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What Happens to Your Commercial Property During a Downturn?

Benjamin Franklin once said that there are no guarantees in life other than death and taxes but I believe we can also add a downturn in the real estate cycle to that list. Having been in the real estate business for over three decades I’ve experienced first-hand multiple cycles in the market. During these phases I’ve noticed a trend, people who operate their properties with a strong management team typically forecast the market turning and prepare in advance.  The market you’re in will have a lot to do with how properties are effected, Los Angeles and a few other major metro areas typically only see a drop in value of a few percentage points while other areas can take a bigger hit. Know your market prior to making an investment and NEVER make an emotional investment that your numbers cannot support.  During a real estate market downturn, real estate investment businesses which are equipped financially have a better chance of surviving and avoiding bankruptcy. If you’re going to be a successful real estate investor, you need to learn to budget for downturns and difficult times. Here are some tips to help you succeed. 1.       Consider extending your loan term now-it’s easier to refinance with your peak cash flow. 2.       Conduct cost benefit analysis to keep your expenses in check. 3.       Have an emergency fund/reserves to cover unexpected expenses or clients that cannot meet their lease payments. 4.       If you own a commercial property with multiple leases coming up at the same time you ......
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5 Inexpensive Makeover Tips to Put Your Leasing Space on Top of the List

image9.jpgHaving property is a good way of having an excellent income for the long-run, but sometimes that same leasing space won’t get you much unless you renovate from time to time. Properties that don’t receive a makeover regularly will be less attractive and will be more difficult to lease, and you’ll thus lose money. You can avoid this by doing some renovations or making changes that will cause the space to become more desirable. However, this can be quite costly, which is why we have prepared a list of tips for you to avoid unnecessary costs, and manage to make some effective makeovers for very little money. Clean Everything Cleaning is always the best way to make anything look good and appealing. Besides, it’s probably the cheapest option as well. You can easily do it yourself, or hire someone at a small expense. What you must remember though is that cleaning both the interior and exterior is essential – all of it together will have a significant effect on the desirability of your property. Give it a Paint Job A simple paint job is always a necessary makeover if you want your leasing space to be at the top of the list. It’s inexpensive and easy as the previous tip, and it’s sometimes enough to merely paint the areas that look bad and the areas where people will spend most of their time. Don’t forget the front door as that’s the first thing most people will see before entering the place. Improve the......
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Pros and Cons of Leasing a Fully Furnished Flat

Property owners usually face a dilemma – to lease a fully furnished suite or an unfurnished one? Which one is better? There’s no easy answer here. We’ve found that it’s best to consider the merits of one of the two – the fully furnished one. It’s always best to decide whether something is good or not by making a list of its good and bad sides. We will give you all the pros and cons of leasing a fully furnished residence, so you can get a clearer picture and decide if that’s the way you should go. The Price Some might think that the price is a negative for fully furnished apartments – as it’s expensive to equip an entire rental for your tenants. However, they are not looking at the bigger picture: fully furnished rooms will yield a higher rent making it a better long-term investment. Naturally, the price will differ from city to city, but the overall picture is clear – fully furnished always bring higher rent. Changing Tenants More Often Furnished units are usually rented by people who are only looking to stay somewhere temporarily. It usually means that your tenant turnover will be high. However, this is not necessarily the case. Some people are looking for long-term furnished rentals. Although, changing your tenants often is good for some landlords, as they get the chance to make upgrades to modify the price before getting a new tenant. Higher Deposits It depends on the state, but based on whether or not an apartment......
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5 Record-Breaking 2018 Holiday Package Delivery Statistics

