By Paul Branton, Director of Investor Services for Home Rental Services
Over the years, we’ve had the privilege of working with many Realtors® to help their Investor clients. I wanted to share a specific story of one of our Realtor® friends, Jake Stallman. We did a video interview with Jake. He talks about how we were able to help him and our mutual client make two very smart rental investment purchases.
Now that you’ve heard the story, here’s a quick summary of how we helped this client (and how we can help you too!)
Rent Range Projections:
– We will review the subject property in relation to the rental market and provide you with an estimated rent range.
– The rent range is typically +/-$100, although for more expensive or unique properties, it is usually a larger range.
– We will walk the property and provide a list of suggested improvements that will help maximize your rental rate and minimize your vacancy.
– Upon request, we can work up an approximation of what the renovation items will likely cost via the use of our preferred vendors.
– If you utilize our preferred vendors for the renovations, we will oversee their work to completion and ensure both quality and timely results.
Please give us a call if you would like to find out more about how we can help you!
Paul Branton, Director of Investor Services
As we approach fall, I begin to think about some of my favorite fall things; the leaves changing colors, strolling around the plaza with coffee and relaxing evenings at home in front of my fireplace with a great book.
At first glance, most people see fireplaces and chimneys as beautiful additions to the architecture of their home. But we should really be looking at them for what they are; part of the heating system. Just as with your HVAC, chimneys require routine maintenance and service to ensure continued, safe and effective use.
Inspect your fireplace annually!
Three biggest problems resulting from poorly maintained chimneys are:
- Carbon monoxide poisoning
- Chimney fires
- Premature failure of the fireplace and chimney (Source: HomeAdvisor)
A report by the National Fire Protection Association showed that between 2009 and 2013, fire departments responded to 56,000 home structure fires that involved heating equipment. The leading factor contributing to these fires (30%) was failure to clean heating equipment properly. These were primarily chimneys.
Fireplace inserts are safe, right?
I bet a good portion of you reading this are thinking this doesn’t apply to you because you have a fireplace with an insert. This type of fireplace accounted for 16% of fires in this same time period. That’s almost 9,000 fires out of the 56,000 fires that fire departments responded to. (Source: National Fire Protection Agency)
As a property owner/landlord; it’s important to take the proper steps to ensure the fireplaces in your homes are safe for use.
We have a policy in place which requires our owners to pay to have any fireplace(s) and chimney(s) inspected and cleaned by a trained and certified company. This policy kicks in when a home has a fireplace that tenants want to use when specified in their offer to lease.
By having the inspection and cleaning done, you’ll know that you did everything possible to protect your tenants and your investment in the event of a fire.
If you actively use a fireplace (even ventless gas inserts) in your home, or have investment property with a fireplace, please be sure to get it inspected annually!
Guest post by Jennifer Hermon, Administrative Specialist at Home Rental Services
In the late 80’s, as a teenager, I took a trip to New York. I was terrified that I would have to take the dreaded subway. It’s reputation at the time was that of Gotham’s finest location to get murdered, mugged, drugged or to find housing for vagabonds. I lucked out and never had to descend into that dirty, treacherous underground world.
When I returned ten years later as an adult, I couldn’t understand what the fuss was about. Every day for a week, twice a year, I’d grab my Starbucks and trek down into the tunnels to get to another part of town in just minutes. I loved it! The stations were cleaner than my kitchen! The trains weren’t covered in gang graffiti.
How could this be? How did this entire system get turned into a place people willingly go and seem to take care of? And how does it stay that way?
The story of the NYC subway turn-around is quite amazing considering what those responsible were up against. Crime was up and subway income was down.
What I didn’t know during my first trip to the Big Apple was that new policies were being enforced with cooperation between the mayor’s office, transit authority and police and that they vowed to turn things around underground as well as above. The theory was basically that people won’t take care of something that isn’t cared for and will leave it in no better condition than they found it, or possibly make it worse.
Every train that was painted with graffiti would be immediately painted and not sent back onto the rails until that was complete. The stations were cleaned, lighting replaced, and crime simply not tolerated. The message the city was sending was clear and effective. The agencies involved were diligent and eventually transformed the underground transportation to a profitable system that locals and visitors were happy to travel.
The idea of taking care of things so that others will follow your example can be applied in many other areas. I tested it out for myself.
For instance, when I make the house smell like I just cleaned it (a bit of lemon Pledge spray is effective), my boys seem to be afraid to touch anything when they come home from school. They take their books and backpacks and head straight to their rooms. At least for a few days after a deep clean, they are suddenly putting dirty dishes straight into the dishwasher! They actually respect the space in which they live. I make it easy for them to maintain by providing a container of cleaning wipes and a roll of paper towels in their bathrooms.
