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 Real Estate Blog 
Monday, February 16 2015

 Just about any investor on the lookout for a promising rental property has a number of assumed criteria in mind—often arrived at without bothering to sit down to list them. Remember, this is already a successful individual, usually with ample business experience—and always with the financial acumen to be able to make a substantial investment. For them, creating a written decision matrix really isn’t necessary.

Still, there’s a lot of literature on the web offering opinions on what are the most commonly agreed-upon factors for choosing a rental property. Quite a few “Top 10”s. Going over them, it turns out that some are only slight variations on a single theme, so I’ve boiled them down to a “Top Six.

The first one is barely ever mentioned. It’s this:

  1. Most investors have predetermined the price range that his or her rental property must fall into, but that can turn out to be a false step. If the goal is to garner the maximum return, it’s possible that some humbly-priced rental properties can actually turn a greater annual profit—even in absolute dollars—than some higher-end homes (particularly those that suffer extended periods without suitable higher-end tenants). So Number 1 is SET YOUR INVESTMENT GOAL. Cash flow return can be a very different goal than long term property appreciation.
  2. LOCATION LOCATION LOCATION.  This is the one that combines a half dozen factors, variously listed as Neighborhood, Proximity to Jobs, Amenities (parks, malls, gyms, movie theaters, public transportation hubs, etc.), Crime, Schools, and even Property Taxes. This factor might be chosen for convenience, as when a rental property investor wishes to be able to supervise the property; or for an expectation of value appreciation in an area which is gaining popularity. As everyone has had heard from time immemorial, L.L.L. is always important!
  3. HEALTH OF THE PROPERTY. If the underlying structure and mechanicals have been intelligently designed and well maintained, this one is of no importance. If not, a thorough inspection with top-grade recommendations and cost projections is a must.
  4. VACANCY RATES. The number of rental homes listed and the number of vacancies should be considered highly important for determining a promising rental property. In newly expanding communities, sometimes you can spot a man parked near an intersection, clicking away on a counter as the autos pass by. He’s measuring traffic to see if the volume is great enough to support a gas station, or market, or mini-mall. The turnover of rental listings—how long rental properties stay vacant from week to week—can provide guidance about the same kind of information.
  5. COMPETITIVE MARKET. The average rent amounts advertised for comparable properties can be the decisive factor for whether a rental home investment makes financial sense.

 Of course, another factor that can make a big difference is the experience level of your Realtor®. That’s actually key factor #6—and (I hope) where I come in! You can call me on my cell phone 812-499-9234 or email: Rolando@RolandoTrentini.com so we can discuss your real estate needs.

Posted by: Rolando Trentini AT 12:58 pm   |  Permalink   |  0 Comments  |  Email
Wednesday, April 16 2014

It’s one of the skills a successful local rental property investor needs to cultivate: if or when to sell. With property prices on the rise, some Evansville landlords may in fact be asking themselves whether now is the time to cash in. Especially for most everyone whose rental property investment was made during the last few years, it’s already been a profitable gambit. According to the Case Schiller Index, by last year’s close, property prices across the nation had risen at the fastest rate in the previous nine years.

But if—and then when—to sell a rental property can be a tough call. As a relatively illiquid investment, it takes a great deal more commitment than the decision to sell a stock or cash in a bond. But sometimes there are circumstances that can make the decision a little easier. For instance:

-Cash flow
One clear reason why you might choose to sell is if the rental property is losing money. The rental may have been vacant for too long, or the rent level may not have been sufficient to cover expenses. In many cases, other real estate investors will be willing to lose money in the short term on a property they believe will appreciate in the future. It’s also possible that a full-time rental property professional may be able to tap economies of scale that are not possible for every individual investor.

-Greener pastures
Your rental property may be doing fine—making money and showing substantial value growth—but now an unusually promising alternative investment has appeared. With the strong spring market, it may make sense to sell now to reinvest the profits elsewhere.

-Taxes

Everyone’s tax situation is different, and the tax environment is subject to change. Even if that weren’t the case, there are some years when personal finances mean that a sale would be a much better idea than others. As with any substantial financial decision, your accountant or other financial advisor will have the relevant input.

-Landlorditis
Being a landlord is not for everyone. Sometimes a professional property manager can alleviate nearly all the stress for an investor who doesn’t relish the vocation, but even then, there can be other chores: bookkeeping, manager management, a leak-through of tenant personality issues…that prompt a landlord to decide he or she would rather direct energy elsewhere. Opting for more passive forms of investment is always a possibility.

