Are you a property investor who is planning on renting the property out? If the answer to this question is yes then you will be one of the many people who are in need of a property manager.
When it comes to handling and managing all of the aspects that are involved in the rental business it can often become overwhelming. Many people who buy property with the intention of renting it out lack the necessary skills to do this successfully. By gaining the help of a property manager however you shift the responsibility of doing this onto someone who is trained and experienced in all aspects of property management. Property management is a great resource that leaves you free to get on with other aspects of business and your life while you have peace of mind that your property and/or rental business is in safe hands.
A property manager will be just what you need to help you get your head around the rental and property market. You will be able to learn how to handle marketing, leasing, billing and rent collections as well as repair and maintenance work. More importantly however, property management will be able to inform you of where you stand with the law and what rights you have when it comes to tenants and the structure of the building.
By using the help from property management you are gaining a valuable resource. The skill set of a property management team is ongoing; as well as the above a property management team can also produce financial reports and security deposit escrows. A property management team will be able to provide you with detailed income and expenses reports as well as cash statements every month, which saves you the headache of bookkeeping. Property management also involves providing you with end of year tax reports for the use of your accountant or financial advisor. A property management team really can help you with every aspect of your property and/or rental business.
The concept of property management is a people business. This is because every time you enter into a new lease you are starting a new relationship with a tenant and within this relationship you will have to play many roles such as landlord, friend and foe to name merely just a few. Your property management team will play all of these roles for your tenants and are trained to do exactly this.
With a property management team you will be gaining years of marketing expertise, which means a property management team will be your best source of knowledge when it comes to marketing your property so that it will be rented in the quickest time possible. Your property management team will also have local knowledge of the rental rates so they will be able to determine the highest rental rate that is possible for your property.
Property management can do so much for you when it comes to property investment. They will be your biggest resource when it comes to gaining and keeping tenants so my advice to you is to get on board with a property management team today.
Archive for March, 2009
What a Property Manager Can Do For You
Wednesday, March 25th, 2009Commercial Real Estate Investment Decisions
Tuesday, March 24th, 2009WEIGH YOUR RISKS CAREFULLY
When you decide to embark on a commercial real estate investment program, how do you get your start? We know that there is no such thing as 100% financing for commercial property, so where do you get your initial capital for that first purchase? One method which I have discussed before is to use Other People’s Money as your initial “stake.” Perhaps having partners is not the path you wish to follow in your investment program. That makes the other option using your own funds. Before you dip into your resources, however, consider some of the risks you face.
First, you are embarking on an investment program about which you have little practical experience. You may have read every book on commercial real estate investing ever printed and gone to every seminar ever produced in a hotel for a year, but you have no experience in the business. Do you really know what can go wrong? Do you realize what additional reserves you might need in case things don’t go as planned?
Second, consider the source of your equity. For most people who have done some real estate investing, they have probably focused on residential investment properties. Residential properties usually enjoy a large number of comparables to easily estimate value, financing programs for residential properties allow potential buyers to facilitate sales with little equity investment, and residential properties are usually less expensive, and therefore more accessible, to most people. If you are such an investor, then you probably have a pretty good pool of equity to tap. But how do you access it? Sell them outright and pay your capital gains? Sell them in a 1031 Exchange? Refinance them? Each option has its advantages and disadvantages.
Third, if you are like most people, your biggest chunk of equity is sitting in your home. There may be a great temptation to go get yourself an equity line, suck out the equity, and go buy a commercial property somewhere. Before you do, make sure to consider how the increased debt service of the equity line will affect your finances. Can you truly afford the payments if something doesn’t work out with your commercial investment? Yes, your commercial property will be producing income. However, the majority of that income will be used to pay its operating expenses and paying off the loan you arranged to acquire it. That doesn’t leave a lot left over for you in the initial years of the investment to pay down the equity line, which will most likely have a rate somewhere above the Prime rate (8.25% today).
