Rental Housing Journal Valley November 2016

Page 1

Rental Housing Journal Valley

November 2016

2. Long-term Hold Investing 3. Dear Maintenance Men – Plumbing, Pest Preventing Primer and Paint 5. Are You Leaving Money on the Table?

EUGENE · SALEM ·ALBANY · CORVALLIS WWW.RENTALHOUSINGJOURNAL.COM • PROFESSIONAL PUBLISHING, INC

Biggest Mistake New Investors Make in Due Diligence

Top Tips for Real Estate Investing Trends and Data Surrounding the U.S. Real Estate Market and What it Takes to Become a Successful Owner and Investor By Michael Monteiro, CEO and Co-Founder, Buildium

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aybe it was passing by the For Sale sign in your favorite vacation town, flipping through the new listings in your Sunday paper or receiving a property passed down through the family—there are countless ways and reasons that real estate investors enter the market. But once that purchase goes through and all the papers are signed, what are you supposed to do next? I know from experience it can be daunting to figure out what your first step should be, how to get a rental ready for the market and how to then expand the business.

By Charles Dobens, www.multifamilyinsight.net

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hat is the biggest mistake new investor make in multifamily due diligence? Due diligence is where many new investors start to go astray. They find a deal, make offers, get an offer accepted, put it under contract and then start the due diligence process. During the due diligence process their entire focus is centered around the real estate. They interview and negotiate rates with property inspectors. They set up a date and time that they will go through each and every unit looking for the most egregious example of poor management so that they can go back to the seller and negotiate a repair allowance. The owner of a bad property will see this coming a mile away and be prepared for it. They will inflate their purchase price to make you pay the repair allowance WITH YOUR OWN MONEY. They will play hardball with you and structure the terms of the repair allowance such that the dollars come out of the deal in an in-kind transfer and not in cash. You, at the end of the day, end up with a property that has a list of needed repairs and no cash to fix it. But that is not where your focus needs to be. Here’s where the new investor goes astray. After the property inspector has completed his task and submits his beautiful 100-page report that you pay for, you will review it and look at the last page that gives a dollar amount as to the needed repairs. You then go back to the broker and open the negotiations all over again and I can assure you, they are lying in wait for you to return. But the problem with this over-dependence upon the inspection report is that,

continued on page 4 Professional Publishing Inc., PO Box 6244 Beaverton, OR 97007

continued on page 7

Four Questions to Consider When Deciding to Buy or Rent Tools By Tony English, Senior Tool Rental Merchant, The Home Depot

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aintenance expenses are one of the largest controllable elements for a property manager’s operating budget, and you have to factor in both labor and equipment. One of the most important considerations for managing equipment costs is deciding whether to buy or rent necessary tools. In addition to the upfront vs. rental costs of the products, there are a lot of factors to consider when deciding to rent or buy. Equipment may be required on a seasonal or ongoing basis and used for small- or large-scale projects. Ask the following questions to help determine what’s best for you and your maintenance staff.

continued on page 6 PRSRT STD US Postage PAID Portland, OR Permit #5460

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Rental Housing Journal Valley

Long-term Hold Investing For Owners/Managers

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he rental property investing strategy for a hold time of 15+ years is significantly different, than a short term real estate investment strategy. This is even more critical for owners who plan to do their own property management. Owning and managing a property for 1520 years is similar to raising a child, from birth through high school. Price is always important when buying any property. If you are planning to own a property for decades, do not consider purchasing a potential “problem child”, because it is cheap. Bad purchases are often made when investors feel they must purchase quickly. Adapt the motto that “I can always spend my money” and keep shopping to you find the “right” deal. Investors need to seriously consider the location, quality of construction, target tenants and financing for a long term hold rental property:

Location

Properties should be located within 30 minutes of where you reside. Anything longer than an hour round trip drive will become cumbersome over time. It is always a wise idea to geographically diversify your rental portfolio. Therefore, owning properties in different neighborhoods. Within 30 minutes of your home, is preferable to owning all your properties, in one neighborhood.

