As a landlord, you want to help your tenants have a nice place to live. However, you also want to be receiving an adequate amount of rent for the quality of your building, units and location. However, in some major cities across the USA, rent is actually dropping. While this is great for renters and potential tenants, it isn’t so great for landlords.
However, there are some things you can do to your buildings and/or units that will allow you to command more rent from tenants. This article will take a look at a few of them.
This is one of the best and most common ways to command more rent in your building. Outside of location and size/design of unit, the building amenities are something that can often command more rent. While adding amenities will often take some time and a bit of money, they can be worth it.
The types of things you can add to your building are endless. Washers, dryers, dishwashers, a pool, a gym, vending machines and more are all things that people enjoy to have at their buildings, and will often pay a higher rent for. Of course, depending where you are situated, air conditioning and heat are also important if you don’t currently have them.
In addition to that, you can also add things such as a doorman or a valet, if you are a high end building. Both of these offer a lot of value, and people will likely be willing to pay a premium for them.
Offer Unique Financial Benefits to Renters
People love free stuff, there is no doubt about it. As a result, if you can find a way to give some free stuff or other financial benefits to tenants, you should do so. This could be a rewards/membership card that gives all tenants a discount at participating businesses, could be a gift card to a partner or anything in between.
A really creative thing that you could do is take advantage of the recent popularity of short-term rentals and work with a company like Rentbelly. They are a web-based service that enables you to implement a short-term rental policy. The tenants will love the ability to rent out their units, and not only will you be able to charge a higher rent by offering ability to short term rent as an amenity, but can also potentially take a cut of their earnings for using your unit.
Offer Extra Storage
One problem that many renters have, especially in places like San Francisco, is that they simply don’t have enough space. Storage space is always important and landlords lose out on a ton of potential tenants if they offer limited space. As a result, adding space in some way (such as a large wardrobe or an on-site storage area) can not only attract more tenants, but also get them to pay a higher rent, most likely.
If you are not able to physically add more space to units or your building, there might be another way. If you have a storage facility in your city nearby, you can potentially come to an agreement with them that would allow each tenant their own unit. For example, maybe the facility would give you a slight discount if you bring them X number of customers, and the fee that the facility does charge would be put on the tenant in the form of a slight bump to rent.
While this would be completely up to you and the facility (and you need to be aware of any laws around this), it could be a way for you to command more rent, your tenant to get more space, and the storage facility to get more business.
In conclusion, these tips can all help you command more rent in your building. While things like age of building, features and location are still king when it comes to deciding rent prices for a building, these few tips can be beneficial. Of course, you want to make sure that the money spent on these additions or added benefits is worth it in terms of your ROI.
Marketing Tips for New Landlords
Acquiring a rental property and getting through the legalities is only the start of becoming a landlord.
If you’re going to turn a profit on your investment property one of the next, most tedious tasks of all are finding the right tenants to occupy the unit.
Sure, there are thousands of renters in the area looking for the perfect place to call home, but getting them interested in your place goes beyond putting a for sale sign in the window.
If you’re going to attract reputable, long-term tenants who will treat your property with respect, pay rent in a timely fashion, and make the property investment experience as smooth as possible, you’re going to need to draw them in. Here’s how:
Get Your Property in Check
Tenants are looking for a place to reside that will create the most convenient for them.
Though they’re not legally responsible for the maintenance and repairs that homeowners are required to cover, they don’t want to move into a location where there are a lot of issues.
Before you can attract tenants to your rental property, you need to make sure it is in check. This not only means making sure that it passes city inspection standards and is up to code but making changes such as those listed below to appeal to your target renters:
If the appliances on the premises are still in pretty good condition, make sure that they are serviced.
Have the vents cleaned and filters changed on the HVAC system, clean and change filters on the refrigerator, clean and maintain the oven and stove, and have the hot water heater serviced.
Clean the property
No one wants to move into a unit that they have to do a deep clean on before they can unpack and get comfortable. So, have the premises cleaned thoroughly from the inside out.
Clean carpets, wash walls, declutter cabinets, mop, vacuum, and whatever else needs to be done to make sure the rental property is move-in ready.
The outside of the house matters just as much as the inside. A property that looks unkempt from the outside won’t interest the quality tenants. Tend to exterior maintenance regularly to avoid the small jobs becoming full replacement at a much greater cost. Keep the roof maintained, gutters cleaned, and regularly check the cladding.
Depending on who your ideal tenant is, consider landscaping, but first check sites that offer tips like Nature’s Seed blog. Adding the right amount of low maintenance greenery, and maybe a deck and some outdoor lighting can entice the tenant you want in your property.
