Searching for the Needle in the Haystack?

1

Searching for the #NeedleInTheHaystack? Search no longer! We are the top-rated property management firm in the #TriangleArea!

#Apex #Cary #FuquayVarina #HollySprings #Morrisville #Raleigh

Blasting Your Landlord Online? Pick Your Words Wisely.

1Few things in life are more irritating than a bad landlord. Typically tenants are trapped by their lease, so they are powerless to combat landlord deficiencies until the lease expires. Frustrated tenants must find it quite satisfying to stick it to their landlord in a scathing online review. But giving into that temptation too much can lead to a nasty hangover, as one loquacious tenant discovered in a recent court ruling involving a Yelp review.

Andreas Papaliolios lived in the Jones Building from 2004-08. In 2012, writing under the pseudonym “Sal R.,” he posted the following review of the building on Yelp:

Sadly, the Building is (newly) owned and occupied by a sociopathic narcissist—who celebrates making the lives of tenants hell. Of the 16 mostly-long-term tenants who lived in the Building when the new owners moved in, the new owners’ noise, intrusions, and other abhorrent behaviors (likely) contributed to the death of three tenants (Pat, Mary, & John), and the departure of eight more (units 1001, 902, 802, 801, 702, 701, 602, 502) in very short order. Notice how they cleared-out all the upper-floor units, so they could charge higher rents?

They have sought evictions of 6 of those long-term tenants, even though rent was paid-in-full, and those tenants bothered nobody. And what they did to evict the occupants of unit #902, who put many of tens of thousands of dollars into their unit, was horrific and shameful.

This is my own first-hand experience with this building, and its owners. I know this situation well, as I had the misfortune of being in a relationship with one of the Building’s residents at the time, have spent many days and nights over many years in the Building, and have personally witnessed the abhorrent behavior of the owners of the Building.

There is NO RENT that is low enough to make residency here worthwhile.

Unhappy about this review, the landlord sued the tenant for defamation. The tenant moved to end the lawsuit early, characterizing it as a lawsuit trying to suppress socially beneficial speech (a “SLAPP”). The appellate court held that the landlord showed enough merit to proceed with the case.

Writing a legally defensible online rant is unexpectedly tricky. You’re free to vent, but you’re not free to make false statements of fact, and the distinction between venting and defamation isn’t always clear. In this case, the tenant doesn’t have to show that the landlord was actually a sociopath, but the court identifies several claims that may require validation: that the landlord sought to evict 6 tenants, including one who had made substantial improvements to the apartment; and that the landlord likely contributed to the deaths of 3 tenants and the departures of 8 others. The court summarizes:

While Papaliolios’s review does contain epithets not meant to be taken as serious assertions of fact, it also contains statements that could reasonably be understood as conveying facts–each provable, and each meant to be used by prospective tenants to evaluate the Jones Building as a future residential choice.

Having determined that some of Papaliolios’ statements were probably factual and thus falsifiable, the court says the landlord provided sufficient evidence indicating their possible falsity. For example, of the 3 claimed deaths, two of the people were still alive.

The court’s overall assessment of the case:

While many Internet critiques are nothing more than ranting opinions that cannot be taken seriously, Internet commentary does not ipso facto get a free pass under defamation law.

I previously wrote about another landlord lawsuit against a tenant for an allegedly defamatory Yelp review. Combined with this lawsuit, there’s good reason to believe that landlords aren’t afraid of going to court if tenants write sharp reviews.

Recently, Lawyers.com issued survey findings that most social media users don’t realize they can be sued for their online content. Percentage-wise, few online postings lead to court proceedings, but unlucky authors who are sued are often dumbfounded by their potential legal exposure for what seems like mere online chatter. One of my guiding principles about blogging is that every time I make a blog post, I bet my house. In the case of tenants reviewing their landlords, they may not have a house to bet, but they are making a sizable legal bet nonetheless.

Case citation: Bently Reserve L.P. v. Papaliolios, 2013 WL 3949029 (Cal. App. Ct. July 30, 2013)

Source: Forbes.com

An Advisor Helps Your Investing Career

1Any competent real estate investment advisor will tell you it’s easy to make your fortune with a real estate career – as long as you know what you are doing. The first advice your real estate investment advisor should give you is to not jump in with both feet right away.

Before making your first investment, you need to do some studying. First of all, do you want to invest in residential or commercial real estate? Which one you chose affects the real estate investment advisor you work with and what you need to be studying.

