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Dear Boston Landlords : Here’s How To Find Well Qualified Tenants

If you’re a landlord in the Boston area and you have a vacant unit currently or becoming vacant in the coming months, myself and the Mandrell Company would love to help you fill that vacant unit with a qualified tenant.

We do so completely free. There is no cost to you the owner or landlord. We start off by advertising your rental unit for lease. We help you show the apartment so you are not using your valuable time standing around waiting for potential tenants. We take care of that for you as well.

Once we find an applicant who we feel is qualified, based on the criteria that you’ve presented, we then do background checks, credit checks, employment verification and several other background checks to make sure that that person is qualified and they are who they say they are.

Once we gather all that information we then present you with a full package on that tenant. If you deem that tenant qualified and the person that you’re looking for we move forward with the lease signing process and if not we put the unit back on the market and proceed to find another qualified tenant.

We also, again, assuming the tenant is qualified, draft the lease for you, collect all the first month fees, security deposits and anything else that you were asking for and then assist you and the tenant through those first few days of keys, lease signing and various other things that need to be taken care of at the time.

If you do have a vacant unit, if you are looking to fill a vacancy we would love to work with you. You can contact us at 617-297-8641. You can also reach us at contact@mandrellco.com. We look forward to working with you. Thanks.

Thanks for watching our video. Did you find this information useful? If so please remember to like the video and also subscribe to our channel for more useful information. I would also encourage you to share this video with your friends and family. Thanks again and we’ll talk to you soon.

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In this video, Patrick Wheeler of the Mandrell company shows you how to easily determine whether your real estate investment is profitable. He takes you through a simple to use rental property deal analyzer that allows you to determine return on investment, cap rate, cash on cash return and several other investment measures. Great investors know that your money is made during the purchase. Use this terrific calculator to make sure you fully understand your investment on the way in. Download now with the link below.

http://mandrellco.com/dealanalyzer

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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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Cash Flow

Cash Flow by definition is the total amount of money being transferred into and out of a business, especially as affecting liquidity. In real estate investing, what this means is:

Total Income – Total Expenses = Cash Flow

While you would assume total income would consist of just rent, make sure to include other potential sources of income including application fees, late fees and laundry income. If these sources are possible, also make sure to estimate your numbers using a conservative approach. In the long run this will be the most beneficial approach. On the flip side, your total expenses are NOT simply your mortgage, property taxes and insurance. Other expenses that cannot be overstated include utilities, potential flood insurance, repairs, vacancy, property management and capital expenditures. The last three expenses can be used as percentages against your monthly income from the property. Failure to include ALL possible expenses could lead to you purchasing a “deal” that actually turns out to be no deal at all.

Depreciation/Appreciation

Once you have purchased a property and become a landlord, it is to stay up to date with the value of your property and identify whether appreciation or depreciation has taken place. While this is very important post purchase, factoring in appreciation for an investment decision is speculative in nature and brings unneeded risk into the situation. In the event that your property has depreciated over time, there may be significant tax advantages to this and those same advantages may even be available to you if your property has appreciated over time.

Net Operating Income

Net Operating Income by definition equals all revenue from the property minus all reasonably necessary operating expenses. To look at this simply, NOI is calculated on a monthly basis using monthly income and expense data, therefore it can be converted to annual data just by multiplying by 12. The important thing to remember with NOI is that the formula does not include debt service costs, (loan costs) which differs from cash flow. One of the biggest reasons a landlord will want to know this number is because Net Operating Income plays a huge role in determining the value of your property. For this reason, it is in your best interest to work towards maximizing this number using different strategies to accomplish this.

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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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Understanding local rental rates in your Boston neighborhood is extremely important to your success as a landlord and real estate investor. There are three basic stages to any investor’s career, which are the buying, holding and selling stages. In each phase your knowledge about the current rental market will determine if you come out on top or not.