If something breaks, I get it fixed. I want them to see that I am holding myself to the same standard of responsiveness I expect from them. (Except when milk runs out, because I refuse four trips a week to the grocery store).
I believe that the same concept applies to a rental home. Arriving in a well-cared for, clean home for the first time puts the tenant/landlord relationship on the right track for a positive experience. They sense your pride in ownership and are likely to carry that forward in how they live in and care for your home.
Landscaping that is well tended tends to stay that way. Issues get reported in a timely manner because the renters know you’ll take care of problems. That you won’t let them sit and fester into something worse. It’s mutual respect that can extend the lease and the life of the home’s components because everyone is working together.
The following list includes what we consider to be the biggest potential costs a landlord may face. Yes, these 5 things are required expenses for any rental property. But minimizing the exposure to these costs can make a significant difference on the balance sheet at the end of the year.
When a home is vacant, no rent is being collected. And that’s a bad thing for landlords. An industry standard of measurement for this situation is called “Days on Market.” The fewer days on market the better. The national average for days on market is 30 days. That’s a full month of rent lost at every turn! On top of lost rent, you also have turnover costs like painting and repairs.
Two: Not Having a Strong Lease
Having a strong lease is key to protecting yourself, and your investment. You want to make sure that it outlines who is responsible for what, and properly covers your liability. Then you must hold renters to the contract that they sign. If you allow them to pay rent a day late, you become the first one to violate your own contract!
Three: Not Screening Renters Properly
Accepting a bad tenant can be costly. They may not pay their rent on time. They may not pay their rent at all. They may not take care of the home, or even worse cause damage.
The best way to minimize the chance of getting a bad tenant is through a professional screening company. Bad credit? Criminal background? Bad leasing history? You can only make an educated decision if you have all the facts.
Every home requires maintenance. The best plan is to set aside a reasonable amount of money every month to pay for things when they break or need to be updated. It’s not about if something is going to require maintenance, it’s about when something will require maintenance. Being prepared financially is the best defense for maintenance costs. You also want to make sure to perform regular upkeep maintenance on things to avoid costly emergency repairs.
Five: Lack of Knowledge
Renting a home is not a simple task. There are so many things a landlord needs to understand to be successful.
What price will the market bear for monthly rent? Too low and you aren’t getting what the home is worth. Too high and you may force longer than necessary vacancy until the price is adjusted.
There are many laws that must be followed related to rental homes. Fair Housing when interviewing and selecting renters. Understanding local laws about the process for evicting a renter. Understanding how to handle security deposits so that you aren’t commingling funds. Getting into legal trouble is expensive and time consuming.
We wrote this story because we manage hundreds of homes and know what it takes to do it properly, safely and successfully. If you need help managing your investment property, please give us a call today. We can help!
I get to do a lot of the fun parts of our company’s business! I get to foster great relationships with all kinds of people including owners, Realtors®, investors, and our vendors. Some of this is done via phone and some via email. My preference is face-to-face.
Since we’re a property management company, most people in our office can rattle off property addresses like their children’s names. I can’t. I do the front end of our business, which is talking to people. So when someone asks me a question about an address, my response is, “I need a name please!”
I take and make phone calls on a daily basis with these relationships. I love connecting this way. I also receive and send a large amount of emails and texts every day. I’m okay with that too. Again, my preference is face-to-face. And those of you with an iPhone, I don’t mean “face-timing” someone. I mean in-person, face-to-face connecting.
You might think face-to-face connecting isn’t efficient, or a bit “old-school.” Sure, it’s more time consuming, but we think it’s incredibly important.
We welcome new clients to our office all the time. We want them to see we have a fully-staffed office with regular business hours. This is often very different than their experience with our competitors. Someone is here to help them in person.
In this crazy world of instant gratification/communication, it’s refreshing to actually see who you are talking to occasionally. I think it makes a bigger impact because it is increasingly rare to do face-to-face time. I’m glad that’s part of my job.
Taking the time to meet people face-to-face and getting to know them has had a significant impact on growing our business. I encourage you to add a couple of face-to-face meetings this week and see what happens!
We’ve all heard it said before, “If it sounds too good to be true, then it probably is.”
Recently I was working with an owner on his vacant property. He insisted on subbing out the flooring job to “his guy” instead of using one of our professional vendors. The reason he made this decision was solely based on cost, and the hope that he could “save” some money. That’s when I wish I would have told him, “If you think it’s expensive to hire a professional, wait until you hire an amateur.”
The money he “saved” was lost in the extra time it took for his guy to get the job done. (Additional days of vacancy due to project work means lost potential income.) The situation got even worse. The job wasn’t done well, which required us to have professionals come in and fix the problems at additional cost. This resulted in even more vacancy.
When hiring a contractor, you typically get what you pay for.
You can typically choose only two of these three categories: Cheap, Fast and Great
- You can have Cheap and Fast but the results will likely not be Great.
