Having an investment property involves a significant amount of responsibility to help maintain the property for renters or do major remodeling to flip the home for a future resale profit. Hiring a general contractor helps ensure all the necessary maintenance and remodeling work is completed promptly, done correctly, and the property remains up to current construction and building codes. To ensure the job is done correctly and as agreed upon, it's vital to hire a reputable contractor to help renovate your investment property.
Investing in real estate is and has always been a smart investment. Real estate ownership offers both passive income as well as great potential for appreciation during the investor’s ownership. However, over the past two years, rental ownership has become increasingly popular, so competition has increased as well. As a result, properly marketing a residential rental property has become more critical than ever.
Many property owners outsource their daily operations to a property management company. The management company handles everything from dealing with residents and potential residents, collecting rent, handling repair and maintenance issues, and responding to resident issues and complaints. The management company also works to provide peace of mind for a residential property owner in knowing that their investment is safe and secure.
Purchasing a rental property is a popular investment strategy for many investors. This technique helps to generate monthly passive income while simultaneously building wealth. Rental property investments typically include some form of risk. The risk the investor faces is defined as the chance that the actual outcome of the investment differs from your expected result. Risk, with regard to a rental property owner, appears in many forms. The following include some of the most common reasons why rental property owners fail.
Like the cost of most goods, rent often increases over time. Some years it changes very little, and others might see a dramatic increase. But as a renter, it's important to understand who can and can't raise your rent and have a basic understanding of the laws regarding rent increases. Here's a look at whether or not a property manager can raise your rent.
Are you seeking ways to improve the energy efficiency on your residential investment property? “Going green” is more than just a buzzword. Installing green initiatives can not only inspire the residents of your properties to conserve energy, it can also lower your maintenance costs.
Consider some options that can make your residential investment property stop bleeding money. Improving the energy efficiency of your property enhances its appeal to residents seeking living space without the problems of pollution and waste.
One main thing owners of commercial investment properties must do is keep up with the ongoing maintenance tasks for the units and grounds. If this is your first foray into the world of commercial property ownership, this can be a bit daunting. To make it somewhat easier for new commercial property owners, below is a checklist of some of the most important preventative maintenance tasks property owners must manage.
A renter’s eviction is a legal proceeding that a property owner must go through to legally remove a renter from a residential rental unit they are currently living in. The permissible reasons for eviction will vary based on the jurisdictional oversight and guidelines, type of property, and pre-determined property requirements that have been outlined in the renter’s lease agreement.
The following narrative offers a general overview of a property manager’s role regarding the eviction of renters in California.
The real estate market’s digital landscape has created new opportunities for real estate investors around the country. With effective virtual reality walk-throughs, real estate investors now have the tools to find attractive investment opportunities in locations that were once out of reach. As a result, it has become more commonplace for an investor to choose a property that is a significant distance from the investor’s home or office.
If you're a business owner who often works long into the night, it may be tempting to just move into your storefront or office space. Rather than wasting time commuting every day, you could simply retire to the back when you’re finished working for the evening. But there are zoning laws and safety concerns you should consider before making the move. Here's a closer look at whether or not it's legal to move into your commercial property.
Are you interested in hiring a property manager? If so, you might wonder what educational background a credible residential property manager should. Unlike some professions, there are no universal licensing credentials required to manage property for an investor, but there are plenty of skills to look for to help you find a professional residential or commercial property manager.
Commercial property management requires time and effort to remain profitable. Many commercial investment property owners first consider managing the property by themselves in an effort to reduce property expenses. This choice appears to be a good idea until the property owner realizes the decision is short-sighted – it limits investment opportunities and potential profit - but this can be corrected by hiring a commercial property manager.
Your property manager may not necessarily be the owner of the property being rented. This is because an investment property owner has the option to be involved in all aspects of a rental property or streamline these processes by hiring another person - a professional property manager, to act on their behalf.
