E-Renter News

The real estate market is still precarious, at best. Some areas of the country, like Durham, NC and Knoxville, TN, have been identified as good possibilities for rental property investment, while others,including Reno, Las Vegas and Orlando, are described as “dangerous.”

If you’re thinking of entering the world of real estate investing, here are some tips we’ve gathered to get you started on making a good decision:

Read, read, read. There are thousands of books out there on real estate investing, from Real Estate Investing for Dummies to The Beginner’s Guide to Real Estate Investing. Both are available on Amazon.com.

Ask, ask, ask. Real estate investors are full of advice. Find investment property owners in your town, and invite them to coffee. They will likely be happy to offer you some words of wisdom.

Keep it local. When starting out, it’s a good idea to avoid long-distance ownership. Some would say avoid it forever, but there are plenty of long-distance landlord success stories out there, too. Before you consider a property, learn everything you can about your local real estate and rental market.

Enlist an expert. When you start getting serious, find a real estate agent who knows the rental market. There could be some screaming deals on single-family homes or multi-family buildings in your area.

Decide if you’ll manage your property yourself or hire a property management company. There are plenty of pros and cons about both choices. Educate yourself through online research or consult the books you purchased in step #1.

Don’t spend all your cash on the purchase. You’ll need some in reserves for repairs, maintenance and emergencies. Or even to buy your next investment property!

Talk to a lawyer and an accountant. Learn the landlord/tenant laws in your state and city, as well as the basics of taxes for rental property owners. Consulting with professionals up front can help you make the final decision on whether or not to invest in real estate.

Today could be the very best time to invest in real estate, if you do so mindfully.

• Create a business plan and strategy.
• Do your homework first.
• Stick to your plan.
• Consult with your attorney and accountant for sound advice.

Good luck!

A heartbreaking side story to the U.S. foreclosure crisis is the huge number of animals being surrendered to shelters. Family pets are being told they’re not welcome in the new living situation, and both people and animals are suffering as a result.

Things got so bad in Phoenix, AZ, that a real estate agent donated a rental property to serve as a “halfway house” to shelter dozens of animals that real estate agents discovered in foreclosed homes and empty backyards. Those unfortunate animals are not included in the unprecedented numbers of foreclosure pets being abandoned at shelters.

Losing their home to foreclosure has meant millions of Americans are returning to rental housing. That’s good news for landlords who need tenants. But it’s turning out to be bad news for many animals. If you’re a landlord with a “no pets” policy, you might want to reconsider—for the sake of your tenants and their furry family members.

More and more rental properties allow pets. It’s good business, since 39% of U.S. households include a dog and 33% a cat. People spend more money on their pets every year. Opening your rental units to pets will help you keep them filled—and often with responsible tenants.

Here are a few tips for landlords who are considering taking down their
“no pets” signs:

Seems like everything, including banking, is done online now. Most landlords have experience with online bill pay and account reconciliation, but some prefer to deposit physical rent checks into their accounts. They’re willing to accept the downsides, including waiting for mailed checks or collecting rent checks from tenants. Then there is the time involved in filling out deposit slips and mailing checks or dropping them off at the bank. And on top of those hassles, many banks charge a fee for every item deposited.

Many successful landlords allow tenants to direct deposit their rent into the landlord’s account—and many require it. If you’re hesitant about giving tenants your bank account information, or feel like something bad could happen if you go to direct deposit, you probably don’t need to worry.

Is Direct Deposit Safe?
Direct deposit has been around for a long time. Millions of banking transactions are conducted electronically around the world every day. So it makes sense that if there were some scandal or huge problems with the direct deposit system, we all would have heard about it.

What Can My Tenants do with my Information?
Let’s face it—most tenants are not hackers with the knowledge to surpass the financial industry’s safety net and firewalls. So it’s safe to assume tenants will not hijack your bank account after you provide them the information they need to direct deposit their rent payment. If this causes worry, then set up an account to receive the rent payments, then sweep the cash into another account.

