We have seen this for years now, and it is becoming more of a problem.
More buy-to-let investors are joining the market with the dream of easy riches. The influx of investors is great for the economy and will help turn the property market around sooner than most skeptics might think.
The problems arise when investors come to the playground without understanding the whole process.
Over the next couple of days we will go through some to the major shortfalls (excuse the pun) that we see investors having
The first mind set that has to change is the need to let the property as soon as possible so that the rent can cover the bond.
Although the fundamentals of this strategy are sound, the problem is that in their hast the landlords neglect to take the time to do that right checks. 95% of the problems come from neglecting to do a credit and background check on the tenant. This small necessary inconvenience is definitely worth its troubles.
The simple steps are,
1. Properly screening. An undesirable tenant will often have a poor rental and financial histories.
2. Landlords should review previous landlord relations.
3. Credit checks and income. It is probable that if they have not met their obligations with previous landlords, then chances are that they will repeat their behavior with you landlords.
4. Screening also involves verifying that the person who is applying is the same person that submits credit/criminal info for screening. A picture I.D. should be cross-referenced with the application.
5. Landlords must make sure that there are no omissions, inaccuracies or inconsistency in the actual application.
Due diligence will certainly save you much money and stress.
Don’t fall into the mind set of “Quick got to get a Tenant now”
Tuesday, April 28, 2009
Saturday, April 25, 2009
New life in to Braamfontein
Braamfontein has been a part of Johannesburg since 1886, the year the city was established. Back then, Braamfontein was a farm where people lived and worked, and there was a strong sense of community.
Situated north of the city centre, over time the area developed into an important commercial and economic node of Johannesburg, housing a vibrant business district, the seat of local government and various educational institutions and business corporations.
Then, between the late 1980s and early 2000s, the area went through a period of urban decay causing an exodus of institutions and businesses to more affluent areas. It became degraded and run down, but was fortunate in that its vacancy rates remained some of the lowest in the inner city, even during the worst of these times.
In 2002, the Johannesburg Development Agency (JDA) and the City council embarked on a R13-million regeneration programme for the area, realising how important the location and function of Braamfontein was to the local economy.
Since then, the JDA has spent more than R55-million on the precinct, renewing the area as a centre of business, entertainment and education.
There has also been significant private sector investment in the precinct, with almost R4-billion spent by investors and developers over the last seven years, resulting in rental rates and land values increasing, and vacancy rates dropping below 10 percent.
Braamfontein remains the fourth-largest node for office space in the city of Johannesburg and is home to a number of South African-based multinational corporations as well as one of the country’s premier educational institutions, the University of the Witwatersrand.
It is on a par with other prime office nodes such as Sandton and Melrose Arch. The area, of more than 428 000m2, is now a mixed-use node consisting not only of A- and B-grade office space, but also with a strong residential component, offering both loft and executive-style apartments and budget accommodation.
Today, the success of this regeneration project can be seen in the beautiful tree-lined streetscapes, public art, and safe, well-lit open spaces. The area has become a vibrant social space again, with coffee shops and small restaurants offering daytime entertainment; and at night the precinct is quiet, safe and clean, the result of its active city improvement district, which ensures quality urban management, safety and marketing remain in place.
Situated north of the city centre, over time the area developed into an important commercial and economic node of Johannesburg, housing a vibrant business district, the seat of local government and various educational institutions and business corporations.
Then, between the late 1980s and early 2000s, the area went through a period of urban decay causing an exodus of institutions and businesses to more affluent areas. It became degraded and run down, but was fortunate in that its vacancy rates remained some of the lowest in the inner city, even during the worst of these times.
In 2002, the Johannesburg Development Agency (JDA) and the City council embarked on a R13-million regeneration programme for the area, realising how important the location and function of Braamfontein was to the local economy.
Since then, the JDA has spent more than R55-million on the precinct, renewing the area as a centre of business, entertainment and education.
There has also been significant private sector investment in the precinct, with almost R4-billion spent by investors and developers over the last seven years, resulting in rental rates and land values increasing, and vacancy rates dropping below 10 percent.