Your Real Estate Investment Advisor Shortens Your Learning Curve

Once you have a real estate investment advisor, he or she will help you decide what books and articles you need to learn from. If you go into commercial real estate, you will have a ton of options to choose among. Your advisor will give you the pros and cons on subjects like industrial properties, apartment buildings, retail space, office space, etc. It will greatly increase how fast you conquer the learning curve.

With your new knowledge from a general overview, you’re advisor will help you narrow down a more detailed reading list. Now is also the time to start talking to everyone in your chosen market segment that will give you a few minutes of his or her time. You want to advance your career with knowledge gained from other investors, attorneys, brokers, appraisers, mortgage brokers etc. Your real estate investment advisor will have contacts he or she puts you in touch with.

Next, you want to select a geographic market and learn everything you can about it. If you decide to get into retail space, pick the brain of your real estate investment advisor to learn everything you can about the current market conditions and for tips selecting a geographic subsection of your local market. Then talk to existing tenants in the market to learn what is going well and not so well for them.

Your Advisor Teaches You Creative Financing

Having cut your learning curve substantially with the help of your advisor, you will now be ready to make your first investment wisely. In all likeliness, you’ll have come across several potentially highly profitable investment opportunities during your studies.

This is where your real estate investment advisor brings invaluable knowledge to your first real estate investment. It’s all about the money. You’ll gain great help performing your first due diligence. When the numbers make sense, you’re advisor will show the ins and out of creative financing. You’ll learn about low cost and no cost techniques such as sandwich lease purchases and seller financing. There are also many sources of private funding available.

Source: realtybiznews.com

Looking for the Perfect Tenant? Seek out These 6 Traits!

1Your most important decision that will determine the success or failure of your rental is the person you put in the property. A bad tenant can potentially cause years of stress, headache and financial loss, while a great one can provide years of security, peace and prosperity.

So, don’t underestimate the importance of renting to only the best tenants. While it’s not possible to know with 100 percent certainty what type of tenant your applicant will be, here are six telltale signs and traits that will give you a pretty darn good indication that this person is great tenant material:

1. The ability to pay

The first and foremost quality of a good tenant is his or her level of financial responsibility and ability to afford the rent. Without proper payment, the landlord may be forced to evict the tenant and face potentially thousands of dollars’ worth of legal fees, lost rent and damages.

Most landlords require that a tenant’s (documented) income equal at least three times the monthly rent. Many tenants believe that they can afford more than they really can — so it is the landlord’s job to set the rules to protect his or her investment. If the tenant is already financially responsible, income that amounts to three times the monthly rent should be sufficient.

2. The willingness to pay on time

While some landlords look at late rent as a benefit because of the extra income from the late fee, a late-paying tenant is more likely to stop paying altogether. The stress generated when the rent doesn’t come in is not a pleasant experience and can be avoided by renting only to tenants with a solid history of paying on time.

3. A positive long-term outlook for job stability

While a tenant may be able to pay the rent and pay it on time right now, his or her ability to do so in the future is often determined by the job situation. If this person is the type to switch jobs often or has had long periods of unemployment, you may find long periods of missed rent.

4. Cleanliness and housekeeping skills

No tenant stays forever — and upon departure needs to leave the property in good condition. As such, it is important that the tenant’s day-to-day lifestyle be clean and orderly. This means taking good care of the property.

5. An aversion to crime, drugs, and other illegal activities

A person who has no regard for the law will also likely have no regard for your policies. Tenants who engage in illegal activities will cause you nothing but stress and expense. So, be sure to run a background check on your prospective tenant to ensure he or she doesn’t have a shady past.

That said, keep in mind that a prospective tenant’s past history of drug or alcohol abuse could be considered a medical problem — and thus something you can’t reject him or her over without being guilty of violating fair housing laws. If this person is selling drugs, that’s different from using. Be sure to study up on the fair housing laws in your area.

6. The ‘stress quotient’ — how much stress will this person cause you?

The final quality of a great tenant is something I call the “stress quotient” or, in other words, the amount of stress a tenant will cause you as landlord. Some tenants are very high maintenance and constantly demand time and attention. Others simply ignore the terms in their lease and need constant babysitting, reprimands and discipline (late fees, notices, phone calls, etc.). This type of tenant will only be a thorn in your side.