How Can I Keep Track of all the Payments?
Tenants can indicate their address or unit number, name, or account number on their payment. If they forget, it could be difficult to trace their payments if all your rents are the same amount. Some landlords avoid this problem by setting up rents at slightly different levels: Tenant A pays $449, Tenant B $450, Tenant C $451, etc.

If collecting and depositing rent checks is taking too much of your time, try direct deposit. It works for thousands of other landlords.

We know plenty of landlords who could be considered the original environmentalists. You know the type: they re-use fixtures, cabinets, carpeting, paint, and flooring in any way they can. They used to be considered “cheap,” but their way has always been better for the environment.

And now, “green” people are a whole section of the demographic landscape. Many landlords are specifically appealing to them, knowing that these folks tend to vote with their dollars. They will choose a place to rent based on its greenness.

If you’d like to borrow a few tricks from green landlords, and appeal to environmentalist renters, here’s five things you can do:

1. Re-use as much as you can. Keep usable fixtures and materials out of the landfill. It’s perfectly fine to let prospective tenants know that you recycle and re-use. Most of your environmentalist renters are shopping at thrift stores, anyway—they’re accustomed to used merchandise.
2. Host a "stuff swap" every six months or so. Allow tenants to display things they no longer need or want, and pick up the same from their neighbors. Offer to take leftovers to Goodwill, the Salvation Army, or other charity re-selling organization.
3. Install bike storage. More and more folks are turning to bikes as an alternate (or even their only) form of transportation. Don’t make them lug their bikes up several flights of stairs or chain them to light poles. Providing bike racks is the way to go—and if you remove a parking space or two to accommodate bikes, even better!
4. Switch to a green lawn maintenance company. Chemicals and pesticides are no good around kids and pets—and the groundwater and streams can benefit from fewer fertilizers.
5. Provide opportunities to recycle. You can probably order bins and even composting containers from your waste disposal service company. People will recycle if given the opportunity--and it might even cut your garbage pick-up bill.
6. Reduce water use. Replace water-wasting toilets with new reduced-flow models, install aerators on faucets, and switch to low-flow shower heads.

RentBits.com recently conducted a survey of over 1,000 renters. The results show few surprises, but it’s good to know what your tenants—and potential tenants expect!

First, an astounding 72% of renters start searching for their new rental home or apartment online. If you’re not advertising with the online rental search engines, Craigslist.com, and your local news site’s online classifieds, you’re probably missing the majority of your market. And do advertise on as many as you can. 93% of searchers look at 2 sites, and 25% search on more than 10 sites.

And not only do they start the search through Google or Bing or Yahoo’s search engines, rather than going straight to the rental site or Craigslist, they are using specific keyword phrases. For example, a typical rental housing search will begin with the person entering “St. Louis apartment pets $650.” So make sure your ad headline includes what people are searching for. Don’t use “For Rent” or “Apartment For Rent” as your headline.

Price and location continue to be the most important factors to potential tenants. Then they look for photos, lease terms, deposit amount, whether pets are allowed, and if there is a washer and dryer included. Be sure to include plenty of photos of your rental unit—especially the bathrooms, kitchen, and closets. Multiple photos keep people on the site longer and get more attention. They also get more click-throughs, where instead of leaving the site, the user takes action, like asking for more information.

Be responsive—potential tenants expect a response to their inquiry—whether made by telephone or online—within 24 hours.

Houses are more in demand than apartments, according to 83% of respondents. It could be because of the many foreclosed homeowners who are back in the rental market. With more apartment inventory than ever, that’s not the best news for apartment property owners and managers!

As more and more landlords and property managers turn to the web for advertising their vacant properties for lease, it’s helpful to know all your options. Here’s one you might not have seen yet: RentShout.com.

Rather than aggregating Craigslist.org,local online classifieds, and other For Rent site ads into a directory, RentShout turns the “funnel” around. When you advertise your rental on RentShout, it “shouts it out” to multiple rental websites and search directories, as well as video and social networking portals.

