If you are reading this, then you are likely a first-time landlord trying to avoid freshman mistakes, or you are a seasoned real estate investor looking for fresh insight into renting out your next property. Wherever you are on the scale, you may be among the 88% of landlords who increased their cash flow over the last year. Below, we look at common issues that landlords face almost every day and how to handle them. If you have any further questions, feel free to call our offices. Our property management experts are here to help you.
Below, we look at common issues that landlords face almost every day and how to handle them. If you have any further questions, feel free to call our offices. Our property management experts are here to help you.
According to the 2010 census, over one-third of homes in the U.S. are currently being occupied by renters. Industry experts project that the number could reach close to 40% by the next census in 2020.
What does this mean for investors? That the rental market in the Detroit area is booming. Millennials, Gen Xers, and Baby Boomers are all choosing rentals over homeownership. Furthermore, opportunities abound for you to expand your portfolio and invest in a few more rental properties.
If you are going to be successful in this endeavor, however, you are going to need a team of real estate experts who can provide support for your business. Property managers do more than handle rent payments and take care of maintenance. JMZ property managers offer a complete management package that includes
While a property management company may seem like an added expense that eats into your cash flow, JMZ property managers help you maximize your cash flow, take advantage of investment opportunities, and find ways to save you money in operational costs. We also handle legal issues, tenant problems, and other areas that can cause you stress. In addition, we list your real estate properties for you when they become vacant.
The bottom line is this: partnering with a property management company in Detroit is part of your overall investment that yields positive long-term results.
If you want the best tenants that cause the fewest problems, then take the time to undergo a rigorous screening process. What does a screening process include?
Running a credit check is also an excellent way to check for evictions. It will also show unpaid rent that has gone to collections, another indication that an applicant is not qualified.
The general rule of thumb for apartments is a monthly income of three times the rent amount. So, verify a candidate’s income to ensure that they can make rent.
You can obtain a local, state, and national criminal background check. Keep in mind, that not all background checks are updated instantly. So, give yourself as much time as possible to conduct a screening.
You can verify address history or compare information with a credit report through a social security verification. You can also confirm an applicant's identity.
If a prospective tenant has a bankruptcy, lien, or judgment against them, it may mean you will have to take action against them in the future.
A property management company can conduct tenant screenings to ensure that you have accurate information and that you follow tenant screening laws.
There are two ways you can approach allocating funds for remodels or repairs.
Designate up to 50% of your cash flow for maintenance and upkeep. If the rent is $1800/month, then you should set aside $900.
The 1% rule: Maintenance will cost about one percent of the property value annually. If your property is valued at $250,000, then allocate $2500 toward maintenance and upkeep.
Remember: You may go for ten months without needing any maintenance or repairs. However, you may suddenly face a plumbing repair that costs you $2100. Therefore, you should allocate funds whether you need them immediately or down the road.
You may also discover maintenance issues when your property manager conducts a property inspection. You should perform a routine property inspection at least once a year. You should also conduct inspections when tenants are moving in and moving out.
Upgrades differ from maintenance and repairs because you use them to increase the value of your home, attract higher-level tenants, or gain a competitive edge. Therefore, you may want to look for opportunities to provide amenities or make necessary upgrades to attract the best renters in Detroit. What are some of the best rental property upgrades?
The best way to determine how much you should set the rent for is to conduct a rental analysis. A rental analysis helps you assess the investment potential of a property within a target area. A rental analysis includes:
Evaluate the neighborhood for specific attributes that will help your property appreciate and attract renters.
Find the rental rates comparable properties in the same neighborhood, same school district, same condition, and about the same size as your rental property.
Determine the price per square foot of the comparable properties and then apply the calculation to your property
Include both in-house and neighborhood amenities in your rental price.
If you allow pets, then factor in pet-related maintenance costs.
Determine the final asking price by factoring in nearby vacancy rates, price points, the cash value of comps, and your cash flow.
If you an investor looking for a property management company in the Detroit area, then contact JMZ Management. We offer a wide range of services for investors and landlords. We can help you maintain your property and ensure that you find the right tenants to fill your vacancies.
To find out more about investment opportunities, contact us at 248-284-6990. You can also message us at firstname.lastname@example.org.