Category: Real Estate Professionals
How can landlords and property managers prepare for the end of summer rush before school starts?
Late spring and summer are considered peak season for home buying and selling. This can result in a back to school rush for tenants to relocate and get into new places before school starts.
When you’ve got this much action all at once, it can get really crazy. If you aren’t prepared it may become very stressful and expensive. Stay ahead of the game, and you’ll keep earning the loyalty of the best tenants, and keep your returns up.
Preparing for Exiting Tenants
The first step is to get ahead of the game on existing tenants. If you have leases renewing you want to touch base early and get new leases signed. You want to keep your good tenants and have a shot at talking them into staying. You also want to know if they are leaving as soon as possible. Then you can capture other movers in the market and get fresh rental property ads up before everyone is locked down for the next year.
Prepare for Turnovers
One of the worst blunders real estate investors make is waiting to put property management in place after a new lease is all closed, and it’s time to collect rents. Savvy investors get property management in the game before the change in tenants happens. A good property manager can help with the needs in getting the property ready, the rental process, and ensuring a smooth turnover.
Bring in Extra Help
With more phone calls, move-ins, and repair requests expected at this time of year, it is smart to bring in extra help. This could just be a part-time outsourced assistant. Factor in what it takes to line up additional vendors and backup vendors for landscaping, turning over units, and handling bookkeeping and tenant screening.
Home warranty plans can be a huge help at this time of year. Between new rental units, new tenants in units with older appliances, and perhaps new appliances being setup, there can be a lot of glitches. These can be a big time and money drain. Home warranty plans can help eliminate or minimize these expenses and disruptions.
Inspections and Preventative Maintenance
This is a smart time of year to set up routine property inspections and tackle any maintenance issues in advance before they get more expensive or disrupt the ability to keep units occupied. Preventive inspections of the heating units and winterizing the A/C unit is good to schedule for early fall.
Better Property Management Software
Better software may help streamline bookkeeping, reporting to any investor partners you have, and with accurately tracking property condition. These programs are constantly being updated, with new companies offering better and better solutions. Make sure you know your options and pick the one that suits your business.
Preparing ahead of time and getting the proper players in place can get you ahead of the game and help you to deal with the back to school rush. Don’t let the big yellow bus, with the flashing red lights, get in front of you and hold you up in leasing your properties!
Property management can be a major time drain if you do not find ways to manage your time. Doing so is a crucial part of the bigger picture, of building a highly profitable real estate portfolio. The more efficient you can be in this part of your investing, the better overall returns you can achieve while preserving time to actually enjoy the rewards of real estate investment.
Check out these ten simple ways to streamline your managing your properties.....
Accept Online Rental Payments
One of the ways to most dramatically streamline property management is to start accepting online rental payments. It will help cut down on time spent taking payments in-house or following up with bank statements and deposit slips. This can also make it easier for tenants to stay on track with their own rent payments.
Get a Bookkeeper
Unless accounting was your major, and you love it, leave it to someone else. Having at least a part-time bookkeeper can really pay off in maximizing annual tax breaks, and countless hours in pulling together receipts and documents at tax filing time.
Proactive Inspections & Maintenance
Slash the time involved in fielding complaints and repair requests, dealing with juggling vendors and additional bookkeeping by staying on top of regular property inspections, and tackling maintenance in advance. Small fixes done early can save many weeks and thousands of dollars.
Freedom to make Repairs
Whether you are a rental property owner with a property management company, or you are doing the DIY thing and are directly dealing with tenants, consider giving them more leeway to make repairs. Do you really need to personally handle every time a tenant locks themselves out, a toilet gets clogged, or a fuse blows? If it is going to cost less than $150 or $250, why not just give them the discretion to fix it?
Renew Leases Early
Ideally, you’ll know whether tenants are staying or leaving at least 60 days before their lease expires. This way you can work with tenants who are on the fence, which can save an enormous amount of time in turnover work. Or at least you know, and can minimize any vacancy periods.
Release Deposits on Time
Not handling potentially explosive legal issues fast can quickly create a lot of work and expense. That inevitably snowballs and impacts your finances in many ways over time. Deposits are a great example. If you delay mailing deposits back to exiting renters, that can lead to all types of problems, versus just handing them a check on the day of your move out inspection.
Deliver Default Notices on Time
The same as above applies to late notices. Train your tenants that if they are late you will start the eviction process. If they can come up with the money, that’s great. It’s also less likely they’ll let it go that far, and create a new turnover situation.
Pay Vendors Fast
When you drag your feet paying vendors, they drag their feet. It’s going to cost a whole lot more dealing with late penalties, digging up old invoices, and in time on the phone. You may even wind up being limited to only being able to work with the worst local vendors who can’t get employed by anyone else.
Streamline Tenant Selection Process
In your tenant screening process, go beyond the credit score or background check and choose who you think will maintain your property the best. The tenant selection criteria and screening process have to be process oriented and very cut and dry with no gray areas. By treating all applicants the same and completing the same process for each person it will help avoid fair housing and/or discriminatory issues.