The point is to consider your investment goals, your tolerance for risk, and your ability to live without the funds you are using for your commercial investment. Over time, your commercial portfolio should provide you with significant current income, a hedge against inflation, and net appreciation. You need to pay careful attention to how you structure your commercial real estate financing to minimize unforeseen risks and increase your chances of success. In your quest to achieve your commercial investment goals you need to carefully asses the impact of the financing decisions you make.
Where to Find Great Commercial Real Estate Deals
Tuesday, March 24th, 2009rcial real estate is a hot product in this moment. Many investors see the massive potential for the income related to this type of property. It is not always clear, however, which type of commercial real estate to invest inside or which part of the country to be chosen. With a little of research, you can find the place perfect to buy.
Columbus, Ohio is a great place for the commercial real estate. Columbus is the capital city of Ohio and also of one of the fastest growth. Everywhere Columbus, of new companies jump to the top and with them the need for commercial spaces. There are several notable commercial companies of real estate working in the area of Columbus to help with people the lucky find perfect space for them.
Another great sector is Greensboro, GOLD. It is a community growing with large historical roots. One has it in the past known as town of border for those looking at to go to the west. With the moderate climate and the friendly southernmost atmosphere of the it , Greensboro is a city which attracts people of all the sectors. There are also many large commercial companies of real estate, such as properties of Kotis, to help of the customers to find their place dreamer. And the cost attracting the life compared with many of other parts of the country, this sector will continue to open out.
Madera, California is also a good investment for those interested in the commercial real estate. Madera is a hot point for families and choices of investments. The increasing economy makes Madera a great place. This made in Madera a good investment commercially. There are many good banks and bankers in Madera. The COMMREX based by Madera east one of the higher commercial companies of real estate. There are also some principal national companies sat and around at Madera.
Los Angeles is one of the largest markets for the commercial investors of real estate. Although it is one of most expensive, the values of property are always increasing. There are significant advantages with the possession in. One of the great tax advantages is that if you sell your house, you can take an exemption of benefit as a long time as you live in your commercial property for at least two the five years following the sale of your property. This, with the potential for the income, is a large chart of drawing for the commercial real estate of.
The commercial real estate is a great investment. They significantly appreciate the year over the year, thus the resale is excellent. If you decide not to sell it or not to employ yourself, you can rent it and collect the continuous income. If you employ a company in the person or the surplus the Internet, is sure to make research about the sector initially. By buying the property, seek the place. It is really the key to find the investment of real estate commercial perfect.
Looking for a Property for Sale? Provence is a Perfect Destination
Monday, March 23rd, 2009
If you’re looking for a property for sale, Provence is a perfect destination for many reasons, and this article will provide you with an overview of Provence and the property market.
With an appealing coastline and a typical Mediterranean climate, Provence never fails to captivate people. Located in the south-east of France by the Mediterranean Sea, with the beach-laden Cote d’Azur in the south, Provence takes you back to the classical times of the past. Tranquillity is in abundance, with ancient oak groves and forests that induce a pronounced feeling of calmness. The scenery is breathtaking with natural gorges, fragrance-laden slopes and dazzling fields. There is an array of activities for cultural enthusiasts, ranging from art exhibitions to traditional music and facilities such as: kayaking, trekking, biking and even skiing in winter for outdoor sport lovers. Last but not least, several stylish cities are only one to two hours away in the car.
Do you have your mind medieval village-like picture in your mind? Then you are both right and wrong at the same time! Provence has the rare twin-mix of being steeped in culture while at the same time being equipped with a good, modern infrastructure. Provence is well connected by a good network of roads and high-speed train services, and several towns boast of great markets, schools and health services.
Provence broadly comprises of the regions of Var, Vaucluse and Bouches du Rhone Toulon. Brignoles (in Var), Avignonm Orange (in Vaucluse) and Aubagne (in Bouches du Rhone) are some of the prominent cities, and the well-known city of Cannes that hosts the prestigious film festival nestles in Alpes-Maritimes, is essentially a part of Provence as well.