Investing in a rental property for the first time can be a lucrative strategy. There are many benefits that come along with investing in rental properties such as tax incentives, value appreciation, leverage, and cash flow. However, investing in rental properties doesn’t come easy, and there are a few risks that you must take. There are a lot of things you should become knowledgeable about if you're a beginner looking to invest.
Are you considering buying a piece of property as an investment? If so, you want to get the best ROI possible. In today's hot seller's market, it's especially important to do your homework before closing your deal. That means doing thorough research about the property you intend to buy to be sure that you don't pay more than it's actual worth or overlook some crucial features of the property (or the lack thereof). Below are some things to keep in mind when seeking an investment property to purchase.
Over the years, both experienced and inexperienced owners of residential rental properties in California have made the sound decision to turn management of their units over to a property management company. Pursuant to its contract with an owner of a residential rental property, a property management company becomes the agent of that owner.
Owning an investment property can be a great way for someone to build long-term wealth. Real estate investors will benefit by receiving regular rental income that can help to pay down their mortgage while also benefiting from long-term real estate value appreciation. While investing in real estate can be a good idea, it's not always a passive form of investment. You'll be required to address resident needs and lease the home. Due to this, hiring a property manager can be a good idea. There are several benefits that come when hiring a property manager to help manage your property.
A vacation rental property has become a popular investment vehicle because many people see it as a good investment strategy for the modern real estate marketplace and a great fit with the 21st century’s gig or sharing economy.
Like most real estate investments, vacation rental properties offer both benefits and concerns as an investment. But the exponential growth of vacation rental hosting platforms like Airbnb & VRBO speaks volumes about the vacation rental market’s potential growth and profit.
When you build or buy into for-profit properties for residential occupancy, it's a major investment. That's why it's vital to take full advantage of all the tax breaks and deductions for which rental property owners are eligible. Many of these owners want to reap the profits from their investments but are less interested in performing the hands-on duties associated with property management.
Property managers take the burden from property owners with regard to the day-to-day operations of an investment or rental property. Property managers are responsible for various managerial tasks associated with the property. This includes anything from fielding calls about broken hot water tanks to staying on top of the many city, state & federal regulations that must be followed. A property manager can help with the following property management functions.
Investing in a rental property is a great way to create extra cash flow each month that can help pay your mortgage or other bills. But just because you have the money to purchase property doesn’t mean you have the knowledge or experience to manage the property. That’s why some investors choose to start with an owner-occupied rental, which can be a smart step for a first-time investment property owner looking to build a small investment portfolio. Here's a look at the concept of an owner-occupied rental and who should consider this investment option.
Owning a rental property comes with a lot of responsibilities. In addition to keeping a steady stream of renters, you also have to keep up with the maintenance of the property. This is especially important in the fall, just before the onslaught of winter. Here are a few common maintenance tasks a rental property owner should be sure to handle before the season changes.
Purchasing an investment property can be a smart financial decision but it also comes with responsibilities. In addition to paying a mortgage, taxes, and other related fees, you’ll have to be sure that the property is properly maintained, in order to create a habitable environment for your residents. As you grow your business, you may eventually need the help of a professional property management company to take care of the routine upkeep of your properties. Here's a look at the difference between property management and property maintenance.
The CDC recently announced that it would be extending the federal eviction moratorium into the fall. The eviction moratorium was designed to curb the spread of COVID-19 by providing relief to renters who are struggling to keep up with their bills. But, this bill also has an impact on property owners who rely on that rent to pay their own bills. Here's a look at what property owners need to know about the extended eviction moratorium.
Professional rental property owners view resident turnover among the costs/responsibilities of managing an investment unit. To maximize the unit’s return, investors find it beneficial to educate themselves on the effective ways to market a vacant unit. The goal is to minimize vacancies by ensuring the property is leased quickly to a qualified resident. Creating an optimized and effective online rental listing is quickly done by following a few simple techniques.
As a rental property owner, you want to do everything you can to keep your investment safe. Keeping your property safe includes doing routine maintenance and conducting safety checks. Additionally, it would be best to think about fire safety and ways to reduce the risk of a fire at your rental property during those safety checks. Here are some fire safety tips to help keep your rental property safe.
