Monthly Archives: April 2013

chico rental property

Chico Real Estate – 6 Investment Tips

chico rental propertyIf you’re fed up with the small returns you get on bonds, the insulting interest rates paid by banks, and the frenetic fits of the stock market, you might consider turning to Chico rental property to supplement your retirement income. But it’s not for everyone. Walk through these six tips to see if real estate can help you construct a sound retirement portfolio. If the idea still seems solid, the next step is to do your homework.

1. Assess your goals
The days of buying real estate and flipping it for a quick profit are long gone. Rental real estate can provide a steady, long-term income, but it takes work. Are you prepared to do lots of research to secure a property in a good location that will be attractive to people in the rental market? Are you ready to crunch the numbers to figure out if a property will work out financially? Are you able to manage your own property, which may include fixing the plumbing, cleaning the carpets, and applying a fresh coat of paint for new tenants? If not, you will need to hire someone else to do it for you.

2. Know the neighborhood
Surely, you’ve heard the old maxim about the three important factors of real estate: location, location, and location. If you’re buying real estate you need to know what you’re getting into. Is there something special about the property, such as a view or proximity to waterfront or public transportation? What are the zoning laws? Is there a new highway on the drawing boards? You can never cover all the unknowns, but you can find out if the rental market is viable. Check with real-estate agents, go online to Zillow and Craigslist, and talk to people in town. You can’t accurately predict what the property will be worth in five years, but you should know if you can rent it next month, and at what price.

3. Buy local
There’s no neighborhood you’re more familiar with than your own. I know one couple who live in a lake community in Pennsylvania. They bought the house next door to them. They break even renting it out for the summer. They make their profit on what comes in during the shoulder season. And when it’s empty they don’t have to worry, because they can look out their window and make sure everything’s okay. The farther away you are from your rental property, the harder it is to do your job as a landlord. If it’s too far, you can’t do it at all. You will have to hire a property manager who will do the job but eat up your profit in the bargain.

4. Best bet: a one bedroom apartment complex or 3 bedroom house
Outside of vacation properties, the sweet spot in the rental market is for single people: young singles, divorced middle-agers, and retired widows. Most of these people do not need, and will not pay for, a larger unit. The one bedroom unit is the Honda Civic of the rental market. There’s nothing sexy about it, but for most people it offers the best value, and is the easiest property to manage since there are no roommates. A 3/2 house is also like the mini-van of the market, easy to rent and a high demand with families.

5. Buy at a good price
An old rule-of-thumb says if you can buy a property for 12 times the amount of its annual rent, then you’re getting a good deal. These days you can do better than that—maybe nine or 10 times the annual rent. Of course, there are always variations, depending on the type of property, location, and the prospects for appreciation. But, remember, there’s no pressure for you to buy. You don’t pay up because you “fall in love” with a place. If you’ve done your homework, you have a pretty good idea what your monthly rental income will be. Don’t pay more than what your monthly cost is going to be. That amount is your limit for what you should pay

6. Make sure you have some reserve cash
If you already own your own home, you know that at some point you’ll inevitably face an unexpected expense—the dishwasher breaks, the roof leaks, or the condo association hits you with an assessment. You need to keep a cash reserve to take care of any surprises, including the possibility that your unit might be unoccupied for a (hopefully short) period of time. You also need to build these irregular expenses into your financial equation to help you decide, in the final analysis, if the whole project is worth it.

Need help purchasing or managing your new chico rental property? Give us a call

property management checklist

Chico Property Management Checklist

property management checklistProperty management is an important element for Chico real estate investors. Having a property management checklist can make the difference between an active and a vacant property.

Here are the most common tasks of a property manager to care for a property:

Outside maintenance is a must for a property manager. Trash cans should be washed and the trash needs to be dumped. The yard needs to be mowed, trees, bushes, or hedges should be trimmed, and weeds eliminated. Check all the downspouts and gutters to make sure they are not clogged with debris.

When it is warmer outside, fix broken wooden trim and paint it. Pressure wash the buildings to get mold and dirt off again. If the building can’t be pressured washed, then add a fresh coat of paint. This is a very important tip for a property manager.

Taking care of the property on the outside adds value to the property. The people who live there feel safe and appreciated, and neighbors are happy because it will help keep their own property values as high as possible.