Coming to the property scenario in Provence, there is only one way the market has gone – up. There exists a clear two-fold benefit to the property buyer – a second home for an idyllic getaway coupled with the fact that it is an undeniably good investment as property prices soar even during the course of a year. Several options exist for the buyer looking for a property for sale in Provence, for example: two-bedroom apartments that would cost around 150,000 Euros to exotically designed villas that can cost over 3,000,000 Euros.
Location plays an important role in the property price. While properties for sale in the coastal Var region (cities like Toulon, Brignoles and Frejus) are more affordable, the downside is a population bottleneck on the roads, especially in early summer, owing to a heavy influx of tourists. Cities like Orange and Avignon in Vaucluse have lower property prices due to Parisians owning second homes in the region and the homes tending to have basic amenities. However the area has a strong musical culture and the beauty of open-air festivals needs to be seen to be believed. Properties in the Alpine region in Provence often have their own vineyards and olive groves and are a wise consideration when you’re looking for a property with a really good return for investment purposes.
When it comes to buying a property for sale, Provence has made it straightforward. All you need to do is contact real estate agents in South East France who are registered with recognised bodies. The agent’s fee is approximately 4-10% of the property price.
In conclusion, investment in property is never considered a waste; more so in a rapidly growing region such as Provence. Non-residents benefit from having a property they can visit whenever they want, then using the property for short-term rental income, and then benefiting from a high return when the property is sold. So when you’re looking for a property for sale, Provence is the perfect destination.
How To Avoid Hiring A Bad Property Management Company In The Oc
Monday, March 23rd, 2009In Southern California, especially Orange County property management is an important aspect of investing in real estate. The profitability of your property is dependent on hiring a qualified helpful and professional property management company.
Hiring the wrong management company can mean losing thousand of dollars, or more. Property owners who hire the right OC property management company however, can enjoy the benefits of a lucrative property investment.
Some of the most common, and often, detrimental mistakes a property owner makes is not doing enough research. The more research you do, the more you can avoid hiring a bad management company.
Property management companies that also sell properties, often nation wide corporations like Century 21, etc. are often a bad idea. They usually are primarily real estate agents, who also do property management because they want to manage when you choose the sell the property. A property management company like this is not a good idea because they make more money selling than managing. You would benefit more from a smaller, specialized company that deals only with property management in your area and nothing else. For example, if your property is in Huntington Beach, you should try to find a local expert Orange County property management company that has a much experience in the local area only.
Make sure you check the references of your management company’s other clients. Don’t be afraid to make a few phone calls, and get a good track record. You shouldn’t sign anything before you have a good idea that the company you’re hiring is the best at property management in Orange County and one that you can trust. On the other hand, as an owner, you shouldn’t be too demanding of references either. A good property management company will not release all of their clients’ information to you, because it is private and confidential information. The management company won’t be making an obscene amount of money managing your property, so they can always tell you to take your business elsewhere if you are being too much of a pain. You will do well with around 3 references to talk to, and get an idea of how they work with their clients.
Some other things to keep in mind: Is the company licensed in the state of California? Is the company insured? Do they have a fidelity bond to protect you in case an employee mishandles your money? Will they provide you with reports? Will they market your property? How do they deal with late charges? How do they handle tenant complaints? And so on. These are some tips for making sure you hire a good property management company that will professionally and efficiently manage your property, helping you turn your home/apartment/condo/commercial property into a steady investment.
Disclaimer: This blog or article is for information purpose only, and should not be treated a professional advise or price protection guarantee. This blog is mainly used for search engine optimization and other commercial purposes and it is advised that readers seek professional consultation in the field of interest for more information.
London and Monaco are Europe’s Most Expensive Cities for Residential Property Buyers
Monday, March 23rd, 2009London and Monaco are Europe’s most expensive cities for residential property buyers. Prices in the Baltics have risen to the same level as capitals such as Copenhagen, Berlin, Munich, Stockholm, Vienna, and Frankfurt.
High rewards await property investors in some parts of Europe, according to the Global Property Guide, a residential real estate research organization (www.globalpropertyguide.com). Rental yields for apartments in several Eastern European capitals are above 10%.
