A real estate investment is only as good as the property you invest in. Make the wrong purchasing decision, and you’ll have a much tougher time making a decent profit than you would if you had bought into a better property.

The question is, how do you know if a specific property is worth parking your money in?

If it has the following traits, then you’ve got a winner.

1. It’s Located in a Growing Area

You might have found a fabulous deal on a great property, but have you paid attention to the area it’s in? The last thing you want to do is sink your money in an area that’s stagnant in growth, or even heading down the tubes.

Check out the local market, and see if you can find any news about new jobs coming up on the market. Research the current status of the local economy. Look for new companies opening up, and lots of new residential and commercial construction. See if there is an increase in the number of homes being renovated or even completely rebuilt, and newly landscaped yards. Find out if there are currently any plans for expanding infrastructure (new roadways and public transit lines). 

You can easily find out valuable information by visiting local government websites. Look for census information, such as population, household income, number of schools, number of children, and so on. Information like this will tell you what direction the neighborhood is headed in. If the area appears to be stable or growing, you’ve got a good contender.

2. The Vacancy Rate is Low

If you’re planning on renting out your unit for the long haul, you want to make sure that the vacancy rate is low. The last thing you want is to continuously advertise your unit for rent and screen potential tenants. You also don’t want to have your unit vacant all the time between tenants. That’s as good as money lost.

Ideally, the vacancy rate should be no more than 5%. Making sure that the property has a low or dropping vacancy rate is crucial to keep your place rented out, as well as make sure you have a healthy cash flow.

You could be collecting a hefty rent, but if the vacancy rate is 20%, that will seriously eat into your profits. Too many months out of the year with no tenant and no rent checks coming in is bad for business. At the end of the day, you want to buy an investment property in an area where demand for rental units is high. That way, the vacancy rate will be lower and the rent rates will be higher.

3. It Makes Money For You Right Off the Bat

Don’t approach a potential investment deal with the idea that the place will make money for you eventually. Basically, the income you generate should cover all of your up-front costs.

A good rule of thumb is to look for a property in which 10 months’ worth of rent can easily cover your mortgage payments, property taxes, insurance, and all other expenses. Similarly, make sure that the monthly rental rate you can charge is at least 2% of the entire purchase price of the property. Look at what comparable units are charging for rent to see what you would realistically be able to charge, and crunch the numbers from there.

4. Desirable Amenities Are Nearby

While looking at the numbers in-depth is critical to ensure a property will make money for you, don’t forget to have a look at the surrounding amenities. Understand what’s happening in the neighborhood, which will give you an idea of the type of tenant that would be attracted to it.

A property located near a highly-rated elementary school, for instance, would more likely draw young families that are looking to plant some roots, which would point to a low turnover rate.

Areas close to public transportation, shops and eateries would likely attract millennials, who are more likely to favor areas that have a high walkability score.

Look at the type of shops and eateries that are in the neighborhood. Odds are the area is a solid one if there’s a Trader Joe’s, Starbucks or Whole Foods in it. High-end chains like these spend a lot of money scouting out up-and-coming neighborhoods with residents who have the financial means to support their shops. That have even been studies done that show a positive relationship between the existence of stores like these and property values.

Getting out of an investment property is not only a hassle, it’s downright expensive. Make sure the right decision is made before you sign on the dotted line so your real estate investment is a profitable and headache-free one.

Google announced Project Bloks today as a research project. According to the site, “Our aim is to create an open hardware platform to help developers, designers, and researchers build the next generation of tangible programming experiences for kids.”

Project Bloks uses a modular system that can be pieced together like a game. Kids would develop computational thinking by physically coding (or putting together) the electronic boards and pucks, which send the instructions when connected.

The modules consist of pucks, base boards, and a brain board. Pucks provide the instructions, i.e., jump, move right, turn on/off). Base Boards hold the pucks which send instructions through a sensor. The Brain Board gives power and connectivity and is where you would connect your multiple Base Boards to send your instructions. These instructions can then be sent via Bluetooth or Wi-Fi to any of your connected devices. One sample shown on the site is the Music Maker which helps you to “compose a track using computational thinking by inputting different instruments, layering and looping sounds, and then playing it through a wireless speaker.”

