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Renovation vs. Rejuvenation

To generate more rental income, it’s sometimes necessary to put a little work into your property. If a potential renter is comparing your property to a similar, less expensive property, the renter will need to be able to easily identify those aspects (whether it’s aesthetics or features) that make your unit worth more than the competition’s. Depending on where you’re starting from and where you want to go, upgrades may consist of as little as some simple “rejuvenation” projects or, alternatively, some larger-scale renovations. Generally speaking, your bathroom and kitchen are two key areas that play a large role in making or breaking the value of your rental unit as compared to competitors’. All other factors being equal (such as size and location), chances are most renters will select the unit with a nicer looking or more upgraded bathroom or kitchen. Many renters will even be willing to pay a bit more if there is a noticeable difference or greater utility in one or both of these two rooms. In other words, these are the first places you should make improvements if you want to command additional rental income for your property. What does this mean exactly? Let’s take a look. Renovation There’s not really any way around it—complete renovation of a bathroom or kitchen (appliances, lighting, tiling, fixtures, etc.) will cost you a few thousand dollars. However, it will also likely pay off in the form of a higher rent rate. Consider a renter who is looking at your apartment......
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Tips for Finding the Right Realtor

Getting ready to purchase or sell property? The first step to a smooth real estate transaction is finding the right real estate agent. Throughout the property selling and purchasing processes, your real estate agent will be your eyes, your sounding board, and your advocate. Here are some things to consider when selecting your real estate agent. Referrals from Trusted Sources Nothing is a better testament to a realtors ability than a proven track record. Ask friends and associates for agent referrals. It’s particularly helpful to speak with trusted sources whose situations are similar to your own. For example, if you are looking to purchase a multi-unit investment property, seeking referrals from other multi-unit investors may lead you toward a better match than asking someone who used a realtor to sell a single-family dwelling. Trust yourself too. Try visiting some open houses and meeting agents one-on-one. Open houses will give you the opportunity to meet a variety of agents and to get a feel for them, the properties they work with, and how your personalities mesh. Online Resources You can further narrow your search by doing some online research on sites like Yelp and Realtor.com to identify local realty companies and specific agents respectively. Also be sure to check out ActiveRain, a social networking platform for real estate agents that provides consumers with the opportunity to acquaint themselves with agents through professional blogs, profiles, and other online resources. Finally, keep an eye on relevant real estate transactions in your area (vis-a-vis local......
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The Home-Buying Checklist

The importance of being methodical when purchasing property can’t be overstated. As you go through the purchasing process, make sure you have accounted for each of the following items on our Home-Buying Checklist. Look for Seasonal Slumps As with every other type of shopping, some times of the year are better than others when it comes to purchasing property. Even during years when it’s a seller’s market, there will likely be certain months that are better suited for buyers than others. For example, home sales tend to be slower around the holidays when people are already feeling over-extended financially. Bad weather can also inhibit other would-be buyers from checking out potential purchases, which means less competition for you if you strap on those snow shoes and a couple of extra layers. It works to your benefit to slant your property purchases to these slower times of the year, when there is less competition out there to drive prices up. Get Pre-approved Obtaining a loan pre-approval will not only save you time in the long-run when you want to jump on a purchase as quickly as possible, but it will also help narrow your search parameters (after all, no use falling in love with a place that ends up being financially unfeasible). By having a solid idea of your price limit ahead of time, you can be sure that you’re not looking at properties that are above your price range or, alternatively, settling for an inferior property. Find a Realtor Who’s Right......
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Who Says T.V. isn't Educational?

One of the great benefits of the reality television craze is that distance education no longer has to cost any more than the price of your monthly cable television subscription. Of course this certainly does not apply to all sectors of reality television, but when it comes to house-flipping and home improvement shows on channels such as A&E, HGTV, and TLC  it certainly is possible to mix entertainment and education. Here are a few of our favorite TV shows that offer up some great business-minded take-away. Designed to Sell, HGTV Designed to Sell is perfect for those real estate investors who have done the hard work of renovations and are ready to flip their home. Or, for that matter, for anyone who is looking to sell their property and wants to command the best price possible. This show is inherently budget-friendly, with the premise of providing sellers with a maximum budget of $2,000 to invest in making their home as appealing as possible to would-be buyers (and, thus, maximizing the sale price). Designed to Sell relies on the expertise of interior designers, stagers,  and home improvement gurus, bringing a team of helping hands straight into your living room. Income Property, HGTV Though Income Property is geared toward first-time buyers who are looking to make some money from their homes by renting out rooms within their homes to cover their mortgage, host Scott McGillivray offers up a ton of tips that property managers can apply. With ten years of experience under his......
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Finding the Right Multi-Family Property Investment

In many ways, the current economic climate makes for a great time to purchase a multi-family investment property. The prominence of short sales and foreclosures has given way to good purchase prices in many areas of the country. Add to this the fact that there are some incredible interest rates out there right now (even for investors) and the fact that many former homeowners have now found themselves back in the rental market, and there’s a very valid argument that this is a good time to get into the multi-family market. If you are considering making a multi-family property investment of your own, following are a few things to consider before taking the leap. Know what you’re looking for Before you even begin to look at properties, have a clear idea of what you’re looking for and what you’re willing to put into a property, both financially and in terms of your time. Of course, this is always subject to change if you find just the right place, but that doesn’t mean that you shouldn’t go into the house-hunting process without a fairly narrow baseline in mind. Aside from basics like location and size, you also want to have know whether you’re looking for a “fixer-upper” or a “as-is” property. Look at the whole package Looking for a multi-family investment property is different from looking for a single-family home and requires a bit more of a discerning eye. Remember that you will be renting multiple units out to different tenants. To......
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Tenant Referral Programs -- Are They Worth It?