- You can have Cheap and Great but it likely won’t get done Fast.
- You can have Fast and Great but that doesn’t usually come Cheap.
Don’t focus solely on the cost… consider the rental ROI.
In business, there are times when you have to spend money to make money. When it’s time to spend, you shouldn’t dwell on how to save money but focus on how to spend your money wisely.
If you have questions about what improvements might bring the best rental ROI for your investment property, give us a shout. We’d love to help you figure it out!
Every year at Home Rental Services, we anticipate late spring and all of summer to be a busy peak season.
We lease homes every day, all year long. If people get to choose when they’ll move, late spring and summer is the time of year they do it. Whether it’s for warmer weather reasons or having to uproot children’s environments, summer break is often the most convenient time to move. Because of this, our typical day at Home Rental Services in the summertime turns into a bit of organized chaos. We love it, and we’re always ready for it.
It reminds me of my family, and the dynamics that change at our house in late spring through summer. My husband and I have three kids ages 15, 19 and 20. Our 15 year old daughter is still at home full-time. Our two oldest boys are in college and have full-time summer jobs. This allows them to move home for their summer breaks. So the same thing happens to me in my personal life and professional life as spring approaches. Things get busy.
This is my second summer of having the boys home, so I was more prepared. Last year, when my oldest came home, I left it up to him to unload and organize his belongings. Long story short—that didn’t work out well. A big pile of his stuff lived in the same spot in his room all summer long. Kinda gross.
This year, I was bound and determined not to let that happen again. My boys share a room (decent-sized, but they still share.) There was no way I was going to let two huge piles of college stuff sit in that room all summer long.
Prior to them getting home for the summer, I cleared out two areas of our storage room. I created space for each boy to NEATLY place things they didn’t care to see again until fall. The rest was to be unpacked in their room. I told them I wanted them to act like they live in their room again and not like they were just visiting. It’s been about a month and so far things are working out pretty well. (My weekly grocery bill to feed my two giant boys, however, not working out so well.)
I continue to improve at home every summer, just like we continue to improve in the business. Each spring, I prepare my office and my calendar, much like I prepared for the boys to be home for the summer. Clearing mess, creating space and welcoming the upswing of activity.
We’re constantly looking for new technologies and programs to make it easier for renters to find your home and sign a lease. We wouldn’t be nearing our 30th year without well-oiled gears that can handle the non-stop merry-go-round of property management and leasing.
Home Rental Services Turns 28 in September
HRS will be 28 years old in September! That’s a lot of years of making sure we’re ready for our busy summer season. Would you believe we’ve written and managed over 10,000 leases since we started? We’re well into July at this point and we are successfully conquering our 28th busy summer season. We hope you’re conquering and enjoying your busy summer as well.
By Paul Branton, Director of Investor Services, Home Rental Services
Do you feel naked when you don’t have your phone with you? Do you find that you always have an electronic device on around you?
If so, you aren’t alone. Would you believe that the average person checks their cell phone over 100 times per day? Wow, it’s no wonder that we feel strange without the devices we’ve come to rely on so heavily.
When I say heavily, I mean that here at HRS, we take technology seriously. We utilize a plethora of databases, apps, websites and tech tools to help increase business efficiency and enhance our client/customer experience. Here is a look at the dedicated folder of “Work” apps I have on my phone!
As this was a growing problem for me personally, and our culture as a whole, I wanted to take a moment to encourage everyone to reduce the attention we give our devices.
You Have to Start Somewhere
Each and every weekend when I get home, I go into my phone settings, select my work email account and click the toggle button that turns it off. This allows me to avoid stress over the number of emails that come through over the weekend. Believe it or not, 100% of the time, the emails are safe and sound… waiting for me in my inbox on Monday morning.
Consistency is Key
Every January for the past four years, my wife and I have taken the month off from social media. We’re not against social media. We realized that keeping up with social media was consuming more of our time than it should. It was distracting us from living. In January this year, I went as far as deleting the Facebook app from my phone entirely. It felt like I got a bit of my life back. And I’ve had no desire to install it again.
Taking it to a Whole New Level
I recently took a three day weekend trip with my family to the lake. I decided I would turn off my phone when we arrived. (I couldn’t turn it off prior because my phone is also my navigation device.)
I powered my phone down and left it in a safe place for the entire weekend. Yes, there were there times when I felt naked because it wasn’t in my pocket. Yes, there were times when I wanted to check the weather or Google something. Or take a picture. But guess what? I survived. And better yet, I was engaged and present with my friends and family the entire time.
Funny side note, when I powered my phone back on, I had a few texts, zero missed calls (ironic) and quite a few emails. Here’s my favorite text message… “Are you alive?”
Its good to know my friend cares… He also sent a text to my wife since I had not responded for a couple days! Thanks Mike!
