How To Manage Investment Property While Working Full-Time

Posted in Real Estate by Michigan Real Estate Expert on June 6th, 2018

How To Manage Investment Property While Working Full-TimeIn 2017, upwards of 75 percent of independent rental property owners in the U.S. reportedly worked another job on top of being a landlord. That means the overwhelming majority of landlords are attempting to juggle more than they can handle at times. However, there are organizational and strategic concepts that can maximize efficiency and profitability.

Consider the following tips that bring property management tasks under three basic headings: organization, automation and outsourcing.  

Organization Matters

One of the things that tends to overwhelm landlords is thinking about the rental properties as an extension of home ownership. The rental seems like it involves many of the same tasks such as maintenance and repair.

By rethinking rentals in terms of a small business, the way these and other tasks are approached can become radically different. If this were a Mom and Pop store or a corporation, the necessary resources would be brought in to handle niche labor. Organize all of the tasks that the rental unit(s) require under categories that may include the following.

  • Rental Advertising
  • Applicant Interviews
  • Background Checks
  • Legal Documents (leases)
  • Maintenance and Repairs
  • Rent Collection and Bill Paying

Accounting

With a defined set of tasks organized under specific headings, it becomes much easier to visualize the breadth of work involved and what supporting resources would be needed.

Automation Matters

Industries across the globe are moving to automation as a way to increase productivity and lower costs. There’s no reason landlords working other jobs cannot do the same.

While fixing a burst pipe may not be a good candidate for automation, there are numerous tasks property owners undertake that no longer require valuable time.

  • Advertising: Consider a process where an online advertisement is pre-written and posted when a lease expires.
  • Rental Payments: Consider automatic withdrawal from tenant accounts or having them direct deposit.
  • Bill Payment: Consider auto pay for every possible facet of the property, including utilities, taxes, insurance, mortgage and others.
  • Maintenance and Repair: Consider an online form for tenants to fill out that provides real-time notification.

These and other tools can streamline the amount of time required to manage a rental property without incurring significant expense.

Outsourcing Matters

People who work regular jobs and also manage rental properties are entrepreneurs by nature. That go-getter personality leads many to take on more tasks than there is time in the day. That’s why outsourcing is so important.

Outsourcing things like accounting or legal services are no-brainers because they require specialized knowledge. But other tasks such as applications, background checks and maintenance may be good things to put on someone else’s plate as well.

As noted in the beginning of this article, if a small business mindset were applied, many of these tasks would be assigned to a designated resource. Consider operating rental units in this fashion by running a cost analysis and outsourcing. Roll in the labor costs that make sense and take some time to binge watch a Netflix series while your investment turns a profit.

If you’re ready to invest in a rental property, contact your trusted real estate professional who can point you to the hottest markets in your area. 

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Thinking About Buying An Investment Property? 6 Tips To Ensure You Don’t Get Fleeced

Posted in Investment Properties by Michigan Real Estate Expert on June 11th, 2014

Thinking About Buying an Investment Property? 6 Tips to Ensure You Don't Get FleecedPurchasing an investment property is one of the most important decisions that you’ll ever be a part of. As such, it’s a necessity to make your decisions with only the most careful of consideration.

Here are six tips that you need to heed in order to ensure that you don’t get fleeced.

Find The Right Property At The Right Price

Yes, this is a whole lot easier said than done. However, it’s not impossible. All it takes is some patience and research.

You have to determine what everything in your area is selling for in order to be able to spot a bargain! Further, you need to know that various property classes will outperform each other. For example, land and home units will appreciate differently.

Figure Out The Cash Flow

It’s always a good idea that you know how to maintain your mortgage repayment obligations over the long term. It’s recommended that you analyze the cost of servicing any loan only on an after-tax basis. By taking this approach, you have the power to calculate and put the cost into actual terms that make sense for you.