Braamfontein remains the fourth-largest node for office space in the city of Johannesburg and is home to a number of South African-based multinational corporations as well as one of the country’s premier educational institutions, the University of the Witwatersrand.
It is on a par with other prime office nodes such as Sandton and Melrose Arch. The area, of more than 428 000m2, is now a mixed-use node consisting not only of A- and B-grade office space, but also with a strong residential component, offering both loft and executive-style apartments and budget accommodation.
Today, the success of this regeneration project can be seen in the beautiful tree-lined streetscapes, public art, and safe, well-lit open spaces. The area has become a vibrant social space again, with coffee shops and small restaurants offering daytime entertainment; and at night the precinct is quiet, safe and clean, the result of its active city improvement district, which ensures quality urban management, safety and marketing remain in place.
Friday, April 24, 2009
CBD Buy-to-let
A question from one of our landlords!
"Hey Guys, I want to build a portfolio of buy-to-lets, how do I know what area is best to invest in to achieve my goal?
"Our reply:Great question, the first thing you have to understand is that before investing in any area, you HAVE to do your research!!!
Its simple: We've found that the most important factors in researching an area can be answered if youask yourself these 3 questions:
1- What type of tenant am I looking for?
2- What type of property would my tenantideally like to live in?
3- In what area will I find that type ofproperty?
All these 3 factors (Tenant, Property& Area)must be looked at together to assess whether the area is good for investing in Buy-To-Let's. When deciding what type of person you are looking to rent to - create a profile for them:
For example, ask yourself if they are young professionals, students, or if you want to rent to families. Once you've decided WHO you'll be renting to, look at the needs and wants of that type of person. If you decide to rent to students, they'll want to be close to their university... The best way to find out about this is actually chatting to people who represent your 'target tenant'. Find out what features your tenant values most and if they are prepared to pay extra for any of them. At this point, you should have a fairly clear idea of WHAT you'll be renting and it'll be time to look at WHERE you'll find the type of property you're looking for. Go back to the profile you've made for yout 'target tenant'and find out which area supplies all the attributes you're looking for. Consider things like the transport connections in the area, the local amenities, how are the schools in the area you're looking at, what is the quality of the local environment, how are the employment opportunities and how relevant are all these factors to your target tenant. Remember: these 3 attributes are inter-related and must be looked at together when assessing whether there is rental demand in aparticular location. Now, the next question you need to answer is:
Can you make any money or does Buy-To-Let financially stack-up in that area?
The CBD is Fast becoming a hot spot for Buy-To-Let investors
"Hey Guys, I want to build a portfolio of buy-to-lets, how do I know what area is best to invest in to achieve my goal?
"Our reply:Great question, the first thing you have to understand is that before investing in any area, you HAVE to do your research!!!
Its simple: We've found that the most important factors in researching an area can be answered if youask yourself these 3 questions:
1- What type of tenant am I looking for?
2- What type of property would my tenantideally like to live in?
3- In what area will I find that type ofproperty?
All these 3 factors (Tenant, Property& Area)must be looked at together to assess whether the area is good for investing in Buy-To-Let's. When deciding what type of person you are looking to rent to - create a profile for them:
For example, ask yourself if they are young professionals, students, or if you want to rent to families. Once you've decided WHO you'll be renting to, look at the needs and wants of that type of person. If you decide to rent to students, they'll want to be close to their university... The best way to find out about this is actually chatting to people who represent your 'target tenant'. Find out what features your tenant values most and if they are prepared to pay extra for any of them. At this point, you should have a fairly clear idea of WHAT you'll be renting and it'll be time to look at WHERE you'll find the type of property you're looking for. Go back to the profile you've made for yout 'target tenant'and find out which area supplies all the attributes you're looking for. Consider things like the transport connections in the area, the local amenities, how are the schools in the area you're looking at, what is the quality of the local environment, how are the employment opportunities and how relevant are all these factors to your target tenant. Remember: these 3 attributes are inter-related and must be looked at together when assessing whether there is rental demand in aparticular location. Now, the next question you need to answer is:
Can you make any money or does Buy-To-Let financially stack-up in that area?
