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.

How To Sell A Rental House

sell a rental house

When the time comes to sell a rental house there are three important factors to keep in mind.

That’s because selling a rental house – or any other residential rental property – is quite a bit different from selling one that the owner used to live in.

Tips To Sell A Rental House

Here are a few things to keep in mind if you want to sell a rental house.

#1  The rental house shouldn’t look like a rental

Most houses for rent look pretty basic.  They have all white paint, basic window coverings and appliances, and very little landscaping.

All of those things are great if you own a rental house or property manage real estate.   They help to keep the routine maintenance costs down and minimize the things that can go wrong with the rental house.

Updating the paint colors, fixtures and appliances can help make the house you’re selling not look like the rental property that it once was.

#2  Consider staging the rental house

If you’re trying to sell a rental house it should be vacant and without tenants in it.  It’s always easier to sell a house that used to be a rental when there is nobody in it.

Once the paint colors and fixtures have been updated, consider staging the rental house for sale.  Proper home staging can highlight the best features of the house.

Staging a home will also make it easier for a buyer to picture your house becoming their home.

#3 Remember the HOA rules & regulations

Good landlords and property managers know that finding and keeping great tenants means there are no surprises.  The tenants know up front what the rules and regulations of the home owners’ association are.

When you’re selling a house that was a rental, always be sure to let the potential buyers know about the HOA rules & regulations.

Doing so will avoid any unpleasant surprises during the escrow, and will make it that much easier to sell a rental house.

How To Break A Lease

how to break a lease

There are times when either a tenant or a landlord will want to break a lease.

Why A Tenant Would Break A Lease

A tenant may want to break a lease for a variety of reasons, some legitimate and some not . . . at least in the eyes of the landlord.

Maybe a group of roommates rented the house and now one has left.  Or the tenant may have lost a job.  Or there’s a personal situation such as a divorce or major illness.

Why A Landlord Would Break A Lease

There are also times when a landlord wants to break a lease.

One example is if the landlord owns a single-family house that is a rental and decides to sell.

It’s almost always easier to sell a vacant house rather than one that is occupied.  Buyers – especially those looking for a home of their own to live in – don’t want to have to deal with a tenant.

Or sometimes the tenant doesn’t cooperate with showings or keeping the house in good condition.  Even if they say they will.  This is a stealth way of a tenant sabotaging the potential sale of the house they’re living in so that they can continue to rent.

A landlord might also want to consider breaking a lease if the tenant is simply too much trouble.  Even if a landlord knows how to find and keep great tenants, it’s always possible to end up with a bad tenant.

Some tenants need to be constantly reminded to pay their rent on time.  Others constantly need something fixed or are disruptive to the next door neighbors.

Tips To Breaking A Lease

To avoid time, trouble, and possible property damage, smart landlords try to make breaking a lease a win-win situation.

First, find another tenant.  Be especially sure to check their references and verify the tenant’s income.

Next, make the first tenant responsible for making sure everything is clean and in good working order, and the the house is move-in ready.

Lastly, have the new tenant take over the remaining term of the existing lease, and sign a new lease as well.

Doing this will minimize any loss of rental income or unnecessary repair expenses, and create a win-win situation for both the landlord and the tenant who wants to break a lease.

American Freelance Copywriters Are In Demand

american freelance copywriters

American freelance copywriters are in demand as never before.  This is according to the most recent Freelancing in America: 2017 survey.

As a top-rated and top-earning real estate freelance copywriter on Upwork I was fortunate enough to receive a copy of this report.  Here are some of the most interesting findings.

Why American Freelance Copywriters Are In Demand

The most recent survey identified a number of reasons why freelance American copywriters are in demand from clients around the world.

The top three factors for choosing a copywriter based in the U.S. include:

  • Freelancers in America are better prepared for the future – They take what they do seriously, and invest in themselves by taking skills-related education almost twice as much as their non-freelancing peers do.
  • American copywriters freelance by choice, not because they have to – Implicit in this decision is the determination to excel at what they do.  This means that clients of freelance copywriters can expect to receive the highest quality product.
  • Technology is enabling American freelance copywriters to do more for clients around the globe – Thanks in large part to the pervasiveness of the internet and the ability to work online from anywhere in the world.  American freelance copywriters are able to work with clients anywhere and anytime, no matter where the client is located.

American Freelance Copywriters Contribute To The Economy

The Freelancing in America: 2017 report notes that over the past year American freelance copywriters  – and freelancers overall – contributed about $1.4 trillion to the economy.

That’s more than the GDP of Panama and Costa Rica combined, according to the latest global GDP report from Statistics Times.

What Motives American Freelancers?