Look For A Good Property Manager

Finding a good property manager who is a professional in his or her field is vital. Your property manager’s job will be to make certain that everything is in order between you and any of your tenants. A good property manager can extract the best possible value for you from your property and help to keep your tenants in line as well.

Choose The Appropriate Type Of Mortgage

There are many options available for financing the investment property that you choose, so it’s best to get sound advice. Options such as a variable rate loan and a fixed rate loan are both popular choices, but your specific circumstances will dictate what’s most suitable for you. Consider that variable rates often end up being cheaper over time, yet fixed rates at the right time are ideal.

Take Equity From Another Property

Leverage the equity from your residence or another investment property. Doing this is actually an ideal way to purchase your investment property. Equity can be calculated by way of calculating any difference between what you owe on your mortgage and the overall value of your property.

Comprehend Both The Market And Dynamics When Buying

It’s best to analyze what other properties are available in the area when you’re looking at an investment property. It’s very advisable to actually talk to both local people and real estate agents in the neighborhood. They can give you hints on small, yet vital, things like which side of a street is considered more desirable.

These are the six tips to help make sure that you don’t ever get fleeced when buying an investment property. They can make the difference between purchasing a great property that has a high return on investment and purchasing a lemon.

Call your trusted Real Estate professional today for more information.

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The Ideal Investment Property: What Features Should You Be Looking for the First Time Around?

Posted in Troy Michigan Real Estate by Michigan Real Estate Expert on April 2nd, 2014

The Ideal Investment Property: What Features Should You Be Looking for the First Time Around?When purchasing a piece of real estate, it is important to ensure that the features of the home meet your criteria and best serve your goals.

An ideal investment property has many important features that will differ from the vital features of an owner-occupied piece of property, and therefore it’s important when choosing an investment property to know what you should be looking for.

Here’s what you need to know if you’re investing in a rental property for the very first time.

Consider The Furnishings To Capitalize On Your Condo

When looking to purchase a condominium, it’s important to first ensure that the building allows for rentals, and that rental terms are flexible.

Second, one should do research about the building and the community’s rental market to ensure that the rent will cover the mortgage, or at least the majority of it.

Generally, two plus bedroom condominiums are easier to rent out than one-bedroom units, and will render a higher rental profit – though one-bedroom suites in high-traffic areas and close to universities can be highly profitable. 

Furnishing your condominium and marketing it as fully furnished can render a much higher rental income for renters who are willing to pay a premium, though this may mean shorter rental terms and perhaps a little more work on the part of the owner.

Centrally located condominiums with nearby amenities and access to public transit tend to net higher rental rates, as well as condominiums that offer parking.

Detached House: Maximize Rental Income Under One Roof

When looking to purchase a detached home for your investment, you can significantly increase the rental income by choosing a property that offers multiple dwellings to rent out.

You can achieve this by purchasing a home with a sufficient basement suite that will allow two rental incomes under one roof. Other options include purchasing a duplex or triplex property, and some single-family dwellings have lane homes or coach houses that can be rented out separately.

Long-Term Gain: Location, Location, Location

Location, though perhaps not everything, is certainly a major factor when looking for a long-term financial gain from your real estate investment. Purchasing in areas that have a history of rising property values is a good way to maximize your returns, and up-and-coming neighborhoods with planned future developments can be a promising sign of a growing, profitable location.

Already-established areas with high property values, though they may not offer an initial “steal” on the property itself, tend to continue growing and may offer a safer bet for future gain. Spend time in the neighborhood you are considering for a future investment, and place heavy consideration on the possible growth of the area before you purchase your investment property.

Choosing the type of property as well as the area it’s located in are important factors in making a wise real estate investment, both for the short term and the long term. The final component to consider is timing, which can significantly affect the overall profitability of your investment purchase.

The best thing you can do to help your decision of when to buy is to speak to your real estate advisor. Ask your real estate agent for a market report today, and get shopping for your ideal investment property!

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