Rental apartments in Moldova’s capital city Chisinau can be expected to yield annual rental returns of around 14.13%; in Poland’s capital Warsaw, 13.28%; in Bulgaria’s capital Sofia, 10.56%; and in Slovakia’s capital Bratislava, 10.06%. The higher risks of Eastern Europe may be a factor in these returns (corruption, political instability, etc).
But risks are not the only factor. The Global Property Guide believes that the relatively recent arrival of the market economy, high interest rates, and relatively undeveloped mortgage markets, largely explain the low prices in the east. To illustrate, it would surely be hard to label the historic city of Bratislava, Slovakia, as a high-risk location, yet the rental income returns are excellent.
Western Europe generally suffers from another, different disadvantage: High taxation. There are high rental income returns to be earned in Amsterdam and Paris (8.25% in both), in Munich (7.80%) and Brussels (7.53%). But all four cities are high tax environments (but so too is Poland).
Property in Prime Central London returns surprisingly high rental yields, at 7.13%. Note that this “Prime” category encompasses relatively a narrow group of super-luxury apartments in absolutely prime areas (Belgravia, Chelsea, and Knightsbridge). The high returns in these select super-central locations contrast with the significantly lower rental yields (5.79%) available in Central London’s other luxury areas (Kensington, Bayswater, Notting Hill Gate, St Johns Wood, Highgate, Islington, Highbury, and Primrose Hill).
Europe’s most expensive cities
The tiny principality of Monaco is the most expensive location to buy an apartment in Europe at around €24,900 per square metre (sq. m.).
Closely on its tail is Prime Central London, where 120 sq. m. super-luxury apartments can cost £1,170,000 (€1,742,656) or £9,750 (€14,522) per sq. m. Apartments of 120 sq. m. in other luxury areas of Central London are likely to cost £580,000 or £4,833 per sq. m. (€863,880 or €7,199). The large difference is explained by London’s highly segmented top-end market, with super-luxury apartments in absolutely prime areas commanding considerable premiums.
Paris and Amsterdam follow London. A 120 sq. m. apartment in either of these cities has an average purchase price of €800,000 (€6,667 per sq. m.).
Moscow is Europe’s sixth most expensive capital for buyers of residential property. And though apartments in Moscow can be rather rewarding for buyers in terms of rental income returns, investors should be aware of the high risks (purchases are cash-based, and the authorities can suddenly turn hostile).
Dublin makes an appearance among Europe’s most expensive cities in 10th place, with a high end 120 sq. m. apartment on average costing around €600,000.
The Baltics, till recently Europe’s hottest residential investment destination, are now expensive. A high-end apartment in Central Vilnius, Lithuania will cost on average around €3,792 per sq. m (€455,000 for 120 sq. m.).
Latvia follows closely with high-end apartments in Central Riga costing an average of €3,020 pr sq. m. Rental yields in the Baltics have also dropped to very low levels.
There are still some very inexpensive capitals in Europe. Berlin, in particular (€3,167 per sq. m.), is now experiencing inflows of foreign money in response to its relatively low prices.
Even less expensive are:
Slovakia’s Bratislava (€1,292 per sq. m.)
Poland’s Warsaw (€1,175 per sq. m.)
Macedonia’s Skopje (€1,125 per sq. m.)
Moldova’s Chisinau (€917 per sq. m.)
Rental returns cannot fall forever
As 2007 dawns, rental returns are lower in most locations than they have been for 20 or more years.
Nowhere in Europe are rents keeping pace with the continued strong rise in property prices. Residential real estate prices are at historical peaks in almost all countries in Europe, except Germany and Switzerland.
This is cause for concern. At the Global Property Guide, we informally consider a danger signal to be rental returns of around 4% or below.
Several European capitals offer rental income yields around or below this 4% level. In example is Madrid, where rental returns are now at only 3.15%. Rental yields in Monaco are the lowest in Europe at around 2.43%.
See tables at:
http://globalpropertyguide.com//articleread.php?article_id=82&cid=
How to Protect Your Rented Property?
