WHEN SHOULD I CONSIDER HIRING A PROPERTY MANAGEMENT COMPANY?
Whether you are an investor to-be cozying up to the idea of taking the plunge and buying your first house for the price of a car, or you’re a seasoned investor with many owned and flipped properties under your belt, property management is a key element that can’t be overlooked. In short, property management has the capacity to make or break the value of your investment portfolio as well as your success as a landlord. Taking time to dig into the ins and outs of effective property management can save you headaches, not to mention money, down the road. Which raises the question: what exactly does a property manager do, and when should you consider hiring one? Let’s dive in to learn more. WHAT IS A PROPERTY MANAGEMENT COMPANY? A property management firm is a company, a partnership, or sometimes just a single individual, who shoulders the responsibility, via a contract that you, the owner, signs with them, to ensure proper maintenance of your investment home. In the initial flush and excitement of buying a property, it’s easy to minimize the time and flat out inconvenience of maintenance. Until, that is, you get your first middle-of-the-night call or have to drop everything to find a plumber (have both of these scenarios happened to me?— yes and yes). A third party maintenance company serves as the chief point of contact and middleman between you and your tenant on such issues, as well as the the first-responder in addressing your maintenance issues. A second role that the property manager plays is finding tenants, collecting rent, and when required, taking a tenant to court who has not paid rent, for instance, or damaged the unit. Because property managers are often directly or indirectly affiliated with real estate companies, they have significant experience interpreting and applying estate regulations and conducting tenant screening. PROPERTY MANAGEMENT COST In exchange for performing the above roles, property managers are normally paid at least two fees: TASKS PERFORMED BY A PROPERTY MANAGEMENT COMPANY As illustrated above, two of the biggest values that a property management company provides is 1) peace of mind that your investment is managed professionally, and 2) distance between you and your tenant on day-to-day maintenance matters and court disputes. Skilled property managers can save you valuable time and increase your returns by providing the following services: WHEN SHOULD YOU HIRE A PROPERTY MANAGEMENT COMPANY? Hiring a property manager comes with benefit of someone else standing in the shoes of the landlord and the cost of having to pay them to do so. The following scenarios, in particular, are tailor-made for securing property management services post haste: Follow us @mysmartcousinsin
ONE STEP CLOSER TO LEVELING THE PLAYING FIELD FOR RENTERS: ADVOCATES CELEBRATE HOUSE COMMITTEE PASSAGE OF SB 101
WILMINGTON, DE—This afternoon, the House Housing and Community Affairs Committee voted to advance Senate Substitute 1 for Senate Bill 101 (SS1 for SB 101) out of committee and onto the floor for a vote by the full House. SS1 for SB 101 provides the most vulnerable low-income renters a fair shot during eviction proceedings by guaranteeing a right to representation in court for renters who fall below 200% of federal poverty guidelines. “Eviction proceedings, where landlords are usually represented and renters are not, reveal a massive imbalance of power,” said Dan Atkins, executive director of Community Legal Aid Society, Inc. (CLASI). “That imbalance frustrates the very purpose of our court system — the pursuit of justice. The practical implications are profound — too many evictions, families displaced, and communities destabilized.” Since the bill’s introduction in 2021 — sponsored by Senators Townsend and Pinkney and Representatives Minor-Brown, Lambert, and Johnson — advocates have listened to concerns from landlords and lawmakers. Changes to the bill reflect a desire to build consensus, while still keeping a strong bill for renters who will significantly benefit from it. In its current form, SS1 for SB 101: Creates a right to legal representation for renters facing eviction whose household income is lower than 200% of federal poverty guidelines; Places coordination of the program within the Delaware Attorney General’s Office, who will contract with appropriate legal service organizations to provide representation in proceedings covered by the bill; Requires landlords to provide notice of the right to representation at certain designated intervals of a tenancy and in eviction proceedings; and, Creates an Eviction Diversion Program designed to help resolve payment or other issues once a landlord files for eviction. In addition to those benefits, SS1 for SB 101 introduces a post-filing