Sunday, August 30, 2009
My friend has mentioned needing an investment property manager for a property he is buying in Boone. Is an investment property manager different than any other time of property manager? What are the responsibilities of an investment property manager?
Jeremy, Charlotte, NC
While there are variations on the types of property management, and what in included in a property management contract, it is important to remember that most commercial properties are "investments" and the reason you hire a property management company is to protect your investment.
Investment property management companies manage properties that serve as sources of income for the owner. An Investment property management company may be hired to provide a comprehensive and professional service, such as tenant vetting, collecting rent, handling complaints and evictions, and maintenance.
The primary task of an investment property management company is to find tenants which involves marketing the property. A good property manager will understanding where and how to advertise the property--knowledge gained from experience.
When renting an unoccupied or vacant space, the investment property manager also involves meeting with and giving a tour to prospective tenants, going over all terms and conditions, providing information on deposits and application fees, and explain the differentiating features of the unit or surrounding land.
Once a unit/building is rented, the investment property manager will often handle all financial issues, including collecting the security deposit, fees and the monthly rent. If the tenant is late in the payment, it is the responsibility of the property manager, to manage the situation which may include beginning the process of eviction--an unpleasant situation that may end up involving the owner and/or an attorney.
The investment property manager is also tasked with handling maintenance issues, including routine landscaping and handling repairs. The property manager may utilize the maintenance staff, or contract with an outside company depending on the company and the complexity of the repair.
I hope this answers your questions and if you or your friend need any more information about investment property management - feel free to give us a call at our Boone office at 803.578.7725.
Wednesday, August 26, 2009
Moss Creek is an easy commute to downtown Charlotte, NC and the surrounding areas. North Carolina's biggest tourist attraction: Concord Mills Mall is just a short 10-minute drive from this quiet, secluded community.
For families with young children, Moss Creek is an ideal location. Cabarrus County public schools are among the best in the state, and Moss Creek is home to two brand new locations, Odell Elementary and Harris Road Middle Schools.
The Moss Creek nature trail is a hidden treasure, running along the East branch of the Rocky River, giving residents a beautiful outdoors experience, for the casual walker to the nature enthusiast. Trails are accessible from a number of different locations within the community, and are bicycle and stroller friendly.
The Monarch Club, Moss Creek's community center, offers tennis and basketball courts, a playground, and a world-class swimming pool complex. The pool area includes something to for everyone: an Olympic-sized pool, baby wading pool, kids' feature pool, and an adults-only lap pool. in fact Olympic athletes from Mecklenburg Aquatic Club trained at Moss Creek's amazing pool facility, and four of them brought home medals from the 2008 Summer Olympics in Beijing!
Are you interested in learning more about Moss Creek? Contact us at Kuester!
Friday, August 21, 2009
The Legal Stuff
Before getting too far in your property investment research, you should look into all the applicable local laws, and hire a business attorney who can help navigate the often abstract and confusing laws. Make sure to work with a lawyer who is familiar with the local laws in the place where you plan to invest in property, since the laws sometimes differ from one state to another.
Having a good attorney who can explain and handle the laws, as well as the contract is vital to a successful investment. This is one area where you need to spend a lot of time and resources!
Show Me the Money
You can base your projected income on current trends and future projections, however you need to be sure that the value of the property will appreciate. When and if you decide to sell, you will want to get more than you paid for it.
You need to look at the different ways the property can be an income generator. Look at how the property is zoned, the location, other rules and regulations regarding the specific purpose that the land can be used for. Remember, when buying commercial land for your business, ensure that you will legally be able to use the land for the intended purpose.
If you are like most people, you don't have all the capital necessary to invest in commercial property, and will probably need a commercial property loan. You will need a lot of documentation to apply for this loan so put together all information on your business operations, your financial status and estimated earning potential and the property title deed. The lender wants to make sure they are making a good investment too!
When calculating cost for any particular property, don't forget fees payable to any professionals you may have hired as consultants to close the deal, any registration or other legal expenses to be paid. These expenses tend to amount to quite a bit, and therefore should be budgeted when calculating the feasibility of a property.
Don't be afraid to shop around before choosing a piece of property. The first may not be the best and it is better to do the extra legwork now, then be wrong later!
In order to protect your investment once it has been made, contract with a reputable local property management company. This company can handle the day to day operations, the tenant negotiations, maintenance, etc. Not only increasing your possible ongoing incoming income, but the property value itself.
Investing in commercial property is a proven way to grow your money, but not everyone can successful. Be sure to take the necessary steps before, during and after in order to ensure a long term positive investment.
Monday, August 10, 2009
I was recently elected to our HOA board and we are considering changing property management companies. Can you tell us what the average cost per resident is for HOAs? And besides the basic services, what can an property management company do? Can we include these in our request for proposal?
Kim T. HOA President
I cannot give you an "average" cost per resident since the cost of HOA management service is directly related to the scope of the work the management company does...and this can vary. You and your board need to develop a scope of work and request proposals from at least three qualified management companies in the Charlotte area. Make sure that your prospects specialize in HOA management, and will offer references. But make sure to provide them each with the same list of "wants and needs." Some companies, (such as Kuester) now offer online applications for the residents to track their HOA dues status and other neighborhood information. This is a great option and should be something your candidates offer.
As for the "what" and HOA can offer, here is a link to the HOA services that Kuester provides. This should give you a good idea of what you can expect and what you can request when you fill out your RFP.
Best of luck and please contact me if you have any additional questions about HOAs!
Wednesday, August 5, 2009
My wife and are about to buy a home in Fort Mill, SC. We are choosing between 2 we really like and the both have homeowner's associations. We are first-time homebuyers and we aren't really sure what the HOA fees generally cover. The two neighborhoods are similar, but the HOA fees are different. What do HOA fees cover and why could they be so different in the same town?
Fort Mill, SC
Congratulations on your upcoming home purchase! HOA fees generally pay for the common area routine yard maintenance, irrigation, ponds, security, street lighting, and the amenities maintenance (club houses, pools, tennis courts, walking trails, etc.), and neighborhood events.
Homeowners Associations are tasked with making sure HOA fees are being used properly for both routine and non-routine upkeep of the neighborhood. Routine maintenance may include lawn mowing and basic landscaping in the summer, and salting roads on icy winter days. And the non-routine things like if large trees need to be trimmed, the pool needs a repair, the HOA fees may be used to hire contractors.
If you are comparing two similar neighborhoods in the same town, but they have different HOA fees, then perhaps there is a 1 time up-front fee when you buy your home, larger fines, or maybe the amenities are different (i.e. one may have a small outside pool, and the other may have both an indoor and outdoor pool.).
The best thing to do is to get both HOA agreements are read them side by side and if you are still having trouble understanding the cost discrepancy, check with your Realtor and/or real estate attorney. They are both expert in home-buying and will be able to see if the costs make sense.
Saturday, August 1, 2009
Put Together a Great Team
No matter where you are on the investment property learning curve, it's a good idea to get advice and support of industry experts such as commercial real estate agents, property attorneys and property management firms to assist you in making the right decisions.
Do Your Research
Research similar properties, including incomes, the demographics of the residents in the area, the traffic, the vacancy rate, current trends and industry information for the businesses you may have as tenants. Also, if you are buying an occupied property, know how long the leases are for the current tenants and at what price. Are the at fair market price? Will these tenants stay to renew under new management? Are the tenants you would like to keep?
As with any investment, commercial real estate requires due diligence and a keen business sense. Consider carefully before investing and always seek the advice of professionals to garner the best results.