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The Positive and Negatives of Owning A Rental Property

art.pngInvesting in property is no small affair; investing in property and deciding to rent is even scarier. However, knowing exactly what you’re getting yourself into in advance can help save a lot of headaches. So, before making your final decision, take a look at what the potential benefits and downfalls of renting a property. The Pros When weighing out the pros and cons of renting your property, the advantages seem to be slightly outnumbered by the disadvantages. However, the pros are more powerful, and if you put in enough time and energy into research before investing, it can pay off. Property is always in high demand and often much more predictable than other markets. It makes it a long-term investment that you can benefit from for years to come. Perhaps the most motivating factor is a monthly rent. Such a stable income is hard to argue with, as occupied property means monthly rent checks that go straight into your account. Monthly rent can also help settle your monthly expenses if you’ve purchased a property with the help of a bank loan. Another big plus is property value growth over time. Your property value increases, and you can bring in so much more income over the years without you investing more. However, this is where proper research is vital. If you invest in an upcoming area, your property can experience a significant rise in price. There are also many tax benefits you can claim and take advantage of to deduct your costs annually when owni......
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Four Reasons Why Property Managers Must Embrace Text and Email

Text and Email      With 88 percent of residents preferring to communicate via email and 90 percent of text messages being read within 3 minutes of delivery, property managers can no longer ignore the fact that the mainstream expectations on how a resident prefers to communicate has changed. It makes sense - texting friends and family is second-nature, it’s only natural that they now prefer to communicate with their property managers in the same immediate and convenient channel. It's also minimally time invasive and gives your residents the opportunity to stay connected no matter where they are or what they're up to.Still not convinced? Here are four reasons you should seriously consider embracing text and email as a day-to-day way to communicate with your residents:Reason 1: Bye-bye Baby Boomers, hello Millennials We’re all witnessing a paradigm shift away from baby boomers and over to the future of business growth in millennials, specifically in the housing category. According to Pew Research, millennials have surpassed baby boomers as the largest living generation and are driving up the rental market every month. To meet this shift, property managers need to embrace the communication channels that this new generation has grown up with. More importantly, they must provide experiences that allow everything to be resolved on a smartphone without them having to pick up and call. This new-age group is a large percentage of the renters that will be shopping and comparing your community, and ultimately determining whether or not they want to sign or renew a lea......
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3 Effective Tactics to Boost Revenue From Your Rental Property

  The usual tactics to boost revenue from property rental is acquiring as many properties as possible. While this may be a valid method for those who are in the property business per se, when it comes to “regular” people that have just a few properties to rent, a better approach would be to focus on their current portfolio and see what they can do to earn more without investing more. Let’s talk: Minimize Turnover Turnover is one of the worst things for everyone in the property rental business. Every turnover costs money and going through tenant after tenant will cost you more than you’ll earn. Apart from advertising costs, there are costs of vacancy, patching and painting walls, replacing and repairing flooring, or fixing anything else left broken by your previous tenant, etc. But, how do you minimize turnover and keep the right tenants in place? There are several points to it: Lowering the rent: Although this may sometimes be counterintuitive, it does show the tendency to increase revenue, long-term and here’s why. When tenants don’t have to pay high rents, they appreciate the place they live in and usually tend to keep it in good shape as if it were their home. Also, they are less likely to leave. Customer service: Whether you have a property manager or personally manage your properties, you’ll keep your tenants in place if you treat them with respect. The more professional you are, the longer they’ll stay, meaning – make sure their concerns are valued and their reasonable reques......
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Top 5 Reasons To Invest In Rental Properties

They say that more millionaires made their money through real estate then through any other means. There are of course many avenues for investing in real estate, but I’ve always preferred rental properties for various reasons: Real estate investing can be simple and straight forward to get started- The pathway to investing in real estate can be quite simple, you can start talking to experienced investors, read a few of the thousands of books available to learn the basics. Once you have the down payment saved and an understanding of property management (or hire a professional to help you manage) you can start. Ability to invest with leverage- By using leverage you can spread your investment wider and be more diversified. Also, if interest rates are lower than what the current return on the property is, you will effectively be borrowing money for less than what you make on it, thus increasing your return. Utilizing your connections is a good investment- Utilizing your connections in the real estate industry is key to finding the right investments, in some other industries it might be considered insider trading. Stability and Predictability- The real estate market is one of the more stable and predictable investments you can make, do the proper due diligence and manage the assets with care and you will find that it will end up better than most other investments. Multiple ways to grow your investment- With a real estate investment you have multiple ways to help your money grow, ren......
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What to consider when buying a single or a multifamily investment

Many first time investors have the idea that their first investment should be a single family home due to the cost of entry and ease of managment, however, this may not always be the best path to go down. One of the main issues that you have to consider is the fact that if the single family homes goes vacant you will have to cover the entire mortgage until you find a new renter, now if you have a duplex, triplex or fourplex that mortgage will be spread out across more units giving you some cash flow to help with the mortgage. Another reason the first time investors tend to like the single family homes is that you can put a lot less down then you can on a commercial loan and the residential loan can be amortized out over the life of the loan. Residential loans can be on properties that have 4 units or less and can be acquired with as little 5% down, however, commercial loans are on 5 units or more will require at least 25% down and you will need to show a business plan plus as well as management experience and cash flow. When shopping for a commercial loan, be prepared to answer a lot of background questions regarding the property. Some of these questions include: Who pays the utilities? What types of maintenance are required? Numerous questions regarding cash flow will also be asked. Commercial mortgage borrowers should be prepared to provide proof of......
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Top 5 "Kid Friendly" Amenities for Apartment Communities

