How Do You Determine the Value of Your Rental Property?

August 26, 2015 by Ron Huckabee Posted in Property Management Blog Tagged Investors, Landlords, Pricing Strategy Leave a comment

When renting a property, deciding how much to charge for rent can be deceptively difficult. Sure, charging more than surrounding properties might pay off if you own the most desirable property in the neighborhood, but this can drive potential tenants away. Remember, while you’re looking to turn the most profit, tenants are looking for the best property, at the best price. The decision to rent out your home is a business decision at its core. As with any business, your pricing strategy affects everything. If it’s priced too low, you’re not getting the maximum ROI, and it can negatively affect the perception of your property to prospective tenants. If it’s priced too high, you run the risk of it sitting vacant for an extended period of time, effectively preventing you from making a profit at all. Finding a balance that’s fair to owners and to tenants may be trying, but there are a few key points to consider that will help you in the right direction. Whether or not you’re working with a property management company, it’s important to know how pricing works so you fully understand what your potential return will be.

Location, location, location.

One of the most important factors to consider is where the property is located. Look at surrounding properties to see what kind of rent they are charging. Try to keep track of which properties in your area are being rented quickly and which are sitting dormant, and try to figure out what differentiates them. Of course, the desirability of a property is affected by its proximity to local amenities, such as schools, transportation, local attractions, and hospitals. The closer a property to these facilities, the more youcan justify adding to a rent. This is one of the key benefits of working with a property management company like Simply Residential Property Management. We know the market and are always up to date on the latest trends in the industry because that’s our job. Our clients don’t worry about all the leg work, we find the information and explain their options to them.

Seeing is believing.

A good view can greatly increase the value of a property. Looking out over a garden or field, a property will feel more enticing to prospective tenants. Meanwhile, a property that faces a parking lot or a highway will sometimes struggle to justify a higher rent.

Extra, extra!

When considering how much to charge for rent, extra storage space, a washer and dryer in the unit, central air conditioning, a fenced in yard, balconies, being pet friendly and off-street parking can all help justify adding a few extra dollars. Prospective tenants will likely have seen several properties, and many will be willing to pay that little bit extra for the added benefits your property has to offer.

Try to find a balance.

If your listing is over 21 days old, despite regular viewings, then it’s time to consider if you have been asking for too much. While it’s tempting to leave a high rent rating on a property in the hope someone will snap it up, tenants are more likely to continue looking than settle for somewhere they feel is overpriced. Likewise, if you set the rent too low just to attract potential tenants, you’ll feel the pinch further down the line when you aren’t experience the greatest possible return. Also, it could negatively alter the perception of your property, or attract tenants that aren’t the best quality. Working with a property management company in this respect is also a huge benefit. They have the resources to do more marketing and thoroughly screen renters before they’re offered a lease.

Know your market.

There are very few properties on earth that will stay the same value forever. When you set your rent, remember that this will be liable to change according to the current property demand. If you leave the rent at a higher price during a dip in the market, then your property will be seen as overpriced in comparison to those around it. If you keep your rent at the same price when everyone around you is raising theirs, you could be missing out on the chance to increase your overall yield. There is no such thing as a set-it-and-forget-it rental price.

Remember what’s important.

The most important thing to remember is that each decision you make regarding your property is first and foremost a business decision. Your property is an investment, and so turning a profit is the most important aspect of your role as landlord. Many property owners, especially those with large mortgages or construction loans, do not see an actual profit until they sell their property or until they have owned the property long term. If the property is not helping you pay down your mortgage, reap tax benefits, or if it isn’t putting money directly in your pocket, you need to reassess the amount you charge as a rent or potentially refinance your home. This is yet another instance where working with a property management company is beneficial. Think of that relationship as a business partnership — at Simpy Residential we’re connected to many realtors, financial advisors, insurance agents, and even lawyers. When our clients need advice or help, we have a strong network to refer them to so they know they’re working with someone they can trust.

