Zing Property Managment

Opportunity Knocks with Property Management

Mike Levitin — Wed, 16 May 2012 17:29:22 +0000

Many agents across the country are experiencing strong and stable sales. For others, the market is more uncertain. And if the recent economic situation of the last couple of years has taught us anything, it’s reinforced that old adage: You shouldn’t put all of your eggs in one basket.

One solution that agents all across the country are turning to is incorporating property management into their existing business. An August 2011 story published by RISMedia reported that “because the current housing environment makes it difficult for investors to sell properties, many are choosing to rent instead.”

The report goes on to quote a survey conducted by Campbell Surveys, which estimates a 20 percent increase in the invest-to-rent market. Imagine the extra business you could gain if your message was, “Buy this house and I will manage it for you.”

It turns out that property management is helping to even out the roller coaster effect that many agents are experiencing in this market by providing a continuous and predictable source of cash flow. And the rewards can be quite high. In addition to the traditional management fees, most property managers collect an up-front marketing fee from their clients. Add to that MLS fees, lease-only fees, rent protection plan fees, eviction protection plan fees, renewal fees, re-keying fees, late fees and vendor income and you begin to see why property management is a goldmine hiding in plain sight.

In fact, all across the country, agents are filling classrooms and seminar halls to learn more about how property management can even out the uncertainties of this market. At the most recent California Association of REALTORS® conference this past September, more than 400 agents assembled the day before the actual conference began at a pre-conference event to learn about the difference that property management can make in their businesses.

But some agents still hold onto old recurring myths about property management. In fact, some agents fear they will not have the time. But property management software today is almost completely Web-based and allows you to take applications, perform background checks, collect and distribute rents and manage repairs all from your computer, tablet device or smartphone.

Another long-held myth is that agents will not know the laws. However, agents are already familiar with 99 percent of the real estate law they need to know. The other one percent can be found easily.

A final myth is that agents believe they do not understand how to manage property. This is where training, certification and a solid system come into play. Today’s marketplace contains many training and certification options, including Agent Cash Flow Secrets (www.AgentCashFlowSecrets.com), which is an incredible program that I am personally very familiar with. In addition, it is relatively easy to locate off-the-shelf property management systems that will bolt onto your existing real estate business and start making money for you right away.

Opportunity knocks for everyone. The question is, are you going to answer the door or hope the knocking simply stops?

Verl Workman is a speaker, coach and business consultant.

For more information, visit www.VerlWorkman.com.

Now Is The Time To “Recession-Proof” Rental Properties…

Mike Levitin — Mon, 14 May 2012 16:12:07 +0000

With continued talk of a down-turn in the economy, the Fed keeping interest rates low and first-time home buyers buying new homes at record rates, rental property owners should be employing any and all means possible to “recession-proof” their investments in real estate.

1. Revamp your application process….clean up/update rental application forms and strengthen credit requirements. If you are using an old “retail CBI” report, update to the use of a scored credit report – much like mortgage credit reports – where the application’s current obligations can be viewed v the amount of the proposed monthly outlay for the rental home. If the applicant is over extended in credit card debt, student loans or other high-cost consumer debt, these types of reports will automatically calculate their monthly obligations and advise if they will be able to pay the stated monthly rent from their current income. Some tenant screening services now have the availability to screen for lawsuits and evictions. Consider using these services as an added protection.

2. Rewrite lease documents….to tighten up unstated landlord’s options….in VA, rental property owners, with proper lease wording, are not required to serve a 5-Day Pay or Quit for rent prior to filing a UD. Insert this wording so that at the expiration of the late fee period, you can file the UD immediately rather than having to wait an additional 5 days. Learn how to file a UD, have these forms on hand so that you can prepare them, file them as appropriate on the 6th and get the brown-shirted sheriff on your tenant’s doorstep ASAP. Insert wording to the effect that you can mark up any security deposit costs to cover your time/energy if they leave it dirty, don’t make necessary repairs or leave with rental monies owing. Tighten up your late fee policy. Consider allowing 5 days for rent to be received and then charging a large, late fee. Update any NSF to cover any charges assessed by your bank and make sure your lease wording applies your late fee to “each adult applicant”. Encourage “group” tenants to issue one rent check so that you are not tasked with collecting the stray roommate’s money. The most responsible tenant should collect from roommates and issue one check. If a roommate’s check bounces, let them handle between themselves.

