Posts Tagged ‘negotiation’

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Effective Advice For Subletting Your Home To A New Tenant

July 15th, 2010

There are many reasons why you might want to consider subletting your home to a new tenant. You might want to move out of state for a while, or take an extended vacation. Relocating for the purpose of a new job is another common scenario.

Frequently, people will decide that subletting their place is a better idea than putting it on the market. The good thing is that it is a temporary fix and will allow you to contemplate any long term adjustment with more time.

If you decide to sublet your home instead of sell it, the property remains under your ownership and you can do what you want with it when you move back in later. You do not need to worry about equities since the new tenant will be the one responsible for your payments.

You need to check with your local government as some areas have strict laws surrounding subletting. Make sure that you know all of this in advance as you may have to register as a landlord.

Do a bit of research to find out what the rental price is for comparable properties in the area. This will help you set a rental price for your home.

Be sure to investigate anyone who you may consider subletting your home to make sure they seem reliable. This can greatly reduce the number of potential problems you might run into while subletting.

Keep and maintain an accurate record of payments and of repairs made to your property to avoid any confusion in the future. Whenever you enter the property, be sure to inform the tenant each time and always remember to respect their privacy.

Try to keep in touch with your tenant and develop a good relationship. By doing this you can catch little issues and nip them in the bud.

This writer has been blogging on subletting homes for the previous seven years. Moreover, this author likes contributing information regarding New York neighborhood subjects, including Carnegie Hill apartments and Beekman apartments.

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How To Negotiate That Limited-Term Rental

June 17th, 2010

A short-term lease is usually one that has a duration of about six months, but will generally cover any rental agreement that is shorter than twelve months. Cases where people would want to rent short term include those who are on a long term vacation and prefer to stay in an apartment or house instead of hotel, companies renting for their expatriate employees, or people who are in the process selling and buying their houses.

In general, many landlords do not prefer short-term leases. Aside from not having the security of steady source of income that long-term rentals provide, renting for shorter terms translate to higher costs in terms of tenant screening and the risk of having more vacancy periods. It also costs higher in terms of the demands on their time since they will be showing the property and meeting with tenants more frequently.

Because of this, often the property owner has the upper hand when it comes to negotiating, and often the potential occupants will have to give a number of allowances such as higher rent, larger deposits, and more conditions on the lease.

To do this effectively, you should take a few things in mind. Always remember that a location with higher vacancy rates means more bargaining flexibility. You can use this as a reason for the landlord to negotiate.

In order to really get the landlord to bend to your will, explain to him or her that you can move in immediately, and that you will provide him or her with two months of rent immediately. This will certainly make the landlord more flexibility in terms of monthly rent.

Another negotiating tip is to offer to rent a property as is. Renting “as is” means that you will be taking care of cleaning, accept a non-working appliance, and other issues that the landlord will usually take care of before renting the space out to new tenants.

You also need to be aware that when bargaining, you need to assess whether you will be given the same facilities and utilities as long-term leases. These things may include a parking spot for your car, water and garbage collection.

Lastly, have a good credit rating and letter of recommendation from a landlord you once lived under. These simple and effective tactics will ensure you win not just the negotiating battle, but the short-term lease war.

This individual has been blogging pertaining to apartment rentals for the last six years. Moreover, this writer likes publishing articles regarding New York real estate subjects, such as Roosevelt Island apartments along with East Village apartments.

categories: Real Estate,Leasing,Renting,Home,Family,Negotiation,Communication,Legal,Moving,Relocation,Advice,Finance,Personal Finance,Saving

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Advice To Take Into Account When Establishing A Written Rental Agreement

June 17th, 2010

Having a written agreement for a landlord and a tenant is usually a must to show what they have decided upon. This agreement will outline what the responsibilities and rights of the tenant and the landlord are and provides a starting point for any disagreements.

However, it is drawn up with the idea of preventing disputes from happening in the first place considering that the parties involved have signed it and should have read it thoroughly before doing so. Having this protection is ideal to ensuring a positive landlord and tenant relationship.

Usually, one will find certain financial information on the written agreement. For example rental fee, due date, late charges, and payment methods are all commonly found on the written agreement. It will also contain information about rent increases and termination policies.