RentShout even creates optimized videos of your rental properties, using images you upload. The videos are then posted to your listing page, as well as popular video sites that your possible tenants may be on already, like YouTube, vimeo, and viddler.

Whether you own one single family rental house, or manage 25 apartment buildings, you can advertise on RentShout and see your listing on 60+ sites. Users also have access to detailed tracking reports, helping them capture leads and create more effective ads. Every listing has its own url, as well as a unique telephone number (that is forwarded to your designated phone)—so tracking is more effective. The urls also include buttons for one-click sharing to Twitter and Facebook.

For apartment communities, RentShout offers Community Web Pages, which offer complete information on an apartment community, amenities, location, and floor plans. It also allows property managers to advertise individual apartments that are available for rent. Contact forms make it easy to respond to interested potential tenants!

RentShout says every tenant searches the web differently, so having your listings across as many different types of websites and search engines as possible helps maximize your exposure. They may be right. You might want to check out RentShout for yourself!

The tough rental market that began the last quarter of 2008 might be over soon. Some markets are showing rent increases, and most are showing signs of stabilization. This is good news for rental property owners and managers. As the rental market recovers, when can landlords start recovering, too—by raising rents and cutting perks?

That answer depends on your market. If it’s still hurting, like in Las Vegas, San Jose, or San Francisco, you might need to hold off on trying to recoup your recent losses. In other markets, it’s best to do your homework before raising rents. Check out the rents and vacancy rates in your area. Talk to other landlords and property managers. Spend a little time making phone calls or email inquiries and be willing to share information with others in the rental business.

Whether or not a landlord should raise rents or cut perks also depends on your financial picture. If you’ve had to cut rents to fill vacancies, or just to jump-start cash flow, it might be a good time to look hard at your bottom line. If the balance sheet shows an unhealthy situation, it doesn’t make sense to continue on—especially if an increase can help stop the bleeding. Some rental businesses can absorb losses for a short time, but most cannot—and none can suffer negative cash flow forever.

If it’s time to raise rent, let your tenants know before their lease is up. Offer a renewal at the new rate, and then start the negotiation process. If you’re dealing with a good tenant, be flexible—and if they refuse the increase, talk about other ways to renew the lease to your advantage. Ask them to pay the cable or another perk you might have thrown in during the existing lease negotiations.

Be flexible. It’s easier and less costly to keep a good tenant for another year than to repaint, repair damages, and find another good tenant. But if you ask for a higher rent that is within your local market’s asking rents, and the tenant refuses to pay, you might need to let them go. Replacing a lower-paying tenant with a higher-paying one could be better for your bottom line.

Meet Demand and Reduce Costs

Landlords everywhere are discovering the joy of implementing non-smoking policies in their rental properties. Imagine countertops and vanities free of smoke burns; carpets with no melted fibers; walls without nicotine stains. And the lack of cigarette odors! Why wouldn’t a landlord prohibit smoking in all rentals?

Check out these numbers from a recent survey of renters:

• Three-quarters would rather live in a smoking-restricted building, "other things being equal."
• 52% would even pay extra rent to live in a smoking-restricted building.
• 42% would feel uncomfortable renting a unit next door to a smoker.
• Three-quarters say it's okay for landlords to prohibit smoking inside rental units to keep secondhand smoke from drifting into other units.
• Only 26% currently live in a building with smoking restrictions.
• More than a third of renters in multi-unit buildings are regularly exposed to a neighbor's secondhand smoke.
• Most renters don't smoke and many smokers smoke outside their units.
• Three-quarters of renters don't smoke at all.
• 19% of renters smoke daily—but only 11% of renters smoke inside on a regular basis.

Smoking is down across the United States—so it only makes sense that most of your potential tenants don’t smoke, and don’t want to deal with a previous tenant’s left-behind smells and stains. Smoke gets into carpets, drapes, and walls—and no matter how much cleaning you do when a smoker moves out, the smell lingers on.

When you implement a no-smoking policy, the expense and trouble of eliminating cigarette odors vanishes. You’ll save on paint and cleaning.

