4 Ways Landlords Can Improve Their Relationships With Their Tenants
Investing in a rental property can offer many benefits. Not only can it help provide a steady monthly income, but it can help build your net worth. However, by investing your time with rental properties, as a landlord, you will have to maintain it, and make it attractive for tenants, and find renters who can be trusted.
Often the relationship between landlord and tenant is poor and strained. Talk to any landlord and they are bound to share a tenant horror story or two about an unruly renter. By establishing a more professional and positive relationship with your tenant, you’ll find that you will have less tenant horror stories to share. The following are four ways that landlords can improve their relationships with their tenants.
Often, tenants are afraid to contact their landlord about issues they are experiencing. Sometimes tenants don’t tell their landlords about repairs until the problem worsens or is out of control. Tenants are afraid of asking for help because they don’t want to bother the landlord or are afraid. Landlords should be both supportive and approachable to ensure that their tenants feel comfortable calling in their time of need.
Be An Effective Communicator
A good line of communication is essential to solving many rental problems. Tenants should have an understanding of why something is happening and be given proper notice for anything that may be disruptive. By landlords providing the most up-to-date information, the tenant will be more willing to work with the landlord rather than against.
Be Hands On
When you lease your property, you must be hands on. Often landlords will want to have rent out their property but make little repairs to the home. You should help your tenant feel important by going out of the way to make improvements. Not only will this make your tenants happy, but it will keep your resale value high.
One of the most important things that any landlord can remember is that tenants are people too. Sometimes it can be easy to forget that your tenants are people with feelings and not just a monthly profit. As a landlord, you have a direct impact on the social and emotional environment for other people. That being said, treat your tenants with the same support and respect that you would want.
Real estate is one of the most attractive investments among those seeking to invest. It is one of the few products that frequently appreciates in value as opposed to depreciating. One of the biggest issues to be an active real estate investor, however, is that it can be time-consuming. Many real estate investors have full-time jobs that keep them from being on call around the clock to address concerns. That is why the following list of three ways to invest in real estate and hold down a full-time job at the same time has been created. The suggestions are, in no particular order, as follows:
- Proper Tenant Screening
- Utilizing Automation
- Considering REIT’s
Proper Tenant Screening
Choosing the wrong tenants can be a nightmare. Rent always seems to be late and property owners are shelling out above average amounts of cash to fix appliances that keep breaking. To avoid this, be sure to properly vet tenants in a rental property. This way, the risk of not receiving payments in a timely fashion are minimized and someone who will respect the real estate is occupying it. Doing the legwork up front can save thousands of dollars in real estate investing costs down the road.
With modern advances in technology, it is easier than ever to automate so many different aspects of a real estate investment. Billing can now be done without ever lifting a finger. A bill reminder will automatically be sent to the renters of a property. Payments can then automatically be deposited into the owner’s account. Because owners also often take care of other aspects like the electric and water bills, these processes can be taken care of through automation as well as saving both time and resources.
Real Estate Investment Trusts, or REIT’s, are a great way to invest in real estate without actually having to manage a physical property. REIT’s trade just like stocks and the amount of money an investor puts in is their share of the total property ownership of the REIT. REIT’s are required by law to distribute dividends which take the place of more traditional rent. The returns may not be quite as high as owning a physical property, but it is a great way to enter the space without a huge time commitment.
Real estate investing offers a great way to grow your savings and build wealth. While many people want to get involved in this possibly lucrative venture, the responsibilities that go along with owning property may be keeping them from acting on their interests. However, there are many options for investing in real estate that don’t include becoming a landlord.
Buy Real Estate ETFs
As mentioned in a previous post, an ETF is an exchange-traded fund that’s comparable to mutual funds in that they consist of stocks relating to a particular theme. However, unlike mutual funds, an ETF is traded publicly on the exchange. Vanguard’s VNQ is one such real estate themed ETF. This fund invests in REITs, or real estate investment trusts, which focus on stocks concerning commercial real estate, such as office buildings, hotels, and similar buildings.
Real Estate Mutual Funds
A more traditional route may be to invest in real estate mutual funds, which provide the possibility of growth without the high risk. DFREX is a favorite in this category, partly because it offers lower fees than other funds. Additionally, DFREX consistently performs well. The fund shows great promise for future gains, because it’s supported by decades of professionally driven research. Nobel Prize winners help to develop the fund’s strategy.
Invest Directly in REITs
This is another option for investing in real estate without taking actual ownership of any property. REITs are like funds in that they stick to a general theme, such as commercial real estate, so you can opt for whichever category appeals to you the most. If you choose to explore this option, do so with caution. The U.S. Securities and Exchange Commission (SEC) recently issued warnings against REITs that aren’t publicly traded. The agency highlighted a lack of liquidity, lack of value transparency, and high fees as factors that create unnecessarily high risk.
Invest with Commercial Real Estate Developers
These can be hotel corporations, resort or timeshare operators, or commercial contractors. By buying stock in these types of organizations, you can benefit from their growth without having the responsibility of buying property yourself. You will have to thoroughly research each company to ensure you’re making a sound investment, but, otherwise, this can be a promising alternative.
These are just a few ways you can invest in real estate without getting your hands dirty. Most people live lives that are too busy to add maintaining a rental property to their schedule, so these options let you reap the benefits of real estate investing more freely. As your money grows, you may find more opportunities for investing in real estate centric funds, stocks, and companies.
There are two ways investors make money in real estate: renting and selling for profit. Of course, the savvy investor can use both methods, even on the same property. Here we will go over some details of each method.