If you’re sick of self managing, or if your property management company isn’t doing everything they can to increase your ROI, it’s time to think about making a change. It all starts with the basics — understanding what your property is worth and how much a property management contract will cost you over time. If you want to take that first step, get your free rental analysis today!

To Our Clients: A Letter from the President

August 25, 2015 by Ron Huckabee Posted in Property Management Blog, Simply Residential News Tagged Simply Residential News, Simply Residential Property Management

We are very thankful for each of our clients and associates. Your loyalty over the past seven years is much appreciated. 2014 was a transitional year with many positive changes. Our new look supports that 2015 is proving to be even more exciting! We have introduced more services. Allow me to name a few rolled out in the first quarter:

New Monthly Magazine! Our monthly magazine is created with the intent to educate our clients and partners about industry related information and trends.

Customer Satisfaction Surveys! We know we can’t be the best-in class property management company without your feedback! Expect to see a survey upon completion of all maintenance related work orders as well as twice during the lease cycle. The input from you via surveys ensures our ability to continually deliver top-notch service.

Complimentary Preventative Maintenance Walk-Through! In an effort to keep your property up-to-date, our Maintenance Team performed a review of your property early this year. This review resulted in a report back to you with recommendations on maintenance and updates that should be done right away or at some point over the next 12 months. Our goal is to help prepare you with a plan for repairs/updates over the next year versus having to worry about maintenance costs all at once. We’e being proactive, instead of reactive.

Increased Rents! Over the last seven years our economy has realized many ups and downs leaving many owners reluctant to raise rents for fear of losing a tenant. In the past year, we have focused on bringing all properties to fair market with great results. In completing a full market analysis on all properties that are due for renewal, we have raised rents anywhere from $50 to $300 per month. This focus has increased cash flow and profitability for many of our clients. We foresee more opportunity with this in the coming year.

The Property Management business has many moving parts. From marketing, leasing, maintenance, accounting to legal… I couldn’t do this without a great
team. I’m proud of each employee as they all work diligently to help provide best-in-class service day in and day out. Our upcoming magazines will introduce each one of our team members so, be sure to watch for that in the months to come!

I personally appreciate your business and the opportunity to serve your property management needs. If you want to stay up to date with the property management industry, our magazine will provide a higher level of communication with regards to new services, seasonal nuances, market conditions and trends. Subscribe here today!

If you have questions about your rental property, or want to learn more about the additional services we provide for our clients, call me and let’s chat: 952-831-5300.

Protect Your Rental Property by Being Proactive With Maintenance

August 19, 2015 by Ron Huckabee Posted in Property Management Blog Tagged Maintenance, owner, Property Management Leave a comment

One of the toughest parts of owning a rental home is keeping your investment in good condition and looking good through the normal wear-and-tear of tenants. That’s why homeowners who rent out their homes will often perform basic upkeep tasks like painting and cleaning carpets between tenants. When faced with a property that isn’t rented, take that time to evaluate your property and determine what projects need to be tackled before the new tenants move in. Making a list of necessary repairs and replacements is a great way to keep this information organized and keep yourself motivated. If you’re using a property management company, making a list for them is a great way to hold their team accountable and keep yourself in the loop.

Who is moving in?

It’s often helpful for homeowners to consider who their usual tenant is or will be. For example, a three bedroom house is more likely to rent to a group — whether that’s a family or college students. A studio will more likely be rented by a single person. This information can help guide your decisions, because it will tell you how much wear and tear you can potentially expect. Each type of tenant will use a home differently and it will help you decide where it is important to spend money. Families tend to be financially secure, long-term tenants, but they can be damaging the property. After all, children aren’t known for their tidiness. If this is the case, consider replacing worn-out carpets with laminate creates flooring that cleans easily and is very hard to damage. It might not be worth the extra expense to put in hardwoods, since they can be damaged by kids. College students are notoriously hard on rentals, but some of the damage can be mitigated. Set the home up with hard to damage flooring like laminate or tile. Pins and nails can be a pain to fill in and students love to decorate their space, so put poster strips in the bedrooms and state in the lease that they are not to hang posters in the walls, only on the provided areas. Single professionals can be difficult in their own way. While they often are not as rowdy as their young student counterparts, they are often gone for large portions of the day, and sometimes even travel for weeks or over weekends. It might be wise to invest in a quality security system to make sure that the rental doesn’t suffer from damage due to theft or vandalism since the somewhat absent tenant can make it attractive to criminals.

