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12 Things Your Property Manager Will Not Tell You But Should! 1) I DO NOT have the experience I claim to have Many property managers claim to be professionals, but many of these so-called professionals have little or no experience in managing properties. They are accountants, bankers, real estate agents, or even truck drivers or pizza makers. The fact is that property management, when done right, requires special knowledge and abilities, and years of experience. Hiring a management company without these things can be disastrous for your investment. 2) I have never actually owned an investment property Face it, a property manager who has never owned an investment property cannot possibly understand the true needs of owners or tenants. A property manager must be able to advise you on a broad range of investment topics, such as how to choose a real estate investment, how to grow your portfolio, how to manage your holdings, and how to increase your return on investment. The aptitude and insight necessary to provide this kind of consultation comes only from years of investment experience. 3) My Administrative Department is my wife Well, she may know administration, but the sad truth is that many companies do not have the know-how to provide quality bookkeeping, administrative, or accounting services. This means that your accounts may be out of balance, resulting in tax problems, higher expenses, overpayment, and a lower return on your investment. A professional property management company knows how to administer your properties, and gives you accurate and timely reports of your accounts. 4) My Leasing Agent is my out-of-work college roommate That ex-roommate, or neighbor, works for your property manager because he is cheap labor, not because he knows what he is doing. Truth is, there is more to leasing a property than just signing a piece of paper. A leasing agent must have expertise in preparing a property for lease, effectively marketing that property, qualifying potential tenants, preparing contracts, and move-in and move-out procedures. In addition, the agent must have an intimate knowledge of the area, the real estate market, and laws and regulations governing property management. 5) My Tech Team consists of my teenage son and his gamer friends They may know how to run a raid in World of Warcraft, but they are guaranteed to be clueless about the computing needs of a property management company. In order to provide cutting edge service to homeowners and tenants, a property management company must have cutting edge technology. Unfortunately, many property managers rely on outdated paper accounting or management systems, or antiquated computer systems. In this day and age, cutting edge technology means fast and secure web-based services with online account access for owners and tenants, web-based accounting, electronic tenant applications, online advertising, online maintenance requests that automatically alert your manager, electronic rent payment, electronic tenant screening, and more. 6) My idea of customer service is an answering machine How many times have you called a property manager only to get an answering machine. This is the type of customer service you will get from many property management companies. What is good customer service? It is an attitude that says we are here for you. It is the will to take action and make a difference. It is the conviction that what is important to you is important to us. Good customer service is an ongoing effort to ensure that every encounter with us is more satisfying than the last. How do you know when you are getting good customer service? That smile on your face! Do not settle for an answering machine. 7) The way I choose maintenance companies is by leafing through the yellow pages If your property management company calls the first contractor his fingers come to on the page, your investment will suffer. A professional property management company maintains relationships with contractors that are bonded and reliable, and who perform high-quality services at a reasonable price. If your property manager cannot perform rent-ready preparations, ongoing maintenance, and emergency services quickly and affordably, keep looking! 8) I am not from around here, but I have heard the market is pretty good There is no substitute for having a property manager that has an intimate knowledge of the local area. Unfortunately, many property managers are not natives of the market they work in. Not only that, but many times they have no real understanding of the market, even if they have been there for some time. This lack of market knowledge can lead to very poor management practices and investment advice. 9) I feel that by managing your property I am doing you a favor We have known property managers who joke about how ignorant their clients are, and how they would be doomed to failure without help. This kind of attitude is not only offensive, but far too common in the property management industry. A property manager who does not value your business, does not put your interests before their own, or does not share valuable knowledge with you, does not deserve your business. Period. 10) I am not insured, but no one will ever know You may assume that because a company provides management services they are properly insured and bonded. Wrong. Tragically, most owners find that out when there is a problem with their property that their company will not, or cannot, fix. A real property management company has specialized insurance coverage, so that if there is a problem, they are covered, and so are you. 11) I am just doing this because my real estate business is struggling It has become increasingly common for struggling real estate agents to advertise themselves as property managers. They tell their clients that because of their real estate knowledge, they are automatically qualified to manage properties. Nothing could be further from the truth! Property management requires specialized knowledge and abilities that are not part of the training of a real estate agent. Before you sign with a property management company, make sure that they are the real deal, not just a real estate agent biding their time until the market swings back up. 12) I am not as interested in your success as I am in charging you fees It is very popular among property management companies to charge fees for every service they provide you, and to provide you with