Finding reliable residents is one of the hardest parts of being a rental property owner. If you own an investment property and you’re looking to get it rented quickly to avoid vacancies, you may decide to accept a resident who doesn’t have the best financial credentials, including a low credit score. Here's a look at the process of evaluating an applicant’s credit and whether it makes sense to rent to someone with a low score.
Has last year created new motivations or means to make a move in the real estate market? If you're facing this situation (and you are not alone), you have two primary choices regarding the status of the property you currently own:
One of the hardest parts about being a property manager is finding quality residents. Although financial records and credit checks can help, you can never truly know a person’s character and ability to make payments on time until they are in the unit. If you own an investment property it may be tempting to rent to a friend or family member to avoid any bad apples who pass a credit check but still refuse to pay. But there are a few things you should consider before renting a unit to someone in your inner circle.
It’s customary for a property owner renting out an investment property to require residents to put down a security deposit that is equal to one month’s rent before moving in to cover any potential damages. But, if the resident has done serious damage to the unit while living there, it’s possible that one month does not cover all the costs to repair the unit. Here's a look at what you should do if you find yourself in this situation.
Preventative maintenance is one of the most important aspects of property ownership. If you want to protect your investment, it’s important to perform routine maintenance to keep everything in the building functioning properly. If you’re thinking about doing some spring cleaning and want to be sure that you’re doing everything you can, here's a look at the most common preventative maintenance tasks a property owner should stay on top of.
We all have to do our part to help the planet. If you own an investment property, and you’re looking for ways to go green, here are a few simple tips to help you reduce your energy usage and save money at the same time.
The art of being a property owner is knowing how to use the benefits to one’s advantage. Most property owners are in the rental property business for income and planning for their future. For all practical purposes, they run a business that they hope will return a reasonably substantial gain for them in the future. So, it stands to reason that they will want to make decisions that will save them money and make them money. One of the best ways to save money and make money is by knowing how to handle rental income on tax returns.
Property owners and renters are always on the lookout to make connections. The property owner is looking for a potential family to come and live in the home. If you are a property owner and wondering what the secret is to attracting quality people to your properties, then there are some marketing strategies that you can do to bolster the attraction to your investment property.
There's a lot that goes into getting your rental property ready for a new resident. You'll need to find the right person, create a rental lease and get them to sign it. You'll also need to have new keys made for the new locks you put on your property. But there is one thing that is often overlooked by both parties and that is the pre-move in checklist.
It's the objective of every property owner to have a resident that would rent for life. And during that time the resident would care for the property like it's their own. They would pay the rent on time and be completely flexible when it comes time for repairs. But the fact remains that the perfect renter doesn't exist. Sure, there are many renters that would make exceptional lifetime residents, but people move for many various reasons.
There are a lot of things that you have to think through when you are a rental property owner. Many property owners think that the technical side is all they have to work through. But there are so many more details such as communication, building a good relationship with renters, and working things out as issues come up. If you're looking for ways to build a better relationship with your renters, here are some ways you can make it happen.
The decision on whether you'll allow pets in one or more of your investment properties isn't a personal decision. It's a business decision, and it's a decision that must be made by you as the property owner before a unit is leased.
Now that you own an investment property, and have leased your unit out, you've come to the realization that you don't know when you might be able to enter it for purposes of checking on any maintenance issues or otherwise protecting your investment. In checking your lease, you confirm that you have the right to enter the premises at reasonable times with reasonable notice, but that doesn't tell you much. Your new residents have the right to privacy in the property, and you just can't show up there this week and say see you next week at the same time. That can turn into harassment. So, when can you legally enter your California investment property?
Being a property owner might sound easy to some people, but owning an investment property can sometimes be one headache after another, especially if you own multiple rental units. Just a few of the issues that owners have to deal with are:
There are millions to be made in the business of commercial real estate. However, you have to be on top of your business if you want to succeed in this lucrative industry. Here are a few tips for investors looking to dip their toes into the field of commercial real estate.