What areas are used the most?

Take a look around the rental itself. How is it faring? Go back through your records and see if there is any one area that is a repeated problem. Sometimes putting a little extra money into one section of your rental property makes sure you save on costly repairs and service-workers later on. For instance, if the home is a family rental and the dishwasher keeps needing repair, it might be worth investing in a high-quality new dishwasher since families will inevitably use one heavily. Along the same lines, if the multi-family home keeps destroying the grass, try looking into a stone patio to minimize lawn space without minimizing the outdoor space for the families to use. If you work with a property management company, you will be able to bounce these ideas off of a maintenance specialist who can tell you whether or not you should invest in these kinds of changes.

When should you assess the property?

When a rental is empty, it’s a good time to truly assess its condition. Walk through and make a complete list of any and all cosmetic damages. Use all the appliances and make sure they are functioning properly. Note any plumbing or electrical issues that need to be addressed. If the property has a lot of damage, don’t simply blame bad tenants. Take a look at the quality of materials being used, and add it to the previously asked questions. If the home is not really set up to handle a large family, even though it’s attractive to them, make a note of that.

In a situation where the rental isn’t set up to withstand the market it attracts, you have two choices. The first is to screen tenants and select someone that will better suit the home. This can cause problems since it narrows the pool of potential renters and can lead to the property sitting empty. Or, you can make a budget, hire a contractor and re-finish the home with new materials that can withstand the tenants that the property attracts. With this option, you have to make sure that how much you budget will be absorbed into the rent to make sure you don’t lose profit, but rather gain it over time. Whichever one you choose, making the changes will make sure your rental looks good and wears tough for tenants to come.

At Simply Residential Property Management, we frequently advise our clients on how to get the most ROI for their rental property. We believe that there is no point in owning a rental property if there’s no profit to be made. If you have questions about how to improve your investment, or just want to bounce around some ideas, give us a call: 952-831-5300!

3 Ways Our Quarterly Furnace Filter Change and Lease Violation Check Programs Protect Our Clients

August 18, 2015 by Ron Huckabee Posted in Property Management Blog Tagged Landlords, Maintenance

Why does Simply Residential Property Management offer a quarterly furnace filter change and lease violation check program to our clients? Because it helps them stay informed and protected, and helps us identify potential maintenance issues before they become emergencies! Here are three specific ways this program makes a difference in the rental properties we manage:

1. They extend the life of your HVAC unit. The most common reason a heating and air conditioning system breaks down is a dirty filter resulting in a lack of airflow. In our experience, 86% of tenants are not willing to replace furnace filters or don’t believe that it is something of concern. Thus, signing up for this added service is important.

2. They’re a great way to proactively review for lease violations. As we are in the home, we will check for any lease violations that need to be addressed. Possible lease violations include unauthorized pets and other occupants not named on the lease (possible occupancy limit violations).

3. They help uncover unreported maintenance concerns. Many tenants are not proactive, or are simply forgetful, when it comes to reporting maintenance issues and/or concerns. Often times when we arrive at the home, the tenant remembers to report any issues so they can be quickly addressed.

If you would like these services for your property, give us a call today! You can reach us at 952-893-9900 or email our maintenance department at maintenance@simplyres.com.

