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What Are the Best Paint Colors for Rental Properties?

March 19, 2018

Seasoned renters know that unpleasant sensation when you walk into a rental property and see bright, clashing colors throughout the space. In some rooms, it can be overlooked, but a bright teal in the master bedroom could make it a challenge to sleep at night.

Without a promise that the rooms may be repainted, some of us would have left such a property without a second thought. “Color wields enormous sway over our attitudes and emotions,” declares Internet marketing guru Neil Patel.

“When our eyes take in a color, they communicate with a region of the brain known as the hypothalamus, which in turn sends a cascade of signals to the pituitary gland, on to the endocrine system, and then to the thyroid glands. The thyroid glands signal the release of hormones, which cause fluctuation in mood, emotion, and resulting behavior…. So, the bottom line is: use the right colors, and you win.”

Although his advice is aimed at website designers, it applies just as much to income properties. When you’re a landlord, it’s wise to use colors your tenants will like.

You can’t afford to drive people away due to poor paint choices. Here are some painting tips that will help you stay on track.

Avoid Bold and Daring

If you feel like making a statement with bright paint colors in your own home, that’s fine. But if you’re trying to attract tenants from various walks of life, bright colors will be a turn-off for many of them.

Not only will the paint clash with some prospective renters’ preferences, but they’ll stir emotions that might counteract what you’re trying to achieve. “I usually suggest to clients to avoid oranges and reds in any type of space,” says Lauren Colson, founder of LMC Interior Designs in Atlanta. “They make people feel anxious and angry.”

The same is true for bright yellows, rich browns, vibrant blues, and other statement colors. People tend to love them or hate them, so you’ll have difficulty reaching a broader audience with these hues.

Use Neutrals Correctly

Most landlords depend on neutral colors because they’re more likely to appeal to a wider audience of potential tenants. They’re a much safer bet than brilliant colors, but it’s still possible to employ them incorrectly.

To begin with, stark white walls can be a damper for tenants who hope for something more interesting. A lack of any color also fails to supply contrast for wall hangings, and it won’t look as good in advertising.

Grays, tans, and creams are more recommended for rental properties. Typically, it’s better to stick with lighter colors for the majority of the house, and slightly darker tones for areas such as the dining room or bathroom.

Gray is a trendy interior color right now, but you have to be careful with it. “Gray is a tricky, tricky color,” Colson says. “There are so many different hues of gray that if you’re not careful you can end up with an icy cold room instead of a warm retreat.”

Dark neutrals can also make a great statement without scaring renters. If you want to experiment with dark colors, do so in rooms apart from the main living areas.

“Separated dining rooms are the perfect place to try out a dark gray because they are supposed to feel cozy and inviting instead of open and expansive,” she adds. Darker neutrals also make suitable accent colors for baseboards, doors, and accent walls.

Use Paints That Don’t Show Dirt

Here’s another reason that stark white walls don’t work as well, both on the interior and the exterior: They show every speck of dirt. When you’re renting to certain tenants, especially if they have kids or children, lighter shades get stained and need to be repainted more often.

That’s going to mean a lot more money and hassle for you. But this doesn’t mean that white is completely off the table.

“You don’t have to paint your interior walls and cabinets mud brown or grimy gray to camouflage grunge and smudges until you get around to washing them,” explains an article from SFGate.com. “Paint sheens, techniques and colors that hide dirt are practically as easy to find as dirt itself.”

The article advises you to use washable paint at a medium gloss. This reduces excessive light reflection and makes blemishes less noticeable, and it can be cleaned fairly easily when the tenant leaves. The piece also suggests neutrals that consist of earth tones to hide smudges.

Use High-Quality Paint

When you paint your rental property, the ideal space will be relatively inexpensive, durable, long lasting, and easy to apply. Using the right kinds of paint will support this goal.

Painting your interior walls in a way that attracts tenants isn’t going to be your only concern as a landlord. You’ll also need to screen tenants, collect rent, promote your properties, evict tenants, draft contracts, and so much more.

With all that on your plate, the job can feel a little overwhelming. Total Property Management understands the hassle that landlords take on every day, and we want to offer our expertise in this area. 

We can help you choose paint colors and so much more. Our flat-rate fee makes us more affordable and accessible to landlords all over the city and the surrounding area. For more information about what we can offer your property, contact us today!

Our Blog

An ongoing series of informational entries

The Snowball Effect: Attention Investors

March 13, 2018

You’re probably already familiar with the classic “snowball” effect. A snowball, rolling downhill, will accumulate snow around its exterior, and grow larger. The effect continues, but the larger total area of the snowball means even more snow is accumulated. The snowball rolls faster and faster, picking up snow at a faster rate, until it reaches massive proportions.

There’s a strategy you can apply to real estate investing that gives you access to the same kind of exponential return; once you build momentum, and choose your direction, you should be able to accumulate more and more revenue, eventually establishing you with independent wealth and a wide portfolio of different properties in your possession.

The concept is simple. You’ll start with one investment property, with the intention of maximizing its monthly profitability. For example, let’s say you bought the house for $150,000, and after all expenses, including your loan payment, property taxes, insurance, maintenance, and repairs, your monthly total is around $1,200. You then charge your tenants $1,700 per month in rent, resulting in a profit of $500 every month.

After a year of ownership, assuming you set aside this extra profit, you’ll have $6,000. After two years, you’ll have $12,000—and more than enough for a down payment on another property. So let’s say you find another property with almost the exact same specs as the first one. It’s $150,000, with $1,200 in monthly expenses and a profit of $500 per month. Now you’re making $1,000 per month in rental profits, and it only takes you one year to accrue another $12,000, which you can use to buy a third property.

Follow this pattern a few more times. Soon, you’ll have 5 properties, each making you $500 a month, for $2,500 per month, total. Hypothetically, you’d make $30,000 that year, potentially enough to provide a down payment for 2 or 3 additional properties. At 10 properties, you’d pull in $60,000 a year easily.

The approach has several advantages:

The model doesn’t require a significant upfront capital investment. As long as you have a few thousand dollars set aside for the initial down payment, you can scrape by as long as you have tenants filling your property.

The model is also appealing because of how it scales. When you first start, you’ll only have to worry about one property, which is a relief to newcomers. If at any point you feel overwhelmed with the number of properties you have, you can back out or sell some of them, meaning you’ll only ever manage as many properties as you want to manage.

Obviously, people love this strategy for its practically unlimited potential as well. As long as you keep adding properties to your portfolio, your revenue is going to grow. There’s no strict upper limit here.

One of the lynchpins of this strategy is your first property. It needs to be a near-perfect investment because it’s going to provide the initial foundation for your future. Assuming you’re new at this, your property needs to be exceptionally easy to manage; try to find a single-family home, and one that’s been recently built or renovated. The fewer instances of maintenance and repair, the better. You’ll also want to choose something with strong long-term growth potential, since this will soon be the oldest property in your portfolio. Carefully examine multiple candidates, and don’t jump the gun; wait until you find the right fit for you.

You also need to make sure you can turn a profit consistently with your first property, or you won’t be able to accrue the down payment you need for the second. There are a few things you’ll need to ensure to make this happen:

Plan for all your expenses. First, make sure you’re accounting for every conceivable expense you could face. That includes your loan payments (principal and interest), your property taxes, your insurance payments, and ongoing expenses such as property management, emergency repairs, seasonal maintenance, and other items. Build in an extra cushion to protect yourself from unforeseen expenses as well.

Set the right rent. Make sure you’re setting the right rent. It’s tempting to post a rent that’s a few hundred dollars over your costs, but if it’s too high for the area, you’ll never attract tenants. Do your research before you buy, and make sure your neighborhood can support the rent you need to charge to make a profit.

