Access Property Management Group, LLC • Grand Rapids, MI (616) 301-9450

Remodeling Tips to Increase Rental Income on Your Property – Management Education in Kalamazoo

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…)

What is Going on In the Real Estate Market?? Rents Up, Homeownership Down, Inventory Low?

What is going on in the real estate markets? Every day there seem to be headlines about the housing market. The trends both nationally and locally are at historic numbers that we haven’t seen in a long time. Let’s look as some recurring headlines and stats from the real estate market:
  • Rental rates are rising
  • Homeownership is dropping
  • Home sales inventory is at a historic low
  • Fewer people can afford to own
Rental Rates Are Rising
According to an article in The New York Times, the national vacancy ratio is the lowest it has been in 20 years. This and other factors caused national rental rates to rise 3.2 percent last year. Locally, Access Property Management has seen an increase in rental rates also. Like in any market, some neighborhoods rise while others fall, but in general, we have seen 5-10 percent increases in rent rates. Some areas increased as much as 15 percent!
Homeownership is Dropping
In the same article from the New York Times, it states that homeownership has been falling for the past 8 years, reaching 63.7 percent this year. Another article in the Wall Street Journal forecasts this rate to continue to drop to 61.2 percent in 2030, below the lowest since records began in 1965.
Homes Sales Inventory is at Historic Low
In Grand Rapids, our current housing supply is at 2.3 months. A healthy market that is moving along smoothly has 6 months of supply. In this news article from WZZM 13, GRAR Executive director, Julie Rietberg, says that when inventory is that low, you have double digit appreciation in the market. Ask any realtor in the area and you will hear about multiple offer situations, offers above asking price, and impatient buyers. The article states, “The average price for a home sale around Grand Rapids was $176,020 for the first six months of this – that’s up 9.6 percent from the same period last year.”
Fewer People Can Afford to Own
What is attributing to less people being able to own a home? According to the Wall Street Journal, a few reasons are tougher mortgage qualifications rules, higher rent to income ratio, slow wage growth, and student debt. When will our economy be able to overcome these factors to increase homeownership rate again? That’s where the experts are on opposite ends of the spectrum. What do you think?

Don’t you wish YOUR Property Manager did this? COMMUNICATE!

For the month of June, we are starting a series of blogs about what you wish YOUR property manager did. When it comes to property managers, your options are vast for your rentals: large property management firms, small local companies, the One-person-show property managers, even some realtors manage rentals on the side! This series will explore what sets Access Property Management Group apart from its competitors.

 

Tell us! What do you wish your property manager did? Return your voicemail before you forget what you called about? Give you access to their cell phone? Reply to your emails?

 

We pride ourselves on great communication. Our team has some of the most dedicated members in town. Here are just a few ways that we rise above the rest on communication:

 

  • Cell Phones: When managing rental properties, issues don’t only occur during business hours. Access provides cell phones to our managers to allow them to get messages wherever they are and respond to emergencies whenever is needed.

 

  • Voicemails: Quick response needed! Call us early enough in the day and we respond the same day. Our policy is a 24 response time!

 

  • Emails and messages: Remember those cell phones? They help us to respond to your emails and messages promptly. As property managers, we spend a lot of time in the field, mobile devices help us to manage our workflow even when we aren’t in front of a computer.

 

Ask yourself, does your property manager do these things?

 

Stay tuned for Part 2 of our series next week!

The Real Estate Investor End-of-Year Planning Guide

The end of year is approaching quickly. As a real estate investor, there are a few more details to consider to plan, do and review for the next year. We put together this guide to help you with your end of year planning.