The Basics of Owner Protection: The Best Defense is a Good Offense

August 14, 2015 by Ron Huckabee Posted in Property Management Blog Tagged Simply Residential Property Management Leave a comment

“The best defense is a good offense.” That old adage has been used for many purposes and spanned many generations. Why is that? Simply put, it’s solid advice for any endeavor. Often, that offensive protection comes in the form of a legal contract or document. If you’ve ever heard someone say ‘get it in writing,’ then you’ll know what I mean.

That statement of fact is something I’ve seen proven in the property management and real estate industry time and time again. Especially when it comes to landlord/tenant relationships. Even the very best renters can encounter difficult problems with their rented property that can cause an argument, or worse, legal action. This doesn’t just hold true for writing the lease itself, but the entire process of renting out your home — before it is rented, when the renters arrive, and after the renters leave.

Before the Renter Arrives

Your home is an investment, certainly, but it also has sentimental value. We’ve found that because a home is such a big part of a person’s life, our property owners and investors are even more keen on protecting them from bad renters. At Simply Residential, we make sure to run full rental histories, criminal background checks and credit checks on all prospective tenants. This process helps us avoid the renters who are most likely to cause damage, steal, or violate their lease.

Once a tenant is placed, it’s time to draft and sign the lease agreement. It’s imperative that your lease is well written to fully protect both the owner and the tenant. Minnesota state laws tend to favor the tenant and put the burden of proof on the landlord, so that calls for an extra layer of protection for people like our clients. Luckily, if you work with a good property management company when renting out your home, they will have the experience to write an air-tight lease, and deal with any issues that may arise while that lease is active.

In your lease, it’s important to make sure you’re not violating any fair housing laws. Most of them are pretty straightforward, but a landlord needs to know the laws to which they’re made to adhere. Some of them may not feel like common sense, and knowledge is key to keeping yourself out of trouble. That way, even if you use a property management company that will handle any lease violations for you, you’re not in the dark about what can and cannot be done. If you’re working with a property management company, they’ll likely have a template to work from. If you’re on your own, you may want to consult a lawyer while writing your terms.

When they sign the lease, you can set a move-in date. Before that date, it’s important to collect the security deposit and first month’s rent from the tenant. Before they move in, make sure to do a thorough walk-through of the property with the tenant, take pictures, and document any existing damage. Don’t forget to note the condition of the carpet, woodwork, and any major appliances that will remain in the unit. It’s helpful to have a checklist of items, so that nothing gets missed by either party and walk-throughs remain consistent pre- and post-move out.

Arrival and Occupation

While there is a renter living in your property, you’re still responsible for maintenance. For example, if your water heater decides to kick the bucket, or you have some leaky pipes in the basement, you need to pay to have those fixed. At Simply Residential, we have a maintenance coordinator to handle all of the paperwork and logistics so that your property is well maintained at the best possible price. If you’re working with a property management company, they’ll be the ones who oversee these kinds of issues. If you’re on your own, this may be your least favorite part of the experience. Emergencies happen, and they have to be dealt with as they come, even if it’s 2:00am.

Property management companies also handle rent collection and late payment notifications. Many of our clients prefer it this way, because this is the area of the business that seems to get the most emotional. Nobody wants to fight over money, and nobody wants to wind up saying something they can’t take back. If you are handling rent collection on your own, always be sure to document each time contact is made as thoroughly as you can.

After the Renter Leaves

Eventually, even the best tenants must move on. Before your tenant moves out, complete another thorough walk through of the property and assess any damages. Small things like normal wear and tear of carpet in high traffic areas, small pin holes in the wall, etc. are to be expected. Be sure to note any damage that you would consider excessive, like holes in the walls or missing windows. Working with a property management company on this will help you determine how much of the tenant’s security deposit you should give back, and what portion will be needed for repairs. There are many legal issues surrounding this simple process, so if you aren’t working with a property management company, you may want to consult with a lawyer before you make any decisions.