In some cases, written agreements will stipulate on things like where you may park, if you can have animals, whether cigarettes are allowed, what happens if something breaks, and how many occupants are allowed in the premises. You may also find that things such as lawn mowing and snow removal are covered, depending on necessity.

Also, the agreement will have all the relevant details for both signees, including phone numbers, email addresses, and physical addresses. It is not uncommon for this to be forgotten and then for trouble to occur because of an inability to contact the other party.

The best agreements will have a section that deals with how disagreements can be mediated. Things such as late rent and potential eviction will be outlined and methods of resolution covered in this section.

If you would like to look over a common written agreement, or need help creating yours, consider doing a quick search on the internet. There are usually free forms you can use, but make sure you alter the information to fit your situation.

Rules vary from state to state, so it is a good idea to talk with a lawyer if you are having difficulties creating your written agreement. It may cost a bit of money, but it will be worth the time and frustration saved.

The author has been contributing articles about legal issues for the last six years. Moreover, the author loves publishing articles about NYC neighborhoods, such as Tribeca condos in addition to West Village rentals.

categories: Real Estate,Law,Legal,Home,Negotiation,Communication,Leasing,Renting,Family,Investment,Finance,Personal Finance,Business,Advice

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A Recession Can Facilitate Rental Negotiations With Your Management Company

June 12th, 2010

With the current economic conditions, many people are experiencing difficulty in meeting their monthly expenses. Renters who were subject to pay cuts or have their businesses earning less than usual often look into their rent and see if they can negotiate for a rent decrease.

In order to do this effectively, you need to evaluate the apartment you live in. Is it managed by a company or an individual? Chances are if it is run by an individual person, you will be able to get a better deal.

Therefore, to begin with, before you start negotiating you need to find out who you should talk to, and be positive that the person you do talk to has the power to actually drop your rent.

Once you have figured out how has the power to make or break a deal, you need to complete some research. Figure out what the current rent rates are and compare the apartments around yours to others nearby.

Rental rates rise and fall overtime, but in a recession period, the rates will be lower. This is your secret weapon when negotiating rent, for you can simply tell the landlord outright that you will have no difficulties finding a cheaper apartment. Be prepared with numbers on rates nearby, this will ensure the best deal possible.

Make sure you explain the situation. Describe your economic scenario and tell them you have been paying every month, on time.

In doing this, you will show them that the best option for them is lowering your rent, rather than them having to find a new tenant. They know that this can be a time consuming and difficult process.

Giving lower rent to an existing tenant is always better than having no tenant at all. It makes everyone’s lives easier and makes things run smoother.

The individual has been publishing commentary on rental apartments for the past four years. Moreover, the author takes pleasure in publishing articles about New York neighborhood subjects, such as Battery Park condos along with Murray Hill apartments.

categories: Real Estate,Leasing,Renting,Home,Family,Negotiation,Communication,Legal,Moving,Relocation,Advice,Parenting,Finance,Personal Finance

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Be Cautious of These Real Estate Investing Programs

September 16th, 2009

So there I was one night, flipping channels, and I saw one of those infomercials that comes on late night TV. You know the kind; promising to make you millions in the real estate market. I was already an amateur real estate investor and I figured this way I could learn enough tricks to shed my amateur status and be on the road to financial freedom. Since I still had a full-time job back then, I used my lunch hour to go to the hotel where they were teaching the course.

Well, although I did not learn anything about real estate investing that I didn’t already know, they psyched me up to be a multimillionaire in the real estate investing market. That’s why I paid $2,000 to go to their upcoming weekend course. I thought the fact that they were letting me bring someone else at no extra cost was a great deal. I could see my glorious future ahead.

I learned a little more at this course, but I left with more questions than answers.

Sure, they gave me tools that I could use, but they were quick to tell me how their other courses would really help me achieve my goals. Before I was done with this program, I spent a further $20,000 on more courses. Through the course I completed one assignment deal (basically a property flip) to make some cash and bought two properties for no money down. Doesn’t sound that bad, until you find out how off track that course sent me! All hyped up and fully believing in what they were teaching, I made some really bad real estate investing decisions and those bad decisions cost me for many years to come.

