In many ways, planning is more important than money because an experienced real estate investor knows how to work with monetary limitations. In contrast, an unskilled investor risks squandering whatever advantages they have. For this reason, every step along the journey of scaling your portfolio is also an opportunity to become a more savvy investor, which will only help you in the long run.
With a 30 year fixed-rate mortgage, you'll be able to pay a lower interest rate on your property, which will leave you with more money to reinvest.
At some point, you'll have so many properties that you won't have the time or mental resources to manage them all. Depending on the market your property is in and the level of services chosen, for 6 to 12% of your monthly collected rent a property manager will screen tenants for you, take care of rent collection, arrange for repairs, make sure you're not violating any local ordinances, and manage a slew of other issues.
You should always include vacancies in your budget, but you also want to reduce vacancies or problem tenants' likelihood in general. This is where stricter criteria for tenants can be helpful when screening to get the best tenants for your rental property. Require co-signers and several references (preferable including their last landlord).
The income you make off your investment properties should only be reinvested into your business. Don't use your new income to improve your lifestyle with new clothes, a car, renovating your own home, etc. You never know when your rental properties may need repair or when you might be hit with a vacancy. In general, you should have your savings account unrelated to your business for personal use or emergencies.
If you start by doing small deals, you'll learn what does and doesn't work for you and discover your niche. Successful real estate investors pick a niche, refine their skills over time, and become experts. As you gain experience, you can start to look for greater opportunities.
Networking is indispensable in real estate. You need to help and be helped by other real estate professionals. This way, you'll grow your knowledge base and access greater resources like reputable contractors or great deals. You'll also have more eyes and ears on the ground to track trends and new developments.
Your properties will inevitably need repairs, both big and small. For this reason, having access to trusted contractors of all kinds is a must. You don't want to scramble in the face of an emergency or have a minor repair turn into a huge undertaking because you didn't have the right contractors already in mind.
Because conventional lenders look at your debt to income ratio, eventually, you'll have to move on to commercial loans or use other forms of financing. Yes, you can have a family member, like a spouse, take the loans out in their name, but eventually, you'll run into the same issue. Having an extensive network can make finding funding easier.
Avoid shortcuts or trying to scale your investments too quickly. You can burn out, make poor decisions, compromise your resources, or leave yourself vulnerable to emergencies. That's why having a reliable network, knowing good contractors, reinvesting in your own business, gaining experience, and being frugal are essential.
Investing time in learning through books, podcasts, webinars and online forums are also essential activities.
The more properties you own, the more time will be demanded of you. Even if you're using a property management company, you can still save time in other ways. Hire a real estate CPA. Use online rental payment software to reduce late payment and tenant tensions/interactions.
By adequately delegating responsibility, you'll have more time to focus on the tasks that only you can do: making sure your business is running how you want it to and meeting your goals.
Don't be afraid to look at properties outside of your immediate geography. There are all sorts of opportunities out there! The best deals may be far away. And don't worry about managing units from afar because there are plenty of services and tech solutions to the problem of distance.
Not limiting yourself by geography also allows you to diversify your portfolio and become a more resilient investor. That's because if all your properties are in the same place, they're exposed to the same risks. If a large employer shuts down or a weather disaster occurs, all of your properties may be compromised. If you have investments across the United States, you're less likely to endanger all your real estate investments at once.
Refinancing your properties can give you more favorable loan terms and free up more resources to reinvest into your business.
A 1031 exchange allows you to avoid paying capital gains taxes. To perform a 1031 exchange, you must use the profits from the sale of one of your properties to purchase another property (or properties) of equal or greater value within 180 days or before the due date of your taxes, whichever comes first.
To lessen your financial burden and stress, you can work with one or more investors. This has both its pros and cons. While partnering may make it easier to scale your portfolio, it also decreases your income. Additionally, if your partner(s) decide they no longer want to invest, you'll have to restructure your business.
A private lender provides loans secured by real estate or a promissory note. While they charge higher rates, private lenders are known to offer loans that banks may shy away from, like rehab loans. They can also provide loans more quickly and with less documentation than banks.
These private money lenders serve an essential function for real estate investors because sometimes, you need money right away. This can be particularly important when you need the cash to get a new property right away since a private lender can cover 80 to 90% of your purchase price.
A home equity line of credit (HELOC) is a 2nd mortgage where your home is the collateral. It's almost like a credit card with simple interest. You can take out money up to a certain amount using a bank transfer, card, or check, repay it, and make more withdrawals. A HELOC can be useful when you need additional funds to close a deal or make an emergency repair.
Dig deep into the specifics of your target market. Look at jobs, median income, and home formation. By studying the area in which you're interested in investing, you're able to find tenants more effectively and cater to your marketing. Looking at school rankings and how desirable your area is to new families can help you find long term occupants.
If the house you're looking at has a roof over 15 years old, you're best off just replacing the roof right away because it's reached its best-by date. Don't ignore major repairs because they're only going to compromise your ability to find occupants and may also lead to higher costs if neglected for too long. You can't rely on your tenants to let you know when a serious job is in order.
You're going to want to keep meticulous records of your expenditures for both tax purposes and general budgeting. Additionally, knowing your past spending habits can help you scale more effectively because you'll know the monetary benchmarks you need to hit before acquiring a new property.
With each new property you acquire, the challenge of managing your business becomes greater. Every investment comes with its unique challenges, which will only sharpen your skills. The deeper you dive into real estate investment, the more capable you'll be at growing and maintaining your properties.
It's just important to remember that no one invests alone, even if they're the sole owner of their business. That's because you're always working with and learning from others, and that's key to becoming the best investor you can be.
