Author: Home Rental Services
Author: Sandy Fisher, Director of Business Development
Have you seen the Snickers bar commercial where a very tired and grumpy character played by Willem Dafoe is not having a very good acting scene? Someone then hands him a Snickers bar and he is magically transformed back into the radiant Marilyn Monroe who finishes the scene with ease. The Snickers’ slogan in that ad is “You’re not you when you’re hungry”, and there sure is some truth to that!
You might have seen the research that breakfast is the most important meal of the day. You’ve probably also heard the tidbit that what you do with your first hour of your day is directly related to your productivity for the rest of that day. Well, we at Home Rental Services decided to put that information to work, order up some breakfast (and some Snickers bars too), and create a Breakfast Of Champions’ event with our valued vendor partners.
Why our vendor partners you might ask?
We work really hard to provide and do things for our owner clients, our renters, and our Realtor® friends, so we decided it was time to also provide for, and make even stronger connections with, our valued vendor partners. A year later, we’ve found that they agree.
We just hosted our fourth Breakfast of Champions event, and at the close of each one Kandy Meehan (Owner/President of HRS) and I put our heads together to go over what went well and what we can do better. We’ve also pushed the “what can we do better?” question out to our entire HRS staff. And after a few team brainstorming sessions, we ramped up our most recent event.
We added some fun take-home items for each vendor (and, yes, a Snickers bar was one of those things), a couple of door prize gifts, and we had Jason Terry with Blue Gurus enlighten our group with a LinkedIn 101 session, and he did an outstanding job.
When I talk with potential owners and investor clients, I love to share with them how we have a quality list of licensed and insured vendors who provide outstanding service to our clients. And then I really love to share that we also know our vendors well, and we work hard to strengthen those relationships by having breakfast with them and learning with and from them several times a year.
We’re so thankful our vendors and their willingness to attend our Breakfast of Champions events. It’s a great way to start the day, get to know our vendors even better and learn something useful from our presenters. (And it was fun having a Snickers bar for dessert!)
Author: Paul Branton
It’s the time of year we fill out brackets, “pool our money” and watch lots of basketball!
While that’s a ton of fun, did you know it’s also one of the best times to get under contract on investment property?
Spring is here and summer will arrive before we know it, and that means folks will be moving. Typically, when you acquire an investment property, it’s vacant, so it makes sense to have it available for occupancy during the time when more people are relocating. According to a report released by AMSA, the American Moving and Storage Association, the most popular months for moving were: May, June, July, August and September.
With that in mind, here is my suggested timeline for March Madness – Investor Style:
- March-April: Locate your ideal property and get it under contract.
- April-May: Close on the purchase, make improvements to maximize rental rate and lower vacancy
- May-June: Market the property, screen and qualify tenants and sign the lease.
- June-July: Tenants take possession, love the home and stay for multiple years!
In addition to capturing this “moving season” for new acquisitions, the team at Home Rental Services does their very best to negotiate leases so that they will end or renew in April, May, June or July.
So, who is your pick to win this year? Don’t forget to fill out your bracket! The tournament starts on March 14th and ends on April 3rd.
We recently did a full overhaul of our website at home4rent.com and mobile app, so it was time for a new look for the logo. We worked with the great people at logomyway.com to get new ideas and select our favorite new look. The winning designer did an excellent job staying true to who we are while giving us a more current look!
We hope that you like our new updated look. Leave a comment and tell us what you think!
There are several joys involved with owning investment property. You hear a lot about the negatives, and there are definitely negatives, but there are great things about owning an investment property as well.
This is an opportunity to have someone else pay your mortgage payment as the house appreciates and gains value. You’re contributing to your wealth, and increasing your ability to save for any number of things.
Source of Income
Owning an investment property means you have a steady source of income from your Overland Park tenants. There will be periods of vacancy where you aren’t earning anything from your property, and you need to be prepared for that. But generally, it’s a steady source of rental income.
Diversification of Income
When you purchase investment property, you’re diversifying your overall portfolio. Instead of just being in stocks and bonds, you’re doing something different by owning real estate.
