Why Apartment Building Owners Are Doing So Well

These folks, the lenders and the banks that provided the liquidity are now feeling the pain of a reversal of fortune. Many of the paper investors, hedge funds and Wall Street firms are now accepting foreign aid (in the form of new partners) to stay afloat and weather the latest storm. It always amazes me that the watchdogs and safety features built into markets seem to dissolve periodically and big time. But the multi family market is holding up quite well. Owners of rental units and the property managers they hire are smiling and here's why...

Supply:

The boom created a hot market for TIC and condo conversion. This created a dearth of supply of rental units as they were taken off the market and owners that sold or converted their rental property during these heady times did quite well.

Higher Land Prices:

The boom also created a land buying frenzy that increased prices. According to via the National Real Estate Investor: "insights from members of NAHB's Multifamily Leadership Board suggest that developers of rental apartments were virtually shut out by the deep pockets of publicly traded home builders and condo developers at the peak of the housing boom."

Cost of Construction:

No doubt China has something to do with this. The cost of building materials like copper and concrete have been increasing for many years as boom builders such as China buy up construction materials worldwide. The cost of land plus the cost of construction kept multi family new building in check.

The resulting high costs of materials and the land coupled with the disappearing supply of existing rental stock, caused by the condo/TIC boom has owners of rental property smiling. This boomlet for rentals will take quite a while to unwind. As Greenspan recently said, there has to be a selling climax for property to find its natural equilibrium.

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How to Interview A Property Management Company

Property Management companies come in all sizes and shapes. It seems that many of them are a small business or family business. If you have a large portfolio of properties or a large multi-family income property you can attract a variety of companies because many are paid as a percentage of rental income. If you have a single family home or a smaller rental property its just not that attractive to many companies because they won't see much income from it and you may not get the attention you deserve. You may find better service from a smaller property management firm.

How Do You Find Them?

Check with the standard sources such as referrals. You can also ask:

* Local Real Estate Agencies - They may have a local property manager they often recommend to or perhaps one of the agents also manages property.

* Check with your local Property Management Association or apartment association for a list of local firms

* In rural areas the State Apartment Association may be a good resource for a firm near you.

What Do You Look for In a Management Firm?

* Valid Brokers License: In may states a brokers license is required to operate a property management company. You can check to with the local dept of real estate to validate it and see if it has ever been revoked or suspended.

* Management Fees: Property Management fees are generally a percentage of rental income. Fees can vary from company to company and you should shop around. Expect fees of 5% or more as a percentage of rental income. If you own a single family home or a duplex that has a low rental income number, you may get quoted a flat rate.

* Maintenance Staff: Does the firm have its own maintenance staff? Are they 24 x 7 for emergencies? Will they provide you with itemized statements and for larger jobs three independent bids? Does the company charge a fee on top off the management fee for major upgrades?

* Working Relationship: Are they friendly and is the staff easy to reach at during normal business hours? Is the office clean and uncluttered? Do they respond in a timely fashion and can they provide referrals or testimonials for you to contact. In short, do you want to work with them?

* Reporting: All property Management firms should have software that will provide you with clear and professional monthly statements. Accounting: When will the manager mail your check to you? Can you use direct deposit? State laws usually dictate accounting rules for managers its good to have that information at hand. On Line Statements: Many firms will have on line monthly itemized statements available to owners. This convenience will increase transparency and save you time. EFT: Does the management firm allow tenants to pay online. This would allow bounced checks to be discovered sooner and that increases your cash flow. 1099: Will the management company provide you with an IRS-1009 and a summary profit and loss statement for tax purposes?

* Reserves: Most companies will require you leave some funds on deposit for small needs your property may require. This way they don't have to call you each time they need to send someone to fix a small item. You should ask how much reserves the company requires. Also, set a limit on how much a company may spend on your property for maintenance or repairs without contacting you for approval. Is $500.00 appropriate or $750.00, discuss your comfort level before you sign

* Vacancies: Do they charge a rental fee? Often companies will charge a percentage of the months rent for the service of renting a unit. The screening should process include an application, a credit report, a conversation with the prior landlord and income verification using the 1040 for self employed or pay stubs. The service should include reporting a qualified tenant to you and a proper lease. We provide a lot of info on tenant screening information. Be familiar with the process so that you can determine for your self that a good job is being done. You only want good tenants, evictions are expensive. Viewings: Some companies will be there for a showing to groups of people interested in the unit. Other companies allow prospective tenants use of the keys with a small deposit. Find out how viewers can see your property and whether you are comfortable with the procedures. If the management company staff shows the unit ask how often they will show and especially on weekends.

* Advertising: How will they advertise the vacancy? Be clear on all costs involved and have limits or a system of approval. Do they use the web? If so, can they create virtual tours or use photographs. These skills should translate into quicker rentals and better cash flow for you.

* Evictions: This should require a lawyer and the proper legal procedure for your area. How do they charge for this and will the lawyers fees be invoiced so that you can see the true cost.

* Termination of your Agreement: We like contracts that can terminate in thirty days with a written notice and without penalties. An exit plan that is agreeable to you is critical.

Howard Bell for yourpropertypath.com

www.yourpropertypath.com

At Your Property Path we believe that knowledge should be free and freely shared.

Article Source: http://EzineArticles.com/?expert=Howard_Bell

When to Hire a Property Manager

If you have the time, its best to do it yourself. This will give you the experience you need to manage your most valuable asset. Its very important to be aware of the landlord tenant laws of your city and state as well as Federal fair housing laws. Tenants are savvier now that the internet has provided all of us with the tools to find anything.

The most appropriate times to hire a manager are:

Distance: If the property is more than two hours drive, you may not want to go that distance every time there is a minor emergency or tenant problem. How or who would handle serious emergencies.

