Consider Consistent Rent Increases
After a period of barely being on the radar, inflation has begun to become an issue again. If you are a landlord this directly affects your bottom line. There are many things to consider when implementing rent increases to keep up with inflation.
First, increasing rent in a courteous manner includes communicating with your tenants in a way that will protect your relationship with them. This is a topic estate author Kevin Ortner educates landlords on in Realtor Magazine. Below are some of his recommendations:
- Consider raising rents on a regular schedule. An excellent time for this would be during the lease renewal. If it is a month to month agreement a year of tenancy would be a suggested period. Increasing in small amounts annually is a better more tenant friendly way to handle rent increases rather than a large amount arranged more infrequently.
- You should be competitive. You need to consider what price tenants will be willing to pay to rent from you. The actual amount must be in compliance with Florida and local laws of course. When considering a price go to the Bureau of Labor Statistics’ annual estimation of Shelter Cost Changes. At the end of August, it was 3.4%. While national trends are important, the amount other Coral Spring’s tenants are paying to rent similar properties is more significant.
- Give the tenant more time. While you must adhere to the law and the terms of your lease, it will make it easier on a tenant if you give them a little extra notice of any impending rent increases. This may be especially important if you have a particularly good tenant that you wish to hold onto. If you are keeping your rent competitive, they will they will see that it is a sensible increase if they research what other similar properties are renting for.
- Always work with your best tenants. It is important to take the individual situations of tenants you want to retain into consideration. Show them what the rent increase was going to be. Then show them a smaller number that they will be asked to pay. Consider sharing with them any operating cost increases that have led to their rent increase.
These recommendations on rent increases by Ortner can help you get the most money from your property while protecting your relationship with your tenant. If you are looking for assistance in finding investment properties, give us a call today!
Selling a Rental Property Can Be Smooth and Easy
How To Sell Your Cash Flow Property
Even investors whose real estate rental property have served them well with cash flow eventually decide to sell at some point.
When considering home prices have been going up since 2010 and today’s low inventories, today’s market makes complete sense to consider selling your income-producing rental investment.
In fact, it may be one of the most timely financial moves you make.
A wise purchase in rental property real estate can add up to thousands of extra dollars in your pocket every year.
A savvy investor knows an even wiser purchase, can mean tens or hundreds of thousands of dollars in appreciation.
That is as long as you sell at the height of the market and not during the fall.
If one should happen to be considering selling an income producing rental property it begs the question. What do you do with the tenant-occupant? Which leads to the next set of questions. Do you wait until the lease expires so the vacant property can be shown without disturbing (or possibly angering) the occupant? Or is it better to sell the property with the tenant still living there? Whatever you decide, just be sure you’re not violating any of the Florida landlord-tenant laws. The specifics will be in the terms of the rental lease (contract), but past experience will teach that following a few simple guidelines will almost always prevent any tenant-occupied rental property sales issues before they become an issue.
When dealing with “people” matters, it’s always a good idea to keep an open line of communication. Basic communication will be a major factor to ensure your transaction remains smooth through-out. Including letting the tenant-occupant know as soon as possible that their home will be going on the market. Reassuring your tenant-occupants that your agent and you will work with the renter to keep inconveniences to a minimum. Somewhere during these discussions, it may not be a bad idea to suggest they consider purchasing a home of their own. This could be a major step to curb further complications.
Be Prepared to Handle All of Your Renter’s Concerns, Including:
- Moving Out. Because your renter has such a great history, this is a slim possibility. Keep in mind, when the new owner takes possession of a rental property they must honor the previous lease. Don’t forget to provide a copy prior to closing. However, once the lease expires, the new owner is under no obligation to continue to offer the property to lease. The lease will outline specifics about what the options are when it nears expiration.
- Strangers Coming Into Their Home. Generally speaking, this is an issue for most people. I don’t know many people that are thrilled about complete strangers coming into their dwelling to “just take a look”. One way to ease the tenant’s mind is to ensure they know that only qualified buyers will be allowed showings. Plus, they will always be accompanied by a Florida-licensed real estate professional. At The Miranda Team we accompany every showing on our listings, even if the buyer’s agent will be there. Not only will it ease the seller and renter’s minds. It also gives us more opportunity to market and sell the property.
- Life Interruption. Nobody likes their life being interrupted by another person. Be sure to communicate to the tenant the terms of your showing agreement regarding advanced notice being required for every showing with your Realtor® , as well as having your Realtor® communicate the same. This will go a long way to ease your tenants mind.