Most people know that a security deposit is required to rent a house or apartment. However, many don’t understand exactly what this payment is intended for and the rules regarding its use and storage. Here is everything property owners need to know about security deposits.
Everyone knows about property insurance, but there is another type of policy called renter’s insurance that is available through most carriers. Renters insurance is designed to protect the renter, however, it’s a concept every investment property owner should understand. Here's a look at this type of insurance policy and how it can benefit rental property owners.
As the coronavirus outbreak spread throughout the globe, public safety measures forced the slowing/closing of economic activity across the board. For the most part, business ground to a halt to stop the spread of COVID-19, with commercial and retail spaces practically abandoned overnight.
Months later, as state and local governments begin to deploy phased-reopening plans, business owners are now tasked with formulating their plans to ensure employees can return to work safely.
It's not always possible to foresee what will happen in the future of real estate, so the best thing a property owner can do right now is keep their property looking fresh and well-maintained. When care has been put into a home, it shows; this is what will attract prospective residents to a rental. If you are looking to up your game in the market, a little work will go a long way. There are many things that can be done to improve a home without breaking the bank. Not only will the rental look more attractive to those on the hunt, but it will also maximize the return on investment by increasing the property’s value.
The economic impacts of COVID-19 are unprecedented. Property owners, investors and residents alike are facing challenges that no one could have seen coming. Due to the state’s closure and reopening plan, many residents still are unable to work, especially in industries such as restaurants or hospitality. Without receiving a monthly paycheck, and even if any kind of second stimulus package is released, many residents are only able to pay partial rent or are unable to pay their rent at all.
It stands to reason that you will want to market to reliable residents that are hopefully willing to live long term at the property. A “for rent” sign is the simplest form of marketing that you can do for your rental property, but it's not always the most effective strategy. If you're looking for ways to market your rental property to a targeted group of people, then there are some strategies that you'll want to do.
Are you thinking of taking the plunge and dipping a toe into the real estate rental industry? Owning an investment property can be a very lucrative income stream whether it's your main source of revenue or a side project. But before you jump in feet first, consider how you plan to handle each aspect of the venture as a property owner.
Whether you are just dipping a toe into the world of rental property ownership or are a seasoned property owner, the one thing that can protect your interests is a solid lease/rental agreement. When drawn-up correctly, both you and your residents should be protected.
With so much uncertainty in the world, you may be looking for a way to secure your savings for the future. Real estate is a tried and true method for building and protecting wealth. But with the economy in such a precarious position, you may be wondering if a rental property is a good investment at the moment.
Property managers understand that filling a rental vacancy with an ideal renter is often an arrangement worth its weight gold, one in which may even increase the potential value of a property. While every property manager or owner will likely have an ultimate objective of finding the ideal renter, the finite details of what defines an ideal renter may vary among professionals. However, there are a few commonalities most preferred renter’s possess.
Renter’s insurance is an often-overlooked expense that can be vital to residents. Many renters, especially younger residents, may be unaware of what renter’s insurance is and how it can help them in an emergency. As a property owner, you should encourage your residents to have renter’s insurance by educating them on the subject so they know what it’s for and how it can help them. Here's a look at the benefits of renter’s insurance for both property owners and residents.
When a vacancy arises in a rental property, professional property managers (or property owners who have chosen to go it alone) are tasked with the responsibility of replacing the lost resident –quickly, if they are to minimize the disruption to the investment property’s monthly cash flow.
Loitering is defined when an individual stands/sits/wanders idly around a property without any real purpose. From a technical, legal perspective, loitering laws vary by state (or most often by locality). Some jurisdictions authorize the police to disperse crowds that are deemed suspicious or dangerous.
Loitering is generally viewed as a subjective act because, in and of itself, most loitering ordinances do not typically consider the act of loitering to rise to the level of a crime. This depends on the jurisdiction’s legislation. However, loitering is often associated with a variety of illegal actions.