Besides outside maintenance, make sure the inside is taken care of as well. This is a top property manager task. Check the smoke alarms in the hallway to see if working properly along with changing out the batteries. Make sure the stair hand railing is not loose and add new paint if necessary. Clean the stairs and even give them a good washing. Wash the windows and fix the screens.

In some colder years make sure everything is maintained for winter like wrapping water pipes and using weather strips for doors and windows. Check the heating and air systems for any potential problems.

Top property manager tasks and tips are numerous. But, a property manager must do their job correctly to ensure the safety of the tenants. The company that owns the property ensures their trust with the manager that runs the property, which is extremely important.

These are just a few of our routine items to check and address. Looking for Chico Property Management help?

Tips On Choosing Property Management Companies in Chico

ownersLocal property management companies play a vital role as the go-between between owners and tenants. This is because most owners do not have the necessary training and experience required to manage such investments successfully. In addition, most landlords also have other commitments to attend to and so are not best placed to run such businesses on a day to day basis. For those in need of services of property management companies Chico property management professionals are always ready to help.

Hiring out service providers in Chico will relieve you the stress of management and let you focus on more investments. Property management firms will professionally maintain and retain the allure of your properties. Depending on your preference, they will lease out the property for you, maintain it at the original state, address all tenancy issues, collect rental income for you and liaise with all governmental agencies regarding any issues. You could be looking for personalized services and thus a mid-sized property management business may work better for you.

Having settled on the outward bearing, the next thing is to go through the company’s profile. The number of years a company has been in this kind of business can be an indicator of how reliable and solid they are. However, a newly established firm can also be having in its ranks personnel with many years of experience and thus should never be ignored. An honestly written company profile should highlight such experience.

When selecting the desired firm, it is prudent to know how they advertise for vacancies. Some of the methods used by various companies are online advertisements on their websites, newspaper placements, targeted marketing and advertising boards. This is crucial because the time taken to lure and vet a tenant means loss of income for you.

Chico is a growing city and it attracts people from all walks of life. The rental property business is highly competitive in this area. This tells you that you need to choose the right property management company so make sure your investment is left in the right hands.

Every landlord’s desire is to recover the investment put into the property in the least time possible and professional service provider plays a very big role in this. Most firms will charge you a percentage of the income that you receive and this practice has been found to be the best because the company will strive to have full occupancy all year round. It is upon you as the landlord to look at the various packages offered by the management firm and choose which services the firm may offer.

With these considerations it’s not difficult to separate professional firms from the latter in the property management industry. For efficient management of your investments, you better retain the services of a professional firm that has enough experience in running the real estate industry in Chico.

Interested in getting a good Chico property management company on your side? Please use this to schedule a free property consultation. We will contact you shortly and confirm a time to visit your property and discuss your situation. 100% no obligation!

Time for Spring Cleaning at Your Properties!

spring cleaningThe sun is out in Chico and it’s time to begin thinking about and planning for summer. There is no better time to do so than the spring time! There are a few things that you can do as a chico property owner to prepare now for a smooth-running summer.

Have multiple properties? Now is a great time to begin formulating a newsletter for your tenants that describes all of the things that you will be doing for them as well as what they can do to make their summers as cool and uneventful as possible. Communication is key to setting expectations about what your tenant is expected to do, so get that letter out there in the next couple of weeks.

Tenants can help you help themselves by notifying you of any maintenance issues that may best be taken care of now rather than later. Things such as leaky faucets, stuck windows, and appliances that seem to be working a little less effectively than before are key items to look for.

Now is also a good time to replace the batteries in smoke detectors as well as carbon monoxide sensors (if needed). Remember it’s the law to have both these in operate in California. Of course, the spring is an ideal time to change HVAC filters—doing so now also gives you a great opportunity to verify that the air conditioning is working in each and every one of your rental units.

You may want to begin stocking up on critical supplies like A/C filters, light bulbs of various wattages and sizes, garbage disposals, various screws and fasteners, and other consumables like faucet aerators, water filters, shower heads, and water heater heating elements, if applicable.

People tend to move most frequently during the spring and early summer months, so you will typically find yourself using a lot of materials and supplies during this time of year. You may also find that your preventive maintenance routine gets put on the back burner this time of year because of all the move-ins and move-outs.