Choose good tenants and keep them happy. Finally, spend some time and effort recruiting the right tenants and keeping them there. It’s far better to find a stable tenant who will pay you consistently for months or years than to fill the void as quickly as possible at the risk of increasing your overall turnover.

Your first few properties should be easy to maintain, and “sure bets” in terms of profitability, but as you become more familiar with buying properties, you might start taking bigger risks or experimenting with variations of the strategy. For example:

Bigger profits. You could buy commercial property, or multi-family buildings that are harder to maintain, but have the potential to return you a much higher profit. The more properties you have in your portfolio already, the lower your overall risk will be.

Minimized demands. You might also optimize your holdings and services to minimize the amount of time you have to spend managing your properties. Instead, you can hire a property management service, and spend your time doing what you want to do.

If you’re tired of managing properties, or if you’d rather pursue other investments, you can always sell some of your older houses and rebalance your portfolio.

If you’re interested in becoming a landlord for the rental income, but don’t want to invest hours of your time every week, your best strategy is to secure the help of a property management service. If you’re interested in learning more about how property management can keep you profitable while sparing you effort.

Tip: Total Property Management offers investors an incentive for a portfolio of five or more homes.

Our Blog

An ongoing series of informational entries

Renting Your Home After it Didn’t Sell?

7 Things You Need to Know

March 5, 2018

If your home won’t sell and you’re considering renting, you’re not alone. Plenty of people switch from homeowner to landlord when unexpected circumstances arise.

When your property won’t sell, renting it out sounds like a profitable alternative; a vacant home won’t bring in revenue. Although, renting your home will make you a landlord, and being a landlord isn’t easy.

Before turning yourself into a landlord, you need to know what responsibilities you’re looking at. Consider the following information before making a decision.

Real estate “seasons” apply to selling and renting your home

Zillow published a study in 2016 that concluded spring is the best time to sell a house. If you’ve been attempting to sell your home out of season, don’t expect it to automatically rent. The same seasonal rules apply to selling and renting your home.

People don’t generally move during fall and winter, although there are exceptions. During the holiday season, people are busy and money is tight. If you’re renting between December and February, be prepared to reduce the rent slightly below market value to ensure your place gets rented out.

Renting for emotional reasons is risky

Renting home because you didn’t get your asking price is an emotional decision that can hurt you. Becoming a landlord isn’t a quick fix to ease the burden of perceived loss; it’s a long-term commitment that takes time and money to sustain.

Renting your home because it sounds better than taking a loss on your sale price will cost you more money, time, and energy if you’re not careful. 

Consider feedback from your prospective buyers

The weather isn’t the only reason homes don’t sell. Other factors like price, condition, and neighborhood can be a large part of the equation. Additional factors specific to why your home isn’t selling may not be obvious to you, but your prospects will tell you if you listen closely.

There are many things buyers hate. What objections did your prospective buyers express? Take note of everything they’ve said, even if you disagree. The reasons your home didn’t sell might also be obstacles to renting it.

Crunch your numbers diligently

If your mortgage payment is $1,700 per month, but you can only rent your home for $1,500 per month, renting it out doesn’t make sense. Selling at a loss, in this case, is your best option.

Include details on showings in the lease

If your ultimate goal is to sell your house, when you rent it out, detail how and when showings will take place in the lease. Getting the tenant to agree to showing terms ahead of time will encourage them to be cooperative.

Being a landlord costs time and money

The cost of being a landlord is extensive, and shouldn’t be overlooked. Selling your home at a loss might be a better option, especially when you don’t have the time (or the desire) to manage tenants.

Some of the costs you’ll encounter as a landlord are:

Ongoing maintenance. Every home requires ongoing repairs and maintenance. When you lived in the unit, you may have been okay with a broken water heater and a leaky faucet. Your tenant won’t be.  In addition to large repairs, your tenant will call you for repairs that are so small, you won’t believe they noticed. Like the pulley for the blinds being slightly off balance, or a tiny hole in the weather stripping on a window. Be ready to get calls and emails often.

Property taxes. Have you noticed property taxes seem to rise but never decrease? There’s no way around paying steadily increasing property taxes as long as you own the home.

Evictions. At some point, you might need to evict a tenant for not paying rent or violating the lease. The prospect of evicting a tenant is intimidating when you realize how much the law favors the tenant.  For instance, if your property is vacant and someone decides to squat, you can’t kick them out for trespassing; they have renter’s rights in the eyes of the law. You’ll need to go through a formal eviction process to get them off your property. This process can take several weeks.

The same goes for a renter who stopped paying you rent. There’s a protocol to follow before you can even file an eviction, and if you make a mistake, you’ll have to start over.

High demand for your time. Between finding and screening tenants, repairs and maintenance, collecting rent, staying up-to-date with laws, and fielding calls from existing tenants, you’re going to be exhausted.  If you don’t have a reserve of energy strapped to your back, you’ll get tired quickly. Money isn’t everything. If you’re not okay with being on call 24/7 for your tenant, you don’t want to be a landlord.

Smart landlords hire a property management company

Being a landlord involves more than collecting rent and calling in repairs. It’s an unrehearsed dance between you and the tenant. When being a landlord isn’t your full-time job or passion, hiring a  property management company to take care of your tenants is the smartest solution.

Our Blog

An ongoing series of informational entries

9 Small Changes That Will Reduce Tenant Turnover

February 26, 2018

Tenant turnover is the bane of most landlords’ existence. When a tenant leaves, you’ll need to spend hours cleaning the place up, hundreds of dollars placing ads and trying to market the unit, and on top of that, you’ll be left without a stream of rental income for as long as it takes to find a replacement tenant. After two or three rounds of this, you may become frustrated to the point you question why you even became a landlord in the first place.

While there will always be unexpected changes that force tenants out of your units (including job offers and family demands), tenant turnover is a variable you can control to some degree. Thankfully, reducing tenant turnover doesn’t have to be as complicated or expensive as remodeling your entire building; instead, a handful of simple strategies may be enough to keep your tenants happy (and paying rent longer).

Best Strategies to Improve Tenant Retention

Try using these strategies in tandem:

1. Take your time finding new tenants. When your property becomes available, your first instinct will be to fill it as quickly as possible; but that approach may harm your tenant turnover rate in the long term, leaving your property empty for a longer period of time. Instead, take your time finding new tenants, screening them carefully and evaluating them based on their rental history and reasons for seeking a new place. Opt for candidates with a strong credit history, and ones who seem the most stable (with few job and apartment changes in the past). The more reliable your tenants are, the longer they’ll stay.

2. Change the lease agreement. If you have a perpetual problem with tenant turnover, the root of the problem may be with your lease agreement; so, consider changing it. For example, if you currently offer month-to-month terms, and you find that most of your tenants bail within a few months, you could add a one-year or two-year minimum to entice longer stays.

3. Build a relationship with your tenants. Your relationship with your tenants should be a professional one, but that doesn’t mean a relationship shouldn’t exist. Start your bond right by introducing yourself personally, and having a friendly conversation with your tenants. If there’s ever a problem at the property, talk to them personally, and communicate with them on a regular basis. Your tenants will feel more comfortable at your property, and will be more likely to bring up any problems they have.

4. Be proactive about tenant satisfaction. Don’t wait for tenants to bring up every problem with the property on their own; instead, be proactive about ensuring tenant satisfaction. Send your tenants a message, asking them if there’s anything different you could be doing, or if there are any problems with the property. Stop by every few months for a personal check-in, and try to make yourself as available as possible. The longer a problem goes without being addressed or mentioned, the worse it’s going to get.