3. Get ‘web active’ with your rental marketing and communications…..as ad revenue is dropping, print media are routinely increasing their advertising rates to cover their printing costs and revenue shortfall. Rental property owners with web access can post FREE internet ads on YAHOO and can maintain rental listings on the RentConnection site for a nominal membership fee. By insisting that your residents maintain an e-mail address, you can communicate more easily and eliminate postage costs for all but the most essential communications. By collecting prospective resident’s e-mail addresses on applications, you can assume they are maintaining a checking account or have access to a credit card in order to maintain an ISP.

4. Get a handle on maintenance and repair costs….if you have the time and skills to maintain your rental properties yourself, establish a “back up” program in case you are not available for emergency or routine maintenance issues. Establish outside providers for cleaning gutters, servicing HVAC systems, changing furnace filters, responding to appliance breakdowns. Cancel or don’t renew costly maintenance service contracts on appliances – they are expensive and in most instances, replacement is cheaper. Maintaining these contracts provides a “false sense of security” especially when you must wait with a key at the property to meet the assigned technician who is driving from F’burg and will be there between 10AM and Noon. Your tenant is not going to stay home from work to allow entry and neither should you.

5. Get realistic on increases and FMR……As a proponent of ALWAYS increasing rent for lease renewals, now is not the time to miss the opportunity to increase your rental income – even nominally.

ALWAYS increase your tenant’s rent on lease renewal – ½ the market rent would be reasonable OR, absent their ability to pay on a routine/regular basis, shift some of the property expense burden to them. Agree that they pay first $50 of any minor repair costs such as leaks, drips, or minor upgrades to save on energy costs. Task residents with changing furnace filters monthly. Residents should pay for ANY plumbing stoppage and if you lease does not address this, insert this provision either at initiation or renewal. Address landscape and yard issues. If tenant can not maintain the yard and exterior appearance of the property, increase their rent for next 12 months to cover costs of professional yard maintenance. They pay over 12 months for an expense outlay you have for only 5-6 months of the year.

6. Address utility costs and task residents to pay where applicable. In SFRs with separate meters, most residents knowingly pay their utilities; however, on duplex or multi-unit buildings, this may not be the case. In the case of large apartment complexes, management can have third-party billing services assume payment for these services and bill residents separately through sub-metering or utilizing historical usage. Smaller unit owners can bill residents on basis of unit square feet, number of occupants OR on a fractional basis of the use of the dwelling. The easiest method is for owners to continue to maintain these services in their names and then bill tenants for their usage. Lease wording should specifically address that billings for usage must be paid within 5 days of bill and that accumulated delinquent utility reimbursement will accrue as rent and subject tenant to assessment of late fee. Make sure that departing residents fill any fuel oil or propane tanks and don’t assume they have done this. Owners should specify that tenants maintain their fuel delivery on an “automatic fill” basis so that costly furnace repairs are not called for when a delivery of fuel would have solved the problem.

7. Start re-renting process earlier as needed……With students, contract employees, landlords should know well in advance when to start their re-renting process. Have your application and any instructions you routinely utilize in your application process. Applications can be scanned into PDF for e-mailing to applicants. When faxing, realize that they returned faxes will be slightly reduced in size so accommodate this in your procedure. Get as much information to your applicants ASAP so that you are not spinning your wheels showing your unit to unqualified prospects – wasting your time as well as that of your current tenant and prospective applicant. Screen for specific qualifications in your web or newspaper listing – when available, features, pets allowed, rent.