This year, shoppers smashed previous records for Black Friday and Cyber Monday spending, with over $7.9 billion spent online. As a result, multifamily properties have been bracing for the millions of package deliveries following in their wake. The dust has finally settled from Black Friday. Here's a snapshot of package delivery statistics from thousands of multifamily communities across the United States. These stats shed light on the aftermath of “the largest online shopping day in US history”, and paint a picture of the unique package management challenges apartment communities face every December.    1. In one week, package delivery increased by 68%. With over 39% of holiday shoppers planning to do their shopping equally in-store and online, it’s no surprise that package volume surged in the week following Black Friday and Cyber Monday. This year, the amount of packages shipped and delivered increased by 68%, compared to the week before Black Friday. This huge jump follows the surge experienced in 2017, when package volume increased by 80% pre-Black Friday to post-Black Friday.  We could be witnessing the emergence of a new status quo: the week following Black Friday, prepare for package delivery volume to nearly double. This knowledge can help property managers better prepare for the operational challenges in store.   2. Properties saw 5% more packages than in 2017. On an individual level, shoppers ordered more packages this year than the 2017 Black Friday weekend—but not that many more. True, the week following Black Friday 2018 saw more packages per day deliver......
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How to Maximize the Space of Your Rental Property

image4.jpgMany landlords and other property owners try all sorts of methods to increase the value of their property. It’s always advisable to do so as you can receive some excellent returns for minimal effort. The same goes for the space in your property. There are many methods that you can use, many of which amount to fairly simple tricks that are always effective for renters. Let’s take a good look at the best of them to enable you to maximize the amount of space your property has and thus increase your earnings Hanging Things on the Wall One of the main ways renters and others use to maximize the space of their property is to hang anything they can on the walls to free up the floor space. The thing about this idea is that it’s quite easy to do and yet it’s so effective. Many things can be mounted – from smaller worktops to lights, nightstands, and much more. That way you won’t only effectively maximize space, but you’ll also make the property appear much bigger. Less Space for Beds Beds are an essential aspect of every rental, but they also might clog areas. The bigger beds are more attractive to your potential tenants, but there will be less space for other furniture. Keep the size in proper comparison to the room space, so it doesn’t hamper the flow of the area. You require a massive area for a king-sized bed. The solutions here are several: Murphy beds – many of which are ......
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5 Smart Strategies To Attract New Tenants

image7.jpgWhen you decide to put your property up for rent, you have to be super smart about who you are renting the unit to, and for how long. Even so, the market today is tough, and the competition pretty strong. So, what are you to do when you want to avoid problem renters, attract new, great tenants and encourage them to rent your property? There may be a few things you should consider: Neat as a New Pin Tenants will be attracted to a well-kept property that looks great and appears easy to maintain. Your property doesn’t have to be the best and most luxurious house on the block or in the street, but – as long as it’s well presented and has potential – you are good to go. How so? Because tenants don’t always look for never-before-lived-in apartments; usually, they’d go for units that merely “feel” right, look fresh and clean, and give them an impression of a home. So, before you put up your property for rent, organize an open house or bring in a professional photographer to snap photos of it, consider booking a cleaning agency to spruce up your place and make it sparkle! Don’t Force Your Tastes on Anyone There are plenty of positives and negatives of renting a property, and you want to be on top of your game. Renters don’t want anyone’s style imposed on them, so make sure your property features neutral colors, plain décor, and not too much furniture. You want the tenants to env......
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4 Ways to Determine the Rental Fee of Your Property

image3.jpgTrying to make a profit on your investment property is one thing; setting the price for it is another. With the competition as strong as it is, you need to make yours stand out and make it a desirable option for the tenants. It means pairing a high-quality offer with the right rental price. With a little market know-how, research and math, you can determine the suitable rental amount for your investment property. Take these four tips into consideration when determining the rental fee of your property: Consider the Market Depending on the market where your property is located, the formula to figuring out a proper rental price is pretty simple: the higher the competition, the lower is the price. However, if you want to have the advantage compared to other properties, survey the market, see what the general prices of those properties are, then find the middle ground that appears ideal for your property. Research Rental Prices for Units Similar to Yours It may be a little hard to find this out yourself, as all information of this type usually is confidential (unless you are a buyer.) You can always try to find out how much rent others are charging for their units to determine the starting point of yours. You can also consult sites like Zillow, Craigslist and Trulia. Start with practical things a rental unit should have: those that resemble yours by age, square footage, amenities, number of bedrooms and bathrooms, location, etc. Make a list of ......
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The First 5 Steps To Become The Warren Buffet of Real Estate

