ROI stands for Return on Investment. ROI is a common, popular and easy-to-calculate metric that many people use when they’re comparing one property to another or one investment to another. When you can increase your ROI, you’ll earn more money on your investment home. (more…)
When you’re preparing a house for the rental market, there are a couple of things you can do that are inexpensive but will have a lot of value for renters. Doing so will help you increase your rental income because with just a few remodeling details, you can charge more monthly rent. Today, we’re in a house in Kalamazoo that I am rehabbing in preparation to rent out. (more…)
- Sponsor: Also called a promotor or syndicator. This is the entrepreneur or team putting together the investment.
- Executive Summary: Also called a Prospectus. This is the initial Marketing tool presented to prospective investors about a deal. It describes who the players are, what the deal is, the yield, the market, etc. It’s important to note that this is not a legal document. It doesn’t contain the full set of risk disclosures, but it still must avoid anti fraud provisions (misrepresentation, “pie in the sky”). This introduces the deal without providing every detail about it.
- Private Placement Memorandum: First of all, this is NOT an exciting marketing document. With this document, you can tell if they hired the right attorney because it will be boring, detailed, and contain disclosures and legal wording that is required by federal securities law. It tells all the ways you could lose your money. It is important to read and understand this document, but don’t waste your time with it unless you liked the Executive summary and want to move forward.
- Accredited Investor: This is defined by federal securities laws. Seen by the government as a less risky investor. They are considered more sophisticated, seasoned investor. They have a net worth of over 1 million excluding the value of their primary residence. OR they have income of at least $200,000 each year for 2 years and will make the same amount this year. You can also include a spouse in this amount and the number jumps to $300,000 year.
- Non-Accredited Investor: Seen as a higher risk investor because the investment is most likely a higher percentage of their income. They could be more problematic in a deal because they are less sophisticated and less practiced.
Stay tuned for our next blog on the benefits of investing in Private Placements!
- Rental rates are rising
- Homeownership is dropping
- Home sales inventory is at a historic low
- Fewer people can afford to own
Have you ever talked with a “professional” and knew more about their profession than they did? Just this week I spoke with a customer service representative at the post office and found myself educating THEM on a new service the post office has out! Frustrating!
Here are a couple things we do to make sure we keep and maintain our status as experts:
- Continuing Education: For most property managers, this means the 6 hours a year that are required to have a real estate license. Besides those hours, we attend seminars, read books, listen to podcasts, go to conferences, join organizations, watch webinars, and learn from people. Here are just a few of the recent topics we have explored: Marketing to tenants, leasing and lease renewals, foreign investors, taxes and investment properties, laws relating to investment properties, team building, leadership.
- Professional Designations and organizations: We seek out the designations that provide our company with the greatest credibility and give us the most “bang for our buck”. What’s the point in getting a few letters behind your name if they don’t actually bring in value to our clients?
- Constant Improvement: In our company, we NEVER accept the answer “because that’s how it’s always been done”. We are constantly looking to improve our communication, procedures, software systems, and team. We bring in outside experts to assess our processes because a fresh look can bring a new perspective. When are are hit with a problem, we huddle as a team and find the best solution. This will be our culture forever, we will not settle and let the world pass us by.
- Client Education: In order for us to work at our best potential, we need educated clients. We spend countless time improving our communications to our clients. The more they know, the better decisions they can make. We work with first time investors that have a multitude of questions, to seasoned investors that bring us the problems that they aren’t able to solve. We are ready to be a partner with you through it all.
Updated kitchens and bathrooms are hot commodities in today’s home construction and renovation business, with kitchens being the more expensive to redo. At Access Property Management Group in Grand Rapids we see that the challenge facing investment owners is how to walk the line between a kitchen that looks great and functions properly, but doesn’t cost so much that it hurts the bottom line.
When renovating kitchens, rental property owners are competing not just with all the other kitchens out there, but with kitchens consumers see on television. Cable channels are full of before-and-after rehab shows that feature knockout kitchens. We’re talking granite, cement, or stone countertops, wood or tile flooring, elaborate backsplashes, beautiful cabinets, and appliances that appear to be top of the line. The operative word here is “appear.”
Buying high-end appliances and appointments is completely unnecessary from a rental standpoint. But buying cheap isn’t a good idea either, as cheap materials tend to break down easily and result in needless repair and replacement costs. An investor is better off buying sturdy, middle-cost faucets, faux granite countertops, and vinyl wood or affordable tile flooring. Manufacturers are all too aware that most consumers cannot afford high-end products, and they are producing durable “look alike” goods at reasonable prices.
Rental properties need to look great in order to compete with other homes on the market, but at the same time they need to be able to stand up to a lot of wear and tear. A smart renovation plan achieves the right look at the right cost.
At Access PM Group we take these needs into consideration and strive to offer the best advice out there to help you, the owner, reach your bottom line and your residents, happy with the design.