Check out the various locations Mynd manages in, we have local teams in 19 major cities and counting. Learn more about our services today and get your free renal analysis or consultation with our local experts!
We all know that owning investment property comes with risk. There’s always a good chance that investors could fail. Sometimes, it’s not the investor’s fault at all, simply a condition of market trends or the industry in general. In Portland, there are a few specific reasons that investors fail. Many investors who can’t succeed end up getting out of real estate altogether. We want to prevent that from happening to you.
There is a really common pattern in Portland, and maybe it’s true outside of Portland as well, in which investors feel that they can and must do everything on their own.If you don’t want to fail with your real estate investment, you need to operate with a view of the long term. This is true whether you’re investing in Portland real estate, investing in stocks, or starting a business. Lots of people read success stories about business people becoming multi-millionaires overnight. It does happen once in a while perhaps, but a lot of time investors get rich slowly and steadily over time. Be prepared to put in the work for months and years.Investors often get excited by buying their first investment property, and they will try to self-manage that property without realizing how much time it takes and how much knowledge is required. It’s very easy to think that it doesn’t take much, and they can do everything that needs to be done on their own.But, this isn’t always true.Maybe an investor will have a bad experience with their resident or find out the requirements of the Portland rental rule book is way more complicated than they originally thought. The rules and regulations in Portland are so complex that the time, energy, and frustration is too much for most investors. It’s easy to forget something or misunderstand something, and then you’ve made a mistake that has the potential to be very expensive.Landlords who are trying to do the maintenance on their rental properties themselves will find that it’s very easy to fail as well. Not only are they losing their evenings and their weekends, they’re probably not doing as good a job as what a professional and licensed vendor or contractor could do. They may not be responding as quickly as they would if they were working with a Portland property management company, and that upsets the residents.When rental property owners try to do everything on their own, they’ll likely get burned out within three to five years. Ultimately, they’ll decide that real estate investing is not for them, and they’ll decide to sell their assets and stop dealing with it. This is a shame because if they had simply worked with partners and property managers, they could have kept the property for the long term and earned a lot more money.
If an investor buys multiple properties, the stakes are even higher. If you own 30 rental properties throughout Portland or even in a single building, scaling those assets will bring you huge successes. But, if you get out of the real estate investment game because you’re frustrated with how things work, you need to take a look at where your process went wrong. Were you trying to do too much?Investors who fail often fail because they don’t run their properties like businesses. Anytime you want to run a business and you go to the bank, the bank will want to see a business plan. If you were to ask an investor if they had a business plan, 99 percent of them would say no. They know that their property is a business and they know there are laws and regulations and expenses. But, they are not putting it all together and understanding that they need an actual business plan as well.A business plan is going to help you understand your strengths and weaknesses. It will help you leverage the expertise of other people. Don’t let your ego mislead you into thinking you have to do everything yourself. It’s not your job to lay tile or put up dry wall.When you have a Portland property management company, you are leveraging their staff. You have access to accountants and maintenance personnel. You have qualified people to lease the property.Most people do not buy real estate to have a second or third job.
There is not a rulebook that tells you how to run your rental property.So, it’s a huge mistake to try to do everything on your own. There’s actually a standardized way of doing most things, and best practices that have been perfected over the years. Normally, your professional property managers will know how to handle every situation that’s encountered. They’ll operate within policies and procedures and effectively run your property like the business it is.There are a lot of laws and regulations in place here in Portland, and most of those are favorable to your residents. That’s going to make things more complicated in this business.Don’t let yourself fail as a real estate investor in Portland. It’s very easy to succeed when you think in the long term, surround yourselves with experts, and remember to run your property like a business. Contact us at Mynd Property Management to learn how to succeed with your Portland investment property.You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
Tampa is currently a hot area for investors who are looking for great properties with a lot of potential. It’s easy to be successful with Tampa rental properties. Today, we’re discussing some of the commonalities among investors who are successful in this market.
Tampa is getting a lot of national attention because it’s been identified as a great place to invest in rental properties. There are lots of great reasons to buy investment property here. People are showing up because of the beautiful weather, the proximity to beaches, and the engaging downtown area, where people can eat great food, enjoy a lot of culture, and take in professional football and hockey games.Tampa is a great place to invest. There’s a wise saying in real estate investment circles: you make money when you buy. This is especially true of the opportunities in Tampa. You have to do your due diligence and make sure you’re making a sound investment in a great location, but it’s pretty easy to succeed in the Tampa real estate market. This makes it a great place for both new investors and experienced investors who are interested in adding to their portfolios.
When you’re choosing a Tampa investment property, consider location, condition, and amenities. You want to make sure you’re selecting a home that residents will find attractive. Do some math and make sure the rent you anticipate earning will be above your expenses. Successful investors understand that they’re not hunting for a home they’ll live in themselves. They’re looking for a property that good residents will find desirable and attractive. They need to know they’ll earn high rents and face low expenses.To succeed, find a sound investment. If you’re not sure what’s going to make a sound investment, get to know the Tampa real estate market a little better and talk to some experts. You want to buy in a desirable area that people want to live. As the years go on, you’ll want to increase both rent and demand. Successful investments make choices that meet those goals.You’ll notice we didn’t say anything about emotions or feelings. We didn’t say you should charge whatever you think your rental income should be. Data is more important than feelings when you’re investing in Tampa real estate. This is the most common trait you’ll find with successful investors; they treat their rental investments like businesses, and they don’t make decisions that are emotional.Settle on a rental value that’s based on comparable rents in the area. Find out what the numbers tell you. If your investment strategy is to have positive cash flow, make sure the numbers make sense for that goal. Your location also needs to be driven by data.Successful investors do not allow their emotions to dictate their actions. They go off the data and the numbers and they stick to their investment plans. Decisions follow a consistent pattern and they believe in their standards and systems. Plans and strategies are put into place to meet their goals and expectations. If they don’t have a necessary piece of information or they realize they’re lacking a resource, they’ll ask for help from a professional.Make decisions based on data, not emotions. This is absolutely critical.
