Landlords: How to Determine the Rental Amount for Your Property

I want to introduce several resources where a real estate investor or property owner can determine what rent you can charge for your investment property. The three most popular websites available for this purpose are Zillow.com, Rentometer.com, and Craig’s List.

Zillow is the most popular and respected so we will start there. Go to Zillow.com and put in the address of your property and then click “search”. Click on the word “rent” or “Zestimate”, both will give you rent estimates. The word Zestimate (rent estimate by Zillow) should pop up with the rental amount and the range Zillow thinks the property may rent for.

We know Zillow is not perfect. Zillow uses computer models and they are basing their rent Zestimate upon averages in the area that have similar characteristics of your property, i.e. square footage, similar number of beds, bathrooms, etc. Again, no computer model will be perfect but generally Zillow is accurate. You will need to be realistic about the property and observe its characteristics. If your house is a multi-unit building or if your house is somehow different than every other property in the neighborhood, the Zestimate may not be accurate.

The second site is rentometer.com. Once on the site you enter the property address. In this site they ask for how many bedrooms are in the property. You can also provide other information that could make the rent estimate more accurate. Once you have entered all information click “submit”. The site will give you a similar analysis to Zillow and a range they think the rent may fall in.

Another good way to get rent comparable is Craig’s List. Craig’s List has had issues in the past involving scammers and fraud. But as far as determining rental amounts it is fairly accurate. On this site, you would perform a slightly different search. You would go on Craig’s List for your area and go to “Apt/Houses” section and type in your town. Or, if it’s a development, you might type in the development name. You then enter the number of bedrooms and/or bathrooms. At that point many house or apartments will appear in your search for rent. You then need to review them and see if any of them are similar and look like your property so that you are comparing apples to apples.

Keep in mind these are estimates and you will have to test the market to really know what your property can rent for per month. We do not recommend that you try to “go high” and figure you can negotiate down. This rarely works to in today environment. Generally, if you over price your property hoping to get more rent it will just get ignored and you will not get any traffic or potential renters.

I better strategy is to use the above resources to get a close estimate of your property will rent for and then price your property slightly lower. This should attract a lot more tariff and may be result in a quick move in versus over pricing and the property sitting vacant for weeks or months.

Make the Most of Rental Property Listings With These Tips

Anyone who hunts for rental homes know the hard work that goes in finding the apt property. Apart from looking for properties, one has to find the right choices depending on needs. This can be time consuming process, and you may have a lot of hassles to deal with. Thankfully, with the internet, things are now simpler. A number of websites are now offering free rental property listing, coupled with a number of benefits. In this post, we will talk of a few aspects that matter the most along with a few tips on how you can choose the right portal.

Knowing an online property search

Real estate portals have found immense success in recent times, and there are quite a few choices. Apart from buying and selling, a number of sites also focus on the rental properties. You can check for homes and apartments, within your requirement range and budget, and all of these things can checked and sorted in a few clicks. Typically, most of the websites will have their filters for cities, area, type of property and pricing, and you can check other aspects, as well. Make sure that you look for more than a few options and sort them based on the pros and cons.

How to choose a website?

As mentioned, there are a number of sites that offer rental property listings, but you need to be extra careful while choosing one. Make sure that the website is easy to use and there are some good choices for every city or area. You don’t want to use a website that’s complicated and doesn’t offer the right features. Also, you should check if the website connects you to the landlord or property owner directly, which can help in getting rid of the agents and ensures transparency in the deal. You can also find reviews and feedback about a portal from other users and tenants, which can come quite handy.

Things to check

First things first, you have to list down the pros and cons of a property before making the choice. Short listing a few options is pretty easy, and once you are done with that, you can spend the weekend finding the right one. While talking to the landlord, you should ask him for the final rent for the month, and if there are any additional or monthly expenses and recurring maintenance fees, it should be mentioned in detail. You might also want to see the terms and conditions as mentioned by the landlord, including issues related to repairs and further upkeep. Not all landlords are the same, and therefore, it is always a good idea to have a concrete rental contract with all aspects in writing.

If you can check these aspects, finding the right home shouldn’t be a matter of days. More often than not, people find the right properties within a few clicks. These services are also helpful for landlords, who can expect genuine results and options, especially when they are looking for specific tenants.

You Bought a Tenant-Occupied Property But Know Nothing About Property Management

Uh oh. But not uncommon.

Let me start out by saying that managing your own properties starting out is the way to go.

Why?

Because you must know the laws and what you can and can’t do as a landlord. Perhaps you have no interest in managing the properties yourself and plan to immediately hire a management company. *Warning* – if you don’t understand property management, you won’t know how to hire a property management company or if they’re doing a good job. I’m quite confident when I say that most property management companies are not good.

Now, to the problem at hand – There’s a Tenant in Your Property!

1. When you bought the property, you should have received the tenant deposits and contracts from the previous owner. If you didn’t, you started out wrong. If the owner says they did not have contracts or deposits with the tenant but the tenant says they had a contract with the previous owner, ask the tenant for copies of the contract they have. If they also can’t produce a contract, there is nothing binding you to any previous terms.

2. Hopefully you received the tenant deposits because, when they move out, you want something to cover the repairs you will need to do, plus, you’ll be responsible to refund any deposit they paid that is not used for unpaid rent or damages (even if they paid it to the previous owner who did not pass it on to you).

3. You are legally bound to uphold any prior contract and terms that the tenants have (again, providing you have a copy of these agreements). Consumer protection laws protect the tenant and bind you to their previous agreements until those agreements expire.

4. If there is no contract, send all tenants your own new contracts immediately. They are allowed to sign or move. You will then be managing your property according to your terms.