Owning investment property is really low risk, especially compared to other types of investments. It’s highly unlikely that a property will disappear and the land will suddenly have no value. Most properties appreciate and grow in value, which makes you money. And, you’ll always “own the dirt” as my dad used to say. That’s a good thing and less risky.
You can put as little as 20 or 30 percent down on a property. You then have a large investment for the amount of cash that you’ve actually had to put in. So, you’re highly leveraged but at a very low risk. That allows you to grow your wealth faster because you can own more properties with less risk or investment.
The IRS isn’t always our friend, but there are lots of great tax write-offs and advantages to owning rental properties. This is something to consider if you’re wondering whether or not to invest.
These are just some of the joys of owning investment properties. If you’d like to talk more, please contact us at Home Rental Services. We can answer any of your questions about property management.
Proper documentation can be an important resource for landlords, and today we’re sharing four of the really great reasons to document the condition of your property before a renter moves in.
1. Tenant Sign-Off
This documentation will be proof that the resident accepts the property in the condition that you’re giving it to them. We recommend having paper documentation, which could be a checklist or a set of detailed notes. You should also take a number of high-quality photographs. When you have a paper checklist or condition report, you can have the resident sign the document, agreeing to the property’s condition. This isn’t a mechanical inspection, it’s more cosmetic and it allows you and your tenants to agree on how the property looks.
2. Proves Habitability
When you document the property’s condition prior to move in, you can avoid any potential later accusations from the renter that there were habitability issues. You documented the smoke detectors were working and attached, for example. You will have photos as well as written documentation.
3. Identifies Property Changes
Some tenants make changes to the house that are great, and others make changes that seem confusing or unappealing. With your documentation, you’ll be able to determine whether any of those unauthorized changes were made by your tenants. It will be easy to see that the walls were not originally pink, for example. This documentation will allow you to see and prove the changes.
4. Tenant Damage
Distinguishing between tenant damage and normal wear and tear is one of the biggest challenges for landlords. This documentation will help you demonstrate any damage that was done by the tenants. Hopefully there won’t be any damage at all after move out, but if there is, you have the original documentation and proof of what the property looked like when the lease started.
These are just a few of the reasons why documentation is so critical. If you have questions about this or anything pertaining to property management in Kansas City, please contact us at Home Rental Services.
Author: Paul Branton
The Great Exchange… no, I’m not talking about Obama v. Trump. While it would be apropos to discuss politics and the “transfer of power” or “alternative facts” in light of that recent great exchange, I would rather stick to what I know best and that is REAL ESTATE. (Real Estate also happens to be a lot more fun!)
The Great Exchange that you should know about as a seasoned or potential real estate investor is known as the 1031 Exchange.
In the past few weeks, I’ve had the pleasure of working with two of our investment property owners that are in the midst of navigating through the requirements and timelines associated with what is commonly referred to in real estate and the tax code as a 1031 Exchange. (also known as a Starker Exchange.)
With this fresh in mind, I wanted to take the time to share the basics of what you should know about these types of property exchanges.
2 quick notes:
- Be sure to consult a tax professional before considering a 1031 Exchange.
- In June of 2016, the House Republicans created a “Blueprint for Tax Reform” called A Better Way. The proposed changes threaten 1031 Exchanges. If you’re considering an exchange, you may want to pursue it before any substantial changes are passed.
What is a 1031 Exchange?
- A 1031 Exchange is a wealth building strategy known as Internal Revenue Code Section 1.1031. It’s used for the exchange of real and personal property held in the productive use of a business or for investment.
- With each 1031 Exchange is a timeline requiring strict adherence.
What are the Timeline Requirements?
- Starting from the day the “relinquished property” closes, you have 45 days to “identify” potential replacement property.
- Starting from the day the “relinquished property” closes, you have 180 days to acquire the replacement property.
- The exchange must be completed in 180 days. (not 45 + 180)
How do I “Identify” a “like kind” replacement property?
- By the end of the identification period, the potential replacement properties must be unambiguously identified to the qualified intermediary. (Legal Description or Property Address)
- You may identify up to three properties of any value with the intent of purchasing at least one.
What is “Like-Kind” property?