In Tampa, both rents and prices are increasing steadily. There are still some great opportunities to buy good rental properties at low prices, especially when you compare the buy-in requirements of other cities on the east coast of the U.S. It’s always our goal at Mynd to get the most rent possible out of a rental property. For this reason, we like to steer people towards investment properties that are move-in ready. Successful investors don’t bother buying distressed properties that need a lot of work, even if those properties are cheap. Look for a home that’s fresh and painted and ready to occupy.A move-in ready investment property will rent faster and to more qualified residents. You’ll have a larger pool of applicants interested in the home. There’s a lot of demand in Tampa, so successful investors are raising their rental amounts steadily. Rents are going up and it usually takes two to four weeks to rent out a vacant property.In the past, the number of out-of-state investors matched the number of local investors. Now, we’re seeing a higher percentage of investors from outside of Tampa and even outside of Florida. Everyone is hearing great things about Tampa, so we’re getting a lot more interested in this market.Many local owners are also becoming investors because they decide to hold onto their home instead of selling it. Maybe they’re upgrading and moving into a nicer property, and instead of selling their first home, they’re renting it out. This is a successful investment strategy in Tampa as well.There’s a buzz in Tampa, and technology has helped. Mynd Property Management, for example, is in 16 regions across the country. We can leverage our data and help investors see what regions fit their investment strategy. Maybe you’ll want an investment in San Francisco that has a negative cash flow, but that’s okay because you have a handful of properties in Tampa or Houston that are achieving a positive cash flow. Before the gains we’ve made in technology, investors could not do that. Now, smart decisions can be made by educated investors.If you would like to experience success as an investor in Tampa, please contact us at Mynd Property Management. We can help you identify an investment opportunity in the local market, or provide professional property management for a Tampa rental property that you currently own.We also have other opportunities to connect with us and learn more about investing in Tampa. You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
There’s a lot going on in the Portland real estate market, and many investors have arrived to buy properties and rent them out. Many of these investors do really well and they are making their success look easy. But, we all know investors who struggle. They aren’t doing as well, and success seems impossible.With that in mind, today we’re talking about the best strategy for investors to employ in order to enjoy long term investment success in the Portland real estate market.
Regardless of the geographic region you are investing in, there are some commonalities and traits that successful rental property owners all incorporate. They know how to identify opportunities, what sort of leverage to use, and how to put together a stellar team of professionals who will help them succeed. They spend time getting to know the industry and their market, and they stay informed.
If we are talking about the Portland market and real estate in the Portland metro area specifically, successful investors really have to understand the political landscape and the laws that are both in place now and under consideration. Portland is a bit unique when it comes to that. You have to understand the economics of the city, and why things operate the way they do.Investors who want to succeed in Portland need to be able to think about the long term.Here is an important example. Portland, Oregon has an urban growth boundary. What this means is that building and development is limited because the people living here prefer density, and we don’t want sprawl.This has created a scenario over the last 40 years in Portland where we cannot keep up with the demand for housing. In fact, for every 100 units that we need to build in Portland to keep up with demand, we can only build 90.After three or four decades of this policy, you end up with a pretty incredible housing shortage. More people want to live in Portland, but we don’t have the housing to support the increase in population and interest. But instead of correcting this problem and reducing the regulations that are causing it or encouraging more building and development, additional laws have been put into place to further squeeze the existing housing market.This just happens to be aligned with the culture and the climate here in Portland. A successful investor, therefore, needs to understand that Portland would rather have a housing shortage than sprawl.
To invest successfully in Portland real estate, you also have to understand the city’s commitment to affordable housing. In 2017, a law was passed that required all new development for multi-family properties with 15 units or greater had to dedicate 20 percent of the units to affordable housing rentals.This means that if you’re building a 100-unit apartment complex, 20 of those units are going to rent for between 20 and 30 percent less than the other 80 units.The value of real estate as future cash flow has greatly depressed the future value. Before this law was passed, a lot of applications were filed to build new housing. A good, successful Portland investor is deciding that despite this blip, the surge of supply coming onto the market will continue to drive prices up. This blip will end in about three years, or in 2021. We’ll have this three to five year gap with no new supply coming onto the market. Once the law was implemented, applications for building permits fell right off a cliff. So, the long term investor is planning. A smart and successful investor will know that in the first three to five years, growth may be slower, but by looking five to 10 years out, it will be easy to see that these rules will not impede growth or profit. Rental property owners will only do better.
In the long term, Portland investors need to wait for the market to evolve. If you’re buying a rental property now, you know that over time you are going to earn quite a premium because of simple supply and demand.Portland is implementing a lot of rules and regulations that will do everything possible to limit and deter investors from building more housing. However, the consistent migration into Portland, Oregon and the demand to live in the city is just getting stronger and stronger. Population growth in Portland is projected to be on the top of national trends. It’s going to experience robust growth in the years to come. Investors who see that these restrictive policies will only increase a strong demand with a shrinking supply will do well with their investment properties.If you can think about a long term investment strategy and hang in on the market for three, five, 10 years, or even longer, you’re going to do well in Portland. There’s a lot going on in this city, and you need to be prepared, educated, and focused on the stability of your portfolio.Investors who are interested in learning more about Portland real estate can contact us at Mynd Property Management. We’d love to discuss this topic with you further. Investing in Portland is something we’re passionate about, and we’d love to hear and talk about your personal investment goals.You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
As an investor, we all know there are expenses that come with owning a rental home. If you’re a new investor, you should think about owning an investment property the same way you think about owning a car. You’re going to get a flat tire at some point. You may not have expected it, but it’s bound to happen.It’s the same with your Tampa rental property. There are always going to be expenses. With people living in your property, you have to be prepared to pay for the wear and tear and the maintenance that comes with a tenancy. Residents will be flushing toilets and turning on appliances.Some things will break more frequently and cost you more money, depending on who is living in your home and where your home is located.Because of its climate and geography, Tampa has some unique expenses that are more common for investors here than in other parts of the country. We’re talking about those things today so you’ll be prepared as a property owner.