Our area has already benefitted from some of the fruits of the national real estate recovery – but that alone doesn’t answer whether this spring is an opportune time for you to consider selling your area rental property. We currently face a shortage of listings and there are many buyers and investors in the market. Call me today for a comprehensive property evaluation—the key piece of information that will help you decide! You can reach me on my cell phone

812-499-9234 or email Rolando@RolandoTrentini.com

Posted by: Rolando Trentini AT 08:00 am   |  Permalink   |  0 Comments  |  Email
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
Posted by: Rolando Trentini AT 09:22 am   |  Permalink   |  0 Comments  |  Email
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
Posted by: Rolando Trentini AT 02:43 pm   |  Permalink   |  0 Comments  |  Email
Friday, February 15 2013
To the extent that rentals reflect wider real estate movement, there is good news and bad news for Evansville tenants. It all depends on how they view it (and how they chart their personal housing strategy). The bad news was not unexpected: for the third straight year, rents were up across the nation in 2012, according to apartment housing industry expert MPF Research. 
Although rents rose at a slightly slower pace than in 2011, national forecasts are calling for rent increases in 2013 that match last year’s. The research firm said that apartment rents climbed 3.0% in 2012, down from 4.8% in 2011, but again were above the long-term norm of 2.5% registered over the past 20 years.
For tenants currently in rentals -- both apartments and single-family homes -- rents may be heading up, but the good news is that this price pressure has not yet resulted in a less friendly home buying environment. “Loss of renters to purchase in the now-improving for-sale housing market is having only a very small impact,” according to MPF’s report. In other words, rentals are not being lost in large number even though rents are rising, so floods of first-time homebuyers are not yet adding significant upward pressure on single-family home pricing.
Even with housing prices on the rebound, first-time homebuyers who decide to leave the world of rentals to buy a home now will still benefit from the record low interest rates and distressed property bargains that result in historically affordable home prices.
Another group that would hail rising rental rates are investors. "Most places are starved for new product right now, so properties that will complete over the coming year appear likely to do incredibly well, generally without hurting the results for the existing stock," according to Greg Willett, MPF’s vice president.
Whether you are looking to buy or sell a rental home in Evansville or the surrounding areas, conditions warrant a thorough look at the opportunities available now and those opening this spring. Call me to get started on a plan of action! You can reach me on my cell phone at 812-499-9234.
Posted by: Rolando Trentini AT 08:00 am   |  Permalink   |  0 Comments  |  Email
Thursday, February 07 2013

Ultra-low mortgage rates mixed with housing affordability has made investing in a rental property pay off for investors. Many investors have eyed foreclosures, snagging them at rock-bottom prices, and turning them into rentals. Some home owners have also used the downturn in housing to purchase second homes and then rent out their first property, the Associated Press reports.

Demand for rental housing remains strong. "In this market, at this point, it's a sweet spot," says Chris Princis, a senior executive at financial advisory firm Brook-Hollow Financial and owner of two rental properties in Chicago. "You're getting the market where it's just starting to rebound, but still at the bottom, with what's looking to be a great recovery."

In earning a profit on a rental investment, Princis uses a formula: He charges 15 percent above monthly mortgage and maintenance costs. But it’s also important to know what comparable apartments are going for, and to be flexible in case you’re unable to find a tenant for months, experts note.

The best investments for rentals typically prove to be in areas with a strong history of rental demand, such as neighborhoods near universities or homes in residential areas that are near schools to attract families.

Source: “Got Cash, Good Credit? Experts Say Owning Rental Housing Can Pay Off Even as Market Recovers,” The Associated Press (Feb. 6, 2013)

Posted by: Rolando Trentini AT 11:24 am   |  Permalink   |  0 Comments  |  Email
Tuesday, December 18 2012
 
