CheckPoint Properties Real Estate Blog

Tips in Choosing the Right Real Estate Investment Advisor

2011-09-24T14:16:00.001-03:00

With the uncertainty of the economy and the people’s confidence declining there becomes an increasing demand to put our money in a save place. Enterprising individuals see this as an opportunity to invest their money in real estate. People are starting to buy properties and if you know the current state of real estate you realize the potential.

To whom do you entrust your money and how do you ensure they are investeing strategically? Real estate investment advisors are a dime a dozen. While many of them are good, there are still those who are not up to par.

Here are some tips to help you find the right real estate investment advisor

Find out if they are investors themselves. You gotta put your money where your mouth is. And if they say that real estate investments are pretty awesome in your area and profitability is good, I’d doubt if they themselves did not take advantage of it.
Ask industry questions that they should be able to answer in a flash. This is how you separate pros from the amateurs. Questions like what is the tax value? What is the assessed value? What ROI are we looking at? A true real estate investment advisor should be able to answer and discuss these with you passionately. If he gives you the “uhms” and “aahhs”, show him the door.
Ask for a list of properties in your area and have them do a comparative analysis. This should be really easy for a seasoned real estate investment advisor because he does it all the time. If he fumbles and even sweats a little, you might want to reconsider.

Those are a few things that you can do to ensure that your money will be dealt with accordingly. Confidence is key to a successful investment. And if you’re not confident with the people handling your money, chances are, you’ll probably lose.

There is no better time to invest in real estate than now. Just make sure you are dealing with the right real estate investment advisor.

No Need To Pull a Tenant Credit Report? Think Again!

2011-05-21T08:42:00.000-03:00

What should a landlord do when a potential tenant states they have had their credit report pulled recently and therefore, there’s no need to run another credit report for their lease application? Should they accept the applicant’s report and save the time and trouble?

In a word: NO. Some tenants might be trying to save money and might not see the need for another credit report. Or, they may want you to know up front that their credit score is low; in this case you can make a decision to continue with your own report or reject their lease application.
Then there are those who fabricate their own credit reports, which happens every day to landlords and others who aren’t as cautious as they should be. Fake credit reports are widely available, so don’t make the mistake of accepting any credit report other than one from a trusted service provider.
Smart landlords don’t run their rental property business on guesswork. To really know who you’re renting to, always reinforce your policy that a credit and background check will be conducted on every tenant applicant.

Landlords have the right to protect their business interests by leasing to qualified tenants. Make sure yours are qualified by conducting a thorough credit and background check on each and EVERY one–even if they have one in their pocket for you!

A Checklist for In Between Tenants

2011-04-11T12:23:00.000-03:00

Just when you think that business is quiet—or even under control—something unexpected happens. Like you receive notice that a tenant is moving out. If it’s a great tenant, you might be unhappy; if not, perhaps you’ll hear a sigh of relief.
Either way, the minute you receive that notice is when the tenant transition begins.

Most leases require a 30- 90 day notice when either party is intending to not renew. It’s a good idea to regularly review your lease expiration dates so you’re not surprised by a tenant’s notice. If you see one that will soon expire, go ahead and check in with your tenants to see if they’re planning on staying or leaving. The more time you have to prepare, the better.
You’ll want to begin the search for a qualified new tenant immediately. Start by advertising in all your usual places, and put signs up in the neighborhood and on the property.
Let the vacating tenant know you’ll be showing the rental unit to prospective new tenants. Try to be respectful of their time and privacy; but do insist on your rights to show the unit if they prove to be difficult about scheduling.
You might want to make an appointment with your tenant to take a quick look through the unit to determine any work that needs to be done after they move out. Be sure to explain that this visit is NOT a move-out inspection, which will be performed after the unit is empty. This is just a helpful way to plan any painting, repairs and upgrades that will need to be completed before the next tenant moves in.
Schedule the move-out inspection for moving day. Let your tenant know they’ll need time to move their belongings and clean the unit before you arrive. Remind them to pull out their move-in/move-out checklist ( which you gave them when they moved in) to see what items you’ll be inspecting. Bring your copy of this document with you when you inspect.
Once the rental unit is empty, you should be ready to immediately begin painting, repairs, replacing fixtures or floor tiles, and any pest treatment or carpet cleaning that is needed.
Continue to show the property while repairs and painting are taking place. Remind prospective tenants that the unit will be completely ready for move-in day. Have photos available to show.

Trouble Filling a Vacant Rental?

2011-04-03T16:51:00.002-03:00

Sometimes landlords simply can’t fill a vacancy, despite market data that shows vacancies are low and would-be renters are finding it hard to find a place to live. Have you ever had a vacancy that should have been filled, but after many showings you have no bites?
Consider these reasons you’re having trouble filling a vacant rental:

Price: Have you checked the rents in your area lately? Perhaps yours is just too high for the number of bedrooms, bathrooms and amenities your rental property offers. Do your homework and adjust the rent if you have to. .
Location: Is your rental property too far from public transportation and shopping? While there’s not much you can do to make a poor location better, you can promote other advantages of the location. Is there a park or walking and biking trail nearby? Is it a walkable neighborhood? What about a neighborhood market? Think about other factors you can educate potential tenants about. What would make you want to live there? And don’t expect the location to sell itself—that’s your job!
Utilities: Most tenants want cable and high-speed internet. Wireless is even better. If you don’t offer the latest and greatest technology, you could be losing tenants for that reason alone. Inquire with your cable and internet service providers to see what they can do to upgrade your property and bring it into the 21st century!
Looks: Take a hard view at how your rental looks from the outside and the inside.
Does it look inviting?
Are there dead shrubs outside and broken window blinds inside?
Does it need a paint job?
Are carpets worn out?
Do the fixtures and lighting need an upgrade?
If it’s been awhile since you spruced up the place, it could be costing you money as potential tenants turn it down.

Finally, when you’re showing the unit, ask potential tenants if they can picture themselves living there. It doesn’t hurt to find out what they’re thinking, and you’ll learn very valuable information. If they offer an objection, find a way to overcome it—and fill that vacancy!

Should You Provide a New Tenant Welcome Package?

2011-02-26T20:49:00.000-04:00

When a new tenant moves in, do you welcome them with open arms, or just hand over the keys? Great tenants are few and far between, and even good tenants make your life much easier. So why not show your appreciation and start the landlord/tenant relationship off right?
Lots of landlords we know present a new tenant with a welcome package of goodies. Some cost them little to nothing out of pocket—say, $10 – $15. Others keep it strictly business and include just the legalities.
If you choose the former, here are a few items to include in a welcome package that will make your new tenant feel right at home:

A list of emergency phone numbers. This might seem old-fashioned when a simple call to 911 will fetch police, fire and ambulance. But your tenants also need to know how to get in touch with your preferred maintenance people in an emergency. Do include the numbers for your plumber, electrician and general maintenance provider, along with utility companies.
A floor plan clearly indicating the emergency evacuation route, location of fire extinguishers and smoke alarms and emergency water shut-offs.
Coupons for local businesses. Stop by the neighborhood pizza shop, dry cleaner, deli and other businesses that might love to have your new tenants for customers. See if you can strike a deal with the pizza shop for discounted gift cards and include one as a gift for move-in day.
Bus routes, trail and bike maps. More and more tenants are ditching their cars for alternative forms of transportation. Make it easier for them to find the right bus, bike to work, or go for a walk or run on nearby trail.
Welcome Fruit Basket. Might sound silly but such a gift is greatly appreciated on moving day.

Remember, a small effort can actually go a long way to establishing a good relationship with your new tenants. And even if some don’t seem to appreciate it, you might be reaping unseen rewards in the form of fewer problems and happier tenants!

Who is Responsible If Tenants Heat is Shut Off?

2011-02-10T13:21:00.000-04:00

Landlords are generally responsible by law to provide sufficient heating for tenants—so what happens when the utility company is getting ready to shut off the heat in one of your units? Most leases cover who’s responsible for utilities; some pay their tenants’ utilities, while others require tenants to set up their own accounts with utility providers.
Most landlords are concerned for their tenants’ well-being, but of must also think of potential property damage that can be caused when a unit goes without heat in the middle of winter, like freezing and bursting pipes, and water damage.
Here are a few general answers to the question, “What can I do if my tenant’s heat is cut off?”
When in doubt about legal questions, check with your legal advisor. This blog is not intended to be a source of legal advice.

1. Landlords are not responsible for a tenant’s legal or financial obligations. If they are required by the lease to keep heat on in the unit, and they fail to pay the bill until the utility is forced to terminate service, they are responsible.
2. Your tenant is also responsible for subsequent damage to your property as a result of their negligence. While it may seem like adding insult to injury, it’s simply the consequence of the tenant breaking a legal agreement.
3. Prevention is the key. You do not want to find out about a tenant with utility issues from the downstairs tenant, who calls to report water dripping through the ceiling. Make arrangements with the utility company that any service shut-off notifications are sent to you.
4. Take another look at your lease agreement. Be sure that it states that heat is required in the unit to protect pipes, etc. from damage, and that failure to heat the unit is cause for eviction.
Don’t allow a simple lack of preparation to cause unnecessary damage to your rental property. Make sure you know what’s going on with your tenants and set up notifications with the utility companies that service your properties.

Notifying Tenants of the Sale of Your Property

2011-01-24T20:13:00.000-04:00

If you’re a landlord who is selling your rental property, here are some guidelines for notifying your tenants. Laws and regulations vary according to the province where you live, so check yours for specifics.

Double-check your lease, which may or may not address the sale of the property. Many large apartment building change hands without the tenants knowing, but for single family residences, small buildings and duplexes, it’s more difficult to show and sell a property without tenants knowing something is going on.
If a tenant asks what’s up, be honest. Reassure them that the new owner will welcome them as tenants. Do what you can to avoid losing any tenants before the sale is final.
It’s not generally required that you notify tenants that the building is going on the market. However, if you need entry to a unit to show a potential buyer, follow the standard notification period you use before entering a tenant’s unit.
Remember that happy tenants are a big selling point. Try to avoid numerous interruptions and make an attempt to accommodate the tenant’s schedule.
Most questions you receive will be regarding security deposits. Let tenants know if you and the buyer decide to:

refund all security deposits

transfer existing security deposits

When the sale is completed, send a notification to each tenant with the effective date that you will no longer own the building or accept rent payments. Ideally, this would arrive at the same time as a letter from the new owner, directing tenants where and to whom to send rent payments.
Provincial laws vary, but in general, once the sale is completed, the new owner is obligated to honor all existing leases. Whether they do or not—or whether tenants wish to continue with the lease or not—is no longer your problem.

Tenant Move Out Day Tips for Landlords

2011-01-16T12:05:00.000-04:00

When a tenant informs you that they will not be renewing their lease, provide them with move-out instructions. Written notice of your expectations is always a good idea when it comes to dealing with tenants.
What Should Move Out Instructions Cover?

