For many real estate investors, it’s tough to make a profit. It’s not as easy as the TV shows make it seem. But with some basic best practices, you can make some serious money.
I’ve invested in rental property for over 10 years now, and I’ve learned some tough lessons. However, I’m more bullish on real estate investing than I ever have been. There has never been a better time to be a landlord in America.
Real estate doesn’t change much, as it can take decades for a property to appreciate. What can change rapidly is how you manage your properties.
Before modern technology, tenants would:
- Drive around and/or read the newspaper classifieds to find available rental properties.
- Call and schedule a tour of the property.
- Fill out a paper application.
- If accepted, they would meet you at the property, an office, or a coffee shop to sign the lease.
If you’ve used any kind of technology in the past five years (like a smartphone), you’re aware of the benefits.
Real estate is prime for disruption because many agents and investors are using technology from the 90’s.
If you like the idea of using technology to save time, here are some ways to make your real estate business more profitable:
1. Install A Programmable Thermostat
Housing is a commodity and isn’t, by itself, personal. However, people crave personalization and want to feel special. If you are targeting a particular demographic, think of how you can offer extra and personalized features to the property. One of my friends caters to senior citizens, for example. He makes sure his doors are 33 inches wide and that the properties have security systems.
I like to target energy-conscious tenants. Even if you don’t personally care much about the environment, you probably don’t like having a high utility bill. I suggest getting the first-generation Nest to save money.
Nest is a programmable thermostat. Although programmable thermostats have been around a long time, the Nest is different because of its simplicity of use. My wife installed ours in less than 10 minutes and had it integrated on her iPhone in fewer than five minutes. And best of all: The Nest learns your behavior and automatically adjusts its settings. A Nest pays for itself in about a year.
Another great item to personalize a property for your energy-conscious tenant is the Philips Hue lightbulb, a programmable, color-changing LED bulb that gives users flexibility over the color of light emitted. This allows you to set the mood for any occasion.
2. Install High-Tech Locks
What happens when one of your tenants gets locked out?
Many tenants live on their smartphones and enjoy the productivity benefits. So consider adding a smart lock that can open with a key or bluetooth. This is a benefit to tenants in case they need to let a friend in, and it’s a benefit to you as you can grant temporary access to maintenance workers.
3. Use Online Systems
Offline and paper-based transaction methods are time-consuming and costly.
The cost with using a paper-based system is with the extra time it takes to sort through paper-based applications, screen tenants manually, and process checks. This problem is exacerbated in my business, since I have a business partner and we like to share information.
To solve this, I use Cozy. With Cozy, all these processes are fast and easy because we have a company log-in that we both use.
4. Collect Rent Electronically
The number one complaint I hear from tenants is that their landlord doesn’t accept electronic payments. Making tenants write a check and mail it to you is not timely, efficient, or convenient. Other tenants want to pay in cash, which requires you to collect in person, which is also inefficient.
Cozy offers a way for tenants to pay their rent electronically.
- If your tenants set up an ACH transfer, payments are deposited within 3-5 days of the tenant initiating the payment, and it’s free for them.
- If your tenant pays with a credit card, they pay 2.75%. The money is deposited 1-2 days after they pay.
I encourage you to visit the “How Payments Work” section on Cozy’s website for more information.
5. Develop a Niche Brand
Branding your business by clearly communicating who you are to the public can be beneficial.
I’m a coffee fanatic, for example, and I make it a point to buy a coffee mug from every title company I have a closing with. Recently, a title company was trying to get my business, and they brought my team and me branded glasses. I told them this was unique. They responded with:
We know you have everybody else’s coffee mugs, so we thought you should get glasses.
I guess my brand is getting around!
Business cards are often thrown away, but coffee mugs with the name of your company and phone number are incredibly useful.
You can also offer a monthly giveaway for local products and services. The cost of this branding doesn’t have to be expensive, and the payoff from longer-leasing tenants and referrals can make this a huge return on investment.
6. Upgrade Your Computer’s Security
With wireless connectivity for several applications in your properties along with Wi-fi that is sometimes public, security will be the forefront of any conversation about technology advances.
As landlords, we collect a lot of information about our tenants: names, phone numbers, address, income, workplace, next of kin, references, etc. It’s not too farfetched to think of personalized services based on this information. However, what would happen if this data were stolen?