Target property purchases in desirable residential neighborhoods with a low percentage of rental properties. Initially, the annual cash and cash return will probably be less, than what could be bought in less desirable locations. Rental properties in more desirable locations usually are priced at a lower capitalization rate, than rental properties in less desirable areas. Over time, the quality of tenant, ease of leasing, and appreciation potential will compensate for the initial lower return. Buying in a neighborhood, that you feel may decline, is a big mistake. You can change many things about a property, but you cannot change its location.

Quality of Construction Properties that are built in quality materials and workmanship tolerate the abuse of tenants, time and the elements much better, than marginally constructed properties. Tile, metal or shingle roofs last longer and require less maintenance than flat roofs. Copper plumbing is preferred to galvanized plumbing. Tenants damage themselves, rather than interior walls, when they punch a plaster wall. Solid wood cabinets will last decades longer than press-board or veneer cabinets. Even if you intend to remodel a property, choose one that has good “bones”.

Target Tenant When you preview properties, form a realistic mental picture of who would be a potential tenant(s) for that property. Is it located near a college or a senior center? Is there a major employer or a hospital nearby? Does the rental have a private outdoor patio? Covered or enclosed parking for a newer car? With the number and size of bedrooms, how many people could realistically live in the space long term? What does the property lack, that the potential tenant might desire? Now that you have formulated a mental picture of your tenant(s), think how it would be interacting with that tenant(s), or a succession or variation of that tenant(s), for the next 18 years. If the mental picture you are formulating is not pleasant, keep shopping for the right property. Financing Investor loans are fixed rate amortized loans, up to 30 years, for 1-4 family

properties. When you purchase 5 unit or larger properties, it is considered a commercial loan. Institutional lenders fix the interest rate for 3-10 years, and then it is variable or renegotiable, on commercial loans. Sometimes you can find a fixed 15 year fully amortized commercial loan. If you are going to hold a property

long term with a commercial loan, develop a game plan for dealing with interest rate adjustments or renegotiation, before purchasing. Formulating a long term rental property real estate investment strategy involves more than analyzing the numbers on paper. Location will be a huge factor in future appreciation and convenience of management. Quality of construction will determine long term maintenance and capital expenditures. If you self manage your properties, the tenants you choose and your relationship with those tenants, will contribute or detract from your quality of life, for decades. Securing stable long term financing, while interest rates are historically low, will insure strong cash flows until the properties are paid off. Incorporate the importance of location, quality of construction, target tenants and financing strategy into your long term invest portfolio strategy. Jade Bossert is a licensed Real Estate Broker in Tucson, Arizona that specializes in multifamily property sales. She has been successfully selling real estate in Arizona for over 35 years. She can be contacted at 520-797-6900 or tucsonrealestate@mindspring.com.

Advertise in Rental Housing Journal Valley Circulated to over 6,000 apartment owners, on-site and maintenance personnel monthly. Call 503-221-1260 for more information 2

Rental Housing Journal Valley · November 2016


Rental Housing Journal Valley

DEAR MAINTENANCE MEN: Plumbing, Pest Preventing Primer and Paint

By Jerry L’Ecuyer & Frank Alvarez

Dear maintenance men,

I own a 16 unit apartment building built in the late 1960s. The property is in good shape and we try to address maintenance issue as soon as they develop. However, the drains lines are starting to get the best of us. For the past three years I have been experiencing clog after clog and now my main line appears to be blocked once again. Other than the obvious (the pipes are old) what can be contributing to my problem? Charles

Dear Charles:

You are not alone. Plumbing issues and rooter service is the largest line item expense as compared to other trades at any apartment building regardless of age. With plumbing and drains, it is best to be proactive rather than reactive. The difference in approach can save you thousands of dollars a year. In order to begin a proactive approach we will recommend the following: 1: Make an appointment with your local plumbing contractor or current service provider and tell them you are interested in having them join you on a thorough inspection of your plumbing, drains and fixtures. A professional plumber may see things you will miss.