The first item should be that a written move-out notice is required from the tenant. This helps clear up any possibility of confusion over dates and terms of the move-out.
Ask the tenant to provide an address to which you can return the security deposit, after deducting legitimate expenses for repairs or cleaning.
Inform the tenant you will be contacting them to conduct the move-out inspection. Let them know this is not optional: you will need the tenant to be present to initial and sign the inspection list.
Let the tenants know that according to the terms of the lease, the unit must be returned to the same condition it was in when they moved it. If they’ve painted a different color on the walls, they need to repaint it. If they don’t clean the unit thoroughly, you can hire cleaners and deduct the fee from the tenant’s security deposit. Any damage repair costs will also be deducted from the deposit.
If there is a fireplace in the unit, let tenants know they must have it professionally cleaned before moving.
Tenants might not know that the last day of the lease is the day they must be out. Inform them that any extra days will be charged a prorated amount of their monthly rent. To calculate daily rent, divide the total rent by 30.
Ask the tenant to set the thermostat at whatever temperature you prefer.
Utilities need to be transferred to you or turned off, according to what works for you. If there is another tenant lined up, then obviously you don’t need to turn them off. Let the tenant know to inform the utility companies, including gas, electric, cable and water, of the last day they will be in the space. Warn them not to have the utilities transferred or turned off until the end of the last day of their lease.
Let the tenant know where to leave any extra trash and where to drop off the keys.

One thing landlords can count on is that eventually, all of their tenants will move out. Whether it’s a good thing or bad, it can be a smooth process when you’re organized and approach each move-out the same way.

Advantages of Short-term Leases

2011-01-08T09:20:00.000-04:00

Short-term leases are beginning to become more popular in some areas . One trend is that homeowners who sell a home are less willing to buy right away, so while they wait and see what the market will bring, they rent for a while. Another factor is the job market, many people are taking jobs that require short term stints in different areas, so often a month-to month or six-month lease is a great option.
When renters are knocking on your door, looking for short-term leases, it many times makes sense to adjust your lease terms from one-year to six-month or month-to-month.
Month-to-month leases mean that at the end of any month, the tenant can simply move—or the landlord can end the lease. Most leases require notice on each side, but if neither side ends the lease, it continues for another month.

Advantages of Short-term Leases:

Your rental units could be occupied instead of empty
Improved cash flow
Possibility of higher rent negotiation
Ability to raise rent more often
Easier transition between tenants (less clean-up and maintenance)
Larger pool of possible tenants
You can get rid of a bad tenant more quickly

Remember, no matter what the length of the lease, proper tenant screening is the most important step you can take prior to signing it. Conduct a thorough tenant credit check and background check and you’ll feel better about offering a lease to short-term tenants.

Requiring Written Notice of Tenant’s Move-Out Plans

2010-12-29T10:25:00.000-04:00

Many tenants notify landlords of their plans to move at the end of a lease by mentioning it in passing. Others assume that, if they haven’t signed a new lease, the landlord knows they are moving and they don’t need to notify.
It’s a good idea to require tenants to provide a written notice of their intent to move. Many provinces require it, and if you use a well-written lease, it probably does as well.
The Advantages of Written Notices
Requiring tenants to put their intentions in writing is a good idea for several reasons:

It eliminates the mix-up that can occur with verbal notifications
It keeps the landlord/tenant relationship more businesslike
It may be provincial law
Written notices leave nothing to the imagination
You won’t forget the tenant’s move-out date, which can lead to problems
You’ll have time to prepare the security deposit return or deductions

What to Include on a Tenant’s Notice of Intent to Vacate Unit
Use a simple form, either one you obtain online or one you create yourself. You can provide it to tenants at lease signing, although it’s not likely they’ll keep it around long enough to turn it in at the end of the lease. Many landlords provide a form to tenants 60 or 90 days before the lease is up, with instructions to return it within 30 days of the end of the lease, if they plan to move.
The form should include:

The date the form was completed;
The name of the landlord or property management company;
The address of the rental unit;
Legal language including: The undersigned Tenant (name) hereby gives written notice of intent to vacate the rental unit at (address) on (date);
A statement that the tenant understands they are responsible for rent until the end of the current lease or the day they vacate the unit, whichever is later;
A statement that in accordance with the lease, the landlord is allowed reasonable access with advance notice to show the rental unit to prospective renters or contractors;
A line for the tenant to sign and date the form.

As you can see, a thorough tenant move-out form covers all the bases: the date of the move-out, the day the rent is to be paid through, and permission to show the unit or allow access to workers.
Landlords who want even more information can include a short survey on the form, asking why the tenant is moving and if there is anything that could have been done to keep him or her as a tenant. This type of feedback is extremely valuable!

Why Do Tenant Credit Checks

2010-12-18T14:15:00.000-04:00

Why Pre-Screen Tenant Applicants?
There are several advantages to screening tenants prior to signing a lease. One is that you can avoid discrimination issues by applying the same approval standards to every lease applicant—including a standard background and credit check. Another advantage is the reduction of risk. Why take a chance on a tenant who could have a history of evictions or an income that cannot support the rent? Mitigate risk by conducting a thorough credit check on every tenant.

What Will I Learn From a Tenant Credit Check?
You can learn at a glance if your prospective tenant pays credit card bills and loans promptly, as well as if there are any outstanding judgments against him or her. Previous bankruptcies are also typically reported. or bankruptcy filings. You can determine the minimum level of approval for your applicants, based on a good record of responsible finances and living within their means.
Be sure to compare the report’s list of an applicant’s previous addresses with those provided on the lease application. Are there inconsistencies? If so, the tenant is hiding something, or there is a legitimate explanation. Either way, you need to know before you sign a lease.
The information you gather from a tenant credit report must be held in strictest confidence, and never shared with third parties. Your applicant may have a right to the report—check your provincial guidelines to be sure you are compliant. If you reject an applicant for credit reasons, you must advise them in writing. Your best and easiest way to screen tenants is through a reputable, professional tenant screening service.

Consistency Counts When Screening Tenants
It’s important to be consistent when it comes to pre-screening tenants.

Screen ALL lease applicants, no matter what!.
Use the same screening procedures for each prospective tenant. Exceptions could be interpreted as favoritism toward or discrimination against a certain group.
Establish a clear policy of background checks on all applicants to protect your rental property business.

Remember! Use a screening service with national coverage and access to all three credit bureaus.

A Move-Out Checklist for Tenants

2010-12-11T10:02:00.000-04:00

Have a tenant moving out? Wouldn’t you love for him or her to leave your rental unit in a state that will make you smile? Why not just tell them exactly what you want? Sometimes tenants need to know your expectations. While there are no guarantees they will fulfill them, providing them with a tenant move-out checklist can make that more of a possibility.
Since most tenants want their entire security deposit returned, following a list can help them achieve that goal. A little education and open communication can go a long way toward a win-win situation for both landlord and tenant. Here are some items you might want to include on your list.
Move-Out Check List for Tenants

All trash removed from premises, including patio and storage unit
Closets emptied and vacuumed or mopped
Bathroom clean, including tub, sink, toilet, vanity drawers, shelves, floor and baseboards
Kitchen clean, including inside of cabinets and drawers, counters, sink, baseboards and floor
Refrigerator empty and clean, including shelves, drawers and door (do not turn off)
Freezer empty and clean
Dishwasher empty and clean
Stove top and oven clean, including range hood
Broiler pan clean
Nails removed from walls
Locks on windows and doors in working order
All window blinds clean, in place and in working order
Carpets vacuumed
Linoleum and tile floors cleaned and mopped
All ceiling fixtures, with light bulbs
Windows clean
Ceiling fans clean
No carpet stains
No scuffs on walls and floors

Starting with a list will help ensure that tenants are meeting your expectations—and help them get their security deposit back.

What Tenants Need to Know About the House Rules

2010-12-06T00:05:00.000-04:00

Many landlords believe that a thorough, well-written lease should contain all the rules and regulations a tenant needs to follow. And that’s partly true. But there’s a difference between the terms of a lease and the everyday policies you want your tenants to follow.
As a rule, leases are where the legalese lives: the legal description of the property, legal names of the parties involved, legal termininology, and the landlord’s legal recourse when terms are not followed. The “house rules” are generally more relaxed in language, are more flexible (i.e., they can change at any time with notice to all residents) and are simply intended to help everyone get along better and live in harmony. They are generally not legally-enforceable documents.
A signature on your list of policies or house rules is just as important as the signature on the lease. You want to be clear that your tenant understands the rules and agrees to abide by them. Review them together at the time of the lease signing, and be sure to ask if any item needs clarification.

Suggested Items to Include in Your Rental Property Rules

Noise: Emphasize that consideration for other tenants is required, and that while your rental unit is well-constructed, it is not to be considered sound proof. Noises that disrupt others’ quiet enjoyment are not allowed. Include quiet hours, if desired.
Window Treatments: Here you’ll include whether or not blinds or drapes are included with the rental unit and what care they require. If no treatments are provided, you may want to specify what color and type of coverings are allowed—and what are not allowed (like aluminum foil or flags).
Keys: Any key replacement fee should be included here, as well as emergency lock-out fees if a tenant forgets his or her keys after hours.
Inclement Weather Procedures: Inform tenants of your requests during times of high winds, low temperatures, or high rain, as well as thermostat settings when the rental unit is occupied for specified lengths of time.
Trash and Recycling: Tenants need to know what can be recycled and where it goes, along with non-recyclable trash.
Parking: Where tenants are allowed to park, how many vehicles each unit is allowed to keep onsite, where not to park, and whether or not non-running vehicles are allowed are some of the rules you’ll want to spell out here.
Common Areas: Are tenants allowed to leave property in common areas like hallways, sidewalks and patios? Who is responsible for clearing snow and ice from walkways? Spell these things out here.
Storage: Indicate where tenant storage is located, how they can access it, and any limitations (flammables, vehicles, dangerous chemicals, etc).
Guests: Include things like where guests may park their vehicles and tenants’ responsibilities for their guests.
Bicycle Parking: As bicycle commuting becomes more popular, many tenants will want to know where they can park their bikes. If you don’t want them chained to fences or balcony railings, specify where bike parking is allowed. Better yet, create special areas for bikes that are convenient and secure for cycling tenants.

Presenting a friendly list of house rules lets all tenants know what is expected of them and their fellow tenants. After all, who (besides fraternity kids, perhaps) wants to live in a place where there are no rules?

Reminders to Help With Eviction

2010-11-28T10:55:00.000-04:00

Experienced landlords know that most landlords will experience the eviction process sooner or later.
If you’re a landlord who’s been fortunate to avoid evicting tenants so far, but are expecting that lucky streak to end soon, you may be experiencing some anxiety about the process. After all, times are tough and tenants everywhere are having a more difficult time with a job market that doesn’t seem like it will ever improve.
Here are things to remember when you face evicting tenants—an unpleasant task no matter how long you’ve been a landlord.