Despite the drawbacks and my own personal bad experience, I believe signing up for a real estate investing course is a good starting step for beginner investors. But here are my tips on ensuring you get your money’s worth from a real estate investing course:

– Know your goals. Make your goals measurable if you can. You also need to know your tolerance for risk, and whether or not you have the ‘right stuff’ to be a landlord. (Being a landlord is more than just collecting rent, you have to fix things too- unless you have a property manager to do everything.) Once you put these goals on paper, you can commit to looking for a course that fits your needs.

– Choose a course wisely. If you type in “real estate investing course” (or class) into any search engine you’ll get so many choices that your head will spin. How will you ever pick one? The best answer to that is to see what classes other people have taken. Ask around in online forums and even ask friends and family members to see if they’ve taken any, which ones they were, and what they thought of them.

– Research the company. You can most likely get information for the company offering the course by mail or on the Internet. Some of the most important information you’ll get is the speaker’s bio. The bio will tell you what makes this teacher qualified to teach the subject. Believe me, people like Robert Allen, Donald Trump, and Russ Whitney do not teach classes like this.

– Leave Your Visa At Home, or At Least Know Your Limits. Before you leave the house to go to the FREE course or the paid weekend on real estate investing, decide what is the maximum amount you will pay for the initial course or any subsequent courses and materials. It’s important to do this BEFORE you attend the course. When you attend the FREE or the less expensive courses, the up-sell is going to be hard to resist, as you will be offered the rock bottom price, but “only if you sign up today”. And every bone in your body might be absolutely convinced that you NEED this to achieve your greatest dreams. If you go in with a threshold of, for instance $3,000, then you can hopefully better control what you actually spend on a future course. Emotion plays a big role in your decision to spend more money, and the programs out there feed on this. Take the “impulse” decision out of the equation by knowing what your objectives are and how much you’re willing to spend to achieve those objectives.

– Use what you’ve learned. All the knowledge or all the classes in the world don’t mean a thing if you never apply what you have learned. You’ve met some wonderful people at these classes and learned some wonderful tricks, but you’re still waiting. Why? If you weren’t planning to buy anything, why did you take all those classes? The real secret to making any class work is to get out there and use what you learned.

At one of the classes I went to I met several people who said this was their fourth or fifth course, yet they had never bought a single piece of property. All that knowledge and education had gone to waste. Don’t let that be you.

In summary, real estate investing classes are great, but if you aren’t going to apply what you have learned, then you might as well have not taken any at all.

You don’t need an expensive real estate program. Learn How to Retire a rich real estate investor with Dave’s free Making Money in Real Estate Starter Tips Guide. Create financial freedom, passive income and massive wealth with tips like: How to find quality rental properties, finding and keeping great tenants, and easy ways to make rental property recordkeeping simple and more profitable.

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Turning Your Home into a Furnished Rental

September 13th, 2009

Offering a furnished rental is definitely not the same as offering a regular rental property. The general principals of attracting and screening good tenants are the same, but there are some important things you should know if you’re interested in turning your home into a furnished rental or buying a property to become a furnished rental:

1. Although furnished rental properties command a higher rental rate, they cost you more too. Typically fully furnished rentals will go for 25% – 50% higher than market rent. That is a big advantage in a market like Vancouver where it’s very difficult to make a place cashflow with regular rent rates. BUT – furnished rentals have a lot more costs. Besides just the cost of furnishing the property (which you probably can expect to spend around $10,000 doing), you are responsible for paying all of the regular utilities, as well as telephone, cable, internet, and if applicable, security. Many rentals also come with regular cleaning services.

2. A fully furnished property means someone only needs to bring themselves and a few personal items. You are providing everything else, such as:

– dishes, cutlery and cookware,

– appliances like blenders, coffee makers, food processors,

– all towels, sheets and other linen,

– cleaning supplies like brooms, vacuums, and shovels (if applicable),

– cable television and wireless internet. A furnished property should be like a hotel with all the amenities.

