Leasing

April 26, 2016

The importance of Tenant keeping Utilities on….

If you’ve noticed a common thread to my posts, it is the critical nature of setting proper expectations for ALL PARTIES in a lease transaction.  In other words, it’s critical for the Tenant to know what is expected of them just as it is for the Landlord to know their role. Today’s article is about the need to properly and repeatedly communicate with Tenants about utilities.  And keeping them turned on! Now, most leases will have clauses in them about who pays for the utilities–Tenant or Landlord–and that is good to have this clarity.  Where I see the expectation “break down” between Tenant and Landlord or Tenant and Property Manager is this:  What about the time period when a Tenant voluntarily moves out of the home before the end of the lease and they turn off the utilities thinking they’ll save money? Case in Point:  The picture of this once-beautiful […]
April 19, 2016

Chipping away at your Property Rights….

Property rights continue to be under full assault. Here’s another recent article describing the Who/What/Where/Why…. http://www.foxnews.com/politics/2016/03/20/no-right-to-rent-cities-barring-property-owners-from-renting-out.html  
March 9, 2016

Housing Market Recovery–Split like Charles Dickens classic….

Today’s WSJ published an article about the US Housing Market recovery diverging into two recoveries.  Reminds me of the Dickens classic a bit…. Essentially, lower priced inventories are vanishing fast while inventory on the higher end piles up.  While on the surface this might seem like “Economics 101” (and it does reflect some of that light) there is more to the story, especially as it relates to your rental portfolio positions and future purchases. WSJ Housing Market Takes on Split Levels 030816. Here’s some of the highlights from the article: On the low end, after a slow recovery from the housing bust, first-time buyers are finally returning to the market, bolstered by still-cheap mortgages. But after years of little new construction, inventory is still tight. High-end buyers, meanwhile, are more sensitive to the stock market’s struggles this year.           So…..how does this information impact your rental […]
October 2, 2015

Millenials ARE INDEED moving to suburbs….and the impact on mass transit plans

Over the past few years, State and city officials have been GaGa over introducing enormous plans for mass transit to Indiana and Indianapolis, specifically.  The  most recent projections I’ve read include the estimate of approximately $1.1 Billion over the next 10 years. The urgency behind such a huge undertaking?  The theory that Millennials aren’t moving to the suburbs, but only want urban areas to reside and they demand mass transit, otherwise they will not relocate to Indy. In other words, it’s about trying to attract them to Indianapolis for high paying jobs. Uhhh…..only one small tiny problem with their hypothesis:  they have zero quantitative data about this projected human behavior pattern on which they are gambling tax payer money. Today’s Wall Street Journal doesn’t help their argument either.  Case in point:  Millennials are the FASTEST GROWING class of car buyers.  Here’s the entire article: Somehow, their choo-choo train idea seems to […]
August 24, 2015

Your Rental property is not worth what you think it is…

August 24, 2015 Today’s New York Stock Exchange activity was historical. Ouch. We may be in for continued volatility for the near term in the equity markets, which reminds me of how this relates to your rental properties… When I speak with new potential clients, the conversation usually goes something like this…. Property Owner: “I’d like to rent out my house, but I need to get at least $1500 a month because we bought it at the height of the market in 2008 and owe too much on the mortgage still to sell it. Can we get that amount for the house?” Me: “Well, according to the market comps and the demand for your house, I don’t think we can get anything higher than $1300 a month.” Property Owner: “But you don’t understand. I NEED $1500 a month in rent.” Me: “I certainly appreciate your needing to maximize the revenue […]
July 26, 2015

Top 7 reasons why Tenants lose Security Deposit money

There’s an old Landlord saying…. If it wasn’t for the dealing with Tenants and property maintenance, Landlording would be Easy! If you’ve been a Landlord for more than 2 months, you’re silently nodding your head acknowledging the above with a smirk.  It’s OK.  Everyone does it, too. You also know that, as required by State law, you are required to send the outbound tenant a letter accounting for deductions to their security deposit. With this in mind, here’s the Top 7 reasons why tenants frequently see deductions made from their security deposit funds: 1.  Light Bulbs.   If your lease document does not require the tenant to replace burned out light bulbs in your property, you are literally throwing money out the window.  When our management company moves in a new Tenant, all the light bulbs are confirmed to be working and in good condition via photographs in our extensive […]
July 18, 2015

Fewer Renters Can Afford to Own–Great news for Landlords!

As real estate investors, opening up the Wall Street Journal can sometimes cause a panic attack. But in June 2015, this article came out giving most investors a sigh of relief and even a tingle down their leg. Spoiler Alert:  You’re going to make good money for a number of years to come if you play the market smart. http://www.wsj.com/articles/new-housing-crisis-looms-as-fewer-renters-can-afford-to-own-1433698639 Here’s a few bullet points if you don’t have time to read the entire article (but please read it eventually…) The U.S. homeownership rate is below where it stood 20 years ago when President Bill Clinton launched a national campaign to encourage Americans to buy homes. Conventional wisdom says the rate, at 63.7%, is leveling off to where it was for decades before the housing-market peak. The declines reflect a surge of new renter households, which is boosting rents. Together with tougher mortgage-qualification rules, this will leave households stuck between homes they […]
May 19, 2015

Why you MUST collect Security Deposit and 1st Month rent at time of lease signing

  One of the most frequent questions I receive from novice landlords is what funds to collect at lease signing. As fast as an Indy 500 car slams into the 3rd turn wall I respond with “Security Deposit PLUS 1st Month’s rent”. The reasons are simple for why you should require both to be paid at once but they all congeal into one simple concept: RISK MANAGEMENT Successful real estate leasing is almost all about risk management and the simplest way to minimize this risk is to force the tenant to have skin in the game.  Collecting essentially 2 months rent value at time of lease signing is plenty of skin for most tenants. It also sets the stage for the tenants to expect a certain standard of engagement with you as the landlord–you aren’t joking around with an important business transaction. Finally, it is an excellent secondary screening method–after all, if they don’t have […]
April 9, 2015

Good Property Management is more than managing homes….

Some days, we feel like ping pong balls getting batted back and forth over a net that keeps rising higher and higher.  We bounce between tenants, landlords, real estate agents, government officials, lenders, inspectors, appraisers, and contractors.  It can make your head spin if you lose focus on the Goal. “What is the Goal?”, you ask? Simple but complex.  Yes, it’s a paradox wrapped in an enigma. The Goal is this:  Assist our Clients move towards their objectives. Sometimes that Goal is to increase wealth by generating capital appreciation of an asset.  Sometimes it is to generate cash flow for living expenses.  Sometimes it is to simply liquidate a property and harvest the equity. Thank you, Mr. McKnight, for inviting our team to assist you in reaching your Goal.  It was truly our pleasure to serve you.     Dan Baldini is the Founder of Polaris Real Estate & Polaris Property Management, […]
April 8, 2015

Meth houses

Our daily interactions with Clients, peers, and prospects is always wickedly weird and unpredictable…. I got this text message from a friend of mine after he calls and I click ‘decline’ on my phone… Uh-Oh…..                 You can tell this isn’t going to be a good conversation ending well….                           Take Away:  When your Spidey-Sense goes into orbit, listen to it!!!