To many, being an investment property owner is the best way to financial freedom. Owning real estate can certainly create and build wealth. However, owning investment property is not something that comes without work. Finding the best property, negotiating the contract, and then finding tenants and managing the property are all obvious tasks, but the most important things... are Time and Money. Managing these are the hardest jobs in investment property!
Before you get started – there are a two things you should know:
Time is of the Essence:
Do you plan to own the property for a long time, or turn it around quickly? These are important questions when trying to figure out what upgrades and improvements should be done. Also, you can expect that if you do own the property for 5-10 years, or longer, that there will be a new roof that needs to be put on, or a furnace that needs to be replaced. Your investment will need continual investing to keep it in top condition—but if you are only planning on hanging on to it for a year or two, you won’t want to sink money into unneeded expenses that you won’t be able to recoup.
Time is also important as you time the purchase and sale of the property, and balancing that against your needs, situation and the property you are looking for. Timing your sale or purchase is tricky, and that is where having a commercial real estate company on your site can make or break the investment. You don’t want to pay too much when you buy, nor do you want to wait too long when you are ready to sell. Timing can be your best friend or your worst enemy.
Money. Money. Money.
Having money on hand and a great credit situation is imperative for investment property owners. Besides having the cash to buy the property, having the monies available to make repairs and manage emergencies is important.
Work with you financial advisor to determine the property amount of cash vs. loans that you will need to get the right mix for your expenses as well as what you will need to make your payments and still have what you need “just in case.”
You also should make sure you can save enough for retirement and other long-term goals before making the investment. Property ownership is not a sure bet, so it is important to not put all your eggs in one basket!
Property Manager
Kuester Property Management
Charlotte, North Carolina
Tuesday, July 20, 2010
Wednesday, July 14, 2010
Finding a Good Property Management Company
Finding a good property management company the most important decision when it comes to your commercial real estate. The right management company will make your operations run smoothly--and a bad one will make your life miserable at the very least, and potentially cause significent financial hardship! Property Management should not be a decision based on cost, but rather one based on customer service and experience. We have outlined a process below for finding the best property management company for you:
1) Outline your goals.
What is it that you want? Would you like a full service property management company, or one that just focuses on finding tenants?
The full service companies such as Kuester will advertise your property, help to place tenants, maintain the property, including major repairs, collect the rent, and send reports and a check each month.
A company that finds tenants will just advertise your property and place tenants. Depending on what your level of involvement is, you may choose one or the other options.
2) Set realistic goals.
Depending on what you bought your property for, and what your mortgage is AND what the average rental cost is AND how many tenants you are able to get, AND a near endless series of other factors - you may or may not make a profit on your property! Run through all the factors with your accountant and be conservative. Consider asking other property owners what surprise expenses they have had and make these part of your calculations.
3) Do your research.
Reputable property manangement companies will have a website outlining their services, philosophies and available properties. After narrowing it down, ask for referrals. Also, look for signs from the company posted around town and take notice of their advertising. Do you like what you see?
4) Always get references.
Ask for at least 2 references from current or recent clients. Most property management companies will give this information with zero hesitation, and if they refuse do you really want them managing your investments?
5) Never sign before you read.
Property Management contracts are legally binding contracts and can be negotiated. But sometimes they include details that were not previously discussed! Not only should you read before you sign, but you should also have your attorney review the contract as well. There may be language in the contract about additional costs that you will have to pay (i.e. major repairs), and reasons that either you or the property management company could cancel the agreement. So know before you make anything permanent.
1) Outline your goals.
What is it that you want? Would you like a full service property management company, or one that just focuses on finding tenants?
The full service companies such as Kuester will advertise your property, help to place tenants, maintain the property, including major repairs, collect the rent, and send reports and a check each month.
A company that finds tenants will just advertise your property and place tenants. Depending on what your level of involvement is, you may choose one or the other options.
2) Set realistic goals.
Depending on what you bought your property for, and what your mortgage is AND what the average rental cost is AND how many tenants you are able to get, AND a near endless series of other factors - you may or may not make a profit on your property! Run through all the factors with your accountant and be conservative. Consider asking other property owners what surprise expenses they have had and make these part of your calculations.
3) Do your research.
Reputable property manangement companies will have a website outlining their services, philosophies and available properties. After narrowing it down, ask for referrals. Also, look for signs from the company posted around town and take notice of their advertising. Do you like what you see?
4) Always get references.
Ask for at least 2 references from current or recent clients. Most property management companies will give this information with zero hesitation, and if they refuse do you really want them managing your investments?
