What to Ask When Looking for a Good Property Manager

What-to-Ask-When-Looking-for-a-Good-Property-Manager

If you’ve ever searched for a good property manager before, then you know how difficult it can be to find a good one for your rental property. There are several property managers out there, probably more than what you really need to bring your property into the market.

With so many choices available, you may find it difficult to choose one for your unit. But don’t worry – if you ask the right questions while shopping around for property managers, you’ll get a better idea of who would make the best fit for your property. Ask them these questions when discussing your property to see if they’re the right property manager for you:

1. What type of properties have you managed?

Experience counts for a lot in property management, and it can separate the good ones from the ones you should steer away from. Experience in this field, however, isn’t just about the number of years worked in the field; it’s also about what type of properties they’ve managed. Depending on what type of property you have, you can either go with someone who specialises in managing properties like yours or someone who has more varied experience managing different types of properties.

2. How do you screen potential tenants?

Screening potential tenants is one of the most important steps to property management, so the way they do this often reflects their level of service to your property. Ask them how they’ll match tenants to your property and what their process is like for finding tenants. This will give you a better idea of how they operate and what lengths they’ll go to find the right match for your property.

3. How do you handle late payments by tenants?

Finding tenants is just one phase of property management; the longer phase involves managing the tenancy itself. Asking them this question will show you what their management style is like and how they’ll deal with critical rental issues like these. See if their process aligns with what you expect them to do and how you want your property to be managed.

4. How do you respond to complaints?

Similar to the previous question, this question allows you to gauge how well a potential property manager will handle the landlord-tenant relationship. Remember that a property manager will act as the mediator between you and your tenant, so it’s important that you’re comfortable with their process for dealing with any complaints or issues.

5. How often do you do inspections?

Routine inspections are important to any tenancy agreement, and the number of times it’s done per year will help give you better peace of mind as the landlord or owner. This question will also show you how well the property manager will look after your property even after the start of the tenancy.

6. What’s the right rental price for my property?

If you’ve done your research beforehand, this question will let you assess how well a potential property manager knows the market and what they can offer you. It also allows you to get a better idea of what your property is worth in the current market. Compare their answer with different property managers to see what they offer and to better understand where your property stands in the market.

7. What are the things I can do to improve my listing?

Asking them this question won’t just reveal their expertise in property management, but it’ll also help you put your property in the best position in the market. Note their suggestions, assess how relevant they are, and decide whether or not they can get your property where you want it to be.

8. What are the full costs and fees for managing my property?

Some have small sign-up fees but a variety of hidden fees once you sign on and let them manage your property. Avoid getting surprised by such fees, and ask them to indicate all management and service fees included in their service. The more complicated their fee structure is, the bigger the headache (and expense) it will likely be.

9. What can you do that others can’t?

This is where prospective property managers will try to sell you on what they offer and how well they set themselves apart from the competition. It’s also the part where you assess the intangibles in any working relationship, giving you a better idea of how well they meet your standards. Listen well, take notes, and assess if they provide what you’re looking for.

With so many choices available today, finding the right property management company can be difficult. But by asking the right questions and doing your research beforehand, you’ll find that all the hard work you put into finding the right manager will be worth it. Once you find the right one, your property (and wallet) will surely thank you.

Article Source: http://EzineArticles.com/9685653

Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

Finding a Down Payment for Your Real Estate Investment

Finding-a-Down-Payment-for-Your-Real-Estate-Investment

In order to meet their loan to value ratios (LTVs), nearly all lenders require borrowers to have some “skin in the game” or equity in each fix and flip project. How does a real estate investor who is just starting in the business or is tied up in another project obtain the down payment necessary to qualify for a hard money loan?

Friends and Family: A Logical Start

Friends and family are a great place to start when looking for help with money down. You know them, have a track record with them, may have worked with them before on other types of projects, and you have access to them to propose your deal.

Laying out your Proposal: Risks and Rewards

Before you approach friends and family, prepare a detailed analysis about the specific investment opportunity. Research the project thoroughly, and be very clear and honest about the pros, cons, and associated risks fix and flip success.

Next, devise a business plan that clearly articulates the time line, projected milestones, and budget of the project as well as the terms of the proposed partnership, joint venture or investor relationship you wish to enter into with them. Approach the entire process like the business relationship that it is.

Real estate partnerships offer your chosen family and friends the chance to invest money into your fix and flip project(s) in exchange for a designated ownership percentage. As equity partners or investors, your family and friends will have an opportunity to receive money that the property generates at closing. So, while they will be taking an investment risk, they will also be in a position to benefit from the sale of the property.