Sunday, March 22nd, 2009Rented property needs to be protected, especially when a landlord does not reside in the vicinity of his let out property. More over, he will be risking it as he is letting it out to a stranger who may or may not keep his house in a good condition.
Get a thorough credit verification of your tenant information from a professional reference agency. See to it, that a reference agency you approach is a licensed one. A landlord should keep a record of his paid rent receipts and also those which are due. He should also maintain the dates when he has visited his property and what condition it was in.
In case your tenant defaults his rent payment, one can approach a rent claim company. But, you will have to pay a percentage of your rent as commission to such claiming agents. To avoid any payment of commission to a claiming agent you can get yourself insured, get covered under rent guarantee insurance. A breather even in times of disaster, is your rent insurance.
Instead of loosing your money in claiming back your rental income or paying for those legal expenses, or eviction charges, you can reach out a tenant assessing agency to refer a good tenant for your house. Basic tenant checks comprise of his personal identity check, address check, anti fraud checks, credit checks, CCJ checks or bankruptcy checks. In addition to this, they also provide you rent guarantee assurance and cover any legal expenses involved in the eviction of your tenant. Select the right person to live in your buy to let property.
Tenant assessment involves collecting, collating and evaluating information of the aspiring tenant to reach a conclusion regarding his eligibility to occupy your house. Most of the time, the landlord may find it difficult to verify the aspirant`s past records including criminal reports. Don’t rely on the assurances of friends, past tenants and so on may backfire, as experience has proved time and again that verbal assurances would not hold true on most occasions. Cross verification of all tenant’s information in an orderly manner is essential. All the facts and figures mentioned should be supported by proper documentary evidence, like documents certifying name, permanent address and date of birth. Any changes found in the information furnished should be taken seriously. By getting in touch with a tenant assessing agency you can manage your buy to let investment and ensures you get your payments on time.
Five Considerations of Hiring Property Managers
Sunday, March 22nd, 2009Five Considerations of Hiring Property Managers
1. Management Fee
The property owner needs to understand the purpose of the management fee (typically 10%). The percentage management fee pays for the property manager’s time. The 10% allows someone else to help shoulder the burden of owning the property. The owner is paying for someone else to field 2:00 am calls. It is important to remember that the property manager cannot take all of the responsibility and burden off the owner. In the end, it is the owner’s property and the owner’s responsibility.
2. Interview
When hiring any professional, an interview will be conducted to hire the correct candidate and then the professional is left to alone to do their job. Working with a property manager is no different. During the interview process ask good questions; require forthright answers, hire the right candidate, and then get out of their way. If an owner is a high micromanager then they should hire a certain type property manager (see Property Manager categories below).
3. Personality fit
The owner’s personality has to fit the property manager’s systems and procedures. Sometimes owners will have difficulty with a property managers systems and procedures. If a property management company sets office hours between 9-5 Monday through Friday and owner wants an update on their property @ 6:00pm on a Friday evening they will have to wait until 9:00 am Monday. This may drive some owners crazy who want to be very involved in the day-to-day management. If this is the case they probably should hire a manager who will be more responsive to the owner’s needs.
4. Communication
Communication is a two-way street. It is not only the property manager’s responsibility to communicate effectively. Owners should understand they have to lead the property manager in how they expect the manager to manage the property.
Here’s an example: My wife is a director of marketing for a company. She has to be the leader in guiding and directing the advertising agency as to what she wants for the project. She cannot expect the advertising agency to try to guess what she wants in the project.
If your property manager is slow in returning your phone calls explain to them the level of communication you expect. In return, ask them how much communication they expect from you.
Many property managers would rather only communicate with you on as needed basis. Much more than this level of communication from the owner is overkill.
5. Property Manager Categories
While Property managers fall into three categories, the size of the property management company is neither better nor worse than the others. Choosing the size of property manager has more to do with the level of owner pampering and paperwork provided rather than a property manager being good or bad.