Passive Income Investments
One alternative to cut out the need for virtually all the above is simply choosing passive income options, like turnkey rental properties, or investment models like Holdfolio which come with full-service property management.
When looking at the time expenditure for managing properties, it is wise to take into consideration all of the factors that eat up the most time for you. Where can you cut, who can you outsource, and how can you ensure that you aren’t a slave to your properties?
What type of insurance coverage do you need for your rental properties?
Rental property owners need insurance coverage. You may not love making premium payments, but you’ll be glad you’ve got it when something happens. If you plan to finance real estate investments you’ll often also find that insurance is mandatory.
Here are five types of insurance coverage you need to know about…
1. Title Insurance
Title insurance covers your rights to ownership and use of the property and helps cover legal defense if issues arise. You do not want to buy property without this. Every dollar of your investment and future income can be on the line. There is a lot of fraud out there today, and without title insurance, you are at risk.
2. Hazard Insurance
This is your basic property insurance. It typically covers fires and other common forms of damage. This is usually based upon the amount of the loan you have on a property, or the cost to rebuild the property. Make sure you keep the amount of coverage updated as your property value increases.
3. Special Disaster Insurances
Basic hazard insurance is very limited coverage. It typically does not cover a wide variety of other natural disasters which can destroy your property. If you are in a flood zone you will typically need special flood insurance. This is normally very inexpensive. Those in coastal zones may need windstorm or hurricane insurance which also can be very expensive.
4. Renters Insurance
Hazard insurance doesn’t cover tenant belongings. You don’t want to be on the hook for your tenants’ furniture and personal items if there is a fire, flood, or break-in. Typically, landlords will require that renters obtain their own renter’s insurance, at their own expense. This should be laid out in your lease.
5. Umbrella Policy Insurance Coverage
There is generally a discount when you group all of the properties together and this also provides ease of management. If you do enough deals, and own properties long enough you’ll run into something. Often loopholes in the above policies will mean you aren’t covered by them, or they may not provide enough coverage. An umbrella insurance policy can be used to cover you and act as a second layer of protection across all of your real estate business and assets. This can help cover issues like “dog bite” lawsuits.
Keeping in mind the need for all types of insurance coverage and this will make your property management experience a smoother and less risky endeavor.
Who are the essential professionals you need in your camp before you start investing in real estate?
It is important to keep up your momentum when getting started in real estate investing. Yet, you also want to make sure you are investing wisely and can enjoy a smooth process which delivers the best possible real estate success.
Here are the first five professionals you need to connect with before you invest:
Your actual investment returns will depend a lot on taxes. There can easily be a double digit difference in what you get to keep, depending on how you set yourself up, and how you file taxes. A good tax professional can help you strategize and get it right before you wind up with a big income tax bill.
Sooner or later you will want or need an attorney. It is just smart to have one already pre-screened and on call for when that time comes. You may want a specialist real estate attorney who can help negotiate contracts, and aid you in defending against lawsuits. It might also be helpful to have a family law or asset protection lawyer who can help you personally set up the right structures to grow and pass on your legacy.
Part of real estate success is the reduction of risk. Even if you don’t need direct property insurance to cover individual real estate assets, you will probably need an umbrella policy, life insurance, and other types of insurance to cover your assets in various areas.
Even if you don’t plan on needing credit or extra cash to invest, it can be wise to have relationships with these sources in advance. It will help you avoid any cash crunches or missing out on any great opportunities. This may be private lenders, mortgage brokers, or angel investors. You will also want to build relationships with bankers to make your transactions go more smoothly.
Having someone you can pick up the phone and call or shoot an email to for urgent help or an experienced second opinion can make all the difference in your business decision making. Find someone who is experienced in what you are doing and who shares your values.
If you plan to be an active real estate investor, make this a full-time thing, or to start a real estate business, you will also want these five people in your camp before you get going.
Having a trusted contractor on call can be invaluable for fast property inspections, repair estimates, timely turnovers and getting work done quickly.
Real Estate Agent
Whether or not you actually use a Realtor to help buy, sell, and rent real estate, investors can find them very useful for making sense of the market, and keeping on top of evolving trends.
You simply can’t do it all as an investor. Even if you have a strong marketing background, the most profitable use of your time is probably inking new deals. Still, with 90% of your success relying on your marketing to secure deals, fill them with renters, and resell them, make sure you have an expert on your team.
An assistant can be used to protect and free up your time so that you are getting the best ROI on every hour of the day. A good assistant can handle a wide variety of time-consuming tasks, including finding the other people on this list.
As you grow your real estate business, taking on a big multifamily property, or are building new homes to rent out, a project manager can save you time, and help things go smoothly. This could be a true project manager for a specific mission, a property manager, or a general manager for your organization.
Putting some thought into what and who you need to have in your camp to be savvy and efficient will help direct you towards the path of success!