Things to Consider Before Renovating Your Rental Property

February 18, 2016 by Ron Huckabee Posted in Property Management Blog Tagged Landlords, Maintenance, owner Leave a comment

When it comes to the renovation of your rental property, there are a number of things that you have to consider. First of all, statistics show that the majority of the money that is spent on renovations will never be recouped. This means that you should consider carefully if renovations for your property are really necessary.

The ROI (Return on Investment)
First things first, consider whether or not the renovations will up the value of your investment, or attract more potential renters. Not every single renter will be looking for a kitchen that has been recently renovated. However, a kitchen that is outdated or not decorated well can definitely be a turn off. Old or ugly cabinets or cheap and chipped counters can sent potential tenants running for the hills. Keep in mind, you can give the kitchen a facelift without having to completely redo the entire space. Consider some smaller repairs that need to be made, which will increase the ROI you receive.

The Hidden Costs Associated with a Renovation
When it comes to remodeling your rental property, there will always be additional consists that you did not anticipate – even smaller jobs. After you calculate all of the potential expenses of the project, you should always add an extra 10 to 20 percent depending on the actual estimate that you are given. This will help you get a much better idea of the costs that you will be having to pay.

You should also not forget to include the costs of any additional tools that you might have to purchase, the gas that will be necessary for picking up materials and any extra things that you may need.

Finding the Right Professional for the Job
A key to the success of your remodeling project will be to find the right contractor. If you are unsure of who to use, this may result in you using a contractor that is not as experienced as you may be able to find. This is when the contacts that a property manager has can be extremely beneficial. They will likely have on-going relationships will all types of contractors who will be able to work on your property for a fair cost and the job will be completed in a timely manner.

It is important to avoid simply choosing the first contractor that you come across. This will likely result in less than ideal results. If you have a rental property in Minnesota that you are considering having remodeled, then you definitely need to contact Simply Residential Property Management. They will ensure that your project is successful and affordable.

Questions about renovating your rental property? Contact us today at ron@simplyres.com!

Classic Mistakes to Avoid as a First-Time Landlord

January 28, 2016 by Ron Huckabee Posted in Property Management Blog Tagged Landlords, owner, Property Management Leave a comment

The right property for the right price
Location is one of the most important aspects to bear in mind as a landlord. It’s important to consider the type of rental income you will get in an area as well as the overall return you will get on the property.

While it’s tempting to look for properties in close range of your own home, your particular neighborhood may not be suitable for your unique requirements. It can be worth looking further away for better rental returns, and you can always look to a property management company like Simply Residential Property Management to take care of the property if accessing them personally is too time-consuming.

Remember to balance the demand and the strength of your rental returns against the cost of investing.

Don’t be afraid to ‘upgrade’ your property
Speak to your leasing agent about refurbishing the property and renting it for a higher rate. This could increase your yield considerably with only a little extra spending comparatively. You could also consider renting the property as a multi-unit or house of multiple occupancy.

Be firm on rent payments
While it can benefit you to be flexible on rent levels, it is never advised to be lenient on late rent payments. Remember, as a landlord, your main source of income comes from the rent, so it is vital to make sure this is paid in full and on time. This requires a clear rental agreement and time taken to ensure your tenants are paying punctually and enforcing repercussions if they are not.

Talk to Simply Residential Property Management about taking out an insurance policy against your tenant failing to pay the rent, or rent your property with Simply Residential Property Management and let us deal with late payments for you.

Don’t jump straight to eviction
As a landlord, you must be prepared to work with a tenant when they are required to repay any debts. Opting for immediate eviction will cost you money and time, not to mention the prospect of your property sitting vacant for weeks or even months. Many property management companies will help alleviate some of that stress with an eviction protection plan. Ask us about ours for more information!

Choose a good property manager
As long as a tenant is paying the rent and bills on time, they are entitled to live in a safe and well maintained property. It is vital to maintain a good relationship with your tenants to ensure the rent is paid and they don’t just leave the property in disrepair. If you rent with a property management company like Simply Residential, they can usually guarantee repairs are carried out quickly, efficiently with minimal disturbance to the tenant.