3. Expect a variety of needs. This could include a crib or high chair or additional desks for people who work at home. There are places where you can rent furniture, so you would have to find one to rent the extra pieces your tenant would require.

4. Remember, this is not where YOU live. Don’t leave anything personal in the house, especially prized possessions or paintings of your family that could possibly be damaged.

5. Prepare a detailed inventory list of everything in the rental unit and the condition that it was in before the tenant moves in. During the initial walk through with the tenant, go over this list together and have the tenant sign off to verify that they acknowledge that everything on that list belongs to the rental unit, and if anything is damaged or stolen it will need to be replaced using their security deposit. When the tenant moves out, you will want to use this inventory list again to see whether everything that was originally in the unit is still there and is in the same condition (more or less).

6. Remember, accidents happen, and with breakable things like plates, glasses or mugs they happen quite often. Since these items get broken so easily, it’s a good idea to always have extras of these things on hand. Buy an extra box or two so that you always have a matching set.

I wanted to share these lessons learned with you in case you are thinking of renting a furnished property as a way to bring in more cash from your rental. It is definitely a great way to make some extra cash off your home if you’ll be away for awhile, or to capitalize on the upcoming Vancouver Winter Olympics. Just remember that it’s not without some challenges.

Learn How to Retire a rich real estate investor with Julie’s free Real Estate Investing Starter Tips Guide. Learn how to create financial freedom, passive income and massive wealth with tips like: How to turn your home into a furnished rental property, finding and keeping great tenants, and easy ways to make rental property recordkeeping simple and more profitable.

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Investing in Furnished Rental Properties

September 6th, 2009

Offering a furnished rental is definitely not the same as offering a regular rental property. The general principals of attracting and screening good tenants are the same, but there are some important things you should know if you’re interested in turning your home into a furnished rental or buying a property to become a furnished rental:

1. Although furnished rental properties command a higher rental rate, they cost you more too. Typically fully furnished rentals will go for 25% – 50% higher than market rent. That is a big advantage in a market like Vancouver where it’s very difficult to make a place cashflow with regular rent rates. BUT – furnished rentals have a lot more costs. Besides just the cost of furnishing the property (which you probably can expect to spend around $10,000 doing), you are responsible for paying all of the regular utilities, as well as telephone, cable, internet, and if applicable, security. Many rentals also come with regular cleaning services.

2. Fully furnished means that someone only needs to arrive with their suitcase. You are providing everything someone would need to live in your home like:

– dishes, utensils and cookware,

– small appliances i.e. blenders, toasters, coffee makers and food processors,

– towels and bed linens,

– cleaning supplies such as vacuums, brooms, and even shovels (if required),

– things that used to be considered luxury items (like cable TV and wireless Internet). Furnished property should be stocked as nicely as a hotel room.

3. Expect to have to rent some items you hadn’t thought of. Children’s furniture, like cribs and highchairs, may be needed for some tenants, while others may require special computer desks or filing cabinets because they work from home.

4. Once the new tenants move in, remember that it’s not your home anymore. If you were living in the property before you decided to rent it out, remove anything personal. The new occupants don’t really want to see the painting of your family on the wall, nor will you want anything to happen to your prized possessions.

5. Prepare a detailed inventory list of everything in the rental unit and the condition that it was in before the tenant moves in. During the initial walk through with the tenant, go over this list together and have the tenant sign off to verify that they acknowledge that everything on that list belongs to the rental unit, and if anything is damaged or stolen it will need to be replaced using their security deposit. When the tenant moves out, you will want to use this inventory list again to see whether everything that was originally in the unit is still there and is in the same condition (more or less).

6. Buy extra boxes of breakable items. i.e. an extra box of plates, an extra box of mugs and glasses. If it can break easily, be prepared to replace it easily!! It’s a good idea to furnish your unit with items from stores that are inexpensive and will always have a large inventory of the same pattern i.e. Ikea, so that you can ensure that you will always have matching sets.

Renting a furnished property will definitely give you a big advantage in the Vancouver market (or any other market) where it’s normally difficult to make a significant monthly rental income. With the Vancouver Winter Olympics are right around the corner and many people are considering renting out their houses to make some cash, or turning their unfurnished rental units into furnished units. If you are considering doing this, please keep my advice in mind; I hope that the lessons that I learned will help you be more successful.