- This is a very broad term, meaning that both of the properties must be “the same nature or character, even if they differ in grade or quality.”
- In terms of real estate, you can exchange nearly any type of property, so long as it’s not personal property.
What is a “Qualified Intermediary”?
- This is the name for the entity through which the proceeds from the sale must pass.
- The proceeds from the sale must go to a qualified intermediary in order to be reinvested and remain tax deferred.
- The sale proceeds must not come to you or they become taxable.
- Any proceeds retained from the exchange (“Boot”) will become taxable.
Why should I do a 1031 exchange?
- The main reason is the tax deferral of the federal and state capital gains and recaptured depreciation taxes assuming the replacement property is of equal or greater value and is acquired within the exchange timeline.
- The 1031 exchange allows you to, rather than paying the tax, use those dollars towards a replacement property that may generate additional cash flow, have greater depreciation, be in a better location or no longer require as much effort to maintain.
In summary, a 1031 exchange has limitations and guidelines, but when done correctly could help you offset or defer paying capital gains taxes on your investment properties.
Until next time….
Overland Park landlords need to have a strong lease because this is the document that will protect you, your property, and your tenant. Today, we are sharing five specific clauses that you need to include in that lease.
Due Dates and Penalties
Have the rent due date clearly listed in your lease. That sounds logical, but you need to have the due date and the date that rent is considered late. Make sure you include late fees, and we highly recommend that you enforce those late fees.
Subleasing the Property
Include language that does not allow your Overland Park tenants to sublease the property. You don’t want your renter to move in and then a couple of months later when they decide they don’t want to live there anymore, they sublease it to their buddy who has friends moving in, and you don’t even know who is living there.
List every occupant who is authorized to live in the property. That would include children. Put first and last names because sometimes families have different last names. So, list the first and last name of every adult and child on your lease.
Your lease should list any maintenance responsibilities that belong to your Overland Park renters. Typically, that would include raking leaves in a single-family home or a duplex, changing the furnace filters, and any other duties that you need the tenant to understand. Make sure the details are explicitly explained in the lease.
Timely Reporting of Maintenance
In your lease, you should require the tenants to report maintenance issues to you on a timely basis. You don’t want the leaky toilet to become a soggy ceiling that runs up thousands of dollars worth of damage. So, put this requirement in the lease.
These are the five clauses that every lease should have. If you have questions about Overland Park property management or you need help with a lease, please don’t hesitate to contact us at Home Rental Services.
Overland Park landlords who want to get the most out of their rental property should follow these six tips that we have gathered throughout our years of experience providing services to Overland Park landlords.
Buy the Right Property at the Right Price
When you’re buying, buy at the right price and leave the emotion out of it. Maybe the home is not the kind of floorplan you look for, and it’s not in an area that you would live. Pick it out based on how a renter would look at it and how it will perform for you financially. You want to buy the best investment property from a tenant perspective.
Assess Your Financial Standing
You need to have enough money to invest in rental real estate. You know your fixed expenses like mortgage, taxes, and insurance. But you’ll also need to consider the age of the roof and the hot water tank. Make sure you have the reserves to cover the things that will come up through normal wear and tear.
Screen Your Tenants
Always make sure you thoroughly screen your Overland Park tenants. It’s better to have a vacant property than a property occupied by tenants who aren’t paying rent or who are doing lots of damage.
Buy in the Right Location
Pay attention to the area that you’re considering. Look for something with high job growth and good schools. These things will keep long term tenants and ensure you always have a large pool of available renters.
Consider Maintenance Needs
Know your limits when it comes to maintenance. It’s always better to hire a professional than to try and do it yourself. Repairs that are not made correctly will only cause more damage and increase your expenses.
Familiarize Yourself with Laws
Know the laws of your state, county, HOA, and the federal government. Not adhering to the laws as written or not knowing them can cost you a lot of money.
If you are looking for additional Overland Park landlord advice, or you have questions about Overland Park property management, please contact us at Home Rental Services. We provide leasing and management services to investors all over the Kansas City area, and we’d love to tell you more.