The first big expense that many investors forget to factor into their budgets is the cost of actually purchasing an investment property. You have to pay for the financing, the property taxes, and the mortgage. In Florida, property taxes are a bit higher than they are in other states. The value of a home and its corresponding taxes are re-assessed any time the property is sold. In Florida, we don’t have a state income tax, so the state’s revenue largely depends on property taxes and the transient taxes that are collected from hotels and short-term rental properties.Insurance is another cost of doing business in Tampa. We are always at a risk for hurricanes, so the insurance costs for your rental property may be a bit higher than they are in other parts of the country. Californians have earthquake insurance and in Texas, investors have to worry about high winds and hail. Hurricanes are the major threat in Florida, and with hurricanes come water. Even a strong tropical storm can cause flooding, so flood insurance is a legal requirement in most neighborhoods on a financed home.These are fixed expenses for the most part. They’re generally outside of your control as an investor because you have to pay them. However, you can usually budget and estimate what you’ll spend every year on things like property taxes and insurance.
Eviction expenses can also creep up on an investor when they have a resident in place who isn’t performing or paying the rent. Everyone who owns rental property is worried about the cost of evicting a tenant. It’s a big expense, especially when you consider how many expenses are actually rolled into an eviction. You’ll have to pay court fees and attorney fees all while rent isn’t coming in at all.The best way to avoid this expense is to do your due diligence. When you’re screening residents, do everything you can to avoid the future eviction risk.You never want to have these eviction expenses because they’re awful and they’re also somewhat preventable. A lot of investors also forget to factor in the mental expense of an eviction. Even if you’re working with a Tampa property management company who is making the eviction has stress-free and low-cost as possible, evicting a tenant is stressful and emotional.During an eviction, you’re also worried about the expense of residents trashing the property. Worst case scenarios will be running through your head. You have to detach. It’s easier said than done, but trust the process and remember that you’re running a business and this is part of the business. Mitigate this potential risk by screening well and putting the right person in your property. Do your background checks and talk to former landlords.When a Tampa investment property isn’t producing any kind of cash flow, it goes from being an asset to a liability. On your P&L statement, you could start getting uncomfortable. At Mynd, we always work with our owners to avoid the potential expense of eviction.
Preventative maintenance is an expense, but it also keeps future expenses down at your rental property.Do things proactively so you aren’t waiting for big and expensive repairs to happen. Flush your water heater and make sure it’s working. Air conditioning check-ups are really required at least once a year in Tampa. We run the air conditioning nine or 10 months out of the year in Tampa, so keeping that system in good shape is critical. You’ll pay between $50 and $85 for an air conditioning inspection and service, but you’ll avoid the potential $6,000 replacement cost.Work with your residents to ensure they’re changing the air filters regularly. Leave extra ones for them so they remember to change them. Preventative maintenance may feel expensive, but it keeps your investment property working and ensures it’s taken care of. This saves you a lot of money and extends the life of your appliances and your property.If you’d like to hear more about how to manage the expenses associated with your Tampa rental property, please contact us at Mynd Property Management. We’d be happy to work with you on maintaining your investment.We also have other opportunities to connect with us and learn more about investing in Tampa. You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
Tampa Real estate investors can often be afraid of making mistakes. It’s scary to fail because there’s no playbook that tells you when you’re going to fail and what you should do when things go wrong. Once you’ve made a mistake, it can be difficult to find a way back from that error, especially if it’s a large error or an expensive problem to fix.Small failures can be just as damaging as big ones. Today, we want to talk about the common mistakes that Tampa investors often make. Everyone has their own stories about what went wrong and how they recovered. If you’re wondering why investors fail in the Tampa rental market, it may be due to one of these common errors.
People will sometimes be in a hurry to fill their vacancy or they won’t be sure about how to properly screen an application, and they’ll place the wrong resident. This is the number one failure with investors in Tampa. When you rent out a home, your cash flow is critical. You need your residents to pay rent, and you need them to help you take care of the property.If you don’t have a great resident, a lot can go wrong really fast. You want to avoid that mistake with a solid marketing and screening process. Make sure you’re using a thorough and consistent application, and check the credit history and an eviction history. Talk to previous landlord about their rental experience with the applicant, and make sure you verify employment and income. You don’t want to rely on a pay stub that anyone can print. Call the employers and make sure the applicants are still working there and earning the income they say they’re earning.Look for felonies and a history of violent crimes. You want to judge their character as well as their financials; an applicant who has had physical fights with former landlords is probably not going to be a great resident.It’s amazing the turmoil you can have in your life when you place the wrong resident. When you place the right resident, everything feels normal and natural. Your entire rental and investment experience starts and stops with the resident you choose.You want to try and evict your residents before you put them in your property. This will save you a lot of time, money, and frustration later on. There are also fair housing and discrimination laws to follow. In Oakland, landlords cannot run criminal background checks on their applicants anymore. Tampa has its own sets of laws, regulations, and best practices when it comes to screening residents.Think carefully about who you place in your property. With the wrong resident living in your investment home, you’re going to be paying for that mistake for a long time.