Partnership Considerations

  • Legalize your arrangement. This is a business partnership and should be structured as such. The most common way to structure these partnerships are as general partnerships, limited liability companies (LLC), limited partnerships or corporations. Consulting with an attorney who specializes in real estate partnerships can provide valuable information about the process and the best type of agreement for your situation.
  • Clearly establish the role of each partner or investor. For example, your friend or family member might contribute the cash needed to make the initial down payment and closing costs, while you will be responsible for securing the remaining funding, buying the property, and managing all of the construction. Alternatively, your partner may want to take a more active role in the day to day operations of the renovation. Spell this out clearly ahead of time.
  • If you choose to set up a partnership, determine the aspects of the deal that will be included in the partnership and split. As partners, your family and friends will be able to participate in all aspects of real estate property ownership. This will allow them to receive a designated ROI percentage that might include: property appreciation, loan paydown, cash flow, and monies from the sale of the property. Remember that the addition of your partner’s funds reduces the amount of your construction loans so that should be taken into account as well when determining what is included in the profit split.
  • Decide how the NET (profit or loss) will be split. Remember to include all costs when determining the profit (or loss): fees, refinancing costs and any appreciation. There are many different ways to split the profits, and not one right way. It all depends on how much money each party brings to the deal, how the work is divided, who takes the most risk, etc. Splits range from 50/50 to 80/20 based on the above factors and what the two parties agree to. The key is to decide and formalize the split ahead of time.
  • Outline terms for reporting the income (or loss) for tax purposes for each party.

Following the steps above gives your partnership the highest chance of success, which can be a foundation for many future successful real estate deals.

Article Source: http://EzineArticles.com/9621762

Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

Factors to Consider Before Buying a Property

Factors-to-Consider-Before-Buying-a-Property

Everybody dreams of owning a house at one point of time. But possessing a house is no joke. It requires careful consideration and planning to make such a heavy investment. A lot many things have to be kept in mind before buying any property. The main concern is finance but there are so many other things that are directly related to it.

Here are some factors that should be considered before buying a property:

1) Stability of income: Doing well in your work and earning good money may excite you to buy property at the moment. But it is very important to analyze your financial condition before making any big purchase. How stable your job is at the moment, will your salary increase in some time, what are your other expenses and how safe is it to invest in an asset are some of the most important questions to answer. If you’re uncertain of your future income situation, then picking up a mortgage isn’t a really good idea at the moment. Wait for some time and save more money for down payment.

2) Credit Score: A credit score is a statistical number that depicts a person’s creditworthiness. Lenders use a credit score to evaluate the possibility of a person to repay his debts. It also determines the rate of interest at which the mortgage will be given if it gets approved by the bank or creditors.

3) Personal commitments: What are your personal goals? What expenses do you see in the near future? Are you getting married or planning a baby? What are the expenses that may delay your mortgage buying? All these events will incur heavy expenses and may delay your property buying task. Ask these questions to yourself and consult your dear ones before planning to take such a major step.

4) Real Estate scenario: What is the real estate trend in your area? Are the property prices going upwards or are in a stable state. If the prices have gone up, will your finances allow you to make that purchase? Some area of your city may be attracting a lot many builders hence the rate of property might be on an upsurge. If the prices are going down, you may be lucky in buying your desired property at affordable rate.

5) Expectations from the property: Buying a home may be for different purposes- it could be for your own use or may be your second home i.e. investment. Since investing in real estate is considered to be the safest bet, a lot many people buy homes and put it on rent to get returns. If you are buying it for your own purpose, you may prefer a specific locality or a specific area, but if buying for investment, you may overlook such points and just concentrate on buying a property that may suit your budget.

We are sure that once you have considered all these points, you will make the best deal. Property related issues are critical and sensitive and should be dealt with great concern.

Article Source: http://EzineArticles.com/9707601

Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

What You Should Know Before Flipping A House

What-You-Should-Know-Before-Flipping-A-House

Many individuals believe they can flip properties effortlessly, however it is likely they will be dissatisfied with the preliminary outcomes. A profitable flip is one that you generate income and there are many steps you must follow to help you to become successful.

For house flippers, there’s recently been a great deal of news of late, since houses flipped throughout the first half of 2016 produced a median gross revenue of around sixty thousand, the greatest median gross flipping revenue since 2005, the highest it has been in 10 years.

However gross revenue does not contain the expenses to rehab the home, which generally contributes an additional 20% to 30% on top of whatever the preliminary purchase price of the house for the flipper is. Flippers are competing for business with not just additional flippers, but additional homeowners who would like to renovate their residences that they plan to reside within as well.

Although it appears backwards to believe the money is created on the front end of the offer instead of the back end, that’s merely how an experienced home flipper tackles it.

You should fully understand precisely what the home will sell for once it’s fixed up, the expense of enhancing it, as well as the permits, contingencies in addition to your lowest profit so you may proceed to the next offer. The moment you have that worked out, only then may you recognize exactly what to offer the seller..