I recommend taking extra security precautions with internet-based tools such as using a password manager like 1Password, which saves all your PINs, passwords, and even credit card information in one place. When you need to sign into something, you just have to click once. 1Password information is encrypted, so you never have to worry about that information being hacked.
Credit to Jimmy Moncrief
Jimmy is a multifamily real estate investor and bank credit officer.
Whether you’re a renter in an apartment building, a duplex, or any other rental home, you deserve relatively quiet living conditions, no matter how many neighbors live nearby.
While neighborly noise is to be expected once in a while, a neighbor’s blaring stereo, shouting matches, or late night dance parties might take things too far. So what should you do when you can’t handle the noise?
What Not to Do: A Personal Story
During my renter years, I moved into what seemed like an ideal scenario: a budget rent price for a modest upstairs unit in a landlord’s house. Things seemed great at first, until the landlord and her teenage daughters regularly shouted at one another from 5 a.m. to 6 a.m., consistently waking me after just a few hours of sleep. If I tapped on the floor (their ceiling) to remind them of the noise, the landlord yelled at me to shut up! Unbelievable, right?
They also kept a young doberman in a cage while they were away at work and school. Naturally, he wasn’t thrilled about and he barked. A lot. When the kids came home from school, he barked even more, at which point the angrier of the teens would shake the cage and shout at the dog. I’m sure it was traumatic for the dog, and all the noise and anger traumatized me for years, even after I left.
I couldn’t afford to move out, so I dealt with the nighttime noise by turning on a loud fan before bed each night to help lessen the impact of the downstairs discord. I was afraid to complain too much for fear of eviction, especially since we didn’t have a written lease. Once I finally earned enough to move out, I moved, posthaste.
Don’t put yourself through the anguish I suffered for years when I was too inexperienced to know how to handle such things. Every renter — even in a situation such as mine — has a right to quiet enjoyment, the right to a peaceful place to live. This doesn’t mean you won’t hear an upstairs neighbor walking or moving furniture from time to time. It means the place should be peaceful enough from day to day to sleep or to carry on daily activities without being interrupted by aggravating levels of neighborly noise.
Step 1: Give a Simple Neighborly Suggestion
If you know your neighbor — at least well enough to share a friendly smile or “hello” once in a while — point out in a calm, gentle manner that their speakers, dog, or television is so loud it’s disruptive. It could be that they’re unaware that anyone else can hear what goes on behind closed doors, or maybe they think their dog is quiet while they’re away for the day. For your own records, write down the date, a summary of what each of you said to one another, and whether the issue was resolved.
If you feel intimidated about approaching your neighbor directly, go to Step 3 below.
Step 2: Read Your Lease
If your neighbor isn’t responsive or repeatedly causes a cacophony that keeps you up all hours of the night, it may be time for more serious action. If you live in a building, read your rental agreement to look for any language about excessive noise. Make a copy of the page, highlighting the appropriate information, and give it to the noisy neighbor. Be sure to point out any verbiage about potential for eviction due to noise violations or information about “quiet hours” in which all tenants are expected to be relatively quiet.
Step 3: Contact the Landlord
Contact your landlord, and spell out exactly what’s going on: the type of noise, when and how often it happens, and any methods you’ve taken to try to resolve the issue yourself. If the noise has been going on for hours, ask an on-site property manager or the landlord to check out the situation while it’s happening.
Step 4: Get Your Town Involved
If your neighbor’s noise can be heard outside or from shared common areas such as a hallway, they may be in violation of local noise ordinances. Contact the non-emergency police number if you can’t find this information on your town’s website. Ask the representative for information about noise regulations. If your neighbor is in violation of the ordinance, let the landlord know. It’s in the landlord’s best interest to deal with the problem since he or she could be held responsible and receive a warning or citation.
If the noise sounds dangerous or threatening or all of your efforts have seemed in vain so far, contact the police. This approach works best if the noise has been going on for hours or if it happens at the same time regularly. The police or a noise-enforcement official may visit with a decibel meter to determine whether your neighbors are in violation of local laws.