Learn How to Retire a rich real estate investor with Julie’s free Real Estate Investing Starter Tips Guide. Learn how to create financial freedom, passive income and massive wealth with tips like: How to turn your home into a furnished rental unit, finding and keeping great tenants, and easy ways to make rental unit recordkeeping simple and more profitable.

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Learning About Real Estate Investing From The Game of Monopoly

August 31st, 2009

You can lose money in real estate. That is a fact. It doesn’t matter if the market is hot or cold. I’ve lost money on properties even when the real estate market was soaring sky high. So I know real estate is not without risk. But through these mistakes and some good investments, I’ve realized that there is almost never a bad time to buy property. But, there are definitely bad properties to buy!

I don’t know what the market will do tomorrow. But what I’ve learned is that NOW is always the best time to buy if you find a good deal.

I learned about real estate early because I come from a family of real estate investors. Whenever there are big family events, we always play Monopoly quite competitively. It’s not just a game to us; we do it to prove how good we are at investing in real estate.

Monopoly, the game, holds few similarities to real estate investing in the real world. But, the big secret to gaining a serious advantage in Monopoly is the same secret to winning in real life real estate investing, and it has everything to do with timing.

“Hold on,” you say, “Didn’t you just say you can’t time the market?” While it’s true that you can’t time the market, and that real estate is about timing, just like in Monopoly you want to make sure you buy real estate early. That means you should buy real estate when you are as young as possible so it has a chance to increase in value. That’s what I mean about timing and that’s why you should never wait to buy real estate.

Here’s the caveat though – when you play Monopoly, what do you do? You open up the box, and read the starting line which states “The Objective of the Game is to Become the Wealthiest Player Through Buying, Renting and Selling Property”. Then, you probably pick your playing piece, roll the dice and get going. If this is how you play, you’ve skipped some critical steps in the process. You may succeed, but your chances of failure are higher than your chances of success.

Similar to Monopoly where you shouldn’t start the game without reading the rules, in real life investing you shouldn’t start buying houses without first figuring out a few things. In particular, you should sit down and think through your real estate investing objectives. Then, do some research to find a market with good fundamental economic conditions, and finally find and evaluate a property to find one that meets your objectives.

The perfect property is one that matches your objectives and has a stable enough income to support itself through good and bad times. This is the type of property you need to buy and hold. The rent you make from it should be enough to get you started with other investments.

A player who travels around the board in Monopoly not buying any property, desperately hoping for the chance to purchase Boardwalk may never land on Boardwalk. That player will end up losing to the other players that settled for buying a lesser property at the beginning of the game. Sitting on the sidelines waiting for the perfect property or the perfect market doesn’t get you in the game.

Although Monopoly and the real-world real estate market can seem totally random, they are not. The market has little to do with whether or not you lose money. It’s possible to lose money in a good market and make money in a bad market. Most of this is decided by how much people decide to research before purchase.

The secret every real estate investor should know about timing the market is comprised of two parts. The first part is that now is always the best time to buy real estate IF, and here comes the second part, you can find properties that will carry themselves through bad times.

Those two things aren’t too hard to remember, are they? There are great deals to be had for real estate investors in this current market; home prices are down, sellers are motivated, and interest rates are low. But if you learn nothing else from this article, remember this: when you find a property that will consistently pay for itself each month, buy it today. Don’t wait to get in the game.

Learn How to Retire with Investment Property with Julie’s free Investment Property Starter Tips Guide. Learn how to create financial independance, positive cashflow and massive wealth with tips like: How to find quality rental properties, finding and keeping great tenants, and easy ways to make more money with Investment Property.

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What Are the Seven Habits of Highly Effective Real Estate Investors?

August 30th, 2009
by Julie Broad

Sometimes a search through your bookshelf is like a treasure hunt. As I plucked Stephen Covey’s 1989 Seven Habits of Highly Effective People from my shelf, I believe I found some long lost gold. Flipping through the yellowed pages, I soaked in some of the long forgotten golden nuggets the book contains, and I pondered what the seven habits of a highly effective real estate investor would be.