5. Respond to any and all requests with urgency. Hopefully, your tenants will actively inform you when they’re experiencing a problem, whether it’s a maintenance need at the property, or a noise complaint in the neighborhood. Whenever you get a request for assistance or action, respond to it with a sense of urgency. You don’t have to drop what you’re doing and make the repair immediately, but you should let your tenants know that they’re important to you, and that you’re taking their requests seriously. Your tenants need to know you have their backs.

6. Keep the curb appeal high. If you can, try to maximize the “curb appeal” of your property. People feel good when they come home to a building that looks nice on the outside (even if you can’t control what’s on the inside). Keep the lawn mowed and tidy, and consider planting trees, shrubs, and flowers to beautify the exterior. Wash the exterior of the building regularly, and occasionally add a fresh coat of paint.

7. Be transparent. Whenever you take an action or make a decision, be as transparent as possible. If there’s a delay in fixing something wrong with the apartment, let your tenant know why. If you need to raise rent, explain the circumstances that forced you to do so.

8. Reward loyalty. If you want your tenants to stick around as long as possible, make it rewarding for them to stick around. For example, you can resist rate hikes for as long as possible, or perhaps even offer a discount on rent the longer they stay with you. You could waive extra fees when appropriate as a gesture of good faith, or even leave them gift baskets and other rewards to thank them for being reliable tenants.

9. Avoid inconveniences where possible. No matter what, you’ll need to inconvenience your tenants at some point, but the fewer instances of inconvenience you create, the better. For example, if you need to mow the lawn, consider waiting until 9:30 instead of doing it at 6:30 and waking them up prematurely. If you’re scheduling a repair to their unit, try to schedule it at a time that works for them; ask for their availability before moving forward. These little compromises won’t make your life much different, but over time, your tenant will be happier with their living situation.

The Property Management Factor

If you’ve tried these strategies and you’re still frustrated with the ongoing management of your property, there is another option that can relieve you of the tenant turnover problem entirely: getting help from a property management agency. In exchange for a reasonable monthly fee, your property managers will take care of every process associated with tenant management, including collecting rent, making property repairs, and even finding new tenants when your existing tenants leave.

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An ongoing series of informational entries

7 Considerations Before Buying A Home Warranty

February 19, 2018

A home warranty sounds like a great deal. You pay a monthly fee and your repairs and maintenance needs are covered. While that sounds good in theory, it doesn’t work out that way in the real world.

If you’ve never dealt with a home warranty before, here are 7 precautions to consider before signing a contract:

1. A home warranty is not actually a warranty

Traditionally, a warranty is a “guarantee of the integrity of a product and of the maker’s responsibility for the repair or replacement of defective parts.” For instance, when you purchase a warranty for your new dishwasher or stove and it ends up being defective, the manufacturer will replace it or pay for repairs – no matter what’s broken.

A home warranty doesn’t fit the definition of a warranty. It’s a contract governing the repair or replacement of defective parts in your home; however, it’s limited and subject to strict rules. Not all repairs and problems are covered. In fact, most repairs aren’t covered, and homeowners are frequently denied claims.

Many home warranty companies deny homeowner claims citing the problem as “pre-existing” or claim owner negligence without inspecting the appliance. According to Today.com, “Home warranty companies have been the worst-graded category on Angie’s List for eight years in a row. Nearly half of the member ratings were unfavorable.”

Before sending a home warranty company your money, thoroughly investigate their reputation. If you can’t verify their integrity, tuck money away every month to cover your own repairs. Or, hire a property management company to get your repairs done professionally and on time.

2. You can’t decide when it’s time to replace your broken heater

Heat is an amenity every landlord is legally obligated to provide their tenant.  A lack of heat is considered a violation of the Health and Safety Code. Without heat, your unit is considered unlivable and the tenant has no further responsibility to pay rent.

If your tenant’s heater breaks and you’re counting on your home warranty company to replace it before your tenant gets mad, be prepared for some blips in the process.

Some home warranty contracts reserve the right to pay you out rather than replace your broken heater. If they pay you out, it will only be a fraction of what a new unit costs. You’ll be on your own to finance the rest of the project.

Meanwhile, your tenant will be without heat for as long as it takes to negotiate with your home warranty company. By the time you look into hiring another company, your tenant might already be planning on leaving or filing a lawsuit. They might even start asking for a refund on their rent.

Home warranty companies make money just like insurance companies.  Just like the insurance business, home warranty companies make their money from people who don’t use their services. While not all home warranty companies are unscrupulous, many are. The key is to do your research before signing a contract with any company.

3. There’s a waiting period

Most home warranty companies won’t let you use your plan for up to three months after signing up. The companies claim the waiting period is designed to prevent people from making a claim for a pre-existing condition. In that case, consider three months of fees to be your loss and their gain. The waiting period is understandable, but paying the fees while you wait is not.

Home warranty companies aren’t the only services with a waiting period. The famed roadside assistance club AAA has a similar policy, although their waiting period is only a few days.

4. Repairs will take longer to complete

Having to route all repairs through a home warranty company can prolong the resolution and frustrate your tenant. First, you’ll need to file the claim and wait for a response. Once approved, your request will be sent to a third party vendor who will need to review the claim and schedule a service call.

If your tenant has to take time off work to accommodate service calls, they’ll be especially annoyed if the technician can’t complete the job in one session. If the tech needs to order more parts and come back a second time, you can expect an angry tenant.

5. Hiring a professional property management company like Total Property Management avoids the lengthy repair process. We have access to a network of top-rated professionals in Greenville and it's surrounding areas, and prioritize requests based on what landlords need. The biggest benefit is your tenant doesn’t need to be home for the repair to take place.

6. Coverage is more limited than you think

Your home warranty won’t always cover the whole cost of what needs to be repaired. For instance, your air conditioner may not be completely covered. While you can get most broken parts replaced, you’ll likely need to pay for the expensive aspects like recharging it.

7. A true emergency won’t be prioritized as an emergency

When you call a local 24-hour emergency plumber or electrician, you can expect them to show up at your door within the hour. Others will show up within a few hours. Your home warranty company won’t necessarily be so quick.

Your contract will define a period of time they promise to “respond” by, but that doesn’t mean that’s when a service professional will show up at the door. You still have to coordinate with a third party vendor and your tenant. Depending on what’s wrong, the damage might be greater by the time a technician shows up.

When you hire a property management company offering maintenance with a quick turn around, you won’t be given the runaround and you won’t need to deal with third parties.

When does a home warranty make sense?

When you first buy an investment property, it might make sense to purchase a home warranty plan for at least a year while you assess the condition of the property. After that, you’re better off with an emergency repair fund.

It’s exhausting searching for a home warranty company that doesn’t play games; if you want to skip the roundabout, hiring a property management company is the efficient option.

Our Blog

An ongoing series of informational entries

7 Tips To Make Your First Rental Property Easier To Manage:

February 12, 2018

Rental property is one of the best investments you can make, and on paper, it seems pretty easy to get started. All you have to do is buy a property, pay a flat mortgage rate, and collect rent in excess of your mortgage payments, right?

In reality, being a landlord is much more complicated. You’ll be responsible for all the home maintenance that comes up (which may be many hours a week, or barely any time at all), you’ll be legally responsible for keeping the property livable, and on top of that, if you have a problem tenant, you’ll have to deal with significant headaches trying to sort everything out.

If it’s your first rental property and you aren’t sure what you’re doing, you might be intimidated at the thought of all those responsibilities—plus all the variables of finding the most profitable property to purchase and maximizing your return.