5) Never sign before you read.
Property Management contracts are legally binding contracts and can be negotiated. But sometimes they include details that were not previously discussed! Not only should you read before you sign, but you should also have your attorney review the contract as well. There may be language in the contract about additional costs that you will have to pay (i.e. major repairs), and reasons that either you or the property management company could cancel the agreement. So know before you make anything permanent.
Saturday, July 10, 2010
Commercial Property as a Retirement Investment
What is your long term plan for income after retirement? Many people, especially those who have been in business the majority of their adult lives, have chosen commercial property as a way to provide themselves with long-term monthly income through their retirement.
A good choice in commercial real estate can not only earn you the money to live off of, but be a significant asset in your estate, even after your death.
Investing in commercial real estate, as much as it has great potential, is not a decision that should be entered into lightly. As with any investment, there is risk involved, but there are several things that you can do to reduce that risk:
1) Do Your Research: Take your time and research the property before making a purchase decision. What is the land zoned for? Has there ever been any problems on the property, are their current tenants? Are the buildings (if any) sound and ready to be leased, or will work need to be done first?
2) Make sure you have enough money: The purchase price may be in your budget, but is the cost of needed repairs, fees, taxes, maintenance, management, etc.
3) Consult your attorney: As with any real estate transaction, having an attorney to advise you and go through the contract is a must to be able to project yourself.
Investing in commercial property can be a very wise decision--one that could see you comfortably through your retirement. However, it is a choice that should come only after long and careful consideration!
If you would like to know more about investing in commercial real estate in the Charlotte area, just give us a call at 888.600.5044!
Kuester Property Management
A good choice in commercial real estate can not only earn you the money to live off of, but be a significant asset in your estate, even after your death.
Investing in commercial real estate, as much as it has great potential, is not a decision that should be entered into lightly. As with any investment, there is risk involved, but there are several things that you can do to reduce that risk:
1) Do Your Research: Take your time and research the property before making a purchase decision. What is the land zoned for? Has there ever been any problems on the property, are their current tenants? Are the buildings (if any) sound and ready to be leased, or will work need to be done first?
2) Make sure you have enough money: The purchase price may be in your budget, but is the cost of needed repairs, fees, taxes, maintenance, management, etc.
3) Consult your attorney: As with any real estate transaction, having an attorney to advise you and go through the contract is a must to be able to project yourself.
Investing in commercial property can be a very wise decision--one that could see you comfortably through your retirement. However, it is a choice that should come only after long and careful consideration!
If you would like to know more about investing in commercial real estate in the Charlotte area, just give us a call at 888.600.5044!
Kuester Property Management
Friday, June 25, 2010
Should You Invest in Real Estate?
Real estate investing can be risky... and very rewarding! The first thing you should know about property investment is to be careful with "too good to be true" and "sure bets." As with any opportunity, there are people who look to take advantage of others and it is important to not get caught up in schemes that can bankrupt your before you ever get started.
If you are seriously considering investing in real estate property, here are a few things you should know to get you started.
•You should have plenty of investment capital, not only to make the purchase, but to make the necessary upgrades and pay the taxes. If an opportunity comes to you and you are being sold a "no-money-down" option, this is probably too good to be true. Also, if you are asked to take a huge loan that will put you in a debt you can't get out of, this is probably too good to be true! Always go into an investment with cash on hand and plenty to live off of as well!
•You should have a good knowledge of the real estate market and the area in which you are looking to buy property. Is this an area that is growing? Are there businesses to support your tenants or future buyers? What are other properties in the neighborhood selling/renting for?
•You should have good management, people and negotiating skills--or you should have a property management company work for you that does. Collecting rent, managing repairs and finding tenants can be a difficult job.
•You should have the ability to do repair work, access to people who can do it for you, or a good property management company who can arrange and coordinate the work that will need to be done.
•You should have a relationship with a property inspector who can evaluate properties before you buy them and validate the claims by the sellers of repair work that they have done.
Finding a good property in which to invest and making that into a rental property, or turning it around for sale can be a job in and of itself. That is why many people are turning to property management companies to turn their investments, into profitable businesses.
If you are interested in learning how a professional property management company in the Carolinas can assist you with your investment property, please contact Kuester Property Management.
If you are seriously considering investing in real estate property, here are a few things you should know to get you started.
•You should have plenty of investment capital, not only to make the purchase, but to make the necessary upgrades and pay the taxes. If an opportunity comes to you and you are being sold a "no-money-down" option, this is probably too good to be true. Also, if you are asked to take a huge loan that will put you in a debt you can't get out of, this is probably too good to be true! Always go into an investment with cash on hand and plenty to live off of as well!