Are You Up to Evicting a Tenant? If you’re having trouble evicting a tenant who has failed to live up to the terms of his or her lease, consider that being a landlord may not be your cup of tea. Owning rental property can be a tough business; it takes a tough person to be successful.

Did you Buy an Investment Property or a Non-Profit Organization? Most landlords invest in property to make a profit. The few who don’t want or need to make a profit must be running a charity. If you’re not one of those, remember that you cannot afford to lose money on tenants who damage your property, don’t pay rent on time, or won’t follow your rules.

Being Too Nice Hardly Ever Pays. When you allow tenants to call the shots, some of them take advantage. They sense weakness, which gives them permission to behave badly. If tenants don’t pay rent on time or otherwise live up to the lease they signed, deal with the situation quickly and move on. Not only will it send a clear message that you are not to be taken advantage of, it also allows you to bring in better tenants. And remember to properly pre-screen all tenants before signing a new lease.

Drama is For the Stage, Not Your Investment Portfolio. Investing in rental property is a business decision. Running your business is not meant to be entertainment. Drama has no place in a business relationship between a landlord and tenant. Nothing in it is worth losing sleep or money over. Keep your relationship with tenants professional and do not allow your feelings to override your business decisions.

If Eviction is Necessary, It’s Not Because of Anything You’ve Done. Remember, you’re not at fault. Theoretically, both parties agreed to the terms of the lease. If you’ve held up your end of the agreement, and your tenant has not, you are usually well within your rights to move toward eviction. That’s why the law allows for eviction.

Of course, if you’ve never been through the eviction process or need legal counsel on how to deal with a problem tenant, it’s best to consult your attorney. Eviction jitters are easy enough to get past—and moving on is good for you and for your business!
Disclaimer:
The contents of this article are intended for general information purposes only, and should not be relied upon as a substitute for obtaining legal advice applicable to your situation

Reasons Landlords Should Verify Tenant Employment

2010-11-17T12:15:00.000-04:00

When renting any apartment to any tenant it is important to have strict procedures in place as a landlord that should not be broken. One such procedure is verifying tenant employment.

An incomplete tenant background check may not provide information on a lease applicant’s employment and income.
Verifying the employer listed by a lease applicant will indicate his or her honesty—or lack of it. If you call the number provided and the telephone is not answered professionally (or at all) you might have reason to suspect the potential tenant is not being truthful. Certainly, exceptions apply—especially for small businesses.
Long-term employment is an indicator of stability. However, recent economic difficulties have put many talented and dedicated employees out of work. Landlords may need to be flexible on their standards until the economy recovers. Requiring all tenants to have held their jobs for two years, for example, could mean a record number of vacant rental units for you.
It can help you determine whether a potential tenant’s income source is lawful or illegal. Sure, it’s nice to have tenants who have plenty of cash to pay their rent. But if they’re not legally employed or cannot provide proof of income, like pay stubs, you could be asking for big trouble.
Verifying employment can give you peace of mind. Renting to qualified tenants with jobs is the number one concern of most landlords. Confirming your lease applicants’ employment can keep your cash flow healthy and reduce turnover in your rental properties.

The best time to thoroughly check out a tenant’s employment situation is before the lease is signed. Following this tenant screening procedure on every applicant will ensure that you are not discriminating against any one and that you will be leasing to only qualified tenants.

Consider a Rental Open House to Rent your Properties

2010-11-12T14:07:00.001-04:00

Realtors know that holding an open house is a great way to get lots of exposure for a property. They also use open houses to find potential new clients. But there are plenty of success stories of homes selling because of a well-run open house.
So why don’t more landlords adopt this idea? It’s certainly worth considering if you have a rental vacancy.
There are pros and cons to hosting a rental open house:

You save time by showing the rental to multiple people at once;
But you might not be able to spend quality time with each potential tenant;
An open house can cause a sense of urgency, when a potential tenant sees others interested in the property;
Spending too much time with Potential Tenant A could mean missing out on selling the rental to Potential Tenant B;
You could waste time with nothing but “tire-kickers.”

Qualify Potential Tenants Prior to Holding the Open House.

Pre-screen over the phone. Ask callers responding to your for rent ad where they presently live and work. Tell them the rent, the security deposit, and any other important lease-qualifying information. Let them know you will be conducting a thorough tenant screening on all applicants. Then, if they’re still interested, let them know you’ll be holding an open house and they’re welcome to view and apply to lease the property then.
Repeat this process for the next several interested callers. You may have a dozen people show up for your open house; you may have two. No matter—you’ll still save time showing it to multiple people at once.
Getting Ready for a Rental Open House
Make sure the property is at its best. Thoroughly clean the walls, floors and ceilings. Pay close attention to the bathrooms and kitchen. Make sure the tile gleams and the floors are spotless. Put a plant on the counter.
Inspect the property from the outside. Pick up trash. Trim low-hanging tree limbs. Cut the grass, and plant some flowers outside to add to the curb appeal.
If you have some extra furniture, place a chair and table in the living room and a bed in the bedroom, so potential tenants can envision their belongings in the space. Wash the windows and turn on all the lights.
Print up flyers and leave them where visitors can find them. Include photos and a list of the basic information as well as amenities offered with the property. Don’t forget to tell potential tenants what’s nearby that they might enjoy: parks, coffee shops, grocery stores, or bike trails.
Allow open house visitors to wander through the space. Don’t crowd them, but let them know you’ll be close by if they have any questions.
Be sure you have lease applications on hand—and don’t let any qualified potential tenants leave without filling one out! If anyone is super interested, offer to collect a security deposit to hold the property, and inform them it will be refunded if they do not pass your tenant screening.
People might be more receptive to viewing your property through a friendly open house than in a one-on-one showing, so why not consider hosting one?

Getting Your Rental Property Ready for Winter

2010-11-06T08:35:00.001-03:00

As the days get colder, most of us realize just how close we are to winter and the challenges that come with owning rental property during the winter months. Avoiding the broken pipes, leaking roofs and tenant injuries that snow and ice can cause is not rocket science. A little preventive maintenance can go far to keep your bank account a little healthier—and you a lot less stressed out!
Tips to Prepare Rental Property for Winter

Have the heating system in your rental property checked out for safety, as well as efficiency. Of course, this is the busiest time for professional heating and air services. Landlords should consider signing up with your preferred provider for automatic annual or semi-annual maintenance checkups. It’s a great way to keep the manufacturer’s warranty in place—and you might even receive priority status if an emergency occurs. You don’t want to find out your rental property heating system is inoperable during the first cold snap of the season.
Change the air filters. You don’t need a professional for this one. Changing the filters in your rental property’s heating system should be done regularly to reduce indoor pollutants and keep the system functioning properly. Depending on the system, you may need to change the filters every month. If the filters are very dirty, you’ll know you waited too long. Dirty filters cut air flow and increase utility bills.
Test smoke detectors. Press the button to see if the alarm goes off, but also use a match or other smoke-generating device to test each smoke detector. Older units may not detect smoke, even if they test well. Don’t risk causing harm to your rental property—and especially to your tenants—with malfunctioning smoke detectors.
Change batteries in smoke and carbon monoxide detectors. You may see reminders to change these batteries when daylight savings time ends. That date is November 6—so next time you’re making routine visits to your rental properties, stock up on batteries and change them in every smoke and carbon monoxide detector in every unit.
Inspect for leaks, drafts, and rot. Check around windows and doors, under sinks and throughout each rental unit for spaces where cold air can get in. Seal and caulk any leaks or cracks. Stuff insulation in holes around pipes and around vents. Add foam sealers to switchplates. Look for rotting floorboards. Check the roof for loose or missing shingles and replace them if necessary.
Prevent broken water pipes. When pipes freeze, water flow can be blocked. When the water in the pipes freezes, the expansion can cause burst pipes—not something you want to deal with on a cold winter day. Outdoor pipes, pipes that run along exterior walls or through crawl spaces are at risk. Consider insulating pipes with foam rubber sleeves or wrapping pipes with fiberglass insulation.
Turn off outside faucets. Insulate them for extra protection.
Clean gutters on your rental property to prevent water spilling over and gathering around the foundation. This can be done after all the leaves have fallen. It’ a dangerous job, so take precautions to prevent falls.
Trim any broken or dead tree limbs to prevent them from falling during storms.
Instruct tenants on what to do in case of emergency. Provide them with at least two phone numbers: yours, a handyman’s and the heating/cooling contractor who takes care of your system.
Arrange for snow clearing services. For the safety of tenants and pedestrians, be sure to arrange for snow and ice removal before the first storm hits.

What is The #1 Trait Common Amongst ALL Successful Real Estate Investors? Philip McKernan Has The Answer

2010-10-30T12:24:00.000-03:00

What is The #1 Trait Common Amongst ALL Successful Real Estate Investors? Philip McKernan Has The Answer

How to Keep Tenants Long-term

2010-10-23T13:59:00.000-03:00

If you are reading this blog chances are you already are or planning on becoming a landlord, there are many ways to make this a much more pleasant experience. Many landlords do not like the process, do not really like their tenants, and generally have a hard time of it. This can be avoided.

Create a loyal tenant base

By utilizing incentives, you are creating a much more loyal tenant base, and thus creating a much better situation all around for them and you.
What kind of incentives do I mean? We must take note of the birth dates of the tenants and the tenant’s children. A simple birthday card, a bottle of wine, a turkey at Christmas or a gift certificate for a dinner goes a long way in the eyes of a tenant. It may cost $50, or even $100 dollars: but it is a small amount to pay to get a very, very appreciative and happy tenant. Not to mention it is a write-off for your business.

Take care of repairs quickly

The main reason why tenants move out is landlords do not do repairs on time, or sometimes ever. As we all know, repairs can be a huge part of being a landlord and can really affect our bottom line greatly. We give our tenants a repair request sheet so they have to outline what is the particular repair, when it happened and how long has it been happening, etc.
They sign it and date it, then send it to us. We then tell them “if the repair is not taken care of within 14 days, we will rebate you your daily rent after the 14 days, until the repairs are complete.”

Treat your tenants like clients

This incentive gives the tenant the assurance that the repair will be done and done on time. If it isn’t then they will be getting money back. This builds confidence as a win-win situation, and builds a bond between you and your tenant.
Lastly, another incentive we like to give: if there has been no repairs within a year, (meaning if the tenants has done their own little fixes), then we will give the tenant $100. This is usually in the form of a gift card.
You may be thinking “what if the tenant doesn’t tell you about a repair?”
You must inspect the property before giving the gift card to them.
So create a better situation between you and your tenants by creating incentives, and you will have a long-term tenant.