It’s easy to get excited about an investment property, but if it’s a property that’s going to make you house-broke, that’s a huge mistake. You want to do the math and respect the numbers so that you’re sure you’re buying an investment that will make you money. If your rent doesn’t cover your expenses or you’ve bought a beautiful property and invested extra money into it but you can’t find a resident willing to pay what you’re asking – that’s a mistake.You need to buy right. Look for a strong cash flow. Most investors in the Tampa area can earn at least $300 a month in cash flow. More would be even better, but if you can reach the $300 per month threshold, you know you’ve avoided one of the most expensive mistakes that investors make.A lot of investors will try to make the numbers fit any deal they want to close. Don’t try too hard to massage things to make them work. You don’t want to hope you’ll get more rent and you don’t want to take a chance that maintenance will cost nothing. When you’re looking at the numbers and the historical data, remember those statistics are there for a reason. Don’t read between the lines. Your decision should be black or white.
You need the right property management company, otherwise your mistakes will be especially difficult to manage. Look for a professional who really knows their stuff. You should be able to rely on your property manager’s advice on what to do and what not to do.At Mynd, we offer resources and support even before you buy a property. If you ask us what we think about a property you’re considering, we will take a look at it and whether we think it can earn you the amount of money you’re hoping it will earn. We talk through your options and we provide reports and analyses that can help you make an educated decision.If you decide to buy, we will lease and manage and maintain the home, all with your investment goals in mind.The right property manager helps you avoid costly and common mistakes. It’s the engine pushing your train down the track. When you buy a rental property in Tampa, you’re buying four walls and a roof. The business you’re running inside those walls depends on a good property management resource.If you’d like to learn more about how to avoid expensive mistakes with your Tampa investment property, please contact us at Mynd Property Management.We also have other opportunities to connect with us and learn more about investing in Tampa. You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
If you’re a new investor and you want to get involved in the Reno rental market, we have a few specific tips, a lot of advice, and a list of items for your to-do list.
Our first recommendation is that you spend some time here. Identify where you want your investments and why you think Reno properties might fit your investment goals. If you’re in another city, come out here and spend some time in the neighborhoods. There’s nothing more devastating than an owner who picks a city that doesn’t match what they want to do.Reno is great town to look at when you’re investing. We are 45 minutes from Lake Tahoe, and the entire state is experiencing a huge amount of growth. There are an increasing number of trades and businesses, and a lot of diversity in real estate and rental properties. Homes coming up for sale on the market right now are good purchases for investors.
Define the geographical area you want to invest in and the parameters you have in place for the type of property you want to buy. Reno has a lot of sub-neighborhoods, and you could find yourself exploring communities like Somersett, Midtown, Arrow creek, and surrounding areas.Talk to the people who live here. Find out what their favorite part of town is and why. When you’re choosing a property to buy, you want to identify a location that’s great for residents and likely to attract some great applicants. Spend some time in the neighborhood at night and in the day. Sleep there if you can, and really get to know the house you’ve purchased.
Every investor needs to know the all-in number that will ensure you break even. Your investment has to make sense, so you need to crunch your numbers and look for the right opportunity and price point before you invest.With Reno a thriving market, sales prices are high. And, we have seen increases in value year over year. So, you need to identify what you can afford and stick to your budget. Don’t make exceptions just because you found a house that you really like. This is a business decision, not a personal decision or an emotional choice. Choose the investment that makes monetary sense. You know what kind of rent and appreciation you need to earn the return you want. There’s nothing worse than getting into a deal and being excited about it, and then after the closing you realize it might not work for you.Get your math done.
Start with an end goal and then work backwards on your strategy for reaching that goal. You have to be certain that Reno matches your strategy and your goal. When investors get into a new market, there are a few things that the more successful property owners do.Find partners. A lot of new investors are afraid to work with other investors, even though it can really help them. Find a mentor or someone who already owns property in the Reno market. Learn everything you can. Get in touch with experts. Other real estate investors can help you communicate with the right people. They’re a wealth of information and knowledge, and there’s no reason for a new investor to feel competitive or afraid. You might make double or triple what you’re currently making just by working better with other people.Identify the level of involvement you want with your investment. At Mynd, we work with a lot of overseas and out-of-state investors who hand over their properties and trust that it will be successful with our Reno property management experience. Other investors who are local to the area keep hammers in their trucks and they show up at their rental homes to take care of renovations themselves. So, decide how involved you want to be – it will determine where and what you buy. You might want a renovation neighborhood or a turnkey neighborhood.Know the local market or find someone who does. You need a real estate agent or a property manager or a sophisticated software system to help you manage the rental home. Local boots on the ground are important. Find a Realtor to write an offer for you. Work with a brokerage that aligns with what you want to accomplish. Don’t forget the Reno property management expertise that you need. In Nevada, property managers have to be licensed real estate agents. Make sure your property manager understands the local, state, and federal laws. You don’t want to get bad advice or incorrect advice.If you’re thinking about buying investment properties in the Reno rental market, or you need advice about the Reno real estate market, contact us at Mynd Property Management. We love to answer questions from new investors and experienced investors. Talking about real estate investing is one of our passions, and we’d be happy to help you. Our team will run some comps for you so you know what kind of rent you can ask on a property you’re thinking about buying. Just send us the MLS listing, and we can help you plan. We’re full of resources and expertise, and we love to share what we know.You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
Even the most well-intentioned Oakland landlords and property managers sometimes find themselves squaring off with residents before the RAP Board, the authority that oversees the City of Oakland’s Rent Adjustment Program. There is no need to panic. The RAP Board is intended to mitigate landlord-tenant disputes fairly, efficiently and in accordance with the RAP guidelines. In fact, landlords and Oakland property management companies who carefully follow RAP regulations will find the process relatively straightforward.Below is a primer for Oakland landlords and Oakland property managers regarding the RAP petition process, including what to expect if a resident files a petition with the RAP Board.