Capital for home flipping is available, however you may pay much more as an investor

Presently there are a great deal of loan providers available which focus in home flipping. The crucial factor to keep in mind is, you’ll be an investor, not necessarily a home buyer. As a consequence, your interest charges, even if you possess the finest credit rating, will certainly be many percentage points above even the greatest rates, at times towards double numbers. You furthermore may only be capable to finance merely 60% of the property, although many loan companies may finance as much as 130% of the purchase price in order to assure there are funds with regard to the renovating.

Get your team together

In order to be a profitable house flipper, you’ll require plenty of close friends, specifically friends who are building contractors, house inspectors, accountants as well as attorneys and real estate agents. It normally takes a crew to construct a home, and it requires a crew to flip a house. Simply because you have purchased a house, sold a house or even painted a house, does not suggest the expertise to flip a house is there.

You’ll require to operate with a reliable builder to be an effective flipper, as well as a qualified home inspector which can point out items which will need to be repaired that you’ll expect to talk down into the sale price, or it will cut into your gains once you sell. You will also need a competent Realtor which can price the residence appropriately when you depart.

Location is important

It doesn’t matter how great the offer you make on the purchase end of the home if the location isn’t a sensible one. Nonetheless, even a 10% to 20% revenue margin on a flipping offer is an effective one. There tend to be far better markets than others with regards to flipping.

You’re an investor, not a homeowner

With regards to the essentials of home flipping, it’s crucial to select a house which demands only cosmetic modifications, such as kitchen cabinetry or a fresh paint job, which may be completed comparatively swiftly as well as somewhat avoidable. Furthermore, if the house is a foreclosure, discover how long it’s been empty and if it has encountered considerable structural damage while vacant. It’s very probable the previous property owners removed everything worthwhile from the house prior to leaving, such as kitchen appliances, electrical wiring and possibly copper piping. Select a house that’s structurally sound and will not call for significant renovations such as a brand new roof or electrical and plumbing.

Also, whenever pricing the flip, it’s vital that you remain inside the conforming loan restrictions established by Fannie Mae and Freddie Mac throughout the market region. Or else you’re constraining your retail customers who won’t be approved for a massive mortgage or need to put 20% down.

In the event that you remain beneath the conforming loan limitations, you’re raising your buyer pool. If not, you are escalating the probability that the house will remain in the marketplace and you will need to carry the loan for a longer period of time.

Article Source: http://EzineArticles.com/9653739


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

Reasons For Investing In Real Estate Properties Today

Reasons-For-Investing-In-Real-Estate-Properties-Today

Everybody wants to have a successful financial future. It is for this very reason that most people today are looking for ways on how they can increase their finances. Investing in properties can be a far better option.

Indeed, more and more people all around the world agree that the best investment they can make is in real estate. Today, there are already plenty of real estate developments anywhere in the world. With plenty of foreign workers, there is a steady demand for different residential provisions which real estate developers must supply. It is worth mentioning also that plenty of these foreign workers want to live in a home that suits their needs. They highly emphasized that these homes are the best investment they can ever make, most especially for those who want to have their families migrate to other countries.

Moreover, powerful and wealthy people are likewise directing their sights toward the real estate industry. They often invest in luxurious hotel apartments which fit their specific requirements. In fact, there are some owners who turn such properties into income-generating opportunities, most especially when they travel a lot or perhaps they just live there during specific times of the year. They often lease out their homes to their friends and diplomats.

Why Invest Your Finances In Real Estate Properties

Lifetime assets – Real estate provisions are considered your lifetime assets. They can be passed on to the next generations. Moreover, they can grow in value over time. Be reminded that property value inflation is most likely to happen, most especially when your property is in a developing location. The emergence of tourist attractions and nearby business establishments can actually have a direct impact on the property’s value in the future. This further means that if you decided to sell your property later on, you can definitely charge a much higher price than what you initially paid for. Indeed, you will get a high profit from a successful sale.

Does not need a lot of time – There are some properties that do not require much of your time and management for them to become smart investments. Examples will include college rentals, low quality properties in bad areas, and vacation rentals. Be reminded though that you must lease it out to good tenants so you won’t spend so much time managing it.

Experts highly emphasized that in order for you to get the best real estate investments, you must do some hard work, read up, perform research, and make smart, well-informed decisions.

 

There are lots of important considerations when buying properties today. Getting help from experts is highly recommended.

Article Source: http://EzineArticles.com/9291027

Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

Buying a Real Estate Property That Will Generate Positive Cash Flow

Buying-a-Real-Estate-Property-That-Will-Generate-Positive-Cash-Flow

When looking at real estate properties as financial investments, you will have to decide whether an appreciated value or positive cash flow is your main goal for getting properties. There are some things you need to consider before you make that decision.