Small 1-50 units
Property managers in the small category are usually unlicensed with no training in property management. These managers will have more time for the property owner. This type of property manager is usually not much more than a handyman who will show and rent apartments. If a property owner wants to be hands on and needs to be updated on every specific action of the property this is the manager they should hire.
Pros:
These property managers have the time to cuddle and coddle the owner. They will provide the owner with receipts for repairs and nothing else in documentation.
Cons:
These managers will have no systems in place to and will not be able to negotiate vendor discounts. No 1099s and no accounting documents prepared for your accountant.
Medium 50-150 units
Pros:
These managers have more of a professional approach with the use of some systems. They have the purchase power to negotiate some vendor discounts.
Cons:
The paperwork may be enough for the owner to understand the numbers, but may not be enough information to submit to an accountant or to the IRS.
Large 150+
Pros:
Large companies have invested a lot of money in their systems procedures. They will have an in-house maintenance staff. Their accounting reports can be submitted to an accountant or the IRS.
Cons:
No time with the owner. Communication is very professional, but impersonal, done mostly through email and voicemail. Large management companies offer very little owner pampering and handholding. The downside: even owners who have been in real estate for many years still need some positive reinforcement once in a while.
Ryan Windley coauthored The Property Management Start-Up Guide – How to Start a Property Management Business and Still Keep Your Life in order to introduce entrepreneurs to property management as a viable business.
If you would like to know more about starting your own property management company you can purchase the book @ http://www.propertyprof.info
Why Would a Real Estate Investor Be Helpful in a Property Tax Appeal?
Sunday, March 22nd, 2009Property tax appeals are successful based on an adjustment of the tax assessed value of the property in question. Whether this property is a commercial property or a homeowner’s homesteaded house, there is a basis for an adjustment of its value based on the condition of the property and other pertinent factors.
Real estate investors traditionally have bought distressed properties, fixed them and resold them at full market value. This process has revitalized many neighborhoods and created wealth for everyone involved including all the neighbors. These investors take the risk of losing money from a declining real estate market, having holding costs and rehabbing costs exceed their expectation, and being unable to find a buyer at their break-even cost.
Investors quickly gain a sense of what is wrong with a property and the cost to fix it quickly and efficiently which is critical for ultimately making a profit. If they don’t “get it” they will be bleeding money in no time at all. Investors who take on huge rehabs should approach their tax appraiser immediately for tax relief through re-appraisal. If the period for application has expired, there are ways to appeal the process.
This experience and knowledge of the repairs needed and the comparison of other houses in the neighborhood are the essential human tools for re-appraising a property for the tax-appraiser. When investors make their presentation to the homeowner to buy the property, they go into detail about the properties deficiencies that reduce its resale value. Again these are generally the same deficiencies that the tax assessor is unable to see from his office and may significantly reduce the tax assessed value.
For example, these deficiencies can be: structural, code violations that must be remedied before a certificate of occupancy can be issued, the structure is in such poor condition it should be demolished, property needs major mechanical systems (roof, HVAC, electrical, plumbing, septic or sewer system, etc.), boundary disputes, title deficiencies or deed covenants, traffic patterns or changes in them, noise abatement issues, proximity to “nuisances”, and many, many more deal-breaker problems that investors face on almost every deal they look at.
Therefore, investors have a learned sense of what is wrong with a property and what needs to be fixed to bring it up to par with the properties in the neighborhood to make it able to sell. This business savvy can be gained by hiring a contract, appraiser, home inspection company, roofer, plumber, electrician or other tradesman for each property their review. The simpler answer, and the way the investors learn themselves is to just do it and make mistakes, and sometimes early in their careers, they make very costly ones!
These deficiencies in the properties are what make the profits for the investor if they rehab them. These same deficiencies are what “depreciate” the tax assessed value of these properties. So, who is better qualified than a competent investor-rehabber to analyze the inflated value of a property? If your professional tax appealer doesn’t have at least a few investors as well as competent appraisers, look for another service so you don’t lose valuable time with a firm that doesn’t have the same “street smarts”.