Size:

Small Ones: If you have a very small property such as a single family home or a duplex, it may be difficult to absorb the annual fees, often 6% of annual rentals.

Large Ones: If your property is too large you should understand that this will be your full time job. If that isn't satisfactory, then your building is a good choice for management. In this case the management costs may very well be absorbed by rental income. You do need someone to watch the property and property managers have insurance and can provide good cover in case of a problem tenant.

Sick of It: That's a good time to pass the buck. If you can afford it then there is no need for you to have the hassle.

Caveat: Management companies make a good side income on in house handyman fees. This can boost expenses; imagine a light bulb change at $45 per hour. So be careful when you get a low quote to manage. Many companies will make it up on handyman fees. Think of it, no more late night calls or irresponsible tenants. Sounds good doesn't it

Thanks for Reading

Howard Bell

www.yourpropertypath.com We believe that knowledge should be free and freely shared. Article Source: http://EzineArticles.com/?expert=Howard_Bell

What Do You Look for In a Management Firm?

1. Valid Brokers License: In may states a brokers license is required to operate a property management company. You can check to with the local dept of real estate to validate it and see if it has ever been revoked or suspended.

2. Management Fees: Property Management fees are generally a percentage of rental income. Fees can vary from company to company and you should shop around. Expect fees of 5% or more as a percentage of rental income. If you own a single family home or a duplex that has a low rental income number, you may get quoted a flat rate.

3. Maintenance Staff: Does the firm have its own maintenance staff? Are they 24 x 7 for emergencies? Will they provide you with itemized statements and for larger jobs three independent bids? Does the company charge a fee on top off the management fee for major upgrades?

4. Working Relationship: Are they friendly and is the staff easy to reach at during normal business hours? Is the office clean and uncluttered? Do they respond in a timely fashion and can they provide referrals or testimonials for you to contact. In short, do you want to work with them?

5. Reporting: All Property Management firms should have software that will provide you with clear and professional monthly statements. Accounting: When will the manager mail your check to you? Can you use direct deposit? State laws usually dictate accounting rules for managers its good to have that information at hand. On Line Statements: Many firms will have on line monthly itemized statements available to owners. This convenience will increase transparency and save you time. EFT: Does the management firm allow tenants to pay online. This would allow bounced checks to be discovered sooner and that increases your cash flow. 1099: Will the management company provide you with an IRS-1009 and a summary profit and loss statement for tax purposes?

6. Reserves: Most companies will require you leave some funds on deposit for small needs your property may require. This way they don't have to call you each time they need to send someone to fix a small item. You should ask how much reserves the company requires. Also, set a limit on how much a company may spend on your property for maintenance or repairs without contacting you for approval. Is $500.00 appropriate or $750.00, discuss your comfort level before you sign

7. Vacancies: Do they charge a rental fee? Often companies will charge a percentage of the months rent for the service of renting a unit. The screening should process include an application, a credit report, a conversation with the prior landlord and income verification using the 1040 for self employed or pay stubs. The service should include reporting a qualified tenant to you and a proper lease. We provide a lot of info on tenant screening information. Be familiar with the process so that you can determine for your self that a good job is being done. You only want good tenants, evictions are expensive. Viewings: Some companies will be there for a showing to groups of people interested in the unit. Other companies allow prospective tenants use of the keys with a small deposit. Find out how viewers can see your property and whether you are comfortable with the procedures. If the management company staff shows the unit ask how often they will show and especially on weekends.

8. Advertising: How will they advertise the vacancy? Be clear on all costs involved and have limits or a system of approval. Do they use the web? If so, can they create virtual tours or use photographs. These skills should translate into quicker rentals and better cash flow for you.

9. Evictions: This should require a lawyer and the proper legal procedure for your area. How do they charge for this and will the lawyers fees be invoiced so that you can see the true cost.

10. Termination of your Agreement: We like contracts that can terminate in thirty days with a written notice and without penalties. An exit plan that is agreeable to you is critical.

Thanks for reading

Howard bell

www.yourpropertypath.com

We believe that knowledge should be free and freely shared.

Article Source: http://EzineArticles.com/?expert=Howard_Bell

Property Management

Once an International Business Corporation is formed, it requires a fool proof plan to protect its wealth and properties. This wealth may be in the form of cash, marketable securities and liquid assets. For protection, these assets can ideally be transferred to a Trust that is formed after consulting a law firm that is well versed in local law. In legal terms, 'A trust is the right, enforceable solely in equity to the beneficial enjoyment of which another holds the legal title'.

It is now customary to form an Asset Protection Trust in a foreign jurisdiction which amounts to infinite protection of the properties of the offshore enterprise. Once the assets are assigned to a trust, creditors cannot retrieve them directly from the trust simply because that which is not in the name of the debtor cannot be retrieved from him.

Such an offshore trust is called an FAPT [Foreign Asset Protection Trust]. By virtue of being formed in an offshore jurisdiction it enjoys legitimate immunity from specific law procedures and is designed to ward off unnecessary and wealth depleting interference from the original area of business [unlike the offshore haven]. Even the law courts in the offshore jurisdictions are inclined to protect the Corporation in its haven, or else the raison d'etre of an offshore unit is lost.

Thus, indemnity from being forced to pay off creditors from the quantum of the Offshore Corporation's wealth has made off shore Trusts a sure shot method of Property Protection and most tax havens are in the running to provide more and more debtor friendly regulations with a view to attracting more and more companies to avail of the haven provided by their respective jurisdictions.

Offshore-protection.com specializes in Property Management - IBC's, trusts and Foundations - and assist in the setting up of banking accounts for asset protection, privacy, and tax reduction.

Article Source: http://EzineArticles.com/?expert=Amit_Salkar