Fortunately, there are some strategies that can make your life easier (and give you more confidence as a landlord).

1.Prioritizing Manageability

Try using these tips to make the process easier, less stressful, and less time-intensive:

2.Get your feet wet. You have to start somewhere; if you waited to get rental property experience before you bought a rental property, you’d never become a landlord. That being said, there are some ways to gain experience and prepare yourself for the realities of property ownership. For example, if you bought a home for your personal residence and have experience maintaining it, you’ll find it easier to manage a rental property that other tenants live in. If you practice some basic home repairs at someone else’s property, you’ll know what to do when you encounter the same problem at your rental property.

3.Focus on a single-family home at first. Commercial properties, and properties that house many families and tenants, will bring you more income than single-family homes, but they’ll also be much harder to manage. If you’re just getting started, you’ll want to start small. Find one single-family home to invest in, and practice managing that for several months—at a minimum—before you consider investing in something bigger.

4.Pick a newer property. Older homes are appealing for their charm, individuality, and maybe even their quirks—but they’re going to be a nightmare to maintain if you don’t have much property management experience. Instead, make sure your first property has been built within the past 20 years or so. Newer homes are going to be less vulnerable to wear and tear, and won’t need as many upgrades. For example, the electrical work will likely be up to code and installed with modern best practices, and the windows will be tightly sealed and reliable. As an added bonus, you may find it easier to keep a new property occupied than an older property.

5.Talk and work with other property owners. Experience is the best teacher, but you can take advantage of the experiences of others to learn the ropes of being an effective property manager. Track down and talk to other property owners in the area, and ask them about some of the biggest challenges they’ve faced so far (and how they’ve faced them). You might be able to find a networking event or social group for landlords in your area on a site like Meetup, or you could meet property owners through general networking events. Either way, try to find yourself some loose property “mentors,” and learn whatever lessons they can teach you about successful, profitable property management.

6.Get a network of contacts you trust. Next, work on building up a network of contacts that you trust. These should include general contractors and specialists in a variety of different fields related to your home. For example, you should have the contact information of a good plumber, a good electrician, a reliable lawn care provider, a general handyperson, and maybe even a lawyer or financial advisor. There’s no way you’ll be able to do everything yourself if this is your first property, so it pays to have a list of high-quality, affordable people you can trust to help you out. You can find these people through other property owners you know, or by tracking them down individually at networking events and other opportunities.

7.Be proactive with upgrades and maintenance. Try to stay as actively involved in the ongoing maintenance of your property as possible. If you notice a pinhole leak somewhere, get it patched immediately. Change the air filters sooner than you need to. Run regular inspections, and address even small problems without delay. This will prevent much bigger problems from forming, and will save you both time and money in the long run.

Screen your tenants carefully. You may be tempted to fill your property as quickly as possible; after all, the faster you get someone in your property, the faster you’ll start generating revenue. And it’s true that empty properties are one of the biggest threats to your profitability. However, it’s almost always worth your patience and diligence to screen your tenants carefully. Look for candidates that have a strong history of payments, a reliable job, intentions to stay in the area for several years, and a good attitude overall. Even if it takes you three months to find the right candidate, you’ll save yourself trouble in excess of the additional costs you bear.

Getting Additional Help

If these tips aren’t enough to make you feel more comfortable with the process of becoming a landlord and managing your own rental property, there is another option that will allow you to remain profitable while mitigating or eliminating almost all the stressful responsibilities. Hiring a professional property management service, at the right price, will spare you the strain of screening tenants, maintaining the property, and dealing with hectic outcomes like evictions—all while securing you the majority of your rental income.

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An ongoing series of informational entries

12 Pros and Cons of Investing in a Multifamily Home

January 29. 2018

If you’re considering investing in rental property, you’ve probably thought about the prospect of managing a multifamily home. In case you aren’t familiar, multifamily homes are exactly what they sound like; houses that are designed or structured to accommodate multiple families in different units within the home. They come in many forms, including duplexes and triplexes, and apartment buildings are considered multifamily properties as well.

There are many reasons to consider multifamily homes as a primary rental investment, but these aren’t the right investments for everybody. Before pulling the trigger on a multifamily home, you should familiarize yourself with the pros and cons of this property type.

The Pros

Let’s start by looking at the advantages:

1.Cash flow. As you might expect, hosting multiple families in one property means you’re going to see a larger cash flow. Assuming each family pays a margin over the actual costs of owning and maintaining the property, each additional family is going to boost your income—and your profitability. Accordingly, you’ll stand to make more of a profit with a multifamily home than you would with a single-family home.

2.Loan simplicity. If you’ve ever tried to manage multiple mortgages at once, you know the headache of dealing with multiple loans and multiple lenders. If convenience and simplicity are goals of yours, multifamily homes are ideal. If you purchase a duplex with a single mortgage, you’ll deal with far less paperwork than you would with the purchase of two single-family homes.

3.Insurance simplicity. Similarly, when you purchase a multifamily home, you’re only going to deal with one insurance policy. The insurance will be more expensive, of course, but you’ll get the same coverage across each individual unit, and you won’t have to open up multiple policies.

4.Risk mitigation. When buying a multifamily home, you’ll face less risk when it comes to tenants; because you’ll be dealing with two, three, or even more units, the risk for a total vacancy is low. Even if one tenant moves out, you’ll have your other tenants to keep your cash flow relatively positive while you try to fill the void. On top of that, it’s highly unlikely that you’ll have multiple problematic tenants at the same time; if one of your units has a problem with paying rent on time, the timeliness of the other units can make up for it. It’s a way of hedging your bets within a single property.

5.Competition mitigation. Competition for buying and renting single-family homes is somewhat high, since it presents an easy entry to the real estate investing realm. When you switch to investing in multifamily properties, you’ll have fewer people competing with you on bids and available units to rent. Multifamily homes also tend to be more unique, so you’ll face less immediate competition as well.

6.Long-term value. Single-family homes are often priced based on what families find appealing, which can be subjective and fluctuate significantly based on changes within the neighborhood. Multifamily properties, on the other hand, are priced almost exclusively based on how much income-generating potential they have. They’re bought and sold primarily as forms of investment, and therefore have more stable long-term growth (in many cases).

The Cons

Now for the downsides:

You’re probably already aware that multifamily homes are more expensive than their single-family counterparts. Though you won’t necessarily pay twice as much for a duplex as you would for a single-family home, when you start looking at homes with three or more units, prices can be a real barrier to entry. If this is your first investment property, or if you’re low on cash, multifamily homes may be too expensive to consider.

1,Management time. Each unit you have in a house is going to translate to more management responsibilities, and more time for you to spend as a landlord. You’ll be dealing with multiple groups of tenants simultaneously, multiple sets of appliances, and of course, multiple different schedules. Plus, if something goes wrong at the property, it will likely go wrong for multiple units at once, presenting heftier maintenance and repair bills as well.

2.Demand for experience. In the preceding section, we mentioned the fact that your competition may decline when opting for a multifamily home over a single-family, but the type of competition you face will also change. Multifamily homes, due to their advantages, tend to be investment targets for highly experienced investors. That means your competition will likely have years more experience than you do—and that might mean you’ll have a harder time finding tenants and pricing your units appropriately.

Multifamily units are inherently more complicated, and are prone to more strange occurrences. There are more types of complications that can arise; for example, if you end up with a noisy tenant, all your tenants from all your units may suffer, and a structural problem could drive down the value of your property immensely.

3.Availability. For many reasons, including lower demand, multifamily homes tend to be less available and less common than single-family homes. This means you’ll have a harder time finding the “ideal” property, and your options are going to be far more limited.