After some thought, I realized that a successful real estate investor is not a special breed; I personally believe that anyone could become one if they really wanted to. However, they would need to practice these seven habits:

Habit One: Know Your Goals

Most of the real estate investors I know set out with a goal. Someone I know started off simply by selling his home to buy two lots side by side and built an 8 unit townhouse complex. He has turned that project into a company that sells and builds hundreds of homes in Toronto every year. Some goals are simple, but lead to big things. Other goals are big and have to be broken down into simpler shorter term goals.

Habit Two: Make Your Money when you Buy

It’s not a good plan to pay above current market value for a property with the expectation that the rent you will be able to charge will increase, the neighborhood will become more desirable, and/or the value of the property will go up. The tried and true principle for success in real estate investing is to buy a decent property below market value in a neighborhood that has potential for future growth.

Habit Three: Hire Help

Unless you plan to handle everything involved with the ongoing maintenance of a property, you should plan to hire a property manager. You may also want to hire an accountant to do the bookkeeping and the taxes related to your real estate investments. Additionally, a real estate agent is also someone you will want to find to help you in your ongoing quest to find properties to purchase. It shouldn’t be hard to find one that will understand your goals and will work with you to achieve them.

Habit Four: Use Just the Right Amount of Leverage

Serious real estate investors use leverage to get what they want. If you keep buying property with cash every single time, even the richest person in the world will soon run out of money. Leverage is when you invest a small amount on a much bigger amount. In other words, it’s possible to put $10,000 down on $100,000 house. If that house makes $5,000 a year, then you ROI ( return on investment) would be 50%. If you had paid for the whole $100,000 up front, then the return would still only be 5%. However, the downside of putting a small amount down is that it does not protect you from fluctuations in the market. If that same house drops to $90,000, you can wind up owing more on that home than the property is worth.

Habit Five: Find Good Partners

If you are starting out in the world of real estate investing without a lot of money, it’s hard to reach your financial goals if you aren’t willing to enter into partnerships with others. Your partners could be a family members, friends, colleagues, or even companies. I enjoy hearing success stories where someone with no money of their own enters into a contract on a property, but know they can make it happen by partnering up with another investor. My husband and I are millionaires from our real estate investing, thanks in great part to some of the partners that contributed equity to our investments along the way. Without them, we would likely only own half of the properties that we currently own today.

Habit Six: Be Persistent

When starting out in real estate (or even when you’re established) you’re going to hear the word “no” a lot, so make sure you don’t stray from your goals. Some of the people you could hear “no” from are as follows:

– Potential partners that do not want to partner with you on a deal,

– Banks- banks can be very picky when it comes to lending money. This means you might have trouble with financing and other lending issues,

– Family – sometimes we try the bank of parents and we almost always get rejected but we still try because the interest rates are so favourable,

– Insurance companies – so few companies want to deal with out of province landlords and it seems like we’ve been turned down by nearly every company in Ontario where some of our properties are located (we live in British Columbia),

– Property Managers – sometimes the company you want to hire doesn’t want to manage the property you own.

And even though we have been turned down by all of the above at one time or another, we keep pushing ahead to reach our goals.

Habit Seven: Research – Always be learning

– The best investors are the ones that ask a lot of questions, keep their eyes open for new opportunities and do a lot of research. Many get right into the details of a city. They go to the municipal offices and pull the official plan. They get zoning details and applications. They talk to the city councilors about plans, they attend city council meetings and know everything that is happening in an area.

Not every good investor I know possesses every one of these habits. And I know there are habits that many good investors have that I haven’t covered. But as I thought about the most effective and successful investors that I have met or read about, I realized that almost all of them did possess each of the above habits. And, that anyone could really do what they did if they set out to establish these habits and practices in their real estate investing.

About the Author:
Learn How to Retire a rich real estate investor with Julie’s free Real Estate Investing Starter Tips Guide. Learn how to create financial freedom, positive cashflow and massive wealth with tips like: How to find quality investment properties, finding and keeping great tenants, and easy ways to make investment property recordkeeping simple and more profitable.

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