Loitering is generally something that is viewed as unfavorable and may even potentially scare off new residents before these potential renters even have a chance to see the investment property's interior.
Property owners have a lot to deal with when it comes to residents renting their property. The desire of every property owner is to have that one family that causes no trouble and actually takes care of the property. But what happens when the resident decides that they are going to run a business out of the home? The property owner may feel that there's nothing that they can do, but the truth is that there are things that can be done to keep it from taking place.
Property insurance is designed to protect owners and their investment against anticipated business risks, which ultimately create financial losses. Rental property owners know that among the essential business safeguards available to their rental property business is purchasing the right insurance. If you plan to rent out a property to a resident for at least six-months, landlord insurance is highly recommended as it helps you rent the property with greater certainty and confidence.
Potential resident screening is an important part of finding the best residents for your properties. The screening process is essential to help you remove those individuals that could potentially cause you financial losses or property damage in the future. In order to help you with the screening process, here are several best practice methods that you'll want to adopt before having your first interview.
Raising the rent is an often uncomfortable, yet important part of being a property owner. Most property values appreciate over time and you may be losing money if you don’t periodically adjust rent. But, increasing the rent doesn’t mean you have to gouge your renter. There is always a way to do it smoothly while still getting fair market value for your rental. Here are a few tips to help you raise your resident's rent graciously and avoid potential conflict.
As a property owner, you have enough on your plate without having to deal with collecting checks or cash from your resident on a monthly basis, logging rental payments in a ledger and depositing these funds into the bank. Accepting online rent payments is a viable option to streamlining this process. Collecting rent payments online saves you time, money and frustration in keeping tabs on incoming revenue from property rentals. Less stress and frustration can lead to a more positive relationship with your residents. Here are just a few of the many benefits you stand to gain from accepting online rent payments.
The new year is upon us, and as such people are setting goals, getting gym memberships, and starting new diets. Ah yes, the new year. So much anticipation, so much hope, so much planning. In this blog I wanted to lay out a short checklist for you to go through in order to make sure you are doing well with your Chico or Redding rental property.
In the world of property management, it’s inevitable you’re going to have conflict. Many investors get into real estate and believe they are in the property business, but you’re not in the property business – you are in the people business – and having good people skills will be essential to your success.
Someone once said, “The road to Hell is paved with good intentions.” In some cases that is absolutely true. Such is the case with the Affordable Housing Act that will be voted on this November.
California is undoubtedly in a housing crisis. There are more people who are moving here than housing that’s available. This shortage of housing is causing rents to soar, especially in high demand areas like Silicon Valley and coastal communities.
Working in the industry of property management, I get the opportunity to speak to a lot of owners. Hignell Property Management manages a wide variety of real estate, but often I find myself talking to single-family home owners who are renting out their homes for the first time. They call a little nervous, a little afraid, and have no clue what the process is to rent out their home. Here’s a little about what to expect when renting out your home for the first time.
Since the great recession, the American rental market has seen incredible demand, with 37% of Americans choosing to rent a home as opposed to own. This is the highest percentage since 1965. Currently the fastest growing segment of rental housing is the single-family home. Here are some reasons why this type of rental investment property has never been hotter.
There are two types of renters in this world: those looking for fully furnished rental units, and those that are not. The former are typically people like foreign exchange students, traveling nurses, traveling construction workers on a short term job, etc. For these people it makes no sense for them to lug a couch, desk, table, and chairs all the way across the country, just to pack up and leave three to six months later. The type of people looking for a fully furnished unit are probably only going to stay for a matter of months and then jump on a plane heading to their next destination. They want to arrive with their suitcase and nothing else. They don’t want to have to bother with putting PG&E in their name, waiting for the cable guy to show up, and they definitely don’t want to deal with unloading a moving van with a massive amount of furniture.
