July 27, 2009
It goes without saying that selling your property is a large undertaking. Arming yourself with as much information as possible, surrounding yourself with knowledgeable professionals, and exercising due diligence when it
comes to pre-sale property preparation can make all the difference in the world between a smooth, profitable sale and a stressful selling experience.
Your REALTOR® is your best friend.
Or at least he should be. Picking a REALTOR® is one of the most important decisions you will make when it comes to selling your property. Do your research and make sure to speak with other property owners and trusted friends for recommendations. After you have created a short list of potential REALTORS®, bring a few of your top choices in to take a look at your property and to “interview” with you. During this interview, you’ll want to gauge not only their industry knowledge and neighborhood expertise, but also determine how their personality and sales style meshes with yours. After all, this is someone you’ll be working closely with and entrusting with one of your most valuable financial assets. This is the time to be picky.
Make sure the price is right.
While it’s obviously important not to undervalue your home, it’s just as crucial not to overprice it. Generally speaking, overpriced properties linger on the market, potentially developing a bad stigma with agents and buyers. In short, an overpriced property is far more difficult to sell in the long-run and chances are the price will ultimately have to be lowered to match the market anyway. A fairly-priced home, on the other hand, will result in a quicker sale, more offers and, potentially, a higher price from competitive multiple offers. Pricing a property is all about strategy so, again, finding a savvy agent is critical.
Comparative sales are a great way to gauge the current market value of your property and to ensure your price point is one the market will bear. Your REALTOR® will have easy access to this information and should utilize it to gain a clear idea of the appropriate listing price.
Boost your curb appeal.
Potential buyers often begin their property search by driving by properties and narrowing their search down from there. This is to say that on their first visit to your property, they may very well never even walk through the door. As always, first impressions count so the exterior of your house should be as tidy and appealing as possible. Make sure that your yard and porch are clean and uncluttered, wash down walls and windows so everything is sparkling clean, and ensure that your yard is at least well-cared for and—even better—landscaped.
Staging goes a long way.
Staging is becoming an increasingly common practice in the real estate business. Staging involves bringing a professional into your property to outfit it with furniture and decorations that complement the house and demonstrate to buyers what it can potentially look like. Staging helps houses look more like homes and can make the difference when it comes to buyer interest. Ask your real estate agent for a good recommendation.
Ask tenants to pitch in.
In the case of rental properties, you may well have occupants in units while potential buyers are viewing your property. Make sure to give your tenants plenty of notice that potential buyers will be coming through and ask for their assistance in keeping everything as clean and tidy as possible. As with staging, this sends visual cues to potential buyers and may well increase your property’s salability.
While preparing for the sale of your property can seem daunting, like anything else it’s a step-by-step process. Taking your time, being thorough, and working with all the right people is the best way to ensure that your property sale is as smooth and profitable as possible.
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Cost Saving Tips, Property Management | Tagged: agent, asking, broker, buyers, comparative, comps, curb appeal, due diligence, financial asset, first impression, furniture, home, house, interview, landscape, landscaping, market, multifamily, nei, neighbor, neighborhood, notice, overpriced property, porch, prepare, preparing for sale, price, profit, profitability, property, real estate, realtor, realtors, rental properties, sale, selling, showing, showings, staging, strategy, tenant, yard | 
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Posted by Buildium
June 8, 2009
Chances are landscaping falls pretty low down on most property managers’ list of things to do. And for good reason. Maintaining intricate landscaping is
not only time-consuming, but it also tacks yet another expense onto your budget. Despite these very good reasons for not moving landscaping to number one on your priority list, there are also some great reasons why all property managers should consider putting forth the effort when it comes to landscaping.
- Property Value
Even if selling your property seems like a far-off (or even inconceivable) idea, bolstering its aesthetic appeal increases value. And every good business professional wants to make sure that that her assets command the best market value possible. Planting trees is a particularly sure-fire way to increase the value of your property—and they’re relatively low-maintenance to boot. According to About.com’s forestry page, “Trees can increase the property value of your home by 15 percent or more.”
