Rentec Direct

Why investing in Real Estate is better than investing in stocks, bonds, or tax-deferred retirement funds

There are many advantages to investing in real estate that you cannot get from investing in the stock market or other typical investment vehicles.

1. Real Estate as a Wealth Creator Appreciation on houses has been throughout history (yes even through the depression and our current economic crisis) on average a 10% gain which equates to doubling in value every 10 years.  This is not a bad ROI (Return on investment) particularly when you consider some of the other benefits of investing in real estate which I have listed below.
2. Real Estate as a Money maker Positive cash flow is a key ingredient to any successful real estate investor whether it is $20 or $2,000, be sure that your investment pencils because you don’t want to end up in a negative cash flow situation.  This income is passive income and is not subject to Social Security and Medicare withholding and is “un-taxed” in other ways such as seen in #4 Tax Advantages.
3. Intelligent Leveraging Multiply your buying power and earning capability by up to 90% by using the banks money.  This is a huge advantage over other investment types, leveraging +appreciation=exponential growth capabilities.
4. Tax Advantages You can reduce your tax burden tremendously from depreciating the structures you own, passive losses, and through rolling over profits into another investment through a 1031 tax deferred exchange.  You can write-off business expenses and if you’re a real estate professional (spend more than 50% of your time investing in real estate) there are even greater tax benefits.
5. Less Risk The risks of investing in real estate can be mitigated through legal strategies, insurance, and other means that are relatively inexpensive and simple to understand and incorporate.  The stock market however can be unpredictable and volatile while real estate on the other hand is fairly predictable if you know what you’re looking for.

The housing prices have fallen and the deal of a lifetime is waiting around every corner so start looking today!

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We are driven to provide the best property management software out there.  To do this we ask for your input on what could be improved, or what may not be working exactly as expected.  We want to do what we can to make your use of Rentec Direct as fluid and seamless as possible.

Here a a couple improvements, based on your feedback, that we’ve recently added.

• Simplified login procedure by saving your username and password upon request.  Selecting the ‘remember me’ button is going to preserve your username and password settings.  The data is stored on the computer you are currently using and is encrypted prior to storage, so it’s safe.  Although, only use this feature if your on your own computer.  You don’t want the next person using this computer to login to your account without knowing your login information.
• We offer a confirmation reminder whenever an activity has been successfully accomplished.  While this reminder is great for new users to Rentec, it may be desirable to turn the confirmation off by advanced users.  You can now do this in the Program Defaults settings page.

If you have a suggesstion on how to improve Rentec Direct, we want to hear about it.  Please email it to suggesstion@rentecdirect.com.

Product Update rentec

If you’ve tried getting a conventional loan recently, you may have ran into this brand new roadblock.  Fannie and Freddie have implemented a new guideline for conventional real-estate loans.  They limit you to a maximum of 4 total properties.  The moment you go to finance that 5th property you smash into their new brick wall.

I’d say this is completely ridiculous.  The foreclosures are caused by two groups of buyers.  The widely publicized primary residence homeowners who were convinced to sign into an adjustable rate mortgage, and the lesser heard of builders who secured construction loans for building their projects, and then converted them to investment loans once the project was complete.

I truly feel for the first classification of folks.  To be booted out of your primary residence because the bank increased your rate is absolutely a shame.  Some may say shame on the buyer, and yes, that is somewhat true.  They should have read those 85 pages of small print text provided at closing.  But I say shame on the banks, and more importantly the brokers who sold these loans.

Now the builders, therein lies the true catalyst to this problem.  Construction loans are often short-term and high rate.  Builders across the nation over the past few years have over-built, and now so many brand new homes sit vacant.  The builders converted the loans to residential non-owner occupied loans, and those are the loans they are defaulting on because they can’t sell their houses.  For those of us who actually use residential non-owner occupied conventional financing for true investment properties, we are penalized.  Because such a high percentage of converted construction loans are defaulting, not only are the banks increasing restrictions on non-owner occupied loans, but so are the mortgage insurance companies.

There’s a few ways around this new guideline.

• If your already at 4 or greater properties, consider your wife, husband, or significant other.  If their credit report shows them on less than 4 real-estate loans, they may qualify.
• Most portfolio lenders do not use this guideline, you’ll pay around 3/8 to 1/2 percent point higher rate, but they look at the property and your management rather than a strict rulebook.  If you work with a mortgage broker, ask them to talk to their portfolio lenders.  If they don’t have any, find a different broker.
• Most all credit unions have a private financing department.  Loans which are fulfilled in house and not sold on the secondary market.  Ask them if they have in-house financing available for real-estate.  I find most credit unions have about the same rates as portfolio lenders.
• Private money is the final option I’ll suggest.  Contrary to popular belief, private money is available to qualified investors.  It takes some work to procure though.  The REI Brain (a real-estate blog) has excellent information and resources about private money.

Regardless if you do qualify for conventional financing, or need to seek out a portfolio lender your going to need impeccable records.  Lenders want to know they are lending to a sound person or organization who maintains positive cashflow on their properties.  The best way to keep your records organized is to use property management software specifically designed for the purpose.

