Property Management Business Plan Tips

property management business plan tips

Here are three property management business plan tips to think about before expanding your real estate business.

Focus On A Single Asset Class

One of the most important things to do when developing a property management business plan is to focus on a specific real estate asset class, and then ‘drill down’ to a specific sub-class.

An example of this on the residential side would be single- or multi-family homes.  Then then focus on a specific price range, area of town, or number of units in the property.

An example of this on the commercial side would be multi-tenant retail or office.  After selecting the type of commercial property you will property manage, determine the class of property (A, B or C) and the property size in terms of square footage.

Developing A Solid Property Management Business Plan

It might seem counter-intuitive by narrowing the type of property you will manage.  But narrowing your focus is great for your real estate business for three reasons.

First, tenant personalities and issues will be more similar.  Their wants and needs will be as well.

The things that a medical tenant requires are much different from what a mom-and-pop small retail business will need.

Second, owner personalities will be more alike as well.  Real estate investors who buy office property are much different from those who invest in small multi family buildings.

Third, you’ll develop a skill set much quicker when you manage only certain type of real estate asset classes.

This will let you grow your property management business faster.  You’ll be able to transfer the skills you’ve learned in working with similar tenants and owners to other like-kind real estate.  You’ll also be able to target your property management marketing to the audience most likely to respond.

Does Buying Foreclosure Real Estate Make Sense?

buying foreclosure real estate

If you believe what you see on television, there’s a lot of money to be made in buying foreclosure real estate and flipping real estate.

But as with most things in life, if it was that easy everybody would be doing it.

Here are some of the things to think about before buying foreclosure real estate.

Is Foreclosure Real Estate Really A Good Deal?

Another word for bank owned property is REO – or real estate owned property.  But no matter the name, inexperienced real estate investors think that if the bank is selling it, then the foreclosed real estate must be a good deal to buy.

Usually that’s not the case.

When a bank sells an REO property to someone buying foreclosure real estate, the bank does an appraisal first.

The bank definitely wants to recover the loan amount that was on the property.  But the bank also wants to sell the property at fair market value.

People buying foreclosure real estate mistakenly think they will have instant equity.  They assume that all the bank wants to do is recover the old loan amount and nothing more.

This might sound good on TV, but that’s now how things work in the real world of foreclosure real estate investing.

Foreclosed Real Estate Needs Repairs

Perhaps one of the biggest cons in buying foreclosure real estate is that the property will need a lot of repairs and updating.

Owners who get foreclosed on sometimes take as much as they can with them.  The vacated property will be without appliances, mechanicals such as heating and air conditioning, and fixtures.

Investors buying foreclosed real estate need to carefully calculate the costs needed to bring the property into a condition for renting or resale.

 

How To Save On Housing Costs

save on housing costs

First-time home buyers frequently discover that their monthly housing costs are much, much higher than they anticipated.  So naturally they begin looking for ways to save on those housing costs.

Updating, furnishing, maintenance and utilities all add up quickly.  Add to these expenses the monthly mortgage, and even at today’s low interest rates these payments can put a strain on almost any budget.

Here are a few ways to save on housing costs.

Save On Housing Costs With Rent-To-Own

One of the more overlooked ways to save on monthly housing costs is to enter into a rent-to-own or lease purchase agreement with the seller.

This type of contract allows the buyer to become a tenant first.

First, agree to the purchase price of the house in advance. The next step is determining how much of the monthly payment is going to be applied to the purchase of the house.  The amount of the payment left over goes to the seller as monthly rental income.

There’s a right way and a wrong way to use a rent-to-own agreement to save on housing costs.

The agreement should be treated like a purchase contract, with an independent third-party such as an escrow company handling payment receipts and funding disbursements.

Sub-Renting Can Save On Housing Costs

Renting out extra space in the house is another way to keep housing costs down.

Some people rent to friends or family, others use an online service such as Airbnb and rent out to people looking for a vacation rental property.

There are both pros and cons to renting to people you know and finding good tenants that you don’t know.

But either way, home owners who rent out extra space frequently find that the extra income they receive is much more than they expected.

The additional money can add up fast, and be used for needed updating or remodeling.

Or even to pay off the mortgage balance much quicker than planned!