8. Consider having many of your administrative costs covered by terms of the lease. Make your late fee, NSF charge reasonable. Consider a “notice service fee” for service of any notice required to initiate an eviction action. If tenant needs to assign and/or sublet a re-lease their unit, institute a $200 lease administrative fee to re-write the lease for the new resident. Many large property management firms in areas with scarce rental inventory charge residents for lease renewals – $50 to $100 for offering an additional year’s lease.

Whether you have one or 20 rental units, remember that you are operating a business and need to look, act and operate the management of your rental property as a business in order to maximize your investment’s potential.

Published in FPG’s March Issue

Wallace S. Gibson is the owner of Landlord Tenant Services and Gibson Management Group, Ltd. in Charlottesville, VA. She has over 30 years of residential and commercial property management experience. She holds the professional designations of Certified Property Manager (CPM) from the Institute of Real Estate Management (IREM) and the Master Property Manager (MPM) designation awarded by the National Association of Residential Property Managers (NARPM). She is the past Chairperson of the Virginia Association of Realtors Property Management Advisory Council and as well as being the past director of NARPM. She is an instructor for several of NARPM’s designation RMP and MPM courses. For additional information,

Copyright (Reprint Terms)
Copyright© 2002, Wallace S..Gibson. All right reserved. For information contact FrogPond at emailsusie@FrogPond.com.

ZingPM Question of the Day – Where can you find fixer-uppers?

Mike Levitin — Wed, 09 May 2012 19:50:44 +0000

They are literally everywhere, even in wealthy enclaves. What sets them apart is price. They have lower market value than other houses in the immediate area because they have either been poorly maintained or abandoned.

To determine if a property that interests you is a wise investment will require a lot of work. You will need to figure out what the average home in the area sells for, as well as the cost of the most desirable ones.

Experts suggest that novices avoid run-down properties needing extensive work. Instead, they recommend starting with a property that only needs minor cosmetic work – one that can be completely refurbished with paint, wallpaper, new floor and window coverings, landscaping, and new appliances.

Also, keep in mind that a home price that looks too good to be true probably is. Find out why before pouring your hard-earned money into it.

When looking for a fixer-upper, some experts suggest you follow this basis strategy: find the least desirable home in the most desirable neighborhood. Then decide if the expense that is needed to repair the property is within your budget.

Home Finance Delinquencies at Three-Year Low

Mike Levitin — Mon, 07 May 2012 17:48:13 +0000

Total delinquent first mortgage balances were under $500 billion as of this past March, the lowest since January 2009. Also, as of March 2012 there were a total of 49.5 million outstanding first mortgages, nearly an 11 percent decrease from the peak of more than 55 million in March 2008.

This is the latest data from Equifax’s March National Consumer Credit Trends Report and Creditforecast.com, a joint product of Equifax and Moody’s Analytics. According to the report, the decline can be attributed to high foreclosures and loan payoffs and low homebuyer demand.

Of delinquencies within existing home equity credit lines, an overwhelming 79 percent come from loans originated from 2005 to 2007. The number of revolving home equity loans is at a five-year low, with 11.6 million outstanding as of March 2012. Credit levels are also continuing to drop, falling 25 percent from the peak of $1.3 trillion in 2008.

Other highlights of the data include:

First mortgage balances were 3.5 percent below their year-ago level in March, having now posted year-over-year declines in the previous 36 consecutive months.
Seventy-one percent of all first mortgage delinquencies are from loans taken out in 2005-2007.
The share of first mortgage loans transitioning from current status to 30-days past due is at its lowest level since June 2007.
The share of first mortgages transitioning from 60-days past due to 90-days past due is at its lowest level in 59 months.
Loans in severe delinquency status, defined as those 90 or more days past due or that have started the foreclosure process, has fallen steadily over the 24 months ended March 2012 and now stands at $477 billion.