At the end of the day, every situation will be different and will require individual attention to specific details. For example, if your properties highest and best use would be to maintain rental status, then keeping a tenant in there might not be a bad idea. But, if you’re selling an upscale home that will likely attract an owner occupant then a vacant home, staged to the 9’s is probably the best route (always a good idea!).
No matter what the case is, the best advice will come when you call The Miranda Team at The Keyes Company. We can discuss the property, and develop a marketing plan together to discuss with the renter. This is how a winning game plan is developed. So whether you’re looking to buy or sell in Coral Springs, or anywhere in Broward County we would love to see how we can make your sales process as smooth as possible.
Top Cash Flow Investor’s Most Common Repairs
Rental Property Top Issues To Watch Out For
Looking to spruce up your investment portfolio with cash flow real estate?
There are certainly enough positive reasons to invest in cash flow properties.
In fact, while weighing the pros and cons, the pros will almost jump out at you.
If you purchase in the right city and neighborhood an investment rental property will not only throw off positive cash flow, it will also appreciate in value year over year.
Like we’ve seen in Coral Springs since 2010. So what’s the hesitation? You should buy a cash flow investment now.
While there are many things to consider, one drawback many fail to consider is the possible maintenance issues. Because you’re dealing with tenants there will inevitably be normal and sometimes not-so-normal wear and tear. One of your top priorities will be to keep your investment in top condition. Which will require your attention.
When coming to maintenance and repair you have two options. Sweat equity, or checkbook equity. If you’re new to investing it will pay off if you’re handy. You can save on paying contractors and handymen by doing your own work. However, veteran landlords know the benefits of farming out the repairs, checkbook equity.
Whatever route you choose to handle your property repairs it’s useful to know which issues will require more frequent attention. We put together a quick list of the top six that made the veteran landlord’s list. Let us know in the comments if this is helpful. And feel free to share with your aspiring real estate mogul friend.
- Leaks. These are the plight of every property owner. Left unattended, even the smallest drip can result in mold. So addressing this at the slightest hint of a leak can save you thousands of dollars, and hours of cleanup. The most common areas to keep an eye on are under window sills, under sinks and in the ceiling. Pay close attention to the ceiling directly below a source of water such as below the second floor bathroom. If you see any discoloration at all on the ceiling investigate immediately.
- Appliances. Today’s appliances aren’t likegrandpa’s old Kenmore from 1960 that’s still running strong. Although they are much more energy efficient, today’s appliances aren’t known for their longevity. When replacing the old ones, it’s worth considering it may be wise to invest a little extra for the higher-quality model. Ask any appliance repair person (if you can find one), and they’ll tell you these new models just don’t hold up as well as they used to.
- Water Heater. Hot water is a must. And your tenants deserve hot water. When the hot water heater goes out it will require immediate attention. However, just because it stopped working doesn’t mean you have to replace it. In this case knowing an honest plumber can pay off in dividends. In most cases, as long as the water heater isn’t leaking you can get by with a repair, not a replacement. Saving you hundreds.
- Leaks. Step 1 – Sealing up all holes will be your first line of defense. A tube of caulk goes a long way to ensuring pests can’t get in. If, however they find a way in there’s nothing a quality pest control company can’t handle. It’s always best to contact them right away, rather than waiting. It’ll save you hundreds if they only have to spot treat as opposed to getting rid of an all-out infestation requiring multiple visits.
- Air Conditioner. In Southeast Florida we have extra-hot and extra-long summers. So a broken air conditioner will very quickly become an emergency situation. It’s helpful to have a reputable air conditioning company saved in your speed dial for just the occasion.
- Running toilet. This is more common than we think. Personally I’ve heard more than one story about the notorious $600 water bill. After investigating they’ve come to find out the culprit was a leaking “flapper”. Fear not! Of all of the issues listed above this one is relatively cheap and easy to repair. In fact, most can watch a 10 minute YouTube video to watch ample demonstrations on how to fix this yourself.
One solution to all of these problems is to have a service contract for maintenance. Pay a monthly fee and when you make a service call all you have to do is call them and they send one of their technicians to repair.
There are several terrific investment properties on the market right now. Whether in Coral Springs or anywhere in Broward County we can help you locate the property, run the numbers, find a renter and start cash-flowing right away.