Step 4: Arrange a Meeting
Contact other neighbors to see if they’ve been bothered by the noise. If so, arrange a meeting with your landlord and all affected, including the noisy neighbor. Power in numbers may be enough to convince the neighbor to quiet down or for the landlord to evict a noisy tenant. If it seems the noisy person isn’t interested in quieting down, inform them that you and the others plan to take them to small claims court if things don’t change. Also say that the cause is well-documented by you, other tenants, the landlord, and even local authorities. All of this evidence may be enough to create a peaceful environment.
Alternate Action: Moving Out
Since you are guaranteed a peaceful living environment, you may have the right to terminate your lease if lack of peace is an ongoing issue.
Credit to Kathy Adams
Kathy is an award-winning investigative journalist, not to mention a writer, brand blogger, decor/DIY expert, renter, commercial landlord. She also writes for brands such as Behr, Kroger, Canon and Black+Decker on topics pertaining to home and apartment decorating and maintenance.
Simply understanding how to use a few key camera settings and pieces of equipment can make all the difference.
It can’t be stressed enough: Great photos help sell homes. The National Association of REALTORS®’ own research shows that well over 90 percent of home shoppers look online for at least a part of their search. For almost half of all buyers, accessing digital listings is the very first step in their process. And while there’s been much speculation as to the homebuying behaviors of millennials, this much is known for sure: Digital natives are much more comfortable with browsing home listings from mobile devices.
None of this is breaking news, but it does highlight just how important digital representation can be when you’re trying to show a home. One industry study found that when listings were accompanied by high-quality photos taken with professional equipment, they spent significantly less time on the market and fetched a premium of $3,400 on average.
Unfortunately, interior shots pose a variety of photographic challenges that are difficult for amateur photographers. Real estate pros shouldn’t be expected to transform overnight into professional camera wielders, but you can certainly benefit from a few tricks up your sleeve and some decent equipment.
Don’t Turn Toward the Light
This scenario might feel familiar: You want to show off the new windows in your client’s living room, but every time you snap a photo, the image is totally blown out. Photos with dark foregrounds and overexposed windows are a common problem that happens when ambient light from the outdoors tricks the camera’s light meter into overcompensating. A flash will balance out the lighting in the room, giving you a better shot. Alternatively, you can use your camera’s manual controls and settings. The right settings depend on the kind of equipment you have, however. For many point-and-shoot digital cameras, it’s mainly a matter of adjusting the ISO, although you may want to set the aperture to f/2.8 as well, if your camera offers that flexibility. For shots near a window, typically an ISO setting of around 400 to 800 works well, although you may want to go higher if you have particularly low light in the foreground. If you have full manual control of your camera, you can increase the shutter speed, which will allow less light into the camera sensor.
Try HDR Tonemapping
The main problem with photographing daylit interiors is that it’s difficult to balance between ambient daylight, artificial lighting, and dark shadows behind walls and in rooms away from the foreground. This situation presents a range of different exposures, and while the human eye automatically adjusts for the various levels, the camera will have a hard time making sense of it all. HDR, which is short for high dynamic range, is a common tool for handling such lighting situations. In essence, the photographer takes three or four photos in rapid succession, which are then combined into one image using specialized software like HDRSoft. Usually, one shot is at normal exposure, one is overexposed, and one underexposed. When those three exposures are combined into one, you’ll see all the details that the human eye can perceive. This results in photos with a vibrant, luminous quality.
Many point-and-shoot cameras have an exposure value meter, which can help you compose under- and overexposed shots. Generally, the meter reads a value of zero on the normal setting, +1 or +2 for overexposed shots, and —1 or —2 for underexposure. Use a tripod so you can play with different exposures while maintaining the same angle on each shot. You’ll also want to make sure automatic flash is turned off for this method. It takes time to perfect this technique, of course, but it can help you capture more detail in challenging settings.
Buy the Right Equipment
Unless you have a surgeon’s steady hands, you’re going to need a tripod in some situations. A tripod helps compose poised shots and avoid blurry photos, but it’s also incredibly important if you’re dabbling in HDR or mixing up shutter speeds. The longer your exposure time, the more likely it is that subtle movements will show up in the final product. You should use a tripod anytime you nudge the ISO to a higher range. Also, if you’re taking wide shots of the home’s exterior or enlarging your photos, even the tiniest shake will be a lot more obvious. In certain conditions, even the slightest breath can create a shaky shot. Avoid this dilemma with a lightweight foldable tripod.