According to Equifax Chief Economist Amy Crews Cutts, “We’re seeing effects of the economic recovery within existing accounts in the form of fewer delinquencies and foreclosures, but not a substantial amount of new activity as home sales and resulting new home financing fail to keep pace with payoffs and foreclosures.”

Rented – Sight Unseen

Mike Levitin — Wed, 02 May 2012 15:51:07 +0000

A property manager returned from a trip in September and found a letter on her desk from a brand new tenant accusing her of fraud and misrepresentation. He was complaining that the garage in the house he had leased “sight unseen” did not have a double car garage “big enough” for his large vehicles. Within months, the property manager was in eviction court after the tenant moved to a nearby apartment complex with no garage facilities for residents.

As more rental residents switch jobs, move across country, sell their homes earlier than expected, they will no longer have the luxury of frequent visits to an area to organize their relocation efforts. Often, they have less than a week to secure jobs, enroll children in schools and find suitable housing. Of these three tasks, the first two seem to take precedence in their schedule trip so they are renting their new residences through the eyes of surrogates, on Realtor recommendations or “sight unseen”.

For the last year, between residents, I have been taking interior photos of my properties and posting then on the web. Prospects calling on upcoming rental availabilities can access these interior photos from my web site at their leisure. For my postings on large sites like YAHOO Classifieds and RentConnection, I have posted a composite of the exterior and 3 interior photos so that prospects can get a better understanding of the size and quality of the property in addition to accessing area amenities, schools and neighborhood profiles.

This summer I showed country rental properties to a prospect relocating to the area with his girlfriend for her new job. He walked through my vacant country property, cell phone in hand and guided his girlfriend to the interior property photos on the web as she sat in their home in Florida. After a 10 minute conversation, he said they wanted to rent the house.

Another pitfall is renting to prospects through surrogates, family or “their friendly Realtor”. When dealing with these situations, it is best to control the information provided to the distant rental prospect – either via website listing information with photos; e-mail or fax correspondence. With this procedure, written documentation is available as to the information provided to the prospect prior to their lease signing. Keeping copies of the web listings, promotional flyers and MLS listing data in your property file will make it easier to document the information provided should this be questioned in the future.

As in the case with tenant with the “vintage cars”, the ultimate outcome rested on the wording of the lease signed by the tenant whereby he agreed to take the property and there was no stipulation as to the length or size of the property’s garage space.

With these situations in mind, some “caveat emptor” wording for these situations might be in order. One NARPM member has a “Sight Unseen” Addendum that the Residents sign in addition to the lease document.

The TENANTS acknowledge and agree that it is their own decision to lease the subject property without first previewing the premises. Should the TENANTS fail to take occupancy of the property, TENANTS understand that they may forfeit their security deposit and they will be held responsible for the terms of the lease and payment of the rent until the occupancy of a new tenant. It is further understood that the LEASE is not conditioned on any repairs or improvements other than what the OWNER/AGENT is required to do per said lease agreement.

Prior to utilizing such wording, it is recommended that you verify that your state statutes allow for the forfeiture of all or a portion of the tenant’s deposit to cover your advertising and re-renting costs as well as your re-leasing fees.

With a little bit of advance planning on our part, we should be able to facilitate prospects’ busy schedules and eliminate some of the risk involved with renting properties….”sight unseen”.

Just where do they live?

Mike Levitin — Mon, 30 Apr 2012 22:01:31 +0000

Where do criminals live? Not the Enron-type criminals, but the ordinary, run-of-the-mill robbers and stealers, the drug dealers, the burglars. I will go way out on a limb and venture to guess that better than 99 percent of them don’t own their own homes. That means that they live in rental housing.

How do they get to live in rental housing? One way is, assuming they are male, that they move in with girl friends. The girl friend rents the house or apartment, and her criminal boyfriend “crashes” with her. She might even have a real job with references and all, and that’s why the landlord rented to her.

