Real Life Monopoly and 1031 Exchanges
By Paul Branton, Director of Investor Services at Home Rental Services.
When people ask me what I do for a living, I think that my new response will be…. “I help people play Real Life Monopoly.” We’ve said this inside the office for some time now, but after thinking about it more, it does seem like a reasonably accurate description.
If you look at the rules of “Classic Monopoly” you’ll see that the objective of the game is as follows: “Become the wealthiest player through buying, renting and selling property.”
Given those parameters and that objective, this is really quite similar to what I do here at Home Rental Services. My goal is to help our clients acquire, improve and maintain the best rental portfolios in Kansas City!
Here is a recent example:
A few weeks ago, I suggested to one of our investors that he sell his property that was struggling to rent and exchange it for another property. With the help of the great team at Group O’Dell, the home went under contract and sold in 40 days. The investor then took his equity by way of a 1031 exchange and was able to put about 25% down on the purchase of TWO rental properties.
In summary, here are the highlights of this transaction:
- His equity is no longer tied up in the form of 40% of one property. (Better Leverage)
- He now has ownership of two properties instead of one. (Better Diversification)
- He took his gross rent of $1,700/month and turned it into a gross rent of $2,650/month. (Increased Income Potential)
If that doesn’t resemble “real life monopoly” game play, then I’m not sure what does! If you ever find yourself wondering what you should do as a next step with your real estate investments, please give me a call!
Real World Scenario: What to do when your tenant drives through the living room?
One of our goals in writing blog posts every week is to provide useful education. We recently saw an excellent article on BiggerPockets.com that talked about “What to do when your tenant drives through the living room?” BiggerPockets.com is a website devoted to helping real estate investors.
Paul, our Director of Investor Services, checks articles on BiggerPockets.com every day, looking for helpful information for our investment community. We’ve learned a lot from the articles we’ve read and conversations we’ve had related to BiggerPockets.com.
In this article, Nathan Miller talks about the real world scenario where one of his tenants accidentally drove a car into the living room of their rental property. It was a 16 year old child and an unfortunate mistake. Nathan goes on to talk about the steps he followed to figure out what needed to happen next.
Three Steps to Take when a Tenant Causes Property Damage
- Talk to your tenants.
- Call your insurance provider.
- Contact your tenant’s insurance provider.
We liked this approach for a few reasons:
Communication is key whenever there is a situation. Talking with your tenants to understand what happened gives you the opportunity to set the tone. If they’ve been good tenants for a long time, it could be an opportunity to demonstrate that you are all in this together as you work towards fixing the problem. It would be understandable if you were upset and nervous about the damage… but talking with your tenant while in that frame of mind probably wouldn’t be helpful.
Calling your insurance provider is a great next step. You want your insurance provider to know there has been an event that could result in a claim. In this case, the tenant’s auto insurance provider would be responsible for covering the damages, but what if the driver was not insured? This story might also be a good reminder to double check with your provider that you have the appropriate coverage in place for a rental property. If you haven’t done so in a few years, we encourage you to call your agent for a quick review.
Finally, contacting your tenant’s insurance provider in a timely manner is the next step. This should happen as soon as possible once you’ve been made aware of a problem involving damage to your property.
We’ve never had a tenant drive a car into a property we manage. Knock on wood. But we thought it might be helpful to share it with anyone that owns an investment property because it makes you think about, “what if?” Making sure you have the right insurance in place before you have a problem could save you many thousands of dollars due to a claim that isn’t covered.
It’s the most wonderful time of the year!
By Paul Branton, Director of Investor Services for Home Rental Services
It really is. :) For a multitude of reasons…
The lights. The music. The cookies. The candy. The parties. The decorations. The traditions. There’s just so much fun packed into this tiny window of time we refer to as “The Holidays.”
Here is a sampling of the decorations at the HRS office. A couple of weeks ago, we think some elves snuck in and had a party… dancing on the ceiling style.
In the spirit of tradition, we recently gathered the team together for our annual Christmas dinner party. As always, we had a wonderful time with Kandy as our gracious host! (Don’t even think about clearing your plate.) This year, the party was attended by some for the very first time, and others for the seventeenth time!
No matter your tenure though, it was certainly “no holds barred” when it came time for the gift exchange.