Ensure all repairs are done before renting a property out
As a landlord, one of the most important aspects of your job is ensuring the property is fit to rent on day one. This will reduce overall maintenance costs throughout the tenancy. At Simply Residential, we perform regular checks and send you regular status updates with regards to your property. This way, you can rest easy as the landlord knowing your property, and your investment, is being properly cared for.

For Our Rental Property Owners: A Note About Statements

January 26, 2016 by Ron Huckabee Posted in Simply Residential News Tagged owner, Simply Residential Property Management

As you may know, we’ve been conducting some over-the-phone and online surveys with our clients. In the process, we’ve heard several times that the accounting statements we send out aren’t easy to read or understand. In order to make it easier for everyone to access the information they need, we provide you with a cheat sheet of information to help make the statements easier to digest.

Check Your Inbox
When Mona sends out your statements each month, she also attaches a PDF of the essential numbers for you to review. Look for it in your next accounting email!

Memorize Your Lines
The statements that are automatically generated into your owner portal contain any and all information you could possibly need each month. Because of this, they tend to be a bit redundant and ‘accounting-y’. The first 5 lines are the most critical for an at-a-glance understanding of your account, and the bottom numbers are simply explaining those top rows in more detail.

If you still have questions, contact Mona at accounting@simplyres.com!

So, You Want to Purchase Your Second Investment Property

January 14, 2016 by Ron Huckabee Posted in Property Management Blog Tagged Investors, owner, Property Management Leave a comment

Owning investment rental properties can be trying. It requires patience, research, excellent interpersonal skills and a financial stability that allows for things to, on occasion, go wrong. But if you find yourself successfully balancing all the aspects of being a landlord and want more, then you might want to think about investing in another property. It may be tempting after you’ve already cut your teeth as landlord of the first property, but there are several new things to consider before investing in a second property.

No two properties are ever the same
While you might be thinking you have a strong understanding of what being a landlord requires, you have to go into the venture of second properties with your mind open to every possibility. So your first property was a dream; it didn’t require much maintenance, you had model tenants, it was within easy reach of your own property. You need to bear in mind that, while your first property was easy, there is still a chance of your new property causing you problems. Obviously you have a better knowledge of what to look for, and you will be going into the venture with more understanding than a first time landlord, but this is no excuse for leniency. That’s why so many experienced rental property owners choose to utilize the services of a property management company.

Try to remember what caused you the most time, money and effort to correct your first property, and prioritize these aspects in your search for a second property.

Don’t always buy close to your first property
While it may be tempting to purchase that property just down the road from your first, this should not be your number one reason for purchase. Remember, it’s still important to do your research into the current housing situation. If the properties close to your first are not doing well, then it may be worth looking a little further away. While it does mean more time driving, it could actually save you money in the long run. However, that doesn’t mean you shouldn’t look nearby, especially if your first property is a good area. This also helps you get a rough gauge on extras, like the most likely tenant type in that area and possibly housing bills such as heating and electricity.

Markets fluctuate, so can your property value
Although you will be more experienced than a first time landlord, it’s important to remember that there’s no guarantee the experience of buying a second buy-to-rent property will be the same. The housing market can fluctuate dramatically, lowering the value of your properties. With two purchased properties, it can mean losing double the amount of money should housing values drop. Take some time to research the market, and the area you are considering. If a new transit route has been built near the property, this could increase its value over time. Simultaneously, a new building appearing nearby could obscure views from the property and bring its value down.

The most vital aspect to remember when considering the purchase of a second buy-to-rent property is that you already have a strong grasp of the fundamentals, so use this to your advantage. Remember what worked for your first property and avoid making the same mistakes. If you’re unsure, or you don’t want to take on the additional responsibility of managing a second property, it’s wise to consider investing in a property management company to take care of the minutia.

Understanding Minnesota’s Cold Weather Rule

January 12, 2016 by Author Posted in Property Management Blog Tagged Landlords, Legal, owner

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This post was written by Jeff O’Brien for Simply Residential Property Management Magazine.