Another way is that they sucker some landlord into renting to them.

Of course, being a criminal and all, they don’t have much respect for landlords, the place they live, their neighbors, or even themselves. They probably don’t pay rent, unless they have to. They probably are far from meticulous about keeping their homes neat and clean. They might walk around with chips on their shoulders being rude and threatening to any neighbor who has the audacity to complain about the wild parties and the riff-raff that shows up after the sun goes down when it can venture out without danger. And they have so little respect for themselves that they feel no shame for all the illegal and sleazy activities they perpetrate and engage in.

Is that the kind of person you want living in your rental property?

No matter how they slithered into living in a rental property, they need to be gone. These miscreants do neither the landlord, other tenants nor the property any good. In fact, allowing them to continue to live in a rental property shows disrespect for good tenants and the property investment.

I have heard more than one landlord say with pride that they want to respect the “privacy” of their tenants. At the expense of what? Can you respect their privacy when they don’t, won’t, or can’t pay the rent? Will you respect their privacy when they trash the property? Will you respect their privacy when they steal from or assault neighbors, possibly your other tenants?

How about the “roommate” of a tenant who is living in a property without an approved rental application? This is the same individual whom a landlord would turn down flat if he tried to rent on his own. But this same landlord allows him to live with his girl friend? Does that mean, just because he’s not a “real” tenant, that he will be a good little boy and not trash the place or throw wild parties? Should a landlord respect his “privacy”?

Go ahead if you want to, but as for me, my investments are more important than the privacy of a criminal, especially one who has not earned the right to live in my property anyway.

Making a profit on your investments means you have to take and keep control of them. So first of all, you don’t rent to people who don’t pass muster. Second, you get rid of tenants as soon as they show signs of being bad neighbors or someone who might be hauled off to jail at any moment (thus moving without notice). Third, you demand that your tenants not allow their “friends” to move in with them without your approval. And your approval isn’t easy to get.

Where do criminals live? Not in your rental property.

Robert Cain has been publishing information, giving speeches and putting on seminars and workshops for landlords on how to buy, rent and manage property more effectively for over 15 years. For additional information about Robert’s Keynotes and seminars, contact

Copyright (Reprint Terms)
Copyright© 2006, Cain Publications, Inc. All right reserved. For information contact FrogPond at emailsusie@FrogPond.com.

Are You a Renter? Some Things to Consider

Mike Levitin — Tue, 24 Apr 2012 17:59:41 +0000

Since the rental market is expected to thrive in 2012 with more homeowners either being forced to consider renting, or renting out their space, we checked in with Jessica Bosari, a writer for LowIncomeApartmentFinder.com, for some advice.

How do renters help protect themselves from landlords whose property goes, or is about to go into foreclosure?

Bosari says property owners are typically aware they are undergoing financial trouble, but as a tenant, you will probably have no idea. You will probably learn about the problem the day the property owner is served with foreclosure papers.

This leaves very little time to find a new place to live before the court forces you to vacate your current apartment/house. But a little advance notice can help you arrange a move before it is too late.

That’s where Bosari says background research can save time, money, and stress.

The best time, she says, to learn about the financial problems of a property owner is before you move into the building/house by looking into the owner’s public financial records.

If the property owner is holding a lien or has filed bankruptcy in the past, you would do better to find a different property for your new apartment/house. Bosari says the property owner will probably not be forthcoming about any financial problems, and you do not want to learn about them a month after moving.

Generally there is a pattern of foreclosure, Bosari says. Property owners who are having trouble paying their bills will usually have a string of financial problems that you can research through your local county or town assessor’s office or website.

These locations will have a record of any liens that already held against the property owner.

Plus, Bosari says you can also discover if the property owner has filed for bankruptcy or some other form of financial assistance.

Any indication of financial instability, she says, is a red flag that the property is not a safe place to begin a rental contract. Keep shopping until you find an apartment/house with no financial troubles attached.