- Appeal to Renters
It is currently a renter’s market in many areas of the country. Now more than ever, it’s the time to make sure that your property stands out from the rest. While it’s true that the chances of a potential tenant renting from you solely based on your property’s lush foliage are slim, someone choosing between otherwise relatively equal units will likely go for the one with visual appeal. Well-maintained landscaping sends renters the message that you care for your property and want to keep it looking as good as possible.
- Cut Energy Costs
That’s right, landscaping can actually save you money. Again, particularly in the case of trees, you may well cut costs in the long run. Not only will strategically planted trees shade your property in the summer, but they will also cut down on heating costs in the winter by shielding your property from chilly winds. Still not convinced that trees make that big of a difference? According to About.com, “Studies have shown that parts of cities without cooling shade from trees can literally be ‘heat islands,’ with temperatures as much as 12 degrees Fahrenheit higher than surrounding areas.”
As you can see, there really are plenty of reasons to invest a little bit of time and money into landscaping your property. But unless you have a green thumb, you’ll also want to keep it as easily maintainable as possible. You’re much better to have a simple, neat-looking landscape than an extravagant one that runs the risk of becoming unruly and overgrown or—even worse—ends up taking a toll on your bottom line with exorbitant gardening fees. These easy tips will help you create a pleasant landscape without breaking the bank … or your back.
- Install an irrigation system. Yes, you’re making an investment up-front but ultimately you’ll have a more self-sustaining landscape, which will save you time and money down the road. (Tip: Make sure you have a secondary meter so that your tenants aren’t absorbing your water fees.)
- Concentrate on grass and trees. As we’ve already discussed, there is a strong argument for planting strategically placed trees on your property. A few trees and some maintained grass will add aesthetic appeal and both are easily maintained—especially with that irrigation system mentioned above.
- Plan ahead. If you’re going to bring in a professional landscaper to help plot out your design, hire him during the winter when demand—and, thus, costs—are lower than in the prime-time spring season.
- Plant perennials. If you do want to incorporate some plants in your landscaping, go for perennials that will last more than one season. Check out this guide to find low-maintenance perennials that will thrive in your specific climate.
1 Comment | Cost Saving Tips, Property Management | Tagged: about.com, budget, climate, costs, energy, garden, gardening, grass, irrigation, irrigation system, landscape, landscaping, maintenance, perennials, property, property costs, Property Management, property value, real estate, rent, rent appeal, renters, save money, trees | Permalink
Posted by Buildium
April 7, 2009
Once again, it’s that time of year. While filing taxes may never be your favorite task, chances are tax season will be incrementally better the more deductions you make. The good news is that there are a lot of deductions available to property owners. But the question is: Are you taking advantage of them? According to legal publisher Nolo, “Every year, millions of landords pay more taxes on their rental income than they have to … because they fail to take advantage of all the tax deductions available.”
You don’t want to miss out on any of the deductions coming your way. To make sure you’re maximizing on deductions, be in the loop about these common deductions you can (and should!) be taking full advantage of.
Interest
This is a big one and it doesn’t apply just to the interest on your mortgage—you can also count interest on credit cards (for property-related purchases only) and on loans used to make property improvements.
Repairs
Both big and small repairs are fully tax-deductible for the year in which they are incurred. This represents a double-win for property owners—you’re simultaneously maintaining or improving the value of your property and earning a deduction while you’re at it. Just be sure that the repairs are “ordinary, necessary, and reasonable in amount.”
Contractor Work
If you needed another reason to keep careful track of your expenditures, here it is. Whenever someone performs a service to your property, his wages can be counted as a tax-deductible business expenditure.
Local Travel
This can represent a significant deduction for property owners when you consider the mileage racked up in the process of showing units to potential renters, driving around to pick up supplies, and checking in on properties. According to Nolo, you’re eligible for this deduction if you drive a car, SUV, van, pick-up, or panel truck.