2: On the date of inspection have your smart phone or camera with you to document any items or areas of concern. A flashlight and clipboard with notepad will be essential. 3: During the inspection take extra care to look for improper drain connections, leaks, possible or future leaks, corrosion, staining and fixtures that can appear be near or at their life expectancy. Also keep an eye out for water damage, dry rot, fungus etc. 4: Check the garbage disposal unit under the kitchen sink and if you find 1/3rd HP disposal unit, consider replacing it with a half horse motor disposer. The underpowered 1/3rd unit is a large contributor to your kitchen drain line clogs. It is important to also instruct the resident in the proper use of the garbage disposal unit such as using plenty of water while using the disposer and not stuffing too much scrap food all at once. 5: Take special note of large trees above the route of the main drain line. The roots may be invading the pipe and causing many of the backups you are experiencing. Have the plumber use a camera snake to inspect the pipe. 6: If your property does not have proper mainline drain cleanouts; plan on having them installed. We recommend having

the pipes hydro jetted at least once a year to clear grease from the lines.

Dear Maintenance Men:

Three years ago, I had termite repairs done to the back side of my building. Turns out the wood was never painted or protected and now the wood is badly damaged. Would prime and paint have prevented this damage? George

Dear George:

It is unfortunate that your contractor did not complete his job by sealing or painting the new wood. This would have saved you the effort and expense of repairing the wood all over again. We cannot tell you how many buildings we see that had termite or dry rot repairs completed years ago, and they are still not weatherized or painted! It is not the cost of the lumber that is expensive, but the labor that you want to avoid by having to perform the same work twice. When replacing wood at your building you should insure that the proper type of wood is used for an exterior job and that the wood is sealed with primer and paint. To do the job properly, the wood should be primed before it is installed followed by a second prime and paint.

When using a contractor for this type of work, be sure to read the contract carefully. Make note and question the contractor if you see the terms: “Paint by others” or “Priming and Paint not included”. You can either ask the contractor to include these items or contract with a painting company to complete the job.

Dear Apartment Owners:

We are getting close to the holidays, which means guests, cooking and an emergency call to you from one of your residents on Thanksgiving Day about a clogged sink or non-working oven with an apartment full of guests waiting for dinner. This scenario can ruin both yours and your residents’ holiday. The answer is: Preventive Maintenance. Before the holiday season begins, check each stove and oven for proper operation, many residents only turn on their ovens at this time of year, and the problem may be as simple as a pilot light being out. Also, check the oven’s temperature calibration with an oven thermometer. Because of heavier than normal use of the plumbing, it may be a good idea to snake out your main plumbing lines. Also, sending a note to each tenant on the proper use of the garbage disposal will be useful. Note what

continued on page 6

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Rental Housing Journal Valley · November 2016

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Rental Housing Journal Valley

Biggest Mistake New Investors Make ...continued from page 1 no matter what the inspector finds, it can be fixed with one thing – Money. Just name your price and the roof is fixed. Get three bids and the foundation is fixed. The brokers focus, along with yours and everyone else is on the real estate. This is exactly where you should not be focused. What business are you in? Real estate or multi-family? You are in the multi-family business. What generates revenue in the multi-family business? The factory or the product? The product, or in our case, the leases, is what generates revenue. How much time and money have you spent up to this point in the due diligence process analyzing the value of the leases? See, when you show up with your inspector and walk the property with your clipboard and flashlight, the real deal is not going to be found in the units. The real deal is going to be found in the filing cabinets in the manager’s office. That is where you should be spending the majority of your time. Now don’t get me wrong, you will still need to do a complete and thorough physical inspection. But that should be secondary to your “product” analysis. Why is this so important? Because you need to understand the types of things that can destroy your business overnight. Hurricanes, tornadoes, floods? Nope, you can buy insurance to protect you for those events and in some cases, you might end up better off. Leaky roofs, broken pipes, appliances that don’t work? Nope, those happen all the time and it just takes money to fix.

What can destroy a property fast that a property inspector never finds?

