Monday, April 15 2013
According to the latest from the U.S. Census Bureau, renters comprise about 35% of all households. That’s a pretty healthy portion of the nation’s population — and a pretty encouraging market-share statistic for investors considering properties capable of generating income to build long-term wealth.
More than just an investment, the own-to-rent model is actually a simplified small business. It has a financing part, an accounting part, and (the time-consuming element): a management part. Effective management means dealing with labor (maintenance personnel), customers (the renters), and a Board of Directors (the ownership: in this case, you!). Not a surprise that many income property owners decide to make themselves the Board, and hire out the rest of property management.
Some business truisms point to sound reasons for that decision:
A local income property should let you be in control of your investment — not become a time slave to it. Some properties seem to want to be tough bosses themselves — with needs to be addressed on an unpredictable timetable. By employing a company specializing in local property management, you divert the 2 a.m. phone calls and headaches to them. Sleep tight!
As with any business enterprise, identifying and limiting risk is smart planning. A management company will help you work through Fair Housing obligations as well as the legal requirements you need to address. Even small mistakes in this department can cost, so prudently and professionally limiting liability is just good business.
Naturally, the major offsetting factor is cost. At somewhere in the neighborhood of 6%-12 of rental income, it is definitely an issue. Yet some veteran investors find that professional property management actually saves money in the long term. A reputable area property management company may be able to spot ways to reduce operating costs and maximize rental amounts, as well as shorten costly downtimes between tenants.
If you are looking to purchase an income property in our area, it’s important to assess all aspects of the investment — and property management is one that’s well worth investigating. I’m happy to offer vetted local references for my clients anytime. You can reach me in my cell phone at 812-499-9234 or by email Rolando@RolandoTrentini.com
Monday, January 28 2013
With the Fed having announced its intention to hold interest rates near 0% until at least mid-2015, even very cautious investors are recognizing that this provides a rare opening. If ever there were a time to start a real estate portfolio, it’s hard to imagine a better one.
For many, the first question is whether there is still an opportunity to buy foreclosed homes in Evansville. That answer is yes, for sure – but that is not always the only strategy that will get you to your goal.
It all depends on you.
Before we can develop your strategy, you first need to decide which type of real estate investor you wish to be:
The Fix-and-Flip Investor - This type of investor is handy (or has a lot of contacts who are), and is familiar with remodels and improvement projects. Usually, at least part of the goal is to create an income stream from the investments. This investor buys a property at the lowest price possible, improves it, and sells at a profit as quickly as possible. This investor may have one or more projects going at a time -- with or without loans on the properties. This is the more hands-on type of investor.
The Buy-and-Hold Investor – This investor need not have a high degree of familiarity with real estate (as long as he or she has a source for accurate market advice), and plans to use the real estate portfolio for its long-term wealth-building potential. This investor may or may not buy foreclosed homes – the goal is to buy property at a price that, when rented, will generate cash flow that makes financial sense. This investor often takes loans on properties. This can be the least-involved kind of investor after purchase – especially if a property management company handles the day-to-day details.
Whether you are looking to buy foreclosed homes in Evansville, or to capitalize on one of the bargains now available in the traditional market, cool-headed, informed decision-making is at the core. If you are also looking for an agent to be by your side supplying up-to-the-minute market data, give me a call. We can talk about your goals, and come up with a buying plan that matches your investing style. You can reach me on my cell phone 812-499-9234.
Tuesday, October 02 2012
Whether you are in the process of buying anincome property thisfall or are already an owner, your decision about whether to work with a localproperty manager is pivotal. When you lack the time or capacity to effectively manage your investment, hiring a professional property manager is certainly the right business move. But suppose you have already decided that you will use a pro – does that solve all management issues for your investment? If you have chosen well, the answer may be almost ‘yes’ – but not quite. As you would with any service provider, keeping tabs on their performance is simply prudent.
The happy truth is that managing yourEvansville property manager will not command a large amount of your attention: a little will go a long way. And some areas to monitor are more obvious than others.
Rent collection is one process that almost monitors itself. When the checks are slow in coming, you’ll know it soon enough. If a regular pattern seems to be developing, discuss your manager’s strategy to improve the tenant’s compliance. Good property management pros have proven strategies for timely rent collection.
Maintenance is one main reason a property manager is invaluable. When a repair issue arises, take a look at the invoices: not only at the cost, but also the time it took to solve the problem. Your manager should have contracts in place with competent maintenance and repair companies, so complaints from the tenant should not be a regular occurrence. You can also ask for vendor references from anyone who performs services for the property. After all, they are really working for you.
If part of your property manager’s job is to act as a leasing agent (or to oversee one), be certain that he or she emphasizes the importance of ensuring that tenants thoroughly read and understand the lease terms. Ask how your manager would handle any tenant non-compliance if that occurs. Situations that could cause sleepless nights for you should be ho-hum affairs for your pro!
Buying an investment property in Evansville can be exciting and profitable, but it’s not usually fully exploited on autopilot. I strive to help my clients find and identify the right investment properties for long-term profitability. If you are considering buying property, contact me anytime to go over your options. You will find that good ones are out there! You can reach me at on my cell phone at 812-499-9234