You can claim this deduction by either: 1) adding up the actual expenses of gasoline, vehicle upkeep, and repairs, or 2) using the standard mileage rate (55 cents per mile for 2009, 58.5 cents per mile for July 1, 2008 through December 31, 2008, and 50.5 cents per mile for January 1, 2008 through June 30, 2008).
Enhancing Efficiency
According to the Energy Policy Act of 2005, improvements to the energy efficiency of interior lighting systems, heating, cooling, ventilation, and hot water systems are eligible for tax deductions. It’s important to note, however, that certification of energy efficiency and certain qualifications must be met in order to obtain this deduction. Specific information can be found on the IRS website.
Preserving History
If you happen to own an older building, you may just be eligible for a Rehabilitation Tax Credit. This provides a credit for 10 percent of the rehabilitation cost of buildings placed in service prior to 1936.
And if all of this still sounds a bit overwhelming, remember that your accountant’s fees count as a tax deduction as well. For more information on reporting income and expenses to the IRS, be sure to check out Real Estate Tax Tips provided by the IRS.
2 Comments | Bookkeeping, Cost Saving Tips, Property Management | Tagged: april 15, april 15th, contractor, credit, deduction, deductions, efficiency, energy, energy policy act of 2005, expense, history, interest, interest expense, internal revenue service, irs, landlord, landlords, NOLO, Property Management, property tax, property taxes, re tax, re taxes, real estate, real estate tax, real estate taxes, rehabilitation, rehabilitation tax credit, repairs, revenue, tax, tax credit, tax deductions, tax tips, taxation, travel, work | Permalink
Posted by Buildium
February 9, 2009
It’s only natural that the current state of the economy will have a trickle-down affect on vacancy levels and the going rate of rental units. At a time when everyone is tightening their purse strings, it makes sense that people are far more likely to think twice before moving. For renters, the moving process in and of itself is a costly one: transporting furniture and belongings from one location to another, putting down security deposits, and sometimes multiple months’ rent. All of these costs add up quickly. So what does this mean for property managers and landlords?
According to a recent New York Times article (One Month Free? Rents Are Falling Fast), for the first time in years, the city’s rental rates are down and vacancies are up. In an effort to fill units, landlords and property managers are offering incentives like a month’s free rent to get tenants in the door. While it’s true that there are many factors that make the Manhattan market different from other sectors of the country, there’s no denying the problem extends further than New York.
A Yahoo article on rocketing rental vacancies declares this a “renter’s market” and goes on to cite the top 10 markets with vacancy spikes, which include (among others): Salt Lake City, UT; Raleigh, NC; Seattle, WA; Portland, OR; San Jose, CA; and Boston, MA.
Even if you’re not in one of these markets, chances are that you already have—or will soon see—some recession repercussions. Be that as it may, there’s no need to panic. Just a few simple strategies will help you stay on top of your rental game, bad economy or not.
Know your market.
Now more than ever, make sure that you are going on Craigslist and other local rental posting sites to compare your rental rates with those of your competitors. If your prices are on the higher end, you may be guaranteeing that those renters who are out there won’t even consider your property. Also, if you’ve only been relying on one rental search engine to post your available units, this is a great time to expand your reach to other sites. (We like Rentvine.com; also be sure to check out online offerings from your local newspapers and other publications.)
Advertise like a pro.
Speaking of listings, make sure you are putting more effort than ever into selling your unit. Write up a few well put-together sentences that really highlight your unit’s amenities and the characteristics that make it more desirable than your competitors’. Do you pay heat and hot water? Are your units larger than most? Do you have a pool or in-house washers and driers? Perhaps a convenient location that will save your tenants commuting costs? If so, be sure to mention all of this. It could be the difference between a would-be tenant checking out your place and someone else’s.
Also take care to add some punch to your listing title or headline to make it stand out from the rest. Rather than writing “One bedroom/$950” in the headline, write “Spacious one bedroom apartment in convenient downtown neighborhood, heat and hot water included.” If you’re offering incentives, this should also be clearly stated in your listing headline.