3 Easy Steps To Train Your Tenants

2010-10-19T22:15:00.000-03:00

Landlords who have been at the business for a while know that their relationships with tenants can be smooth and easy, or rough and rocky, depending on a number of factors.
Rental property investing and management is a tough business, and being a pushover is quick path to disaster. Many landlords say it’s a fact that tenants can be “trained” to follow the rules and requirements of their leases. This is not to say that tenants are like puppies, or aren’t people who deserve respect—of course they do! It’s more of way of encouraging good behavior and enforcing consequences for breaking the terms of a lease. When landlords fail at this, they are in for a rough and rocky tenant relationship.

How to Train Tenants in 3 Easy Steps

Communicate clearly—and often. It’s not enough to sign a lease with a new tenant and then go away. Need a question answered? Ask it. Is the rent late? Call, text or email the tenant. Concerned about the number of cars they’re parking on your property? Knock on the door and talk to them. Ignoring a problem will not make it go away. Establishing communication is the first step to developing a good relationship with your tenants.
Clarify expectations. Most tenants are not mind readers. If you are not clear on your expectations, don’t blame your tenants for not fulfilling them. If rent is due on the 1st and considered late on the 5th, spell out what that means on the lease. Will the eviction notice go up on the 5th? Or will you just charge a late fee? If so, how much? And by “due on the first,” do you mean in your hand? In your bank account? Or postmarked on the first? If a unit is “non-smoking,” does that mean no smoking inside? What about outside on the deck? Or in the hallway or lobby? If residents are expected to smoke in certain areas only, then clarify it on a layout of the property.
Be firm. For many landlords, this is a problem. For many others, being firm comes naturally. Remember, this is not just to keep tenants following your rules. It’s a matter of fairness. For example, if you allow the single mothers, but not male tenants, to move in without a security deposit, you risk a discrimination charge based on gender. If you ignore one tenant’s yappy dog, but don’t allow her neighbor to have a cat, you’re going to have problems. Know your rules, apply them to every tenant equally, and don’t back down when a tenant asks for leniency.

Training your tenants simply means that you require certain behavior from all who lease your property. When you allow tenants to bend or break your rules and requirements, they are training you on how it’s going to be. And that’s no way to run a rental property business!

Landlord Mistakes to Avoid

2010-10-13T20:35:00.000-03:00

As a landlord there are many mistakes you can make that ultimately can cost you money and negatively impact your real estate investing business. Below find several you will want to avoid:

Not approaching your rental business like a business. To be successful, all businesses need to have and follow a plan. They need to be capitalized. And they need to be run professionally. This takes time, energy and money. Some landlords are not willing to invest all of these resources into their businesses. Some don’t have a plan. Some don’t have enough capital to keep their businesses going when rent income falls below projections due to unforeseen circumstances.Being unable or unwilling to do all of these things will almost guarantee a rental property business that is not as successful as it should be.
Conducting less-than-professional relationships with tenants. Landlords vulnerable to becoming too personal with tenants (see previous blog post) are often sucked into giving extensions on paying rent, reducing security deposit requirements or otherwise allowing tenants to ignore the established rules. Tenants who suffer no consequences will usually continue to bend or break the rules. It may seem harsh, but just as you can’t walk out of store without paying for a litre of milk, a tenant should not be allowed to live for free in your rental property—even for a day.
Treating tenants differently. Letting certain tenants slide on the rent, steering certain tenants toward certain units, and otherwise showing deferential treatment to an individual or group of tenants can land you in trouble quickly. Landlords are constantly taken to court on charges of discrimination for actions like these. You don’t want to be one of them.
Failing to document. Keeping excellent records is a habit that can save your business. It’s vital to make copies of everything from move-in/move-out inspections, applications, and lease documents. But consider making notes of phone and text messages, emails and snail mail communications, too. Even a simple spreadsheet can prove to a judge that you treat all tenants equally and follow the law.
Not knowing when to call in the professionals. A licensed electrician and plumber, landscaper, lawyer, accountant, and a property management company should be on every landlord’s list of resources. You may not need all of them all of the time, but you will likely need them at some point in running a rental property business. Trying to do it all has been the downfall of many real estate investors. Knowing when help is needed in managing rentals can save your sanity—and maybe even some of your profit!

Verify Employment and Income When Tenant Screening

2010-10-08T14:27:00.004-03:00

Thorough tenant screening is one of the best investments a landlord or property manager can ever make. We feel that it can help avoid more than 90% of the problems landlords and property managers have with their tenants. When prescreening tenants, don’t skip over two essential pieces of background checks: verifying tenant income and employment.

Three Reasons to Verify Every Tenant’s Employment and Income :

1. Not all tenants tell the truth. Tenants reflect the whole of our society, and your potential tenants are a mix of honest, dishonest, professional liars and ex-cons. When they tell you where they work and how much money they earn, they might be telling the truth—or they might not. Verifying employment and income is the only way to know for sure. Landlord Tip: Be wary if the tenant insists you talk to a certain person at their place of employment—they could be directing you to a friend who is posing as the employer.

2. Having money doesn’t equal having a job. A nice car, expensive clothes and armfuls of jewelry can all be purchased on credit. A landlord we know was conned by a nicely-dressed applicant and signed a lease with her. Later, he found out that she had been laid off six months earlier from the employer she listed on the lease application. Making a quick telephone call to the employer would have avoided this situation. Landlord Tip: Look up employer telephone numbers yourself, either online or in the phone book. Some tenants will provide false information.

3. Keep your tenants safe from harm and your business safe from risk. Verifying income and employment helps you avoid renting to tenants involved in criminal activities. It’s easy to be impressed by a tenant with cash in hand to pay your security deposit and rent. But failure to verify a tenant’s source of income—with paycheck stubs, income tax returns (in the case of self-employed applicants) and phone calls to his or her employer—is almost asking for trouble to move into your rental property. Landlords and property managers who fail to screen properly have been held liable for harm suffered by neighbors or other tenants. Landlord Tip: Be prepared to submit a written request for information. Many employers will not provide salary info over the telephone. Don’t be in such a hurry that you can’t invest the time necessary to obtain complete information.

Prescreen Tenants for Complete Peace of Mind The best way to be sure you’re renting to a qualified tenant is to prescreen all rental applicants — reduce your risk!

Problem Tenant in Your Future? Warning Signs to Look Out For

2010-10-05T19:56:00.000-03:00

Sizing up potential tenants is a tricky business. Legally, a landlord cannot discriminate against potential tenants based on gender, age, race, family status, religion or disability . Experienced landlords know that you can never judge a book by its cover. That flashy car ,expensive jewelry or that $1000 suit doesn’t guarantee a tenant that will pay the rent on time. Conversely, a beater car and sloppy appearance might not be ideal, but if they can pay the rent, should we care about their wrinkled shirt?

While keeping an open mind during the tenant application process is a good idea, you still want to start the screening process with your very first contact.
Here are some warning signs that a potential tenant could cause you problems:

Your potential tenant cannot pay the security deposit. If they want to pay in installments, or as soon as they get paid next week, or when they get their security deposit back on their current place, you will probably need to get used to hearing such excuses.
They are a little too “salesy.” Excitement over finding a great apartment is great—you want your tenants to like your property. But major flattery of you, your outfit, your hairdo or the property should be a red flag. So is selling him or herself too hard. You could have a con artist on your hands!
A potential tenant starts asking about trading services for rent. There are plenty of landlords who allow tenants to repair and maintain their building or cut the grass in exchange for rent(which we do not recommend). But it can lead to problems. If you’re not yet at the lease stage and you’re hearing offers of bartering for rent, consider yourself lucky and move on.
The lease application is not filled out completely. Conveniently forgetting the phone numbers of a current landlord, boss, or personal references is a bad sign. Leaving blanks indicates that your potential tenant might not want you to have that information.

Follow up your gut-check on every tenant with a thorough background and credit screening. If all comes back clean, check with references and employers to give yourself a complete picture of your tenant—before the lease is signed!

Exit Interview Your Ex-Tenants

2010-10-03T13:09:00.000-03:00

Many human resources managers are fans of the exit interview, where a soon-to-be ex-employee is asked a series of questions about his or her time with the company. They generally use the employee’s feedback to monitor procedures and gain insight into problem areas. Presumably, they will take the information gathered and make improvements.
Some employees use the exit interview as an excuse to unload every frustration about the company, the boss and the co-workers they were doomed to work beside. But most HR folks know that they can be a source of good, honest feedback—after all, with no chance of repercussion, an employee who’s already resigned can be completely honest.
Haven’t you often wondered why your good tenants leave your rental property? Perhaps you routinely ask, but have you considered expanding on the simple “why are you moving?” into your own version of the exit interview? It’s good to know what went wrong and why a good tenant is moving. They are your perfect focus group—they are your target market, passed your screening process and apparently liked your rental property enough to live there. But something made them move. As a landlord, it’s your job to find out why they’re leaving—and how to prevent it next time.

Here are some questions you can ask tenants who are moving out:

Why are you moving? (Obvious, but necessary.)
Where are you going? This question is not intended to elicit an address—remember, you’re not interested in stalking the tenant! You want to know generally where they’re going—across town? Leaving the province?
What do you think about the rent for this unit? Is it fair? Too high? Too low? These answers can tell you what the market will actually bear.
How did you find your new place? This can help you determine where to advertise your new vacancy!
How would you describe your experience renting here? This is an open-ended question that can result in all types of answers.

You may hear an earful about the other tenants. You may hear some unpleasant things about yourself as a landlord/property manager. Most likely, it will be a mix of things you can do something about and things you can’t. The goal is to get good feedback on how to improve your rental property to keep good tenants from moving away.

Renovation Payback

2010-10-01T15:49:00.000-03:00

The Appraisal Institute of Canada recently published the results of a survey they conducted with Canada's professional fee appraisers. The top three home renovations which provide the highest payback potential for property owners are:

Bathroom Renovation
Kitchen Renovation
Painting-Interior/Exterior

This information is valuable for real estate investors to measure what effect property improvement projects may have on the resale/refinance values of their properties.Investors should be aware that their property values and return on renovation investments are dependant on many factors such as the location of the property, i.e.province, rural/urban, the neighborhood etc.

Whether you are planning to sell or refinance, you'd probably rather have any improvements you make add as much value as possible. Here are some projects for which the Appraisal Institute of Canada's members projected average payback value ranges.

Top four greatest payback potential:

Bathroom Renovation ( 75-100%)
Kitchen Renovation ( 75-100%)
Interior Painting ( 50-100%)
Exterior Painting ( 50-100%)

More average pay back potentials:

Roof Shingle replacement ( 50-80%)
Furnace/heating system (50-80%)
Flooring (50-75%)
Constructing a garage ( 50-75%)
Window/door replacement ( 50-75%)
Building a deck ( 50-75%)

Is it Smart to be Friends with Your Tenants?