News 30 yr loans, conventional, conventional loans, investment property, investors, landlords, lending guidelines, loans, private money, residential loan

This current market opens up the possibilities for property owners, or aspiring property owners to make it big.  The market has housing prices at an all time low.  In the last 2 weeks I’ve seen 3br 2ba townhouses selling for less than $95k.  Additionally an eleven (yes, I said eleven) bedroom house in foreclosure listed for $159k (it sold the day after it was listed).  Another example is a 5br house for $129k.  These are just the ones in Southern Oregon that I found.  If your not familiar with home prices in Southern Oregon, I can assure you those are all absolutely smokin deals!

What does it take to get those properties though.  That’s where so many investors are running into trouble.  Conventional lending is shot.  Let’s face it, although every man and woman in the US just donated roughly $7.000 to finance the “mortgage bailout”, all the banks have done is buy up other banks with that money and it has not loosened up lending restrictions.  Quite the contrary really.  Lending restrictions are tighter now than I’ve ever seen.  A+ credit is no longer 720+.  You need 760+, and in some cases 780+ to get a lenders best rate.  While the richest people get a little richer, the average investor’s life becomes a little harder.

Aside from the tips everyone knows about (don’t pay late, etc); here’s some tips to improve your credit, and maintain it.

• Make sure your credit cards are increased to their maximum level.  Your credit line with the major banks should equal 25% – 35% of your annual gross income.  If your limit is not there, call them and ask for a credit increase.  The most compelling line I give is:  “I’d like to see my credit line increased.  Frankly, some other banks have given me larger lines and so I carry their cards in my wallet so I’m prepared for a large purchase.  Your card only offers me $x and therefore it’s not as valuable to me”.  I’ve yet to be turned down for a credit line increase with that reasoning.  If you don’t have a credit card with a higher balance than the one your asking for an increase on, come up with another reason, don’t fib.
• Use your high limit cards, even if it’s for smaller purchases.  Cycle the card in your wallet every month or find another way to cycle them.  The reason for this is banks, even the larger ones, are reducing credit lines automatically.  Amex has recently sent out thousands of letters to consumers stating their credit line is being reduced because they believe the consumer does not need that high of a line.  If this happens to you, your credit score will take an immediate dive because your ratios of used credit to available credit will go down.
• Pay down your revolving lines.  If you have any home equity or 2nds that are considered a revolving line, I suggest paying them down as quickly as you can.  Get them below the 50% level so they are not negatively impacting your score.  Your conventional loans don’t matter.  A 30yr conventional loan, regardless the balance, will typically improve your score.

Aside from these items, keep your expenses low and income consistent.  A good way to reduce your expenses immediately is to begin managing properties yourself.  Also use a free property management software to manage those properties with minimal effort and time.  A lot of people predict tough times ahead and it is best to prepare now.  For those prepared, there will be abundant opportunities for property owners and the like to do very well.

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We’ve been hearing from our subscribers that Rentec is one of the only landlord software offering a reliable online storage solution for important documents.  We are very pleased to hear that!  Since most software applications run on the user’s computer, it stands to reason our product is “ahead of the game” by running on a high powered server instead.  That’s what gives Rentec a 1-up on the other fellas.

As a thank you to our existing customers and those in the future looking for new or different property management software, we’re going to improve it yet further.

Effective immediately, the free version is getting bumped from 25MB to 100MB of storage.  Wait, there’s more….  Until we have the Pro version released, we’re going to allow any free version subscriber the full 1000MB of storage.  That’s probably enough room for all your important documents, plus some.

We don’t restrict what gets uploaded.  If you want to throw a couple other items in there that aren’t related to your property, it’s no skin off our back.  We’re ok with that.

Product Update

Signups for Rentec Free Property Management Software have been consistently growing daily.  While it used to be possible for us to individually review every new applicant, those days are behind us.  New signups are signed up immediately now and given access as soon as they confirm by email.  We do still review all signup data to ensure nobody’s gaming the system though.

While this isn’t a major feature for existing customers, it’s great to know because it does free up our staff for more programming for adding lots of great new features to Rentec Free.

Site Updates

We’re extremely excited to announce that the file library is online! You have the ability to upload all your documents, images, and compilations of anything important related to your property or tenants up to Rentec Direct.

Our flash based uploader will let you select any file from your computer and mark it for upload.  A progress bar will show you the progress as it uploads, and then the file is available.  A couple neat features here:

• Click on the file itself, or the file line to download the document or image.
• If it’s a supported image (jpg, gif, png) the system will store a preview of it for you.  Click the icon to the left of the image, or the (preview) link to see it right away right there in the browser.
• Every different filetype is given it’s own unique corrosponding icon so you can easily distingusih between the different type of documents.
• The Name, Date, and Size columns are sortable in either ascending or descending order.  Just click the title link of the column you wish to sort.

Filetypes supported include, but are not limited to, PDF Documents, Word Document, Excel Documents, Openoffice Documents, JPEG/GIF/PNG/TIFF images, Zip files, and more!  If the system doesn’t recognize your file type, that’s OK too.  It will still accept the file and give it a generic icon.

Product Update online storage