Real Estate Investment Blog

5 Smart Questions you Should be Asking EVERY Management Company

When you are screening potential management companies to run your property, you shouldn’t just hire anybody.  Here are five absolutely necessary questions you should be asking before making your final decision.

  1. “How long have you been managing properties?”
    This is clearly the most obvious question to ask anyone, but if you are looking to hire a management company you don’t want to take the risk on an amateur for the sake of saving a buck. Experienced and reliable management companies will often publish how many properties they manage in an impressive portfolio.
  2. “How many people do you have on your team?”
    A one-man-show can be impressive sometimes, but the downside is that there’s only one of him. There should be people out in the field, and then there should be people running the operations from an office.
  3. “Can I get references from at least 3 owners?”
    If their current and previous clients are satisfied with this company, then you are moving in the right direction to finding the management company for you.
  4. “How will you market my property?”
    Advertising is important. The right management company will have the right marketing strategy to bring your property to the masses via web, print, etc.
  5. “Describe your tenant screening process”
    This is a critical question because you are putting your trust within a company to pick the right tenants and root out the bad ones. Most management companies have them fill out an application that asks for their income, employment, credit. criminal history, eviction history, and sexual predator history.

3 Things to Stay on Top Of

Delaying things can sometimes be a smart move. For example, orchestrated delays are an artful part of negotiating. But when it comes to managing your property’s day-to-day operations, although there are some things you can put off, there are others that you need to take care of ASAP. Keeping a constant watch on these will keep your investment at peak performance.

Lets look at 3 core essentials you must stay on top of and should never let slide, even for a day.

1. Occupancy.
Units that are filled put money in your pocket. Empty units take money out. Priority #1 for your management company is to fill up your property. Lost income from an empty unit is never recovered. If your occupancy level is below the market average, find out why. There can be any number of reasons tenants are moving out and others are not moving in, such as too much deferred maintenance. Whatever the culprit, fix it.

2. Attitude.
Once your property is filled up, priority becomes keeping it full. And more often than not, you’ll find the key to this is all about having the right attitude. Every member of your management team has to have a “can do” attitude; otherwise you end fruitlessly spending your time managing the manager and trying to turnaround poor attitudes. Find people who are inherently go-getters and ruthlessly dump those who are not.

3. Collections
Collections are always a high priority. Rental income puts the “cash” in cash flow. You can expect a few outstanding rents at the start of the month, but your management company should have all rent collected long before the next rental payment is due. Rents at go uncollected for more than 30 days are likely […]

5 Easiest Ways Tenants Can Go Green

April is officially “Earth Month” and Friday of this week marks the 41st anniversary of Earth Day. I did some “Q&D” (Quick and Dirty) research and came up with the 5 easiest ideas your tenants can get on the Green bandwagon. The light bulb has long been the graphic symbol for a bright idea, so lets start right there with one of the biggest wastes of energy on the plant… the antiquated incandescent light bulb.

1. Kick out Thomas Edison
Thomas Edison may have invented the familiar bubble-shaped incandescent light, but it’s time he got the LED out. Incandescent bulbs are notorious wasters of energy. If you pay the electric utilities at your building, you have an even greater incentive to make the switch.

2. Grow a green thumb
Indoor plants clean the air. More plants mean cleaner air. Your model apartment should make good use of them because it drops the hint that green is beautiful and welcome.

3. Use the dishwasher
Dishwashers use less water and less soap. Plus, they are more sanitary. And when you’re finished in the kitchen, turn off the light. It is a massive waste of energy to light space that nobody is using.

4. Be a bag-free person
Instead of accepting plastic bags from retailers, bring your own tote. Many supermarkets sell tote bags and you may even be able to strike up a deal with a green-friendly retailer near your apartment complex and get free tote bags for your tenants. (There’s an added value: when you carry a tote you tend to buy only what you need because you carry less. So now you’re not only saving the planet, you’re saving money.)

5. Change by degree
Adjust the thermostat to be one degree cooler […]

Successful Apartment Ownership Requires Efficient and Quality Maintenance

Since a professional team is so important to your success as a real estate investor and, more specifically as an apartment owner, I would like to wrap up this article series on how to use these team members in a little more detail.

Just to recap, some of the essential team members that you’ll want to have in place include:

· Bird dogs
· A real estate agent or agents
· A commercial mortgage broker
· A banker (one or more)
· A title company or closing attorney
· A real estate attorney
· Private lenders
· An SEC attorney (if part of your business includes securing private funding)
· An asset protection attorney
· An accountant or CPA
· Property management companies
· Contractors

Contractors are the behind the scenes magicians that can really aid your overall cash flow in the long run as an apartment owner. Units that are in need of complete renovation or simply a few updates do nothing for you if they are unrentable. A good contractor (or collection of them) can minimize the time that units in need of some fixing stay vacant, thus optimizing your income from your properties.

Finding contractors who both do good work and do so in a timely manner can sometimes be challenging but remember that it is a tougher economy out there right now and people are looking for work. Make sure your contractors are necessarily bonded and insured and don’t be afraid to move on if someone does poor work or, worse yet, shows up late or not at all. It is your business and you have every right to expect quality and timely work.