poor service for the fees they charge. They are not interested in your long term investing goals, or in helping you achieve those goals. Their policies are directed at charging you the highest number of fees possible, not at increasing the value of your investment or the return on your investment. Before you sign, make sure your property manager is interested in partnering with you, and helping you reach your investing goals, not just in taking your money. » Find out more about our company and our team » Learn about our Property Management Services and Fees » Read about our unique approach to Property Management © 2022 Time2Rent.com 5 MUSTS for All Investment Property Purchases 1) It MUST Fit with Your Investment Strategy There are as many real estate investment strategies as there are investors. It seems that every new real estate article describes a new way to invest. As diverse as they are, however, these strategies fall into just two categories, the buy and sell, or the buy and hold. Both can be viable strategies under the right circumstances, but there is no denying the long-term benefits of the buy and hold. Under this strategy an investor buys a property with one of three ideas in mind: 1) Break even on rent and rely on market forces to increase its worth; 2) Cash flow the property and not worry about long term appreciation; 3) The holy grail: buy below market to lock in equity, cash flow it, then sell high. This strategy yields a number of short and long term benefits. The important thing is to have a well-defined strategy, and use that strategy to inform your purchases. Your real estate agent, banker, accountant, partner, or the current real estate guru on television, may be telling you when and how to buy properties, but only you can know what purchases fit best with your strategy. If you are in the process of developing or revising your strategy for purchasing properties in the Phoenix area, call us. We will do a FREE consultation to make sure your strategy is as profitable as possible. 2) It MUST be a Good Value - Do not overlook this one We all know the old adage about buying low and selling high. This is a good general rule of thumb. However, the right time to buy an investment property is when your particular strategy and circumstances dictate it. Of course, gather all of the data you can on price trends, comparables, etc. But buy when it makes the most sense for you, not when others tell you the time is right. A few hints may help you determine whether or not the property is a good value. First, look for a price point from $65000 to $100,000. These homes are generally in stable areas, are easy to purchase and repair, and are generally rentable at a rate that allows for cash flow. Second, focus on homes that were built in 1995 and later. These have fewer problems with key systems such as plumbing and air conditioning. Third, choose homes that have a newer look. Renters frequently rent based on aesthetics. Fourth, prefer homes in newer areas. These typically have fewer problems with crime, undesirable neighbors, etc. To determine a maximum purchase price, many investors use the formula: Appraised Value x 70% - repair costs. This will vary a little from market to market but is fairly standard. Lastly, If you are considering a purchase in the Phoenix area, contact us before you buy, and we will perform a FREE evaluation of the value and rentability of the property. 3) It MUST be in a Good Location Regardless of your investment strategy, few considerations are more important than location. In the current real estate market, rental properties are in high demand, but owning homes in the most desirable locations can increase your occupancy rates, and your investment return. The most desirable locations for rentals, however, are not usually the most expensive, or exclusive - they are the most convenient! Convenience is critical. Properties that rent quickly are in close proximity to grocery stores, shopping centers, mass transit, schools, and other conveniences. A qualified and experienced property manager can easily point out the neighborhoods that possess these qualities, and where rental occupancy rates are the highest. 4) It MUST Have Universal Appeal This is one of the most closely-held secrets of successful real estate investors. The most profitable investment properties are those that have universal appeal. Properties with the widest appeal tend to have four main characteristics. First, they are painted - inside and out - in neutral colors. Even accent colors must be neutral, subdued, and complimentary. Next, the floor plan of the house must be open and logical. Strange additions, dark enclosures, or unexpected layouts are very bothersome to renters. Third, they require very little routine maintenance. Choose investments with low-maintenance landscaping, low-maintenance flooring, and reliable systems. And lastly, remember, size matters! Properties that are too large or too small will only be rentable to a select few. Properties that rent well are those with three to four bedrooms, two bathrooms, and are 1600 to 1800 square feet 5) It MUST be Easily Repaired and Maintained There are two related concerns here, namely, the cost to rehabilitate the property, and the cost to keep it in rentable condition. Fixer-uppers are always tempting, but 80% of owners say it cost far more to repair the house than anticipated. This can be avoided with professional advice. In our market, an investor is allowed a 10-day inspection period after a purchase contract is submitted. During this time, we encourage our investors to contact us. We perform a FREE and complete evaluation of the property, then give an opinion on rentability, rehabilitation and rent-ready preparation. If necessary, we can put the investor in touch with a trustworthy and reliable contractor, or home inspector. This allows the investor to make an informed decision about the purchase. In addition, the investor should be aware that the return on the investment will be directly related to recurring maintenance costs. Good investment properties will have good roofs and foundations, low-maintenance landscaping, modern and well-executed plumbing and electrical systems, and reliable heating and air-conditioning units. Professional advice can be invaluable in estimating these costs as well. » Learn more about our Investor Services, or request a FREE consultation. » Find out more about our Brokerage Services for investors © 2022 Time2Rent.com |