The CBD is Fast becoming a hot spot for Buy-To-Let investors
Thursday, April 23, 2009
Developement
In 2002 in response to the urban degeneration of Braamfontein, Sappi along with the JD Group and Liberty Properties decided to upgrade the entire corporate area bounded by Hoofd, Simmonds and Stiemens streets up to Bertha Street in the west. The Civic Theatre park and the National Ballet School were also developed all in a joint venture with the Johannesburg Development Agency (JDA), the development arm of the City of Johannesburg.
The City of Johannesburg funded the rest of the upgraded area, developed by the Johannesburg Development Agency from Stiemens street down to and including De Korte street and from Bertha street to Joubert street extension including the area around the Council Offices.
The JDA team created an intimate public square on the east side of Bertha between Ameshof and Stiemens streets. They have also upgraded the whole of Juta Street between Loveday Street and the M1 off ramp. The same urban designers and professional consulting team was used by both parties so that conformity of design and quality of finished product would be uniform. The design team created distinctive on street lighting designed to cater for pedestrians as well as vehicles as well as distinctive paving patterns, street furniture, benches bollards etc, all of which combine to give a unique look and feel to the development area.
While a series of projects have already been completed, some future plans for Braamfontein include a new reception centre for the council offices, pedestrian linkages through to Constitution Hill, upgrading the alleyways between buildings, providing public art and street toilets, re-opening of the historic Alexander Theatre, new primary health care clinic, lots of new residential apartments, and more pavement coffee shops.
Other improved road and rail links will make commuting between Braamfontein and the rest of the inner city easier. The future Gautrain Rapid Rail Link involves a modern state-of-the-art rail connection linking Johannesburg with Sandton and Pretoria as well as Johannesburg International Airport.
For more information visit www.jda.co.za/braamfontein/index.stm
The City of Johannesburg funded the rest of the upgraded area, developed by the Johannesburg Development Agency from Stiemens street down to and including De Korte street and from Bertha street to Joubert street extension including the area around the Council Offices.
The JDA team created an intimate public square on the east side of Bertha between Ameshof and Stiemens streets. They have also upgraded the whole of Juta Street between Loveday Street and the M1 off ramp. The same urban designers and professional consulting team was used by both parties so that conformity of design and quality of finished product would be uniform. The design team created distinctive on street lighting designed to cater for pedestrians as well as vehicles as well as distinctive paving patterns, street furniture, benches bollards etc, all of which combine to give a unique look and feel to the development area.
While a series of projects have already been completed, some future plans for Braamfontein include a new reception centre for the council offices, pedestrian linkages through to Constitution Hill, upgrading the alleyways between buildings, providing public art and street toilets, re-opening of the historic Alexander Theatre, new primary health care clinic, lots of new residential apartments, and more pavement coffee shops.
Other improved road and rail links will make commuting between Braamfontein and the rest of the inner city easier. The future Gautrain Rapid Rail Link involves a modern state-of-the-art rail connection linking Johannesburg with Sandton and Pretoria as well as Johannesburg International Airport.