It should be emphasized that whether renting out a property or selling for raw profit, the importance of location can’t be overemphasized. The fact is that nearly any model of residential or commercial building can be replicated in many locations. However, the local amenities, culture, atmosphere, weather, or historical value cannot be duplicated. It is such factors that give rise to widely different prices and rents for otherwise identical structures.
Cash Flow: Rent
When renting, the first priority is attracting and retaining tenants. Generally, home-like rental properties or long-term commercial leases are a better option than short-term rentals that, admittedly, fetch a comparatively higher monthly rental. This is because vacancies take their toll and are bad for cash flow. Make sure to specify clear lines of responsibilities for tenants and the property owner. Maintenance, repairs, utilities and tax responsibilities accrue as costs to the property owner, so make sure that rental cash flow at least matches maintenance and other necessary expenditures.
Fix and Flip
Buying low and selling high is the holy script of investing. When buying real estate, beware that the purchase price essentially traps liquidity upon sale completion and for as long as it takes to renovate and resell the house. Also consider the opportunity cost of other income-producing activities, including renting, that the property owner could be doing. Such opportunity costs can add up, but if the buyer were to completely outsource the “fix” to others, the added cost would reduce or even eliminate the profit margin upon resale.
Note that both methods of making money from real estate entail unexpected costs along the way. Vacancies, irresponsible and toxic tenants, as well as competing units can take the steam out of anticipated cash flow from rental properties. Costly repairs, illiquid funds, and all-in marketing and resale costs can deflate profit margin from fix-and-flip properties. Consider the time and expertise required for each investment method and pick whatever works best. Real estate can be lucrative, but is not risk-free.
In an effort to separate themselves from the pack, businesses owners and entrepreneurs alike have turned to social media platforms to give their products and services an edge. Some companies create short viral video campaigns for YouTube, live stream their latest product launch on Facebook, or produce compelling photographs for their audience on Instagram.
One social media platform that’s sometimes overlooked by people in the business world is LinkedIn. While some entrepreneurs believe that LinkedIn is just a network for resume posting, the platform actually offers a wide range of tools for business people looking to grow their company.
To learn more about the ways that LinkedIn is a vital tool for entrepreneurs and businesses, read on below!
LinkedIn is Great for Professional Networking
While social media platforms like Facebook, Twitter, and Instagram focus on the social aspect of networking, it can be difficult to make serious inroads on these networks if you’re interested in growing your network on a more professional basis.
LinkedIn, on the other hand, makes growing your professional social network easy by allowing users to search for like-minded professionals in their particular area of expertise. LinkedIn allows users to build relationships with people on both a local level, as well as on national and international levels, too, making the social network unique in its ability to help entrepreneurs quickly find other business savants who are revolutionizing the business landscape in their cities.
LinkedIn has message boards and groups that further allow people to identify who they might want to connect with to grow their business venture. This feature can be an extremely invaluable tool for entrepreneurs who want to expand their product or service into new areas.
Using LinkedIn as a Tool for Product Launches
One innovative way that business owners are using LinkedIn as a vital tool to grow their companies is by creating product-specific LinkedIn pages. That’s right — not only is LinkedIn an excellent option for those posting up your resume, but the platform is also great if you want to showcase the benefits of a product you’ve recently launched.
On LinkedIn, entrepreneurs can create a page for their product or service that is similar to the resume-style profile pages the platform offers. These product pages are a great way to quickly highlight what makes your new product great.
LinkedIn is such an effective tool from a marketing standpoint that a new study indicates that 81% of business-to-business companies are using LinkedIn to advertise their product launches.
Investing in real estate meanings putting the money you have today to work for tomorrow. Simply put, real estate is a business that requires a healthy dose of foreknowledge, confidence in your research, and skill in assessing the lucrative real estate markets of today and tomorrow. The revenue you make on your return must be enough to cover things like taxes and the cost of owning real estate investments like paying for utilities, maintenance, and insurance.
Basically, real estate is the real world equivalent to monopoly. But just because the concept is easy to grasp doesn’t mean that the industry is easy to excel in. Below are a few helpful tips for those who are novices in real estate investing.
Deciphering the best cities and bustling towns to start investing in real estate is crucial. If you can develop the foreknowledge it takes to scope out lucrative areas, then you are already off to the best possible start. An old real estate investing adage is to look for the worst house on the best street. Why? Well, a good location provides strong potential for tourism, and “fixer-upper” property allows you to buy low, invest your money into renovating and upgrading, and then sell for a price that reflects your renovations.
The 1% Rule
If you plan on purchasing a property that you’ll rent out to one or more tenants, then you should utilize the 1% rule.
The 1% Rule states that an income producing property must produce 1% of the price it costs you every month. For example, if you buy a property for $150,000, then the monthly rental income should be 150,000 x 1% = $1,500. Simple enough, right? Well, the true skill in this area comes from searching out and capitalizing on properties that are conducive to the 1% rule.
Appreciation is when the land and market around you goes up due to an outside factor in the community. A major new shopping mall, city upgrades, and even the investments you put into your properties that make it more appealing to potential buyers all help produce appreciation. While extremely lucrative, this is one of the riskiest elements of real estate investing, and caution should be taken when playing the tricky game of real estate appreciation.
Real estate investing is a great industry to enter into, and simple as it may be in its description, the application of it is something that requires skill and precision. However, difficult as it can be, implementing these three steps will prove to be extremely useful for you in the long run.