You may also want to invest in a point-and-shoot with a wide-angle lens. When buyers are browsing through real estate listings, they really want to get a sense of the space. But that’s difficult to translate into photos unless you have a wide-angle option. This is important not just for exterior shots but for indoor compositions as well. A wider lens in the interior gives rooms a sense of luxury and space that you just can’t get with a regular shot. Point-and-shoot cameras that have a large range in their focal length specification are ideal; the lower the value at that end of the range, the wider the shot will be.
If you’re really interested in refining your shots, you’ll want a camera with manual controls that allow you to adjust shutter speeds on your own. Or it may be time to graduate to a digital single-lens reflex camera, especially if you want to experiment with wide-angle lenses (with focal lengths under 35mm, used for very wide shots). DSLRs have come down in price recently, especially since manufacturers like Canon and Nikon have introduced entry-level DSLRs aimed at beginner photographers. Usually these run for around $300 to $700, and they are available with bundled lens kits to get you started trading out lens lengths for sharper photos.
Get Rid of the Clutter
Staging photos ahead of time by cleaning off counters, tabletops, and floors can turn an ordinary listing into a real stunner. Clear your photography appointment with your client before you arrive, and tell them to clean, clean, clean. Even a detail as minute as a crooked picture frame or a rolled carpet edge can detract from your photos, so be sure to run over your shots with a fine-toothed comb. Decluttering means no power cords or vacuum cleaners in the shot—but it doesn’t mean completely sterile surfaces. A few welcoming touches like a stack of books, a vase of flowers, or a set of candles will make the space feel lived-in and homey. After all, that’s what you’re really selling anyway: a vision of buyers’ future lives in a new and welcoming abode.
Erin Vaughan is a blogger, gardener, and aspiring homeowner. She currently resides in Austin, TX where she writes full time for Modernize, with the goal of empowering homeowners with the expert guidance and educational tools they need to take on big home projects with confidence.
Most professionals believe these ideas will improve their personal security in the field. Sometimes, they’re wrong.
Real estate brokers and agents have hyped certain safety protocols in an effort to beef up personal security in the field, but some of the ideas that have become popular in the industry don’t necessarily make you less vulnerable to attack. In fact, some may have the opposite effect.
It’s not that these suggestions don’t have any value in the pursuit of safer practices, but none of them are foolproof. You shouldn’t rely too heavily on any one safety practice; to truly conduct business in a safer manner, you must incorporate a multitude of safety measures. As a longtime real estate safety educator, I offer these five personal security myths from agents around the country, along with my suggestions for how to work around them. (Request a handout to learn 7 More Safety Myths That Can Get You Hurt or Worse.)
Myth number one: Meeting prospects at the office first will enable you to vet them properly and ensure you work with only legitimate clients.
It’s always a good idea to ask prospective clients to come to your office or meet in a public place before taking them out on showings. But you are not equipped to properly vet prospects to determine whether they are criminals. Making judgment calls based on how a person looks, acts, or talks is not a science, and while you may be able to spot obvious red flags during a face-to-face meeting, you cannot guarantee that a prospect won’t intend to do you harm. Many offenders are repeat or career criminals, and they know how to present themselves in a manner that makes you feel comfortable and safe. Never consider yourself safe after meeting with a prospect.
Asking for a prospect’s ID and mortgage approval letter can provide some clues as to their legitimacy as a client, but you should do background research on new clients to get a fuller picture of who they are. Searching for them on Google is the typical place to start, but also search court records and public documents online as well as sites such as Anywho.com and Spokeo.com, which combine public records, social network information, and other online references.
If you want to go a step further, customer relationship management tools such as Great Agent provide prescreened customer leads. The program conducts a soft background check on potential clients and delivers a report of the findings to you. Though this decreases the level of danger in the prospecting process, you must remain alert and vigilant once you begin working with a new client.
Myth number two: Using a code word is a good way to discreetly signal you’re in distress.
