Setting Rental Prices

If you are a property management company, condo property management company, retail property management company, or industrial property management company you are probably all too aware that setting a rental price can be tricky.  Setting rental income is vital for any property management company or landlord, so getting the price right is key.  If you don't charge enough or charge too much you could find yourself in a heap of trouble.  Mechanisms needs to be put in place to bring in the right amount of money each month to keep your property management company or business afloat.  When all is properly balanced, you can expect to achieve a great return on investment.  Before setting your rental's price, consider the following:

Look to the local market

For a property manager or landlord to successfully set a rental's price, he or she must have knowledge of the local market and perform solid research on the last 15-20 most recently rented comparables.  Nothing takes the place of thorough research using current market data.  Make sure you consider the following:

-Current rents being charged for similar properties in the area:  Say your rental property is a two-story townhome with 2 bedrooms and 2 baths, then look for similar properties in your rental's area that match up to your rental.  See where they are priced at and that will give you a good range of what to charge tenants for your rental property.

-The shape that your rental property is in:  You cannot expect to charge a fortune for a rental property if it is not in excellent condition, so price needs to take into account the shape the property is in.  Look at your recently rented comparable properties and most specifically look at properties that are in similar condition to your rental.  See where they are priced at and that may give you a good ballpark figure for your rental property.

-Current rental demand in the area:  What is the current rental demand in the area your rental property is in?  If there is high demand and your rental is in a great area, that will allow you to charge more for your rental.  If the demand is low you will have to adjust the price accordingly.

-How desirable the rental's neighborhood is:  Is your rental property in an extremely desirable neighborhood or just the opposite?  The more desirable the area, the more you can charge for your rental.   

What will be included in your rental's price? 

What will be included in your rental's price is somewhat of a personal choice.  Some tenants or property managers may prefer that electricity, internet, water and gas be included in the rent and others may prefer to keep that separate.  If you are looking for a great competitive edge, you may want to consider including these items in your rental's cost.  However, leaving those things out may save you in case your tenant uses those items excessively.  This way you would not have to directly pay for them.  It is certainly something to think about.

Looking for more tips on setting rental property prices?  Feel free to leave us a comment or contact us.

Preparing Your Property for Winter Storms

If your rental properties are in cold-weather states, you could be in for a rough winter.Preparing a rental for winter storm season is an important part of maintaining your investment. Here’s how to limit the damage a storm can do:

• Trim dead tree branches and limbs: Snow, wind and ice can bring down branches, damaging property or causing injuries. They can also take power lines with them, which is even more dangerous.
• Clean gutters: If gutters are filled with leaves and debris, snow and ice can build up, causing damages to the roof an eaves, and eventually harming walls and ceilings.
• Check chimney flues: In units with working fireplaces, it’s important to have an annual inspection by a qualified professional. Creosote buildup can cause fires.

Renters and Landlords Beware: Scams are abound!

A few weeks ago, there was a televised warning for renters and property owners to beware of rental scams so naturally, we're letting you know! Too often, we only hear one side of the story though: tenants. However, the story went on to benefit the property management community in that it didn't completely slam us. It actually praised the benefits of using a credible and licensed property management agency instead of doing it on your own. 

Here's the run-down on the Tenant version.

Typically, there are internet scams where businesses or con artists lease out properties that don't actually exist. Wow! The other side of the coin is that the property does actually exist, but it isn't available for lease of purchase due to the fact that it isn't owned by the advertiser. The con artist(s) then ask the applicant to supply all of their most personal details: social security number, current address, name, birth date, bank accounts, employers, the whole nine yards. They are also asked to pay upfront upon approval of their application. The scammer then supplies fake identification, in some attempt to look legitimate. This should be the first red flag. The next step: the applicant is sent tenancy agreements from the property owners 'lawyer' requesting money sent to an overseas account. The applicant signs the agreement, sends the money and typically...never hears from anyone again.

Rental scams are entirely too easy to set up and are typically fronts for other more devious criminal activity. The obvious is identity theft. So make sure you do your homework and deal directly with the verified property owner or property management firm. 

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Property Management Firm in Chicago

Curbing Troublesome Tenants: Part one

Residential Property Management Firm in Chicago

Troublesome tenants is something that keeps most property owners up at night. Some states that are tenant-friendly such as California and Arizona make it much more difficult for rental real estate owners to deal with tenants who are being unreasonable or causing problems. There is a way to protect yourself though: clearly and properly defined lease terms to protect from issues such as unpaid rental fees, property damage and more. Landlords or real estate professionals are usually the people putting together lease forms, but these forms can be added to in order to protect by using additional statements and stipulations.