Ah, the gift exchange. Now this is fun! Anyone who wants to participate in the exchange, brings a wrapped “useful” gift valued at around $25. We proceed in numerical order opening a gift from the pile or “stealing” an already opened gift. The open gifts can only be “stolen” twice and then that gift belongs to the third owner. It can get to be quite entertaining… especially when a first time attendee steals a hand warmer/phone charger gift from the boss. (I think there’s an unwritten rule about doing that… Oops!)
While you spend time with your family and friends at the end of 2017, remember that it’s more important to bring your presence than it is to bring presents. It’s not about what’s under the tree that really matters, it’s who surrounds it.
We hope that you experience much Joy and Peace in this season; The Most Wonderful Time of the Year!
2017 KVC Shopping, Wrapping and Delivering to 10 Kids!
By Caitlin Meehan, Director of Client Care for Home Rental Services
KVC provides in-home family support, behavioral healthcare, foster care, adoption, youth substance abuse treatment and psychiatric hospitals, KVC touches the lives of over 60,000 children and families each year.
We support the mission of KVC every year as a company by volunteering to buy presents for children in KVC programs. On Monday, November 27th, we met at Target to buy gifts for 10 kids that otherwise wouldn’t be getting presents for Christmas.
Many people wore ugly sweaters (or shirts that looked like ugly sweaters) for the shopping event. We distribute the children’s wish lists across teams and spread out to shop till we drop. We’ve done this for many years and have the process down to a science! We know to keep presents organized by each child. And of course we get gift receipts for every item in case an exchange is necessary.
Next, we schedule time in the office to put the presents in large, green bags that KVC provides and get ready to deliver everything.
And the final step is to take everything to KVC! We decided to deliver the presents in our wrapped Home Rental Services car this year.
There is nothing better than giving to others during the holidays. It’s a great way to get into the spirit of the season! And it’s a great way for your team, family or friends to do something fun together while making a positive difference in the lives of others.
Are you drowning in paper at your home or office?
By Caitlin Meehan, Director of Client Care for Home Rental Services, talking about the great shredding services provided by Shred-it.
Over the years, everyone collects stacks of paper, canceled checks, confidential paperwork, and customer forms are just a couple of examples of the things that can stack up. And you can’t just throw that stuff away.
Our office is mostly web based. But we still generate enough confidential paperwork that we’ve got to have a secure shredding solution.
Our answer? Shred-it.
Shred-it is the largest document destruction company in the world. They operate in 18 countries and in 170 markets. They’ve become a best-practice for information security and workplace privacy. They provide document destruction, hard drive destruction, chain of custody and other privacy related services.
Shred-it brings one of their massive trucks with on-board shredding machinery to our parking lot each month. One of their staff comes up to our office on the 9th floor and grabs the locked “to be shredded” bin that we keep in our kitchen area. They take it out to their truck and shred the paperwork immediately and bring the bin back to our kitchen.
It’s a great service for a reasonable monthly price.
Do you have boxes of paperwork sitting around your home?
If you have trouble making it to one of the local “shred days” hosted by banks or other businesses, you can do a one time drop-off! Shred-it has a secure shredding facility located near Lackman and College in Kansas City.
Shred-it Kansas City
10000 Lackman Road
Lenexa, KS 66219
888.750.6450
Secure Drop-off Service
$60.00 for the first 10 boxes
$6.00 for each additional
$40.00 to witness shreds and by appointment only
Monday through Friday from 8:30am – 3:00pm
I want to work for a company that does pie parties!
By Oretta Croushore, Assistant Property Manager for Home Rental Services, talking about the recent client appreciation event where we gave away tons of pies!
My family takes an annual trip to Branson for Thanksgiving. We rent a condo so we can balance eating out and cooking at home. We spend at least one evening at Silver Dollar City, but also balance that with some down time.
Last year, I was working a job where the stress was high and the appreciation was low. I was looking forward to decompressing on our Thanksgiving trip even more than normal. I spent the long weekend thinking about how it was time to take the bull by the horns and make the changes I needed to make. I came back from the trip feeling refreshed.
I woke up Monday morning with a feeling of dread. I knew all this released tension would come flooding back as soon as I walked into the office. I stayed in bed a little longer and glanced at my emails. There was an email about a job posting at Home Rental Services. I started to read through the description and started to get excited. I read over the qualifications and realized this was written just for me! I sent my resume in right then and there.