2010-09-29T10:00:00.003-03:00

Most real estate investors say that you should never become friends with your tenants. This could lead to problems in the future. Your friends could potentially take advantage of the situation and do things like being late on rent. They do this because they know you would never do anything to them. It’s totally fine to be friendly with your tenants of course, but just be sure and be firm with what you told them up front. You cannot let them slide on things like being a few days late on rent because it will eventually become a pattern which could lead to headaches down the road.

You have to remember that you aren’t letting them live in your property for free, you have bills to pay yourself. Don’t let them take advantage of your generosity and eventually leave you in a financial burden.

So what can you do to eliminate problems with your tenants?
Some property investors do prefer to manage their own properties and they will often pick up the rent in person. This way they can see what kind of condition the property is in. They can see if there are any things that need to be fixed and they can bring up any concerns that they have with how the property is being treated.

Other investors choose to set up a post office box to receive their rent. This way your tenants do not know where you live and can’t be a nuisance at your home. This is also wise if you live a good distance away from where your investment property is. Even smarter is require post dated cheques from your tenants up front for a year.Some tenants see long distance as an opportunity to neglect the property more. They know the landlord will not be checking up on them as much due to the distance.If you are a distance away we recommend regularly inspecting the property.
Block the caller ID. This happens all the time. The tenants are late on the payments and low and behold, they won’t answer their phone when you call. Blocking the phone number will help with this. I even know investors who purchase calling cards so the tenants will have no idea who is calling and answer the phone.This cannot be stressed enough….You don’t want your tenants to know where you live, don’t tell them. Real estate investing is a business for you so treat it like one.

Tips For Preparing to Invest in Real Estate

2010-09-26T12:32:00.000-03:00

There are some steps that can be taken before you make a real estate investment that can help you minimize the negative situations that could possible arise. It is impossible to eliminate all negative situations, sometimes things will happen that you just cannot see coming, no matter how well you prepare. All of these tips will be helpful whether you are wanting to rent property or you are wanting to make money flipping houses.

One of the easiest things you can do before you make your purchase is to check out the neighborhood. See how many apartment communities there are and see what kind of rates they have. Check and see how many vacancies there are. If you see several complexes that have vacancies, or if you see several “for rent” signs in yards, it may be a bad area for new rental properties. You may want to find another area to make your purchase and then check on that area at a later date.

Check around the community to see if there is any new construction other than residential homes. New shopping centers or recreation areas are more good signs that the neighborhood you are looking at might be a good place to invest in some property. Also, run down properties are bad signs. If you see several properties that have been neglected, that is a black eye on the neighborhood. You don’t want to see any run down property near a property that you might be interested in investing in. Odds are, if it is a nice neighborhood, that you will not see that. Most really nice, desirable neighborhoods are kept well. Everyone wants to live there and investors realize this, so they spend time and money on making their investments very attractive which allows for a premium rental rate. Also, the premium rental rate generally will attract a tenant that will be more likely to take care of the property.

The nice neighborhoods will also allow for easier rental increases from time to time. The demand will be higher in the nicer neighborhoods, therefore, the rents will increase at a higher rate.
If you are an investor that wishes to buy properties to rent, it might be a good idea to find a quality property management company. Some investors like to use property managers, some do not. Notice I said “quality” property managers. Just because you hire a property management company does not mean they will always work well for you. It is just like any other business, some are good and some are bad. It is necessary to do research and find out if you have a property management company in your area that would benefit you.
There have it, a few tips on how to make sure you are buying a real estate investment in a good area. It sounds difficult but it is not. All it takes is a little time and effort.

Real estate investors need all the help they can get. If you want more information, please visit our website.

10 Property Photo Tips

2010-09-25T13:38:00.000-03:00

One of the most important elements of your apartment marketing strategy is your property photos. Even if you aren't a professional photographer, here are ten tips for taking great pictures of your property, while accentuating the best features and amenities it offers and minimizing the less desirable features.

1.) Turn off your camera's date/time stamp. This feature is really only useful when recording dates and times when it's appropriate, such as in children's lives and event. Date and timestamps on property images convey unprofessionalism and devalues your property's image.

2.) Exterior photos should be inviting and welcoming. Use your property's assets like trees, benches, and water features to welcome your prospects by including them in the frame when you shoot buildings, monuments, and clubhouses. At the pool, showcase the lounge areas and spa. Try taking your exterior shots at dawn or dusk when the lighting is not directly overhead.

3.) Interior rooms should be well lit. Turn on lights if you need to, and use the camera's flash to help fill light in darker rooms. When using the flash, remember that it is simply for "filling" in, and you'll need to open curtains/shades/blinds or even doors to allow more light to come in. If you rely only on the flash, whatever is right in front of the camera will be bright, but the background will be very dark.

4.) Take pictures of rooms, not furniture. The furniture should complement the room, so arrange the shot so that you are focusing on the entire room, not just a couch. Prospects want to see room sizes and things like sliding doors, how the fireplace is situated in the room, how their dining room set might be placed, etc.

5.) Don't over-stage your rooms. Everyone knows that the kitchen is where you cook food. Setting out a spatula or food boxes or coffee mugs intentionally is distracting and cheapens your images. Keep your staging simple. A few modern and good looking food storage containers on the kitchen counter, a few nice vases with flowers in them on the dining room table, or piece of art on the wall are all great ways to showcase your apartment without overwhelming it. There is no need to set a table with expensive wares or fill the room with plants. Prospects need to see themselves there, and how their furniture and style will fit.

6.) Prospects will assume there is a bathroom in the apartment, there is no need to take pictures of it – unless it has been recently remodeled and is absolutely sparkling clean and has a few nice special features or staged touches. NEVER take a picture of a toilet with the lid up.

7.) Clubhouse and Fitness Center pictures should be shot with the same care and finesse as interior apartment pictures – well lit, don't over-stage. Fitness Center images should be either free of people, or any persons appearing should be dressed appropriately.

8.) Don't forget your property's monument! This is one of the most important elements you'll have in your apartment's album. Try to frame the monument with trees in the background, and any accompanying landscaping features.

9.) Unless you have covered parking or garages, avoid parking lot pictures.

10.) Focus! Review your pictures right after you take them, zooming in to make sure your images are clear and in focus. Don't make the mistake of shooting away only to discover later on that your images are blurry or unusable. Don't settle for inferior images…good photos are the most important part of your apartment marketing strategy

Canadian Housing Market Experiencing a Decline in Housing Starts

2010-09-24T10:28:00.000-03:00

According to a monthly report released by Canada Mortgage and Housing, the Canadian housing market is likely to see some problems over the months that lie ahead.

One of the primary areas of concerns within the Canadian housing market is that of housing starts, which slowed for the fourth month in a row in August. In fact, starts fell by 3 percent in August, with the seasonally adjusted rate in August being 183,300 compared to 188,900 in July. Furthermore, Statistics Canada is reporting that Canada’s new housing price index fell to 0.1 percent in July, which represents the first decline over the past 13 months. This decline is, however, in line with the 185,000 that had been forecasted by analysts. Additionally, considering that there has been a decline in the value of building permits over the last four months, analysts were aware this drop would also be coming soon.
“The report shows that despite a litany of headwinds, there is still a fair degree of forward momentum in Canada’s housing market,” said David Tulk, who is the senior micro strategist at TD Securities. At the same time, he cautions that “markets should be prepared for a volatile couple of months ahead before the tone of the data improves.”

Both major areas of the Canadian housing market are feeling the pinch, with starts for single urban homes dropping by 3.6 percent to 65,000 units and urban multiple starts experiencing a drop of 3.7 percent to 97,800 units. Still, despite predictions for some rough months ahead, analysts are not concerned that the Canadian housing market is on a bubble at risk of bursting.

“The risk of a 1990s-style housing market correction are minimal,” wrote David Onyett-Jeffries, who is an RBC economist. “Much of this slowing represents a payback from earlier unsustainable strength.”
In other words, analysts believe the current decline is mostly the result of rate hikes implemented by the Bank of Canada as well as because homebuyers are working toward getting ahead of the harmonized sales tax that has been implemented in Ontario and B.C. As such, analysts predict the housing market will continue to soften throughout 2010 and possibly into 2011 as well.

“Over the next few quarters, we forecast housing starts to continue to ease, down near 170,000 units in the fourth quarter, and bottoming in the 150,000-160,000 range by mid-2011,” said Pascal Gauthier, who is the senior economist at TD Economics.

When looking at various regions throughout the country, the results are mixed. In the Atlantic region, housing starts were down by 29 percent, while starts were down by 19.9 percent in the Prairies and by 17.7 percent in Quebec. In British Columbia, on the other hand, starts were up by 26.4 percent while starts were up by 15.6 percent in Ontario.

Tenant Referral Programs.....Are They Worth It?

2010-09-22T23:06:00.000-03:00

Keeping vacancy rates as low as possible is any property manager’s first priority. With the economy in its current state, this is truer than ever before.Here we discuss another tool aimed at keeping vacancy rates low – a tenant referral program.

Tenant Referral Incentives – How Much is Enough?

By far the most common type of tenant referral program involves offering current tenants a monetary incentive to refer a new friend, family member, or colleague to their community – the current tenant is then paid for their referral when the referred tenant signs a lease. Although monetary incentives can come in all sizes, one of the most commonly used programs offers $100 ( we offer $200) per tenant successfully referred. It’s important to note that if you go the monetary route, incentives should match your tenant demographic – we recommend starting with an incentive that is about 20% of one month’s rent. That being said, some of the most successful referral programs actually occur in more high-end properties. A wealthy person in a high-end property may be more motivated to refer a friend for a $1000 incentive than a less well-off person would be for a $100 incentive.

Get Creative with Your Program

You know your property better than anybody else. In order to achieve the highest adoption of your tenant referral program, it’s very important to implement a program designed specifically for your unique property. This may require a little outside-the-box thinking: Are you going to offer incentives to only current tenants, or to the general public? Will incentives be paid out on a per tenant basis or a per unit filled basis? Perhaps even more interesting are the array of incentives that you can offer. In lieu of monetary compensation we’ve seen programs that offer incentives ranging from flat-screen televisions to parking spots. We even found a program that offers referred tenants 20% reduced rent for 90 days if they lose their job. Talk about recession proofing a lease!

A Word of Caution

Tenant referral programs can be a very slippery slope depending on the tenant make-up in your building. Always consider the history of the tenants who will be referring new tenants to you. If a current tenant is frequently late with their rent or has been the subject of several noise complaints, the tenant that they refer to you may act similarly. If you have some major problem tenants it may be best to not offer a tenant referral program – you might find yourself with more of the same.
While offering monetary incentives or luxuries like flat-screen televisions and parking spots may seem out of your reach in this economy, you need to think about the income to be gained rather than the money spent. Ultimately a newly signed lease will almost always bring in much more money than a few hundred dollars paid out in incentives.