Offer incentives.
However frustrating the economic climate may be right now, it’s crucial to bear in mind that it’s better to fill your units by using incentives or taking rents down a bit than letting vacancies build up. Yes, your profit margins may decrease and, obviously, this is not ideal. But it’s better than letting units remain empty. Also, be willing to negotiate. If you find a tenant with a good credit report and track record, you may be better to negotiate and get them signed up than to leave your unit vacant. Consider lowering the rent a bit (but know your bottom line!), paying rental agent fees, offering a month’s free rent, or one month less down at move-in.
Be flexible.
This may also be a good time to be more flexible with your rental qualifications. For example, if you generally don’t allow college students, perhaps this is a good time to consider them. Same goes for pet owners. This is not to suggest you deconstruct your entire rental procedure—again, remember, these problems are only short-term—but if you find a particularly responsible college student with a co-signer or a renter with a small pet and lay down very specific rental guidelines, this may be the time to consider expanding your pool of potential tenants a bit.
There’s a lot of gloom and doom news out there right now about the bad market and how it pertains to rentals. Certainly, it’s a time for everyone to be very conscious of their spending and the market around them. However, don’t despair. Regardless of the current economic situation, people will always need a place to live. Just be aware of your local market, stay abreast of the tactics other property managers and landlords are using, and be creative and flexible. And remember, although your profit margin may dip in the short-term, by following these strategies you’ll be better able to keep those vacancy rates low and will weather this economic durntown just fine in the long-run.
2 Comments | Cost Saving Tips, Property Management | Tagged: advertise, credit report, economy, falling rent, fees, free rent, incentives, landlord, manhattan, negotiate, new york times, Property Management, property manager, recession, rent, renters, renters market, security deposit, strategies, strategy, vacancies, vacancy, vacant, vacate | Permalink
Posted by Buildium
January 20, 2009
The temperature has gone down and it’s about time for you to turn up the heat in your properties. Getting your property ready for winter involves more than just adjusting the temperature, though. Here’s a quick guide to ensure you’ll be ready long before that first storm arrives.
1. Service your heaters. Before winter has the chance to get the best of you, make sure that all your heaters have been serviced (once a year is a good rule of thumb) and make a habit of replacing furnace filters. This will increase efficiency and save energy, keeping your bill as low as possible.
2. Take care of A/C units. Make sure the water valves of any window air conditioning units have been drained and excess water has been cleared from the unit. This will keep your A/C pipes from freezing during the winter months and expand their lifespan significantly. Even better, if possible, remove them from windows altogether as they tend to create cracks for cold weather to seep in.
3. Close your windows. If your property units have storm windows, either send a letter to your tenants advising them to close all storm windows by a specific deadline or give them notice that a maintenance person will be by to take care of it for them. You can also add locks to your windows to cut down on drafts. Fewer drafts equal lower costs. (If you don’t have storm windows try picking up a window insulation kit at your local hardware store for just a few bucks.)
4. Mind the gaps. Speaking of drafts, do you have any seasonal caulking to take care of? Do away with gaps and drafts with a little caulking and weather stripping (corners where two building materials meet and wire and pipe exit points are prime candidates for drafty leaks). Supplies for this are cheap and can be found at any general hardware store. This relatively cheap fix can save you big. According to gas and electric company NStar, “ … reducing air leaks could cut 10 percent from an average household’s monthly energy bill.”
5. Book your plow ahead of time. Now that you’ve braced your units from the blustery weather, make sure you have all the supplies and vendors you’ll need lined up. Weather may be unpredictable but you can have a plan of action ready to roll out as soon as that first storm hits. Price out and select a plower ahead of time, securing a deal so that once that first snow hits and everyone else is frantically calling for snow removal, you’ll be sitting pretty.