Is Allowing Real Estate Pre-Possession A Smart Move?

real estate pre-possession

Real estate pre-possession means that the buyer or tenant are allowed access to the real property before the sale is closed or the lease begins.

There are pros and cons to a seller or landlord allowing real estate pre-possession.

Pros of Real Estate Pre-Possession

Probably the biggest pro of allowing a real estate pre-possession is that it creates a good working relationship between the two parties.

If you’re selling a property, allowing pre-possession can help keep the deal on track.

If you’re a leasing property manager or owner, allowing the tenant early access to take measurements and get bids from contractors can establish a good landlord-tenant relationship right from the start.

Cons of Allowing Pre-Possession of Real Estate

There are also some drawbacks to allowing a buyer or tenant early access to the property.

In the case of a real estate buyer, they may be secretly looking for a reason to cancel the purchase agreement.

Maybe they’re having second thoughts about buying your property.  Or maybe they found a better deal somewhere else.

If that’s the case a buyer will try to come up with an issue they claim was never disclosed to them.

Sometimes they will try this move even if all of the contract contingencies have been removed.  The threat of non-disclosure can create big problems for the seller both before and after close of escrow.

Allowing tenants pre-possession can also create potential problems for the property manager or landlord.

One of the biggest risks is that the tenant underestimates the cost of its tenant improvement.  Or they realize the cost of making their space move-in ready is more than they anticipated.

A tenant who has second thoughts will then try to raise all sorts of issues with the landlord.

They will try to turn minor issues into big ones.  This virtually guaranties the tenant will be a problem to deal with.

Often times over the entire term of the lease!

How To Make Money With Vacation Rental Property

make money with vacation rental property

There are a lot of ways to make money with vacation rental property.

Some people rent out a spare bedroom while others rent out their entire house.  Some hosts even rent the place that they’re renting out on sites such as Airbnb.

Make Money With Vacation Rental Property

Here’s the #1 tip to make money with vacation rental property:

Greet Your Guests In Person

This is absolutely contrary to the smart lock trend.

The rationale for using a smart lock is that it allows guests the opportunity for late arrivals and early departures.  And that’s a good thing.

But sometimes vacation rental hosts get lazy, or they’re too busy property managing other vacation rentals.  So they use the smart lock as a crutch and don’t meet their guests in person.

Guests really appreciate a quick tour of the place and being able to put a face to the name of the host.  After that a phone call or quick text message is all that’s needed.

Top Notch Internet Service

The #2 tip to make money with vacation rental property is to offer top notch internet service.  That’s because virtually everything we do now days is on the internet.

People Skype and use Netflix all the time.  Business travelers using vacation rental property as a home base often times need a speedy connection to hook up with the server at their main office.

Both experienced hosts and first time landlords will make sure the internet in their vacation rental is superior, and then tout that fact on their listing.

Including a screen shot of a Speedtest report is also a great sales tool.

Each vacation rental property market is different.  There are always unique factors to consider when buying your first rental property.

But using these two examples of how to make money with vacation rental property will help you do just that, no matter where your vacation rental is located.

(If you’re not familiar with Airbnb, using this link will get you a $25 credit on your first visit anywhere in the world!)

 

Vacation Rental Property Management Trends

vacation rental property management trends

Vacation rental property management trends are a hot topic lately.

That’s because more people are renting out their home part of the time, or sometimes most of the time.

Here are some of the latest tips and trends in vacation rental property management.

Personal Touch – The #1 in vacation rental property management trends

Many owners of vacation rental property are going the way of smart, electronic lock boxes.  The reason for this is that it makes it easier for the guest to arrive early or late, and to come and go as they please.

While that may be true, guests also appreciate the personal touch of being met in person, getting a quick walk through of the place they’re renting, and having any questions answered.

Speaking of the personal touch, guests absolutely love the offer of tours or events put together based on their interests – golf, wine shops & tastings, best foodie locations.

Doing this shows the guest that you want them to have a great time during their stay and are willing to go the extra mile.

Richer Experience – Why people choose vacation homes to rent

Sites such as Airbnb are becoming increasingly popular almost everywhere around the world.

(If you’re not familiar with Airbnb, be sure to check it out.  you can get an Airbnb travel credit just for clicking and signing up.)

People who travel for pleasure or business are tired of the traditional hotel experience.  Vacation homes offer a much richer experience.