High rental occupancy and rising rents” was how economic trend-watcher Kiplinger.com summed up 2012 – and as the nation counts down to the New Year, owners and future owners oflocalrental property are clearly anticipating more of the same. Experienced managers have some timely advice for first-time Evansville rental property owners as they prepare to lease in the coming year.
Rule #1 for attracting quality tenants, they say, is to be hard-nosed about offering a quality product. Rentals are hot, but that doesn’t mean a property will rent itself – especially when the goal is to attract the kind of conscientious tenant who means a trouble-free income stream. 
Touch-up and trim renewal can be a quick, cost-conscious way to add appeal to any rental property. Restoration Hardware’s neutral palate (and Benjamin Moore’s counter-offering) are excellent sources for trim colors which breathe new life and visual interest into just about any décor. 
Replacing older carpet is a more costly (though eventually inevitable) way to make a big difference in key first impressions; while simply polishing middle-aged hardware can revitalize an otherwise aged look.
Property managers also suggest replacing older appliances in the kitchen before they become failure-prone. Even where there is no budget for new cabinets and countertops, a little stainless steel can command a higher rent – and literally pay for itself.
Rental properties have been a hot topic for more than a year – but opportunities remain. Whether you are preparing to rent property you already own, or are simply weighing the prospects, the New Year promises to be a propitious time to look into our current Evansville rental property offerings. Sound interesting? Call me! You can call me on my cell phone
812-499-9234.
Posted by: Rolando Trentini AT 08:00 pm   |  Permalink   |  0 Comments  |  Email
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.
Posted by: Rolando Trentini AT 11:24 am   |  Permalink   |  0 Comments  |  Email
Friday, November 09 2012

Fifty percent of Americans recently surveyed say they expect home rental prices to rise in the next year, and it’s making them lean more toward home ownership, according to the Fannie Mae October National Housing Survey, which surveyed 1,000 Americans.

"This has been a year of steady growth in the percentage of consumers with positive home price expectations," says Doug Duncan, Fannie Mae’s senior vice president and chief economist. "Increasing household formation, encouraged by an improving labor market, is adding additional momentum to the housing recovery and putting upward pressure on rental price expectations. Expected increases in both owning and renting costs may encourage more consumers to buy and add further strength to the housing recovery already under way."

Rental price expectations continue to rise and are much higher than home price expectations, according to Fannie Mae.

More Americans say that with rising rents, home ownership is looking like a better option. Seventy-two percent of those surveyed say that now is a good time to purchase a home. Eighteen percent say it’s a good time to sell.

Still, the optimism over the direction of the housing market is met with some caution and predictions of a slow recovery--not a high speed one, according to Fannie.

Source: Fannie Mae

Posted by: Rolando Trentini AT 08:00 am   |  Permalink   |  0 Comments  |  Email
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
Posted by: Rolando Trentini AT 08:49 am   |  Permalink   |  0 Comments  |  Email
Wednesday, May 02 2012

As the number of for-sale homes listed on the multiple listing service (MLS) drops, the number of single-family homes up for rent has been gradually increasing, RISMedia reports.

Single-family home rentals are a growing business, as more investors buy up foreclosures at bargain prices and then transform them into rentals.

About 16 percent of all listings on the MLS are rentals, which is more than double the number of rentals listed in 2006, RISMedia reports. Single-family rentals are often listed on the MLS by real estate brokers, whereas multifamily units typically aren’t.

The single-family rental market now accounts for “21 million rental units or 52 percent of the entire residential rental market,” according to a new study by CoreLogic.

Single-family rentals are usually very differently from multi-family homes. For example, rents for single-family rentals typically are 1.5 to 1.6 times higher than multifamily homes. Also, families and prior home owners tend to be attracted to single-family rentals whereas multifamily tenants tend to be younger, more mobile people who have never owned a home before.

Many of the single-family rental tenants nowadays are former home owners who had faced foreclosure and can no longer afford to own. According to CoreLogic, more than 3 million home owners have been turned into renters over the past five years due to foreclosure.

Source: “Single Family Rentals Now Exceed Multifamily,” RISMedia (April 23, 2012)

Posted by: Rolando trentini AT 08:00 am   |  Permalink   |  0 Comments  |  Email
Monday, April 16 2012
Buying homes and renting them are such distinctly separate aspects of Evansville’s real estate scene that we tend to pay attention only to the sector we are most involved with.  We pretty much ignore the other. Renters and real estate investors watch trends in residential rentals, while homeowners and soon-to-be homeowners check on prices and activity in the local home market.
 
All of which means that it’s easy to overlook how trends in one sector have major impacts on the other. And any sort of residential construction activity – new building or remodeling – has a direct and positive impact on our economy as a whole. 
 