“If you fail to plan, you plan to fail.” We have all heard this catch phrase, but few of us are really taking planning seriously. Whether it applies to our nutrition, retirement, or our investment property, planning takes time and brain power. At our company we manage many large multifamily complexes and homeowner associations. Around November of every year you can hear the groans from the managers as they dive into the numbers and reports to get the necessary info to put together the next year’s budgets for the properties. Is the roof going to last another year? How much do we spend on landscaping? Can we negotiate a better rate with this vendor? All these questions come up as I peer into the offices of the managers sharpening their pencils and getting their numbers right.
Nobody wants to be the mean guy. As humans, most of us have an innate desire to please people and get on people’s good side. We want to be accepted and liked by those we interact with. It’s just human nature. So, what happens when you’re a residential property manager and a prospective resident asks you to make an exception when they don’t qualify financially for your unit? What happens when your resident shares a sad story of why they are late on their rent? Do you make an exception? Should you be the proverbial “nice guy or gal?” My simple answer, for the most part is…no. Do not make exceptions. Here’s why.
There are risks and rewards to every decision in life. Real estate investing is no different. The key to making a good investment decision is weighing out the risks versus the rewards.
In the world of real estate investment there are many opportunities with older homes. Many of these older homes are one of a kind with all kinds of unique craftsman finishes. After all, they don’t make ‘em like the used to! So, what are some of the risks involved in picking up an older rental property?
Every 20 seconds in the United States there is a break-in. Unfortunately, we live in a world where bad things happen. Crime is a reality and something that prospective residents will consider when choosing a place to live. I wanted to take some brief moments to share some tips on how to create a safe environment that can help deter crime from your Redding or Chico rental property.
There are many different property management companies out there. There is half a dozen just in my small town of Chico, CA. Not every property management company will offer the same services so you’re going to want to check and see what exactly will be the scope of services that will be included in your management contract.
I’ve recently been a go-to source of information for friends looking into investment property. There are so many options. How do you know which one is right for you? What are the strengths and weaknesses of each type of property? What are the long term issues that are going to spring up now that you have this property long term?
These are all great questions, so let’s go through the strengths and weaknesses of each type of property.
As a professional property manager, I speak to investment real estate owners every day. Most are calling because they are tired of managing their own property. Sometimes I get calls for advice about how to handle a situation. The benefit of being in my position is that I get a broad perspective of what it takes to self-manage your own property. I also see the other side of having a property management company manage your property. Today, I am compiling a list of the pros and cons of managing your own property.
I work in the world of property management and my job is to interact with real estate investors all day. It’s a great job. I have many rental property owners who call me not only to ask for quotes on services, but also to ask advice on the local market and decisions they need to make. I get to hear all kinds of stories. Some are great the others and terrible. Here’s a compilation of the most common horror stories I hear in my position.
You have probably heard that there are three rules to real estate: Location, Location, Location. The same is true with where you buy your Chico or Redding rental property real estate. When deciding how much to charge for rent or where you can buy a great rental property you need to first look at location.
Turning over a rental property is probably one of the trickiest parts of rental property management. You need to coordinate move-out dates, maintenance, marketing, cleaning, inspections, possibly remodeling and a whole host of other variables. No doubt this takes skill and finesse to nail down a fool proof strategy to turning over rentals. In this blog I’m going to talk to you about developing an excellent strategy that works for your Redding or Chico rental property.
Stuff happens, and unfortunately if you have a Chico or Redding rental property, this “stuff” will happen to your property. Your lawn will die, your parking area will need to be resealed, gutters will need to be replaced, exterior paint will need to be freshened up, and there’s a winter storm coming where you’ll inevitably receive calls saying that the roof is leaking. This stuff is going to happen. It’s not a matter of if, but when. So, what can you do about it? In a world of deferred maintenance how do you keep your investment looking good and staying profitable?
In the late 1980s there was an amazing TV show called MacGyver. MacGyver was a secret agent that would solve all kinds of problems using random things he had around him. He would start car engines using a bubble gum wrapper and some duct tape. It was fantastic to see his creative solutions to save the day.