Price it Just Right
The rental market is very competitive as more individuals move away from homeownership for the convenience of renting.
That being said, your rental rates need to be attractive to prospective tenants while also being lucrative for you.
Here are some factors to consider when pricing your rental unit:
Consider what needs to be covered
There are a few things you’ll want the tenant rent to cover to prevent your asset from becoming a liability. This includes the mortgage (if necessary), maintenance, repairs, and small profit.
To price your rental unit, first take a look at other properties in the area that are the same structure as your own. Pricing just below theirs gives you an advantage.
Are there conveniences a tenant might get with renting from you as opposed to another property? Did you upgrade the kitchen? Do they get a better view? Are they closer to public transportation or tourist attractions?
Finding the Right Platform
Now that your property is up to par (both structurally and aesthetically) and you’ve decided on an attractive price, the next step to marketing your rental property is finding the right platforms to reach your ideal tenants.
Draft a detailed property description along with key benefits and tons of pictures then decide where you’ll post.
Here are a few suggestions:
Free classified sites such as Craigslist
Rental sites like Trulia, Zillow, or Apartments.com
Social media sites like Facebook, Twitter, or Instagram
If you’re going to find the perfect long-term tenants for your new rental property you’ll have to work hard. In order to draw in reputable renters, you must have a property that is intact, aesthetically appealing, convenient, and priced efficiently.
Once you have that, it’s all about finding the right platforms to reach your audience. Hopefully, these tips will put you just a bit closer to finding a resident that will treat your property with care for years to come.
How Much Profit Should You Make on Rental Property?
Do you own a rental property? How then do you increase your income and profit? Is it by increasing the value of your property? Or, is it by raising the rent? What about cash flow? Have you ever thought of ways to make money from your property, besides rent?
And where do your tenants enter the picture? As you probably know, long-term tenants increase occupancy, lower turnover, and increase profits. So, how do you keep them from leaving while attracting new ones like them quickly? In short, how do you earn a profit and gain money on rental properties?
Let’s see these 5 tips:
1. Reduce Tenant Turnover
Losing long-term tenants is acceptable if they move after buying homes or finding jobs in other cities. What’s not acceptable, however, is losing them to another landlord. Remember, every lost tenant leaves behind a repair bill. Walls must be painted and floorboards or tiles replaced. And then there’s the cost of advertising and that of lost revenue.
What does this mean for your bottom line? Simply this: With a high turnover rate, you incur this cost repeatedly and, more importantly, unnecessarily. To avoid it, give tenants a reason to stay. Upgrade kitchens and bathrooms or enlarge rooms. Next, improve customer service. Be courteous and professional, address any problems promptly, and ask for feedback. Or, have your property manager do likewise.
2. Increase Occupancy
A vacant property costs you money. But do you know how much? Here’s the surprising answer. Every month of vacancy lowers your annual revenue by as much as 8 percent. Obviously, keeping occupancy close to or at 100 percent is the key to profitability. But how do you do this in the face of stiff competition?
You act the moment a tenant leaves. Post ads about the vacancy, and if the property is in a prime location, tenants will start lining up for it. If they don’t, offer them an incentive. Lower the first month’s rent by about 5-8 percent. This way you break even. After all, this discounted rate approximates the 8 percent annual loss we’ve just seen.
3. Collect Late-Payment Fees
No landlord loves the inevitable task of rent collection, which is partly why most leave their properties to property managers. But let’s assume you don’t, that you manage your property yourself. Regarding rent collection, what difficulties do you face? More often than not, it’s late payments.
Appealing to your kind side, tenants pay later and later each month, all the while giving excuses. And when they finally hand over the rent, they leave out the fees associated with late payments. What should you do?
Be firm, yet professional. When a tenant pays late, explain that you consider the rent fully paid only if it includes all the fees. Then, politely decline the money until they comply. This way, they respect and abide by your boundaries.
4. Raise Rent
After upgrading a property, you can safely increase the rent without turning away tenants. In fact, you do just the opposite. New tenants want the property because nothing else matches it in the neighborhood. Existing tenants, on the other hand, hang on to it for the same reason. Also, moving comes with extra costs they may not be prepared to incur.
However, exercise caution while you’re at it. Research the rents in your area first to know how much to rent to increase. Otherwise, you stop being competitive. As a general rule, aim for an increase of not more than 3 percent, which adds to your revenue without adversely affecting your competitiveness. And if possible, schedule the increase to coincide with lease renewals. This gives tenants the chance to opt either in or out.
