Wednesday, June 19 2013
With housing prices on the rebound, it’s easy to see why some homeowners find buying an additional property an increasingly attractive possibility. Getting into the landlord business offers the appeal of a growth investment coupled with the possibility of a favorable cash flow situation.
That said, make no mistake about it: renting a home in Evansville is its own business enterprise. Becoming a landlord means making business decisions that carry elements of risk as well as reward. When renting a home in Evansville, there are a number of common — but avoidable — first-time landlord mistakes:
Fair Housing Violations
From the moment you begin marketing your income property, the language in your ad can easily run afoul of the fair housing rules that prohibit discrimination. Avoid phrases that single out any particular group or profile, such as “family-friendly,” “suitable for a couple,” or “singles only.” Since violations can run up to six figures, make sure your ad simply describes the property and the neighborhood in generic terms — and be prepared to accept the first qualified applicant who meets your terms.
Credit Report Mistakes
Another common mistake when renting a home in Evansville is to fail to adequately qualify applicants. Today, accepting credit reports supplied by the applicants themselves is a gamble. Run credit reports yourself (including an eviction check for every applicant over the age of 18). You want to see the history of ALL applicants who will be living in your income property.
Security Deposit Mistakes
When it comes to the security deposit, taking too much – or not enough – is another common first-timer misstep. Too little and you won’t have enough protection; too much, and you risk violating state regulations (with the possibility of jeopardizing your right to use any of the funds!).
Renting a home can be an outstanding wealth-building venture, but your responsibilities as landlord must be taken seriously. For anyone unsure about legal requirements, hiring a professional property management agency can make good business sense. I’m here with recommendations for my clients on these and all other matters that accompany your real estate opportunities. You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com
Thursday, May 16 2013
You are buying a second home: this will be more than a sizeable investment — by any measure, it’s a considerable personal achievement as well.
That second home may be a family retreat, a vacation property you will be renting out (at least part time); or a pure income-producing rental. When a realistic appraisal says that you won’t be able to devote much time and attention to your new holding, the way to fill that gap is to locate an experienced local property manager.
As you will learn, it’s a specialized field. According to the latest studies, the median income for property managers nationwide tops $80,000 per year — a pretty trustworthy real world indicator that what they do has substantial value. If your second home is going to do duty earning additional income, the last thing you want is to face a commitment that competes with your full-time profession. Yet when tenants experience problems, dealing with them right away is a ‘stitch in time’ that does more than fostering good will. It can wind up saving money!
Your new property is a business, and like any, needs cash flow supervision. A vacation home, for instance, may from time to time incur unforeseen end-of-stay housekeeping costs which could require an extra payment. Your local property manager will handle this kind of problem for you (in fact, he or she probably made sure your rental contract foresaw this in the first place!).
Whether or not you buy your second home for profit, you want it to be more of a joy than a burden. A professional property manager delivers insulation from the smaller details, and corresponding relief from the stress of 2 am phone calls, maintenance worker no-shows, and all the other day-to-day management details.
If you are fortunate enough to be in a position to buy or sell a second home in the area, I offer the kind of first-tier real estate service that will get you what you are looking for. Contact me anytime for reliableproperty manager recommendations — Evansville has some of the best! You can reach me on my cell phone 812-499-9234 or by email Rolando@RolandoTrentini.com
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.
Monday, November 26 2012
According to the non-profit Demand Institute, this year nearly 35% of housing in the United States is now categorized as rental property. In our area as elsewhere, some of these properties belong to “accidental” landlords -- folks who had to relocate for professional or other reasons, but didn’t (or couldn’t) sell. Many others decided to buy investment properties when the prices of homes dropped so dramatically. One way or another, this fall a good many of our neighbors find themselves in the position of owning rental property for the first time.
What all new and long-time landlords have in common is the simple need to secure a trouble-free tenancy – which in many cases means securing professional property management. If you have a rental property yet are on the fence about the cost, some of the considerations that point to a professional for your property management solution look like these:
· A reputable localproperty management company knows how to find and screen qualified tenants at the same time they are complying with local and federal Fair Housing laws. It amounts to protecting you from potential lawsuits.
· Reputable property managers will take care of rental collections, protecting the cash flow that makes your investment worthwhile.
· Tenants who are handled professionally tend to stay longer – and that cuts down on costly turnover expenses.
· Experienced property management companies make sure that repair and maintenance work is completed promptly by licensed and insured professionals. This protects your asset while minimizing potential liability.
Property management may not seem to be the lowest cost solution, but for landlords who cannot spare the time to manage their property legally and carefully, finding one of the stellar property management companies in Evansville the best bet to protect that underlying asset and keep cash flowing. If you are one of those new ‘accidental’ landlords or are considering buying or selling an investment property, I am happy to share some of the best contacts in the industry! You can reach me on my cell phone at 812-499-9234.