Sometimes Redding & Chico rental property owners can be a bit like MacGyver. Instead of calling a plumber to fix a leaky pipe, they will instead use some duct tape and bubble gum to save the day. The problem is that when maintenance work needs to be done, you need to do it right and do it quickly. Many properties have what we call deferred maintenance which are maintenance issues that are left undone.
Much of successful property management is getting qualified residents to rent out your property. But even when you get the sense that you are getting the best residents to move in, you still need to cover your bases when it comes to move-in and move-out paper work.
In my small town of Chico, as well as all over California, the rental property market has been on fire. Currently we have never seen such high rents with such low vacancies. As a matter of fact, I’d be willing to say in our 60-year history, it’s never been quite as good as it is now. Rents are up and vacancies are very low. At the moment, the vacancy rate over our 1,500 local units sits at .56%, and this is after we raised all our rents and built 56 brand new apartments. Pretty amazing!
Most readers of our blog are holding anywhere from one to 20 rental units. However, there’s a growing movement of apartment developers who are building brand new luxury apartments with well over 20 units. For those of you out there who are planning on building brand new apartments there will come a time when you will need to lease them up. If you self-manage your properties, you should know there’s an art and science to doing a lease up well.
If you’re going to win in the world of real estate investing you are going to need to be well informed. You will need to be able to quickly and effectively assess what a property is worth. In order to do this, there are some well-known equations that you’ll want to calculate as you assess the property. Here are some of the commonly used real estate equations.
The past few blogs we have been talking about how to keep your Redding & Chico rental properties filled by working on your selling skills. In this competitive market, you need to make sure that you’re using every competitive advantage to fill your vacancies. Developing your selling skills is a great way to get a leg up on the competition without spending any additional income.
We started this blog series with some basic selling skills. Here’s a recap:
If you’re just popping into this blog you may have noticed that this is a series of blogs about how to sell your rental units to prospective residents. If you missed the first two, you can check them out by clicking below:
Time is your most valuable resource. The age-old adage that you can always make more money, but you can never make more time, is true. As a rental property manager, you need to invest a significant amount of time into your investment property if it’s going to be a viable source of income for you – or hire someone to do it for you.
Being in the rental property management industry we get to work with a lot of different investors. It becomes quickly apparent that not all investment property owners are created equal. Some property owners are great to work with and constantly make wise decisions leading to a growing portfolio and happy residents, while others struggle and stress constantly about their investments.
When investing, diversification is usually a good thing. Typically, this blog is about residential property management, but I wanted to take a second to deviate from the normal course of content and dabble a bit in commercial property. If you’re considering diversifying your investment into an office, storage, or retail space, one of the first things you’ll need to understand are the different types of leases.
Do you remember when you purchased your first investment property? Maybe you took a huge risk on a fixer upper. Maybe you rented out the home you lived in for a decade when you upgraded homes as your family grew. No matter how you first got into investing one thing is true among all investors – you have invested a lot of money and you will turn the keys over to someone else. Every investor wants to make sure that the person they hand those keys to is a great resident.
When you first invest in real estate you run a lot of numbers. You want to calculate your Cap Rate, Cash Flow, ROI, projected income, gross rent multiplier, etc. Everything looks good so you pull the trigger. Great, now you just need to keep your property rented and let the numbers run their course right? Well, there is one variable that can’t be calculated, and that is people. You are renting to people. And where you find people, inevitably, you will find problems. It’s just the way it is.
Over the past number of years, the property management industry has seen a huge rise in activity concerning student housing. It’s been pretty amazing. In our college town of Chico, California there’s no doubt that the highest rents are achieved around our University; and we’re not just talking about a 10 or 20 percent increase to be close to campus. We’re talking a 100 to 200 percent increase in rents for prime locations close to college. It’s been a very fruitful investment for owners as rents have been driven up dramatically faster in neighborhoods within walking distance of the University than other locations in our community.