Google is currently looking for participants in this research phase of the project later this year. And if you’re interested you can sign up for Project Bloks updates. They have also published their position paper which further explains the project.

CATHY MALLERS & DEAN’S TEAM CHICAGO

Another summer fest weekend is here and even though it is the last weekend in June already, Chicagoans have been pretty fortunate with cooperative weather as well! So let’s get this weekend started!!

The 3^rd annual Chicago Food Truck Festival has a new location this year at McCormick Place (2200 S. Indiana Ave.) in the South Loop as this fest has become very popular and takes place Saturday and Sunday (11:00 a.m.-7:00 p.m.). Over 50 food trucks will be serving up a wide variety of delicious dishes and tasty treats along with a host of new features such as a Sangria Garden, live entertainment, outdoor games that include corn hole, volleyball, Jenga and more, FREE general admission with event ticket, giveaways and much more! It’s the most diverse food truck lineup in Chicago and won’t disappoint!!

Returning for its 2^nd annual fest, the Elston Avenue Sausage & Music Fest returns to 3800 N. Elston Avenue (Elston at Grace) in the Irving Park neighborhood for its celebration of encased meats this Saturday and Sunday (12:00 p.m.-10:00 p.m.). Needless to say, besides the great line-up of sausage vendors (Paulina Meat Market, Genoa Italian, Nottoli & Sons, et al.), indie music acts with “Local H” headlining Saturday and “Murder By Death” headlining Sunday, arts & crafts and kids activities round-out this Fest! It’s truly a crowd-pleasing community party!!

How about heading to Montrose Beach (4400 N. Lake Shore Dr.) in the Uptown neighborhood this Saturday (2:00 p.m.-8:00 p.m.) for the 2016 Whiskey Wine Swine Beach Fest. Attendees can enjoy up to 60 wines and whiskeys with either a VIP Tasting, a General Admission Tasting or a Festival General Admission all while experiencing a hog roast right on the beach! Additional food from local vendors will be available for purchase as well along with music, art and games for the day!!

Partake in authentic Greek cuisine such as gyros from local restaurants and fresh Greek pastries such as baklava at this year’s Gold Coast Greek Fest located at Annunciation Greek Orthodox Cathedral (1017 N. LaSalle St.) in the Gold Coast neighborhood this Saturday and Sunday (2:00 p.m.-11:00 p.m.) and also featuring a local brewery, ale syndicate beer and live music all weekend long! Whether you’re Greek or not, this Fest is for everyone – OPA!!

Also taking place this Saturday (8:00 a.m.-5:00 p.m.) is the 16^th annual Chicago Dragon Boat Race for Literacy at Ping Tom Memorial Park (300 W. 19^th St.) in Chinatown. This 30 dragon boat race, consisting of 20 member teams, will compete on the south branch of the Chicago River in beautifully decorated dragon boats with the top 2 winning teams racing for the championship. Races begin at 8:00 a.m. with an Opening Ceremony at 9:00 a.m. featuring a Lion Dance. Guests can also enjoy a Free Chinatown Trolley which will travel from the park and loop and around Chinatown throughout the day to enjoy the entertainment, vendor booths, children’s activities and more being featured as well! Rumor has it that Chicago White Sox’s mascot Southpaw will be visiting at 10:00 a.m.!!

Finally, Sunday brings the 47^th annual Chicago Pride Parade featuring floats, decorated vehicles, performance groups, walking contingents and a marching band to 4400 N. Broadway Street (Broadway to Halsted between Montrose & Diversey) at 12:00 p.m. in celebration of National Pride Month. This year’s Grand Marshal is Monica Raymund, star of the NBC hit show, “Chicago Fire!” She will be riding in a vehicle near the front of the parade!!

This weekend’s Movies in the Parks are –

Saturday

“Creed” – Ellis Park (707 E. 37^th St.) – Douglas
“The Goonies” – Touhy Park (7348 N. Paulina St.) – Rogers Park
“The Sandlot” – Oz Park (2021 N. Burling St.) – Lincoln Park
“Ferris Bueller’s Day Off” – Touhy Park (7348 N. Paulina St.) – Rogers Park
“Angels in the Outfield” – Winnemac Park (5100 N. Leavitt St.) – Lincoln Square

Sunday

“The Hunger Games: Mockingjay Part 2” – LeClaire Courts-Heartland Community (5120 W. 44^th St.) – Garfield Ridge

“The Lego Movie” – Maggie Daley Park (337 E. Randolph St.) – The Loop

Enjoy Your “Summer Fest” Weekend!