•You should have a good knowledge of the real estate market and the area in which you are looking to buy property. Is this an area that is growing? Are there businesses to support your tenants or future buyers? What are other properties in the neighborhood selling/renting for?
•You should have good management, people and negotiating skills--or you should have a property management company work for you that does. Collecting rent, managing repairs and finding tenants can be a difficult job.
•You should have the ability to do repair work, access to people who can do it for you, or a good property management company who can arrange and coordinate the work that will need to be done.
•You should have a relationship with a property inspector who can evaluate properties before you buy them and validate the claims by the sellers of repair work that they have done.
Finding a good property in which to invest and making that into a rental property, or turning it around for sale can be a job in and of itself. That is why many people are turning to property management companies to turn their investments, into profitable businesses.
If you are interested in learning how a professional property management company in the Carolinas can assist you with your investment property, please contact Kuester Property Management.
Saturday, June 12, 2010
Reasons for Hiring a Poperty Manager
Many people have chosen to make property an investment, and the smart and lucky ones have made a significant amount of money with this investment. Using a professional property management company can assist you in turning your investment into a profitable one.
A Property Management Company can maintain your property, find and screen tenants to lease your real estate to, collects the rent and handle maintenance and other tenant issues. Here are just a few reasons you should consider a Property Management Company:
1. Experience and Expertise:
Your goal with your investment property is to have the property make money for you. You do this by keeping the expenses low, and maximizing the income potential. An experienced property management company knows what can be done and has the ability to do it in an efficient way. They are also aware of the best practices, rules and laws in property management in your area and can give you the advantage of their knowledge so that you don't make errors in judgement that end up costing you your profits!
2. Property Maintenance.
Keeping your property maintained and attractive is important to retain its value and attract tenants. Maintaining a property can be hard work and require anything from minor grounds-work to major repairs. Your property management company not only has the relationships with the best contractors, they will be able to manage the day to day and the non-routine maintenance such that your investment is kept in tip-top shape at the best possible cost.
3. Getting the Price Right.
Getting the price right, and marketing it correctly can make or break your investment. If you go too high, you wont get tenants; not marketing it correctly, means you wont get tenants. AND... without tenants, you are losing money each month! By working with a qualified and professional property management company, you can assure yourself that the prices set are competitive in your market, for the type of property you have and that you have directed your marketing efforts at the proper demographic.
Owning investment property can be a lucrative income stream, but it takes good decision making and professional know-how to make this work. Feel free to contact Kuester Property Management to learn how we can assist you manage and market your investment.
A Property Management Company can maintain your property, find and screen tenants to lease your real estate to, collects the rent and handle maintenance and other tenant issues. Here are just a few reasons you should consider a Property Management Company:
1. Experience and Expertise:
Your goal with your investment property is to have the property make money for you. You do this by keeping the expenses low, and maximizing the income potential. An experienced property management company knows what can be done and has the ability to do it in an efficient way. They are also aware of the best practices, rules and laws in property management in your area and can give you the advantage of their knowledge so that you don't make errors in judgement that end up costing you your profits!
2. Property Maintenance.
Keeping your property maintained and attractive is important to retain its value and attract tenants. Maintaining a property can be hard work and require anything from minor grounds-work to major repairs. Your property management company not only has the relationships with the best contractors, they will be able to manage the day to day and the non-routine maintenance such that your investment is kept in tip-top shape at the best possible cost.
3. Getting the Price Right.
Getting the price right, and marketing it correctly can make or break your investment. If you go too high, you wont get tenants; not marketing it correctly, means you wont get tenants. AND... without tenants, you are losing money each month! By working with a qualified and professional property management company, you can assure yourself that the prices set are competitive in your market, for the type of property you have and that you have directed your marketing efforts at the proper demographic.
Owning investment property can be a lucrative income stream, but it takes good decision making and professional know-how to make this work. Feel free to contact Kuester Property Management to learn how we can assist you manage and market your investment.
Sunday, June 6, 2010
What you ALWAYS need to do when you own rental property
Do you own rental property? Here are a few tips for you and your property management company to keep your business running smoothly.
1. Always Screen Your Tenants.
Never rent your property to anyone before doing a thorough credit history, checking references, and doing background checks. Failure to screen tenants often result in problems such as late-paying tenants, or those who damage the property. Your property management company should be able to assist you, (or in some cases completely manage) the tenant screening process.
