Home Improvement – Real Estate

Regardless of the current condition of the housing market it is very well known that investing in real estate and properties is one of the most stable and most profitable activities in the long run. In order to keep your Investment Property profitable it is important that you manage it correctly, that means that from the moment you put your property for rent, you need to make sure that the person you are renting your property to is responsible hence keeping your risk at a minimum.

While property management does involve screening and hand picking your tenants it doesn’t mean that it stops there, the property itself needs to be maintained and there needs to be a high level of accountability regarding all the financial transactions resulting from your properties equity growth as well as from the revenue generated by renting it to a tenant.

Many property owners who think about saving money often end up hiring a single person to manage their property, whether it be an apartment complex or a house, the only problem with this situation is that not everyone is fully qualified to run your property, give it proper maintenance while making it a profitable investment.

Because of the fact that managing the property is not an easy task and is not laughing matter either, your number one concern as an investor and as an owner is to hire a qualified company that will provide you with financial statements that are accurate and that the services they lend you will keep your asset performing at the highest level possible.

If you are the owner of an apartment complex or an even bigger piece of property then you definitely want someone who knows what they’re doing and is able tool assess your financial goals. All properties should be treated as businesses because of their ability to generate cash flow for their owners so when you are ready to hire a management company to take hold of your investment is necessary that you consult with them in order to create the business plan because only those who treat your investment as an actual business are the ones who are going to be capable of handling your asset, lowering your risks and returning balance sheets that will in turn favor your finances.

As you see, there is so much at stake that when you choose a company to run your asset and keep it profitable it is important that the company and the overall presentation inspires trust which is actually the bottom line when it comes to giving your investment for someone else to manage. Making the right decision when it comes to property management and assessing the experience of the company you are about to hire can dictate whether are not your investment will be a success.

Barbados Property Management is basically a service by which your Barbados property will be managed completely on your behalf. The best Barbados Property Management offers personalized services for your convenience. Considering your options, a good Barbados Property management company could offer a one-size-fits-all cookie- cutter approach for your business. The goal of your Barbados Property Management services company is to bring out the best potential of your Barbados property, lessening running costs, while allowing both potential tenants and the owners alike to get the best out of the property.

What exactly is this management service need to do on your behalf? Your Barbados Property Management service could start the process of management by conducting an in-depth analysis of the type of property you have and what its needs are. Examples of specific needs are what kind of septic system would be best for your property, as well as how your garden should look like. For some Barbados Property Management service companies, this is a free part of their service so you may want to consider that, though free does not automatically mean better or best service.

Further, the Barbados Property Management service could prepare a detailed proposal concerning how property management should be done for your property, what requirements you have, and how much the property management package should it cost. For instance, if your property management plan involves hiring gardeners to maintain the grounds of your property so the Barbados Property Management company has to come up with an estimate of how much periodic gardening would cost and how long this would take to be completed.

Hiring a Barbados Financial Management services involves managing the insurance and the accounting services. Therefore, it’s important for you to consider such features or services of the Barbados Financial Management company you’ll hire.

Getting appropriate Barbados Property Management services is sometimes very important for those property owners who may be shuttling from the Caribbean to other countries often, or may be absent for long periods of time from their Barbados property. It is also important for your property to be managed appropriately so that you are able to optimize the value of your property. Some properties also have high maintenance amenities like swimming pools, tennis courts, and gardens which need constant attention. If you cannot be around to manage your property, then Barbados Property Management may be best the solutions for you.

To track down which Barbados Property Management companies are reputable and deliver on their promises, asking around is one of your best ways of researching for the reputable management company. Check for online information or try to ask around in Barbados personally. Maybe you have run into some Barbados property owners at some community event so you can always probe who does their property management. This is a good way to get referrals to a short list of Barbados Property Management companies that others have already tried out. Remember, word of mouth through referral is sometimes the most effective and cheap ways of looking around. You can think of your predecessor clients who have done the initial testing for you. Realize the results of predecessors’ experience before you approve or hire the property management company.

Copyright (c) 2008 Michel Lautensack

Owning rental property can be an overwhelming experience for both new owners and longtime investment veterans. Fortunately, that’s why help is available in the form of a professional pResidential Property Management company. But is this the right decision for you? Here are the top 10 reasons to consider why you should hire a residential property management company and how the benefits far outweigh the costs.

1) Rent Collection: A professional residential property management company (“PM’s”) have systems and strategies to improve rent collection and on-time rent payments. This allows you to ensure swift and consistent rent collection. Quick and consistent rent collection is absolutely critical in this real estate market where good cash flow can mean the difference between success and failure as a real estate investor.

2) Local Knowledge of Rental Rates: PM’s have extensive local knowledge of rents and the ability to determine the highest rental rate possible for your property. With the internet and the ability to do large scale searches for rental properties, potential tenants know if your property is overpriced, even by $25. Overpriced properties sit empty while other properties get rented. Knowledge of rental rates is a key factor to fast rentals and quick cash flow.