So what can destroy your business overnight and that can’t be fixed with money? The answer, just so we can keep it in the business realm, is bad customers. More specifically, felons, drug dealers and those convicted of violent crimes. Nothing can clear out a nice apartment complex faster than the news that a sex offender has just moved in. Not only will you lose existing customers, your property will quickly get the reputation as being the place where felons can go and live. That is the kiss of death for any property. Let’s discuss the repair allowance. What do successful people do? Successful people do those things that the rest of the world won’t do. In this case, the seller is expecting you to come back with a list of items that shows all the things wrong with the property. He is seeing you coming a mile away because he played the same game when he bought the property. In addition, his broker is preparing him for it and they have already have a strategic response.

But you are not like all the other investors. You look at this business as a business. You look at the strength of the customers as the strength of the asset and you will negotiate accordingly. When you complete the inspection and set up a meeting with the broker to review, you will have two sets of reports. The first one will be the property inspection report. That will have a dollar figure at the bottom. The broker will nod his head, let you know that he will present this to the seller and then ask the waiter for the check. This is where you distinguish yourself from every other investor. “Not so fast, Mr. Broker, there is one more thing,” you say in your best Colombo imitation. This is when you bring out your analysis of the leases. This is where you show the broker that fifty percent of the files were lacking criminal background checks. This is where you show the broker that there is no income analysis done on any of the residents and therefore the sales pitch that the rents are below market and can be increased is meaningless because there is no way to tell if the current crop of residents could even afford an increase in the rent. The broker will do one thing; stare at you with the blankest look you have ever seen and wonder what comeback he could possibly muster. He has done absolutely no analysis in this department so he will not have any facts on the table to respond back to you. You will be in complete control of the deal. Let’s say just the opposite is true. After your analysis, you cannot find anything wrong with the resident files. They are completely up to date and accurate. If that is the case, start getting serious about buying that property. It might be as good as you think. I do spot reviews on my properties to make sure that the files are up to date. I review credit and criminal background checks all the time and make sure that everything is in order. That’s the type of business you want to buy. Mr. Dobens is an attorney and multifamily owner. We thank him for his guest post and insights on due diligence. He can be reached at www.dobenslaw.com Mr. Wilhoit is the author of two books: How To Read A Rent Roll: A Guide to Understanding Rental Income and Multifamily Insight Vol 1 – How to Acquire Wealth Through Buying the Right Multifamily Assets in the Right Markets.

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Rental Housing Journal Valley · November 2016


Rental Housing Journal Valley

Are You Leaving Money on the Table? By Cliff Hockley CCIM, President, Bluestone & Hockley Real Estate Services

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ost real estate investors tend to operate their properties with a simple rule in mind: If money appears in their checking account by the end of the month, their property is healthy. As long as they see the same amount every month they’re happy. However this rule inevitably leaves money on the table. Sophisticated investors know that they need to plan for their properties to be successfully operated. They need to buy the right property and operate it with a vision in mind. That vision should include an annual focus on rent increases and tenant relations.

Rent Increases

Residential: Multifamily or single family investors have the opportunity to increase rental income at least once a year through the annual budgeting process. This process starts with an annual inspection, followed by a local area renewal rate review (rental comparison survey). Keeping your property well maintained is the key to managing long term rental increases. Tenants will not be as hesitant to pay more if you treat them with respect and keep the property looking well maintained. A clean property with great looking landscaping, a current paint job without any mold or a refinished roof will net you more rent. Yes, it will cost more to maintain, but in my opinion the payback will be in the form of higher rent, longer tenancies and lower turn-