  • Prepare For Tax Season
    • Taxes are not scary! If you do these items, you will be much more prepared for tax season.
        • Organize and Label Expenses. If you have been doing this all year long, good job! If not, now is great time to get started.
        • Find a great CPA. Ask for referrals. Check out your local investor organizations for accountants. Interview and choose the best.
        • Learn about taxes . Our founder, Justin Bajema, always says, “If you want better answers, ask better questions.”. How can you do this without knowing about the subject itself. A great book to get you started is Tax-Free Wealth by Rich Dad advisor Tom Wheelwright.
  • Analyze Your Property Numbers
    • You will need these for the next steps. Now is the time to look back over the past year, notice the trends, unexpected expenses, and get the big picture of what happened. Correct any mistakes you may have made and dig into the financial statements.
  • Goal Planning
    • Most people experience a lull during December. We encourage you to think of it as a time to review and plan. Without a roadmap, you can’t expect a result. Goal planning is different for everyone, so find out what works best for you. Write them down? Type them out? Private goal planning trip? Attend a goals retreat?
  • Set up Replacement Reserves
    • This is an area that can kill an investment. You HAVE to plan for repairs. Every item in a home has a useful life. How many years are left on the roof? appliances? flooring? What will need to be replaced in the next 12 months. Budget for these expenses.
  • Budget
    • I know we are talking business here, but we believe that you will only be given what you can manage responsibly. It’s important to budget in both a business and in your personal life. This is part of your roadmap. There are plenty of great ways to do this, so choose an expert and learn how to do it.
  • Education
    • The most important things to invest in is yourself. You will only get as far as you take yourself. Start to look at what conferences are coming up. Are there any books that are on your reading list?  Is there a speaker that you want to hear? Do you need to start taking people out to dinner to learn about them? Add these items to your budget. Make it a priority to become a better investor.

 

Deposits, Damages, and Charging Tenants

Follow us on Twitter or like us on Facebook!

Anyone who has ever rented — or rented to someone — knows that there can be a lot of negativity surrounding the security deposit. As a landlord, knowing what goes into it can save you some bickering or even a lawsuit.

We’ve assembled some quick-hit facts according to Michigan state laws about security deposits in every step of the process — from signing the lease to move out day.

What is a security deposit?

The first thing to know about security deposits is that, according to law, they are the property of tenants held by landlords to ensure rent is paid, utility bills are paid, and the property is kept in the same condition in which it was first rented. After a lease is up, the tenant is due back their deposit unless they (1) owe unpaid rent, (2) owe unpaid utility bills, or (3) caused damages — other than wear and tear — to the property.

The beginning

In order to understand what landlords can charge for once the tenant is out, it’s first important to understand the legality of collecting a deposit. First of all, a landlord cannot ask for a deposit that is larger than one and a half month’s rent.

While there can be fees for things like pets, credit checks, storage, mailboxes, and keys, all of these fees are still considered a security deposit depending on certain verbiage. If fees are labeled “refundable fees,” they are considered part of the security deposit. If they are labeled “non-refundable fees,” they are additional to the security deposit.

Proper notices

There are three notices landlords and tenants are both required to provide regarding security deposits. Generally, these notices are in the lease.

  1. By 14 days after the tenant moves in, the landlord must provide the name, address, and receipt of communications regarding the tenancy.
  2. The name and address of the bank where the deposit is being held or who filed the bond with the Secretary of State.
  3. The landlord must tell the tenant it’s their obligation to provide a forwarding address within four days after move-out date.

The Inventory Checklist

While it’s not illegal not to have an inventory checklist done for your property, it can save some trouble in disputes over deposits. If a checklist isn’t done, it becomes one person’s word over another.

It must state on the first page of the checklist that the tenant is required to return the filled-out list to the landlord seven days after moving in. The checklist should include everything that is in the unit — such as appliances and carpeting.

It is also recommended that the tenant and the landlord both take photos or video of the property prior to when the tenant moves in. It’s a good idea to have a newspaper with the day’s date in some of the shots.

A landlord’s responsibility when the lease is up

Thirty days after the tenant moves out, the landlord must:

  1. Return the entire amount of the deposit by mail — which the tenant should have provided four days after moving out. OR
  2. Mail a list of damages and the remaining security deposit or additional charges. The notice has to state the tenant has seven days to respond to the receipt, otherwise the amount for damages will be forfeited.

If a tenant chooses to dispute charges, the landlord must either negotiate them or decide to go to court.

What is wear-and-tear vs. damages?

Things like smudges on walls as well as the wearing of appliances are considered normal wear and tear. The landlord cannot charge for things like painting walls or shampooing carpets — unless excessive cleaning is needed in which it is then considered damage.

An example of things that a landlord can charge for, however, would be holes in walls, broken windows, broken blinds, or a broken appliance that is relatively new.

For more information on deposits, you can read more on Michigan’s government website.