Smoking damages rental units. Burn marks in carpet; nicotine stains on counters where smokers “rest” their cigarettes; holes in vinyl flooring where a cinder landed. Fixing the damage is expensive and time-consuming. Who needs it?

A no-smoking policy means less replacing of carpet, vinyl flooring, and countertops.

Smoking is a danger to other tenants. While no laws specifically protect tenants from others’ second-hand smoke, if a tenant or their child suffers from asthma or other respiratory disease, they might qualify for protection under the Fair Housing Act. This could trigger legal action against the landlord. It’s easy to eliminate this possible liability.

A smoke-free building keeps all of your tenants safe from second-hand smoke.

Smoke-free housing is in demand. Just as hotels and rental car companies meet non-smokers’ demands with smoke-free rooms and cars, so can landlords meet this demand—and rise above the competition. In this difficult rental market, landlords need every advantage they can get to entice tenants to sign a lease. A large market wants smoke-free housing—and you can provide it to them.

No-smoking polices are legal. Smokers are not a protected class, and nobody has a “right” to smoke—it’s not like disabled tenants, who have a right to access, for example.

Remember—restricting smoking in your rental housing not only keeps your expenses down, it’s good for your tenants’ health. And that makes it a winner for everyone!

Source: Smoke-Free Housing Project

Depending on where you live and own rental property, you might be thinking the rental market may never rise from its current valley of lower rents, higher inventories, and less-qualified tenants.

But fear not—the tide may be turning, finally. Here’s why:

• The economy is improving. Job losses have stabilized and unemployment is steady. Earnings are up at several major U.S. companies, and retailers have seen increased sales. Even oil prices are rising again—another positive indicator.
• Demand will increase. The 20 – to – 34 age group, made up largely of renters, will grow by 5 million over the next decade, according to reports from real estate investment firms.
• Sharing housing will decrease. When the job market improves, renters will move back out of mom and dad’s house or away from sharing apartments with friends.
• Landlord concessions are drying up: More desirable neighborhoods in New York City, which has been experiencing a renter’s market, are seeing an end to landlord concessions like free rent and WIFI. Where property owners were paying broker’s fees to entice new tenants, the tenants are again paying the fees. And two months’ free rent has become two weeks’ free rent.
• Developers are getting back into the development business in more stable markets (as in, not Las Vegas, Phoenix, and parts of California). Real Estate Investment Trusts (REITs) are expected to start $1 billion in new multifamily projects, a huge increase over 2009. It seems they are betting that by the time the projects are completed in 2011 and 2012, the recovery and demand will match new supply.

While all these signs point to long-term, not near-term, improvements, they might add up to a reason for cautious optimism for stressed-out landlords and property managers!

In some good-for-a-change housing market news, S&P/Case-Shiller reports that 2009 home prices actually increased in several of 20 metropolitan areas studied. Overall, prices dropped 2.5 percent, mostly because of hard-hit areas like Las Vegas, Tampa, and Detroit, where prices declined 20.6 percent, 11 percent and 10 percent respectively.

But in San Francisco, Dallas and San Diego, prices rose by 4.8%, 3% and 2.7%. Overall, there is an indication that year-over-year declines in some markets are reversing, which may mean the market is beginning to show signs of stabilization. In fact, Las Vegas actually showed an increase in home prices in December, 2009—the first such increase in three years.

Do these price reversals mean the economy is finally on a rebound? Maybe not. With unemployment still high, and all indications pointing to a slow recovery in the job market, we probably should not plan on rapid home value appreciation and another housing boom any time soon. More likely the government’s involvement through the home buyer tax credit and buying up mortgage-backed securities is bolstering the housing market.

What does this mean to investment property owners and buyers? Is now a good time to get back into the market? There is no single answer to that question; like most investment questions, it’s best to ask your professional financial advisor. The experts say that while mortgage rates won’t stay this low forever, we’ve probably seen the last of the housing market buy/flip mentality for a while. We should all put our “buy before the price doubles” mentality on the shelf. At least for now!