By John Voket

HARP 2.0 to Provide Underwater Homeowners a Lifeline

Mike Levitin — Tue, 17 Apr 2012 21:01:21 +0000

While underwater homeowners may still be a common theme today, the government recently enacted a new Home Affordable Refinance Program to help eligible participants pay down the principal on their home mortgage loan without having to pay mortgage insurance.

The new HARP 2.0 Refinance Program was made available to U.S. homeowners as of March 17, 2012 and those eligible have until Dec. 31, 2013 to refinance.

“You can use HARP even if you’re really far underwater on your mortgage. There is no loan-to-value restriction under the HARP mortgage program so long as your new mortgage is a fixed-rate loan with a term of 30 years or fewer,” said Dan Green, a loan officer with Waterstone Mortgage in Columbia, Md. “If you use HARP to refinance into an adjustable-rate mortgage, your loan-to-value is capped at 105 percent.”

The original HARP program (also known as the Making Home Affordable program) was started in April 2009 and changes were rolled out by the Federal Home Finance Agency on October 24, 2011, and confirmed by Fannie Mae and Freddie Mac on November 15, 2011.

The original version of HARP had several roadblocks that made it difficult for homeowners to refinance. Originally, the program only assisted those with mortgages with a loan-to-value ratio between 80-125 percent, but in many hard-hit housing markets across the country, homes have lost more than 50 percent in value, making those homeowners ineligible for the program.

To be eligible today, a loan must be backed by Fannie Mae or Freddie Mac, and the mortgage must have a securitization date prior to June 1, 2009. If you have an FHA, USDA or jumbo mortgage, you are not HARP-eligible.

One of the changes within the new HARP 2.0 program is that borrowers will now be able to refinance regardless of how far their homes have fallen in value. Previous loan-to-value limits were set at 125 percent.

Appraisals and underwriting have also been eliminated, as most homeowners will no longer be required to get an appraisal or have their loan underwritten, making the refinance process smoother and faster.

In addition, certain risk-based fees for borrowers who refinance into shorter-term loans will either be eliminated or modified.

It’s also important to note that the program will only work on a first mortgage.

“HARP 2.0 is meant for first liens only,” Green said. “Second liens are meant to subordinate. You’ll get to replace your first mortgage and your second mortgage will remain as-is. Just be sure to mention your second mortgage at the time of application so your lender knows to order the subordination for you.”

Remember, the Home Affordable Refinance Program is not meant to save a home from foreclosure. It’s meant to give underwater homeowners a chance to refinance without paying PMI.

For more information about HARP 2.0, contact our office today.

Original article By Keith Loria

Last-Minute Filers: 5 Common Mistakes to Avoid When Filing Your Tax Return

Mike Levitin — Thu, 12 Apr 2012 22:20:43 +0000

With just a few days left until the April 17 deadline, it is getting down to crunch time for taxpayers who have yet to file their 2011 tax returns. As Tax Day approaches, Jackson Hewitt Tax Service® is reminding last-minute filers of the most common mistakes to avoid when filing their tax returns, as well as what they need to know about filing a six-month extension.

“Each year, there are many who wait until the final days to file their taxes,” said Mark Steber, chief tax officer, Jackson Hewitt Tax Service Inc. “With the last-minute rush, it is important to carefully check your tax return prior to filing because even the simplest of mistakes can cause delays in the issuance of a refund.”

Steber discusses the top five most common mistakes made when filing a return:

Incorrect Filing Status – Choosing a filing status is usually one of the first steps when preparing a tax return, but it can also be a confusing decision that leads many to choose an incorrect status. The wrong filing status can significantly impact the amount of a tax refund or tax liability, so speaking with a knowledgeable local tax preparer about your situation can help guide you in selecting the correct status.