For more information visit www.jda.co.za/braamfontein/index.stm
Wednesday, April 22, 2009
Braamfontein's chance to shine
To crown the creation will be a 750-square-meter open-view, glassed-in venue facility - which looks out over a fantastic, uninterrupted view of the city, the Nelson Mandela bridge and the railway tracks - and Joburg’s first daylight studio. Clients will travel by an external glass lift to these, so the view will be obvious before even arriving at the still-to-be-constructed fourth floor.“We were looking for an old building which we could refurbish, with very high ceilings,” says Paul, “the extra height allows for high camera shots in the studios and a hence, greater variety of perspectives.” Shooting should be a buzz for major clients, as they can simply drive a truck in off the street straight into a studio. A canteen will be on site, and there is ample parking – all just one block off the freeway. Once completed, Shine will allow for clients to book models and shoot them all in the same building. “Shine combines every aspect of advertising, fashion, beauty and motion picture under one roof” reads their website. Already in the stable are Heads Models, G3 Models, O Model Africa and Shine Models; between these four agencies, over 600 local and international models are represented. “We’re also creating a hub for freelancers here, for those who don’t have access to the facilities we will have on offer, for content production,” explains Paul. Also on site will be hair, make-up and styling experts, while creative consultancy, production management and casting can all be handled simultaneously at Shine studios. Visit www.shinegroup.com
Tuesday, April 21, 2009
How well do you know Braamfontein
The name Braamfontein dates from at least as early as 1853, when this farm to the north-west of Randjeslaagte belonged to Gert Bezuidenhout. In that year he applied to the government to have his farm surveyed. Barely five years later, in 1858, Gert sold his farm to FJ Bezuidenhout.
Like so many farms on the Witwatersrand, Braamfontein was subdivided early on, indicating a fairly dense population in the area. Two other Bezuidenhouts, Gerhardus Petrus and Cornelis Willem, each purchased one third of the farm in 1862, and a third part went to Frans Johannes van Dijk. Between 1862 and 1886 different portions were further subdivided, at escalating prices.
Three other well-known owners were Johannes Jacobus Lindeque, who in 1884, bought a section where the Country Club was established in 1906, and Frans Eduard and Louwrens Geldenhuys, both personalities in Afrikaner circles in Johannesburg.
The first suburb established on the farm Braamfontein in 1888-1889 was unofficially named after the farm, in reality being an official extension of Johannesburg proper. Today this area is still called Braamfontein. There was, however, an earlier but unsuccessful effort to create a suburb prior to this.
Source: Early Johannesburg: Its Buildings and Its People
Like so many farms on the Witwatersrand, Braamfontein was subdivided early on, indicating a fairly dense population in the area. Two other Bezuidenhouts, Gerhardus Petrus and Cornelis Willem, each purchased one third of the farm in 1862, and a third part went to Frans Johannes van Dijk. Between 1862 and 1886 different portions were further subdivided, at escalating prices.
Three other well-known owners were Johannes Jacobus Lindeque, who in 1884, bought a section where the Country Club was established in 1906, and Frans Eduard and Louwrens Geldenhuys, both personalities in Afrikaner circles in Johannesburg.
The first suburb established on the farm Braamfontein in 1888-1889 was unofficially named after the farm, in reality being an official extension of Johannesburg proper. Today this area is still called Braamfontein. There was, however, an earlier but unsuccessful effort to create a suburb prior to this.
Source: Early Johannesburg: Its Buildings and Its People
Monday, April 20, 2009
Exciting Times
Many property experts (as well as us) are predicting that the property market will start to take a turn for the better in the latter half of this year. To prepare for this upturn, We suggest that those interested in getting into the market start doing their homework now. Start looking at your options, work out what you can comfortably afford and try and get into the market as soon as you detect an improvement.
We must stress that the world has see some tough times over the last 12 months. There has been alot of artifical lowering of interest rates to help stimulate markets. This might cause a hyper inflation senario in 2 to 3 years time. We will be doing a little story on fixing your rates later in the year to give you all the pros and cons.
for now start doing your home work and start looking for those great deals,
We must stress that the world has see some tough times over the last 12 months. There has been alot of artifical lowering of interest rates to help stimulate markets. This might cause a hyper inflation senario in 2 to 3 years time. We will be doing a little story on fixing your rates later in the year to give you all the pros and cons.
for now start doing your home work and start looking for those great deals,
Sunday, April 19, 2009
Keeping your Tenants happy
Keeping your tenants happy saves you money in the long run. Happy tenants tend to stay in your rental property longer and don’t complain much. Here are some attributes about rental properties that tend to keep tenants happy over the long haul:
A place with not-too-high rent increases. Don’t be unreasonable and raise the tenant rents too high and too often. If the market is a strong market, explain what the rental market is for their apartment and let them know you value them as great tenants and you are keeping the property under the market for that reason.