mediation program and mandatory referrals to the Delaware Housing Assistance Program (DEHAP), which creates more opportunities for amicable, quick, and satisfactory resolutions of disputes in ways that keep families housed and landlords paid. Public comment in support of SS1 for SB 101 came from a wide range of stakeholders, including a Delaware landlord. Pam Hill, who owns properties in New Castle County, submitted testimony that read: “To me, passing a bill that secures the right to representation for renters facing eviction is common-sense. It’s not an attack on my rights as a landlord; it’s about ensuring that the rights of my renters are also taken into consideration.” Now that the bill has advanced out of committee, it will go to a full vote on the House Floor, then will need to advance through the Senate one more time before it can go to the Governor’s desk. Advocates hope to see this vote happen soon. “Representatives in the House Housing Committee took an important step toward leveling the playing field between renters and landlords today,” said Javonne Rich, policy and advocacy director at the ACLU of Delaware (ACLU-DE). “We applaud the vote in support of right to representation today, and ask all members of the House to stand up for renters by voting ‘yes’ on SS1 for SB 101 when it comes up for a full floor vote.” The Delaware Right to Representation for Eviction Defense campaign is a partnership between ACLU, ACLU of Delaware, Community Legal Aid Society, Inc., Delaware Coalition Against Domestic Violence, Delaware Volunteer Legal Services, Inc., H.O.M.E.S. Campaign, and Housing Alliance Delaware. More information about the Delaware Right to Representation for Eviction Defense campaign can be found online here: http://aclu-de.org/rtr. Read our Other Blog : A GUIDE TO SHORT-TERM RENTAL OPTIONS FOR YOUR INVESTMENT PROPERTY How to Score an Affordable Investment Property in 2022 Reference : Click Here Follow Us at @MySmartCousin
A GUIDE TO SHORT-TERM RENTAL OPTIONS FOR YOUR INVESTMENT PROPERTY
If you have one or several investment properties that you’ve bought for the price of a car and want added income without building a bathroom, bedroom or finished basement, read on for insights on growing your cashflow in the short-term rental market. WHAT IS A SHORT-TERM RENTAL PROPERTY? A short-term rental property is a property that is rented out for an evening or a couple of days to a few weeks or months. In short, anything rented out for less than a year under an annual lease is viewed as short-term. The types of properties that can be rented out short term come in many flavors including: your home sweet home a tiny house or cottage that you place, either temporarily or permanently, in your backyard or a side lot next to your home a single family investment property a small multifamily investment property of 2-4 units an entire apartment building bought solely for the purpose of short-term rentals ADVANTAGES OF A SHORT TERM RENTAL INVESTMENT PROPERTY Short term rentals can provide you with increased cashflow on the revenue, expense and personal budget fronts, giving your pockets a wonderful case of the mumps. Your Own Vacation Getaway: If your investment property is located in a city that you frequent for vacations, family reunions or get-togethers, then a short-term rental can save you money by avoiding hotel costs, and generate income when you’re not using it. Also, having a vacation rental that you own makes it easier to block off vacation timeframes that work for you. Fewer maintenance headaches: Short term rentals are subject to less wear and tear than year-round rentals because: 1) they’re occupied in only short bursts of time (for instance, an evening or weekend), 2) the unit is furnished so there’s no wear and tear from furniture or other large belonging being moved to and from, and 3) the damage deposit for a short-term rental of a couple of hundred dollars usually invites a greater level of precaution from visitors than a long-term rental might. Additionally, because of the gaps between guests visits, repairs and minor cosmetic work can be done quickly before any issues turn into a more expensive problem. Higher overall monthly rental income: The daily rate for a short term rental is higher than the equivalent daily rate for a monthly rental. As an example, the average monthly rent for a 3-bedroom, 1-bathroom house in New Jersey is $1,800, which translates into an equivalent daily rent rate of $60 over a 30-day period. The average short-term rental rate for a 3-bedroom, 1-bath house in New Jersey is more than twice this amount, or $130-$150 a day. Although your investment property will certainly have some level of vacancy, over the long-term, your short-term rental will out-earn its long-term peers. Real-time Price Adjustments: