Monthly Archives: November 2012

November 29, 2012 · 1:12 pm

Income Property Numbers

It’s your numbers, silly. With income property it’s all about the return numbers. But to determine the return numbers you need to know as closely as possible what the cost of the property is. Items that go in to cost?

Cost of rental property.
Closing costs.
Capital improvement costs.
Ongoing maintenance costs.
Taxes.
Insurance.
HOA?
Advertising, marketing and vacancy.
Depreciating costs of big items like ac/furnace, roof, foundation, carpeting.
Property management.

That’s not an all inclusive list but should get you to thinking. Which were you already forgetting? If list all the variables and add them up and then divide by realistic expected income then you should have your income property numbers. Are they good? Bad? Now is the time to evaluate. Before you buy. Not after.

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Filed under Real Estate Investing

November 26, 2012 · 8:41 am

Want to keep your Tenants? Fix your house.

We have pretty high expectations of the tenants we rent to here at KCPropertyManager.com. But by the same token we are pretty demanding of the owners, as well. Want to keep your tenants? Then fix your house.

Property management is a symbiotic relationship between the three principals; The Owner, The Tenant and The Manager. All have to be doing their part. But if a one breaks down the whole relationship can go sour in a hurry. Everyone likes to bust on the tenants for non-payment, late payment or breaking this or that. I hear all the time of property mangers that don’t fulfill their end of the duties regarding collection of rent, maintenance and communication during evictions. But let’s be fair, not all owners deserve great tenants or property managers. 🙂

Not fixing dishwashers is not acceptable. Having a tenant sit in a cold house for three days while you decide which heating and air conditioning company might save you $75 is not acceptable. If there is a water leak, fix it. If there is a roof leak. Fix it!

Listen, these are the owner’s obligations. And you won’t be able to sell the house until these things are repaired anyway. Don’t buy a rental property until you have a reserve set aside for repairs (not to mention if you have a couple months of vacancy) because repairs will be necessary.

The Worm Has Turned – Sorry Real Estate Investors

Well, the worm has definitely turned here in the Kansas City real estate investing market. Oh, don’t get me wrong. As I survey the country I know we are still a great, steady market to have some of your portfolio in. But the last 18 months (until about a month to two months ago) we were able to find 14% cash on cash returns on a regular basis on homes in neighborhoods where my grandmother would feel safe. (Not to @bawldguy)

Prices are up. Competition is definitely up. But, there are still houses to be had. It’s just that my usual forecast of 14% cash on cash has been downgraded to about 11%…maybe 12%. I challenge you to look at the strength of real estate as an investment vehicle and find better returns that that when you take in to account the 4 Benefits of Real Estate Investing.