A place tenants are proud to live. Everyone wants to live where they can invite their friends and family over and be proud of where they live. By providing a rental property that is clean and well maintained, you are providing a property that your tenants will be proud to show off.
A place that they can move into that’s clean. They want to be able to put their belongings in a clean environment. Be sure old odors are gone and nothing of the past tenants’ is left over.
A place with well-kept common areas and clean grounds. Clean laundry room, clean pool, well maintained landscape, and well lit parking lot.
A place that’s safe and well lit. Let them know that you feel safety is important. Be sure all the smoke detectors are working and that they know how to turn off the water if needed.
A place where everything’s in working order. Make sure before your tenants move in that all the appliances work, and the furnace and air conditioning are in working order.
A place that respects tenants’ privacy. Don’t go over to the property unannounced; instead, let your tenants know you are coming over prior to showing up. This is their home, too, while they pay the rent and live there.
A place that encourages good neighbors. Don’t lose a good tenant due to a bad tenant making noise and causing problems. Take care of the problem. Be sure to let the good tenants know you are attempting to solve the problem.
A place where the rental manager truly cares about the property. From the very beginning, tenants can tell whether they are renting from someone who cares about the property, based on the condition and the reaction to any request before the tenants move in.
A place where the manager responds to reasonable maintenance requests. Tenants want to know that when they have a problem, it will be addressed and taken care of in a reasonable time.
A place that keeps tenants informed. No one likes surprises, so keep your tenants informed. If the plumber is really busy and cannot come out for a couple of days, let the tenants know that. If you cannot make a scheduled appointment, show common courtesy by letting tenants know.
A place with fair rules that are monitored and communicated to all tenants. These are rules the tenants would agree to and sign prior to moving in. It is important that all tenants follow the same rules and that you as the owner see that they are enforced.
Being fair and reasonable will keep tenants a whole lot longer. You don’t have to make long-lasting friends to have a long-lasting tenant.
A place with not-too-high rent increases. Don’t be unreasonable and raise the tenant rents too high and too often. If the market is a strong market, explain what the rental market is for their apartment and let them know you value them as great tenants and you are keeping the property under the market for that reason.
A place tenants are proud to live. Everyone wants to live where they can invite their friends and family over and be proud of where they live. By providing a rental property that is clean and well maintained, you are providing a property that your tenants will be proud to show off.
A place that they can move into that’s clean. They want to be able to put their belongings in a clean environment. Be sure old odors are gone and nothing of the past tenants’ is left over.
A place with well-kept common areas and clean grounds. Clean laundry room, clean pool, well maintained landscape, and well lit parking lot.
A place that’s safe and well lit. Let them know that you feel safety is important. Be sure all the smoke detectors are working and that they know how to turn off the water if needed.
A place where everything’s in working order. Make sure before your tenants move in that all the appliances work, and the furnace and air conditioning are in working order.
A place that respects tenants’ privacy. Don’t go over to the property unannounced; instead, let your tenants know you are coming over prior to showing up. This is their home, too, while they pay the rent and live there.
A place that encourages good neighbors. Don’t lose a good tenant due to a bad tenant making noise and causing problems. Take care of the problem. Be sure to let the good tenants know you are attempting to solve the problem.
A place where the rental manager truly cares about the property. From the very beginning, tenants can tell whether they are renting from someone who cares about the property, based on the condition and the reaction to any request before the tenants move in.
A place where the manager responds to reasonable maintenance requests. Tenants want to know that when they have a problem, it will be addressed and taken care of in a reasonable time.
A place that keeps tenants informed. No one likes surprises, so keep your tenants informed. If the plumber is really busy and cannot come out for a couple of days, let the tenants know that. If you cannot make a scheduled appointment, show common courtesy by letting tenants know.
A place with fair rules that are monitored and communicated to all tenants. These are rules the tenants would agree to and sign prior to moving in. It is important that all tenants follow the same rules and that you as the owner see that they are enforced.