5. Owning a property and managing tenants are two very different businesses. You must learn property management if you’re going to have tenants. I wrote a book – The Essential Handbook for Landlords – available on Amazon, which is a great starting point.

You own the property – you’re the one in charge. You need good contracts and it’s essential that you know your local laws and how to manage tenants.

6. When you do decide to hire a property management (PM) company, know that they manage based on your paperwork and your rules. I owned a PM company for years and most owners came in with their own previously-signed contracts and rules. Some allowed pets – some didn’t; some allowed smoking – some didn’t, etc., etc. We enforced the owners’ rules. What you do with your property is up to you – the PM company enforces your rules (if the company is any good… ).

Managing properties and/or tenants all goes back to the contracts. And your local laws. Every state is different. Know your laws.

Additionally, owning rental properties is a business. When any tenant is “bad” including behind in payments, start eviction IMMEDIATELY. I listen compassionately to their reasons, but the rules are the rules and don’t bend them for any because, if you give in to one, you must give in to all (consumer protection laws, again).

Have you ever bought a property with a tenant already in place?

Tips for Outgoings Management and Budgets in Commercial Property

When you manage commercial real estate, the outgoings within the property will require focus and financial control. When the property market slows or gets tougher, managing the outgoings is really important; the outgoings form part of the financial strategy for the landlord and will impact the net income for the property. If the outgoings get too high, the property will be hard to lease and hard to sell.

Set Some Rules

You can split the outgoings into a number of categories and this is normally done to identify and track the cash flow by expense streams. Most importantly there are two sides to the outgoings equation. Some of the items will be controllable and others will be uncontrollable. This means that the landlord can exercise control on only some of the outgoings.

The uncontrollable outgoings are those which are imposed on the property and have to be paid without any opportunity for cost savings, adjustments, or budgeting. Those uncontrollable items are normally council rates, land tax, and water rates. To a degree, insurance and energy costs will also fall into that category although some cost controls are possible with these items.

To manage the property outgoings effectively it pays to adopt a process similar to the following:

  • Create a budget for the property prior to the commencement of financial year
  • Track your expenditure to budget monthly. Adjust expenditure when you see a need and reason; early adjustment prevents bigger blowouts.
  • Look at the history of the property expenditure over the last few years to identify any excessive spending or items that are beyond the averages in the local area. The history of the property will allow you to adjust your budgets and cash flow expectations.
  • Make sure that you have removed the capital expense items from the normal repairs and maintenance for the property.
  • Talk to the owners of comparable properties in the same area. The outgoings between your property and their property should be similar. If not, you need to know why and take steps to fix that. Share information of outgoings costs with other similar property owners for this very reason.
  • Monitor the annual valuations for rating purposes. When these valuations are done, you will soon see the statutory charges and council rates rise soon after. It is not unusual for landlords and property managers to dispute the valuation in an effort to keep the statutory charges at a lower rate.

In preparing an expenditure budget for the property, you should time the expenditure so that the larger costs are expected; hence ensuring that the cash flow is suitably adjusted in preparation.

The controllable outgoings are those that the landlord can exercise decision and timing. Normal items of repairs and maintenance together with the contractor maintenance will fall within this category. If the landlord chooses to delay the expenditure with the controllable outgoings, then they can spread the impact of those items on the net monthly income from the property.

In summary, the property manager working on behalf of the landlord should exercise due care and diligence in the budgetary process for property expenditure. A well-managed landlord cash flow in an investment property is a correct balance of income against expenditure given the tenancy mix pressures on the building and the existing vacancy factors.

Best Three Tips To Find Your Rental Property

With the rising cost of properties, It has been harder than ever to buy a new home. Of course, people cannot do without a roof, and there comes the choice of rental properties. Finding the right home isn’t going to be easy, especially in US and Canada, where landlords are charging insane prices for almost every single home. As a smart tenant, you have to go a step ahead and decide on certain things before narrowing down to certain choices. In this post, we will talk of some of the things worth considering before you find your rental property.

Start with an online check

Gone are times, when you would need to spend hours on the weekend trying to find ads for rental homes! Thanks to the internet, things are much easy today, and you can find some amazing sites that enlist rental properties for most states and areas of US. You can check properties based on your needs, and it is very easy to sort a few options. Some of the sites connect the tenants with the landlord directly, which makes the process of negotiation and discussion much easier. Just make sure that you choose the right website, which has plenty of properties.

Check the budget

It is essential to have a budget for your home, but don’t set an amount based on your whimsies. There are always a few trends in the rental market when it comes to prices, and hence, you should spend some time researching on the same. Make sure that you check for the actual rent, added expenses if any and other long and short term expenses. Typically, rental sites can give you a good idea of how much you may need to shell for a particular type of house, but you can also check on other sites too.

Know what the lease means

Many tenants don’t read rental agreements in detail, and that can have serious consequences. There are usually a few things that you should note. The first thing is the length of the lease, which should be clearly mentioned. Secondly, you need to check for deposit requirement, and how the landlord is going to deal with the refund when you move out. The third part is property maintenance, and you should know if there are any expenses that are payable every month.

Also, not all home owners allow pets, so if you intend to bring your pooch home, always discuss the same. Sometimes, homeowners and landlords don’t allow changes in the house, like adding of special lights and painting, and hence, you should talk on the same. If you are going to have roommates, you need to know the arrangements with them, and the lease sharing clauses, if any.

If you can check for these aspects, it would be pretty easy to find a house that would eventually become a home. Always make sure to talk to the landlord directly, so that there are no misleading facts and talks. Start checking online right now!