2. Always Get It In Writing.
It is never wise to enter into a property agreement without a written lease or month-to-month rental agreement. It is important to document the terms of the relationship with your tenants -- including when and how you, or the property management company will handle tenant complaints, emergency and non-emergency repair requests, notice you must give to enter a tenant's apartment, etc. Your property management company should be able to assist you with a proper contract.
3. Always Handle All Financial Transactions Properly.
Establish a fair system of setting, collecting, holding, and returning rent and security deposits. Always inspect and carefully document the condition of the rental unit before any tenant moves in, (and make any necessary repairs to keep it in rent-ready condition) to avoid disputes over security deposits when the tenant moves out.
4. Always Stay on Top of Maintenance.
Maintaining a clean and safe property as well as making the needed repairs in timely fashion is vital to being successful at rental property ownership. If the property is not kept in good condition, you'll likely alienate good tenants, and tenants may even have the right to withhold rent, or sue for injuries caused by defective conditions, or even move out without needing to give notice.
5. Always Provide a Secure Environment.
Your tenants deserve a safe a secure premises. Assess your property's security situation and take the appropriate steps to protect it with proper lighting, tidy landscaping, security patrols where necessary and whatever else you need to do to protect your assets and tenants.
6. Always Let Tenants Know Before You Enter Their Rental Units.
It is not only polite, but in many cases the law to notify your tenants whenever you plan to enter a rental unit. You should provide as much notice as possible, at least 24 hours or the minimum amount required by state law.
7. Always Disclose Environmental Hazards.
If there's a danger such as lead or mold on the property, you need to disclose this to your tenants. You could be held responsible to any health problems your tenants suffer due to these types of hazards. It is always best to remedy the situation properly and as soon as possible, but at the very least you need to let the tenants (and potential tenants) know.
8. Always Work With a Reputable Property Management Company.
Choose and supervise your property management company carefully. Choose a company with a good reputation, references and experience managing the specific type of property you have in that market.
9. Always Purchase Liability and Property Insurance.
It is important to protect yourself by purchasing enough liability and other property insurance. Insurance can protect you from lawsuits by tenants. Injuries, fire and storms damage, burglary and vandalism are all things that can happen, and you should carry insurance to keep a small disaster from turning into a major one.
10. Always Resolve Disputes Quickly.
Dispute will occur eventually—in any time of property relationship. It may be something small—such as a client paying a day late each month, or something big, like the need to evict. But it is important to resolve disputes with your tenants quickly and without lawyers and lawsuits when possible. If a dispute becomes more difficult, you can consider mediation by a neutral third party, (again, your property management company can be very helpful here). By addressing any issue that arise quickly, you will be able to avoid costly and potentially devastating repercussions.
Kuester Property Manager
1. Always Screen Your Tenants.
Never rent your property to anyone before doing a thorough credit history, checking references, and doing background checks. Failure to screen tenants often result in problems such as late-paying tenants, or those who damage the property. Your property management company should be able to assist you, (or in some cases completely manage) the tenant screening process.
2. Always Get It In Writing.
It is never wise to enter into a property agreement without a written lease or month-to-month rental agreement. It is important to document the terms of the relationship with your tenants -- including when and how you, or the property management company will handle tenant complaints, emergency and non-emergency repair requests, notice you must give to enter a tenant's apartment, etc. Your property management company should be able to assist you with a proper contract.
3. Always Handle All Financial Transactions Properly.
Establish a fair system of setting, collecting, holding, and returning rent and security deposits. Always inspect and carefully document the condition of the rental unit before any tenant moves in, (and make any necessary repairs to keep it in rent-ready condition) to avoid disputes over security deposits when the tenant moves out.
4. Always Stay on Top of Maintenance.
Maintaining a clean and safe property as well as making the needed repairs in timely fashion is vital to being successful at rental property ownership. If the property is not kept in good condition, you'll likely alienate good tenants, and tenants may even have the right to withhold rent, or sue for injuries caused by defective conditions, or even move out without needing to give notice.
5. Always Provide a Secure Environment.
Your tenants deserve a safe a secure premises. Assess your property's security situation and take the appropriate steps to protect it with proper lighting, tidy landscaping, security patrols where necessary and whatever else you need to do to protect your assets and tenants.
6. Always Let Tenants Know Before You Enter Their Rental Units.
It is not only polite, but in many cases the law to notify your tenants whenever you plan to enter a rental unit. You should provide as much notice as possible, at least 24 hours or the minimum amount required by state law.