A long-term rental under an annual lease offers the ability to adjust prices only once per year. Additionally, depending on the state and tenant population, the annual increase amount might be capped. In contrast, short-term rental investors can adjust their prices after each and every occupant, based on market conditions and opportunities. Thus, if a concert or sporting event is coming to your area on a particular weekend, you can raise the price for your rental unit based on the increased demand. DISADVANTAGES OF SHORT TERM RENTAL INVESTMENT PROPERTY Of course, as with most investments, there are always downsides that should be discussed. Short-term rentals will require more day-to-day involvement than annual rentals in terms of marketing and communicating with the revolving door of guests you will have. As such, before diving headfirst into short-term rentals the moment your annual leases expire, consider the challenges that come with this territory: Edging out Competition: In order to minimize vacancies and negative reviews, short-term rental landlords will need to consider as competition both short-term rental properties as well as commercial properties like inns, long-term stay hotels and conventional hotels. Investing both money and time on well-appointed furnishings will pay dividends in the short-term market more so than for long-term, unfurnished annual leases. Likewise, promotional discounts and other marketing sizzle will be required to keep your property top-of-mind with potential guests. Maintenance and Repairs: While renting out your property or a room in your house to a new guest each week may result in less overall wear and tear versus an annual rental, the frequent in and outs mean lots of mini and ongoing housekeeping on your end. If you are serving as the head handyman and housekeeper for your short-term rental business, this translates into a never-ending list of chores, honey-do’s and home repair purchases. Off-Peak Vacancies: Just as you factor in a vacancy rate for a traditional real estate investment property, you will need to price in the cost of vacancies for a short-term rental property. Do your homework to find out when vacation travel is down in your area and adjust your pricing and offerings accordingly. Alternatively, schedule large maintenance and capital improvement projects during off-season. Property Management: In many ways a short-term rental is like a traditional rental property that is located out of state. Both will require the use of a capable property manager to screen and choose tenants, address repairs and collect rent. Because of the added work, however, a short-term rental will attract property management fees that are significantly higher, from a low of 10% of the rent to a high of 50%, vs. a long-term rental where property management fees range from a low of 5% to a high of 15%. This added cost will need to be priced into the value of the short-term rental opportunity. HOW TO MAXIMIZE YOUR PROFITS WITH SHORT-TERM RENTAL PROPERTIES Short-term rental properties will provide returns throughout the year, but as discussed above, a more active engagement strategy is required. LOCATION AND CONDITION OF THE PROPERTY – The largest driver of profitability, more so than with long-term rentals, will be the location of the property because of it serving as a vacation residence for guests. Inspecting your property from the vantage point of guest will help ensure that
SHOULD A REAL ESTATE INVESTOR OBTAIN A REAL ESTATE LICENSE?
Real estate, even in today’s hot market, offers the opportunity to buy a house for the price of a car, both for new and seasoned investors alike. The decision to buy, rehab and rent or buy, rehab and sell often comes down to market conditions. Which raises the question of whether a real estate license is required or provides an edge in assessing market conditions and becoming a successful investor. A REAL ESTATE AGENT OR A REAL ESTATE INVESTOR? First, to the question of requirements: real estate investors are nonrequired to become or to be licensed as real estate agents. While some real estate agents invest in properties and property-related businesses such as property management, and some real estate investors sell property as agents, the two are separate activities, and the pursuit of one does not require engagement in the other. That said, obtaining a real agent license offers certain advantages and can serve as an asset for real estate investors. Deciding on whether to pursue a real estate license should not be considered lightly as a significant time investment is required along with licensing costs. To help better inform your decision, let’s take a look at the pros and cons of pursuing a real estate license. BENEFITS OF OBTAINING A REAL ESTATE LICENSE One of the biggest advantages of