I’m putting together a newsletter regarding Kansas City real estate. Many of you have sent me your contact information before and I’ve kept it. But if you are a newer reader and you would like to sign up for periodic mailings and/or emails I send out regarding Kansas City real estate…including some real good deals…you should just drop me an email today.
listwithchris at kw.com
Filed under Kansas City Real Estate
Today is a national holiday for this Kansas Jayhawks Basketball nut. Today is the first day the NCAA allows teams to hold official practices. It used to be Saturday. But Lefty Drisel back in the day at Maryland decided he wanted to get a jump on the rest of the ACC and so he would hold practices at 12:01 am on Saturdays. A few schools soon followed suit and Kansas jumped on board 25 years ago today. Thank you Larry Brown!
Of course, the NCAA can mess up anything. Just look at how they randomly choose to enforce rules and eligibility. It’s atrocious. Then someone said that having 16,300 people up late in Allen Field House was too late. Oh, please. So now it starts at 6:30 pm and ends at 9:30 pm. Oh, I long for the days of old when not everyone was so concerned with legislating the fun out of everything. I remember Late Night as a student in 1985. Sure my grades stunk. But darnit! I had a lot of fun! 🙂
Anyway, MY Kansas Jayhawks are supposed to be the favorites to win it all again this season. There is a long way to go and injuries or unexpected chemistry problems and the usual NCAA red-hot tournament team can show up in your path…but I’m hoping and praying (like God cares) for another NCAA championship. (To my Missouri fan clients, sorry, you know my bias!)
Filed under Kansas City Sports
As I am helping a young couple to buy their first home in Olathe and take advantage of the First Time Home Buyer Tax Credit I wanted to bring you this little discussed caveat: It’s up to 10% of the home’s purchase price to a maximum of $8,000.
Now most people won’t have any difficulty with that because they will buy a house priced over $80,000. But this young, soon-to-be-married couple are looking at homes priced between $70,000 and $100,000. So they could potentially be under the $80,000 purchase price. Just something to be aware of.
By the way, these first time home buyers are smart. Between the two they could qualify for a home up around $175,000 to $180,000. But they’d rather stay out of debt and being newly married they want their own house but not the massive debt that can come with it. Ah, if I had the chance to do it all over again…
Filed under First Time Home Buyers, Kansas City Real Estate, Olathe
B
ecoming a series, this post will discuss the cost of property management. At least here in the Kansas City area. I do follow costs in other parts of the country but with the diversity of our readership, I’ll just discuss Kansas City rental property management. You can talk to your local real estate agents for your local details.
Property management here in Kansas City is pretty homogenous, at least in cost structure.
Monthly fees for collected rents run anywhere between 7% and 10%. There are a few companies that charge one flat fee per door.
Lease-out fees are running between 50% and 75% of the first full month’s rent when the property manager has to find a new tenant.
Then there are additional fees many of the companies offer. There are eviction protection fees and rent protection fees. These are usually add-on services that can run anywhere between $5 and $45 per month. I’m not a big fan of those. Sort of like the extended warranty on your Best Buy electronics. They wouldn’t be offering it if they weren’t coming out ahead so…
When you are considering buying a new residential investment property you want to factor in your property management fees. Quite possibly even if you intend to manage yourself just in case you change your mind later. So if you have a place with a $1,000 per month rent and it changes over once a year you might want to consider;
This doesn’t absolve you from figuring other costs/expenses as well. You know, your vacancy and repairs…just to name a couple.
Filed under Property Management
Let’s face it, the toughest and sometimes most frustrating aspect of owning and operating residential investment property is managing the property…or even just working with the property manager. Let’s look at your choices, shall we?
Self Manage
Self managing your rental property really isn’t too tough if you own one or two or three houses. You can still work your full time job, show the place every now and again when it becomes vacant and there really shouldn’t be too much maintenance on just three rental homes or less. You will save the property management fee and you’ll be able to keep a handle on expenses better since they come directly out of your checkbook.
But then again, maybe you are a softie. Or you are a professional that really is very, very busy at work and you need all your personal time. Or maybe you just would rather be at your son’s baseball game.