3) Tenant Screening: A PM requires a detailed written application from each adult with photo identification. Additionally, PM’s will run criminal, social security and public notice (bankruptcy or judgments) searches to determine if the application is accurate. PM’s will also call past and present employers, landlords and other references. PM’s have set requirements and standards for accepting or declining an applicant and thereby ensuring you comply with fair housing rules and other local and state regulations.

4) Marketing Expertise: PM’s have years of experience in how to best market your properties so they are rented in the quickest time possible. PM’s use both offline and online marketing to maximize your properties’ exposure and find qualified tenants quicker. Most PM’s utilizes 10, 20 or even 30 different techniques to rent a property quickly which reduces your carrying cost of a vacant property.

5) Property Law and Regulations: PM’s have extensive and up-to-date knowledge of property laws and regulations and will assist you in making sure you are in compliance with your local, state and federal rules and regulations. These rules and regulations include complying with fair housing regulations, the Americans with Disabilities Act and other applicable local, state and federal laws. Avoiding one law suit will more than pay for any PM’s fees many times over.

6) Tested and Reliable Professionals: residential property management company’s will already have vetted numerous vendors, suppliers and contractors to make sure they provided good quality work at reasonable prices. Failure to properly vet these professionals can be a costly mistake. Many Owners overlook this function because they do not know how to do it or because it is a time consuming and laborious process.

7) Inspection Reports: PM’s perform property inspections before, during and after a tenancy. Additionally, most PM’s will perform routine property inspections at least every 180 days. Your PM should be responsible for preparing frequent written inspection reports for each of your properties. Faults in your property that are found quickly can be resolved before they become expensive items of disrepair.

Financial Records and Security Deposit Escrows: PM’s will provide detailed income and expenses reports as well as cash statements every month saving you the bookkeeping headache. Additionally, PM’s will also manage your security deposit escrow funds and make sure you are in compliance with local and state regulations. PM’s will provide end-of-year tax reports for your accountant or financial advisor.

9) Emergency Calls and Shield You From Tenants: A residential property management company will shield you from emergency maintenance calls and tenant headaches. Imagine never having to deal with late night “my toilet is overflowing” call.

10) Low Costs: A PM should only be charging around 6% to 10% of the monthly rent collected. Assuming a monthly rental rate of $1200 per month that is a fee of $72 to $120 per month. This is less than $4 per day! Can you possible do all these things for less than $4 per day?

11) Bonus Reason! FREE TIME: A good residential property management company will free up your time for doing deals that make money. I mean serious money as opposed to dealing with non-money producing activities like tenant and property management.

Questions to ask yourself:

• How many property managers do I want to interview? While the attached form allows you to compare 3, I recently interviewed 5 for my new property. A little exhausting to say the least!

• How will I find out who to interview? I find personal referrals from other property managers to be the best method.

• What are the most important areas to me in finding a property manager. Do you want the cheapest fees or the highest rent or is the service provided more important?

To follow is quite a long list of questions you may wish to ask a potential property manager. Have a read through it before you go to interview an agent and identify which questions are most important to you. After the questions is a form you can fill in while interviewing the agents. It’s best to start from the far right column so that you can fold that over out of sight when you start interviewing the next agent.

Structure:

• How is the property management department structured?

• Who will be your point of contact?

• How many people will you have to deal with on an ongoing basis?

• What is their contingency plan for when your point of contact is ill or on leave?

• What is the ratio of staff to properties managed?

Maintenance:

• What is their procedure?

• Do they contact the property own for all maintenance?

• Do they charge a fee to conduct maintenance?

• What percentages of their tradespeople are licensed?

• Can the owner nominate their own tradespeople?

• How are large bills paid (directly by the owner or through the rental receipts)?

Lease renewals:

It is very important to choose a company that handles their lease renewals promptly and efficiently ensuring your tenant always remains on a current lease.

• What is their procedure?

• Do they perform rental increases only upon lease renewal or during the period as well?

• Does the company charge to renew an existing lease (ie: where they don’t need to find a new tenant)

Rental arrears (tenants who are behind in rental payments):

• What is their procedure? (ie: how often do they check arrears, how many days behind does a tenant have to be before their procedure starts and what does that procedure consist of)

• At what point does the owner of the property get contacted to notify them their tenants are in arrears?

Inspections:

• How often is the property routinely inspected?

• Who conducts these inspections? (ie: is it your point of contact or someone else?)

• What points are noted on the inspection report to the owner?

• It is appropriate to view or request a sample of one of these reports.

Fees:

• What are all of the costs they charge (get written confirmation).

• Charges typically include: management fee (usually a percentage charged against all rent received), letting fee (usually a percentage or number of week’s rent charged up front when a new tenant is found), advertising (internet, newspaper etc), sundry or postage (usually a nominal fee per month), lease renewal (often charged when a lease is renewed as opposed to a new tenant being found).

• Will the owner be charged more than one letting fee in a year if there are more than one set of tenants (if the letting fee is based on a percentage of annual rent this can be costly).

• Are these fees negotiable (ie: for management of more than one property).

• It is appropriate to view or request a sample of the authority you would sign if you were to give them your property to manage.