over costs. Don’t forget, tenants want to be appreciated just like you do. If you have a property manager you work with, have them help you draft an annual budget and forecast the annual increases. Think into the future; plan your rent increases and capital expenses two to three years ahead so you can better control your long term destiny. Commercial: Owners of office, retail or industrial buildings need to think through the same process. They need to develop a plan that lasts through the initial lease term and includes details regarding the tenant’s options to renew, (since commercial tenants tends to stay for 3-10 years, even more planning is involved in controlling the costs and the rental increases). Annually, property owners need to review the comparative position of their property. They need to be realistic regarding the value of their real estate. Just as with residential investments, they must consider the condition and location of their investment. Commercial landlords need to have a long term plan in place that keeps rent increasing on an annual basis If you make a concession regarding a starting rent to get a tenant in, plan to step it up to market value within three years. Aim for a minimum of 21/2 % to 3% in annual increases based off the pre-negotiated step increase or per-

centages that increase on the basis of a business’ success (typically used by retail businesses). I am not a huge fan of CPI (consumer price index) increases because the government has too much control of those numbers. Don’t permit expense caps unless you can stay ahead of the expenses, regardless of the caps. Landlords and their property managers should not automatically cave into very low or zero rent increases at lease renewal time, even if the tenant threatens to move out. Run realistic scenarios regarding the cost of re-tenanting. Include vacancy rates, leasing commissions and tenant improvements in these calculated scenarios. Consider also, the moving costs an existing tenant will face. Understand their business and business goals, their staffing and their success at your location. Most importantly while they are renting from you, fix repairs that are required by your lease, and fix them quickly. Show your tenants you appreciate them by treating them how you would want to be treated, otherwise they will blame you and possibly hold back rental payments, do the repairs themselves or, worse yet, move out. We once had a client who took two months to repair the air conditioning units on a newly leased space. It was wintertime and it was raining; the tenant

was livid and hired an attorney to preserve their rights under their lease. The landlord wanted absolutely the lowest price for the repairs and getting the lowest price took over 30 days of negotiating with vendors. The tenant almost moved out because it took so long, and alternative cooling systems needed to be provided. The experience drove them to become a hostile tenant. These bad feelings could have been prevented and we could have agreed on rent increases and lease renewals with this tenant if the landlord would have allowed the property manager to be more proactive. Note: Typically property managers have vendors they work with that are reasonably priced who respond quickly, but they may not be the absolute – lowest, period.

Conclusion Inevitably, attention to detail, future planning, a current understanding of the marketplace, and a fair and realistic approach to taking care of your properties will yield higher returns for real estate investors. A key component to profitability is a focus on current and future rental incomes. Sticking to the basics with an annual planning process and taking care of your tenants will increase your annual yield and keep reliable tenants in your properties.

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Rental Housing Journal Valley

Four Questions to Consider ...continued from page 1 How frequently will we use it?

Generally speaking, this is one of the easier questions to answer. Renting is a viable solution when equipment is used a few times a year, while buying is much more economical when it’s an item of regular use. There may even be times when choosing to do both is the best option. For projects that require duplicates of the same tool, consider buying one and renting the extra items to complete the project more quickly. This will allow you to scale up and only worry about maintaining one tool or piece of equipment.

What kind of maintenance is required?

Depending on the complexity of the tools, maintaining them may cost significant time and money, especially if your staff is not familiar with the ongoing upkeep. Purchasing equipment may require the assistance of an experienced professional and may hold up projects if tools are not in working order. Renting gives access to tools that are professionally and regularly maintained by experts. Your staff will then be able to spend more time and effort completing the project.

up in your storage area. If a new piece of equipment requires an additional shed or room, factor in the cost. You don’t want items sitting out as eye sores for residents. Renting takes this factor out of the equation and simplifies the process, allowing you to return all units to the tool rental center after being used.

How do we transport the item?

Lastly, take into account transportation costs if the piece of equipment is particularly large and factor in whether you will need to transfer it to different parts of the property. Avoid taking a toll on your current vehicles and consider renting a large truck or special oversized trailer to transport the equipment. It may be an additional cost, but it will make for smooth and safe transportation from the tool rental center to your property and back. By Tony English, Senior Merchant, Tool Rental Tony has worked in the capital equipment manufacturing and equipment rental industries for nearly 20 years, with extensive experienced gained at Ingersoll-Rand, Sunbelt Rentals, and The Home Depot.