Property Management Tip - Rent Collection And Arrears Management

2010-09-18T09:41:00.000-03:00

There are several important points with rent collection to help landlords to minimise the likelihood of arrears occurring, and the amount of arrears potentially incurred.

Always check that rental payments have been made on the due date so you can initiate collection of arrears immediately
Automatic rent payments deposited directly into your rent account are preferable, and it is best to set up payments to coincide with the date of your tenants personal income payments( where possible) to reduce the likelihood of missed payments
Have a zero tolerance policy to arrears and have direct and immediate contact with your tenant in the event of rent payments being missed
Arrange immediate repayment of arrears (preferably the next day) with your tenant and if repayment is not initiated as agreed start formal proceedings straight away – follow the residential tenancy rules for your province to a T.
File formalized documents via Residential Tenancy for your province and enforce all their rules and regulations.

By following the points above, you will collect rents on time more often. Rent collection is imperative to the success of a rental property. Learn from your mistakes and improve your rent collection policies as you go. By having a solid foundation to start with you will be better prepared if the time comes when a tenant stops paying.

How To Choose The Right Property Manager- Part 3

2010-09-18T09:24:00.000-03:00

Here is the continuation and conclusion of the list of questions you should be asking your potential property manager:

7. What sets you apart from your competition?
As always, you want the best person for the job and someone who might be able too offer something extra, such as maintenance services and discounts.

8. Can you provide references?
The individual and firm should provide written or verbal references if requested.

What to expect
The aim for any investor is to hire a property management company that will perform the following tasks:

Aggressive marketing
Professional tenant screening
Unit inspections, supervising tenant move-in/move-outs
Initiating leases, lease renewals, terminations or evictions
Collection of rents
Evection and recovery services
Tenant communications and resolving disputes
Maintenance and repair- 24 hour service

Real Estate Investing is a Business

2010-09-17T15:55:00.000-03:00

Real Estate investment is a business and must be treated like one. Whether residential or commercial, a new property investor is now ‘in business.’
Not everyone is able to do this, because it’s not in their nature to cope well with such things. Dealing with tenants requires many personal attributes such as communication skills, patience, a working knowledge of the law, sometimes a very firm style of personal approach, and so on.

Attention to detail is important.Recording everything is important: expenses for repairs and maintenance items, rent received and in what form (directly into a bank account, or cash/cheque), receipts for cash payments, and so on.
Computers with appropriate software and an Internet connection can make these tasks easier. Daily access to the bank account to check rent payments have been received is a modern technology boon for property investors.

Like many businesses, most everything can be done on a DIY (Do It Yourself) basis, perhaps more so when only one or two properties are involved. DIY covers everything from purchasing the property, obtaining a tenant, doing repairs and maintenance, to filing a tax return.
When or if the number of properties increase to the point where a DIY approach is not manageable, there’s plenty of people and companies around that will help with different aspects. A Property Manager is the most common, in such things.
However, there’s no need for an all-or-nothing arrangement. E.g. DIY everything except for using an accountant for the tax returns and a lawyer to prepare and execute the tenancy/lease agreements.
While there are Property Managers available to look after the routine aspects of tenants and property maintenance, utilising one does not free a property investor from all aspects of their business. Oversight of the property manager is important.
Liaising with a property manager does not mean interfering. It means being kept informed – both ways. A property investor should have a contract for service with the property manager and both should be sure of its contents and the obligations such a contract imposes on both parties. Being kept informed is of critical importance. There is probably nothing quite so startling as a letter from the bank saying that no mortgage payments have been received for the last five weeks. Then the property investor realises that no rent payments have been going into the account (to cover the mortgage payments) and hurried calls are made to the property manager to find out what’s going on. “No surprises” is a good motto.

All businesses have their rewards and trials and property investment is no different. If ‘being in business’ is a scary thought, proceed with caution and lots of good advice from experienced people

Protect Your Real Estate Investment - Find A Good Property Manager

2010-09-16T00:47:00.001-03:00

Most rental property owners, especially if they only live within a few hours drive, try to manage their own properties. This is usually shortly followed by headaches and all the time consuming tasks that come along with it. There is always a toilet running or the furnace has conked out. The funny thing is they always seem to pop up at the worst of times. Of course you can’t forget that faithful tenant that every week cries that they promise to have the rent next week. They all have something more important than paying the rent that has come up! A good property manager can be the solution to have your free time back. So when looking for one, here are a few good things to keep in mind. Do you want to find a property management company to manage an individual home, condo, apartment or an apartment building ? We know that we can help you. Having an efficiently managed property is important. Finding and choosing a management company for your rental property can seem difficult. The following tips will ensure you make the right decision.

Choosing a company that is knowledgeable of the local market is one of the first criteria that you should look for. Hiring a management company that knows the local market means that your property manager knows what renters are looking for. A good property management company will look at a property as if they were a renter to help increase rental rates, lower turnover rates, and decrease vacancy time. The company should go through the property and advise you of smart and cost-conscious recommendations that will increase overall return while at the same time improving the property so that it becomes more desirable. A good property management company should always make sure that your property stays competitive in the rental market.

Next, you will want to interview the property manager or property management company. You will want to know how they find tenants. Do they have a marketing program that goes beyond their website? Find out how do they look after properties and respond to tenant’s maintenance requests. How are do they track income and expenses? Find out if they are utilizing property management software? Do they offer owner statements reflecting the property’s income and expenses?

It is always a good idea to find out how long they have been in business and how long they have managed properties in your area. Someone who is new and just starting out may not have enough knowledge to handle situations that may arise. Are they a member of any Real Estate management organizations, possibly a certified property manager of have they received any specific training for property management. It also never hurts to ask if they have references; consider asking for at least three. Make sure you find a manager who has experience with your property type. Looking for a company with a system in place is the key. For instance it is always a good idea to request to see an example of their management report that they give to owners. If they hand you something typed up by hand on the spot and not a computer generated report, tis is not what you are looking for. That’s an automatic red flag. That shows that they do not have proper rental bookkeeping methods in place. Remember you’re not looking for someone without a system. You even want someone who has a back-up for when he or she is on vacation or out of the office for any other reason. Make sure you review a copy of their property management agreement or contract and understand what the fees are for property leasing and management. Make sure you know the terms of the agreement and when the agreement is renewable. You may want to even go as far as to check them out through the local Better Business Bureau, or the real estate commission for any complaints.

Next you will want to find a management company that uses a can do credit and criminal checks, income verification and nationwide screening for previous eviction filings. How will they collect the initial security deposit and where is the money kept? How often are payments made to owners and what is their policy for collecting the rents? What options are available for your incoming payment, do they offer direct deposit?
Will they handle arranging any necessary repairs and do they have qualified people that they use if you don’t have a personal preference or requirement for your property? Can paying vendors be handled out of incoming rent payments? Does the property management company set up a property reserve for minimal/insignificant repairs? make sure all repairs over a certain dollar amount you are notified and approve of it first. This is usually around $200 to $300.

When the properties are furnished are there periodic inspections of inventory? Will they contact you immediately upon tenants giving a notice to vacate property? Do they issue timely notices to tenants that are delinquent with rent or violating the lease agreement?

Ultimately, a good property manager is not always the one that charges the lowest fees. The ability to manage the property according to your requirements will differ and so it’s necessary to carry out a screening process.

Canadian Foreclosures- Reasons and Tips

2010-09-16T00:17:00.001-03:00

Reason for Foreclosures is simple. Home owners are not able to make mortgage payments. The reasons could be various- Job loss, divorce, ill health – in short, a change in financial situation. In some situations people have refinanced their homes by pulling out available cash for increased mortgage payments from their equity and are unable to make those payments for various reasons.
Foreclosed homes in Canada are sold in two ways:

Courthouse Auction sale: Check with the Courthouse assistant to verify available sales and dates. If the bids do not cover the mortgage balance, usually the bank or any other mortgage lender will buy out the property. But one cannot buy such a property as the balance of the mortgage payment has to be made on the date of the sale. House inspection is not possible prior to the purchase. You have to take it as it is. The highest bidder wins and gets to buy the property.
Realtor or MLS Listings: Most of the foreclosed homes in Canada are sold by realtor even before the houses are listed on any foreclosure listings. The procedure is just like buying a regular property, the house can be financed, and you can do prior house inspection but need not pay any commission to anyone. To buy a home that is going into foreclosure, you make an offer to the home owner. If the offer does not cover the mortgage the bank has to approve the offer. If the house is already in foreclosure, you have to deal with only the bank. We just recently bought a foreclosure this way.

Buying a foreclosed property is now a Smart Investment. It has become the fastest evolving trend in Canada now. It is important that the buyer considers every pros and cons before buying a foreclosure home.
Before starting on research on the foreclosure homes, the buyer should work on the plan. You must work out on the finances first- how much money you have and how much are you going to borrow. It is very important to understand and learn the buying and selling procedure of the foreclosed properties. You must decide on the best mode of purchase. It can be through bidding, through auctions or through negotiations. Once all the research is completed you can start the procedure with utmost care and caution. After the research, you have to understand what your needs and requirements are; start looking for a dependable source of property listing. It should be within your budget but should not end up in a compromising state. You can choose a local agent because they are the best as they know all about the location. You can then start looking for the foreclosure home listing. Apart from the above you need to locate a house where you can get necessary amenities and basic facilities of life. Choose a place where property rates will go up in the near future. This is an important point to consider if you are looking for a better resale value.
After you have short listed the foreclosure home, it is time to get on to the next step.
The next step is inspecting and viewing your future home. A thorough examination of every minute detail can show up things like utility dysfunction or structural weakness or damage. This validation inspection can cost you some but it is worth spending as it saves you from expensive repairs later.
Last but not the least- you must complete all the legal formalities and issues to save yourself from any unexpected future problems.
You have to have a realtor who is experienced and familiar with the area and location.
It is always easier to buy a foreclosed home from the bank direct than to buy at the courthouse auction. If you go in for a courthouse auction house, you have to deal with the unpleasant task of evicting occupants, house inspection and competitions from other eager buyers.

10 Habits of Successful Real Estate Investors

2010-09-13T22:02:00.000-03:00

Successful real estate investors posess the following 10 habits:

•Treat Investments as Businesses

It is important for real estate investors to approach their real estate activities as a business in order to establish and achieve short- and long-term goals. A business plan allows real estate investors to not only identify objectives, but also determine a viable course of action towards their attainment. A business plan also allows investors to visualize the big picture, which helps maintain focus on the goals rather than on any minor setback. Real estate investing can be complicated and demanding, and a solid plan can keep investors organized and on task.

•Know Their Markets

Effective real estate investors acquire an in-depth knowledge of their selected market(s). The more an investor understands a particular market, the more qualified he or she will be to make sound business decisions. Keeping abreast of current trends, including any changes in consumer spending habits, mortgage rates and the unemployment rate, to name a few, enables savvy real estate investors to acknowledge current conditions, and plan for the future. Being familiar with specific markets allows investors to predict when trends are going to change, creating potentially beneficial opportunities for the prepared investor.