Property Manager
Choosing a property manager is a very important process in your real estate investing career. Sadly, most just go with whomever they find in the phone book or was recommended to them without ever really doing any research. There are some good property managers out there. But property management also lends itself to the shadows. After all, if the owner is California and his property is in Kansas City will he/she ever really know what the condition of the air conditioner really was?
Then there is the time issue. If y0u own more than a few properties you have to decide if you are going to be a whatever you are or a property manager. Where do you make more money? What is a better use of your time? Heck, even if someone else charges you 9% and then overcharges you occasionally are you still not better off using a property manager? (Not advocating the latter position. Just asking.)
Filed under Property Management
I literally went from feeling normal (such as that is for me) to feeling achy and knowing I was going to be sick in less than an hour. Most of last week I had a temperature and still this week I have a lingering cough, cough, cough that comes along with full recovery. Yes, folks. I had the swine flu. Pretty cool, eh?
But in our modern world of political correctness we cannot upset the swine so I’m told it is now called H1N1. Whatever. Four of us got it. Myself, my second son and my first daughter and the little friend from across the street. My wife, oldest son and youngest daughter have skated through unharmed. Funny. We all live in the same house and breath the same air. Guess I’m just one of the weak ones.
As I sat reading and researching all last week and weekend I learned a lot about our current real estate market. More of that to follow. Till then, cough, cough.
Filed under Uncategorized
Dictionary.com describes schizo-phrenic as;
2. a state characterized by the coexistence of contradictory or incompatible elements.
Frankly, I think our current real estate market here in the greater Kansas City area fits that definition about perfectly. Nearly every day people call or email me to ask me what I think of our current real estate market. On some days I think “Hey! It’s not too bad.” On other I think “Is this ever going to end?”
Proof of Recovery
My office, Keller Williams Realty, Diamond Partners, Inc of Olathe, Kansas has had two record months very recently. I believe I was told that June and August were the best June and August months we’ve ever had. (Keeping in mind our office got started in 2003.) Personally, my June kicked hiney and July wasn’t too shabby. Olathe housing inventories have been down a little and DOM seems to be holding steady after having dropped a bit.
Proof of Lingering Slump
It’s all around. While many agents are keeping up or dipping only slightly from previous highs most have seen at least a 10% – 15% dip in sales volume from 2007. A great many of the agents that are still in the profession will quietly whisper that they are down 20% – 25% from 2006. I don’t know about you, but if your income took a prolonged 20% hit when would your spending habits and lifestyle have to change? Over 3,000 agents have fallen off the MLS rolls and more are expected to fall off this renewal season. I’ve heard the local builder’s association rolls have been devastated.
Forget housing starts, equity statistics and talking heads. Look at the incomes and sales volumes of your local real estate agents. If the amount of agents is going up and their incomes are even or going up you have a good housing market. And the opposite is true if all that is dropping. We can bend statistics (politicians, CNN and Fox are masters of this) all we want. But if people are or are not earning a living in real estate then there is your answer.
A Last Word About This Administration’s First Time Home Buyer Credit
While the first time home buyer’s credit has been an excellent resource for a great many people…and I have helped five different home buyers take advantage of the credit…I still don’t like it.
First, four of those people would have bought a home anyway. So there is money that didn’t have to be given away. Second, I believe it provided a false bounce to the market by accelerating the purchasing time frame of a great many people so as to not miss the arbitrary deadline of November 30, 2009. Now they want to extend it. But realtors I know here in Olathe aren’t finding very many takers. I believe you have taken current and future home buyers out of the market for at least the next six months. Extending the credit will not magically provide us with new home buyers that are credit worthy.
What to Expect?
Listen, the sky has shaken but it hasn’t fallen. I still believe 100% in the long term value of real estate. But the dips hurt, no doubt. For me, an average guy with an average income in an average city in the middle of the country, to sit here and give you answers would be folly. I suspect, however, more of the same. First we heard this would end in the latter part of 2008. Then the Summer of 2009. Now I’m hearing recovery is just around the corner in 2010…but maybe the last quarter.
I wouldn’t necessarily count on it. This could linger. Our houses are no longer just easily accessible piggy banks. You have to use good sense. Move when you need to. And most of all, look at your local market independently of even your city or state. As always, real estate is very local.
Filed under Kansas City Real Estate
BBQ Capital | Kansas City Real Estate Investing 