Top 5 "Kid Friendly" Amenities for Apartment Communities
I recently posed a question to a group of developers...What if you started looking at your communities from the standpoint of children being the residents, instead of the adults? Now obviously, I'm not talking about a community where every unit is filled with slides and see-saws or kids roaming the grounds like Lords of the Flies. But it's a question to highlight what can be done if the primary motivation for the planning of amenity space, marketing and the overall feel of a community was done with children in mind.With 33% of all renter households (14.3 million) having minor children, it's an important question. And as more and more residents with children decide to rent instead of buy, having a true "family friendly" community can become a huge differentiator in the marketing and retention of tenants.So what would a community that is designed around the family and actual children look like?Onsite Daycare This may be a game changer when it comes to "family friendly" communities. One of the most significant issues for families is finding quality child care close to their residence. Having an on-site daycare within your community solves many problems for working parents and could be a tremendous asset to your residents. We see partnering with a local daycare to open in a retail section of your community or underused space. You get a great tenant that genuinely adds value to your community, and your residents get a one-of-a-kind amenity. On-Demand Babysitting With services like Care.com, you can set up a "portal" for your residents......
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Top 5 Amenities Renters REALLY Want (and 5 they don't)

Top 5 Amenities Renters REALLY Want (and 5 they don't)
Everyone in the industry these days is talking about amenities. What renters want, what they don't, and what they will want in the future. The problem is, most developers aren't listening to the actual renters. Over my career, I have spoken with 100's if not 1000's of renters, listening to their wants and needs for a place to call home. Contrary to popular belief, not every renter is a millennial who wants a smoothie bar in their bathroom. The vast majority of renters have simple needs in a building or community when it comes to amenities. Real Closet Space When I say "real," I think we all know what we are talking about. Not the closets with one bar that can fit a shirt and jeans. We're talking about walk-in closets or ones with built-in storage. Renters these days are older or moving from established households and have more clothing. Many developers are "afraid" to take a portion of a bedroom to enlarge a closet, but I can tell you from first-hand experience, I think most of us would like larger closets and a smaller bedroom. More Storage This is a must-have for most renters these days. Unlike prior years, when renters were younger with very few things, today's renters are older and have amassed a lot of items. It's important to give residents enough space to make a difference, especially when units are small. I've never seen a renter say "I'm going to give up all my possessions so I can live in......
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Mortgage Broker, Direct Lender, or Mortgage Banker?

There are three sources where a commercial or multifamily borrower can obtain a loan.  In this article we will discuss each avenue.  This article is not intended or is it applicable for owner-occupied one-to-four family properties. Direct Lender A Direct Lender can be any of these sources: bank, life company, pension fund, credit union, mortgage REIT, or even a private or public mortgage funder. Each type of lender has their advantages, but the one thing remains consistent is that every lender has their preferred box for the type of loans they will provide.  Here is a list of common preferences:  loan sizes, LTV, property underwriting requirements, DSCR, asset age, asset type, asset class, tenant profiles, location, demographic statistics, asset competition in the market, borrower credit profile, and borrower background profiles. If you happen to know all the lender’s parameters before you file an application and know that you will meet all of them, then go ahead and file.  Otherwise, you most likely will end up with a different outcome than you anticipated or worse, have spent a lot of time and money and not have your loan approved. A Direct Lender is also known as a Balance Sheet Lender, meaning the loans they close are made to be held. Mortgage Banker Sometimes there is a very fine line between what constitutes a direct lender versus a mortgage banker.  While the mortgage banker has the same loan preferences as the direct lender, they typically will not keep the loan, may only keep a......
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How Real Estate Can Be Socially Responsible


Partners Joe Killinger and George Pino were recently guests of the "Lifetime Cash Flow Through Real Estate Investing with Rod Khleif" podcast. We've broken up the podcast into segments for convenience.

First topic of conversation is how #realestate brokerage can also be socially responsible.

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7 Low-Maintenance Ways to Boost Your Property’s Curb Appeal

  on 7 Low-Maintenance Ways to Boost Your Property’s Curb Appeal These days, most renters find their new home through online listings, not by driving around the neighborhood. However, that doesn’t mean property managers can afford to overlook curb appeal. If your properties fail to impress when a prospective tenant drives up, it won’t matter how good the online photos look. Even property managers in highly competitive rental markets should pay attention to curb appeal. A great-looking exterior doesn’t just get tenants in the door; it also attracts high-quality tenants who are more likely to treat your property with care and respect. Of course, if you’re managing a lot of properties or a single high-density property, you don’t have a lot of time to spend manicuring lawns and flower beds. So how can you create great curb appeal without spending a lot of time? These seven tips show you how. 1. Paint the Front Door Don’t underestimate the impact a fresh coat of paint on the front door can have. A cheery front door can make an otherwise unremarkable home stand out and leave passersby wondering what’s on the other side. A Blissful Nest recommends 10 hues that are perfect for front doors. In a multi-unit property, try painting each door a different, but complementary color to set the units apart. 2. Replace House Numbers Is that newly painted front door flanked by dated, faded, or missing house numbers? Make each unit easy to find by replacing house numbers with a new set that’s easy to read from the str......
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