maxresdefault.jpgIf you’re considering being the Warren Buffet of real estate you’re going to need a few profitable ideas.  Here’s 5 initial steps you need to consider to start you on your way to success. 1)      Have a Complete Understanding of Your Market Educate yourself by talking to as many real estate agents, lenders, title reps, and other investors. Keep track of market trends and what other investors are doing in the area, as they may impact your investment. Watch/listen to as many videos or podcasts that you can stand and read as many blog post as possible…NEVER stop doing this in your investing career. 2)      Choose The Asset Class You’re Most Comfortable With Many beginning investors like multifamily because at some point they’ve likely rented an apartment and that makes it somewhat more relatable. Don’t be afraid to take a look at office, retail, or light industrial investments.  Try to match your investment goals with the type of asset class you’re most comfortable with. Don’t Make Unnecessary Errors When Leasing Office Space 3)      Choose Your Strategy Are you going to buy and hold, flip or reposition? Choose the strategy that best aligns with your investment goals. Determine what your investment horizon is. Even if you plan on keeping the investment forever, you should still have an exit strategy.  4)      Funding Your Investment Know where your money is going to come from, investors (if you have investor friends and family or professionals that know the investment vehicle LLC or Corp), cash, or bank financing.......
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Why Is It Important To Background Check Your Soon-To-Be Tenants

image6.jpgIf you have ever rented a live-in unit, you know avoiding problem renters is everything. When you’ve got good, responsible tenants living on your property you know you won’t have to get into uncomfortable arguments and situations every other month, or – even worse - come to collect rent one day and find your property demolished, or robbed with your renters nowhere in sight. On that note, if you are considering renting your property, here’s a list of reasons why it is essential to do a background check of your soon-to-be tenants. #Your Property Protection In talking to your potential tenants, you are setting yourself up to know as much valuable information as possible that will help you decide if this person is a good match or not. Start by asking yourself questions like: Does this tenant have a history of reckless behavior and vandalism? What is their lifestyle? Are they party people or low-key? What’s their temper like? Do they strike you as reliable or flaky? These and similar questions may be a great start for when you are marketing your rental property. You want to make sure you are renting your property to someone who’ll treat it like their own, not someone who’ll ruin it. #Financial Security No matter how well you click with someone during your interview doesn’t mean you can cut corners and ignore their financial liability. Like criminal background checks, financial background checks are an essential starting point when saying “yes” to a tenant. Why? You want to be sure ......
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What Causes HVAC Systems to Fail and How to Prevent It

What Causes HVAC Systems to Fail and How to Prevent It
Preventative maintenance goes a long way in keeping HVAC systems operating as they should be, but breakdowns can still occur. These complex systems are made of many components. Without being familiar with how HVAC units and their many parts work, diagnosing issues can be difficult. Especially when you’re managing large multifamily properties, it’s helpful to know about some of the most common causes of HVAC problems, as it can save you, your team, and your residents from a lot of frustration.   Swollen Capacitors  Air conditioners cannot run on their own when their capacitors stop working. The job of a capacitor is to start the motor and to help keep it running. It does this by sending jolts of the energy it stores to the fan. Without the jolts, the fan simply can’t get going. There are a few ways to tell if a capacitor has gone bad. A visual inspection is often the easiest, as a swollen capacitor is a problematic capacitor.   What causes capacitors to swell? Gas is created when the conductive electrolyte within the capacitor decomposes, which happens with time or damage. Capacitors have a lifespan that can vary but is definite. The HVAC systems that house them can outlive them, meaning there naturally comes a time when a capacitor must be replaced. Swelling is a sign that the time has come, as any swollen capacitor has reached its end. You can tell that a capacitor is swollen when its shape has become altered, usually resembling a can of soda ......
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