Since you would more than likely be looking at single family homes and multifamily homes, there is a difference between the two.

With the former, the value of the property usually increases in value quicker. However, since more expenses are attached, you may not be looking at the kind of positive cash flow that you want.

On the other hand, multifamily units (i.e., duplexes) can generate more positive cash flow. However, they may not appreciate quickly like single-family homes do. Also, not as many expenses are attached to the latter.

Since most real estate investors look to create wealth, they will choose having a positive cash flow. In this case, you will need a reliable real estate agent that is willing to help you find real estate properties that will produce the positive cash flow you want.

Look at the balance sheets and see what you will look forward to as far as repairs, maintenance, fees and other miscellaneous expenses.

In order to maintain a steady stream of positive cash flow, you need to have the right tenants, so take your time. There are some people who will spend lots of money on real estate courses that don’t teach much of anything.

They end up being back at square one. Find a good real estate agent that is willing to genuinely help you. Sometimes, you may be fortunate enough to find one that is also an investor on the side.

Calculating Your Cash Flow

As a real estate investor, you need to be able to calculate all of the cash flow that comes from your properties. You want to make sure that you are making a profit. You will also be able to make decisions on real estate investments that you may purchase in the future.

In order to calculate your cash flow, you will need to add up how much rent you will get from your tenants. If you have more than one unit, take into consideration any vacancies you may have. Depending on how your property looks, include a small percentage of the vacancy rate into the equation.

With the total rental amount, get a figure for your losses. You will have to include property expenses, mortgage loan interest and property depreciation.

Deduct the expenses from your total rental income in order to get your losses or savings for taxes. With that, you will either add or deduct that from your expected amount from your tenants. Take your operating expenses and monthly mortgage payment(s) and deduct them for a second time. The result will be your cash flow.

When you come up with a cash flow amount, you will be able to figure out how much you will charge for rent if you decide to purchase future real estate properties. It’s important that whatever money you make, that you don’t squander it. Put it away because eventually you will need it for other things relating to your investment properties.

Changing Negative Cash Flow To Positive Cash Flow

When you have negative cash flow, you are not making a profit. You are paying out more in expenses than you are taking in as profit. That’s not how you want to operate when you’re investing in real estate properties.

Here are some ways that you can chance the negative cash flow to a positive one:

  • Implement a rent increase. Only increase it to the amount of the current market. Don’t overdo it, other wise you may not have any tenants.
  • Make the tenants pay the utilities. This would relieve a burden from you. Besides, since they are living in your property, they will be using utilities every day.
  • Go over your property taxes to see if you can find anything that may have been missed before. Who knows-you may find out that you were charged more in taxes than you should have been charged.
  • Contact your insurance company and see about paying more for your deductible. Then make inquiries about getting a better deal for coverage on the property.
Article Source: http://EzineArticles.com/1984942

Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

Tips on Investment Properties for Beginners

Tips-on-Investment-Properties-for-Beginners

When you have extra cash and want to invest it the best option is real estate because they have high returns. Although property prices in the short term may go up and down, they appreciate substantially in the long run. Investment properties are something that you can bank on as it will acquire value with the development of the areas in the vicinity of the property. There are risks that cannot be completely eliminated but if you do a thorough research and planning you can lessen the risks. If you are a beginner investor, investing in real estate can seem daunting at first. Here are some tips to help you make the right investment choice.

  • Know the range of options for real estate investment-you can invest in buying commercial properties, residential houses, apartments, condos, or land so you need to study which would be a better investment for you. There are many options so you will need to do your research to see which one will align with your future plans and stay within your budget.
  • Why investing-are you investing to buy to sell again for a profit or do you want to rent the investment property? If your investment properties are residential you can create a regular income by invent in rental properties. You can also be a “house flipper,” which is where you buy an older home, renovate them, and sell them for a profit. If you decide to invest in commercial property you can hold it until the prices go up and then sell it to make a good profit.
  • Location-when buying an investment property remember it is all about the location. The price of the property is largely a function of where it is located. Where the property is helps to decide the price range. Make sure that you research the price trends according to different locations before you buy investment properties.
  • Network with a real estate agent-they can make your job a lot easier finding the type of property you want to buy. When you network with real estate agents they can help point you toward investment properties that fit your plans. A real estate broker will handle the legal work that is involved with the sale and purchase of the property for you. They can also make an offer and negotiate for you.
  • Make financial arrangements-once you chosen the investment property you will need to arrange a mortgage to pay what your savings do not cover.

The most important thing to remember when buying investment properties is to do your research.

Article Source: http://EzineArticles.com/9452370

Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com