So here’s some good news: this year, rental construction is expected to reach its highest level since 2005. Somehow that may not seem like such a big deal, but despite the way it looks, 2005 is SEVEN years ago (time flies, doesn’t it?)! Those have been seven painful years for most of the construction folks we know, so the change comes as welcome news. It’s also possible that a turnaround could mean that other turnarounds in different areas of the economy may be in the wind.
 
The apartment experts at NMHC just published something that most of us already suspected. They found that nationally, apartment vacancy rates fell to a decade low of 4.9%. We have already written about how asking rents continue to rise (in March, up .5% from the previous month). The same experts noted that some empty-nesters seem to be increasingly likely to opt for the convenience of apartment living -- even those who could easily afford to buy.
 
It explains why more investors are stepping up to order the building of new rental homes even as many older apartments and rental homes are being renovated. Add to that recent government moves to encourage lenders to become at least temporary landlords, and the result is real activity. Budgets have been tight for families in recent years, which may have caused them to decide to choose rental homes that were older, hence less expensive. If the economy continues to strengthen, these same families may later be able to afford to look at one of the new rental homes now under construction. It’s likely that many tenants would choose to live in a place that is a product of new construction, or in a complex that has been recently renovated.
 
All that increased building activity is another sign that the housing market as a whole is waking up. In the longer range, since newer rentals generally cost more money, more would-be tenants will ultimately reconsider the prospect of owning a home – in turn increasing demand for first-time or entry level homes.
 
Wherever your family falls in theEvansville real estate mix, don’t hesitate to call me when you have a question about the market and what is available for you. You can reach me on my cell phone at 812-499-9234 or email at Rolando@RolandoTrentini.com
Posted by: Rolando Trerntini AT 10:44 am   |  Permalink   |  0 Comments  |  Email
Tuesday, April 03 2012
 Buying Evansville real estate as second homes in the buyer's market of today is never a bad idea, pending all the studying that an investment requires. Second homes demand from the prospective buyers a lot of responsibility, and this tends to scare them away sometime. That is a fear, however, that comes unwarranted. Second homes are better investments than most people think.

The primary concern that prevents people from taking a chance with second homes is the price. With the current trend of the American economy, images of bankruptcy tend to influence the average buyer's decision. Look at it from a different perspective: if a lot of people are looking at real estate purchases in the same way, then that would significantly lower the current demand for it. The market would then have to adjust itself to lower prices, and financial institutions are doing a similar adjustment: mortgage rates are much lower than a couple of years back. When thought of the real estate market this way, you'd realize that now is the perfect time to buy, as it would be much easier on your bank account.

The additional tax benefits alone pile up to help you cut down on your current expenses. Take, for example, a situation wherein you decide to have your second home rented. If the renting period has gone beyond 14 days (as per IRS regulations) then you can write off the expenses incurred by the property.

A lot of buyers are looking at Evansville real estate as investment properties that can earn them passive income. This thought requires a bit of introspection. What would be best is if your intended investment property is somewhere that invites a lot of potential renters. Investment properties close to business districts would not be a bad idea. The same goes with beachfront properties. Think of it this way: why pay for the mortgage of your second home when you can have the renters do it for you?

Speaking of location, if you choose a particular type of investment property, like a beachfront property, then that could spell not just rental opportunities for you (hello, extra income), but also a vacation home for your personal use.

And of course, there's the usual increase in value when it comes to real estate. Remember today's buyer's market with Evansville real estate, you have to know that not only are prices down by significant margins (with the number of foreclosures and bank auctions out there). Sellers are now also highly motivated, so their flexibility when it comes to price negotiations should let you make an even smaller investment--that spells higher returns in the future.

With the help of a credible realtor, you can begin your search for your second home. This is not simply about your needs (that's for your first home, after all). A second home is about making an investment that will serve you as it appreciates in value in the future. As it appreciates, the rental opportunities that a well thought out second home offers will generate a steady flow of extra income for you--it's like making an investment for free.

I hope you have found this information helpful. If you need any help with buying, selling or renting a home in Evansville, Indiana please contact me at any time. TYou can reach me on my cell phone 812-499-9234 or email at Rolando@RolandoTrentini.com

 

Posted by: Rolando Trentini AT 11:05 am   |  Permalink   |  0 Comments  |  Email
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The Trentini Team
F.C. Tucker EMGE REALTORS®
7820 Eagle Crest Bvd., Suite 200
Evansville, IN 47715
Office: (812) 479-0801
Cell: (812) 499-9234
Email: Rolando@RolandoTrentini.com


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