So, is a perfect tenant even possible?

Obviously, no tenant is going to be 100 percent perfect, so deciding how much near-perfection you require is a personal choice that largely depends on your desired involvement and the community in which your property is located. If tenants are difficult to find, it may be financially advantageous for you to rent to a less-than-perfect tenant in order to fill a vacancy.

Notice the use here of “less-than-perfect tenant,” and not “anyone.”

On the other hand, if you have plenty of applicants to choose from, you can be significantly more picky. Just remember, it’s much better to have your unit vacant a little longer while you wait for the right tenant than to rent to the wrong person.

So, how exactly do you weed out the bad tenants and find those quality tenants? The answer involves setting strict qualifying standards and screening your applicants to verify whether or not they meet those standards.

Source: stamfordadvocate.com

Should you allow pets in your investment property?

1If you are feeling hesitant about allowing tenants with pets to rent your property, it might be time to take another look.

Property investors have long been hesitant to list their properties as pet-friendly on the rental market. Fears that animals will damage their property prevent landlords from all the potential benefits of offering a pet-friendly property. It is important for homeowners to consider all the benefits and potential pitfalls before a decision is made, to ensure they are not needlessly excluding a large amount of prospective tenants.

Benefits of managing a pet-friendly property

  • Listing your investment property as pet-friendly immediately increases your prospective tenant pool
  • Your property has an automatic advantage over competing properties, without having to reduce rental prices – particularly in inner-city properties where pet-friendly properties are few and far between
  • Advertising your investment property as pet-friendly makes the rental more in-demand, which reduces time and money spent on advertising
  • If the demand increases significantly, you may look at increasing the weekly rent for the property. Tenants with pets are willing to pay more to secure (and then stay in) a property that fits their needs
  • In-demand properties also have very short vacancy periods, limiting pauses in cash flow from rent payments
  • Once a pet-owner secures a property, they feel ‘at home’ having their pets with them, and are thus less likely to leave. This creates a steady rental income for the landlord
  • Pet-owning tenants also prefer to avoid the apartment hunt, as they are very aware of the difficulties of finding a pet-friendly place. This will ensure they stay put in your property

Pitfalls of managing a pet-friendly property

  • Potential damage from animals chewing or scratching the property
  •  Potential odor from animals
  • In apartment buildings, neighbors may be unhappy with the idea of living in such close proximity to animals
  • Increase in homeowner’s insurance fees

How to make your investment property pet-friendly Making slight modifications to your investment property can minimize the damage caused by tenants’ pets and the need for excessive maintenance.

Here are some easy things you can do to properties within your portfolio to make them more pet-friendly and reduce your long-term outgoings:

  • Tiles or linoleum flooring is a lot more practical than carpet, as it is easier to keep clean and does not pick up odors, fur or waste stains. They are also both more practical than floorboards, as they are less likely to be scratch or stained. This is not only attractive to the landlord, but also the tenant, as day-to-day cleaning and maintenance is minimised
  • Ensure outdoor space is securely fenced off to attract tenants with outdoor pets and reduce their stress levels
  • Additional features such as doggie-doors have greater appeal to renters, and therefore warrant an increase in the asking rental price. This will also reduce potential damage to doors and windows as the pets won’t have to scratch to signal their intention to go outside
  • Create a pet-keeping contract/agreement for tenants to sign with the lease, to agree on responsibility of any additional cleaning or repair costs within the lease period. This will make responsibilities clear and will likely reduce any confusion in the event of damage and/or at the end of the lease

Pets in apartment buildings Keeping animals in the confines of an apartment is a more complex process than allowing pets in a house, townhouse or villa – and it may require more planning. However, it is certainly achievable.

When it comes to strata buildings, there are general laws in place that vary from state to state. As a general rule, strata communities have the choice of one of a selection of options regarding the acceptance of pets in the building.

Some buildings may not allow pets at all. Some may allow tenants to submit a ‘pet application’, and make a decision based on the type of animal, the breed and temperament, and any supporting documentation or references. The reason for this process is to protect the health and well-being of tenants and pets. Very large animals are unlikely to be accepted into an apartment building, as there is not enough space for the pet to live comfortably, and allow other tenants to live undisturbed.

With an increase in demand for pet-friendly rental properties, developers and strata managers are becoming aware of the benefits of running a pet-friendly building.