Who doesn’t know what the “red file” is? It’s probably the most commonly used safety code word—and not just in the real estate industry—so you can bet criminals know what it means. Could you use a less conspicuous code word? Sure. But here’s the problem with code words in general: In a perfect world, the person you’re calling for help will immediately know that the code word means they should call authorities and have them dispatched to your location. That requires everyone at your office—all brokers, agents, and administrative staffers—to be properly and uniformly trained on the code word procedure. How likely is that to happen?
Unfortunately, when you make that call using your safety code word, there’s a high risk that the person on the other end of the line will have no idea what you’re talking about. If you can safely make a phone call and talk to someone—even briefly—your best option is to call 911 and give police as much information as possible about your situation. If you can’t speak freely, try using apps such as Life 360, which sends covert notifications to your predesignated contacts that you need help.
Myth number three: Safety apps will save you in a dangerous situation.
Speaking of safety apps, more agents are embracing them. Forty-two percent of REALTORS® use a smartphone safety app, according to the National Association of REALTORS®’ 2016 Member Safety Report. While those are a good tool in the real estate professional’s safety arsenal, the problem is that some agents rely solely on them to save their lives. But if you’re in a situation where your cell phone isn’t accessible, you lose a signal, or a criminal takes your phone away, those apps become useless. Safety apps should be part of a layered plan; they alone will not save you.
Investigate standalone or wearable safety devices that offer added features, such as Alert Lion, a pendant-type device that can be used to call for help with the press of a button. Once the button is pressed, an Alert Lion representative can listen in and make the call to authorities or medical personnel.
Myth number four: Dressing to impress will always attract the right customer.
For real estate professionals, the appearance of being successful is an important marketing tactic. Do you broadcast on social media how many millions of dollars in real estate you’ve sold? If you’re a luxury agent, do you take marketing photos of yourself in a high-end car or in front of a mansion?
Wearing expensive jewelry, watches, and other accessories, or carrying around costly gadgets such as tablets and high-end cameras, may project the image you want your clients to see. But it can also garner unwanted attention from criminals who see the cash you’ve got on you. If you think dressing to impress will only attract people who are qualified to work with you, you’re wrong.
Dress professionally, but leave the bling and flash at home. And you typically don’t need expensive devices—aside from your smartphone—when you’re out on showings with a client. Limit the places you take your gear. While trend-conscious clients may appreciate your fashion forwardness, the people you want to attract will be more interested in your service than your cachet.
Myth number five: Avoiding working in the “bad” parts of town will keep you safer.
I always get agents in my classes who tell me they don’t do business in dangerous neighborhoods and never work at night, so they feel safe. These same agents also say they don’t work with “strange” or “scary looking” people.
As long as criminals are mobile, there is no safe part of town. Some areas may be safer than others, but agents need to be alert wherever they are. The worst thing you can do is let down your guard because you think you’re in a nice neighborhood; some criminals target higher-end areas where they can find more valuable items. They also may perceive agents who work those markets to be wealthier.
Your prejudgments on what kinds of people look legit may also cause you to miss out on business. I always reference Sam Walton, the late founder of Walmart and Sam’s Club, and his signature overalls and old pick-up truck. Many may have assumed based on his appearance that he couldn’t afford high-end property. By the same token, famed serial killer Ted Bundy cleaned up quite nicely.
Instead of judging people or neighborhoods by their appearance, agents should rely on taking the proper screening steps and always trusting their intuition, gut, or instinct. We all possess a built-in warning system designed to protect us from danger. Too often, we ignore that feeling in the pit of our stomachs. If your body sends these signals, listen to them and get out of the situation. Do not try to rationalize your feelings.
Tracey Hawkins, a.k.a. “Tracey, the Safety Lady,” is founder and CEO of Safety and Security Source. She is a former real estate agent who, for more than 20 years, has been a national speaker and educator on real estate safety issues. She has created the country’s only real estate safety designation, the Consumer Safety and Security Specialist (CSSS) program.
Like rookie buyers, clients who are new to selling need extra hand-holding through the sales process.
Even the most steely-eyed sellers can get emotional when it’s time to list their home. It’s the place where they raised their children, gathered friends for annual holiday parties, or painstakingly executed their design vision over many years. The longer they have stayed in a home, the greater the challenges they may face getting up-to-date on the rules and regulations governing transactions. Those who have never before sold are, indeed, in uncharted territory. Here are suggestions for working with first-time sellers who may find the financial and legal complexities, as well as the emotional terrain, especially daunting.