Providing Incorrect Information – Another common mistake is when taxpayers misspell a name or incorrectly record their Social Security numbers. It is vital to clearly record the correct name, Social Security number and address (including zip code) directly on the return. Names and Social Security numbers for a spouse, dependents and qualifying children should be documented exactly as they appear on their respective Social Security cards. For those who changed their name due to getting married or divorced, or for any other reason, make sure the name used on the return is your legal name.

Mathematical Errors – Another error on tax returns is bad math, which remains common on paper returns. Making mathematical miscalculations can greatly impact your tax return by reducing your expected refund or positioning you to owe more money than you actually do.

Claiming Ineligible Exemptions – With so many complex rules, taxpayers often claim exemptions for which they are not eligible. Some examples include claiming a grown child who no longer qualifies as a dependent or claiming an exemption for a live-in significant other. A local tax preparer can help you properly claim eligible exemptions.

Forgetting to Claim Items – In the rush to file, forgetting to claim certain items is a mistake that is made all too often. For example, certain charitable contributions, medical expenses and IRA contributions can all be claimed on a return, if you have the proper documentation.

“For those who need more time to file, filing a six-month extension may be an option,” says Steber. “But keep in mind that while you can postpone filing your return until October 15, 2012, filing an extension does not provide additional time to pay. You must pay any taxes owed by April 17, 2012. Otherwise, you may be subject to penalty and interest charges.”

For more information, visit www.jacksonhewitt.com.

When selling becomes clear for your investment property

Mike Levitin — Mon, 09 Apr 2012 19:52:38 +0000

There comes a time during the course of any real estate investment when it becomes clear that selling off the property is the best course. When that time comes, getting the most out of your piece of real estate is crucial to seeing the big payoff at the end of the real estate investment experience that you have been expecting over the course of the investment, often many years.

When selling your personal home, improvements like new landscaping and new interior work can net big benefits in a raised sale price. Investment properties are much different and going through those types of improvements are nice, but they will not add real value to a property that is being investigated by potential investors.

Raising the value of your investment property goes beyond a coat of paint and is affected most by the cash flow that can be seen from that investment. There are two key ways to make an investment property increase in value in the eyes of a potential investor, increasing the income and reducing expenses.

Bigger Income

When you raise the income seen by the property, you raise the value of your investment property. While that can seem like a daunting task, there are some maneuvers that can be undertaken to make a property more attractive to investors. Raising rent is the most obvious way and while any raise comes with opposition by current tenants, if the real estate market justifies the move, it has to be made.

Many times landlords will get into a rental rut just to avoid a potential confrontation over a $30 per month increase. Getting over that fear can result in better cash flow, but only during times when the market justifies the move. If the market doesn’t justify it, perhaps a few improvements to the property can.

Adding components that current renters want can justify a raise in rent that they will not bristle to. Raised rent not only helps cover the expense of the improvement, but adds permanent value to your property that can be realized whenever you decide to sell it.

Smaller Expenses

In situations where it may not be feasible to raise rents either because the market won’t allow it or renovations are not possible, reducing expenses is the best way to increase the profitability of a property. Remember, an investment property’s sale price relates directly to profitability.

Many times, these types of steps take planning and time to recover expense. Adding better insulation to a property can save on energy bills and over time, it is possible the improvement will pay for itself. At the same time, you can charge more for your investment property because a reduction in energy expenses adds to profitability.

These types of moves are unique to each property and achieving lower costs on things like lawn care or snow removal may be more readily available in some areas than others. Do what you can within your limitations to reduce cost in anticipation of selling so that when the time finally comes, you can point to low expenses and high rent income as proof that you deserve a higher selling price point.

Of course, in a perfect world you would be able to increase income and reduce expenses at the same time, giving you a much more attractive real estate investment that will command a better selling price on the open market.

More realistically, there are at least a few small steps you can take to enhance your investment property in anticipation of placing it on the market. Don’t let your real estate investment go out with a whimper. Work to get all that you can out of it to ensure a great return on what is often times a labor of love.