Other times, you may need to evict a tenant. There are a variety of reasons why this could happen, but more often than not, it will be failure to pay rent. If this is the case, there will likely be a long, time consuming process ahead of you. At Simply Residential, we handle this entire process for our clients, from notification through litigation if necessary. If you’re on your own, again, this would be a good time to consult a lawyer.

Being a landlord isn’t easy. There are many facets and possibilities that need to be assessed and regulated throughout the entire process. That’s why working with Simply Residential Property Management is the right option for our clients and many other property owners. But, if you’re self-managing, make sure you’ve done your research and are protected from the potential dangers associated with bad renters.

If you want to learn more about how Simply Residential keeps property management simple, call us today: 952-893-9900!

How Online Rent Collection Improves ROI

August 5, 2015 by Ron Huckabee Posted in Property Management Blog Tagged Landlords, Rent Collection Leave a comment

Have you ever met an investor who wasn’t interested in making a profit from their investment? It’s highly unlikely. The abbreviation ‘ROI’ (Return on Investment) is practically punctuation in the financial circle. Our clients are no different, they own a rental property and that’s an investment. It would be foolish for them to not be primarily concerned with turning a profit. In fact, that’s one of the main reasons that our clients hire us — they want to make a profit from their rental property. Their time is valuable, and the more of it they have to invest in late night maintenance calls and following up on late rent, the smaller their return. After all, it’s a busy world. How much is your free time worth to you?

Of course, the bulk of the profit that our clients make from their rental properties is gained by collecting a larger amount of money in rent than what is spent in expenses. In addition to a positive cash flow, they also reap benefits from the appreciation that is able to be accumulated from their property.

If you’ve decided to invest in real estate, ensuring you’ll make a profit takes on a slightly different form than you may anticipate, with a more specific set of challenges. To make a profit, investors have to ensure that all rent is collected in a timely manner. Every day that rent is not received will cost more money. If the tenant fails to pay their rent completely, then they may have to pursue legal action, which will cost more and begin to erode profits. That doesn’t include the time that needs to be invested in any legal action on the part of the investor — especially one that isn’t represented by a property management company.

One way to reduce the stress of collecting rent is to hire a professional property management service. After all, it’s not always easy to collect rent on time. There are a number of reasons that this may be true. For example, your tenant may be facing financial issues, or you may just have a hard time tracking them down. It may even be due to your tenant having the thought that requested repairs have not been made, so they are withholding rent. Luckily, with a property management company there’s documentation and signed agreements to protect owners from claims like these. No matter the reasons, when rent is due, you need to ensure you are collecting it. That’s one of the key benefits of using a property management company, we collect the rent on behalf of our clients so they get to sit back and collect their earnings.

One way to encourage on-time rent payment is to make it as easy as possible for tenants to get their rent to you. In many cases, this means offering an online portal. This prevents you from having to hunt down tenants, or wait for their checks to arrive in the mail. Since most bills can be paid online now, your tenants may even expect this option. If they can schedule recurring payments, that takes all the stress away from all parties involved. Online payments, in that regard, allow a ‘set-it-and-forget-it’ mindset when it comes to rent. When you give your tenants an alternative option for paying their rent, you will likely have much more success when it comes to receiving it online.

Another benefit of offering this payment method is that you will be able to more efficiently track the payments that have come from your tenants. For example, you will have real time access to the payments that have been made. This means you will always know if a payment is late, and be able to track which tenants pay on time regularly and which ones don’t without having to do much extra work. A good property management service will have an online portal for owners that allows this kind of tracking.

While collecting rent can be frustrating and sometimes tedious, with the help of a property management company like Simply Residential Property Management, and online rent acceptance, you can streamline the payment process and reduce the instances of late payments.