There are four motivating factors the American freelance copywriters have in common:

  1. Be their own boss
  2. Choose when they work
  3. Choose their own projects
  4. Choose where they work

While these four items relate to the freelancer, they also benefit the clients whose projects they take on.

That’s because a successful, full-time American freelance copywriter can be selective, which means that when a client’s project is accepted the work produced will be second to none.

 

Why It’s Important To Verify A Tenant’s Income

verify a tenant's income

Both beginning and experienced landlords often overlook the crucial steps to take to verify a tenant’s income.  Not doing this can end up being an expensive mistake, both in lost rental income and damage to the rental property.

Why Verify A Tenant’s Income?

In today’s real estate rental market, rents continue to go up while tenant’s incomes remain the same, or maybe even go down.

When this happens, people who would normally rent a place to live just for themselves often find that they need to have one or more roommates in order to make ends meet.

It’s easy to verify a tenant’s income when you’re only talking about one tenant.  But dealing with verifying the incomes of multiple tenants is a bit more difficult.

This is also where problems can occur.

Verifying The Income Of Multiple Tenants

As a rule of thumb, and depending on local laws and customs, landlords will usually require a total income of at least three-times the monthly rent in order for a tenant to qualify for a rental property.

Problems can occur with multiple tenants.

Many landlords believe that the more tenants they have on the lease, the more secure the lease will be.  That’s because the more people there will be to go after if the tenants default by not paying their rent.

All of this might be true.  But good landlords and property managers know it’s much more important to find and keep great tenants than having to chase down the bad ones for money owned.

The Risks Of Multiple Tenants

If one of the tenants on the lease ends up losing a job, relocating for work, or simply never moves into the rental property, the landlord ends up with a weaker group of tenants than expected.

Self-employed tenants can also be a risk, especially when the tenant says he works a cash-only job.

This type of tenant will offer to present a letter from his employer verifying the income.  This is always a big, big red flat for a landlord and a property management company.  Tenants with cash incomes will almost always create problems for the property owner – usually sooner rather than later!

Landlords should remember that it is more expensive to evict a tenant and repair damage to the property that it is to wait for a tenant whose income can be properly verified.

How To Flip Homes With No Money

flip homes with no money

Recently a reporter for a major publication asked for some comments on how to flip homes with no money down.  While at first glance this might seem like an impossible task, it can and is being done – more often than one might think!

Ways To Flip Homes With No Money Down

In today’s super-hot real estate market where prices increase almost monthly, it isn’t that difficult to flip homes with no money down.

This technique is also known as a back-to-back or double escrow, where the buyer of a home turns around and sells it immediately after he (or she) closes escrow on their purchase.

Steps To Flip Homes With Money Down

Here’s a first-hand report on the three steps to take when you flip homes with no money.

#1.  Make an offer, get it accepted, and open escrow on the home.  Put down as little earnest money as possible and have the close of escrow as long as possible.

#2.  Market the home for sale while you have it tied up in escrow.  In a hot housing market prices will increase over a very short period of time.

#3.  Accept a purchase contract from a buyer of the home that you are waiting to close on, insisting that the close of escrow for your buyer be immediately following the close of escrow for the home you are buying.

Benefits Of Flipping A Home With No Money

Other than tying up your small earnest money deposit for 60 or 90 days, even longer if possible, you’ve invested nothing else in the deal.

You haven’t spent the time or money applying for a mortgage because you don’t need one.  There’s also been nothing spent on inspections or other due diligence items.

Plus if you’re a licensed real estate agent, you’re probably receiving a commission for buying the home that you’re flipping, increasing your potential profit even more!

STEM Tenants

STEM tenants

STEM tenants currently drive the demand for office and industrial space in many markets throughout the U.S. and Canada.  They’re taking available space in previously vacant buildings, bringing relief to some depressed real estate markets.

What Are STEM Tenants?

STEM is an abbreviation for science, technology, engineering, and mathematics.  In other words, cutting-edge industries such as high technology, biotechnology, and biosciences.

There are two reasons why STEM tenants have been bringing relief, and much needed rental revenues, to building owners.

Why Are They Good?

A recent article in the World Property Journal noted that when STEM tenants lease space, they lease lots of it.  Often times in the 50,000 foot plus range.

Secondly, they’re great not just for owners of buildings with a high vacancy rate, but for secondary and tertiary markets as well.

That’s because companies that employ workers skilled in science, technology, engineering and mathematics find that they have to go where the talent is, rather than successfully recruiting employees to relocate and come to them.

Going Where The Work Force Is Skilled

That’s one of the reasons by high-tech companies such as Google, Amazon, and venture-capital funded startup companies are appearing in cities where you might not expect them to be.