Anyone living in a rent-controlled unit may file a petition with the RAP for any of the following five reasons:
Understandably, the majority of tenant petitions are filed under the first category.In order to contest a rent increase, the tenant must be filed within 90 days from the date the owner serves notice of the rent increase provided the owner also gave notice to the RAP as required by law. If the owner did not give notice to the RAP, the tenant has 120 days to file a petition.Petitions claiming decreased housing services must be filed within 90 days of the tenant becoming aware of the decreased housing service (). If the decreased housing is ongoing (), the tenant may file a petition at any point but is limited in restitution for 90 days before the petition is filed and to the period of time when the Oakland rental property owner knew or should have known about the decreased housing service.
Once a tenant has filed a petition with the RAP, someone from the Rent Adjustment staff will notify the landlord and/or Oakland property management company of the complaint. A copy of the original petition will be included with that notice.Oakland landlords have 30 days from the date of the notice to file a response with the RAP. The RAP will send a copy of that response to the tenant.Tenants and landlords are both asked whether they’d be willing to pursue mediation in lieu of appearing before a RAP Hearing Officer. If both parties agree, the RAP will assign a mediator to the case. The parties can choose to use an outside mediator but they will be responsible for covering those costs. If a resolution can be agreed to through mediation, both parties sign a binding agreement and the case is closed.If a resolution is not reached, or if one of the parties is unwilling to pursue mediation, the petition will be heard by a RAP Hearing Officer. Both the tenant and Oakland property owner can submit documents supporting their case to the RAP up until seven calendar days before the scheduled hearing date. Documents can be submitted either online or in person.
On the day of the hearing, both parties are expected to report to the Rent Adjustment Office at 250 Frank Ogawa Plaza, Suite 5313 to present their case before a RAP Hearing Officer. Most hearings begin promptly at 10am.The Hearing Officer will review the rules and process of the hearing, followed by a roll call to account for everyone in attendance. Both parties will then be given time to present their documents to the Hearing Officer to prove their side of the dispute. After each side has presented its case, the opposing party will have an opportunity to ask questions (). Just like the court cases shown on TV, each party will be given the chance to recite a closing statement.After closing statements, the hearing is adjourned. The Hearing Officer does not make a decision that day. It usually takes 30 days for a written decision to be made, which is then mailed to the tenant and landlord or Oakland property manager.
There is an appeal process for anyone who disagrees with the RAP’s verdict. The appeal must be filed within 20 calendar days from when the written decision was mailed. The application must cite all of the reasons for the appeal. Evidence is capped at 25 pages. The appeal and all attachments must be filed with the RAP and a copy must be sent with proof of service to the opposing party.During the appeal process, the decision by the RAP Hearing Officer is suspended until the appeal process is complete.Both parties have until the 9th calendar day before the appeal hearing date to submit documents or evidence for the RAP Board’s consideration.A RAP Program Analyst, Program Manager and Hearing Officer will review all documents submitted by either party. Only information contained in the appeal and the records from the original hearing will be considered. An appeal hearing is then scheduled with the City of Oakland’s Housing Residential Rent and Relocation Board.On the day of the appeal hearing, the Board will listen to arguments from both parties. The Board will then deliberate publically, vote, and will announce their decision at the meeting. A written decision will follow, confirming the facts of the case and the Board’s decision. The appeal decision becomes the final decision of the RAP and by extension, the final decision by the City of Oakland.Any residents, landlords or Oakland property management companies wishing to appeal the decision further will have to seek relief through the Superior Court.The City of Oakland has put together this handy infographic to help guide Oakland rental property owners through every step of the petition process.As always, this is just intended to be an overview. If you have additional questions, contact the Oakland RAP or consult with your real estate attorney for specific advice.
One of our responsibilities at Mynd Property Management is to keep our owners in compliance with all of the federal, state, and local laws that govern and regulate rental properties. We have a department that oversees regulatory aspects, and we work hard to keep up with all of the legal and regulatory changes that impact our owners, our investors, and even our tenants.Today, we are focusing on the regulatory aspects of real estate investing. This topic isn’t always a fun one for our real estate investors, but it’s critically important. If you’re going to invest in real estate and rent property out to tenants, you need to be comfortable navigating and identifying the different statutory regimes.
If you’re interested in entering a new market or even renting out homes in a new city, you’ll have a new set of rules and laws that apply to the way you do business. As most of you are aware, each state has its own landlord and tenant act and its own regime of statutes that govern the relationship between property owner and renter.Many cities and municipalities have laws that augment and enhance what the state already requires. A lot of times, those city ordinances are more onerous and have more details. If you’re caught by surprise or you’re not aware of the regulatory and legal issues in your market, you can have a technical foot-fall that may lead to costly errors. So, be aware of what’s out there and what’s required.
The implications of not being aware of the laws that affect you or running afoul of those laws can be costly and create headaches. It’s essential that you educate yourself because if you’re not aware of the laws and the requirements, the statutory penalties will also surprise you. The trend among many cities and states right now is to assess treble damages, which means a dispute or a mistake can cost you three times the amount that it should.This is especially common with security deposit disputes. If the security deposit amount in question is $1,000, and you are found to have violated the security deposit law, you will have to return the tenant’s entire $1,000 deposit, even if damage was left behind at the property. Not only that; you’ll face punitive damages of three times the original deposit amount, which adds $3,000 to your bill. So, the tenant is entitled to full refund plus three times the award, and sometimes attorney fees and costs as well. You do not want to find yourself in this situation, and tenants’ rights attorneys are always more than happy to take these cases to court.