To give you an example, let’s assume we’re considering at a rental condo in Boston’s Beacon Hill.  When you’re evaluating whether or not the property is a good deal, an obvious factor is the potential rental income the property can generate. You must understand the Beacon Hill market, the tenant base and the length of time or DOM (days of market) of your average rental. It’s also a good idea to understand what your tenant base is looking for in a rental. Is the area dominated by families, single professionals, students or is it and older community? This knowledge will help you determine the types of finishes and improvements you’ll need if any.

There are many investors who’ve had tremendous success in the rental business and have been able to hold onto properties for a number of years. When these landlords eventually go to sell, they’re in a less than perfect position despite their past success. The reason for this is that they’ve failed to keep up with current rental rates in their markets. Often, landlords with long-term tenants will keep rents low despite the steady increase in values throughout the neighborhood. These landlords do this in fear of disturbing “a good thing”. They have a great tenant who’s been paying rent consistently and they fear of increasing rents would possibly disrupt that consistent flow of income. While this is a valid concern, what most investors don’t realize in that they are devaluing the property. The easiest way to put this into perspective is to pretend you’re a potential buyer and you’re considering two identical rental condos. The condos are identical in every way and they are both coming with the existing tenant base. If condo A has rental income of $1700, while condo B has rent income of $3200 (current market rate), most potential buyers are going to value condo B higher despite the fact that it’s identical to unit A. If we assume our Beacon Hill Investor owned unit A, s he would have to take a lower sales prices than her competitor selling unit B, not to mention all the additional rental income she didn’t collect over the years.

The best way to combat this potential scenario is to consistently monitor your local rental rates. Have your real estate agent send you regular reports like the one attached below. The report will tell you what apartments have rented, how long they’ve been on the market, and the average price  those rentals have rented for.

The example report is for a landlord in the Beacon Hill area. She has a 2 bedroom unit with 850 square feet. The report shows activity in the area for the last 3 months.

Beacon Hill 2 Bedroom Market Report

Would you like a FREE rental and sales market report for your area? Simply email Contact@MandrellCo.com with your criteria and we can have it out to you within 24 hours! You can also call us at 617-297-8641.

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The numbers don’t lie! Before you decide to accept your next tenant application take a closer look at their income. Many landlord find themselves in trouble shortly after accepting a tenant into their rental units…mainly because the tenants are financially overextended.

A good rule of thumb is to require that your tenants annual income is at least 40 times the monthly rent. For example, if two roommates are looking at a $3,000 per month apartment, you would require a combined income of $3,000 × 40, which equals $120,000. To determine how much rent you they can afford, simply divide their combined annual incomes by 40.

You might have also heard that you should spend no more than 30% of your annual income on rent.  Spending 30% of your yearly income on rent is believed to be an affordable amount, leaving enough money for all your other expenses. What’s the difference between 30% and 40 times the monthly rent? Absolutely nothing, they’re just two different ways of deriving the same number.  The 40x trick is just easier to calculate.

For example, let’s take $120,000 of income.

  1. 30% of $120,000 = $36,000.
  2. $36,000 ÷ 12 months = $3,000 per month.

But to make the calculation easier, just divide $120,000 by 40.

  1. $120,000 ÷ 40 = $3,000 per month

Again, to determine how much rent your tenants can afford, simply divide your combined annual incomes by 40. Don’t have a calculator handy?  Use the following table to look up your maximum rent.

Gross Annual Income

Max Monthly Rent

$40,000

$1,000

$44,000

$1,100

$48,000

$1,200

$52,000

$1,300

$56,000

$1,400

$60,000

$1,500

$64,000

$1,600

$68,000

$1,700

$72,000

$1,800

$76,000

$1,900

$80,000

$2,000

$84,000

$2,100

$88,000

$2,200

$92,000

$2,300

$96,000

$2,400

$100,000

$2,500

Need help renting one of your units? Contact us! We can help you find qualified tenants….often at no cost to you!

Contact@MandrellCo.com or 617-297-8641

 

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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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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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