The Different Approaches To Realty Management

Realty Management

Frequently during property management training the topic comes up about whether single family or multi family properties make the better investment.

Much of the answer to this is really a question of realty management, your specific real estate investment objectives, and whether or not the individual tasked with managing your rentals has the necessary property management training.

Single and Multi Tenant Properties Realty Management Review

Some of the common discussion about realty management cover these points:

Consider whether or not the market has really bottomed out. Are there too many properties on the market for the available buyers, or are unsophisticated investors bidding up property values while the smart money stays on the sidelines?

Think through the exit strategies available with each investment.

With single family properties you can:

• Sell to your tenant
• Sell to an owner-user who is not your tenant
• Sell your portfolio to another single family investor, although this is the toughest of the three to do and often times easier said than done

With multi tenant properties the exit strategy is more limited, but also more clear cut:

• Sell to another multi tenant investor
• Go condo, split up your multi tenant property into individual units for sale, and sell to either the current tenant, another owner-occupant, or a beginning residential investor

Realty Management Differences

There are big differences in the type of realty management required for each of these product types.

Here's what I see the top three being in each:

Single Family Realty Management

The realty management of a group of single family homes becomes much more difficult if they aren't close to each other.

On the other hand, the amount of ongoing repairs required is probably going to be less, since tenants in single family homes tend to have more of a "pride of ownership" in their property, even though they're renting.

But when repairs are needed, they are probably going to run on the high side, in particular when the property needs to be turned over to another renter. There's simply more of everything that needs to be spruced up or replaced, compared to a small sized multi tenant rental.

Multi Family Realty Management

The realty management of multiple units is almost always easier, since each grouping of units is right next to each other. Even if you have a real estate investment portfolio that's spread across town you've still got multiple units right next to each other.

You may have a higher level of on-going repairs, since tenants in multi family property may take a lower "pride of ownership" view than those in single family properties.

When repairs are needed, the costs are probably going to be lower due to the smaller sized units, when compared to a single family home.

The Impact Of Appreciation

I've seen a lot of real estate investors purchase property with the idea of building a legacy that they can pass onto their kids. Their intent is to never sell.

Sometimes this happens, sometimes it doesn't happen, for various reasons.

My point is that buyers of investment real estate should always think through the potential selling exit strategies of each and every investment they buy, in addition to the ease of realty management.

Here's where to start when you think about selling before buying.

Multi Tenant Investors

With multi tenant properties, you'll most likely be selling to another investor who is driven by financial performance, CAP rates, or cash-on-cash return. There won't be a lot of emotion involved with this type of sale.

So, your type of realty management should be developed with this in mind.

Single Family Buyers

Here you're most likely selling to an owner-occupant, either the existing tenant who wants to own, or an end-user who wants to buy.

With single family, other than the ability to finance the property, emotion is probably the number one driver for most buyers. The color of paint, carpet or flooring, the type of appliances, and much more all come into play.

Your realty management of the property should be done with this emotional twist in mind.

Making Money On a Vacation Home

Making Money On a Vacation Home

I'll just buy a condo on the beach, and rent it out for $700 a week, and then I will be rolling in the money." WRONG! Although you can make some rental income on a property, seldom will you make a huge profit, or any profit at all. There are many factors to consider.

Make sure you can afford the payments, utilities, insurance, and upkeep when it is not rented.

In the southeast U.S. there are many attractive places to have a condo, or home on the beach. However, that beach property is only in season as a rental certain times of the year. The rest of the time you just pay.

-There are monthly condo fees, that go on whether it is being used or not.

-Mortgage payments continue on.

-Utilities to some degree continue.

-Rental agency fees are deducted from rental income.

-Cleaning fees.

-Repair and upkeep costs.

-"Mother Nature" blowing plans to rent for that period.

-Insurance fees

The last one is a big one. After every major storm, insurance fees triple, or even higher for the beach areas. Your profit disappears.
If you are in the mind set of purchasing a place because you will be retiring there some day, and you just want to rent it out to help a little with the payments until then, it may be a good idea. Just be cautioned of the business expenses that will be involved. Do not cut yourself too short, in order to allow for the expenses, and non - rental times.

Carpet Maintenance in the Snowy Winter

There are four forms of carpet maintenance. They are preventative cleaning, interim cleaning, restorative cleaning and spot removal.

The most overlooked part of carpet cleaning is called preventative cleaning.

What this revolves around is the ability of the home or facility to keep the soil outside the building or at least at the entry doorways.

If the soil gets past the front doors then it becomes difficult to keep the place clean. In the winter this may often revolve around the dreaded slush or even worse yet - salt! - on the carpets.

It is extremely difficult to remove salt with any true green method of carpet cleaning method except for rinsing with straight water. This method can take dozens of attempts and still may not be successful.

Here are a handful of steps that are vital in maintaining a good appearance to your carpets at the buildings entryways during the winter:

Step 1 - Keep the salt swept away from the doorways when there is no ice or snow.

Step 2 - Keep sand, soil and settlement off of tires in parking areas swept up daily.

Step 3 - Have large capture mats at all entries.

Step 4 - Keep these capture mats clean. If they get slushy vacuum up the slush immediately with a wet-dry vacuum. If it's a bad winter you may have to do this several times a day.

Step 5 - Clean visibly soiled area frequently. This may mean that the carpet has to be cleaned daily at high traffic entrances.

Step 6 - Vacuum carpets in all directions. The dry particulate matter comes out much easier when its dry. Vacuuming in strokes north-south, east-west, south-north and then west to east will make a huge difference in the amount of soil removed from the carpet.

Step 7 - Speed dry carpet matting. A huge percentage of installed carpet matting is made of olefin. This olefin fiber wicks soils quickly. Speed drying will allow for salty moisture to dry and be either vacuumed out or padded out with an acid rinse.

The fundamental element of winter carpet maintenance is preventative cleaning. A thoroughly thought out carpet maintenance plan requires constant inspection. This may require looking at the carpet before and after the cleaning. You may need to vary the amounts of water employed and the chemistries used in cleaning. Never forget that salty slush is much easier to remove with a wet/dry vac than after it has hardened.