They are located in local neighborhoods vs. business or tourist districts.  Guests get a better idea of what the area is like.  They can shop at the local stores and eat at the local restaurants.  Plus they get to meet ‘real’ people rather than other tourists.

Easy To Use

Millennials make up the largest segment of vacation renters.

These are people who are used to using the internet and cell phones for almost everything.  Online booking and payment makes managing a vacation property much more efficient, as does text messaging.

Sending a guest a quick text to make sure everything is going well is very much preferred over a phone call that could interrupt whatever they are doing.

Remember that the personal touch is one of the most important vacation rental property management trends.

Why Use An American Real Estate Writer?

american real estate writer

“Why should I use an American real estate writer?”

A potential – and now current – client of mine in Australia recently asked me this question as part of our mutual, two-way interview process.

The truth is that in her case I couldn’t answer the question because at that point I really didn’t know enough about her or her project.

She wasn’t trying to be adversarial.  On the contrary, she was being inquisitive.  But it did start me thinking about why somebody in another country would want an American real estate writer rather than a local copywriter.

I’ve written about real estate for clients in Canada, the U.S., Sweden, Saudi Arabia, Dubai, China, and yes, Australia.

Sometimes the project has involved writing for a foreign company wanting to introduce their clients to another country.  In one case it was a private REIT fund in Saudi Arabia wanting their investors to begin thinking about opportunities in the U.S.

In another case the real estate writing project involved writing for a company in one country whose investors were mainly from another part of the world.

Other times I’ve written real estate copy for use within a certain country, such as a green energy system in Sweden or a real estate attorney in Canada.

Reasons To Choose An American Real Estate Writer

My future client had asked a good question.

I thought about it for a while.  I realized that unless one is using slang words, writing about real estate isn’t really that different from one part of the world to the next.

True, the words may be slightly different to reflect the local language.  But buyers, sellers, investors, tenants, and managers of real estate are all looking for the same thing.

Sometimes it’s return on investment or appreciation, other times it is maximizing cash flow or finding & keeping good tenants, or maybe it’s all about moving from one real estate asset class to another.

Other times, the reason for choosing an American real estate writer is to get an American view point.

 

 

 

 

How To Get The Most From Your Freelance Real Estate Copywriter

freelance real estate copywriter

If you’re hiring a professional freelance real estate copywriter for your project you want to be sure you’re getting the most for your money.  Be it a small ad on Facebook or a real estate profile for LinkedIn, a blog article for your real estate website, or an entire content creation project.

Here are three things that you can do to ensure you get the five-star product you’re looking for.

Know Your Freelance Real Estate Copywriter

A lot of the real estate copywriting that I do is through the Upwork platform (click for my profile there) where I am a top rated freelancer.  But that doesn’t mean what I write is going to be a match for every client.

Some clients may want a different writing style.  Others may find my rates out of their budget.  Or I simply may have too much on my plate to complete their project in the time frame that they’re looking for.

Upwork makes it easy to see the past types of project a freelance real estate copywriter has worked on and their client satisfaction rating as well.

Know Your Real Estate Topic

Oftentimes clients who hire a real estate writer have only the vaguest idea of what their real estate topic is going to be.  Usually this happens with real estate people who are launching a new website.  Other times they are entering a new market – for example, a Middle Eastern client wanting to introduce its readers to the U.S. real estate market, or vice versa.

Sometimes a client not having a specific idea of a topic can be good, provided you have a good writer who can work from the basic guidelines that you give him or her.

Other times not having an idea of your topic can create problems, especially when clients – either accidentally or on purpose – ask for multiple revisions from their freelance real estate copywriter as a way of figuring out what they really want their real estate article to be about.

Know Your Target Audience

In order for your real estate writer to create the most effective copy possible, they need to know who they are writing too and also how to ‘get inside the head’ of your target audience.  The more you know about the characteristics of your potential buyers- or tenants if you are a landlord – the better.

Some clients believe that everybody is a prospect for what they have to sell, and on a very generic level that may be true.  But that’s how you end up with a generic piece of copywriting.

Take this article for example.  I could have written about copywriters in general, but instead we’re discussing freelance real estate copywriters.  It’s a subset of the copywriter category topic, and something that both you and I are specifically interested in.