Payments:

• By what method does the landlord get paid (direct debit to a bank account is the most common and convenient method).

• How often does the property owner get paid (weekly, fortnightly, monthly).

• What payment methods are available to tenants.

Statements:

• Does the statement get emailed, mailed or both to the owner

• It is appropriate to view or request a sample of one of these statements

Tenant screening:

• How is this performed and what does the tenant need to provide

• It is appropriate to view or request a sample of one of these statements

Advertising

• How are vacant properties marketed to the public (commonly – internet including large property portals and the real estate agent’s own website, newspaper, window display, in house database of tenants currently looking)

Estimated rental projection:

• What does the agent think the property is worth?

• What other comparable rentals on their books can they show you so that you know that their figure is realistic and achievable?

Other:

• Any other questions you think to ask

• Comments on their presentation materials etc

• Did they provide testimonials? Can they give you contact details for 5 of their current landlords who you could query about their service.

Preparation / Follow Up:

• What did the agent do before and after the presentation to stand out.

Overall rating:

• A section to rank a number of property managers

To download a free checklist to help you find the right Property Manager head to

cmrpropertymanagement.com – Your property doesn’t sell? Do you own real estate that doesn’t make you money? Stop bleeding and let us help you! • Can’t sell your property? Rent it! • Don’t want to wait until the market improves to sell your home? Lease it with Option to Purchase! • Can’t find tenants for your rental? Let us do the marketing for you! • Don’t have time to manage your real estate investment? Let our professional property managers do it for you! • Can’t deal with problem tenants? We’ll do it for you! Carolinas Metro Realty helping property owners to manage their investments in Charlotte (North Carolina) and surrounding areas, whether it is residential or commercial property, single family home, condominium (condo), duplex, triplex, apartment complex, home for rent, lease or lease with option to purchase. We specialize in managing residential rental properties – homes, condominiums (condos), townhomes (townhouses), apartments, duplexes, triplexes and commercial properties – in the Charlotte region including Lake Wylie, Lake Norman and towns of Mint Hill, Fort Mill, Rock Hill, Tega Cay, Gastonia, Indian Trail, Harrisburg, Mathews, Mooresville, Waxhaw, Weddington, Uptown Charlotte, Huntersville, Pineville, Huntersville, Cornelius, Davidson, Denver, Mooresville, Troutman, Sherrills Ford, Catawba for individual owners, investors and corporations. We serve North Carolina, South Carolina, Mecklenburg, Iredell, Lancaster, Union, Gaston and Catawba counties.

Consider expanding your service offerings to include mortgage services.  Mortgage services are extremely profitable.  Many states only require one or two courses to get licensed, and you may be able to use the loan officer course to get MCE credit for your real estate license.

You probably have a large pool of prospective investors with adjustable rate mortgages who need to refinance their mortgage. Why refer this business, when you can easily provide this service. You already have an established relationship with each owner.  If you own your office, you may even consider subleasing space and partner with a mortgage broker. Our in house mortgage broker pays us rent and refers real estate and property management business to us. This drastically lowers the overhead cost for both companies.

In my last article, I discussed how 2008 will be a great opportunity to purchase rental property from motivated landlords with negative cash flow properties.  As property managers, we can easily achieve instant equity by purchasing property below market and earning a commission at closing. We can increase our return on investment with monthly cash flow, appreciation, principle reduction, and tax savings by depreciating rental property. However, only licensed real estate professionals can use rental property to generate business income.

No other investment can potentially offer a greater return for a property manager than investing in rental property.  Our company provides maintenance, sales, leasing, property management, and mortgage services. We leverage all of our services to generate as much revenue per client as possible.  We offer a one stop shop for all our customers. 

As a licensed real estate broker and loan officer, we generate thousands of dollars each year by assisting tenants living in rental properties I own to purchase homes. We assist tenants in repairing their credit, obtaining a mortgage, representing them as a buyer’s agent, and utilizing our in house maintenance company to help them fix up the property or make any necessary repairs. Not only are tenants happy to utilize our services, but they refer business to us as well.

In our market, there is a huge demand for home buyers who just sold their home and need a place to park while they build a new home. Yet few property managers offer lease terms less than six month, because short term leases are not profitable for the owner. I fill this market demand with properties I personally own and network with Realtors and builders and offer short term leases for their clients and customers. In return, I ask them to refer my company future property management business. We will refer the owner back to the Realtor if they decide to sell the property in the future. This makes the sales transaction go very smoothly, and Realtors are thankful for us providing this service. We have obtained many property management referrals because of this service offering. Even the short term tenants have referred property management business to us.

The more properties you purchase, the more you can leverage your company’s services to generate business income. You will save thousands of dollars in income taxes each year by depreciating each rental property.  Owning rental property can lower your income tax liability to low single digit percentages. Some landlords with a large rental property portfolio pay no income taxes, because their depreciation expense exceeds their taxable income.

I encourage property managers to take advantage of near record low interest rates and purchase as many rental properties as possible. Leverage your rental properties to generate incremental business income.  

In my next article, I will discuss how licensed real estate agents can leverage rental property to generate additional business and tax savings.