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In our latest series of educational webinars, we explored the topic of self managing your rental properties vs. hiring a property manager. In the fourth and final section of the webinar, we talk about six ways to create more value in Boston rentals, creating a “preventative maintenance schedule” and should you hire a professional and what do they charge.

For more resources and tips on managing your properties, please contact us.

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In our latest series of educational webinars, we explored the topic of self managing your rental properties vs. hiring a property manager. In the third of four sections of the webinar, we talk about protecting your real estate investments and essential landlord/tenant forms that you will need throughout the course of running your business. Many people will say it’s not “if” you will get sued, but “when” so learning about all the strategies that can protect your investments is imperative.

For more resources and tips on managing your properties, please contact us.

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In our latest series of educational webinars, we explored the topic of self managing your rental properties vs. hiring a property manager. In the second of four sections of the webinar, we talk about how you should handle your income, expenses and taxes when it comes to your rental properties. This is another area of focus that is very important when running your business.

For more resources and tips on managing your properties, please contact us.

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In our latest series of educational webinars, we explored the topic of self managing your rental properties vs. hiring a property manager. Even if you initially plan to self manage your properties, it is important to still factor in the cost of hiring a property manager. In the first of four sections of the webinar, we talk about the eight tools every small landlord needs, mastering your rental market and marketing your rental units. Each topic is very important when running your properties like a business and making the best decisions for the business.

For more resources and tips on managing your properties, please contact us.

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Now that summer is finally here, it is a good time to take a look at all potential maintenance needed for your properties. As the winter months tend to be the quieter time of year, spring is typically the time that tenants move out, whether it is a result of a new job or just general life changes. Therefore, it is most important that you inspect your properties to ensure that the condition is such that you can turn them over quickly. If not, it is definitely important to address such issues to maintain the desirability of your property. Some specific areas of maintenance include:

Landscaping
One of the more important summer maintenance areas, a well landscaped property can do very well for the desirability of your property. Falling under curb appeal, this is one of the first things a potential tenant or buyer will notice when first seeing your property. And seeing as first impressions can be very important, it is critical to keep your property well maintained on the outside. The good news is that this is one of the easier jobs to do yourself and should be relatively easy to receive help if need be.

Siding and Walls
Like landscaping, the siding and walls on the outside of your property go a long way to maintaining its desirability and positive first impression appeal. When cleaning your siding is all that is required, simply wash the siding with a soft cloth or ordinary long-handled, soft bristle brush. This can be done using water and mild soap. The best approach is to start at the bottom of the siding, work your way up and rinse the cleaning solution completely before it dries. If siding needs to be replaced, this is another relatively small job and can be learned and applied in a relatively short period of time.

HVAC Systems
Your tenants are definitely going to have working A/C during the summer months, so this is one of the most important areas of focus within your property. One of the specific components to pay attention to for A/C maintenance is cleaning the air conditioner coils, both inside and out before cooling season begins. When the coils are dirty, the system runs longer, which reduces efficiency and increases cooling costs. Another component to address is to check and refill the refrigerant charge if necessary. If you do not have the right amount of cooling refrigerant, you run the risk of damaging the air compressor. Lastly, clean and calibrate the blower system components for optimal airflow. This will lead to a longer lasting and more efficient system.

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Okay, so you’ve found great tenants and their expected to move in on the 1st of the month. Now what? Here is a quick “to do” list to make sure you and your rental property appear super professional from day one.