I suggest having a variety of contractors at your disposal. You won’t need all of them all of the time (at least […]

How Essential Property Management is in Apartment Investing Success

There is a belief that an apartment investor can “get away with murder” by not having a professional property management person on site is negligent on the property management spectrum. The stark reality is that next to the rents, the property management aspect is top of the list for essentials in the apartment investing market. The average apartment complex has a few hundred units and at the very least, 40 hours of daily work tasks. These tasks need to be done on the occupants schedule not the schedule of the management. This creates a very interesting dilemma for any of the property investors that feel a 40 hour employee on site is either unnecessary or unwarranted. In both aspects this is incorrect. A simple table will demonstrate why this is a reality and a reason to employ a property manager on site, at least part –time.

Four Reasons to Come out of Pocket for a Great Property Manager on Site

• Professional Presence: Many Residents Prefer and Expect a Person On Site
• Customer Service Advocate: Professional Approach
• ‘Fire’ Person: Daily ‘fires’ That Blaze and Can Destroy an Investment/ Separate from the Real ‘Flames’ of a Fire
• Maintenance Issues: If There is no Dedicated Maintenance Person On Site the Professional Property Manager Will Know Who to Call or Do it Themselves
• Collection: Collector of the Rental Units Dues.

These issues listed above are very important and that list is just a microcosm of the reasons that can be formulated in the realm of property management for apartment investing success. Many other reasons are commonsense related and need no further defining and if they did then possibly there are […]

Successful Apartment Ownership Requires Efficient and Quality Maintenance

Some of the essential team members that you’ll want to have in place include:

· Bird dogs · A real estate agent or agents · A commercial mortgage broker · A banker (one or more) · A title company or closing attorney · A real estate attorney · Private lenders · An SEC attorney (if part of your business includes securing private funding) · An asset protection attorney · An accountant or CPA · Property management companies · Contractors

Contractors are the behind the scenes magicians that can really aid your overall cash flow in the long run as an apartment owner. Units that are in need of complete renovation or simply a few updates do nothing for you if they are unrentable. A good contractor (or collection of them) can minimize the time that units in need of some fixing stay vacant, thus optimizing your income from your properties.

Finding contractors who both do good work and do so in a timely manner can sometimes be challenging but remember that it is a tougher economy out there right now and people are looking for work. Make sure your contractors are necessarily bonded and insured and don’t be afraid to move on if someone does poor work or, worse yet, shows up late or not at all. It is your business and you have every right to expect quality and timely work.

I suggest having a variety of contractors at your disposal. You won’t need all of them all of the time (at least you hope not) but there is something to be said for specialization. Maybe you’re replacing carpet in your units as they turn over from one tenant to another. A professional carpet installer might be […]

Managing Multi-Family Properties in Tough Economic Times

I have seen some troubling images in recent times, all due to the present state of the housing market. I have seen images of wild animals who have taken up residence at abandoned homes, images of neighborhoods that are now virtually empty of their once owner occupants, and stories about groups of former homeowners who have taken to living in tents as they transition forward in their lives.

All of these things are sings of some of the troubling economic times we face and there has been one particular type of real estate that has proven to be somewhat ‘economy proof’. That type of real estate is multi-family real estate and there is a very good reason for this. People need a place to live and cost-effective rental housing is a logical place to turn when times are tough.

The past few years of our economy could easily have been titled ‘The Rise and Fall of American Homeownership’. During the good times, politicians were raving about record numbers of homeowners across our country and people were basking in a glow of economic bliss that many had never experienced before. However, much of this was founded upon sketchy financing programs and basic issues like housing affordability were cast aside.

The result, as we are now seeing, is a current record number of foreclosures and abandonment of homeownership, as people try to regroup and determine how best to move forward in more challenging economic times. Subdivisions have emptied, homes sit empty, yet people still need a place to call home, even if it’s just a stepping stone to a better tomorrow.

What I have found, as an owner of many multi-family properties, is that the same period of time […]

Successful Apartment Ownership Means Having Proper Management

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Since a professional team is so important to your success as a real estate investor and, more specifically as an apartment owner, I would like to take the opportunity to discuss how to find and use these team members in a little more detail.

Just to recap, some of the essential team members that you’ll want to have in place include:

· Bird dogs
· A real estate agent or agents
· A commercial mortgage broker
· A banker (one or more)
· A title company or closing attorney
· A real estate attorney · Private lenders
· An SEC attorney (if part of your business includes securing private funding)
· An asset protection attorney
· An accountant or CPA
· Property management companies
· Contractors

Property managers are the epitome of delegation when it comes to owning apartments. A rare few among real estate investors actually enjoy the property management side of the business but most would prefer to have someone else do it. The larger the number of units, the more important it becomes for you to seek professional property management. Among the many services they provide are:

· Tenant screening and selection
· Rent collection
· Call center for tenant questions and problems
· Marketing/advertising for new tenants
· Arrangement of property cleaning and minor maintenance
· Processing of evictions (as needed)

Would you want to have to handle all of that, especially if you owned a building with 20 or more units? Probably not. Property managers charge a percentage of the gross rents (usually 5-10%) for their services and, when done well, it is worth every penny because you can truly be a business owner, rather than owner, manager, troubleshooter, and shoulder to cry […]

Road To 7,000 Pt. 14

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On The Road To 7,000 Pt. 8

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