Let’s face it – keeping vacancy rates as low as possible is any property manager’s first priority. With the economy in its current state, this is truer than ever before.  We’ve written several articles in the past on combating a lousy rental market with strategies like lease renewal incentives and cross-promoting with local businesses. This week we are offering just another tool aimed at keeping vacancy rates low – a tenant referral program. Tenant Referral Incentives – How Much is Enough? By far the most common type of tenant referral program involves offering current tenants a monetary incentive to refer a new friend, family member, or colleague to their community – the current tenant is then paid for their referral when the referred tenant signs a lease.  Although monetary incentives can come in all sizes, one of the most commonly used programs offers $100 per tenant successfully referred. It’s important to note that if you go the monetary route, incentives should match your tenant demographic – we recommend starting with an incentive that is about 20% of one month’s rent. That being said, some of the most successful referral programs actually occur in more high-end properties. A wealthy person in a high-end property may be more motivated to refer a friend for a $1000 incentive than a less well-off person would be for a $100 incentive. Get Creative with Your Program You know your property better than anybody else. In order to achieve the highest adoption of your tenant referral program,......
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3 Questions to Ask Yourself Before Renovating

Determining when the time has come to do renovations on your rental property is a process that requires good judgment and a careful analysis of your goals. Depending upon your situation, renovation time may occur before you ever even move tenants into your property or, alternatively, it may be one of the final things you do before selling your investment property. Following are a few key questions to consider when contemplating a renovation. Would I want to live here myself?While you don’t have to outfit every rental you manage like a luxury penthouse complete with every amenity imaginable, it is important to make your rental units as comfortable and livable as possible for tenants. Upon purchasing a rental property (and every few years thereafter), look around your rental unit and ask yourself: Is this somewhere I would want to live? If the answer is no, it’s time to start taking a serious look around at what features could stand changes or improvements. The better condition your rental units are in, the more quality tenants you will attract. And the better quality tenants you attract, the better care they will take of your units. Good tenants are a key element to consistently maintaining the value of your rental property. How do I stack up with the competition?If you are looking to sell your investment property at any point in the near future, you should make yourself familiar with comparable properties in your area. In real estate, sale prices are determined in large......
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Realtors Turned Property Managers

Anyone who has made a career in real estate knows that the market is always changing. There’s no arguing the fact that real estate professionals must have the ability to accept that while there are times of feast, there are also times of famine. But even when buyers are hard to come by, opportunities for income generation exist. And one of those opportunities is property management. Adapting to change. It’s not news at this point: Over the past couple of years, the real estate market has taken a huge hit. With foreclosures running rampant, loan qualification processes that can be difficult at best, and severe job losses across the nation, successful real estate transactions have been hard to come by. Even successful transactions now require far more time and effort than they once did. While things are slowly beginning to turn around, the real estate market is cyclical — we will at some point see it dip again. This is why it’s so important for real estate agents to have a back-up plan when times get rough. Property management offers realtors a great way to remain in the field and put their skills to use, even when the market is down. Steady income. No matter what, people will always need shelter. Particularly during economic climates like that of the past couple years, home sales may go down, but renting goes up, with all of the displaced former home owners looking for new places to lay their heads. No matter what field......
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The Fair Housing Act and You

The Fair Housing Act (FHA) exists to ensure that all potential tenants are given an equal opportunity to obtain residency. This anti-discrimination policy means that, as a landlord, you are not allowed to base tenancy at your property upon any of the following factors, including: age, race, color, religion, familial status, or handicap. This law is straightforward enough; however, there are certain common instances in which landlords find themselves inadvertently in violation of this act. A common slip-up that can potentially lead to legal troubles down the line is searching for a certain “type” of tenant based upon your property’s location, amenities, or general pre-existing demographic. Consider the following scenario.  As clearly stated in the FHA, you cannot base your decision upon whether or not to accept a tenant on their situation or life circumstances. For example, even if you prefer to rent to students, you absolutely cannot refuse to rent an available unit to a family of three simply because they are a family rather than a single student. Remember, though, the average tenant wants to find a living situation that is comfortable for them. In the above scenario, for example, if you have a ten-unit complex that is primarily occupied by students, chances are other students (as opposed to families or young professionals) are going to be most enticed by your property. To achieve maximum visibility among this target demographic, you should place advertisements in outlets that cater to the university population in your area—school-affiliated publications, websites and bulletin boards at local college ......
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Keeping Your Lease Agreements Up to Date

If there’s one document in property management that simply has to reviewed (and updated as necessary) on a regular basis, it’s your lease. This is, after all, the document that will ultimately determine your rights and protect your best interests when it comes to issues both big and small.  Because you’re dealing with a host of rules and regulations on the federal, state, and local levels, it’s imperative that you not only adjust your lease as necessary when laws change, but also that you’re in compliance and protected on all three fronts. If you’re not proficient in legalese, chances are reviewing your lease (and, moreover, identifying those elements that need to be changed) is a daunting endeavor at best. Following are some tips and best practices for keeping your lease up-to-date and your best interests protected on an ongoing basis. Hiring Legal CounselYes, this can be a somewhat expensive option. However, consider the fact that a water-tight lease can potentially spare you legal costs of a far more unpleasant variety in the future and additionally saves you a ton of time (as compared to reviewing and revising a lease on your own). Suddenly, the cost of hiring a legal professional to review your lease becomes a far more appealing option. If you do choose to take this route and don’t already have a trusted lawyer in your contact base, talk with real estate and property management professionals for references to proven lawyers that specialize in such matters. Professional or Association Meetings and SeminarsTaking part......
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