Category Archives: Property Management

August 27, 2007 · 10:19 pm

Tenant Screening Service & Post On Lease Options

Lisa Wells of Landlord2Landlord has authored a very nice piece about lease option purchases and how they may be of benefit to today’s sellers. In this tougher buyer’s market sellers are going to have to explore other opportunities if they absolutely have to sell.

Opportunities like:

Pricing the house right the first time.
Chasing the market down.
Getting top dollar by lease-optioning.
Renting.

These are not all the options a seller has at their disposal. But if you go the rent route, or the lease option purchase route you are going to want to know you are getting a quality tenant or potential buyer.

I recommend always using a tenant screening service to cover your backside. Whether you are a property manager or a owner of income property. It always pays to do your due diligence.

Rental Housing Registration In Kansas City

The Kansas City Star ran an article in the Local section of the paper today titled More cities keep eye on landlords. I found that the article clearly presented the issue revolving around rental property licensing that is being proposed in several areas around the Kansas City metropolitan area.

(Although I still find it annoying that every weekend the KC Star insists on running some horrible foreclosure related photo from the west coast in the business section. Note to KC Star, if you cannot find the problem here then don’t take the photo. You keep insinuating the real estate meltdown is here, as well. And you know it.)

Let BBQCapital be very clear where we stand on the issue or rental housing registration and/or licensing;

Rental licensing is not acceptable. It is simply a tax and an additional burden to the investment property owner.
Registering rental properties and having an individual with sole responsibility is okay here. (No hiding behind a LLC to shirk your responsibilities.)
Administrative warrants (used by the City of Lawrence) to inspect rental property without the permission of either tenants or landlord is blatantly absurd…regardless of what the federal court of appeals says.
The City of Mission ordinance that allows the city to conduct an inspection of the property when requested by the tenant is a solid compromise.
Tenants should treat their rental homes with respect and care.
Landlords should treat their tenants with respect and care and maintain their Kansas City area investment property to a clean and safe standard.

Agreeing with Dan Kelly of Landlords, Inc. in Kansas City a city should spend more time worrying about code enforcement. If a rental house is becoming a blight on the neighborhood then code enforcement should act. Having registered owners, actual individuals, will allow the city to go after the owner and not have the owner “hiding” from the violations because the city doesn’t know whom he or she is.

And our last point here will be this: Landlords, it is to your benefit to maintain your properties! You will attract better tenants, collect higher rents and sell for more money. Why is this so hard to get across? If you don’t, if there is mold in the basement or a roof leaking then a tenant should have the right to have the city come in and work on their behalf. It wouldn’t have happened if you had maintained the house, right?

Here in Kansas City landlords can evict a tenant for non-performance (no rent payments or tearing up the house) a lot easier than in other parts of the country. Believe me. The flip side is they should have rights too when the landlord is guilty of non-performance.

In the words of Stuart Smith of Mission (as quoted in the Kansas City Star) “If you can’t afford to keep the property up, you shouldn’t have bought it in the first place.”

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August 3, 2007 · 7:21 am

Gen Y Will Be Your Tenants

I was reading through my copy of the REALTORS Commercial Alliance Report last evening and specifically a story titled Who Are Tomorrows Renters?

Thought I would share a couple of exerts from the article:

“I’m really bullish on multifamily demand” says Leanne Lachman, president of Lachman Associates…

Projections by the Joint Center for Housing Studies at Harvard University estimate that around 2 million new households will be formed between 2005 and 2015. Rising interest rates and booming growth in many traditionally renter demographics make it likely that apartments will receive a proportionately higher share of that growth than they have in the last few years.

Between now and 2020, 4 million Americans or more will be turning 18 each year.

While an average of 31 percent of all U.S. households rent, the number jumps to 74 percent of those under 25 years old and stays at 59 percent for households between 25 and 29 years of age…

Some households rent as a lifestyle choice, avoiding the costs and inflexibility of home ownership. Indeed a 2006 JCHS study found that some 20 percent of renters had incomes above $60,000. However, the majority of long-term renters are there because of economic necessity.

I find this all a great indicator of growth. Especially in the areas of town that will appeal to the upcoming youth. Close to business centers, nightlife and where space is affordable. Know of any areas that fit this description?

Property Management Problems

I received a disturbing phone call yesterday from a client I have out west. (You know who you are.) Before we had ever met she had purchased an Independence, MO duplex and arranged for a property manager to take care of the rental home.

Well anyway, she called me yesterday to ask about other property managers I might know in that area who could take care of the duplex. Why? Her tenant had contacted her and said the property manager was missing in action.

Carpet had gone unreplaced that she had approved four months ago. The other side is vacant without so much as a sign in the front yard. And July’s proceeds had yet to be forwarded to her.

Wow. It got me to thinking that owners may not be fully aware that when you hire a property manager for your investment properties that you will still want to stay in some form of contact or the other with your tenants. Maybe have them fill out a questionnaire once a year about the PM’s management abilities.

That, or you better have a lot of faith in a very good property manager for your investment properties.

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July 5, 2007 · 2:19 pm

What Will That Investment Duplex Rent For?

What are the real rents?

Do you think that question is funny? You shouldn’t. If you have been a real estate investor for any period of time you know that rental values can be manipulated. Here are ways;

Charging a higher monthly rent but getting 1-2 months “free.”
Charging Section 8 tenants more than the market will actually bear.
High rent…but utility cost are included in rent.
Charging a higher rent in lieu of a security deposit.

That should get your mind started. When I look at rents in a particular income property I am always curious as to what the rest of the neighborhood is getting. Curious enough that I will research the rents online and also knock on doors.

I’ve actually had sellers tell me they are getting $995/mo when every other property in a two block radius is getting $750. Well, maybe they really are. But when it goes vacant, what do you think you are going to get to replace it?

Know your true rent values. That’s my $.02.

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June 16, 2007 · 9:15 am

Landlord Tales of Nighmare Tenants

This was found on MSN. I’m in a hurry and will read it later in it’s entirety. But the overview looked like something of interest for this real estate investing blog.

Why should you hire a property manager?

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Filed under Investment Property, Property Management

April 26, 2007 · 10:13 pm

Real Estate Guru: Watch Your Wallet!

I had a great evening, real estate wise. The best part was working with an investor who has owned rental houses before but has never had to do any tenant selection on her own. So I’ve been walking her through advertising the income property and answering calls/emails and tonight we met together with a prospective tenant couple. She let me do all the talking, question answering/asking and such. She seemed to show tenants houses the same way I show houses to her…I let them look around and leave them alone. But she said she wasn’t suprised at how I went over in detail what I would expect from them as tenants and, in turn, what they could expect from her as a landlord.

We have a couple more prospective tenants to show the house to on Friday evening and she’ll be there to continue to learn. She wants to be her own property manager for a while to learn how it works from that angle.

I tell you all of this because I’ve been having a good time surfing around the web tonight and reading some very good real estate blogs. And on a few of them there are backhanded references to real estate gurus. (Deservedly so, IMO.)

If you are starting out in the real estate game you have three choices as I see them:

Read all you can and go out on your own. Figure things out as you go.

Hire an investment “mentor” and follow him down the path. (Someone who can actually show you what they are doing NOW…not 5 years ago.)

Work with a professional real estate agent that has a proven track record. My guess is, and this is only a guess, that each major city only has about 4-7 of these guys. Here in KC my figure is about 6 out of the 13,000 agents. Better interview carefully!

But whatever you do…Don’t buy the books, tapes and seminars of the real estate gurus! Why? Give me a call or email. We can discuss it.