a real estate license is instantaneous and comprehensive access to information on upcoming and sold properties. If your goal is to spend significant time researching, buying and selling properties, not just on behalf of your own portfolio but on behalf of others, then obtaining a real estate license will serve you well. Likewise, if you intend to amass a significant investment portfolio or plan on selling a number of properties through the services of a real estate company, then representing yourself in these transactions as a licensed real estate agent may offer advantages, particularly in terms of the commissions that will no longer have to be paid to a third-party selling agent. Real estate licenses are issued state by state, with some states allowing holders of a license in another state to qualify to buy and sell property in their state through reciprocity provisions. As such, if you have or intend to build a multi-state real estate portfolio or real estate agency, the requirement for multiple real estate licenses and availability of reciprocity should be weighed. ACCESS TO MLS- THE MULTIPLE LISTING SERVICE: As mentioned earlier, the biggest advantage of becoming a licensed real estate agent is access to the MLS (Multiple Listing Service): Particularly in a hot market, receiving immediate notifications of new sales listings can provide an edge in getting ahead of investment competition. The MLS system also speeds your research, offering detailed information about recent sales, fast-selling neighborhoods, popular home types and comparable properties without having to check multiple sites. INCREASED INDUSTRY KNOWLEDGE: Another advantage of becoming a real estate agent is firsthand introductions to appraisers, title companies, lenders, inspectors and other key players in the real estate industry. This exposure increased your expertise in the many facets of the real estate process. Additionally, directly working with lenders and appraisers improves your negotiating position and assists in reaching quick settlement on terms and conditions. GET PAID TO BUY AND SELL YOUR OWN PROPERTIES: By becoming your own agent and representing yourself as the buying or selling agent, you can receive the buying agent’s commission when you buy a property for your portfolio, and likewise the selling agent’s commission when you sell a property. As an example, if you buy a property that has a standard 6% commission, a commission of $12,000 would be paid to the selling agent, who would then split it, 50/50 with the buying agent. Since you’re representing yourself as the buying agent, you receive the $6,000 commission, effectively lowering the purchasing cost for you for the house from $200,000 to $194,000. EXPANDED CONNECTIONS: As a real estate agent, you will work under a licensed real estate brokerage firm. The relationships you form with other agents at your brokerage will yield tips and lessons about the market. Additionally, through your colleagues you will build a strong network that helps you find and close good deals quickly and gain intelligence on recently-visited properties. DRAWBACKS OF A REAL ESTATE LICENSE While becoming a real estate agent offers many advantages, it is not without its challenges, especially for beginners. DIFFICULT TO ACQUIRE: Obtaining a real estate license requires a time investment on the order of 4 – 8 months for most in terms of classes, exams, applications and background checks. While the required courses differ from state to state, they generally cover topics including fair housing laws, ethical standards, real estate practices and record-keeping. In addition to time, an investment of a few hundred dollars to a couple of thousand dollars is required to obtain a license, along with ongoing investments icon continuing education and license renewal. TIME COMMITMENT: Once a license is in hand, it can take new agents several months before they obtain their first client or close their first deal. Marketing, advertising, showing and helping to stage homes can take many hours a week, all of which takes time away from searching for investment properties. MUST ENSURE NO CONFLICT OF INTEREST: Real estate agents have a legal obligation to prioritize the interests of their clients. As such, agents must ensure that they act in the ethical interests of their clients and disclose any conflicts of interests, such as if an agent is selling their own investment property to a buyer that the agent represents. A conflict of interest could lead to a lawsuit and/or penalties and damages. As such, it is crucial that agents who are also investors ensure that no conflict of interest, perceived or actual, occurs. Read my other Blogs: Click Here Follow Us at: @MySmartCousin
What’s the Difference Between Fix & Flip Hard-Money Loan and a Conventional Loan?