4.Regulations. Landlords already have to deal with multiple regulations about how property can be rented; with multifamily homes, regulations are even stricter. You’ll need to do your research beforehand to find out the laws in your state, or else you could risk fines or imprisonment.

Multifamily homes can be extremely profitable (and in some ways, easier to manage than multiple single-family homes). However, they’re also more complicated and challenging. If you want to mitigate some of the risk in managing your own property, and cut back on some of the effort and stress you’ll incur along the way, consider investing in a property management service.

What’s the Most Profitable Real Estate Strategy?

February 5, 2018

You’ve likely heard that investing in real estate is one of the most profitable financial endeavors you can undertake; real estate is responsible for many self-made millionaires, and is often found as a component of diversified investment portfolios.

The problem is, “real estate investing” can refer to one or more of several strategies, each of which have advantages and disadvantages, and a different potential level of profitability. So if you’re interested in making the biggest profit, which one should you choose?

The Major Options

Let’s start by defining the major options:

1.Buying for long-term value. The first option is to buy property with a focus on long-term value. The idea here is to purchase homes or buildings in neighborhoods with a high propensity for growth. If you buy a piece of real estate at a relatively low cost, wait a few decades, and sell, you’ll probably make a sizable return on your investment. Whether explicitly considered or not, this is a goal for many homeowners.

2.Rental properties. With rental properties, the goal is to collect more in rental income from occupying tenants than you pay on your monthly mortgage payment. Ideally, with minimal vacancies, you’ll make money every month. When you’re done with the property, you can sell it—hopefully for a profit—and move on to other endeavors.

3.House flipping. Some people also attempt to “flip” houses. In these cases, a prospective owner will purchase a property in poor condition, or one selling for an exceptionally low price, or one in a questionable neighborhood, and attempt to improve it through contract work and DIY projects over the course of a few months. The goal is to sell the home after a short period for a sizable profit.

So how do these options stack up to one another?

Cash Flow

There are a few ways to think about profitability, and one of the most important concepts is cash flow. Rather than focusing on an eventual gain, prioritizing cash flow gives you the ability to collect a consistent stream of revenue. This is advantageous because it will help you offset the ongoing costs of owning and managing a property, and give you more insight and control over your eventual profitability.

For example, let’s say your monthly payments (including mortgage principal, interest, taxes, and home insurance) amount to $1,200, with $100 set aside for maintenance and repairs. Assuming your property remains occupied with a rent of $1,600, that nets you a monthly profit of $400—all while you’re building equity in the home itself.

This is one reason why rental properties are one of your best options—especially if you’re not experienced in real estate investing. However, there’s always the possibility that your property remains unoccupied, or that you won’t be able to charge enough rent to offset your costs.

Long-Term Gains

You can also choose to focus on long-term gains. Housing prices fluctuate with some volatility, but overall, the trend moves upward at a steady rate. The past few years have seen price increases of 5 to 7 percent per year, and that’s an overall average—the rates in some fast-growing areas is far higher than that.

Assuming you’re making an optimal decision and waiting a decade or longer before selling, it’s not unreasonable to double your money (or triple it) on a single investment. Of course, you’ll also need to consider the additional costs you’ll incur with things like insurance, maintenance, and improvements over time.

The real key to profitability here is choosing the right property to invest in; areas with growing job prospects, improving schools, and attractive neighborhoods are good bets, but only if home prices haven’t caught up to the appeal. Look for homes below market price in these areas.

The Risk Factor

Different types of real estate investments come with different levels of risk, too. Long-term investments are generally safe, but take a while to pay off, while short-term investments are riskier but could pay off substantially and immediately.

The big risk strategy here is “flipping” houses; with this tactic, you’ll buy a house for a very low price, spend time and money fixing it up, and then sell it for a profit. The trouble is, many house flipping efforts end up far less profitable than they originally seemed. It’s difficult to gauge how much a home’s value can increase with any given upgrade, and it’s even more difficult to accurately estimate the cost of the repairs and improvements before you actually begin. Accordingly, only the most experienced real estate investors end up able to turn a profit with any kind of reliability—and even then, profits are limited.

Other Variables to Consider

There are also other variables you should consider when choosing a real estate investing strategy:

In general, adding more properties to your portfolio is going to increase your profitability and mitigate your risk.

The more experienced you are in buying and selling real estate, the better you’ll become at finding good deals and timing the market. Even after a few investments, you should have a better sense of future market trends.

Timing is everything, no matter what type of property you’re investing in; missing the mark by even a few weeks can interfere with your return.

Even the most experienced real estate investors know the results of their decisions are based at least partially on luck—it’s too hard to concretely predict where the housing market is headed.

The Most Profitable Approach

The most profitable approach is one that strikes a balance between short-term gains, long-term gains, and risk: investing in attractive rental property with the propensity to grow in value over the next several years. Of course, managing a rental property takes more effort than you might think; in fact, many landlords end up seeking a property management firm to help them with their core responsibilities.

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How to Let Tenants Know You’re Raising Rent

January 22, 2018

As a landlord, you obviously have a vested interest in your properties and want to do whatever you can to maximize profitability and enjoy the highest ROI possible. Sometimes this means increasing rent prices to account for new costs or increased demand. However, you can’t just arbitrarily increase rents whenever you want. There’s a process you must follow in order to legally raise rents and keep vacancy rates low.

What Justifies a Rent Increase?

You have the right to set your own rental rates, but what exactly justifies a rent increase? In most cases, one of these factors is involved:

1.Cost of living. Each year, the cost of living changes. Historically, it goes up every year, but there are some years where it remains the same. Over the last decade or so, the average cost of living increase per year has been somewhere around 2 percent. Thus, many landlords consistently raise rent by 1 to 3 percent per year, regardless of what happens.

2.Neighborhood improvement. Clearly, rent is more expensive in desirable areas. If something positive has happened in the neighborhood where your property is located, then it would stand to reason that rental rates would increase. For example, many neighborhoods experience significant increases when a major employer decides to place a corporate office nearby.

3.Property improvements. Did you recently purchase a new HVAC unit? Was the kitchen upgraded with modern appliances? Did you add on a bathroom? Property improvements almost always necessitate a rent hike in order to justify the expense. 

There are plenty of other situation-specific justifications for increasing rent, but one or more of these factors is usually involved. While it’s probably a good idea to explain to tenants why you’re raising their rent, you shouldn’t feel bad if you’re doing it to keep up with the market, move up with the neighborhood, or offset property improvements. 

Determining the Rent Increase 

As a landlord, the biggest decision you have to make is how much you’re going to raise rent. You obviously want to increase revenue as much as possible, but you don’t want to do so at the expense of losing a tenant and leaving your property vacant.

It’s important to understand that you’re legally obligated to provide adequate notice. While the laws and fair housing regulations do differ from jurisdiction to jurisdiction, most requirements are similar across the board. Here are some general guidelines:

You can’t increase rent in the middle of an annual lease agreement. For example, if your tenant signed an annual lease agreement 90 days ago, you can’t increase rent next month. You’ll have to wait until 12 months have passed before an increase is legally enforceable.

If you’re in a month-to-month agreement, it’s usually okay for you to raise the rent at the end of any month with a 15 day notice. Just try not to frequently blindside tenants.

If you’re increasing rent by a small amount (less than 10 percent), then you need to provide at least a 30-day heads up before hiking the rate up. If you’re increasing the rent by more than 10 percent, it’s usually required that you provide a 60-day advance notice.