In Minnesota, when temperatures dip in late fall, a law known as the “Cold Weather Rule” kicks in. The Cold Weather Rule set forth in Minnesota Statute Section 216B.096 is designed to protect tenants and homeowners from having their heat source permanently disconnected in winter (defined by law as October 15-April 15) if they are unable to pay their utility bills. The Rule, implemented by the Minnesota Public Utilities Commission, provides that a utility may not disconnect and must reconnect a customer whose household income is at or below 50 percent of the state median income if the customer enters into and makes reasonably timely payments under a mutually acceptable payment agreement. It does not, however, prohibit shut-offs, and a tenant who fails to comply with the agreed upon payment agreement could trigger a shut-off which, depending upon the utility involved, could result in damage to the property due to pipes freezing and bursting.

Utility customers whose household income is above 50 percent of the state median income also have the right to a payment agreement to prevent disconnection or get reconnected that takes into consideration the customer’s financial circumstances and any other extenuating circumstances of the household.

The Cold Weather Rule applies to all natural gas and electric utilities. It does not apply to delivered fuels like fuel oil, propane and wood. The Cold Weather Rule requires a utility company to notify its customers in writing before it disconnects their heat. The notice must be in easy-to-understand language and must contain the amount due, the date of the scheduled disconnection, the reasons for disconnection, and options to avoid disconnection.

A regulated public utility must notify a customer of disconnection at least seven working days in advance. An unregulated utility; i.e., a cooperative or municipal utility, must notify a customer of disconnection at least 15 days in advance. A disconnection may not generally happen on a Friday, Saturday, Sunday, a holiday or the day before a holiday, while an appeal is pending, or after the close of business on the scheduled day of disconnection.
For landlords, it is important to note that the Cold Weather Rule does not prevent a landlord from evicting a tenant or refusing to renew a lease that expires during this “cold weather” season. In fact, if the lease requires the tenant to pay utilities and the tenant fails to make timely payments pursuant to the agreed upon payment plan, such nonpayment could constitute grounds for eviction.

For questions about the Cold Weather Rule, contact your local utility or call the Consumer Affairs Office of the Minnesota Public Utilities Commission at 651-296-0406 or 800-657-3782.

For questions about how to handle an eviction during the cold weather months, be sure to contact a knowledgeable attorney.

Jeffrey C. O’Brien is an attorney with the Minneapolis based law firm of Lommen Abdo, P.A. and a MSBA Board Certified Real Property Specialist. He can be reached at (612) 336-9317 or via email at jobrien@lommen.com.

Temporary Housing for Your Tenants: A Guide

January 7, 2016 by Ron Huckabee Posted in Property Management Blog Tagged Landlords, Legal, Maintenance, owner Leave a comment

Life as a landlord can be stressful at times. Take the temporary relocation of tenants as an example. Despite your best efforts to prevent or foresee an issue arising in the property, something has come up that requires your tenants to temporarily relocate. You’re already worried about the cost of repairs to the property, but now you have to worry about a whole heap of other things; will they be paying rent while they’re relocated? Where will I be able to relocate them to? Should I keep them happy with a plush hotel room or risk finding them a budget motel, as it’s only temporary? All these questions and more will likely come into consideration, but it’s important to bear certain facts in mind. Your tenants are entitled to temporary accommodation, and as such it is your duty to find, reserve and show them to their provisional property. Simply Residential Property Management has compiled a few handy tips to help you with the process.

Give advance warning
If moving your tenants to temporary housing cannot be avoided, then it is important you go out of your way to limit the disturbance to their lives. Any notice alerting your tenants they will have to temporarily relocate from their property must be given at least 60 days in advance. Failure to do so could end with the tenants refusing to pay your rent for the time they are at the property, or even for that particular month. If the case should go to court, your inability or unwillingness to supply them with adequate notice will reflect badly on you.

Reasonable replacement accommodation
You must provide clean, suitable replacement housing for the entire duration of the property’s reconstruction period. Failure to do so could result in your tenants taking the matter to court, and the state of Minnesota tends to favor the tenants over the landlord, particularly when the relocation is due to a fault with the property. It’s not unreasonable to expect you as the landlord to provide comfortable and safe accommodation, but it is also important you try to find something in close proximity to the original property, so as to cause as little disruption to your tenants’ lives as possible.

