Good Books on Real Estate Investing
Whether you’re in the market for a home to live in, purchase as an investment property or both, you can never have enough detailed information. The knowledge gained will help you to make a smart purchase, maintain it properly, and not over-improve it for its neighborhood, the overall economy, and your own pocketbook. Fortunately, the number of good books on real estate investing seems to expand exponentially each year. Here are four we think noteworthy for various reasons, listed in alphabetical order by author. Be assured, there are far more worth reading—and taking notes from—if you google the topic and then head to your favorite bookstore or library:
The Heart of the Deal
The Heart of the Deal by Anthony Lolli with Benjamin Platt (DivisionBooks, 2017). Much of this book recounts the rise of the author’s real estate company, Rapid Realty NYC, and the strategies Lolli used so it could become successful. Many of his suggestions represent good general business practices rather than anything specifically related to real estate such as a strong work ethic, goals for short-, medium- and long-term plans, understanding that goals are likely to change over time, trusting your heart and gut whether it relates to decisions about a client, employee or business situation and even deciding whether to delegate or find a partner as your business grows. When it comes to real estate, Lolli reminds readers that there’s no perfect home and you sometimes need to help clients see situations from different perspective. Example: An apartment—or house—may be too small. In the case of a New York apartment, however, many are small, especially for those young and new to the city. He suggests reminding them that they’re not usually moving to the city for its spacious apartments but to take advantage of everything the city has to offer outside its four walls. One of the last chapters may prove to be among the most helpful: Real Estate Investment 101, offers a list of minuses such as the illiquidity of real estate, that it involves managing debt, management and maintenance, is physically vulnerable and exposes its investors to liability. On the other hand, the value of real estate certainly has a profit side—it can increase in value, give you a feeling of control, be a hedge against inflation, provide a strong return, offer flexibility with regard to taxation (time will tell the effect of the new Tax Bill) and be fun. Furthermore, Lolli goes on to reveal how to invest in different types of real estate, including your first apartment building, and master his top 10 takeaway lessons. This reader’s favorite: Know your strengths and weaknesses. Overall, the book is a good basic primer.
Building Wealth One House at a Time
Building Wealth One House at a Time by John W. Schaub (McGraw Hill Education, 2016). Here’s a good fact. The average house in this country increases in price about 5 percent per year but the author of this book—an investor with decades of experience—uses the Rule of 72, which says that it will take 14.4 years for a house that increases in value at the rate of 5 percent a year to double in value. But he also suggests that you can buy a house and double your money sooner by investing in an area with better than average appreciation or buying in different neighborhoods with different appreciation rates. This includes buying in an area that is on the way up, and renting to responsible tenants. The book is especially useful for its “what-if” scenarios such as the signs that your market may be near the top and could crash. It outlines how to survive that, as well as the importance of understanding that real estate is a cyclical business, so markets will change even if they do not crash. Another useful section is urges the reader to consider houses that others may pass by such as empty homes, those that need work, those that represent a sale by owners, or aren’t in good condition, perhaps, because their landlords aren’t maintaining them properly. One of Schaub’s best lessons is the importance of mastering the secrets of professional negotiators who understand when negotiation is a worthwhile strategy and when it’s better to avoid it and just buy the home, apartment, or building.
Finding Home by Michael W. Trickey (Next Century Publishing, 2016). Here’s another basic primer, which is more about buying a home than becoming a pure investor, and it would make a good gift to someone who’s never purchased a home—perhaps, a grown child or even adult beginning to consider the possibility. Trickey takes a reader through the entire process of deciding when they’re ready to buy, evaluating if they have a sufficient salary and savings, good enough credit rating, adequate reserves for an emergency—frozen pipes!—and the right mindset. You want to help them sleep at night and deal with buyer’s remorse. The book also addresses how much they should spend and budget for regular, repeating expenses such as heating, furnishing the home, and different repairs. Among the more helpful and different approaches this author takes are found in two chapters. The first helps a reader decide on a neighborhood and location based on a hierarchy of different needs such as schools and possible flooding. The second deals with packing and moving. The one downside to this author’s approach in this reader’s view is the distraction of hypothetical buyers, Jack and Eva. The facts and information Trickey provide are more than worthwhile.
Real Estate Investing for Dummies
Real Estate Investing for Dummies by Eric Tyson and Robert S. Griswold (John Wiley & Sons Inc., 2015). This very comprehensive guidebook will keep its readers from making any dumb mistakes when buying and investing but there’s a caveat from this one reader. Don’t just skim through this. It’s very detailed and to be most useful requires multiple careful reads because of all the information they provide, including in charts such as how a rental property’s income and wealth can build over time. There are plenty of useful warnings provided such as the risks in buying real estate—and anyone who did in the late 2000s may have experienced a steep decline. There’s also the crucial factor of time needed to be a landlord especially when problems arise due to repairs required or problem tenants. They address the importance of protecting yourself legally and with adequate insurance and the dangers of sometimes investing in no-money-down possibilities. Yet, they also provide opportunities for those who insist, including retired folks looking for a steady income stream. The authors also do a very good job in describing all the types of real estate that can be considered for investment, from single-family homes to attached housing, condos, co-ops, townhomes, apartment buildings, commercial real estate, undeveloped land and foreclosures and REOs (real estate owned); in evaluating a region and local market as a place to invest; and what to check during an inspection with a very detailed room-by-room checklist worth printing out. The final chapter focuses on what’s at the top of many investors’ wish lists: how to increase a property’s value. They offer 10 ideas, from raising rents to reducing turnover, developing a market niche, scaling back operating expenses, and improving management.