PROS & CONS of the Different Types of U.S. Real Estate Investments with Jason Hartman
About Jason Hartman:
- Founder of Platinum Properties Investor Network, Hartman media foundation, and Jason Hartman foundation
- Author, speaker and media personality
- Has a podcast called The Creating Wealth Show
Unrelated to Real Estate:
- Jason travels extensively and has visited 79 countries
- Has other podcasts on non-business topics e.g. health, bio hacking, longevity
Nuts and Bolts:
Jason is the founder of several real estate related companies including the Platinum Properties Investor Network and the Hartman Foundation. His real estate strategy is to buy and rehab single family homes, apartment complexes and mobile-home parks; however he does not invest in condos. He also only invests in residential properties because he feels this is a more secure investment; people can work anywhere but will always need somewhere to live.
Most of Jason’s investments are in linear markets like Little Rock, Arkansas. This ensures a secure investment and has the added layer of security because tenants can be arrested for not paying rent in Arkansas. When you’re looking for an investment property Jason recommends that you calculate the cost of land to cost of improvement ratio per square foot and invest in a place with low land value properties. He also sensibly says that you should never gamble; everything you do should make sense from day 1.
When foreign investors are starting to research their chosen market and looking for companies to invest with they should be looking out for several warning signs. Firstly avoid people who don’t standardize their data, never assume more than a 6% appreciation rate (or lower). Expect an 8% vacancy rate or 1 month per year and make a maintenance assumption of 4-6% of your rental income. If these things aren’t accounted for with the company you wish to do business then run!
As an investor, don’t trust the promoters offering houses at $100-$5000 and a rental rate of $300-$400 in C to D class neighborhoods. This is because if a property rents for less than $800/months then chasing rent can become problematic. If you do chose to go down this route then always do a home inspection before purchase.
Creating Wealth Podcast