Being fair and reasonable will keep tenants a whole lot longer. You don’t have to make long-lasting friends to have a long-lasting tenant.
Managing your property
The positive aspects of renting property are as follows; a lot of these apply whether you hire a property management company or not:
- You own your own business.
- You save the fees charged by a property management professional.
- Technology has made self-managing your properties easier than in the past.
- It’s a people business.
- It can be fun and challenging.
- You may enjoy it enough to make it your career and even manage property owned by others.
- After everything is set up properly, it’s not a lot of work.
- You can see and touch your investment.
- The business provides continual income rather than the one-time income from a sale.
- With creativity, you can purchase with little cash.
- You can keep a home you may want to move back to later.
- Renting properties is usually profitable.
- Renting property provides current or future lodging for your children.
- Buying your first property starts you on your way to purchasing more.
- Property values usually appreciate.
- You diversify your investments.
- There are great tax advantages.
- It can be a second income.
- It can be a part of your retirement.
- It can be a long-term business.
Cons of Managing Rental Property
You may have days when you question why you purchased rental property and became a landlord. But then, when you arrange an appraisal and find that your property value has gone up, you’re probably pleased with the gain in value. The time, money, and effort suddenly are all worthwhile, and you realize that hard work really does pay off.
- It takes a lot of time in the beginning to set things up.
- There are many details you need to learn and understand.
- The initial outlay may be greater than with other investments.
- Your property may have a negative cash flow, especially at first.
- Technology is hard to keep up with and takes time.
- Reporting income and expenses on your tax return requires additional time and knowledge.
- Like anything, there is always a risk involved.
- The hours are not 9 to 5.
- It is like having a second job, often without vacations.
- Dropping everything to respond to an emergency isn’t fun.
- Finding and dealing with contractors can be tricky.
- It is a people business, which means you have to enjoy talking to people.
You listen to many complaints. - You can always hire a professional to rent and/or manage your property. This way you don’t have to deal with the emergency call in the middle of the night or all the problems that arise from dealing with different types of people. You let them take on the time-consuming tasks while you receive the income.
Questions for your new tenents
We often have limited time, here are a few question that you should ask when a tenant calls you to make an appointment. if their answers don't satisfy you, you don't wast your time on a fruitless viewing.
If you do make an appointment to see the unit, ask them to bring ID.
If you do make an appointment to see the unit, ask them to bring ID.
- What are the best phone numbers to reach you should we get disconnected or I need to reschedule an appointment? (home, cell and and work, if possible)- So that you can call them back if necessary. (Remember, they have yours!)
How many people will be living in the unit, even if temporarily?
What's your current situation?/ Where are you renting now?
Why are you looking to move?
When are you looking to move?
Do you think your current landlord would give you a good reference?
Do you have any pets? (if so, what kind?)
Does anyone who wants to rent this property smoke?
How many vehicles total would everyone need to park at the property? (not normally a problem in the CBD)
In what other areas would you be interested in renting? (in case you have vacant units in other units, too.)
How many bedrooms do you need?
How long are you looking to rent?
How much do you make per week/month/year (whichever seems most appropriate)? How about the other applicants? Is this "gross income" or "take home" income?
The right TENANT
When you buy a rental property, it is a huge financial investment. Why then, do landlords end up with tenants who do not pay their rent, destroy the apartment, loss of rent money, inflict extreme stress, then leave your unit to move into another newly prepared unit? What can a landlord do to prevent renting to an irresponsible or high-risk tenant?
One of the most important decisions a landlord with vacant unit will make is to choose a tenant who will pay the rent, respect the property and the other tenants, and obey the laws of the land and the rules of their lease.
If you have rental property, you want to get the most income out of it, while keeping expenses low on your investment. You may not always have the funds or the desire to use an outside real estate agent. There are also landlords who like to rent their own apartments in order to control who will live either with them and their family in the same building, or in an investment apartment.
