Should I invest in a Multi-family Building?

Should You Invest in a Multifamily Building?

A sound investment strategy is the key to building residual income in the property management industry. The promise of collecting a lifetime supply of rent payment can be quite short lived, however, if you end up getting in over your head. The process is akin to new homeowners. The joy of living independently often overcomes the facts and responsibilities that come with ownership.
If something breaks, you have to pay for it, as you are the property owner. When you want to move, you cannot simply terminate or wait for your lease to expire; unless you can find a buyer for the property, the lending institution will have full ownership. As the owner, not only are you faced with regular maintenance and upkeep expenses, you also are letting strangers live in the property.

The right tenant can make for an easy rental. The wrong ones not so much. Individuals new to the business of property management are better off starting with small single or multi-family dwellings. Besides, commercial offices and upscale apartment complexes are probably out of your league as far as budget goes at this point. Making smart decisions and staying the course is a surefire way to make these lofty property aspirations a reality.

Multifamily Must-Haves
A basic cost evaluation on a given property can be performed within 5-10 minutes, granted you have the needed data. Calculate the total potential rent payments (know how many units and what sizes are available), then subtract the mortgage and repair expenses from the figure.

Error on the side of caution. Assume 30% rental vacancy and factor in major maintenance costs (e.g. plumbing, HVAC, and electrical). Location is crucial for securing the maximum number of tenants. Area competition is something to keep in mind. If after all of this you are still in profit, then make the go ahead to shortlist the property.
Another factor to take into account is security. Is the building located in a neighborhood where crime rates, specifically burglaries, are high? If so, be ready to pay higher than average property insurance premiums. To keep these down and protect your investment and tenants from loss, installing a new security system and/or hiring guards should not be out of the question.
Unexpected costs are the norm with most multi-family buildings, but the value of your property management is not one of them. Expert Property Management is here to make your next investment worthwhile.

Home prices up, sales down and help is on the way!

The real estate market in Jackson County continues its recovery with the median price of a home growing by 4.2% for the first quarter 2014 to $187,500. The number of homes sold in the first quarter of 2014 has actually decreased to 345 compared to 389 sold in the first quarter 2013.
 
Jacksonville, which extends all the way to Ruch, has fared much better with the median price of a home increasing in the first quarter 2014 by 16.5% to $282,500.
 
The number of homes selling has been hampered by the low amount of homes on the market and by many families inability to qualify for a mortgage. Currently there are less than 1,100 homes for sale in Jackson County which is down from a high of over 2500 homes.
 
There is help on the way. This spring/summer should bring an increase in the number of homes on the market giving buyers more choices. Combine more choices for buyers with an increasing amount of families being able to qualify for a home mortgage through a new federal program and the numbers of homes sold should increase.
 
The new federal program is called the “Back to Work” program which allows many families with damaged credit, foreclosures and even bankruptcy to apply for a loan as soon as 1 year after the damaging event. See the chart below for details, but waiting periods have been shortened and can be shortened drastically with extenuating circumstances such as families who experienced job loss or high medical bills.
 
So expect another “Hot Summer” ….for home sales!

Hiring the right property management company in Oregon

Hiring the Right Property Management Company in Oregon
NunanProperty oversight is no small matter. Whether you own and rent a single family home or manage multiple, commercial office strips, we know you do not have time to worry about maintenance and upkeep. We also know these things have to be attended to by someone, otherwise your rentals will remain vacant, and that is not good.

By hiring a property management company, you are free to do more important things for your business, such as acquire new clients, and expand your rental network. The right firm, granted the one you choose meets the requisite qualifications, will handle everything from leasing, maintenance, and invoice processing. After all, you are entrusting a major part of your business and essentially placing your brand’s status in the hands of a third party.

Nothing ruins cash flow like a property management company that has a poor reputation in the neighborhood. You will find there are many of these businesses in Oregon, some that will offer low management fees. Never base your decision on price alone. Quality of service and a willingness to collaborate with you, the owner, on all aspects of the property(s) should be their primary concern.

What to Check before Signing the Agreement
Credentials – the property management firm should be a member of at least one accredited organization like the National Apartment Association. This prerequisite alone will help filter out shady prospects.

Ongoing training – be up front about how the business trains its employees. Do they have a designated program in place, and how high is their turnover rate? Remember, these are the individuals you will rely on to clean, maintain, and represent your commercial interests.

Legal standards – first, the business should be a member of the BBB and have a solid record of accomplishment of success (e.g. very few customer complaints). You should verify if they had any problems complying with government regulations.

In order for your business to be successful, it needs to have a solid foundation. Take the time to evaluate the various property management companies in Oregon before prior to making a commitment. At Expert Property Management, we take your interests to heart.

10 ways to increase the value of your home before selling it!

picWhen you are preparing your home for sale, there are many inexpensive improvements you can do to your home that will bring you greater value and help sell your home faster. We have all heard that you should de-clutter, de-personalize and have chocolate chip cookies baking in the oven when it is shown.  We also know that if you have unlimited funds that granite, hard wood and stainless steel appliances are all the rage, but expensive.  There are also the basic improvements, such as new carpet, but this can still costs thousands of dollars. The following are some inexpensive ways to improve your home with very little cash that we suggest you consider before selling.