It’s always wise to keep rent increases as minimal as possible. However, if you must increase a substantial amount in order to justify an added expense, make sure you run careful calculations.

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How Rental Property Cash Flow can fall and what to do About It

January 15, 2018

When managing a rental property, cash flow should be one of your highest considerations. Cash flow, of course, refers to how much money you have coming in from rent compared to how much money you’re spending on things like your mortgage, property taxes, insurance, and ongoing maintenance.

Ideally, you’ll be able to make a profit of a few hundred dollars per month, per family property in your portfolio. Assuming you’re able to establish that, your cash flow should remain relatively consistent for at least several months, since your loan conditions won’t change much, and your tenant will likely be contractually obligated to pay a fixed amount every month.

However, there are some conditions that can slow down your cash flow significantly, so it’s important for you to take proactive action to correct it.

How Cash Flow Falls

1.These are the main reasons why your cash flow could be interrupted:

Falling rent prices. There’s a chance the rental prices in your area could fall significantly. This could happen in response to a wave of criminal activity, falling test scores, a large movement of people away from the area, changes to job availability, or any number of other factors. If this happens, your tenants may demand lower rent prices to match the surrounding area; if you don’t give it to them, they may leave. Either way, you’ll end up with less income every month.

2.Vacancies are the biggest cash flow killers in rental property. If your property isn’t occupied, you’ll make zero dollars, but you’ll still be responsible for any ongoing monthly expenses. Your revenue model should include some excess funds to compensate for vacancy time, so a month or two won’t hurt you long-term. However, if you face a vacancy for more than a couple of months, your property’s profitability could plummet.

Missed payments. You might also experience a holdup in cash flow if your tenants frequently miss their payments, or miss multiple rent payments. It’s not a big deal if they plan on paying you that rent a bit later, but it can interfere with the cash you have on hand—and if they end up leaving without paying you what they owe, you’ll either end up with a loss, or a legal headache trying to get that money back.

3.Maintenance and repair costs. Your cash flow can also weaken during months of especially high maintenance and/or repair costs. Again, your budget should accommodate at least a few instances of repair per year (between 1 and 4 percent of the home’s value per year, depending on who you ask). However, your rate of repairs will not be steady or consistent. Some years will require heavy investments and large costs, while other years will be almost completely hands-off. You’ll have some months that require multiple expensive repairs, and when they hit, your cash flow can take a nosedive.

4.Insurance and tax costs. Though not often, your monthly payments for property taxes and home insurance will occasionally increase. When this happens, you’ll owe more money every month—but you might be temporarily locked into your current rent prices.

5.Management costs. Finally, you may experience lower cash flow if you enlist the services of a property management firm. The flip side here is that all your other responsibilities and stresses will disappear; the management firm will take care of things like repairs, tenant issues, filling vacancies, and maintaining the property, so while your cash flow may be reduced, your workload will be reduced as well.

Options for Improvement

So how can you turn the situation around and maximize your cash flow? Most of your options come in the form of prevention:

1.Choose your properties carefully. Some neighborhoods are going to be more prone to volatility than others. It’s impossible to correctly predict the trajectory of neighborhood rent prices 100 percent of the time, but with a bit more research and critical thinking (not to mention experience), you can select properties with a greater likelihood of increasing in value over time.

2.Screen tenants and keep them happy. Your first instinct, upon experiencing a vacancy, will be to fill the vacancy as quickly as possible—after all, the faster you get a new tenant, the faster your cash flow will be restored. However, it’s almost always better to wait, screening your tenants carefully and only accepting tenants with a strong history of on-time payments. You’ll make a short-term sacrifice to your cash flow, but you’ll end up with tenants who stay longer and pay more consistently as a result.

3.Opt for lease agreements. There are advantages to offering rental agreements with a great degree of flexibility, including month-to-month rentals, but it’s usually more advantageous to offer long-term lease agreements of 12 months or longer. This can help you lock in your rental prices for a longer period of time. They aren’t a guarantee that your tenants will stay, but they can help you create better models for your future revenue, and attract more serious long-term tenants.

4.Set aside a cushion for unexpected developments. You should always budget conservatively, and establish an emergency fund to help you deal with unexpected developments. For example, a tenant might choose to move out early for a new job opportunity, or your roof might suffer major damage that needs immediate repair. Having a financial cushion to fall back on will mitigate the short-term risks of low cash flow, and will buy you time to recover from the incident—whatever it may be.

5.Plan to occasionally raise prices. Some expenses will increase no matter what you do. To compensate for them, plan to incrementally raise your rental prices. Small increases—those less than 5 percent—will rarely be met with much criticism from your tenants, so long as they aren’t too frequent. Make sure you’re able to justify those increases with cost increases that you’re facing (or rising rent prices in your neighborhood).

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11 Creative Sources of Income Through Your Rental Property

December 27, 2017

The concept of investing and capitalizing on a rental property is fairly simple. You purchase a property with a low-interest mortgage, make necessary repairs, and rent it out for an asking price higher than your mortgage. You make money to pay off the mortgage quickly and/or make further investments to increase your revenue streams.

But there’s more opportunity for making money on rental properties than just collecting rent. In fact, there are dozens of ways that you could increase your regular income from your rental properties and make more money faster.

Here are some you should try.

1.Set Late Fees

If you’re trying to be likeable, you might allow a small grace period for late rent. It shows respect and kindness to renters, leading to less turnover. But don’t be a pushover about it. Many apartment complexes are more relaxed on their late fees than they should be.

Collect late fees for any renters who fail to pay on time. They signed a contract, and they owe you the money. The late fee helps people pay rent on time, and it protects you if a renter defaults on their payments.

2.Charge for Parking

When you’re in charge of an apartment complex, there are plenty of extra, in-demand things you can charge for, like parking spots. A lot of renters don’t own a car, so they’ll feel like they’re getting a deal if they don’t have to pay for a parking spot. Meanwhile, you’ll get to pocket a little extra for those that do.

If you don’t fill up your parking spaces all year long, you can also rent them out during events. One property manager made more than $7,000 during a 10-day strawberry festival in Florida by renting out his extra parking spaces.

3.Install Solar Panels

A few years ago, solar panels were ugly and expensive. It was rare that you could get a higher return than what you put into it. However, things are much different now. Power grids are changing along with the structure and affordability of solar panels. The price of solar panel installation has fallen by more than 60 percent in the last decade!

Now, not only are these panels economical, but they’re also an attractive thing for renters. When you’ve installed solar panels, you can sell energy to your renters, who can then sell the extras to the grid. It’s a win-win for everyone, and in a place like Katy, where it’s sunny often, it’s an excellent investment for your multi-family rental property.

4.Add Services of Convenience

The millennial generation are the most common renters, and they tend to prefer one-stop shops, even if it costs a little extra. You can turn your rental property into a profitable business with convenience services like babysitting, dog-walking, dry cleaning, concierge, coin-operated laundry, and more services.

If they’re affordable and convenient, renters are likely to pay for them. You’ll have an easier time filling your vacancies and padding your bank account at the same time.

5.Charge Based on the Unit

If you own an apartment complex with different units, base your rent based on what’s inside. For example, if one unit has an excellent view, a balcony, and central air, you can charge more than one with fewer windows and a window air conditioning unit.

If you have a cookie-cutter style apartment complex, there are still ways you can capitalize on prime apartments. You could base the rent on the view, which floor it’s on, or how it’s furnished.

6.Storage for an Additional Charge

If your complex has vacancies, an attic, a shed, or extra rooms, you can make a little extra by renting them out as storage units. Renters almost always need extra storage, and if it’s nearby, they’re happy to pay for it.