In a few days, I received an email telling me my resume had been opened four times. “This is a good sign” the email robot said. A good sign you say? Maybe I should check these people out a little closer. Surely, there’s a catch.
I started some good old fashioned Google stalking. “Ok Google, tell me about these folks at Home Rental Services. Are they some fly-by-night company? Do they beat their employees? Do they use baby seals for rugs?” The answer was a resounding NO on all accounts. A woman-owned company who has been around a long time is what I first discovered.
I stalked over several days, wanting to know more. Then, I found a blog post about a pie party they had just thrown for their owners. The post was written wonderfully. I could tell the person who wrote it was not beaten at all. In fact, I could tell she was proud to work for Home Rental Services. Proud! I almost cried because I knew that this is where I needed to be. “I want to work for a company that does pie parties!”
I found another blog about their trip to shop for KVC kids. The whole team seemed to be there. They even had pictures and everyone was smiling. I think they might even like each other. “I wish they would call already,” I thought to myself.
Well, call they did. Though the waiting was hard, I felt even stronger in my hunches about HRS. They were taking their time to find the right fit. When the call came, Kandy asked “Would you like to come work for Home Rental?” I tried to cover the lump in my throat when I blurted “More than you know!” I applied between Thanksgiving and Christmas and started the last day of February in 2017.
Fast forward a year. I was mingling with owners and handing out pies at the 2017 client appreciation pie party… just like the one I had read about. A little voice in my head giggled as it said, “you’re working for a company who has a pie party!”
I’m truly thankful for this door which opened, the people I’ve met, the things I’m learning, and the pies we get to share with our clients.
Gobble, Gobble! Happy Thanksgiving from the Home Rental Services Team
Friends, it’s that time of year again. There is no time more fitting to say Thank You than right now… Happy Thanksgiving! Whether you’re an owner, a renter, a vendor, friends or family, we appreciate each and every one of you. Thank you for being an important part of making 2017 another successful year.
On Monday next week, we’re going shopping for gifts for KVC children… something we do every year as a fun way to give back. We will be doing another blog post about that event in the next couple of weeks.
Have you started shopping for gifts yet? If you didn’t know, dealnews.com is an excellent resource for finding great deals online. And if you love to shop on Amazon.com, be sure to check out camelcamelcamel.com. Camel lists the most popular things being bought on Amazon.com, and is a great source of inspiration for gifts! If you are looking for an easy way to give back while shopping at Amazon.com… be sure to use smile.amazon.com.
We thought it might be a good idea to share this list of top 10 things to consider for having a safe holiday season in your home:
1. Inspect electrical decorations for damage before use.
2. Don’t overload electrical outlets.
3. Never connect more than three strings of incandescent lights together.
4. Keep live trees fresh in your home by watering daily.
5. Use battery-operated candles.
6. Keep combustibles at least three feet from heat sources.
7. Protect cords from damage.
8. Check decorations for a certification label.
9. Stay in the kitchen when something is cooking.
10. Turn off, unplug, and extinguish all decorations when going to sleep or leaving the house.
Have a safe, happy and warm Thanksgiving!
NARPM® 2017 Convention Recap
By Paul Branton, Director of Investor Services for Home Rental Services talking about the recent trip to the NARPM® convention in Florida.
Just a few weeks ago, Caitlin, Kandy and I traveled to Florida to go to the 29th annual convention and trade show for the National Association of Residential Property Managers (NARPM®). The theme of the convention this year was “Engineered for your Success!” and it was held in Orlando at one of the largest hotels I’ve ever visited, the Rosen Shingle Creek.
We’re Committed to NARPM
This marks the second conference that I’ve attended, the sixth for Caitlin and the TWENTY-THIRD for Kandy.
Home Rental Services has been a member of NARPM since 1991. We continue to receive value nearly every day from the relationships, educational opportunities and member designations.
The biggest takeaways from the 2017 NARPM conference:
- We implemented additional screening criteria to ensure we remain compliant with Fair Housing Regulations.
- We added a feature to our website that allows prospective owners to receive a Free Rental Analysis report.
To see our Free Rental Analysis report system in action, click the screenshot below and enter a rental address. In less than an hour, you will receive a detailed rental report with comps in your inbox!