Try to refrain from making that mistake. In fact, you may want to consider hiring some temporary staff, just to help keep up with all that will be going on in a few short weeks. Line up your vendors, too, so that they don’t become a sticking point in getting new tenants moved into their units. Chico’s turns over a lot of units each summer, so sometimes it can be hard to find vendors at the last minute!

You will need to set your budget and calendar for more carpet cleaning appointments, painters, paint and supplies, as well as general maintenance on move-outs. There are always things you need to repair before moving a new tenant in. We like to have a 15 day turnaround goal, but your’s may be shorter or longer depending on your team and properties.

Additionally, your time will be tied up more, too, because you will be doing more inspections during this time, as well as all of the marketing to get new tenants and all that that endeavor entails: Things like interviews, background checks, more frequent deposits, more frequent and greater expenses due to all of the outside vendors you may have to bring in to get people moved out and in as fast as possible.

Obviously, planning in the early spring for all of the activity that will ensue in May and June is time well-spent. If you don’t plan soon, you may find yourself scrambling at crunch time.

Advertising Your Rental Property in Chico

For-RentAdvertising your rental property in Chico can be done in many different ways and you have many options that are free while others can cost you an arm and a leg.

Yard Signs
Yard signs can be an integral part of your overall marketing plan. Yard signs give you the ability to let anyone that passes by know that this property is currently, or will be shortly, available for lease. With your yard sign, you are not only advertising to the prospective tenant, but you are also advertising to their friends and family. How many times have you encountered a friend or family member that is looking for a place to rent? You might not go out of your way to research available properties but you would let them know that you passed a house in a neighborhood that seemed nice, right?

A yard sign is an indispensable part of your marketing strategy. And don’t use the cheap ‘fill in the box’ “For Rent” or “For Lease” signs; it is all about how you present yourself. Create and order your own for rent sign online instead of buying the cheap ones. For a moderately inexpensive yard sign that is very high quality, consider using BuildASign.

Business Logo
You may want to consider having a custom logo designed for your business. Just like anything else, you can spend absolutely nothing other than your time all the way to thousands.

Advertising
You have may choices available when trying to advertise your rental property ranging from Free to $99.00 or more! Stick to online advertising and as long as your property is in a decent location for a fair price, you will most likely have more inquiries than you know what to do with.

There are two sites that we recommend using, CraigsList and Postlets. CraigsList is by far my number one choice for advertising a rental property, but you will want to start with Postlets. Postlets offers free syndication of your rental advertisement to, currently, 9 different websites. Once you have setup everything through Postlets, you can then take the HTML that it has generated and copy and paste it into Craigslist (Craigslist doesn’t appear to allow automatic postings at this time).

Other paid options include listing with the properties local newspaper and including in the Multiple Listing Service (MLS), ChicoRentalListing.com and CSUCHousing.com

Some Alternatives to Eviction in Butte County

evictionsEviction is a lengthy and complicated process, and probably a solution you’re reluctant to jump to when a resident is missing rent payments or violating the lease. Instead of beginning a long legal process to get renters out of your unit, there are alternative strategies you can use (that are not self-help evictions) to try take care of the situation before resorting to the eviction procedure. Double check what the necessary process for eviction is in your state to make sure you are in compliance with local Chico and Butte County laws. In our experience, evictions usually take 45-60 days, not to mention the time that passes before you start the eviction process. Here are a few more tools in our tool belt.

Talk With Your Residents First
How severe is the problem? Why do you feel they should move out or are breaching the lease agreement? If the issue is something besides missed rent payments, try to work out a solution with your resident. Plan to meet in a neutral location, and calmly explain the issue. Meeting in a neutral, public location makes it less likely for emotions to boil over or for one party to have the upper hand. Sometimes, residents may not realize how they’re violating the lease or damaging the home. If they’re understanding of the situation, try to come to an agreement about the situation and solve the problem.

Send a Legal Notice or Official 3 Day to Pay Rent or Quit
When multiple written warnings just aren’t spurring your residents into action, sometimes a legal notice from a local Chico attorney will do the trick to ‘scare’ them into good behavior. We have recommendations if you need a few names. The letter should explain the issue, how it’s in violation of the lease agreement, and the legal actions that could follow if there is no compliance. A legal notice, if effective, can prevent you from having to initiate an actual eviction.