You might find that it’s even easier to rent out a vacant apartment for storage rather than to someone who will live there. You won’t have to worry about contract breaches or legal rights, and you can potentially make more on the storage space than you would on a renter.

7.Charge for Property-Related Services

Your landscaping services don’t have to be included in the price of the rent. You can easily build some extra cash by charging for little things like snow removal, lawn mowing, and basic non-essential maintenance. Call it an HOA fee, and ensure that the property always looks great.

You could also offer other services like housekeeping or deep-cleaning services. This is a double-edged benefit for you; it brings in a little extra revenue while keeping your properties clean and well-maintained between renters.

8.Increase Rent Strategically

Although a sudden rent hike will likely leave a bad taste in the mouth of your renters, there are strategic ways to increase rent. It starts with understanding your current market. Renters might leave in search of a cheaper apartment if you don’t raise your rent according to complementary units.

If you’re planning to raise the rent, make it worth the rent increase. If you’ve never repainted, repaired the leak under the sink, or replaced the carpets, your tenants won’t be happy with a sudden increase. However, small updates here and there can make a rent increase worthwhile to a tenant over time.

9.Charge a Flat-Rate

Charging a flat rate means you include a general cost estimation of utilities, including water, gas, garbage, sewer, and electricity in the cost of the rent. A flat-rate rent payment can be an incredibly powerful tool in the hands of a savvy property manager. It’s an attractive rental option for the renter who wants to minimize their responsibility and maintain a steady rent deduction each month.

It can also be positive for you. Although some tenants may use more utilities than their rent payment covers, others will use far less. You can pocket the extra and put it back into your units.

10.Hold Paid Classes

There really is no limit to the ways you can create revenue in your rental properties. One great idea is to hire a yoga, Zumba, or personal training instructor to hold classes on the lawn each morning for a fee.

You could also hold personal finance classes, self-reliance courses, or any number of useful gatherings. Your tenants will appreciate the convenience of these gatherings while growing closer as a community. You’ll reap the financial benefits and maintain tenant loyalty.

11.Hire the Property Managers at Total Property Management

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6 Tips For Making An Ugly Rental Property Look Good

December 22, 2017

Profit is the name of the game when it comes to investing in rental properties. You can’t let your emotions or design and style preferences get in the way. With that being said, many landlords end up with properties that are cheap, yet ugly. And while you don’t want to pour a ton of money into these properties, you do want to make sure they attract renters. Thankfully, there are some inexpensive and high-returning hacks you can try to give your property a little boost.

1.Hide Ugly Flooring - One of the telltale signs of an old, neglected house is ugly flooring. Whether its carpet, hardwood, linoleum, or tile, old flooring can be a major turnoff and often dissuades even the least sensitive renters. Thankfully, flooring is also one of the cheapest problems to fix.  If you have hardwood flooring that’s scratched, stained, or otherwise tarnished, you probably don’t have the money in your budget to refinish or replace (especially on the lower end of the market). In this case, the best thing you can do is invest in some inexpensive area rugs. If you really want to get trendy, try layering some area rugs for a unique look that adds appeal to small spaces.  If you have smaller house with carpet, your best bet is to replace the old carpet. You’d be surprised how affordable this is. And not only does it instantly make a house look fresher, but it also gives it a new home smell that will subconsciously make prospective renters like the property more.

2.Burn a Candle - Speaking of making your rental property smell good, it’s always a good idea to freshen up the place before showing it to a prospective renter. Even if you think the house smells fine, burning a candle can give it a nice, homey aroma. If you don’t want to overwhelm people, diffusing essential oils might be a better route.  “Avoid strong, polarizing scents such as patchouli, sandalwood or ylang ylang. Instead, go with relaxing scents such as lavender or uplifting scents such as grapefruit or Satsuma,” blogger Heather Levin suggests. “You can also unobtrusively add wonderful scents to your bathroom by adding a few drops of essential oil to a cotton ball, and hiding them on shelves or by the sink.”  A classic open house tactic that real estate agents use is to bake cookies or brownies in the oven a few minutes before people arrive. It makes the house smell good and gives you something to offer people.

3.Update Cabinet Hardware - It doesn’t take long for a kitchen to become dated – and considering that this is the most important room in a rental – you want to freshen it up however you can. The first thing you can try is updating the cabinet hardware.  Drawer pulls and knobs can be replaced relatively easily and cheaply, yet provide an instant facelift. In a small kitchen, you can probably remove and replace all hardware in less than an hour. You may also want to swap out hardware in the bathrooms, so account for this when purchasing the new hardware.  Though a little more time intensive, consider repainting cabinets if they look dated or are currently finished in a non-neutral color. Once you have the hardware removed, it’s actually pretty simple.

4.Spruce Up Countertops - While you have to stop somewhere, your little kitchen remodel might spill over to the countertops. If you have Formica or another cheap material that’s stained or visually unappealing, there are some options for fixing them up without doing a total replacement.  If you have the patience and it looks good with the rest of the kitchen, faux marble can actually create a really nice look. Another option is to paint the countertop black for a nice modern look.

5.Paint Walls a Neutral Color - Everyone has their own color preferences, yet few people are keen on bright colors like red, orange, or green. If your rental property has extreme colors, consider going with a neutral – such as white, gray, or beige. If nothing else, you’ll appeal to the masses and won’t risk turning away a prospective renter.

6.Enhance the Curb Appeal - Even for a rental property, curb appeal matters. People want to drive up to a nice home and will be turned off if there are weeds, mildew on the siding, trash in the yard, etc. While you probably don’t want to spend a ton of time doing yard work, there are some simple and rather effortless chores you can do to enhance the look of even the most basic home.  The first thing you’ll want to do is pressure wash the siding, sidewalk, driveway, and front porch area. You can rent a pressure washer or even use a hose with a high-pressure nozzle, if you don’t have the right equipment. The goal is to remove any cobwebs and loose dirt.  If the house doesn’t have shutters, spending a few hundred bucks on some shutters for the front of the house can change the entire look. (There’s no need to put shutters on the sides and back of the house unless you want to.)  Finally, plant some fresh flowers and mulch the bed a couple of weeks before showing the house. There’s something about a fresh pop of color that breathes some life into a house.

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10 Ways To Be A More Likeable Landlord

December 8, 2017

Property managers spend a lot of time behind a desk: working out rent payments, marketing properties, and handling paperwork. They may also spend time with tenants, on whom it’s smart to leave a good impression.

A tenant may love the property, but if he or she doesn’t like the manager or landlord, then the tenant is less likely to sign or renew a contract. But being liked isn’t everything.

In the long run, it’s better to have a solid marketing and rental strategy to support your property. You also need sufficient backbone to set strong policies and stick with them, even in the face of an intimidating renter.

Being liked and respected can help you fill vacancies and reduce tenant turnover, however. Human beings respond better to authority if it shows a pleasant demeanor and appears to have their best interests in mind.

You don’t have to be a tenant’s best friend, but you can create a positive impression. Are you a likeable landlord? If you aren’t sure, here are some tactics to work on.

1.Offer a Warm Welcome

The most loved property managers make tenants feel welcome. They present a welcome letter that has information about the neighborhood as well as the property. They may also provide documents that facilitate address changes and utility activation.

To the extra mile, help your tenants get adjusted to the area with directions to nearby grocery stores, takeout menus, and other amenities. Pay attention to details and stock the bathroom or leave a welcome basket on their doorstep.

Such extras don’t consume a lot of time or money, but leave a long-lasting impression on the tenant.

2.Be More Available

Tenants won’t feel like you value them if you aren’t available when they have a need. You should provide multiple ways to contact you, including phone numbers, email addresses, contact forms, and social media.