Developers could decide to design and construct their apartment building as pet-friendly from the get-go – which would mean many of the modifications and additions listed above would come as standard. There is also the advantage of tenants living among other pet-lovers, reducing the risk of upsetting neighbors and inter-building disputes.

Property investors can have tenants sign a standard Pet Keeping Agreement, which requires them to agree to a certain level of cleanliness, minimal noise, and responsibility for damage to the property caused by a pet. A Pet Keeping Agreement also gives the body corporate peace of mind, as they know the tenant is in breach of contract should they disturb the living environment for other tenants.

It is important for landlords to be covered by the right homeowner’s insurance, as terms change when pets are permitted in your property. Investors should do their due diligence when making the decision to approve a certain type of pet, as some pets are considered bigger risks than others, which can hike up your insurance premium.

There are plenty of low-maintenance pets that won’t have much of an effect, including fish and rodents in enclosed cages, as these animals are contained, easily cared for, and won’t provoke noise complaints.

Source: smartpropertyinvestment.com

4 Things to Consider if You’re Looking to Buy a Rental Property

1Buying a rental property can be a very lucrative and sound financial investment. But it can also winding up costing you, particularly if you haven’t done your due diligence prior to making a purchase.

1. Location, Location, Location

Location for the property is critical. Buyers tend to think of a rental property in terms of dollars and cents related to the transaction with less focus on location. While this isn’t necessarily a bad strategy, a rental property in a fantastic location will always have strong rents, fewer vacancies and much better appreciation over time compared to a property with better cash flow in a less desirable location.

2. Get Real About Repairs

Generally, it is a good bet when you can buy a rental property where the rent is greater than the mortgage payment, turning your cash flow positive. Still, it is a good idea to allocate at least 5% of the gross rents for the inevitable repairs that you’re going to incur as a landlord. These repairs include but are not limited to:

  • New roof
  • New/repaired gutter
  • New paint
  • New kitchen
  • Various repairs

3. Return on Investment

Considering how much cash your rental property will need to earn X return is critical. Rate of return (ROI) is your net (after expenses) annual income divided by the capital investment. For example, if your net income is $1,000 per month and your cash to buy a rental is $100,000 (down payment + closing costs), then $12,000 divided by $100,000 equals a 12% return.

Each property will have a different rate of return. What’s the best return to aim for? That depends on your appetite for risks, cash on hand and rents the property in question could generate.

4. Property Type

This one is big and is by far the most important decision you’ll need to make. To give you some general rules of thumb, let’s consider single-family homes, condominiums and multi-family properties. Multi-family properties almost always generate more rental income than single-family homes. A multi-family home is essentially getting several single-family homes for one.

Here’s a reason: Buying a rental, such as a duplex, allows the landlord to have flexibility when there’s a vacancy. If one unit is vacant, the other unit makes up for the loss and vice versa. The combination of more units means more revenue-driving potential and higher returns.

Single-family homes can be solid financial investments as long as you do your homework. A single-family home in a great location can be a sound financial investment. However, if you have a vacancy, you don’t have another unit to offset loss of rent — unless you have a single-family home with a granny unit. The granny unit can help offset that negative rental impact from the vacancy.

Condominiums are at the end of the list of properties types to consider since they are the last to appreciate and the first to depreciate in economic cycles. Additionally, you’re sharing units with other owners, which makes the income potential limited compared to a single-family home or a multi-family property. Taking it a step further, the homeowner’s association payment can be anywhere between $200 and $400 per month. That’s a big chunk of your cash flow that otherwise could be used to plan for upkeep or pay a property manager.

The Big Picture

Ask yourself the following questions when evaluating whether a rental makes sense for you:

  • Is the property in a good location that would command solid rents and will always be desirable?
  • If it’s not in a good location, how much better is my ROI?
  • Is this a property that will need minimal or manageable upkeep over the long-term?
  • Is this an older property that will need more upkeep?
  • How is this benefitting me financially?

A good rule of thumb when buying a rental property is to make sure you understand all the figures associated with this high-ticket investment. (Remember, this can include checking your credit, since a good credit score will generally net you lower rates on a mortgage. You can view two of your credit scores, updated every 14 days, for free on Credit.com.) The better handle you have on the numbers, the better chance you will have at purchasing a solid rental property.

Source: blog.credit.com

Some people feel the rain, others just get wet.

1

Some people feel the rain, others just get wet.