  1. Change the locks and get new keys to the apartment – You’ll like your tenants to feel as safe as possible when they take possession of their new living space. The last thing you want is for them to start questioning whether the old tenants still have access to the unit. Be sure to make several copies and keep a copy for yourself. You’ll need your set of keys if your tenants happen to lose theirs or if you need to enter the apartment for an emergency.
  2. Get a new mailbox key – In the haste of new tenant preparations, many landlords forget the also place a new lock and key on the mailbox. Your previous tenants should have changed their address with the post office so there is no need for them to come back and access this box.
  3. Change the name on the mailbox – Make sure to let the mailman know your old tenant have moved and the new tenants are coming in. The easiest way to do this is to place a new label with the tenants name on the mailbox. If you don’t have one already, get yourself a label maker. When your new tenants see their name on the mailbox on move in day, it will make them feel right at home.
  4. Get the apartment professionally cleaned  – Make sure the apartment has a clean/ fresh feel to it. If you want your tenants to stay for awhile they’ll need to feel as if it’s truly there home. The best way to do that is to make sure there are no remnants of your prior tenants. I always replace the toilet seat and leave the plastic wrap on top. For $20, this shows my new tenants that I truly care about making them feel comfortable.
  5. Add a fresh coat of paint on the walls – Paint is the “new car smell” for apartments.
  6. Check the batteries in the smoke detectors & change the light bulbs – There is a good chance the tenants that just moved out didn’t change the batteries or light bulbs. Do these things before your new tenant moves in. You’d rather not have a smoke detector chirping a week after move in and you certainly don’t want light bulbs dying as they’re moving in boxes.
  7. Prepare a “Welcome Basket” – Moving isn’t easy and there are often things that are lost in boxes the first couple nights after a move. Help out your new tenants out with a couple a basic items. Prepare a welcome basket with toilet paper, tooth paste, tooth brush, soap, local take-out menus and any other low cost item that they may need the first night. Anything you can do to help them get settled in is going to be very much appreciated.
  8.  Get a list of service providers for your new tenants – Prepare a list of companies your new tenants will need to contact. They’re going to call you for this information anyhow, so you might as well have it ready for them at move in. Who provides gas or oil heating? Who provides electrical services? What about cable and internet?

Do you need help finding qualified tenants for an empty apartment(s)? We can help you fill your vacancy at NO COST to you! We do a complete a background and credit check as well as income verification and several other services. For more information, call us at 617-297-8641 or email Willie@Mandrellco.com

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Installing hardwired smoke detectors are as easy as twisting a wire. Follow these step by step instructions on how to do it yourself.

Step 1:

Purchase compatible smoke detectors.  It’s best to stick with the same brand.  It’s imperative that they use the same wiring.  Incompatible smoke detectors will not work with each other.  If there is a fire, one smoke alarm will go off  but will not trigger the other detectors, leaving some tenants unaware of the potential danger.  Incompatible smoke detectors will show a red glowing light.  They may also sound randomly and trigger the other alarms to do the same.  You may be able to silence it temporarily but they will continue like this until the incompatible detector is removed or replaced with one that’s compatible.

Step 2:

Pick a time of day to work when you know you get great light in the stairwell windows if there are any.  Bring a flash light if you need it.

Step 3:

Make sure your tenants are aware of the work being done.  Let them know they don’t need to be alarmed if detectors start going off during a certain period of the day.  You’ll need to test the alarms to make sure they’re working.  Since this is your first time you might want to do so more than once as you go.

Step 4:

Turn off the power to smoke detectors.  This will likely turn off the power in the stairwell as well.  The stairwell window light or flashlight will come in handy.

Step 5:

Remove smoke detectors and smoke detector mount from stairwell wall.  You may want to dispose of the old smoke detector, but if you should consider saving the newer ones that simple aren’t compatible with the detectors you are installing.  If you manage more than one property, you might be able to use them elsewhere. Hold on to all screws use to mount the detector.

Step 6:

Remove old smoke detector wiring. There will be 3 wires red, yellow and white connected to the other wires in the wall with caps on them not always indicating the color of the connecting wires.  Remove the caps and then unwind the wires until all 3 smoke detector wires are free. Replace this wire with the new smoke detector wires.  The white and black wire power the detector.  The red wire connects that smoke detector to others on the property.  If there are no other hardwired smoke detectors present connecting it may not be necessary. The red wire often comes with a covering for this reason.  Be sure to put caps back onto all the wiring.

Step 7:

Add new detector mount to the wall.  You should able to use the same screws from the older detector.  Mount the smoke detector, turn the power back on and your mission is complete. Well, depending on how many you have to install.

Step 8:

Take a look at the detectors and make sure they’re all glowing green after you’ve completed your work. If you want to check your work before installing all the new smokes, try detaching the older smokes and then turning back on the power.  If the newer smokes are glowing green and not sounding you know you did the job right. If they are glowing green, but still sounds there may be an older detector you’ve have not removed, possible in the basement or somewhere else you forgot to look.

This is easy work that just takes a little time and patience. Feel free to call me anytime with questions.  617-818-0408. I’m always happy to help where I can.  I’m your Boston Rental Property Specialist!

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Real estate is an excellent investment vehicle for building wealth, especially here in Massachusetts where we have a large number of multifamily buildings. The 3 family home, as an investment tends to make a ton of sense when it comes to the balance between the purchase price of the building and rental income you can achieve from one of these buildings.  Let’s take a quick look at a recent purchase made by one of our clients.