This is advantageous to both sides, since you probably want to know if a toilet’s overflowing, because it could cost you thousands in damage. You could also post a list of people to call if you’re unavailable.

For example, leave numbers for the plumber, electrician, and other contracted service providers so a problem can be handled quickly and professionally, even when you’re away.

3.Look Professional and Act That Way

Your appearance and demeanor also play a role in the impressions you make. Always dress neatly at work, especially when you meet new tenants. You might not work in an office, but you can still dress well and leave cut-off jeans and T-shirts at home.

Your behavior should always be professional. Follow the lease guidelines consistently and refer to them whenever issues arise. Tenants will respect that you stuck to the agreement they signed, even if they don’t like the outcome.

4.Be Online

If you have a larger property with multiple units, a website can provide a valuable service for your tenants. A social media presence can also help them stay connected with you and their neighbors.

It’s a good idea to maintain a presence on sites like Yelp or ReviewMyLandlord so prospective renters can get more feedback about your performance as the landlord. Online reviews can exert a lot of power over a customer’s purchasing decisions; generating great reviews on such sites will fill vacancies fast.

5.Implement Compassion and Flexibility

Tenants will occasionally submit requests that are not possible under the lease parameters. Other situations won’t be so black and white.

For example, the lease might say no pets, but your tenant wants to keep a betta tropical fish. In this case, the risks are minimal, and it might be in your best interest to let this one slide.

You don’t need to throw the rule book at your tenants every time a question surfaces. A little compassion and flexibility can go a long way toward commanding respect and heightening good relations.

6.Respond Quickly and Appropriately

Nobody likes to be ignored, especially when they have a pressing concern about their living arrangements. You should do your best to respond to emails and messages within 24 hours. Unless, of course, it’s an emergency, when you should respond right away.

It’s also worthwhile to cultivate a steady stream of communication with tenants. You might send out a monthly newsletter, draft email reminders, and check in with them on a personal basis. Stay professional and polite in all communications.

7.Don’t Accuse

Pointing fingers or confronting tenants harshly about an issue will only create more waves. The mess will become more difficult to clean up, and you’ll have left a poor impression. Don’t talk badly about tenants or give unpleasant replies when addressing a problem.

Work with people as much as possible. Don’t make yourself an unyielding force that makes problem resolution impossible. As long as you’re willing to maintain an open mind, your tenants are more likely to follow suit.

8.Stay Positive

Most individuals prefer to surround themselves with positive people. They will be drawn to a landlord who appears confident and content instead of miserable and difficult to talk to.

Tenant problems and emergencies are disconcerting for everyone. Try not to let a negative outlook show through, which can make tenants more anxious than they should be. Keep calm, and stay positive when you work through challenging and frustrating situations.

9.Remain Calm

Staying cool is just as important as being upbeat. A tenant might come to you in distress about a conflict with a neighbor or a plumbing issue. Panicking yourself or letting the stress get to you will make the situation worse and cause the tenant to lose confidence in you.

The same advice goes for situations in which a tenant brings you unreasonable complaints. Try to make your office a calm, inviting place. Tidy up a messy desk, install a scented candle, and greet tenants with a smile. It’s amazing what a calmer atmosphere can do for an upset renter.

10.Listen Actively

When tenants approach you with a concern, pay attention to what they say. Don’t allow yourself to zone out and think about dinner. Most important, don’t jump to conclusions.

Note the details and offer signals of affirmation, such as a passive comment or the occasional nod. Hear them out completely before you speak. Only after the tenant finishes talking, start to suggest solutions.

Make it clear that you heard everything and validate the person’s concerns. Then, devise an action plan to address the problem. This is one of the best ways to instill confidence and respect in you as a property manager.

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7 Myths about Property Managers

December 1, 2017

When you invest in real estate, things aren’t as easy as they seem on television. There’s a lot of stress, time, money, and hassle that goes into running a successful rental property, and going it alone makes things even more difficult.

Thankfully, there are property managers who can help carry some of the load. Have you heard some misconceptions that make property management sound unappealing? Well, don’t dismiss the process so quickly. Sometimes people mix fact with fiction, providing an inaccurate depiction of what it’s really like to work with a property management company.

Before you get too caught up in hearsay, let’s debunk some common property management myths:

1.Property management companies aren’t really necessary. I can do everything myself.

Investors often believe they can handle the ownership and management of a rental property on their own. They believe that by being the landlord and doing the repairs, they can make the most of their investment.

However, experienced property owners will say that you definitely need to hire help. It’s much easier to hire a single property management company than it is to keep track of a long list of contractors. With one company at the helm, you eliminate the confusion of communicating with a variety of contractors, and can enjoy your profits without hassle.

2.Their services are too expensive.

One of the most common myths is that property management companies are expensive. However, this is one misconception that’s inaccurate in more ways than one.

To begin with, rental properties typically only implement fees when someone is renting the unit, which means you’ll always have rental income to cover the cost. Additionally, property managers, like Green Residential, charge a flat fee for all of their services, which is often more affordable than being charged for each service individually.

Finally, your return on investment is typically much higher when you work with a property manager. They work hard to ensure the quality of living for your renters. In turn, you can raise the rent and attract top quality tenants. This increased rent often covers the property management fees and brings in a little extra each month.

3.Property managers can’t possibly preserve my property as well as I can.

It’s totally natural to feel you can handle your property best. You’ve invested time and money, so no one can possibly care about your property quite as much as you.

Although property managers can’t match the feelings you have for your property, they can make sure it’s extremely well cared for. You might love your property, but when you have other responsibilities, it’s difficult to find the time to care for your investment.

4.Property managers have your best interests at heart, and they have the time and resources needed to keep your property looking great. If your rental property does well, then their business does well. It’s a win-win for everyone involved!

5.My property is located in a small town, so no property managers will help out.

Many rental owners are concerned that their property falls outside a company’s sphere of care because it’s in a remote location. However, that doesn’t mean they’re entirely out of luck. Many companies will work with your property no matter where it’s located. They may not be able to travel to the property themselves, but they can work with contractors in your area to get the job done.

6.Property managers will take control of my rental.

Oftentimes, property owners want nothing to do with property managers because they’re afraid they’ll take control of the property. The owners will no longer have any say, and their income will suffer.

This couldn’t be further from the truth. You’re in no way signing away your rights as a property owner when you sign a contract with a property manager. You’re actually signing an agreement that someone will help you control your tenants.

With someone to monitor interactions with your renters and keep the property well maintained, you’ll be able to handle problems more efficiently as they come. Property managers can often spot problems before they happen, helping you to control of the situation, before it becomes a major issue.

7.I can find renters better than my property managers can.

You might be a great judge of character and have a history of putting good residents in your home, but that doesn’t mean you should attempt the process. Renting is a huge liability, and one bad renter can destroy the property.

In addition, there are a variety of legal criteria that many owners don’t know about, such as the Federal Fair Housing and HUD guidelines. Also, most owners don’t conduct background checks or credit checks. These are important because they help prevent illegal activity and make sure your renters will pay on time.

A professional management company will know how to handle the above situations and more. In addition, they also have experience screening clients, which means they know what to look for in good tenants, something you might miss. This keeps you legally and ethically covered when it’s time to fill a vacancy.

Property managers won’t handle my single-family unit.

A major misconception in the management world is that property management companies are only made to handle large, multi-family properties. However, they’re equipped to handle units of all sizes, from single family units to large complexes.

Everyone deserves the benefits of a good property management company. They can make a difficult project infinitely easier, and it’s always better to do your research before committing to the right one.