Whether you’ve bought your house for the price of a car or paid several hundred thousand dollars for it, becoming a brand new homeowner makes you feel like a million bucks. Becoming a real estate investor, once the province of the rich and famous, has opened up to the every-man, with dozens of avenues for getting a toehold as a buy-and-hold or buy-and-flip property owner. But first, a few definitions. What Exactly is a Fix & Flip Investment? The term ‘Fix& Flip’ real estate gained traction in everyday vocabulary beginning in the late 1980s. In the grip of an economic recession and surging home foreclosures (repeated 20 years later with the Great Recession), investors bought, rehabbed, and sold foreclosed properties, thus birthing the notion of ‘flipping’ or improving and selling a property quickly as a normal business practice. Properties ripe for fix & flip are those that offer a large and quick payoff potential. For instance, a house that is structurally sound but several years past its prime on the paint, flooring, appliance, and overall maintenance fronts. Such a house that requires a maintenance overhaul but isn’t a complete gut-job offers two key benefits. First is that the house can be improved quickly— a quick turnaround minimizes the risk that as weeks turn to months, the housing market suddenly sours. Second is that a maintenance overhaul, while expensive, costs tens of thousands of dollars less than a gut job, as major overhauls almost always involve a brand new roof and heating/ventilation system along with significant wiring and plumbing upgrades. Best Sources for Fix & Flips One strategy that is growing in popularity is purchasing a property that is old, under-maintained, or abandoned, followed by renovating it and then renting it out, either as a long-term rental or as a short-term Airbnb. Four Big Differences Between Hard Money Loans and Conventional Loans One way to differentiate hard money loans from conventional loans is to think about their purpose. Conventional loans are taken out to finance the residence that you will live in a long time— your primary residence. As such, the duration of a conventional loan is typically 15 years or 30 years, and the interest rate is relatively low as lenders believe that you are likely to prioritize payment of bills relating to your home-sweet home. Conversely, Fix & Flip loans are short-term in nature, funded by investors who expect a quick profit realized within months or a handful of years. Likewise, particularly for fix & flip investments, the ownership horizon itself will only be months or a year or so until the property is sold at its now higher, rehabbed value. beylikdüzü escort bayan, gaziantep escort, ataköy escort, esenyurt escort, seks hikayesi, kayseri escort, şişli escort, beylikdüzü escort, beylikdüzü escort A second difference is who the lender is. Conventional loans are generally provided or guaranteed by government-backed mortgage lenders such as Fannie Mae and Freddie Mac. Fix & Flip or hard money loans, however, receive no such cushion and are backed strictly by individuals or private sector entities. And each lender provides its unique set of benefits and trade-offs. Conventional mortgages are long-term and low-priced but require reasonably strong personal credit. Hard money loans can be provided quickly with no credit check but must be repaid quickly and at a relatively high-interest rate. A third difference is the eligibility requirement. All financial good deeds and skeletons alike come tumbling out when a conventional loan is provided, due to the stringent regulations and requirements that banks must abide by. Private money lenders face few restrictions and thus are not required to validate your creditworthiness. Their chief concern will be the value of the property that is securing the loan. Lastly is the time to complete the loan process. Conventional loans may take one to three months to complete, while fix & flip loans can be wrapped up in a few days. Read our other blogs: Click Here Follow us: MySmartCousin
Real Estate Investment Opportunities That Provide Housing For The Homeless
The National Housing Trust Fund Program (NHTF), funded by the Department of Housing and Urban Development (HUD) provides funding to build or rehabilitate housing that supports extremely low and very low-income households. According to HUD, 90% of NHTF’s funding is centered on repairing, preserving and developing rental housing and the remaining 10% of funding is used to assist with homeownership services. Eligible activities Eligible activities for the funds include: – fresh construction – restoration – acquisition of property – rehabilitation – financing expenses – relocation expenses Who are the Eligible Applicants – Non-profit developers – on the For-profit developers may also receive funding when they partner with non-profit developer who is receiving funding through the program. Read more Follow us : Click Here
Community Development Block Grants (CDBG), a Gateway to Affordable Housing
The development of its citizens is the surest path to the development of a country. People who are homeless or who cannot afford to purchase a home can become property owners through a little-known program sponsored by the U.S. Housing and Urban Development Agency (HUD), the Community Development Block Grants program (CDBG). HUD’s CDBG program, established in 1974, was created to provide a path to homeownership for low and moderate-income families. Under the program, states, cities, and counties are able to apply for grants annually to revitalize housing stock and infrastructure in their communities. Eligible activities under the CDBG program Funds provided through CDBG grants support housing-related activities including housing repairs and rehabilitation, down payment assistance and closing costs, and the purchase or construction of rental housing or owner-occupied housing. Housing counseling and relocation assistance are also provided to help aspiring owners in their home buying journey. You can read my recent blog here: Click Here
A Penny Doubled For 30 Days is How Much?