5. Increase Income Streams
How much profit should you make on a rental property? As much you can is the best answer. So, look beyond rent and property appreciation. Also, focus on cash flow. Let’s assume you own a multi-family apartment, for instance. Have you ever thought of installing vending machines in them? How about coin-operated laundry equipment? Both increase not only your income but also the value of your property.
And don’t stop there. In one-family residences, clean houses and landscape yards for your tenants, but for a fee. As they already hire out these dull tasks to others, convince them to hire you instead. And after negotiating a price with them, collect the fee. Then, approach cleaning and landscaping companies and negotiate a lower rate. By keeping the difference, you make an extra few hundred dollars per single-family home per year.
Increasing rental income isn’t that difficult if you keep tenants and attract new ones quickly. And besides, increasing rent and income streams, also improve on how you collect rent. But above all, treat tenants with dignity and respect, but be firm, especially on rent collection.
Top Tips for Increasing Security (and Thereby Rents) at Your Rental Properties
When you buy property as an investment and rent it out to tenants, you want to ensure that each year you get the maximum yield possible, and that good, reliable renters stay living there for a long time. While there are numerous ways you can attract top tenants, such as choosing properties in a popular area, keeping the home maintained and up to date, allowing people to have pets on the premises, and so on, something that’s well worth thinking about more is security.
In this day and age many tenants are worried about their own personal safety, and that of their family and pets, as well as their belongings. As such, you can make your property more desirable by ensuring it’s secure. Read on for some ways to go about doing this in 2019, and enjoy increased rents in turn.
Let There Be Light
One key thing to do is install outdoor lighting on your property. This helps to prevent crime because robbers and other people whose intentions aren’t honorable usually don’t try anything if the area they’re looking at is illuminated. It’s obviously not a guarantee of safety, but it certainly increases security and works as a deterrent.
If you own a house (condo units and townhouses should already have outdoor lighting installed), make sure you install lights at both the front door and back door of the property and potentially further out into yards or along pathways. It is a good idea to make these motion-activated and solar-powered.
Make Doors and Windows Secure
Another one of the most important security steps is to make your property’s doors and windows secure. For example, when it comes to the doors used at entry and exit points, these need to be of a good quality and solidly made from heavy-duty materials such as steel and wood. Steer clear of hollow doors, as these are easier for burglars and other people to break; instead opt for solid doors.
Something else to be mindful of is having front or back doors made from glass or including glass panels, especially if these panels are located close to the locking mechanism on the door. Glass can be broken by those with ill intentions, so they aren’t the best option. In addition, install doors with peepholes built into them, so tenants can look outside and see who is at their door without actually opening up.
To increase security, place proper locks on all exit and entry-based doors and windows in the house. Deadbolt locks are a good addition, especially double-cylinder ones, as these are much harder for criminals to break into. Specifically, double-cylinder deadbolts are recommended for doors located near windows since they stop people from reaching through such openings to get to doors. Chain locks and security screens are another element you might want to install.
With property windows, keep in mind that even those you feel would be too small for anyone to access aren’t necessarily going to keep thieves out. Plus, people can also enter windows on higher floors than you would expect by using fire escapes or finding other types of access points. As such, all window should have locks on them.
If you own a house or have a unit that’s on or near the ground floor, it’s wise to add security bars or screens to the windows. These deterrents really give criminals something to think about. An alternative option, if you don’t like the look of bars or screens, is window sensors. These work by sounding an alarm if the locking mechanisms are tampered with at all.
Install Security Alarms and/or Cameras
Another addition to your property that can make tenants feel safer is that of security alarms and/or cameras. While these are usually installed in multi-family homes or expensive properties with high rents to justify the costs of the feature, they can be added anywhere you think the need is warranted.
Contact specialists in these products, such as any of these Balt home security services, to install cameras or alarm systems for you. Cameras usually get put in at front and back entrances of houses or outside of apartment doors in unit buildings. They can also be placed in garages, to monitor the parking space or garage of the flat in question.
Alarm systems have to be wired in, and may be paid for by the landlord, but are often charged to tenants as an additional fee if they want access to the monitoring option.
Smart Ways to Handle Renting out Your Property for the First Time
When you become a landlord for the first time, whether because you have bought an investment property or because you have to rent out your personal home for some reason, the whole process can be rather daunting.
There are lots of stories, after all, of tenants from hell, damaged properties and lost money that can make being a landlord seem a very hard job. Plus, when you take a look online at the number of properties to rent, whether checking out Omaha apartments, Texas houses or L.A. studios, you’ll see that there is always plenty of competition for your property.