They’ve got to go where the labor pool is.  This works out well for the tech companies too, because often times the non-traditional technology areas also have much more affordable space to lease than would Silicon Valley or Silicon Beach in California.

Office, Industrial, and More

While STEM employers are users of Class A office space, they will also re-purpose older Class B or C space, or renovate dated industrial property into a work environment that will attract the labor force that they need.

In certain markets there’s also an increase in shared work and office space, because when high-tech employers come to town, small support services and entrepreneurial businesses are also created.

Why Invest In A REIT?

invest in a REIT

Tell a friend you’re going to invest in a REIT and they’ll probably ask you why?

After all, most people get their start in real estate investing by buying a single family home, them progress into smaller multifamily or apartment buildings.

On the commercial side of real estate investing, people often get their start by buying a small office condominium or a building for their own business.  Then, they branch out from there.

What all of these have in common is that they involve direct ownership of the real estate, something that a REIT does not.

What Is A REIT?

A REIT is a real estate investment trust, which is a form of group ownership of some or more pieces of property.  REITs can be asset class specific, for example investing only in apartment buildings.  Or they can be more generalized, holding a mix of real estate assets and targeting a specific return or investment strategy.

REITs can also be public or private.

An example of a large, publicly held REIT traded on the New York Stock Exchange is Equity Apartments (symbol EQR).

Privately held REITs have become more commonplace since the passage of the JOBS Act in 2012.  This allows smaller, non-accredited investors to put some of their capital into privately held REITs.

Three Reasons To Invest In A REIT

Unless a real estate investor is dead-set on owning properly directly, there are several advantages to investing in a REIT.

#1 Indirect Ownership of Property

This is an advantage because the real estate investor doesn’t have to get involved with the day-to-day issues of leasing or property management.

#2 Access To Class A Property

While the definition of Class A property varies from market to market, in general this term refers to only the newest or most updated property, with the best amenities, and national or regional tenants.

#3 Invest In Multiple Asset Classes

When a real estate investors buys directly they usually have limited resources, meaning they can only purchase one or two properties.  Investing in a REIT allows people to potentially own a mix of property across different real estate asset classes.

Is Investing In A REIT Right For You?

Since different investors have different investment strategies and objectives, only the investor can answer this question for sure.

But given the way the real estate market is growing, and the advantages that REITs offer, many people are finding that putting some investment capital into a REIT is a good way of diversifying their real estate investment portfolio.

 

Hurricanes and Real Estate

hurricanes and real estate

Hurricanes and real estate are definitely in the news lately.  Because I’ve been receiving a fair amount of client inquiries regarding this topic, here are a few takeaways to consider.

Hurricanes (and other things) Happen

“What all happens in a hurricane?”

“The wind blows so hard the ocean gets up on its hind legs and walks right across the land.”

The above conversation is from the 1948 movie Key Largo starring Humphrey Bogart and Lauren Bacall. They are stranded inside a hotel in Key Largo, Florida along with fellow travelers in the middle of a hurricane.

But this exchange could just as easily have taken place inside of any hotel when Hurricane Harvey hit Texas, Hurricane Irma hit the Caribbean and Florida, or Hurricane Maria devastated Puerto Rico.

This isn’t meant to downplay in anyway the tragic loss of life and property.  But it is meant to point out that natural disasters do occur.

Hurricanes and Real Estate

The amount of projected damages just from Hurricane Harvey and Hurricane Irma are about $200 billion.  Many local, national, and international real estate investors are questioning whether investing in coastal, hurricane-prone area makes sense.

Real estate investors need to consider their own comfort level when answering this question.  But taking a step back and a deep breath, it’s important to recognize that real estate markets consist of many sectors or asset classes.  All of which are affected differently following a natural disaster.

Different Real Estate Sectors React Differently

Professional real estate investors realize that just because a hurricane hits a large metropolitan area in the U.S., that the entire real estate market is not going to be destroyed.

Let’s take Hurricane Harvey in Houston, for example.  Of the total destruction, much of it was in the single family home asset class.  Over the short term, and possibly longer term, this boosts the multifamly housing and hotel real estate sectors.

Rebuilding also gives a boost to the industrial sector of Houston, as additional space for contractors, material and equipment is needed.  The retail sector also receives a push as companies such as Home Depot, Lowe’s, and other home improvement retailers see increased business.

Coastal Commercial Real Estate

Coastal cities such as Houston and Miami also play a major role in the global economy.  That’s highly unlikely to change because of weather.

Professional real estate investors should always consider the long-term, big picture of demand.   Risk management techniques include flood and property insurance, protection of mechanical systems, and sustainable construction such as rebuilding to LEED certified standards.