Quotable quotes from the keynote speakers:
- “If you’re not failing often, you aren’t trying enough.”
– Scott Steinberg - “If you don’t have a crystal ball, perhaps it’s time to get some brass ones.”
– Troy Hazard - “Do we want to be tools of our tools, or let our tools be our tools?”
– Curt Steinhorst
While we didn’t have quite enough time to make it to Disney World, I at least got to see this Topiary of Mickey Mouse!
In closing, we highly encourage you to make sure when selecting a property manager, that they are members of NARPM®. Why? NARPM promotes a high standard of business ethics, professionalism and fair housing practice. The Association also certifies its members in the standards and practices of the residential property management industry and promotes continuing professional education.
If Snowmageddon happens, are you ready?
By Caitlin Meehan, Director of Client Care for Home Rental Services.
It is getting to be that time of the year, temperatures drop and leaves start falling. We’d like to remind you of a few things that can save you money, time and headaches:
Disconnect water hoses from exterior faucets:
If you leave the hoses connected to your water spigots, you run the risk of them freezing which can break the supply line. The simple fix is to simply disconnect the hoses. We recommend that you store the hoses in your garage to help them last longer!
- Install a clean furnace filter:
Per your Lease agreement, this is to be changed at least once a quarter. If you have a window air conditioning unit, remove from the window or place a waterproof cover over it to prevent damage during the winter. Don’t forget filters in stove vents, and clothes dryers. (Clean air filters will keep your family healthier in the fall months and keep your heating costs down!)
- Check the smoke detectors:
Replace any batteries as needed. There should be one working smoke detector per floor in your house. Please let us know if there is not or if you have a detector that is not working because of something other than a dead battery. We want you to be safe!
- Sprinkler systems:
Please inform us immediately if you have a sprinkler system that has not yet been winterized or scheduled for winterization.
- Examine your gutters and downspouts for debris:
While standing on the ground look at your gutters and downspouts for built up leaves and debris. Also, check downspouts for damage or loose pieces.
Remove leaves from the grass and flower beds:
It is very important to remove leaves from the grass and flower beds as they begin to fall, before the ice and snow come. If you don’t pick up the leaves, there is a good chance they’ll kill the grass and landscaping which is expensive to repair.
- When that dreaded ice and snow do get here please do NOT apply any chemicals or salts to the driveway or sidewalk of the property that will cause damage to the concrete. Read and follow labels carefully before applying.
- Consider having some extra food, water and blankets on hand in case ice and snow take out your electricity.
We want to help ensure you do not face any emergencies related to the weather at the home, so consider taking the time to complete the above items. We hope your fall is off to a great start!
Why buy investment properties during football season?
By Paul Branton, Director of Investor Services for Home Rental Services, talking about acquiring investment properties during football season.
As the weather changes and the temperature begins to drop, so begins the “off-season” for housing activity. While things are heating up between your favorite football rivalries, we usually see the demand for housing cooling down. That’s exactly why football season is a great time to buy!
Now you might be asking “Why would I want to buy when there is less of a demand?” Let me expand on this idea and give you a few reasons why:
- Not as much competition.
- With families settled into school and not wanting to relocate during colder months, this leaves sellers with fewer buyers.
Lower Prices! With less competition, prices are lower than in the summer months.
- Summer is typically the most expensive time to buy real estate. When buying during the Fall (September through November) you can expect prices to be about 3% less than summer. If you wait to buy in the winter (December through February) prices in the KC metro are typically 6% lower than in the summer months.
- Inventory is lower. (Wait, how is that a good thing? Refer back to my first point about competition.)
- Ok, I realize it would not be a good thing to simply have less inventory. The GOOD NEWS is that while there are fewer homes on the market, there are even fewer buyers. In some markets during this time, there are nearly double the number of homes per buyer than in the summer.
- Banks want to get bad debts sold by the end of the year.
- In order to start off the New Year in a better position, banks tend to be open to offers in the fourth quarter that they might otherwise reject during the first three.
Contractors are not as busy.
- This allows you the opportunity to negotiate better deals for the home improvements and probably get the job done sooner too!
Now that you know it’s a great time to buy, are you ready to get started?
- ← Previous
- 1
- 2
- 3
- …
- 28
- Next →