7. Always Disclose Environmental Hazards.
If there's a danger such as lead or mold on the property, you need to disclose this to your tenants. You could be held responsible to any health problems your tenants suffer due to these types of hazards. It is always best to remedy the situation properly and as soon as possible, but at the very least you need to let the tenants (and potential tenants) know.
8. Always Work With a Reputable Property Management Company.
Choose and supervise your property management company carefully. Choose a company with a good reputation, references and experience managing the specific type of property you have in that market.
9. Always Purchase Liability and Property Insurance.
It is important to protect yourself by purchasing enough liability and other property insurance. Insurance can protect you from lawsuits by tenants. Injuries, fire and storms damage, burglary and vandalism are all things that can happen, and you should carry insurance to keep a small disaster from turning into a major one.
10. Always Resolve Disputes Quickly.
Dispute will occur eventually—in any time of property relationship. It may be something small—such as a client paying a day late each month, or something big, like the need to evict. But it is important to resolve disputes with your tenants quickly and without lawyers and lawsuits when possible. If a dispute becomes more difficult, you can consider mediation by a neutral third party, (again, your property management company can be very helpful here). By addressing any issue that arise quickly, you will be able to avoid costly and potentially devastating repercussions.
Kuester Property Manager
Saturday, June 5, 2010
What to Look For When Renting Property
In these harsh economic times, individuals are turning towards renting rather than purchasing, and it is important to build your own checklist of what you want out of the rental. Moving to a new apartment could definitely be an exciting task for you, but before you make advances in leasing, here are a few simple guidelines to follow.
First you should set a budget for yourself, and determine how much money you can spend each month to make rent. Focus your search around your budget, and even think about saving money; decide if living with a roommate is worth it for you and your situation. When looking for a roommate, make sure you thoroughly interview them to determine if it is someone you can see yourself living with.
When searching for an apartment/house to rent, make sure that it is close to where you work. Because gas prices continue to climb, and you're trying to save by renting, it would be ideal to find a place where you can walk to work. This will help you save while renting. Look for an apartment/house that is sizeable enough for you to live. You obviously don't want to live in a 4x4 brown box, so it's important to find something that won't be too difficult to adjust to.
Like negotiating the price on purchasing a house, you can also attempt to negotiate with a landlord. There is really no harm in trying! The landlord will be lucky to have a tenant that pays on time and doesn't cause problems. When signing a lease, make sure you read the fine print. Try not to sign a long-term lease, and look for a 6 month lease, unless you want to live there for an extended period of time. Find out exactly what you're responsible for, and budget your expenses. If it's not exactly what you're looking for, don't be afraid to write up your own agreement, and present it to your landlord for approval.
Remember, if you are really tight on cash and cannot afford much, you can always move back in with your parents (if that's an option). I know it doesn't sound glamorous to say that you live in your parent's basement, but it may be beneficial to you to save up for that dream apartment, or even house for the near future!
Are you looking to rent in the Charlotte, Boone, Myrtle Beach, Fort Mill or Concord? Or have you considered an investment property? Please check out the Kuester Website for some great Kuester properties!
First you should set a budget for yourself, and determine how much money you can spend each month to make rent. Focus your search around your budget, and even think about saving money; decide if living with a roommate is worth it for you and your situation. When looking for a roommate, make sure you thoroughly interview them to determine if it is someone you can see yourself living with.
When searching for an apartment/house to rent, make sure that it is close to where you work. Because gas prices continue to climb, and you're trying to save by renting, it would be ideal to find a place where you can walk to work. This will help you save while renting. Look for an apartment/house that is sizeable enough for you to live. You obviously don't want to live in a 4x4 brown box, so it's important to find something that won't be too difficult to adjust to.
Like negotiating the price on purchasing a house, you can also attempt to negotiate with a landlord. There is really no harm in trying! The landlord will be lucky to have a tenant that pays on time and doesn't cause problems. When signing a lease, make sure you read the fine print. Try not to sign a long-term lease, and look for a 6 month lease, unless you want to live there for an extended period of time. Find out exactly what you're responsible for, and budget your expenses. If it's not exactly what you're looking for, don't be afraid to write up your own agreement, and present it to your landlord for approval.
Remember, if you are really tight on cash and cannot afford much, you can always move back in with your parents (if that's an option). I know it doesn't sound glamorous to say that you live in your parent's basement, but it may be beneficial to you to save up for that dream apartment, or even house for the near future!
Are you looking to rent in the Charlotte, Boone, Myrtle Beach, Fort Mill or Concord? Or have you considered an investment property? Please check out the Kuester Website for some great Kuester properties!
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