, a landlord still owns something. The house is still there, and tenants are paying rent. Under any circumstances, residential real estate has value to the current owner, any renter, or any future buyer. The value of real estate seldom, if ever, drops to zero. Rental income provides inflation protection. Traditionally, Americans are heavily invested in residential real estate because of their home ownership. Some buy and hold houses for rental purposes. Others inherit a family home. Americans who have to relocate become accidental landlords when renting out a family home is the better alternative to an empty house and second mortgage in a slow real estate market. See Figure 1, page 7 to compare rental real estate to an average stock investment. THE BOTTOM CANNOT DROP OUT OF A BASEMENT The principles of real estate investment are simple and the values generally understandable; anyone who has ever rented or bought even one home can grasp the basic tenets. But it takes some education to understand the mechanics of buying, holding, and selling real estate. Rental property investment is manageable. If the property is in good condition and the tenants are respectable, the situation generally takes care of itself. Residential real estate is the ideal long-term buy and hold, especially when rented. MANAGING INCOME REAL ESTATE Those who are new to real estate investing will need to figure out how to make the most of these assets. Without guidance, and without intending to, a homeowner may become an accidental landlord, a circumstance few are naturally skilled at managing. The secret to making this all work is a reliable property management partner. Enter the professional property manager who manages rental houses, condominiums and apartments for the benefit of the landlord as intentional or accidental investor. But all property managers are not created equal. Tampa Property Management is an exception to the average property manager based on three facts: size, standardization, and national presence. Their mission is managing the rental home to the comfort, benefit, and profit of all the parties involved: the tenant, the owner, and the property manager as a professional service provider.