If you ask the average person if they want to have a penny doubled for 30 days or $2 million dollars, they are likely going to take the $2 million. It is a tricky question, doubling a penny doesn’t seem like it would amount to much right? Well at the end of 30 days that $0.01 is worth $5,368,709.12! Surprised? This is the power of compounding. Compound interest is the 8th wonder of the world. He who understands it, earns it; he who doesn’t, pays it. – Albert Einstein Pretty crazy stuff. To visualize what is happening each day take a look at the chart below: The key takeaway from this should be to start investing early and think of the long-term game. Let your money work for you. Oh and if a genie ever pops up and asks you if you would like $2 million dollars or your penny doubled for 30 days, now you know what to do. Reference: Click Here
HUD Dollar Homes for Low and Moderate Income Buyers
What can you still get for $1 these days? Scratch-off lottery tickets? A paltry few items at the Dollar Store (now the home of $1.25 items)? A suspect candy bar in an unlit corner of the neighborhood corner store? Now you can add a whole house to that list. The Housing and Urban Development Agency (HUD) sells homes to local government agencies for $1, under an initiative to help communities foster housing opportunities for low and moderate income families. The so-called “Dollar Homes” are made available to local governments to buy if the HUD-owned homes have gone unsold for at least six months. The market value of these homes is less than $25,000. A $1 price tag allows local governments to buy the homes at a significant discount, rehab them and sell them to low-income and moderate income families. While the qualification criteria are stringent, this offers an attractive path to home ownership.
Ring in Mo’ Money This New Year
Ring in Mo’ Money This New Year Nothing keeps your head more in a spin than out-of-control finances. Since most of us didn’t grow up with banker parents teaching us the ins and outs of budgeting, make this your year of earning your ‘3M’ degree— your ‘Masters in Making Money’. Your first class?— the Envelope System. ‘Cause Money Don’t Grow on Trees The cheapest car is the one you already own. Same with money, the quickest dollar is the one already in your pocket. Grandma was on to something when she used different coffee cans to stash away money. The envelope system works the same way. The Envelope What? The envelope system is as old as the hills, but the need is even more critical in our credit/debit card society where money goes so quick, you’re not entirely sure you ever earned it. The envelope system forces you to put your hard-earned coins on the table and parcel them out to different envelopes or spending needs. Prime categories for envelopes are required expenses that leave you scrambling every month— I see you car payments, rent and light bill— and non-critical stuff that eats a hole in your wallet— cigarettes, eating out, shopping. An Example Let’s say you take home $700 a week, after Uncle Sam gets his cut, and you spend your money on five main things: groceries, rent, car (including the note/gas/repairs), utilities and hanging out. Your $700 a week, or $2,800 a month, is going to get divided into 5 envelopes. If your rent is $1,000 a month, then each week you’re going to put $250 in the Rent envelope. If you spend $100 a week on groceries, then you’ll put $100 every week in the Groceries envelope. And so on. Your envelopes will serve two purposes: first, they’ll help you really see where your money is going. No longer will money run through your fingers without a trace— you will have to physically carry the Grocery envelope to the store, open it to pay for groceries, and put the change back in the Grocery envelope. If you get to the supermarket and realize you forgot the Grocery envelope, guess what, no groceries for you, it’s back home you go to get the envelope. Second, the envelopes discipline your spending. So let’s say you’re midway through the month and your cousin says it’s been a minute since y’all have gotten together, and to come to the movies with her tonight. Checking your Hang Out envelope and seeing only a couple of singles, you realize, not unless the movie is playing on television, you can’t do it. But then you spy the Rent envelope and see it fat with $500 in it. Two words: back…off… No money, I mean no money, comes out of an envelope to pay for anything other than what’s written on it. In other words, no two-timing between envelopes. When money in an envelope is gone, it is gone. Leftover Money So you arrive at the end of the week, look at your Groceries envelope and what do you know, there’s still some money left. Cool beans, you’re under budget! Your options? Reward yourself, within reason, but enjoy your budgeting success. Rewarding yourself for a budgeting job well done helps you feel not just pain, but also pleasure from the process. Next Steps Start now! Gather your envelopes, get a pen, and get started with your 3M degree!