 

1. Replace Front Door

The national association of realtors does a study every year of “Remodeling Cost Vs. Value Report”* where they rate home projects with the highest and lowers return on investment.  Last year the highest return on investment went to replacing your front door (85.6% R.O.I). The first impression is a lasting impression so make it count.  A dated front door makes a house look cheap, and a worn front door makes a house uncared for or old.  If you cannot afford to replace your front door consider painting it a bold color, maybe using high-gloss paint. If your front door is in disrepair, consider replacing it with a new, stylish door. For a few hundred dollars you can buy a nice door.  It is also a nice touch to put a flower pot on each side of the front door with flowers in bloom.

 

2. Interior Doors

This is also true for interior doors.  If you have old dated brown flat panel wood doors, consider replacing them with nice raised panel white doors or paint the existing door to make them look clean and fresh. The basic raised panel hollow-core doors are about $20 to $30 and they come pre-primed. If you want to make an extra good impression, replace the trim the with and an updated style.

 

3. New Electrical Switch Plates
This is such an easy improvement, but can really stand out. We have seen freshly painted rooms with old yellowed ugly switch plates. Even worse, some even paint over them. New switch plates cost about 50 cents each. You can replace the entire house with new switch plates for about $20. For the entry, living room and other obvious areas, spring for nice bronze or brass plates. They run about $5 each – but make a difference.

 

4. New Door Handles

In addition to changing doors, consider changing the handles. An old door handle, especially worn gold ones look bad. For about $20, you can replace them with new bronze finished handles. For an added touch you can also replace bathrooms and bedroom door handles with the fancy lever handles (about $20 each).

 

5. Paint/Replace Trim

If the entire interior of the house does not need a paint job, consider painting the trim. Newer, modern custom homes typically come with beige or light brown walls and bright-white trim. Use a semi-gloss bright white on all the trim in your houses. If the floor trim is worn, cracked or just plain ugly, replace it! Lowes and Home Depot carry a new foam trim that is pre-painted in several finishes and costs less than 50 cents per linear foot. If you really want to create a great first impression, add crown molding in the entry way and living room.

 

6. The Entry

After the front door, your next first impression is the foyer area; make sure it is inviting.  Find a plant, decorative piece of furniture or art that sets the tone for the home.   Many older homes have linoleum entry floors. Consider 12″ ceramic tiles, which for a 8ft x 8ft area should cost about $100 in materials, or use travertine.

 

7. In the Bath

It is amazing how many older homes that have an ugly old shower curtain. An old used shower curtain can be a turnoff and make the home feel dirty.  If your shower/tub is nice, buy a curtain that ties back so you can show off your tub and display decorative soaps and candles.  If you have shower doors and they are worn and beyond reviving, consider removing and hanging a curtain.  If you need to replace a shower door, consider clear glass to make the bath look larger (unless the shower is unsightly then use obscure glass).  A new shower door cost about $500.  Shower Doors and More will measure and install for about the same price as the door alone.   If you need a new vanity they are a couple hundred dollars. Make sure the bathroom is clean, put up decorative towels and soap.  So make a trip to Ross, Tuesday Mornings, Fred Meyer or Target and buy some fresh towels, decorative soaps a nice new rod, curtain hooks and a fancy curtain.

 

8. In the Kitchen

Replacing kitchen cabinets is expensive, but painting them can save you money. If you have old 1970′s style wooden cabinets in a lovely dark brown shade, paint them. Use a semi-gloss white and finish them with colorful knobs. There is no need to paint the inside just organize them well so if they are opened it, is not scary in there! For a considerably more you can replace the cabinet doors and paint them to match the cabinets.  Americans spend a major amount of their time in the kitchen so a nice bronze modern faucet looks great as well. They cost around $150 from Lowes or Home Depot but you can shop sales or go to Amazon or eBay for better deals.

 

9. Window Shutters and Trim

If the front of you home is plain or you have old looking windows, consider adding shutters. You can purchase them in a few colors at Lowes and are easy to install.  For a custom color you can purchase them pre-primed.  Paint them a color that sets off your house.  They do not necessarily need to be the trim color – (if the house is dark, paint the shutters white. If the house is light, paint them dark).  You can enhance your curb appeal by just painting the trim of your house.  We actually replaced our outside trim and added crown and dental molding and now our standard 80’s home looks more like a craftsman home and the trim really pops.

 

10. Add a Nice Mailbox and House Numbers

Everyone on the block has the same black mailbox. Be different and for about $35 you can buy a nice mailbox. For about $60 more, you can buy a nice wooden post for it. People notice these little details and buyers love them!  Also buy new house numbers or paint the existing ones make them stand out.  Be creative.

 

All indicators point to another year of increasing home prices but go beyond what the market is doing and ensure you get more for your home by increasing its appeal!

