How Property Management Benefits REALTORS

As a real estate agent, finding the most efficient way of doing things can save you a lot of money, frustration and time. More and more, Realtors are choosing to work with property management companies to help streamline their day-to-day responsibilities and to increase earnings.

If you’ve been thinking of working with a property manager, you’ll be interested to learn about these three huge ways that property management benefits Realtors.

Property managers open up your earning potential

If you’re spending your time dealing with your investment property, you’re losing valuable time you could be using to show and sell properties that are on the market. Losing that time can mean losing sales, which means less earnings overall—not an ideal situation by a long shot.

When you have a property management company taking care of things for you, you can spend your time on more lucrative ventures that help you grow your business and earn more money.

Think of it like this: If, for example, you earn 5 percent commission, and you spend three hours showing a $500,000 property and closing the deal, you stand to earn $25,000 for that amount of work.

Now, think of spending those same three hours at your rental property fixing a toilet or repairing a broken heater in the middle of winter. If you’re not working with a property management company, you can add up those potential earnings over time, and the amount of money you’ll be missing out on can become downright staggering.

Why spend your most valuable time on your investment property? Instead, you could be doing what you do best and earning more money for it—that’s an ideal situation.

You don’t have to deal with maintenance

When you have to take care of something at your property, such as a leaky faucet, you might quantify it as, say, an hour’s worth of work that you’ll lose out on. However, think about the real amount of time you spend working and resolving an issue like this.

You first have to find a plumber or maintenance worker who can fit your property into their schedule–this can involve calling a number of vendors.

Then, you might have to meet that worker at your property. Depending on how close you are, getting to the property can eat up a significant chunk of time as well.

Waiting around while the repairs are made so that you can pay the bill for it is even more time. Add up that “hour” for fixing a leaky faucet, and you may have lost almost your entire afternoon. When you have a property management company taking care of maintenance at your property, the amount of hassle you have to deal with is significantly diminished.

Your time becomes yours again

If you got into owning investment properties to earn more money, you might be doing so, but at the expense of your free time (and your time doing your “real” work!). Spending time finding tenants for your rentals, vetting contractors for maintenance, chasing down rent checks, and other minutiae related to being a landlord can suck up all of your free time—and then some.

You don’t need to be leaving the office early to show an apartment or missing dinner with your family to meet a repairman.

When you have a property management company looking after your properties, you can be present at work and earn your living, then go home when you’re finished—your investment won’t feel like a second full-time job anymore. Living the life you deserve to live is easy when you have a property management company taking care of your property.

If you’re a Realtor and you’ve been looking for a way to make your investment property work better for you, working with a property management company can be an excellent solution.

With property management, you’ll have the potential to earn more money at work by using your time in more beneficial ways, you won’t have to deal with maintenance headaches, and you can leave the busy work to someone else.

-Andrew Nast, inman

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Why Real Estate Is Your Smartest Investment

Inflation is defined as, “a general increase in prices and fall in the purchasing value of money.” Your money doesn’t go as far — simple. The $30k you made at your job 10 years ago and lived comfortably with barely gets you by now. You can’t control inflation (the Federal Reserve does that) and the government has doubled their debt since 2008. It’s now at $18.3 trillion and grows every day.

The government cannot save you or your family, or ensure your financial freedom. Set your mind right about earning money. More cash = more freedom! Money itself won’t make you happy, but it will give you the ability to provide a better life for yourself and your loved ones. You must invest with income streams that give you positive cash flow, learn to leverage your debt, learn to handle inflation and take control of your physical assets.

Do you currently have commercial real estate assets in your investment portfolio? Are you scared to have your money in the stock market (like I am) but also fed up with almost no return on investment with your money at the bank? Do you instinctively like the idea of being invested in income producing real estate with results you can see?

Here are eight reasons why investing income producing real estate is an excellent choice for protecting and growing your wealth:

1. Positive cash flow.

One of the biggest benefits to income producing real estate investments is that leases generally secure the assets. This provides a regular income stream that is significantly higher than the typical stock dividend yields.