Purchase Price:  $500K    Down Payment: $100K    Mortgage: 15 Fixed @ 4%

Expenses: (Mortgage, Taxes, Insurance, Water, & Misc):  $3,800    Income:  $4500 ($1500 * 3 Units)

Monthly Cash Flow:  $700

$700 monthly cash flow is great, but the real financial benefits come from the long-term effects of this investment on my client’s portfolio. If you noticed above she opted to take a 15 year loan and pay off her debt sooner than the typical 30 year plans. Let’s take a look at where she is financially in 15 years:

Debt Pay Down:

As you make your monthly mortgage payments the principal balance is slowly decreasing. This debt pay down is called the “amortization” of your mortgage. If you look at a mortgage amortization chart (which is usually provided with your loan documents) you can pinpoint what the principal balance on your loan will be at any given point over the term of the loan. This assumes you are making all your payments on time and only paying the minimum amount due each month. As your mortgage balance decreases your net worth increases. With the above scenario my client is done paying or has “fully amortized” this loan in 15 years.  She will receive a discharge notice from the bank and no further payments will be due. Her tenants will have essentially paid off a 400k debt for her and increased her net worth by that much.

Property Appreciation:

Appreciation is the increase in your property’s value year over year.  The rate of appreciation you will receive in future years is impossible to predict but history tells us that property values tend to increase at a rather consistent rate over time. Removing recent market adjustment years (2006-2011), US real estate values have appreciated at a rate of approximately 6% annually, with Massachusetts falling right in line with average rate. If we take our property from above with a current market value of $500k and assume we achieve at least a 5% rate of appreciation over the next 15 years, we would be looking at a property value of $1,039,000.

Rent Appreciation:

Rent prices tend to move upward with inflation. Just like the cost of bread and gas, rent rental values always go up. With that said, the same $4500 per month ($54,000 annually) my client is collecting in rents today will be much higher in the future.  If we assumed rents in her building also increased at a rate of 5% yearly, she will be collecting $9,355 per month after 15 years. That’s over $100K annually in passive income!

Net Worth & Passive Income:

If you take these numbers as a whole, thats when things start to get exciting. 15 years from now this mortgage will be completely paid off and it will have been done by someone other than my client. Her tenants are paying off the debt every month with their rent checks. Not only is she getting the debt paid off but she will be putting $700 (or more) per month back into her pocket over the next 15 years. At the end of the 15 year term her debt will be gone and her rents have now grown to $9355 per month, which she can put in her pocket or use to go out and purchase other investments.  Her property has also appreciated to over 1 million in value which will be a major contribution to her total net worth number!

Building Wealth Takes Time:

My client is not very special …in the sense that anyone can follow this wealth building model and achieve exactly what she has done in the past and is in the process of doing again. Don’t have $100k to invest? You don’t need it. There are ways to achieve the same with a whole lot less. Don’t have time for tenant issues? Hire a property management company! With this model my client is achieving $700 in cash flow. I’m sure for $700 per month you can find a company to manage your tenant issues. Long story short… there is really no reason why this can’t be done by anyone.  15 years is not a walk in the park but the earlier you start the sooner you’ll get there. If you only had this one building and invested in nothing else during the next 15, you would still have a net worth of over a million dollars and earning over a $100k in passive rental income! Imagine if you bought several of these investments!

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Your tenant’s move in day is a very important time for you as a landlord. Move in day sets the tone for how your tenant(s) will view your apartment business during their tenancy.  If you’re organized and professional most tenants will show you the same level of respect. On the other hand if you are, sloppy and unorganized you will be setting yourself up for headache as your tenants will see you as such and treat you poorly during their stay. Here are a few quick ways to make a good first impression to future tenants.

  1. Create an apartment walkthrough checklist. This checklist should be used a guide so every aspect of the apartment is reviewed by you and the tenant on their first day. Your checklist should include a review of flooring, walls & ceilings, windows, cabinets, doors, and everything else in the apartment that could be damaged during the tenants stay. This checklist tells the tenant that you will also be looking at these same items on the day they move out and you expect them to be in the same condition…minus normal wear and tear.
  2. Make sure you have a copy of the apartment keys ready for the new tenants. This seems like a no brainer, but many landlords forget this simple step and cause themselves lots of running around the day of move in. You should also consider changing the locks depending on your apartment building and neighborhood. Many tenants come to expect that the locks will be changed and you should be prepared to manage this expectation.
  3. Briefly go through the lease and rules of the building again. For some, moving is a very involved and emotional experience and sometimes things get mis-understood or loss during the shuffle. It’s a good idea to remind your new occupants of the rules and regulations of the building.  
  4. If you didn’t already have a W9 form completed by your tenant, now is a good time to collect this. If you are collecting a security deposit from your tenant, than it need to be placed into an interest bearing bank account (separate from your personal funds) during the tenants stay. To open this landlord-tenant account, the bank will require this form from you. This account also allows any interest earned on the deposit to be accredited to the tenant as well as saves you from paying taxes on that interest.
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http://www.MandrellCo.com/Management   617-297-8641