However, as long as you’re proactive and follow some key tips on being smart in the way you handle renting out your property, you will give yourself the best possible chance of success in finding the right tenant and reducing the risks of damage or non-payment significantly. Read on for some ways you can move forward effectively today.
Think Like a Business Person
One of the most important steps is to think like a business person in your investment property transactions. That is, rather than handling things emotionally or being laissez-faire, you want to be objective and look for ways to cover yourself and your interests, while earning as much income as possible.
For example, be wary of renting out your property to people you already know, such as family members, friends or colleagues. If you do lease the property to a contact, it can be hard to be strict with them if they end up being late with their payments or cause damage to the property.
To maximize your income, expect on-time payments and chase up late ones rather than letting them just slide. Protect yourself by taking necessary measures to get properly compensated or to evict tenants if they continually get behind or just don’t pay.
It’s wise, too, to create a separate bank account for all your investment property transactions. This way, any money coming in or going out related to the home will be separate from your personal finances. This makes tax time and other financial steps simpler and easier. Also, keep receipts for all costs associated with your property, so you can claim them on taxes. Think in a business-like way by considering insurance and the safety and upkeep of the property, too.
Seek Advice From Professionals
To be smart when it comes to renting out your property, seek advice from professionals such as accountants and lawyers. Accountants, for instance, can help you by recommending the best way to structure the ownership of your property. Then, they can advise you on what you can and can’t claim on tax and other income and expense-based matters.
Lawyers should be consulted too, as they can protect your interests in numerous ways. For example, they can look over the contract for the property when you buy it and that of any mortgage associated with it, and they will peruse a real estate management contract if you decide to hire a property manager. Lawyers are also good to have on hand to keep you up to date on your rights and responsibilities as a landlord.
Find the Right Property Manager
While some property owners decide to look after the renting and management of their home themselves, particularly if they live close by the property, most people end up hiring a manager from a real estate firm to handle things on their behalf.
This is usually wise because the job takes up a lot of time throughout the year (if it’s done correctly), and people who specialize in it are more aware of the right way to go about the various rental elements, such as advertising vacancies, finding tenants, creating leases, conducting inspections, getting repairs and maintenance sorted and so on.
If you want to take some of the stress off yourself and free up time, make sure you find the right property manager for your needs. Research the various options in your property’s city carefully, and check reviews and testimonials about the agency or specific agent to be sure they have a good reputation and won’t be likely to drop the ball.
Ask lots of questions of those you have on your shortlist – about their experience, communication style and, in particular, fees. Try to find out any potential extra charges you could be hit with. Always get everything you agree upon in writing in a signed contract, so you’re covered if things go pear-shaped.
5 Essential Tips for Finding a Great Lodger
Taking in a lodger can be a great way to get more income from your property and put an empty room to good use. In the best case scenario, you’ll find a reliable and responsible lodger with whom you’ll hit it off from the start, and in other cases, you might find yourself left with an unrecognisable room and thousands in damages to deal with, not to mention the possibility of lodgers skipping on their rent.
However, when done properly, taking in a lodger should go smoothly without any complications. Here are a few simple tips to ensure that you get the most out of the whole experience.
Calculate the Rent
Knowing how much you’ll charge for rent may seem straightforward at first, but there are a few things you’ll have to consider before you set your price. You have to consider things like where in the country or the city you’re located, the general condition of the home, and the amenities offered.
You should calculate whether the cost for things like electricity, council tax, water and gas charges will be included in the rent or not. You should also be aware that taking in a lodger will make you ineligible for single occupancy tax breaks, so you should account for this as well.
Understand Rent-a-Room Benefits
However, while you won’t have access to single occupancy tax breaks, you’ll still be able to earn up to £7,500 completely tax free per year thanks to the government’s rent-a-room scheme. However, you have to make sure that the room is fully furnished and note that there are no expenses that can be offset against the tax. If you earn £7,500 or less, it’ll automatically get deducted, but for anything more, you’ll have to complete a tax form.
How to Find a Great Lodger
This is where things get tricky. However, thanks to the internet, finding a great lodger is easier than ever. There are tons of services that allow landlords to advertise their rooms and find suitable lodgers. Services like Monday to Friday allow landlords to find lodgers specifically for Monday to Friday arrangements. These are often professionals living in the country looking for a place in or near the city to stay during the work week. The above-mentioned service will also facilitate the screening process allowing you to reduce risks.
You could also decide to go for a more traditional approach and advertise through print for instance, though it won’t be as safe and efficient as using a site made specifically for this purpose. You could place postcards in nearby shops or even pay for an ad in your local newspaper. Colleges and universities are also great places to post your listing if you’re ready to do the footwork.