Caring for Your Plumbing System

You probably don’t think much about the network of water and sewer pipes inside your walls that deliver your hot and cold water—and eliminate your waste—on demand. But giving your plumbing a little regular attention can prolong its life, prevent leaks, and avoid costly repairs. Here’s how to care for the pipes in your house.

Avoid chemical drain-clearing products

Clogged drains are the most common home plumbing problem, and you can buy chemicals to clear them. But these products sometimes do more harm than good. They can actually erode cast-iron drainpipes.

And because they typically don’t remove the entire clog, the problem is likely to recur, causing you use the chemicals repeatedly. “Each time, they’ll eat away at the pipes a little more,” says Passaic, N.J. plumber Joseph Gove. “Soon, you’re going to get leaks.”

Better to hire a plumber to snake the drain (usually $75 to $150) and completely remove the chunk of hair or grease that’s plugging the line. Or you can pick up a snake of your own, for around $20 at the hardware store, and try clearing the drain yourself.

Prevent future clogging

Clogs aren’t just nuisances. Backed-up water puts added pressure on your wastepipes, stressing them and shortening their lifespan. So avoid plug-ups by watching what goes down your drains. That means keeping food scraps out of kitchen drains, hair out of bathroom drains, and anything but sewage and toilet paper out of toilets.

Install screens over drains in showers and tubs, and pull out what hair you can every few weeks to prevent buildups. Scrape food into the trash before doing dishes—even if you have a disposal—and never put liquid grease down the drain; pour it into a sealable container to put in the garbage after it cools.

“Grease is only liquid when it’s hot,” Gove says. “When you pour it down the drain, it cools and becomes solid. Do that enough, and just like a clogged artery, your drains won’t work anymore.”

Reduce the pressure

As nice as high water pressure can be when you’re taking a shower or filling a stockpot, it stresses your pipes, increasing the likelihood of a leak. “That drastically reduces the life of your plumbing,” says Phoenix, Ariz., plumber Alex Sarandos. “It makes your pipe joints, faucets, and appliance valves work harder.”

You can measure your water pressure with a hose bib gauge, available at the hardware store for under $10. Attach it to an outside spigot and open the line. Normal pressure will register between 40 and 85 psi. If it’s above that range, consider hiring a plumber to install a pressure reducer (around $400).

By the way, adding a low-flow showerhead won’t affect pressure in the pipes. It only affects the amount of water coming out of the showerhead itself.

Soften the water

If your water has a high mineral content—known as hard water—it can shorten your plumbing’s lifespan. Those naturally occurring minerals, usually magnesium or calcium, build up inside your pipes and restrict flow, increasing the pressure. Plus, they can corrode joints and fittings. Although hard water can occur anywhere, it’s most common in the Southwest and parts of the Northeast.

A white buildup on showerheads and faucets is a telltale sign of hard water. Or, if your house receives municipal water service, you can easily find out how hard it is. By law, every municipality must file an annual water quality report with the Environmental Protection Agency. If you have a well, check your most recent water test report for hardness information. Anything over 140 parts per million is considered hard water.

The only way to effectively deal with hard water is by installing a water softener. Most use sodium to counteract the minerals in your water, but new electronic softeners use electromagnetic pulses to dissolve minerals, and have the advantage of not adding sodium to your water.

You’ll need a plumber to install a traditional, sodium-based softener, for $500 to $1,000. Electronic units start below $200, and because the pipes don’t have to be opened up, you can install one yourself. Keep in mind, though, that you’ll need an outlet nearby to power the unit.

If you opt for a sodium-based softener, consider installing a whole-house pre-filter at the same time. Since the plumber will already be cutting into your pipes to install the softener, the pre-filter might add only $100 to the job. And not only will it give you cleaner drinking water by removing particulates and chlorine, you’ll reduce stress on your pipes that can occur when those particles clog faucet filters.

Keep your sewer lines or septic tank clear

If you have municipal sewers, hire a plumber to snake your main sewage cleanout every few years. This will cost $75 to $150, and will remove tree roots that inevitably work their way into these pipes—leading to messy sewage backups. If you have a septic system, get the tank pumped out every three to five years, for $200 to $500.

Other ways to avoid trouble

  • Learn where your home’s main water shut off valve is—so if there’s ever a leak, you can go straight there and quickly turn off the water to the entire house.
  • Remove hoses from outdoor spigots in winter to prevent frozen water from cracking the pipes and causing a flood.
  • Add pipe insulation to the plumbing in cold parts of your house—such as garages, basements, and crawl spaces—to avoid frozen pipes (and to shorten the wait for hot water).
  • Never use an exposed pipe as a hanger rod for laundry. Doing so can loosen joints and fasteners.
  • Fix problems quickly. Even small leaks can make pipes corrode more quickly, and cause significant water damage or mold.

Joe Bousquin‘s work has appeared in the Wall Street Journal, Kiplinger’s Personal Finance, and Men’s Journal. He owns a 79-year-old home in Sacramento, Calif.

“Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.”

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