Be prepared to pay for travel/transport expenses
While this may seem like a trivial issue, you have to remember that it is your responsibility as the landlord to provide these things. If the temporary property you have assigned to your tenants requires them to travel to work, college, school, etc., then it is up to you to pay for travel expenses. Of course, a two minute move down the road does not warrant you reimbursing any of your tenants on travel costs, but anything that could warrant an extra bus journey or substantially increased car journey could justify your tenants requesting you cover travel expenses. The same applies to any increase in utility costs or an increase in rent while they are based at this temporary address.

Remember, it is your duty as a landlord to provide alternative accommodation if repairs or reconstruction is required for the original property. How you decide to provide this alternative accommodation is up to you, but it is best to keep the tenants happy, even if this means paying a little bit more money. This eases tensions, shows you’re caring for the needs of your tenants and means future interactions should be a little bit easier.

What You Should Know About Rental Properties and Tax Deductions

January 5, 2016 by Amanda Rose Keller Posted in Simply Residential News Tagged Investors, owner

Rental properties offer bigger tax deductions and tax breaks than most other investments. For this reason, we find that it’s important to keep our owners up to speed on what they need to know for tax season. Here are a few of the things you may be able to deduct as a landlord or rental property owner:

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At Simply Residential, we know that investing in a rental property is a solid financial decision, and we encourage our owners to fully take advantage of the benefits they’re entitled to as property
investors. As we say quite frequently, we have a wide variety of financial professionals, including some awesome CPAs, that we’re happy to recommend.

If you’re curious about which of these deductions apply to you, let us know! If we don’t know the answer, we’ll connect you with someone you can trust to walk you through it!

Ready to learn more? Call us today at 952.893.9900 or email Amanda at amanda@simplyres.com.

A Letter of Thanks from Ron

December 1, 2015 by Ron Huckabee Posted in Property Management Blog Tagged owner, Simply Residential Property Management

When the fast pace of summer dies down and a noticeable chill (and even show!) are in the air, we know that fall is upon us. For me, fall has always been a time of reflection and introspection. It’s an opportunity to look back and see how far I have come and where I want to go next. This has been a great year for the SRPM team and for me!

Through our relationships with you, our clients, we’ve gained a unique understanding of how grateful we truly are for the opportunity to serve you. This year, we have seen rents increase in many cities, especially in the summer months, your properties have rented faster and renewals were strong. This means more profitability for us all.

In particular, we thank you for your loyalty and willingness to learn along side us when strange situations arise, as they often do in this industry.

These learnings, whether experienced first-hand or passed on through conversation, have helped many of you invest more into acquisition and preventative maintenance to improve the return on your investment. Proactive maintenance has been the key to reducing overall maintenance costs and saving all of our sanity along the way.

I’m personally thankful for your kindness with my team. Each one of them is committed to working hard for each of you, all day, every day. From foregoing summer vacations to working long hours, often through nights and weekends to help an owner with an urgent need. I couldn’t do it without them.

We are excited about the direction we are headed and services we will be rolling out over this next year. Our partnerships and network are expanding to better service your needs.

We are here because of each of you. From the entire SRPM team, we thank you for your business and wish you a spectacular season!

Why Hiring a Property Management Company for a Single Rental Property is a Good Idea

November 20, 2015 by Ron Huckabee Posted in Property Management Blog Tagged Investors, Landlords, owner, Property Management, Rent Collection, Renter placement 15 Comments

For many rental property owners, a common question that they ask is if they need to hire a property management company for a single rental property. The answer from property managers and rental property owners alike is a resounding “Yes.” The fact is that a professional property management service can be a real asset and the services offered are likely much more complex than you might imagine.