A more obvious example of a city and local law that require your attention is rent control. If you’ve never had to deal with rent control before but you’re in a new market which does have a rental control ordinance, you’ll want to spend some time understanding exactly what that means.According to the cities and jurisdictions with rent control laws on the books, once you enter into an initial lease with a tenant, you are capped on how much you can increase the rent once the initial term is up or your lease goes month to month. It’s usually the city or a rent board that determines how much of an increase is acceptable and permitted.The rent control laws we work with often include a just cause ordinance too, which prevents evictions without a very good reason. Tenant are permitted to stay in your property for as long as they want, as long as they are paying the rent and complying with the lease. So, you could find yourself with a tenant who has been in place for 20 years, leaving your rent at a level that’s dramatically below the market norms.Some cities have a just cause ordinances that stand alone and don’t come with rent control laws. These just cause regulations serve the same purpose; they prevent landlords from evicting tenants or terminating leases for reasons that aren’t a nonpayment of rent or a lease violation. You can increase rent once the lease term has expired, but the tenant is otherwise entitled to stay as long as the tenant wants to as long as rent is being paid. Landlords cannot arbitrarily terminate the lease agreement.
Security deposits can be another hotspot for local ordinances. They will differ and have variances, so it’s important to understand whether there’s a maximum amount you can charge in a security deposit, if there’s a particular place you need to hold it, and what you can and can’t do with your tenant’s security deposit.Local laws will dictate when you can apply funds from the deposit, and how long you have after a tenant moves out to return all or part of the deposit. Your security deposit accounting will be extremely important, and must be well-documented. Some states will require you to disclose in your lease agreement which bank holds the deposit. Other states will require you to pay interest on the deposit. Sometimes, you will be required to apply the interest annually and provide the tenants with an account of what has been accrued in interest.There are little nuances to every state’s security deposit law, and it’s easy to find these details buried in larger landlord/tenant statutes. Make sure you take the time to know what’s required, and be careful about disputes with your tenants. Documentation is critical, and if you don’t document well, you could find yourself at a huge disadvantage when it comes to managing your tenant’s security deposit.
You’ll have to provide several different disclosures and other materials to your tenants with your lease. Some of the most common disclosures are federally required, such as lead-based paint disclosures. In each state, there are different sets of disclosures that layer on top of the federal requirements. Cities will often require their own disclosures in the lease agreement as well.It’s possible you’ll have to provide a document that outlines all of the tenant’s rights and the landlord’s responsibilities. Some cities have this ordinance. You might have to provide it with the lease or as an addendum to the lease agreement. Make sure you know what’s required.Rental registrations are also required in some cities. You may have to register your rental unit with the city, or register yourself as a landlord. This will require a fee, and in most jurisdictions will trigger annual inspections or regular inspections that you’re required to coordinate with licensed inspectors.
Something that’s gaining momentum in a lot of communities is preventing discrimination based on source of income. It can launch a discrimination complaint if you reject a tenant based on how they earn income. In most jurisdiction, landlords can choose whether they want to participate in Section 8 or other housing voucher programs. But, some cities may designate that a voucher is a protected source of income. All of a sudden, landlords cannot choose to allow Section 8 tenant to apply; failing to consider those tenants will subject the landlord to a discrimination complaint because those housing vouchers can be considered income.
Compliance starts with having the right forms. Your lease agreement should be vetted by local counsel, and that will set the groundwork for putting you on the right foot in complying with requirements. You need the right notices and forms that are current and up to date with legislative activity.Landlord/tenant law firms are well-established in most markets, and they are a great resource when you need someone to review a lease agreement. Try to get on their email lists and subscribe to their newsletters. You’ll be exposed to all the common legal issues that landlords in your area deal with.Join local housing associations for similar resources. They will also have forms you can use, and they’ll be kept up to date and with the right language. That’s your starting point, and then make sure you have the processes and procedures that align with those requirements.A local attorney and a good property management company will have the best forms and processes and systems.Lastly, something that does get overlooked more than anything else is your tenant relationship. No one is perfect. So, develop a good relationship with your tenants. If you have trust, open communication, and empathy, you’ll have tenants who come to you if there’s trouble or something goes wrong. With a good relationship in place, you’ll resolve 99 percent of issues before there’s a big problem.Make sure you have a good property management company that’s responsive and knows how to provide outstanding customer service to your tenants.We can get into detail on any of these topics, so if you have any questions at all, please contact us at Mynd Property Management, and we’ll put you in touch with the right person to help.About Giles ImrieGiles Imrie is VP, Corporate Counsel for Mynd. Giles has more than 14 years of legal experience in the real estate industry and extensive property management. Prior to Mynd, he was VP, Legal Counsel at Invitation Homes.
Real estate investing can be one of the most lucrative ways to build wealth and establish financial security. However, new investors often struggle to decide where to start. They’re not sure about what they should buy or where they should look for impressive investment opportunities. If you’re new to investing in rental properties, it’s easy to wonder what the best asset class is for your portfolio.Do you want to invest in single-family properties or multifamily rentals?Today, we’re discussing what the challenges and benefits are to each category. At Mynd Property Management, we work with investors at every level. Some of the rental property owners we help are preparing to buy their first investment property. Others have a growing portfolio of successful investment homes. Our experience has given us a unique perspective on what you should do and where you should buy when you’re deciding on the right acquisition.But First, Know Your Goals and Your MarketWith all residential real estate investing, you need to start with your own goals and your vision for where owning rental property will take you.