•Maintain High Ethical Standards

Realtors are bound to act according to a code of ethics and standards of practice policy, and real estate agents are held to provincial rules and standards. Real estate investors, however, unless they are associated with membership-based organizations, are not usually required to maintain a particular degree of ethics in their business practices, as long as they operate within the boundaries of the law. Even though it would be easy to take advantage of this situation, most successful real estate investors, and especially those who remain in the business for the long haul, maintain high ethical standards. Since real estate investing involves actively working with people, an investor's reputation is likely to be far reaching. In the case of an investor lacking in ethics, the consequences can be damaging. Effective real estate investors know it is better to conduct fair business, rather than seeing what they can get away with.

•Develop a Focus or Niche

Because there are so many ways to invest in real estate, it is important for investors to develop a focus in order to gain the depth of knowledge essential to becoming successful. This involves learning everything about a certain type of investment - whether it is single family, multi family or commercial real estate - and becoming confident in that arena. Taking the time to develop this level of understanding is integral to the long-term success of the investor. Once a particular market is mastered, the investor can move on to additional areas using the same in-depth approach. Savvy investors know that it is better to do one thing well than five things poorly.

•Strive to be Good Customer Service Representatives

Referrals generate a sizable portion of a real estate investor's business, so it is critical that investors treat others with respect. This includes business partners, associates, clients, renters and anyone with whom the investor has a business relationship. Effective real estate investors are good customer service representatives by paying attention to detail, listening and responding to complaints and concerns, and representing their business in a positive and professional manner.

•Stay Educated

As with any business, it is imperative to stay up to date with the laws, regulations, terminology and trends that form the basis of the real estate investor's business. Keeping current does require additional work, but it can be viewed as an investment in the future of the business. Investors who fall behind risk not only losing momentum in their businesses, but also legal ramifications if laws are ignored or broken. When it pertains to the law, ignorance is no excuse. Successful real estate investors take the time and make the effort to stay educated, adapting to any regulatory changes or economic trends.

•Understand the Risks

Those choosing to invest in the stock or futures markets are inundated with myriad warnings regarding the inherent risks involved in investing. Numerous agencies, such as the Commodity Futures Trading Commission, require disclaimers to warn potential market participants about the possibility of loss of capital. While much of this is legalese, it has made it clear to people that investing in the stock or futures markets is risky; meaning, one can lose a lot of money. Greenhorn real estate investors, however, are more likely to be saturated with advertisements claiming just the opposite - that it is easy to make money in real estate. Prudent real estate investors understand the risks associated with the business - not only in terms of real estate deals, but also the legal implications involved - and adjust their businesses to reduce any risks.

•Invest in a Reputable Accountant

Taxes comprise a significant portion of a real estate investor's yearly expenses. Understanding current tax laws can be complicated and take time away from the business at hand. Sharp real estate investors retain the services of a qualified, reputable accountant to handle the business's books. The costs associated with the accountant can be negligible when compared to the savings a professional can bring to the business.

•Find Help When They Need It

Real estate investing is complicated and requires a great deal of expertise to engage profitably in the business. Learning the business and the legal procedures is challenging to someone attempting to do things on their own. Effective real estate investors often attribute part of their success to others - whether a mentor, lawyer, accountant or supportive friend. Rather than risk time and money solving a difficult problem on their own, successful real estate investors know it is worth the additional costs (in terms of money and ego) to find help when they need it and embrace other peoples' expertise.

•Build a Network

A network can provide important support and create opportunities to a new or experienced real estate investor. This group of associates can be comprised of a well-chosen mentor, business partners, real estate agent, mortgage broker, lawyer. A network allows investors to challenge and support one another, and can aid significantly in advancing one's career through shared knowledge and new opportunities. Because much of real estate investing relies on experiential-based learning, rather than on reading a book, for instance, savvy real estate investors understand the importance of building a network.

Conclusion

Despite abundant advertisements claiming that real estate investing is an easy way to wealth, it is in fact a challenging business requiring expertise, planning and focus. In addition, because the business revolves around people, investors benefit in the long run by operating with integrity and by showing respect to associates and clients. Tough it may be relatively simple to enjoy short-lived profits, developing a viable real estate investing business that can last for the long-term requires additional skill and effort. Whether focusing on apartment buildings or single family properties, highly effective real estate investors share these 10 essential habits.

Real Estate Investors Guide To Bookkeeping Basics

2010-09-13T20:09:00.000-03:00

Whether you keep your books on paper, through computer software, or hire an accountant or bookkeeper , proper bookkeeping practices are important to the operation and survival of new real estate investors. Without proper bookkeeping, your business is susceptible to not only cash flow issues, but potential legal problems as well. To help new real estste investors have a better understanding of smart bookkeeping practices, we’ve compiled a quick guide on the basics.

Business bookkeeping serves two purposes – to enable CRA to evaluate your operations, and to help manage your business. Your books make up one very important part of your overall business records and should include all transactions made by your business. As a standard practice, several pieces of information should always be kept in your books.

Revenues and Expenses

How much money is going out, where it’s going, and what money is coming in are all questions that can be answered by recording the revenues and expenses of your business transactions. Records can be maintained through a journal, a popular method that details receipts and expenses, or a ledger, a method that records transactions as credits and debits.

Cash Expenditures

Important to record the cash your business spends so you’ll have an accurate number of expenses each year. Writing reimbursable checks or keeping petty cash records are both valid methods of documenting cash expenditures.

Inventory

Maintain records of all inventory to prevent stealing and misplacing merchandise, keep inventory holdings to a minimum, and track business trends. Dates purchased, stock numbers, purchase prices, dates sold, and sale prices are all relevant information for inventory records.

Accounts Receivable and Payable

Always keep track of what customers owe you and what debts you owe others. It’s prudent to record as much data as possible including invoice dates, numbers, amounts, terms, dates and amounts paid or due, balances, and client information.

It doesn’t matter how you choose to keep your books as long as you find the most efficient way to do it. If you decide to do it yourself, it is a good idea to consult with an accountant or bookkeeping expert to keep your business on track!

Should You Hire A Building Inspector When Buying A House?

2010-09-13T19:21:00.000-03:00

A building inspector is a home buyer’s best friend. He makes sure that the house is safe and sound, and that it complies with all the building regulations provided by the city. When you are determined to buy a new house, it is therefore to your best advantage to have it first inspected by a certified home inspector.

It is a very crucial role indeed what a building inspector performs in any home purchase. Because his reports are always based on facts and actual inspection of the home, he can greatly influence the decision of the buyer whether in a positive or negative way.

While it will cost you to have a home inspected, it is an added expense that you should never skip. You cannot simply say that you can inspect the house yourself because you are not trained to do so.
How much do you know about a house’s structure? How about its electrical system or even the plumbing? A building inspector knows everything that there is to know to properly inspect any home or building. He has been trained to spot any shortcomings made by the construction company or in case of a second hand home, if there are any needs for repairs or renovations to keep the house safe.

Anyone who is offering home inspection services are certified by the government because they play a crucial part in every home buying process. Most building inspectors started out in the building industry as an architect, a carpenter, an electrician or any other construction related job. Any of these can serve as a good foundation to become a building inspector later on because they have the experience and the expertise to inspect any house.
Some people would ask if they have to accompany the building inspector to the house. It is actually up to you but you are not required to do so. The good thing about coming along ( which we recommend) is that you can see for yourself all the things that the building inspector would note as defects or needs any repair. You can have a much better understanding regarding the quality of the house you are about to buy.
You can see immediately if the flooring need to be actually replaced, if the electrical wirings need to be upgraded or if the sewage system adheres to the environmental certifications or requirements of the government.

As a closing, it is indeed a necessity to have any new home to be checked by a qualified building inspector. This is for your peace of mind knowing that the house you are buying for your family will be safe and stay that way for a very long time. This is one service that you would definitely never regret hiring since it will usually just be done once or at least once every decade.

We NEVER purchase a property without a building inspection by a qualified building inspector!

How to Write a Real Estate Business Plan

2010-09-13T10:26:00.000-03:00

Here are an overview of what goes into a business plan for a real estate enterprise.

An Executive Summary should includes the following information:

 The length of time you have been in operation

 A description of the structure of your operation as a single proprietorship, a partnership, or a corporation

 The names of your attorneys, accountants and other significant outsiders who lend their counsel and expertise to your operation

 The names of other investors in the enterprise, if any

 Your business name

 A list of properties you currently own that includes their values and the amount of income they produce, if any

 Your organization’s earnings in the tax years since it started

 The current net worth of your enterprise, including cash on hand, value of properties owned, and other real assets

 Specific strengths that will make the business succeed (You currently own a large older building in a prime location, for example, and now you need the funding to convert it into luxury condominiums.)

 Current limitations that can be overcome by new funding (It will allow you to buy a specific property, for example, or renovate a building you already own — or improve land and sell lots to developers.)

 The location of your enterprise (If you obtain funding using your business plan, will your location change?)

 The kind of real estate properties you invest in and/or plan to invest in

 A description of anything unique about the kind of properties you own or intend to own

 An explanation of any major opportunity that will enable your enterprise to make significant profits

 A profile of your customers (Will you be selling or renting properties, to families, or builders, or upscale retailers?)

 Other companies in competition with you (Note that your plan should document your ability to compete against these other entities by offering something different or better in the eyes of consumers.)

 An outline of significant trends and opportunities that will create new profits for you (For example, new train service has just been instituted between the town where you own property and a nearby city — a factor that makes your holdings immediately more profitable.)

 A profile of the person in charge of the business

 A pitch for why you or your partner(s) are qualified to make the enterprise a success (List prior experience, education, etc.)

 A projection of your immediate goals for the next year, two years, and later if possible

 The amount of money you have already invested in your enterprise

 The amount of money you need (if the primary purpose of writing the plan is to obtain funding) and how you intend to spend it, (For example, you will invest 40% of it to improve current buildings, 40% to acquire new properties, and the remaining 20% to outfit a new office.)

 The projected payback are you prepared to offer to investors, over what period of time

Your Current and Projected Properties and Holdings Analysis should include only the information that applies to you and your enterprise. Here are some questions you will probably want to answer:

 What properties, if any, do you currently own? What are their values? (Include appraisals or other documents if appropriate.)

 Are there more properties (or more land, or whatever) that you intend to acquire and develop in the years ahead, or are you in a market where that will be unlikely?

 Do you currently own offices or other facilities for business use? If so, where are they located and what is their value? What kind of properties are they (single family homes, self-storage facilities, etc.)?

 What additional properties would you like to acquire, on what kind of timetable?

 What has your primary real estate activity been in the past and how do you intend to change that in the future?

 Who are the consumers for your properties (your renters and/or projected buyers)? Include as much information about them as you can such as their income, assets, and eagerness to become your buyers or renters.