Property management companies do much more than simply collecting rent checks and fixing broken appliances – their real value lies in risk mitigation, which should be your top priority when renting out a property. For example, Simply Residential signs the lease with the tenant, taking on some of that risk and allowing our owners to remain anonymous to our tenants. We also offer protection services like our Eviction Protection Plan and our Quarterly Furnace Filter Change and Lease Violation Walk-Through. These services protect our clients from the dangers of evicting a tenant, and help us identify any problems with their property before they become full blown emergencies. This also allows us to provide an efficient and regimented way to ensure that our properties are fully protected.

Choosing a property manager for a single rental property, or even for multiple rental properties, can be a challenge for first timers. The key to this choice lies in knowing what you want and need from a property management company. Some of the specific services you should look for are:

Finding high quality tenants.
Determining how to advertise your rental property.
Screening all tenants, including background checks and credit reports.
Drafting legal leases that will hold up in court.
Collecting evidence and documentation to reduce chances that property owners will have to pay for tenant caused damages.
Maintenance of the rental property.
Handling tenants who don’t pay.
Evicting tenants without violating their rights.

While property owners can complete their own research and learn how to do the things listed above, this is an extremely time consuming and legally convoluted process that can often land owners in a difficult situation, especially when evictions are a factor.

A knowledgeable property management service can also ensure that rental property owners understand legislation changes and how it will affect them, as well as their tenants. This can be extremely complicated and difficult to understand, and keeping up with the changes requires dedication and time. However, when you hire a property management service, they will know what the legislation means and ensure that you, and your property, meet all new or changed requirements.

One of the most important services offered by a property manager is the ability to respond to emergency situations in a timely manner. This will prevent property owners from having to halt their day – or night – in order to handle a tenant issue or emergency.

Hiring a property manager can eliminate the possibility of your rental property turning into one of the horror stories you have likely heard. In fact, a reputable property manager will handle all aspects of managing and maintaining your property. If you have questions, we’re happy to help. Call us today at 952-831-5300 or email me!

[Photo credit: Rental Realities on Flickr]

A Landlords Guide to Upcycling

November 6, 2015 by Amanda Rose Keller Posted in Property Management Blog Tagged Investors, Landlords, owner Leave a comment

Upcycling is the art of taking old, unfashionable materials and turning them into something much more chic and contemporary with little to no cost to the owner. Not only this, but upcycling can help keep your property looking modern without having to purchase new furniture every few years. Here’s a quick and handy guide to everything you need to know about upcycling and how it could help save you money while improving the value of your real estate investment.

Furniture:

With furniture, upcycling can be as easy as sanding down some rough edges or applying a new cover to a battered old sofa. But, if you really want to make an impression with prospective tenants, don’t be afraid to get creative. Kitsch art décor can give your property a bohemian vibe while costing you just a few dollars in new materials. Retro patterns and unvarnished wood are great ways to give your property an earthy sixties vibe. Combine this with modern accouterments and you have a property young professionals would die for. The best thing is, providing they’re still in working condition, you can always upcycle your furniture again the next year to keep it up to date.

Fixtures:

If you’re worried that your property may be too old-fashioned for the kind of tenants you want, then upcycling could provide the answer. An old lamp can quickly be turned into something hip with just a little imagination and some easy to acquire materials. Don’t be afraid to use your imagination, taking ideas from the plethora of upcycling blogs on the internet and making them your own. Old fans can become chandeliers, jam jars can become quirky lightbulbs and old advertisement signs can become a piece of contemporary art with just a few simple twists. It may sound like a cliché, but your imagination really is the only limit.

Exterior:

When it comes to upcycling the exterior of your home, there are even more options available. Without needing to worry about your old garden features appearing weather-worn, you can begin to really test your creative skills. Water fountains are surprisingly easy to make from old materials, yet they add character to your garden and ensure an interesting collection of wildlife all year round. Meanwhile, the addition of a garden swing or hammock made from indoor materials will give your property the kind of personal flair that insists prospective tenants take a seat and never leave.

Summary

Upcycling is just one aspect of your property that you have ultimate control over. Don’t be afraid to play around with aspects of your property, but be sure to limit the level of personal touches. Try not to make the unit too orientated to what you like. It’s important that you bear the tenant in mind when setting up your property. As long as your upcycling serves a practical or subtle stylistic purpose, it could go on saving you money tenant after tenant.