Are you buying or selling a multifamily or investment property in Massachusetts?  Need help filling an empty unit or interested in property management services?  The Mandrell Company specializes in multifamily & investment property sales, rentals and management!

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I don’t know about you but not only did I get into real estate investing to create financial success but to create more time in my life as well.  When it came to having rental properties in the portfolio I quickly found that instead of creating more time I had created another full time job that sucked up so much time that I found myself working on the business instead of in it.  Let alone the damage it did to the quality of relationships to those around me.  Like many an Entrepreneur that was a dangerous position to be in and it was more sooner than later the train wreck was going to arrive.

Well I said to myself you can continue to do this the hard way or the easy way.  The hard way being you can continue to have tenants calling you in the middle of the night or just badgering you about property issues as the laws regulating property continue to get more and more complicated on the federal, state and local level eating up even more time.  Or you could hire a property manager to take care of it for you putting a much needed buffer between myself and the tenants.

But how do you hire a management company and still make a profit? Consult with your fellow investors who have had success in hiring a management company. I can tell you we’ve gone through our share of them.

Once you have assembled a list of companies and before you call them, design a list of expectations for the property company and a list of goals for each of your rental properties.  Your goals might sound something like this:

·          Keep property rented

·          Prepare an annual budget

·          Manage a siding installation project

·          Annually inspect the property and send you a report.

·          Send you a monthly financial report

·          Help you lease up property

Before you dial the phone, look at your list of expectations.   These are the questions you can ask the property management company to see if they are a good fit.  Remember to also have a property description and income and expense information available for them to be able to give you a detailed response to your questions.  Your list of questions may look something like this:

·          How long have you been in business? (You are looking for long-term stability.)

·          How much insurance do you carry?

·          Do you have experience in the kind of property I want you to manage? How much experience?

·          Is your staff bonded?

·          What does the bonding and your insurance cover?

·          Are you accredited by a national organization?

·          How do you collect the rents?

·          If a tenant does not pay what do you do?

·          How do you advertise vacancies?

·          How do you select tenants for my property?

·          How much do you charge monthly? Are there additional charges?

·          What service do I get from you?

·          Do you send me monthly reports?

·          What is included in my monthly reports?

·          How do you handle property maintenance?

·          How much could the maintenance cost?

·          Can I visit your office?

·          Can I meet the property manager who will be directly managing my property?

·          How do you handle property emergencies?

·          Can you give me some example of your attention to detail?

·          Tell me about some of your success stories?

·          Tell me specifically how you will take care of my investment?

·          Do you have references I can call?

The answers to these questions will probably give you a good idea of how the company is run and how well your property will be taken care of.

Clearly the questions you ask will also depend on the size of the property you are planning to have managed and the results you expect. For our purposes we are talking about successfully managing a single family to smaller multi-family units (up to four units), tenant selection, screening, as well as rent collections and property maintenance are key issues.

Have confidence once you have selected your team.  If you have done your due-diligence you should have a qualified organization that you can consider an extension of your business and can be confident they will follow the law and abide by a code of ethics.  It’s an important choice so don’t be afraid to interview many companies to find the one that fits the needs of your investment portfolio.

In the end after you have evaluated price, experience, and accounting reports, the key decision factor will be the level of trust you have in the management team of the company that will be taking care of your property. If you have any questions at all call me at 617.297.8641. I’d be happy to help you select a property management company that’s right for you!

P.S.   If you are ready to start building your wealth through real estate investing, make sure and become a member of The Boston Landlord wholesaler buyers list.  As a member, you’ll be notified immediately when they have a new property up-for-grabs (that means YOU will have first dibs on the hottest deals)! To sign up, visit the website at http://www.TheBostonLandlord.com/Buy or give them a call at 617.453.8571. 

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