Why are you investing?This question has to be answered thoroughly before you choose a specific investment property. If you’re looking for cash flow, the path you take will be much different than if you’re looking for equity or appreciation. Perhaps you want a combination of cash flow and appreciation, which is ultimately what strong cash on cash return becomes.
If you aren’t clear on your investment goals, no one is going to be able to steer you in the right direction when it comes to choosing between single-family homes or multifamily units. So before you go shopping for your first rental property or even your seventh or eighth rental property, make sure you’ve established and reviewed your priorities and your investment goals. One of the biggest mistakes new investors make is buying the wrong property. Enter the market as an educated investor.Speaking of education, make sure you know your market. Before you invest, you’ll need to know what the inventory looks like where you’re investing and which properties are offering the best opportunities. You’ll want to know where rental values are, how long it’s taking to rent a property, and what the tenant pool looks like. Get to know your local rental market and your local sales market if you want to choose the best properties and decide on the right asset class.
Single-family homes can be great investments, particularly in markets where there is a high demand for houses or where you can get below market rates when you’re buying these homes. Acquiring a single-family property that’s below market is an outstanding opportunity for many investors, even if they have diverse investment goals. Maybe you’ll find an owner who is selling a property because he or she is leaving the area or is already under contract for another home that’s been purchased.When you buy a single-family home at a price that’s below market, you start with equity already. This is going to lead to pretty great cash on cash return. Look for these opportunities in your local market. You’ll need to act quickly.Another benefit of investing in single-family properties is that it’s often easier to buy this type of property, particularly for first time investors. You will likely qualify for a conventional mortgage, and there’s a lower down payment on those through banks, credit unions, and other traditional lenders. So your initial investment may be a bit lower than it would be with other types of properties.Depending on your market, single-family homes are often more attractive to tenants. If you’re in a suburban market where qualified residents are going to want an established neighborhood with good schools and amenities, a single-family home can provide what they’re looking for. Tenants will be attracted to yard space, garage parking, and extra square footage.The sales market also looks at single-family homes favorably. You can expect a good return at the end of your investment period because there’s usually a higher demand in the sales market for single-family homes. You can expect to sell faster and for more money because there’s a larger pool of potential buyers. You’ll have investors interested in buying the home as well as buyers who would be owner-occupants.
When it comes to investing in real estate, it’s not all about single-family homes. Multifamily rental properties can also be great investments, and they come with a number of advantages that single-family homes cannot provide.For starters, there are multiple units and multiple tenants. So, you have a higher cash flow because more than one rent check is coming in every month. If you have a tenant who pays late, you aren’t completely without rental funds. And, if you find yourself with a vacancy, you still have rental income from your other units to cover your expenses. We have seen some owners who buy multifamily buildings and live in one unit. This virtually eliminates any kind of living expenses because your tenants are paying your mortgage and your bills. It’s a nice situation if it fits your investment goals and your personal housing needs.Rental property owners who have multifamily buildings and units are also able to access some great economies of scale. This will be especially helpful with repairs and maintenance expenses, and there will be multiple benefits. First, when you need repairs, you’ll be able to negotiate lower rates with vendors and contractors. If they know you have multiple properties, all of which will eventually need plumbing or electrical work or cleaning during turnovers, you’re going to get a pretty good discount. You can also plan to have work done at more than one unit at a time. This will save you money on mileage and trip charges when those things are included in your maintenance bills.Also, your cost for insurance and marketing are lower per unit than they would be with a single-family home. Overall, you’ll pay less for these things because the cost is spread out among several properties instead of just one.There’s also a financing benefit to investing in a multi-family property. You might find that it’s easier to get financed because with this type of property, you have to use a commercial mortgage instead of a traditional mortgage or an investment loan, which you’d use for a single-family home. Much of this will depend on the amount of a down payment you’d like to make, the strength of your credit history, and any other assets you might have. It also depends on where you’re going to finance your purchase. But, many investors have an easier time navigating the lending process when they buy a multi-family property. In some cases, the expected rental revenue will help you negotiate better terms.A final benefit to buying multifamily properties is that your professional management fees will likely be lower. When you buy a single-family home, your management fees are probably going to be in the range of eight to 10 percent of your rental income every month. The exact amount will obviously depend on where you are and which property management company you choose. However, that range is pretty standard around the country. With multifamily properties, you can usually negotiate a lower management rate because you’re handing over several properties to be professionally managed. Usually, you can expect to pay between five and seven percent of rental income per unit. This will add up to a lot of savings.
With real estate investing, there is rarely a one-size-fits-all strategy. This is why it’s so important to know your market and what you’re comfortable with when it comes to financing and being a landlord.The most important thing you can do as a new investor who is deciding between single-family and multifamily properties is to surround yourself with smart people who you trust. Investing is not something you need to do on your own. If you can find a broker who knows the details of both the sales and the rental market in your local area and a property manager who understands rental values and the local tenant pool, you can make an informed decision about what and where to buy.The decision you need to make is a personal one. There’s always money to be made whether you decide to invest in single-family homes, multifamily properties, or a combination of asset classes. The best way to ensure you meet and maintain your investment goals is by knowing what they are and making strategic and intentional choices that will lead you closer to what you hope to accomplish.At Mynd Property Management, we love working with new investors and talking through investment options and financial goals. You can rely on our experience in your market and our expertise in the property management industry to help you identify the best type of property to buy and rent out.Contact us at Mynd Property Management and let us know what you want to achieve.