Lease Form Tips:

1. For tenants who are always late with rent, and this is the top complaint from property owners, a stipulation such as: Eviction processes will begin on the first day after the grace period that rent has not been received. That simple line is an incredible motivator to keep inconsistent tenants paying on time.

2. Another great motivator are late fees such as: Tenant shall pay (a percentage) of the total monthly rent in late fees after the grace period has ended. The thought of having to pay more if late will, more often than not, keep people paying on time.

As a residential or commercial rental property owner, it is absolutely essential to protect yourself from troublesome tenants. Rentals today range from homes that cannot sell to standard residential apartment buildings. Home owners are even renting out their homes while renting an apartment themselves. Having a binding contract is essential when others are utilizing the buildings you own. To make sure you're not being taken advantage of, make sure there are proper stipulations to be agreed upon. Doing so will save you money, heartache and stress down the line.

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Northern Illinois Property Management

Property Management: 10 Tips for Landlords

Chicago Property Management Firm :: Northern Illinois Commercial Property Management
Landlords need to keep an eye out on their real estate investment properties just as much as the property management firm does, and while it is the job of the property management firm to handle certain aspects of the building, it is up to the Landlord to keep tabs on tenants, contracts and the overall state of their real estate properties. A few things Landlords should be doing:

1. Always Screen Tenants
Never rent out space to anyone before checking credit history, references, and background. Inconsistent screening and tenant selection too often results in problems -- a tenant who pays the rent late or not at all, trashes your spaces, or lets undesirable people move in. Use a written rental application to properly screen your tenants for warning signs.

2. Get Leases in Writing
Always use a written lease or month-to-month rental agreement to keep track of the important events and agreements of your professional relationship with your tenants -- including when and how you handle complaints and repair problems, notice you must give to enter a tenant's apartment, and anything else significant.

3. Handle Security Deposits the right way
Establish a fair system of setting, collecting, holding, and returning security deposits to tenants. Inspect and keep track of the condition of the rental unit before the tenant moves in, to avoid misunderstandings and disputes over security deposits when the tenant moves out.

4. Make Necessary Repairs
Stay on top of maintenance and repair needs and make repairs when your tenant's request them. If the property is not kept in good repair, you'll alienate good tenants, and tenants may gain the right to withhold rent, repair the problem and deduct the cost from the rent, sue for injuries caused by defective conditions, and/or move out without needing to give you notice.

5. Provide a Secure Property
Don't let your tenants and property be easy marks for a criminals or other undesirable peoples. Assess your property's security and take reasonable steps to protect it. Often the best measures, such as proper lights and trimmed landscaping, are not that expensive. If you can justify the extra expense, a gated entry may be a great selling point for security.

6. Before Entering, Provide Notice!
Learn about your tenants' rights to privacy. Notify your tenants whenever you plan to enter their unit, and provide as much prior notice as possible, at least 24 hours or the minimum amount required by state law. If you do not handle notice properly, your tenants may be able to use what's known as 'Tort' and receive monies from you. Note: Landlords are only allowed to enter a rental unit without notice in the event of an emergency such as fire.

7. Disclose Environmental Hazards
If there's a bio or environmental hazard such as lead or mold on the property, tell your tenants right away. Landlords are increasingly being held liable for tenant health problems resulting from exposure to environmental toxins in the rental units.

8. Oversee your Property Managers
Choose and supervise your property manager carefully. If a manager commits a crime or is incompetent, you may be held financially responsible. Do a thorough background check and clearly spell out the manager's duties to help prevent problems down the road. If you're using a reliable Property Management Firm, many of those responsibilities can be loaded onto the firm rather than having to oversee an onsite manager.

9. Purchase Liability and Property Insurance.
Purchase enough liability and other property insurance. A well designed liability or other property insurance program can protect you from lawsuits by tenants for injuries or discrimination and from losses to your real estate rental property caused by everything from fire and storms to burglary and vandalism.

10. Always Resolve Disputes.
Try to resolve disputes with your tenants without the involvement of lawyers and lawsuits. If you have a conflict with a tenant over rent, repairs, your access to the unit, noise, or some other issue that doesn't immediately mean an eviction, meet with the tenant to see if the problem can be resolved without outside help. If that doesn't work, consider mediation by a neutral third party before resorting to legal help.

If you are in need of advice from a professional Chicago Property Management Firm, call MK Asset Management for top notch assistance with your Residential or Commercial Real Estate Properties.