First-time sellers who have never contended with buyer demands may not initially understand how neutralizing their home or adding small upgrades can make their property more competitive on the market. Using data to highlight comparable nearby homes and what they’re selling for is a good place to start, but make sure to explain how the data supports your argument. Andy Werner, abr, e-pro, associate broker at RE/MAX Realty Group in Gaithersburg, Md., says many first-time sellers don’t realize how minor repairs can elevate their property’s market value. Buyers typically expect a home to be in move-in condition, so sellers who choose not to upgrade could face a $10,000 to $15,000 price reduction, he says.
“I tell buyers that if you don’t fix up your house, the buyer will go around the corner and buy from someone who did—and they’ll pay $5,000 more,” Werner says. Such an explanation demonstrates market fundamentals to your clients and keeps them on track toward the closing table. The costs of modest repairs, such as repainting, installing carpet, and refinishing or replacing kitchen cabinetry, are often recouped at resale, Werner adds.
Selling After Decades of Owning
Some common seller issues become more difficult simply because of how long a first-time seller has lived in a home. Decluttering, for example, can be hard enough for someone who’s been in their home only five years. Imagine how challenging it is for sellers who have lived in a home for their entire adult life.
It’s not just emotional resistance they’re experiencing. First-timers may simply not be aware of how clearing out personal items improves the odds of a sale. Alice Chin, psa, a broker with Keller Williams Infinity in Naperville, Ill., recommends that sellers who have never dramatically decluttered their homes before do it in stages, clearing one room at a time. Slowing down the pace can ease the mental and emotional pressure involved in getting rid of personal items, she says, and once sellers see the results in one room, it can encourage them to continue working on the rest of the house. If your client needs more convincing, ask a professional home stager to weigh in, Chin says.
Patience Is a Virtue
All sellers benefit from practicing patience while waiting for the right buyer, but this is doubly true for those who are listing a vacation home in resort areas for the first time. They face different market dynamics than if they were selling a primary residence, says McKee Macdonald, a broker with Coldwell Banker Carlson Real Estate in the ski resort town of Stowe, Vt. Many of his clients who are new to selling are shocked to learn how long it can take to sell—an average of 250 days in his market. Some properties have languished for as long as five years, he says.
Therefore, first-time sellers require a higher degree of communication so they can be prepared for the realities of a niche market, Macdonald says. He explains that traditional marketing tactics such as open houses aren’t always effective because the number of skiers (who are prospective buyers) in town on weekends is unpredictable. Instead, he advises his clients to consider renting out vacation properties while they wait for a buyer. After all, selling a second home often isn’t urgent, and a seller’s motivation can change. “Some sellers say, ‘Throw it out there. If we get the price we want, great. If not, I’m still using it,’” Macdonald says.
Experienced Sellers Can Be Rookies
Even seasoned sellers can feel like newbies when market conditions have changed markedly since their last sale. A client who sold one property during a downturn may be ill-prepared for today’s tight-inventory environment and the stress of handling multiple offers. Though it’s a nice problem to have, it can still be overwhelming.
Ashleigh Fredrickson, sales associate at 8Z Real Estate in Denver, says the biggest challenge for sellers of all experience levels is determining which offers stand the best chance of holding up. In a strong seller’s market, buyers can get swept up in the heat of the moment and bid 10 percent over list price only to realize later they won’t be able to qualify for financing, she says. So it’s important to counsel sellers—particularly those who have never been in such a situation—that the highest bid isn’t necessarily the best. “You want to make sure you’re getting the most qualified buyer so that you’re not back out on the market again,” Fredrickson says.
She suggests using a spreadsheet to help sellers analyze competing bids, taking special note of any contingencies. Your clients need to understand that a higher offer with more contingencies may not be in their best interest. “Maybe the timeline is paramount, so the seller will sacrifice a couple of thousand dollars to ensure the deal is done by a certain time,” Fredrickson says.
Above all, directness and thorough education are what every first-time seller needs, Macdonald adds. When a sale isn’t going the way a seller had imagined it would, “you need to look for strategies to offset the negatives.” But always “give sellers the honest truth, and don’t sugarcoat it,” he says.