My challenge to you (and for myself) is to become less distracted by our electronic devices. To be present and “in the moment.” Stop pulling out your phone every time it rings, bleeps or vibrates.
Strike up a conversation with the person on the elevator or in the long line at Chipotle. I bet you notice the difference. And I bet you like the change. Good luck!
Author: Sandy Fisher, Director of Business Development
I have several family members and good friends who I chat with occasionally for support, guidance, learning opportunities, etc. I don’t know what I’d do without those regular or random chat sessions. Whether or not I want to hear what they have to say, it’s such great support for my personal life for sure.
However, I also have this little professional life to which sometimes my friends and family can’t really relate. Lucky for me, one of my job “duties” is attending a once a month small group session with a great bunch of Realtors®. We offer that same support, guidance, and learning opportunities to each other for what we do each day in our businesses. There are about ten of us who meet, and we have a leader who tries to keep us on a positive and productive track during our hour and a half long sessions.
Initially, when I became part of this group, I really didn’t look forward to it. Everyone was incredibly nice and enjoyable to be around, but I thought I had too many other work-related things I needed to be doing and just felt this was holding me up. A couple of months of meetings went by with me dutifully attending all of them, and I slowly felt myself looking forward to being there. I was learning names and personalities to go along with them, and they were learning and knowing more about me as well.
And now, after a year and a half of almost 100% attendance, I can’t wait to go. We all have the monthly assignment of bringing new ideas and problems to the table. We all take our turns sharing and giving feedback to each other, and then we all leave with our work tanks full and ready to go for the next month.
Our group does have the benefit of a successful process that helped us all find each other, and systems within that process that help us move forward with each meeting. But it’s not that hard to put it all together, and to be honest, we don’t follow the plan we are supposed to as there’s usually so much we want to share and learn.
The benefits of this professional support definitely outweigh the little bit of time away from my desk, and certainly make my desk time much more productive. If you are not currently in a support group for professional reasons, I’d highly HIGHLY recommend it.
Author: Paul Branton, Director of Investment Services
It has arrived! Summer 2017 officially starts today, June 20th! I can hardly believe that its already here, can you?
If you can recall, back in March I authored a post asking “Who’s ready for the Madness!?!?” and in May I wrote “You have to spend money to make money.” Well, I’m happy to report that the Home Rental Services team was ready for the madness! (and now we’re ready for Summer!)
Over the past few months, we’ve had the privilege of helping quite a few investors do exactly what I discussed in my previous posts. We’ve been able to help these investors in a number of ways such as: identifying properties, preparing renovations budgets, coordinating renovation work and of course, professionally leasing and managing the properties as long term rental investments.
In order for you to have a better idea of the process, here are a couple of examples:
Investment Property Example #1
Location: South Overland Park
Under Contract: 3/16
Purchase Price: Low $300’s
Home Specs: 2 Story Plan with 4 Beds, 3.5 Baths, Finished Walkout Basement, Approximately 3,000 Sq. ft., 2 Car Garage
Rental Rate Projection: $2,300-$2,500
Renovation Budget: $13,693
- New Deck w Cedar and Composite Materials
- Adjust Doors
- Glaze Hall Shower
- New Tile Floor in Master Bath
- Demo Fluorescent light in master and install LED can lights
Work Started: 5/1
Work Completed: 6/2
Lease Starts: 6/12
Lease Term: 3 years
Rental Rate: $2,395/month
Investment Property Example #2
Location: South Olathe
Under Contract: 3/27
Purchase Price: Upper $200’s
Home Specs: California Split Plan with 5 Beds, 3 Baths, Finished Walkout Lower Level, Approx 2,500 Sq. ft., 3 Car Garage
Rental Rate Projection: $1,950-$2,150
Renovation Budget: $15,439
- Junk Removal
- Extend downspouts
- Demo Concrete pad and install sod
- Paint Garage Walls and entry door
- Remove Curtains and Install 2” White Faux Wood Blinds
- Install new Hardwood flooring at front living room area
- Misc. Painting
- Tile Master Bathroom
- Install new Vinyl Plank Flooring in Lower Level Rec Room
Work Started: 5/1
Work Completed: 6/3
Lease Starts: 6/30
Lease Term: 2 years
Rental Rate: $2,250
On new acquisitions, I tell Investors to plan for about 45-90 days of combined renovation and marketing time. As a frame of reference, in 2016 our average combined renovation and marketing time for new acquisitions was 59 days. This means that once the home closed, it was placed on the market for rent, renovations completed, the lease was executed and tenants moved in, all in under 60 days!
If you or someone you know is interested in learning more about real estate investing in Kansas City, please let us know! We would love to help!
Now I’m headed to the driving range… right after I grab my first Quik Trip Dr. Pepper for the summer of 2017! Have a fun and safe summer everyone!