As a real estate investor, you know that time is of the essence. Typically, most investors I know are highly leveraged. They have a mortgage to pay every single month, and the bank doesn’t accept any excuses as to why you’re late or a month behind. Renting out your Chico or Redding rental property fast is important, and it’s something not every investor thinks about with a new investment.
In the previous blog post I talked about the importance of not just showing your properties, but selling your rental property to potential residents. I can’t underestimate how important this is. Any company that goes out of business, or loses money does so because they didn’t sell enough of their products or services in the quantities necessary. Selling is an important skill no matter what business you’re in and it’s something that we can all improve on.
In this complex world of millions of options and tough decisions it’s nice to come across a no-brainer every now and then. It’s like when you go to your favorite lunch place and they tell you the sandwich you want to order is on special and you can get it for a cheaper price and it comes with a side and a drink included. I love those moments. Sometimes I’ll say out loud “why wouldn’t I do this?” It’s an easy decision.
If you are actively looking for great residents to fill your investment property then not only are you a property manager, but you are also a salesperson.
Now, being in sales, it would greatly benefit you to know how to develop the skill of selling. So, I’m going reveal the most important question you need to ask to sell something. It’s basic, but very powerful for you to grow your business and get your properties filled quickly.
“I want to invest in rental property management so I can meet some nice people and make friends,” said nobody ever. Managing Redding and Chico rental property is a business and must be treated as such. Although nobody has said the statement above, there are plenty of rental property owners who have had similar thoughts in the back of their minds. It’s tough because there are those owners who may have had a bad experience with a property manager and now want to right the wrongs. They want to be the nice manager.
The life of flooring in a Chico or Redding rental property can last anywhere from a few years with low grade carpet to decades with high end tile or hardwood floors. Typically, if you’re a long-term rental property owner, odds are you’ll have to replace flooring in your rental. As someone in the rental property management industry, many owners ask me which flooring solutions are the best for rentals. The answer is – it depends.
If you’ve managed property in California for any length of time you understand there are many laws that must be followed or you could end up in some very hot water. These laws are constantly changing every year and you need to be aware of what laws have been passed and what you as a property manager must do to comply with them. There are a number of new laws, but let’s look at two major ones that will affect all rental property managers in the state.
Bed bug infestations have been rising at alarming rates across the nation. In hotels, houses, and apartments there are hardly any places where people sleep that are immune to the effects of these parasitic insects. Unfortunately, if you're a rental property manager of any kind there’s a high chance that you’ll have to deal with the reality of these unwelcome pests. So, it’s time to prepare yourself for that moment when you come face to face with these nasty insects.
Pot, weed, Mary-Jane, wacky-tobacky, no matter what you call it, recreational Marijuana is now legal in California. For some people, these aforementioned names are cringe worthy and bring up thoughts of commercials on MTV with a man dropping an egg on a frying pan and saying, “This is your brain on drugs.” For others, these names bring up memories of a care-free time in college when they lived dazed and confused. No matter what your stance or view point on Marijuana, if you own investment rental property in California, you’re going to have to get familiar and become educated with this new law. It’s high time we cut through the haze and get some clarity about what this means for you. (I promise, I’ll try to keep the puns to a minimum).
If you’re in the market for hiring a property management company, you should know that one of the key factors for the kind of service you’ll get is how much the company is capable of taking on – or can handle. Learn why a property management company’s capacity should matter to you here. Now that you’re aware that capacity matters, there are some indicators to help you determine if a management company is beyond its capacity.
Capacity. It’s a word we don’t throw around too often. It’s something I believe most Americans don’t consider enough, and it’s a concept that, if not adhered to, will have a systemic negative effect on any company, organization, or individual.
When people comparing and contrasting management companies ask me “what sets Hignell Property Management apart from other companies?” My response is one word – Capacity.
Capacity is the ability or power to do, experience, or understand something. It’s also defined as the maximum amount that something can contain. We all know that there’s only so much we can do. Our proverbial plates can only hold so much. When we commit ourselves beyond our capacity, bad things happen. Responsibilities get missed, balls get dropped, and people get let down.