Work Towards Finding an Alternative to Eviction
Perhaps your resident is unable to pay the rent because they’ve lost their job, owe medical bills, or can’t afford to move. Do you have a smaller, cheaper unit they could move into, or are you willing to lower the rent if they help you with maintenance tasks on your property? Approaching your resident with these solutions shows that you’re understanding of their situation, and they may be more willing to cooperate with you as a result. Include an addendum to your lease to reflect the agreement. Work out a payment plan, but be careful if you accept anything less than full rent, it may make eviction even longer if you do decided to go that route.

Paying them to leave aka Cash for Keys
If worst comes to worst, and you really want to prevent eviction if you can help it, a solution is to pay your resident to move out. If a renter can’t afford to move, or flat out refuses to move despite neglecting rent payments, offer a sum of money or forgive one month’s rent in exchange for an agreement to move out. Make sure you inspect the unit before the move-out, and get the agreement signed by your resident before the money is exchanged.

For specific advice or to schedule your own no obligation property consultation, drop us a note.

curb appeal

Increase Your Curb Appeal with a Few Seasonal Flowers

Is your Chico rental property’s landscaping prepared for the warmer months? In our area curb appealprospective residents begin their search during the summer. Therefore, your properties should look their best by the time summer rolls around including the landscaping. The front yard is usually the first thing prospective residents see when walking up to the property, making it important to have polished landscaping to make a good first impression. Curb appeal is critical to attracting good residents.

April is a great time to get started with landscaping for the summer. After all, as they say, “April showers bring May flowers.” Flowers are great for landscaping because they are known to cause in humans the emotional responses of happiness, enjoyment, and life satisfaction. Incorporating flowers could give your property a pleasant vibe, making it welcoming to both prospective and current residents.

In preparation for the warm months to come, here are some flowers that you could plant in April:

Sweet William
These flowers range from white to yellow to deep purple. There are also a bi-color varieties. Landscapers frequently use Sweet William flowers for their low maintenance and minimal care. These flowers need to be replanted after two to three years.

Marigold
Marigolds are known for blooming all summer long and range from orange to yellow colors. These flowers are easy to grow, since they can grow in almost any type of soil. Additionally, these plants could be used to repel certain pests and insects from the garden.

Zinnia
Zinnias are one of the easiest flowers to grow. They are annuals that are known to grow and bloom quickly. These flowers are highly recommended for property managers who might be lacking a green thumb.

Cosmo
Cosmos are also easy to grow. These flowers also could grow tall, making it ideal for flower arrangements or decorations for places like the entry way or common spaces of your property. One perk of these flowers is that they have the habit of reseeding themselves. Therefore, you may not have to plant them every year.

going green

Going Green to Attract Prospective Residents

going greenWe all are aware of the current competitive rental market. Everyone is fighting for the attention or prospective renters, trying to gain an edge on their competitors. One way for landlords and property managers to make their properties more attractive is to go green.

Creating green apartments will not only help you market vacancies, but could also save you and your residents money. This is because greener living and apartments conserve resources, decreasing the costs of items like utilities or garbage services.

Here are a few ideas you could attract more prospective renters using greener practices in your apartments:

Use low-flow toilets and showerheads
Save water by implementing low-flow toilets and showerheads into your properties. These changes will make these plumbing fixtures more efficient, saving money on these utilities.

Start recycling programs
I once lived in an apartment that didn’t offer any recycling. I had to lug all of my recyclables down to a recycling center a few blocks away, which was difficult because I didn’t have a car. It made me feel like my apartment complex was wasteful and inefficient. If we had recycling available, it would have been more convenient for me and I would have used it.

Implement a recycling program in your apartment community. Residents who are earth-conscious find recycling instinctual, and will expect your residence to offer it. If you don’t, this could deter prospective renters.

Use energy efficient light bulbs
Replace all old light bulbs with energy efficient ones. Use energy-saving incandescent lights, compact fluorescent lamps, or LED lights to save anywhere from 25 percent to 80 percent of the energy that would have been used by traditional incandescent light bulbs.

Go paperless
Reduce the amount of paper waste your office uses by going digital. You could send your residents an application or lease agreement online, rather than printing out dozens of pages. You could even allow your residents to pay online rather than having them write out a check and use an envelope every month.