Do we have space for storage?

Don’t underestimate the amount of space a large piece of equipment will take

Dear Maintenance Men ...continued from page 3 they should and should not put down the disposal unit. A few items to include on this “Do Not” list are: banana peels, potato skins, coffee grounds and any stringy food. Also make sure they turn on the water before using the disposer and put down small amounts of food at a time. Do not use the disposer as a trash can and then turn it on when full, it will clog. Halloween and other holidays also means more people than usual walking on your property. Is your property safe? What are some of the liabilities to worry about? Check trip and fall hazards. Sprinkler heads sticking up above the grass or landscape near sidewalks. Use pop-up heads to solve this problem. Look for sidewalks that have been pushed up by tree roots. This can be solved with a concrete grinder or replacement of the section and removal of the tree root. Cut any low hanging tree branches and look for branches that may break in heavy winter wind or rain. Check your decking for cracks or damage and inspect the exterior stairways for wear and tear. Inspect all your garage door springs, winter wind and rain may make them heavy causing the door to close or fall unexpectedly. As a precaution, always replace both garage springs at the same time and throw away

any used springs. Never install used garage springs. Check all property lighting and timers. Remember: Preventive Maintenance is cheaper than Emergency Maintenance! Bio: If you need maintenance work or consultation for your building or project, please feel free to contact us. We are available throughout Southern California. For an appointment please call Buffalo Maintenance, Inc. at 714 956-8371 Jerry L’Ecuyer is a licensed contractor & real estate broker. He is currently on the Board of Directors and Chairman of the Education Committee of the Apartment Association of Orange County. Jerry has been involved with apartments as a professional since 1988. Frank Alvarez is the Operations Director and co-owner of Buffalo Maintenance, Inc. He has been involved with apartment maintenance & construction for over 20 years. He is also a lecturer & educational instructor. Frank can be reached at (714) 956-8371 Frankie@BuffaloMaintenance.com For more info please go to: www.BuffaloMaintenance.com

Text REALESTATE-ROI to 44222

Advertise in Rental Housing Journal Valley Circulated to over 6,000 apartment owners, on-site and maintenance personnel monthly.

to receive a digital copy of this year's Real Estate Opportunities in Investing (ROI)

Call 503-221-1260 for more information

Finding Investing Success in Today's Housing Market

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1) Type _______________ Breed _______________ Size ______ Age __ WeightBlinds/Drapes ___ Color ____ Name ________ Vaccinations: Yes____ No____ License Number: ______________

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Pursuant to RCW Doors/Woodwork 59.18.150, this is your Counter Tops Walls 48 hour entering the dwelling notice that your landlord Locks unit and premises or their agents will located at (Address) ____________________ Cabinets be Windows ____________________ Ceilings ____________________ Sink Blinds/Drapes __________ Electrical Outlets ________ on between the hours Floor Rods of Garbage Cans (Date) and . Windows (Time) Floor TV Antenna/Cable (Time) The entry will occur Blinds/Drapes for the Light Fixtures Fireplace ____________________ following purpose: __________ __________ Cleanliness Doors/Woodwork__________ ____________________ ____________________ __________________ ____________________ Locks ____________________ ________

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Locks Tenant(s) certify that the above pet(s) are the only pet(s) on the premises. Tenant(s) understands that the additional pet(s) are not permitted unless the landlord gives ten Ceilings ant(s) written permission. Tenant(s) agree to keep the above-listed pets in the premises subject to the following terms and conditions: Electrical Outlets

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Rental Housing Journal Valley · November 2016

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Rental Housing Journal Valley

Top Tips for Real Estate Investing ...continued from page 1 In 2002, when my business partner and I first started our property management business in Rhode Island, we had a lot of questions on how to successfully manage a property. We were faced with what seemed like a never-ending list of day-to-day, tedious tasks such as credit checks, lease renewals, rent collection, etc., while simultaneously trying to grow the business with new properties. But fourteen years later, and through some growing pains, we’ve seen the potential for real estate investment and the success it can bring.