6. Stock up on salt. Prepare for even the most unpredictable weather by keeping salt on-hand. (Also, you’ll avoid the frantic lines when everyone else is trying to buy their salt and shovels in the hours before a storm is scheduled to set in.) Once the weather does set in, lay down the salt as soon as possible. Icy ground is an accident waiting to happen and you don’t want to be held responsible for anyone’s bad slip.
7. Cover up your floors. Speaking of salt, that’s just one of many things tenants may trudge in during stormy weather. Lay down mud carpets to protect communal floors and carpets. This is another cheap fix that can save you big, potentially extending the lifespan of your floor and carpet tremendously.
And last but not least, a bonus tip. Despite all your best planning, the fact of the matter is your heating bills are going to be higher in the winter. Plan ahead for this by budgeting ahead of time, in those warmer months when winter is but a distant memory. Some utility companies also offer a flat annual rate to even out gas and electric costs throughout the year—this may be worth looking into for those property managers who live in particularly cold climates.
1 Comment | Cost Saving Tips, Property Management | Tagged: a/c, energy, filter, fix, floors, furnace, gas, heat, heaters, ice, nstar, plow, plowing, property, Property Management, salt, save energy, snow, snow removal, storm, utilities, utility, windows, winter, winterize, winterizing | Permalink
Posted by Buildium
December 30, 2008
Get ready for the last round of property management links of the year. Stay tuned for lots more to come in 2009!
2 Comments | Cost Saving Tips, Property Management | Tagged: 10 tips, estate, hyperlink, investment, landlord, links, money, money saving, NASA, Property Management, property management links, property manager, real estate, REIT, save, this old house, tips, trust | Permalink
Posted by Buildium
August 6, 2008
If you’re like most property managers, you have lots to do but precious little time to do it. Whether you’re a landlord with just a few rental properties or a professional property manager managing hundreds of units, this is always the case. While (unfortunately!) you can’t tack a couple more hours onto the day, there are some things you can do to work smarter.
Let’s take rent collection, for example. Have you ever have calculated how much time you spend dealing with checks? Even if you haven’t done the math, we can all agree it takes way too much time. Each month the rent checks come pouring in, requiring time-crunched property managers and landlords to open envelopes, figure out which check is whose, record rents paid and rents still owed, fill out deposit slips, and trek off to the bank. There must be a better way.
Want more proof? Take a look at this article, “Businesses Adopt Online Payments to Improve Cash Flow and Save Time and Money”, posted on WorkZ, a website for small business owners. The article cites a Gartner research study showing that it costs between $2 and $5 to send a paper bill and another $10 to process a paper check. Whether you buy Gartner’s numbers or not, the bottom line is it costs many of us way more than it should to collect rent payments each month. This is supposed to be income generation, afterall.
Here’s what Andrew Block, head honcho at the Boston-based property management company The Hamilton Company has to say on the matter:
We have been looking for a solution where we could send a statement to our many tenants either by email or fax and to allow our tenant to be able to make payment over the internet. Our company processes a significant number of transactions each month and it is very costly to send out statements. The problem with paper checks is that it takes a lot of time and money to handle them.
Okay, so if it costs too much to collect rent by check each month, what’s the solution? One option is to accept credit cards—with services like PayPal, anyone can do it. But bear in mind, while credit cards are more convenient than checks, they’re also an expensive way to go. With credit card companies charging between 2 and 4 percent of each rent payment, costs can add up fast.
A better option is to debit your tenant’s bank account directly, just like stores do when you use your ATM card. Electronic rent collection services allow you to withdraw rent from your tenants’ checking or savings accounts and automatically deposit it to your bank account. And instead of charging 2 to 4 percent of the rent payment, these services generally charge much less—sometimes as little as 50 cents per payment.
If you factor in what your time is worth (let alone the cost of gas these days), collecting rent electronically makes a ton of cents. And what’s not to like about that?
7 Comments | Bookkeeping, Cost Saving Tips, Property Management, Real Estate Technology | Tagged: investment property, landlord, landlord tips, online rent collection, Property Management, property management software, real estate, real estate management, rent, rent collection | Permalink
Posted by Buildium