Air Conditioner Maintenance 101

August 4, 2015 by Ron Huckabee Posted in Property Management Blog Tagged Landlords, Maintenance

Your heating and cooling system uses over 50% of your energy costs in your home. While changing the air filter is one of the simplest things you can do to keep your air conditioning working, a routine tune-up with an air conditioning professional will keep your unit from malfunctioning during the hottest days of summer. Depending upon your unit, a typical tune-up on your air conditioner will likely cost between $75 and $175.

Air conditioners should be tuned up on an annual basis. Signs that yours may be ready for a tune-up are: dirty outdoor coils and/or the cooling capacity is not up to par and is not producing enough air flow. A professional will check the outdoor unit, the indoor and outdoor coils, the capacitors, compressor, check the refrigerant level and temperature as well as complete an all-systems check on the electrical in order to ensure the system is efficient and operating as it should.

If you would like this service at one of your properties, call us at 952-893-9900!

Simply Residential Property Management’s Tips for Tenants: Performing Maintenance

July 31, 2015 by Ron Huckabee Posted in Property Management Blog Tagged Property Management, Tenants 6 Comments

Rental Property Moving into a new apartment or home is an exciting experience. Everything is new to you, and it feels like a fresh start. When you rent an apartment or house, you have confidence and trust in the fact that your appliances and other fixtures will be in perfect working order. However, even in the best of situations, things can happen that will require maintenance. While the maintenance staff at Simply Residential Property Management is happy to repair any issue, as a tenant there are things that you can do and check for when your appliances or other fixtures malfunction. Sometimes, the fix is simple and easy to handle on your own. Before you call maintenance to your home or apartment, it’s important to check things yourself first.

One of the most common maintenance issues you’ll encounter in your time as a renter is smoke detectors that aren’t working properly. For that reason, it is important to perform regular monthly tests to ensure these devices are functioning properly. If you are testing your smoke detector and it won’t work, be sure to check your battery. It way seem like a no-brainer, but try to remember the last time you though about your smoke detector battery — chances are it wasn’t within th last month. Sometimes batteries that come straight from the packaging can be defective or damaged and may not work, so make sure you check them with a battery tester and replace them when necessary. Some more common signs of battery related issues are if your smoke detector starts beeping on its own without the presence of smoke or fire, and if the beeps are weak and intermittent.

Property Management Another common issue has to do with electricity and power outages. If you don’t have power to certain appliances or if the power goes out, the first thing you should do is check your breaker panel in the main fuse box. If the fuse to a certain appliance has been tripped it will be indicated by the on/off switch being in the off position or the indicator color of a certain breaker showing a red color. Reset the breakers and if you are still experiencing power failures call maintenance immediately. Trying to reset faulty breakers can increase the risk of fire. Unless you want a ‘Tim the Tool Man’ situation on your hands, it’s best to leave the electrical work to the professionals.

If you’ve ever taken an unexpected cold shower, this third common issue will be very real to you. In the case of having no hot water, you want to check the thermostat located on the hot water tank. Additionally, you want to see if the pilot light is lit in the tank and check the appropriate breaker in the fuse box. In the case of water being too hot, you want to check the thermostat and turn it down to a tolerable level. However, if you are experiencing leaks in your sinks or toilet, you need to immediately turn off the fixtures under the sinks or toilet and immediately notify maintenance.

Have you ever heard the “is your refrigerator running?” joke? Believe it or not, that hits home for many renters. Another common occurrence in apartments and homes are refrigerators that are not properly functioning. Before calling maintenance, you first want to check the thermostat and readjust it if the temperature is too high or low. You also want to routinely clean the front and back grills of the unit since dust and debris and restrict air exchange. If your freezer has excess accumulations of ice, you will need defrost for a couple of days to fully remove ice buildup.

Renting a home, for many people, is an excellent way to avoid all of the irritating maintenance issues that go along with owning your own home. But, as with anything, there are some minor things that need to be routinely cleaned and checked to ensure that things continue to run smoothly. Keep these common issues in mind, and you should be able to have an easy and low maintenance experience in your rental home!