 How will obtaining funding allow you to reach more of your target consumers or generate profits from them more effectively?

 Are there other companies that have generated significant profits by doing what you are planning to do?

 Do you enjoy a significant advantage over your competitors? For example, perhaps you own the best piece of land in an area where other builders are already active, or you have retained the services of a great architect who has experience in designing the kind of properties you are intending to build.

 Who are the other primary business entities—contractors, consultants, etc. — whose help you will need to bring your plans to completion?

 What activities will you need to subcontract out, such as construction, land improvement, and paving, in order to profit from your plans?

 What are the potential risks of doing what you plan to do?

 Do you have in place permits, environmental studies, or other documents that show that your plan is relatively free of risk to potential investors?

Your Market Plan should provide a more in-depth analysis of your customers, the people who will buy or rent your property. Note that you should include only information that lends credibility and support to your enterprises. You might even decide to omit this section entirely if you have adequately described your target consumers in earlier sections.
There are times, however, when your plan will genuinely benefit from the inclusion of this section. If you are seeking funding to develop a large number of houses in an area where other developers have made a lot of money in the same way, for example, you should include this section to explain your target consumers. Here are the questions to answer:

 Who are your target renters or buyers? Are they small families, single renters, or small companies who will rent your homes and/ or offices?

 How many of your target consumers are there? Where do they live?

 How much money do those consumers have to spend on what you have to offer?

 Are there significant marketing opportunities that can generate more income from your consumers (advertising in major newspapers in a nearby city that lies within commuting distance of the property you want to buy, for example)?

 Is there some significant characteristic of your properties that makes them immediately more appealing than your competition’s?

 Is there a particular share of the market that you intend to capture? (Perhaps the building you want to acquire would give you a 20% presence in the rental market in a particular town, for example.)

 How will you advertise or promote your properties in order to generate maximum profits?

 Do previous consumers behaviors, such as buying properties you already own, indicate that your future activities are likely to generate money?

 Can you include news articles, local business reports or other documents that support the validity of your business plans?

Investing in Rental Property For Beginners – 7 Tips From a Seasoned Investor

2010-09-12T12:45:00.000-03:00

There is so much hype around investing in rental property that makes it sound too easy for beginners. Investing in real estate is a proven method to build wealth, but it is a long term deal. A novice real estate investor should consider joining a real estate investment club to get the scoop on what it really takes to manage rental property.

Investing in rental property is not a get rich quick operation. It is a long term commitment that includes responsibility. Even with a property manager, if you can find a good one, there are accounting and fiscal responsibilities to consider. Here are some tips from a seasoned pro:

1. Start out with just one rental property and learn the ropes.

2. Decide what kind of tenants you are willing to deal with.

3. Allow for at least a 10% vacancy rate.

4. Be realistic about potential maintenance expenses.

5. Don’t force your first deal. Keep looking until a profitable investment opportunity presents itself.

6. Don’t buy property far away.

7. Don’t assume that you will be able to get a good property manager. Trust me on this one, it is why I started my own property management company!

As time goes by and you gain experience, buying property in different areas will be more realistic because you will know in advance what problems may occur. Even if your goal is to hire property managers( which I recommend) ultimately you need to be able to take responsibility for your real estate investment. Over time, rents should rise and your mortgage debt will decrease if managed properly. Remember, rental property is long term deal but it is one of the few proven paths to financial independence.

5 Secrets Of Keeping Rental Property Occupied and Putting More Money In Your Pocket

2010-09-12T09:58:00.000-03:00

Many property managers, landlords and real estate investors forget that in order to succeed in rental property business it is important to keep your rental properties occupied. You want to make sure that the turnover of your tenants is low and your residential rental properties are always occupied.

A residential rental property with high occupancy rate not only puts more money in the pockets of owners but it also significantly increases the value of the residential rental properties. So there is significant incentive to keeping properties occupied and increasing the cash flow of the property. The key secrets to keeping tenants happy, satisfied and enjoying their experience and thus renewing their leases are:

1. Property Manager is monitoring the local rental market and adjusting rents and incentives

2. Ensuring that property has curb appeal so that it looks better than its competition

3. Keeping up the property and responding to maintenance requests quickly

4. Respecting tenant’s privacy

5. Fair and consistent rules, policies and their enforcement

In a competitive rental market, attracting and retaining tenants is key to success in residential rental business. In order to improve your property management, follow these 5 well known secrets and you will be putting more money in your bank account.

How To Choose The Right Property Manager- Part 2

2010-09-11T11:24:00.000-03:00

Here is the continuation of the list of questions you should be asking your potential property manager:

4. If a tenant does not pay, how would you handle this?
          Put the property manager on the spot. Give them a couple of scenario questions to see wether they really do have the experience to handle any situation.

5. Do you provide monthly reports? If so, what's included in these reports?
          These reports will allow you to track the investment and the work that the property manager puts towards it. Ask for a sample report so you're clear about what's included.

6.How do you plan to take care of my investment?
          Make sure that the person handling the rental has a game plan in mind. Discussing this ahead of time tells you wether their services fir your criteria.

Look for part three of this series in a future post.

Mortgage Brokers Help Consumers

2010-09-10T17:43:00.000-03:00

Mortgage brokers have become an important part of bringing financing to homeowners and investors. Banks and credit unions offer consumers services that brokers cannot, but they also have more regulation and hold much higher standards than brokers.

Loan officers at any banking institution are merely employees of that institution. While they may have some flexibility in tailoring a loan to fit a specific need, they are confined to the products that particular institution has to offer its consumers. Many consumers prefer to do all their business with a bank, for not only the convenience they offer but for the relationships that they establish. Banks can make simple transactions even simpler with automatic payment options, online banking, investment products and full service financial needs.

Loan officer are employees of their banking institution. Perhaps you have built a long relationship with your bank and can get a loan on a whim. For many consumers, a bank is the only financing vehicle they would ever consider because they like the relationship and the atmosphere of a bank. It is not only the relationship with your favorite teller that entices consumers to stay with banks. Today there are so many services such as online bill pay and financial planning, that the consumer feels as though they have everything they need for their bank account under one roof.

But there are many consumers with less than perfect backgrounds and credit histories that most banks will not deal with. And this is where mortgage brokers can be helpful. Most brokers work as independent agents. They can solicit to many different lending institutions and find different programs to match the consumers personas situation. They are particularly helpful in situations where the consumer has less than perfect credit or some other flaw in their history. Banks generally will not finance someone with a history such as this.

Brokers can usually offer lower interest rates for their clients because they are working in the wholesale market. But a consumer should become educated in the fees that their broker is charging before the close a loan. Many times these fees will outweigh the lower interest rate. Today all brokers must disclose this information prior to closing the loan.

If you are a real estate investor with plans to purchase more that three investment properties you will have difficulties obtaining future financing from your bank, brokers can help here as well.

Retaining Tenants

2010-09-07T19:19:00.000-03:00

As cash flow is the most essential ingredient in any business, so it is as a landlord. Obviously, in order to maintain cash flow as a landlord, your properties must be occupied. There are several cost-effective ways to make you and your property very appealing to new tenants; and, infinitely more importantly, there are ways to retain the good tenants already living in your property, to avoid both the cost and uncertainty of vacancy or tenant turnover.

Imagine yourself in a tenant's shoes, and provide the little perks you know they want, but no one else is offering. For example, practically every landlord I have ever spoken to has assured me that the walls would be repainted before move-in, but not one has asked what color scheme I would prefer. Allow your tenants to select the color scheme they want in their new home( with in reason and landlord approval)-it's no additional work for the landlord or the painters, just a different bucket of paint. If the tenant can move in to the home they want, with the scheme they want, without having to do the work or pay the expenses themselves, that may be enough to distinguish you from the other landlords.

That is just one example; there is an infinite number of little ways to excite a new tenant. Free cable, installed appliances, fans, fenced-in yards, etc. Clearly each of these things costs the landlord money, but it cannot be overstated how much money you will save by keeping your property occupied at all times.

Once you acquire a good tenant, the real trick is to keep them forever. Spoil your tenants-make it so that if they go anywhere else, they will come running back to you. This doesn't mean lavish them with expensive gifts, but be responsible. Make repairs, follow-up, and provide little bonuses like a gift card when they resign the lease, birthday and Christmas cards, Christmas gift basket. Some landlords are going as far as offering long-term tenants free high speed internet and even a free computer! What's $500 spent on a person who will bring you thousands? While not everyone has to take such an expensive approach to tenant maintenance, I think the concept is clear: don't just sign your tenants up and then disappear. The cost of getting new tenants-between repairs, repainting, installing new carpet, and the loss of rental income during the period of vacancy-far outweighs the cost of keeping your current tenants happy. The most successful landlords are, quite simply, the ones chosen by their tenants. Keep your tenants happy, and you will be much better off.

Tips in Choosing the Right Real Estate Investment Advisor

2010-09-07T19:01:00.000-03:00

With the economy growing and the people’s confidence shooting up there becomes an increasing demand in real estate. Enterprising individuals see this as an opportunity to invest and earn good money in the near future. People are starting to buy properties and if you know the current state of real estate you realize the potential.

To whom do you entrust your money and how do you ensure they are investeing strategically? Real estate investment advisors are a dime a dozen. While many of them are good, there are still those who are not up to par.

Here are some tips to help you find the right real estate investment advisor

Find out if they are investors themselves. You gotta put your money where your mouth is. And if they say that real estate investments are pretty awesome in your area and profitability is good, I’d doubt if they themselves did not take advantage of it.
Ask industry questions that they should be able to answer in a flash. This is how you separate pros from the amateurs. Questions like what is the tax value? What is the assessed value? What ROI are we looking at? A true real estate investment advisor should be able to answer and discuss these with you passionately. If he gives you the “uhms” and “aahhs”, show him the door.
Ask for a list of properties in your area and have them do a comparative analysis. This should be really easy for a seasoned real estate investment advisor because he does it all the time. If he fumbles and even sweats a little, you might want to reconsider.

Those are a few things that you can do to ensure that your money will be dealt with accordingly. Confidence is key to a successful investment. And if you’re not confident with the people handling your money, chances are, you’ll probably lose.

There is no better time to invest in real estate than now. Just make sure you are dealing with the right real estate investment advisor.

How To Choose The Right Property Manager- Part 1

2010-09-06T17:15:00.001-03:00

Here is a list of questions you should be asking your potential property manager:

1. Do you have experience with this type of property?
          Ensure that the individual has the necessary experience in your particular type of property because each has its own specific needs.

2. What are your fees?
          Be specificwith regards to charges involved. Fees represent the type and quality of service that can be expected. The old saying " you get what you pay for" is true when applied to property management.

3. How do you select tenants?
          It is vital for the property manager to use a special screening process to find a suitable tenant who will pay rent on time and respect the property.

Look for part two of this post on a future post.