Landlords need to learn the basic and effective methods of the tenant selection process used by Blue Label property managers. Landlords need to learn from the experiences of professional apartment renters, who can recommend which decisions and procedures work best, and advise which poorly used techniques will not get you the kind of tenant you need and desire. Over our career, we have rented many of the markets apartments. We have three primary reasons why we think homeowners, landlords, and/or managers end up with poor choices of tenants. For the most part, there are three areas of omission:
1. Owners do not check or verify all of the applicant’s information through a rental application;
2. Owners accept the rental applicant’s explanations and excuses instead of searching for the facts;
3. Owners do not ask the right questions or enough questions by interviewing each candidate
Some homeowners allow a total stranger to occupy their real estate financial investment. They take the minimal amount of time and spend as little money possible to investigate a rental applicant. If the applicant is friendly, smiles a lot, and appears to be ‘neat and clean’, he or she can get the keys to an apartment with little else than a security deposit and the first month’s rent. There are owners who will rent their apartments to their relatives and/or friends of their children or neighbors, without checking anything at all.
Rental applicants come to you for a roof over their head on a month-to-month paying basis for a pre-determined amount of time. There is a cost to having shelter provided to an individual or family. Those who do not pay for their shelter must be asked to leave the premises, so that a more responsible family may benefit from the housing.
There are costs associated with providing decent, safe, and sanitary housing. A homeowner needs to check out a rental applicant’s information in order to attempt to ensure that you will receive the rent every month, on time, and that the tenant will respect the condition of the apartment and building. The return in spending the time and money in checking out a rental applicant as thoroughly as possible in advance of handing out the keys, will be the long-term stability of your property, and especially your finances from that property.
It is important to remember what we gain from using a practical approach to renting out a vacant unit.
When you take the ‘lazy’ approach to picking a tenant, when you cut corners, spend less or no money to verify application information, when you listen to excuses, or just do not pay enough attention to the answers, you can rent an apartment to your peril. Many owners realize too late they have allowed an applicant to slip through the process. Perhaps the unit has been vacant for a long time. Maybe the unit is not one of the most desirable in your portfolio, or is in a neighborhood that makes renting it out difficult. Whatever the reason, the time and money spent checking out every piece of information on the rental application is rewarded with a low-risk tenant. It is certainly cheaper than the eviction process.
One of the most important decisions a landlord with vacant unit will make is to choose a tenant who will pay the rent, respect the property and the other tenants, and obey the laws of the land and the rules of their lease.
If you have rental property, you want to get the most income out of it, while keeping expenses low on your investment. You may not always have the funds or the desire to use an outside real estate agent. There are also landlords who like to rent their own apartments in order to control who will live either with them and their family in the same building, or in an investment apartment.
Landlords need to learn the basic and effective methods of the tenant selection process used by Blue Label property managers. Landlords need to learn from the experiences of professional apartment renters, who can recommend which decisions and procedures work best, and advise which poorly used techniques will not get you the kind of tenant you need and desire. Over our career, we have rented many of the markets apartments. We have three primary reasons why we think homeowners, landlords, and/or managers end up with poor choices of tenants. For the most part, there are three areas of omission:
1. Owners do not check or verify all of the applicant’s information through a rental application;
2. Owners accept the rental applicant’s explanations and excuses instead of searching for the facts;
3. Owners do not ask the right questions or enough questions by interviewing each candidate
Some homeowners allow a total stranger to occupy their real estate financial investment. They take the minimal amount of time and spend as little money possible to investigate a rental applicant. If the applicant is friendly, smiles a lot, and appears to be ‘neat and clean’, he or she can get the keys to an apartment with little else than a security deposit and the first month’s rent. There are owners who will rent their apartments to their relatives and/or friends of their children or neighbors, without checking anything at all.
Rental applicants come to you for a roof over their head on a month-to-month paying basis for a pre-determined amount of time. There is a cost to having shelter provided to an individual or family. Those who do not pay for their shelter must be asked to leave the premises, so that a more responsible family may benefit from the housing.