Author: Sandy Fisher
A big part of my job at Home Rental Services is writing notes: “just saying hi” notes, “introducing myself” notes, and mostly “thank you” notes. I’m from the handwriting generation, so I love doing this. I love everything about writing these notes – from picking out my favorite pen and ink color to selecting the notecard style to carefully thinking through the message I’m going to put on that particular note.
Don’t get me wrong—I send dozens of emails and texts every day. I wouldn’t be able to do my job without all of my tech gadgets. However, I’m so glad writing these notes is an important part of my job. It’s reminded me how important the handwritten note is and how it can affect people.
For my work relationships, it’s showing people more and more that the team at Home Rental Services cares enough to take the time to write a custom note and not regularly spew out a bulk mailing that might not get read, or even opened. There’s a purpose of bulking mailings for sure, however, and I do send those out occasionally.
I think about the daily mail that gets dropped on my desk. Because I don’t want to miss a thing, I open it all. However, without a doubt, I thumb through it, see what’s handwritten, and open that first.
Because of all of the note writing I do at work and the value and benefit I see in it, I challenged myself to hand write my personal Christmas cards this year. I have for years sent out the token form letter updating all on my family’s happenings, folded it around the annual Fisher family picture, and popped it in the mail. I even pre-printed the mailing labels. Not one bit of handwritten ink on those notes.
This year I bought the good old-fashion Christmas card, still included a pic of my kids, and then I actually wrote a note to each recipient. Did it take a heck of a lot more time? It sure did. But I loved doing it and I hope my friends and family who I don’t see often loved receiving them. I know one did: my Great Uncle Dick. Just a couple of days ago I got a letter back from him. It wasn’t a Christmas card, but a wonderful handwritten letter back. He thanked me for my note to him and updated me on his life. I loved it, and I have a feeling I’ll be writing him back very soon.
A few years back I read the book A Simple Act of Gratitude by John Kralik. I had heard great things about it and wasn’t disappointed. A quick summary: a man is not in a very good place in his life both personally and professionally, so he challenges himself to hand write notes every day of the year. He wrote “how are you” notes, birthday notes, notes to the Starbucks’ guy (I still need to try that!), and he even wrote notes to his clients thanking them for paying their bills. How his life transformed over that year was amazing. It’s a great quick read and I’d highly recommend it for both personal and professional benefits.
I’m glad that note writing is a big item on my to-do list. I’m definitely looking forward to writing my way through 2017 to great relationships and business for myself and Home Rental Services!
Author: Paul Branton
If you’ve visited my LinkedIn profile, you may have seen that I list the following items in my professional headline: Director of Investor Services | Real Estate Consultant | Project Manager | Estate Sale Enthusiast | Ice Cream Aficionado.
Today, I would like to take a moment to talk about the “Estate Sale Enthusiast” side of my life and introduce you to a not-so-secret, secret…. You can see a lot of great houses by attending estate sales! In the past year, I’ve been able to attend estate sales all across the KC Metro including Olathe, Lenexa, Lee’s Summit, Raymore, Prairie Village, Leawood, Stilwell, Overland Park and Mission Hills.
The other secret about estate sales is that they almost always precede or coincide with the home going on the market. It’s the sale before the sale. So, by going to the estate sale, you are able to get a sneak peek of the house and you may discover it’s a worthwhile investment opportunity!
I understand the purpose of going to an estate sale for the majority of people is to score a great deal on some furniture, housewares, jewelry or perhaps a vintage figurine. For me, it’s more about seeing the house. I enjoy seeing the old construction with vintage décor and original woodwork. I enjoy seeing the older home that’s been renovated to meet today’s modern tastes, and I enjoy getting lost in the custom built, Italian marble adorned mansion that has rooms for days.
Don’t get me wrong, I also try to find great deals. After finding something, I think about whether or not my wife will give me “the look” when I bring this “treasure” into our home; then, and only then, do I decide if it’s a worthwhile purchase.
Here are a few of those items:
Here’s a tip for finding out the details on estate sales. It’s a website called www.estatesales.net and more recently, they released an app which is super handy while on the go! It will tell you where the nearest estate sales are, provide you with all the details of the sale and give you directions!
Let me know if you end up using the app or if you have your own treasure stories to tell about estate sales!