2. Using leverage to multiply asset value.

Another important characteristic of commercial real estate investing is the ability to place debt on the asset, which is several times the original equity. This allows you to buy more assets with less money and significantly multiply asset value and increase equity as the loans are paid down.

3. Low-cost debt leveraged to multiply cash flow.

Placing “positive leverage” on an asset allows for investors to effectively increase positive cash flow from operations by borrowing money at a lower cost than the property pays out. For example, if a property generating a 6 prcent cash-on-cash return were to have debt placed on it at 4 percent, the investors would be paid 6 percent on the equity portion and approximately 2 percent on the money borrowed, thereby leveraging debt.

4. Hedge on inflation.

For each dollar that is created, there is a corresponding liability. Real estate investments have historically shown the highest correlation to inflation when compared to other asset classes, such as the S&P 500, 10-year Treasury notes and corporate bonds.

As countries around the world continue to print money to spur economic growth, it is important to recognize the benefits of owning income producing real estate as a hedge against inflation. Generally speaking, when inflation occurs, the price of real estate, particularly multi-tenant assets that have a high ratio of labor and replacement costs, will also rise.

5. Capitalize on the physical assets.

Income-producing real estate is one of the few investment classes that, as a hard asset, has meaningful value. The property’s land has value, as does the structure itself, and the income it produces has value to future investors. Income producing real estate investments do not have red and green days, as does the stock market.

 6. Maximizing tax benefits.

The US Tax Code benefits real estate owners in a number of ways, including unlimited mortgage interest deductions and depreciation accelerations that can shield a portion of the positive cash flow generated and paid out to investors. At the time of sale, IRS allows investors a 1031 provision, allowing investors to exchange into a like-kind instrument and defer all taxable gains into the future. (See your tax advisor for full explanation.)

7. Asset value appreciation.

Over time, more and more inflation has made it into the economy, drastically reducing purchasing power. However, income producing real estate investments have historically provided excellent appreciation in value that meet and exceed other investment types. Properties historically increase in value as the net operating income of the property improves through rent increases and more effective management of the asset.

8. Feeling the pride of ownership.

The right property in the right location with the right tenants and ownership mindset can produce a tremendous pride of ownership factor that is highest among all asset classes. Homeownership is out of reach for most people. Imagine owning thousands of multi-family housing units instead?

No one can ensure the future of rental of income properties’ values, but this asset class seems positioned to continue to benefit from many other socio-economic issues that I will save for another time.

-Grant Cardone, Entrepreneur

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Treasure Valley 2017 Vacancy Report

We are thrilled to have had another chance to attend this year’s IREM (Institute of Real Estate Management) Multi-Family Housing Luncheon. Mountain States Appraisal and Moe Therrien, with Valbridge Property Advisors, collected data from local property management companies throughout the Treasure Valley to compile this year’s multi-family vacancy report, and here’s what they found.

Starting off the year 2017, overall vacancy rates have increased from 2.6% at the beginning of 2016  (with 15,324 units survey), to 3.2% (with 16,515 units survey).  Occupancy has stayed strong throughout the Treasure Valley thanks to the continuous local job growth, growth of Boise State, CWI, and the high level volumn of families and individuals relocating to the Treasure Valley area.vacancy

Average rent prices have also raised about $25 per unit size in the last year.

rents

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With the increased vacancy rate, and many other Multi-Family projects scheduled to be completed in 2017, it is a vital time to make sure your client’s investment properties are being managed and marketed correctly. This will assure that your clients properties don’t get passed over for other available properties. Park Place aggressively advertises your clients properties on over 60 different Websites and has amazing systems that get many more qualified tenants looking at their properties.

If you would like additional information about the Vacancy Report please contact Park Place to schedule a time to meet with our Business Development Manager Eric Josephson. Eric’s focus is to help realtors grow their business by helping to educate, inform, and make sure you clients investment properties will be successful for the long term.

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