Are you looking to expand your own portfolio in a thoughtful and low-risk way?

While it will be trial and error to get a successful real estate investment or multiple investments off the ground, here are a few of the tips and indicators that helped my business partner and I along the way:

Location Matters

It may seem obvious, but location is a key factor when it comes to real estate investment. While it likely won’t make sense to invest in a property across the country because of travel constraints, a real estate investor or property owner/

manager should definitely put thought into what location will offer the most potential for rentals or flipping a home. This research can be done by looking at both industry trends along with other contributing factors. For example, Buildium’s annual Rental Ranking Report looks at a combination of U.S. real estate, rental housing and jobs reports, along with property appreciation forecasts, and a comparison of quarter-over-quarter and year-over-year data to discover how rental markets are changing. For 2016, some factors to consider for location from the report include: • Top Performing Metros: The top five performing metros for the past year include: San Francisco, Seattle, San Jose, Calif., Louisville and San Diego. • Top Performing Region: The Western U.S. is currently the best region for rental property investment, thanks largely to the impressive rent increases and property value appreciation found there. • Vacancy Rate: Worcester, Mass. had the lowest vacancy rate with 3.05 percent, and Birmingham

came in the bottom spot with a 17.67 percent vacancy rate. • Rent Variance: The percent change in median rent was best in Buffalo, New York at 16 percent and worst in Hartford at -6 percent. Looking at industry data along with other important statistics can help a real estate investor truly understand the market and serve as a valuable resource to guide property purchasing decisions.

Think Like a Renter

Becoming a successful real estate investor goes beyond just finding a good piece of land or a property at a good price. In the end, the success of a property always depends on its marketability, whether it’s for new buyers or renters. Does your property have the amenities that people are looking for? Is this a safe or quiet neighborhood in the city? Is the right property management company handling the property? Buildium’s annual American Renters Survey looked at these questions as it aimed to shed light on what tenants care most about in their apartment or home rental and provide insights to help prop-

erty managers and landlords attract and retain the very best tenants. Some of the findings include: • Overall, an in-unit washer/dryer, high-speed internet and central air are the three most commonly sought after amenities among the age groups surveyed. • Feelings about property managers tended to be significantly more negative overall than feelings about landlords. Of those tenants who don’t like their property manager, 58 percent say they are extremely or very likely to move in the next year. • Among all the factors that renters consider when renting an apartment, 72 percent of the surveyed renters prioritized location. Indeed, when renters were asked what they love most about their homes, two of the top three answers were a great location and a nice, safe neighborhood. It’s necessary for real estate investors to consider these factors if they want their investment to eventually be profitable through either selling or renting. Researching what tenants are looking for in that area, or what amenities are included in recent rentals or home purchases can really help convince that buyer or renter to make the move.

Going Digital is a Must

It goes without saying that technology exists in every facet of our lives, and this goes for the real estate industry as well. Adopting and implementing relevant technologies can only help an investor’s business, and there are a few ways to do this. Right from the start, technology should be used when marketing properties. Buildium’s aforementioned American Renters Survey found that when renters are searching for new housing, they first look at Craigslist, Zillow, a Google search and finally ApartmentList—clearly showing that just listing properties in the local paper is not a top search method. The report also found that a large percentage of potential renters are looking for digital options such as online listings, electronic leases, electronic payments and online maintenance requests/ tracking. Especially for those renters in multi-tenant dwellings, where 37 percent of renters indicate they can currently pay online and 59 percent indicated they like or would like to pay rent via ePay methods. Additionally, while only 27 percent of residents say they currently use a tenant portal (property management sites where they can connect, get information, file maintenance tickets and pay rent), 45 percent report either having and loving it, or wanting one. When it comes to real estate investing, the success of a business goes beyond just purchasing a brand new condo around the corner. Investors should make sure to look into the key trends listed above and relevant research in their area in order to set themselves up for success. While in the end it always depends on the effort put in, these tips can assist as some fail-proof guidelines to help along the way.

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