Work on an Application Form
An application form will help you get more information on the lodger and make sure that they’re suitable and trustworthy. But you don’t necessarily have to go into full detail about their life; all you’ll need is their current and previous address as well as information on their current employer at the very least. You should also make sure that you get some identity documents too, such as a driver’s licence and/or passport. And don’t forget to ask for references as well. You should get at least two references from either previous employers or landlords.
Another important detail that you should add is a signed permission to check on the applicant’s credit history. Credit history will often give you a much clearer picture on a prospective lodger then any type of reference. Many websites will allow you to perform a credit check in exchange for a small fee. This will give you the added peace of mind that the tenant you’re letting in is in good standing with their creditors, and lowers the risk that they’ll default on their payment.
It’s also essential that you have a clear contract laying out the conditions of the agreement if you want to avoid chances for conflict and misunderstandings in the future. This will include things like whether pets are allowed or not in the property and whether they’re allowed guests, and how often if so. You should also draw up a cleaning rota and work out more delicate issues like food sharing for instance. Another thing you’ll have to draw out is how much access the lodger will have to other parts of the property if you want to protect your privacy and personal space.
Finding a great lodger is possible if you do your homework and go through the proper channels. Always make sure that you follow the few simple tips in this article if you don’t want to end up with a lodger from hell on your hands.
5 Tips How to Negotiate Your Office Space Rental Lease Agreement
An office lease is one of the most expensive contracts a small company will negotiate. In this market, how much you pay is not nearly as important as how you negotiated it. As the owner of a small company, the pressure can make a successful negotiation for your first lease seem impossible. A bad lease agreement could endanger your company’s survival. With a few tips, you can get negotiate a strong agreement in your favor though. The following tips will show you how to negotiate your office space rental lease agreement.
Find Your Leverage
In your negotiation, make sure you have leverage over the landlord. This involves researching the property you want to lease and looking for advantages. Determine if there are other companies interested in the space or how long the space has been free. Knowing these factors can let you pressure the landlord for favorable terms if they’re desperate to rent the property. On the other side, make sure the landlord knows that you have other comparable options. If they know your desperate for the space, or if the space is exclusive for your purposes, they may demand more in rent. A good negotiation is all about information. If you go into the negotiation knowing the other party’s weaknesses, you can leverage a better deal.
Focus On Term of Lease
Getting a good length of term for the lease should be your main goal in negotiation. Getting a low rate is good, but term is more important in case you want to move corporate offices later on. If your term of lease is matched to your company’s needs, it will save you a great deal of money over time. Make sure that your term doesn’t extend beyond when you can use the space. In determining term, you need to realistically consider the future of your company. The best way to protect the term of the lease is to make sure the agreement has a right to leave. Concentrating on the term of the lease will protect you from having to pay rent if your company collapses or if you need to expand into a bigger office.
Look For Hidden Costs
The Landlord will try to find ways to hide fees in the agreement. As a result, make sure you read the agreement carefully and identify them. A common hidden fee is maintenance costs. Insist that there are dollar caps on any maintenance costs your expected to cover. Similarly, you might find office space for rent NYC that comes with housekeeping and maintenance included. You could have additional fees for reception, shared conference rooms or internet access. When possible, try to insist on a gross lease, which will prevent the landlord from charging these other fees. By the end of the negotiation, all costs should have been discussed so that you can sign the agreement confidently.
Check The Condition Of The Property
During the negotiation, determine the condition of the property and who’s responsible for needed repairs. It’s important to avoid a deal where the landlord rents you the property “as-is.” Even if the property looks clean and up to date, you should have all of the workspace options checked. If property has code violations or other problems, they can become your responsibility depending on the terms of the lease agreement. Discuss needed renovation in the negotiations. If possible, acquire an incentive or allowance from them for the renovation.
Have The Agreement Reviewed
After a deal is struck, make sure you have a lawyer look it over before you sign. Even if you employed a broker to help in the negotiations, it’s good to have a real estate lawyer check it. Brokers are working on commission. As a result, they many not necessarily act in your best interest towards the end of the deal. A real estate attorney can ensure that your lease agreement is written fairly for you as a tenant. Regardless of your skill at the negotiating table, you’ll benefit from having an expert check your work.
Negotiating your first office rental lease agreement can seem difficult. With a few tips, it can be manageable though. Do research on the property and find leverage on the landlord. Focus on the term of the lease, not solely on the rate. Look for hidden costs hidden in the agreement. Plan to discuss the condition of the property. Once an agreement is reached, have it reviewed by a real estate lawyer. With these tips you can negotiate a new lease without fear of a bad deal.
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