There are costs associated with providing decent, safe, and sanitary housing. A homeowner needs to check out a rental applicant’s information in order to attempt to ensure that you will receive the rent every month, on time, and that the tenant will respect the condition of the apartment and building. The return in spending the time and money in checking out a rental applicant as thoroughly as possible in advance of handing out the keys, will be the long-term stability of your property, and especially your finances from that property.
It is important to remember what we gain from using a practical approach to renting out a vacant unit.
When you take the ‘lazy’ approach to picking a tenant, when you cut corners, spend less or no money to verify application information, when you listen to excuses, or just do not pay enough attention to the answers, you can rent an apartment to your peril. Many owners realize too late they have allowed an applicant to slip through the process. Perhaps the unit has been vacant for a long time. Maybe the unit is not one of the most desirable in your portfolio, or is in a neighborhood that makes renting it out difficult. Whatever the reason, the time and money spent checking out every piece of information on the rental application is rewarded with a low-risk tenant. It is certainly cheaper than the eviction process.
Fedruary update
Good morning CBD Investors
First interest rate cut, now a bit of tax relief for us coming out of the budget speech. The great news was an increased exemption for interest and dividend income with company tax was unchanged.
Our tenants do not seen to have felt the credit crunch yet. Demand has been fantastic so far this year.
Bridgeview – (220 units) was 95% let in just 2 months, it is great to see how the efforts to clean up town are paying off.
Broadway – (140 units) now a little more than 1 year old. Cluster Consultants will be the new building managers taking over from Trafalgar this year. We are looking forward to working alongside them to make this another great building.
A first-class class start to the year with all our units let, we have had our team sort out a few maintenance items, shower doors and cupboard door wheels being the most common. A happy tenant is a paying tenant.
Madison – ( 67 units) Black & White properties have replaced Trafalgar as the building managers. Fully tell and still in very good shape.
Liberty – (120 units) is in good running order, Trafalgar just need to keep an eye on the levies arrears that seem to be a little high.
Time Square – (82 units) is well run with trustees that are keeping looked after.
100 Jorissen – (163 units) seems to be having a bit of a tough time coming right, with overcrowding becoming more noticeable. Overcrowding poses the biggest risk to CBD property. Overcrowding portrays a lack of management and interest that then filters down to the residence of the building, we are to have a chat with management to find out if they are aware of the problems.
2009 will be an interesting year with some investors sitting tight for now and some investors getting ready to start looking at new opportunities again.
We should all take a step back and put a little time into our portfolios; check up on body corporate, see that our banks are giving us the best rate, reduction costs and improving our systems to take the worries out of property.
First interest rate cut, now a bit of tax relief for us coming out of the budget speech. The great news was an increased exemption for interest and dividend income with company tax was unchanged.
Our tenants do not seen to have felt the credit crunch yet. Demand has been fantastic so far this year.
Bridgeview – (220 units) was 95% let in just 2 months, it is great to see how the efforts to clean up town are paying off.
Broadway – (140 units) now a little more than 1 year old. Cluster Consultants will be the new building managers taking over from Trafalgar this year. We are looking forward to working alongside them to make this another great building.
A first-class class start to the year with all our units let, we have had our team sort out a few maintenance items, shower doors and cupboard door wheels being the most common. A happy tenant is a paying tenant.
Madison – ( 67 units) Black & White properties have replaced Trafalgar as the building managers. Fully tell and still in very good shape.
Liberty – (120 units) is in good running order, Trafalgar just need to keep an eye on the levies arrears that seem to be a little high.
Time Square – (82 units) is well run with trustees that are keeping looked after.
100 Jorissen – (163 units) seems to be having a bit of a tough time coming right, with overcrowding becoming more noticeable. Overcrowding poses the biggest risk to CBD property. Overcrowding portrays a lack of management and interest that then filters down to the residence of the building, we are to have a chat with management to find out if they are aware of the problems.
2009 will be an interesting year with some investors sitting tight for now and some investors getting ready to start looking at new opportunities again.
We should all take a step back and put a little time into our portfolios; check up on body corporate, see that our banks are giving us the best rate, reduction costs and improving our systems to take the worries out of property.
Subscribe to:
Posts (Atom)