SUE MOSS & DEAN’S TEAM CHICAGO

Buying and renting out real estate is a tried-and-true way to develop wealth over time. Not only can you build equity in the property simply through appreciation over time, the rent collected can cover the carrying costs.

While there are a number of different types of properties that can be rented out for investment purposes, many investors look to condos. They’re typically cheaper to buy compared to single-unit dwellings, and are virtually maintenance-free. With property management on site to handle the day-to-day maintenance of the common areas of condominium buildings, all the grass cutting, snow removal, landscaping, and other tasks are handled for you.

But in order to make sure that your investment pans out over the long term, it’s important to take steps to protect the value of your investment condo. Here are a few tips to help ensure your investment goes according to plan.

1. Maintain Regular Communication With the Condo Board

Even though you don’t live in the building, you still want to make sure that the condominium remains a safe and positive place for residents. The condo board has a direct influence on this; these individuals make decisions that affect the well-being of the building. What they choose to do can literally affect the value of the building as a whole, and even impact your profits.

Is the board adding necessary amenities? Are they promptly dealing with issues that residents have been complaining about? Are they increasing the condo fees unnecessarily? Issues such as these can impact the value of the condo, as well as your profit margins.

Since you’re an owner, you have the right to vote for those who have been nominated for a seat on the condo board. If you so choose, you also have a right to take one of these seats yourself, as long as you’re voted in. Understanding the health of the building and its corporation can give you important insight into whether or not the condo remains a solid investment, or whether you should bail out and park your capital elsewhere. 

2. Visit the Condo Frequently

Unless your tenant calls you regularly to update you on the daily occurrences in the building, you’ll want to get a first-hand glimpse of the state of the complex yourself. When you visit the condo to pick up your rent check or any mail, take an extra few minutes to walk around the building, identify any possible issues that should be rectified, and ask your tenant if there is anything that should be looked into, regardless of how minor you might think they are.

Rather than depending on other owners to communicate their concerns to the condo board or property management team, you can do this yourself. At least you’ll have first-hand knowledge of what’s happening in the building, and can follow up with the board on your own to make sure any issues you’ve witnessed are being handled properly.

3. Collaborate With Your Tenants

It goes without saying that tenants can make or break your investment. A good tenant is critical to ensuring that your long-term investment is a fruitful one; on the other hand, a bad tenant can cause you nothing but headaches, and can severely affect your profits.

After you’ve thoroughly screened your tenants, established an open, honest relationship with them. Collaborate with them and make it known that they are essentially a part of your investment “team.” No matter how temporary their home will be, most tenants appreciate the opportunity to take pride in their home.

Let your tenants know that you will do everything possible to make sure the property is well-maintained and continues to be a great place to live. Make them understand that they play an important role in this, and encourage them to report issues the moment they’re noticed. Cultivate a positive and respectful landlord-tenant relationship that’s based on honesty and co-operation.

4. Be Smart With Your Rent

You can’t just arbitrarily pick any random rent amount to charge your tenants. Obviously, the more you can charge, the better for your bottom line. But the reality is, you need to stick to a certain range that the building and the neighborhood dictate. If other similar units in the building are going for $1,000 per month, for instance, there’s little justification to ask prospective tenants for $1,500.

Before you even consider buying a condo unit, make are that the rent you can realistically charge will adequately cover all carrying costs. Understanding current market rates in the area is critical when it comes to establishing the appropriate rent for your unit.

You’ll need to determine how the rent you plan to charge will work to cover your mortgage, maintenance fees, taxes, repairs, and other expenses. Keep in mind that you’ll have to declare your rental income come tax time, so make sure you’re saving up so you’ll have enough to pay Uncle Sam every year.

The Bottom Line

Having a clear objective about what you want out of your investment is critical to making sure the decisions you make are the right ones. Maintaining the value of your investment is essential to ensuring you get the most bang for your investment buck. Be present, be vigilant, and be smart about how you handle the property, your tenants, and your capital.