Archive | July, 2012

Tip: Using Google Alerts to Monitor Rental Rates

30 Jul

This is a system I use to keep an eye on the fair market values of our rental property – both rent price and property value.

First, I create a new Google Alert of the street, city, and state of my investment property.  You can create a different alert for each property, or create alerts for multiple streets in the area if one street doesn’t give you enough data points. In my case I’m lucky: the entire street is lined with duplexes that get rented out and they were all built around the same time, so they interior conditions are probably similar.

Now Google Alerts will send me an email when it detects a new mention of this street on blogs or websites.  They arrive occasionally, and typically contain a combination of for sale listings, for rent listing, and garage sale announcements.

This list of Google Alerts Tips will help you refine your alerts.  For example, I could add -garage to my search query to remove garage sale listings from appearing. Or if the street name has two words, you could put the street name in parenthesis to limit the search to the entire phrase instead of inadvertently receiving listings for similarly-named streets.

As I get new rental rate data points, I add them to this on-going Excel chart:

Unit Rent Bed Bath Sq. Feet Price per Sq. Ft. Source
1 $995 3 2 1150 $0.87 hotpads.com
2 $1,050 3 2 1387 $0.76 hotpads.com
3 $1,095 3 2.5 1319 $0.83 realestate.yahoo.com
4 $995 3 2 1319 $0.75 txpropshop.com

I can then take the average price/sq. feet of the street or neighborhood and apply that to the square foot of my unit.

Using the above data as an example: $0.8925 / sq. feet average * 1199 sq. feet of my unit = $962 fair market rent. This is great news for us, because we’re currently receiving $875/month per unit. When we do impose a rate hike, we can include this information in the notice letter so tenants can see they’re getting a fair deal, and exceptional tenants can see they’re still getting below-market rent. 

An added perk of this system is that I now have a list of websites in my back pocket to use when I have a vacancy to fill.

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Rental Landscape Watering; Summer DriWater Test

23 Jul

There is a noticeable gap in rental landscape expectations – apartment complexes care for the grounds, while smaller properties leave it to the tenant. Understandably, an apartment complex can share the cost of landscaping over more units, and the continual search for a tenant provides the motivation to put their best foot forward. Still, I think we can do better. This post is a part of my on-going search to find a middle ground that allows respectable rental landscaping that scales for a small real estate empire. 

As a follow-up to my landscaping projects from earlier this summer, I continued my weekly weekend watering, but it wasn’t enough for the new shrubs.  Despite my best efforts, I’d come back a week later to find droopy, lifeless plants. In retrospect, summer was not the best time to establish a new root system…

So began my quest for a self-watering solution that could help keep these shrubs alive during the summer, with specific criteria in mind: cost-effective, a 30+ day timeline, and attractive.  Several products would get the job done, but left unsightly globes, 2-liter bottles, or water beds in the lawn.

I eventually found DriWater, a gel substance that slowly turns into water when it reacts with enzymes in the soil. There are several products with different timelines and applications, but I pieced together my own technique that lets me use the cheaper 32 oz refill packs and keeps the product hidden from view. Cost including shipping: $23.20 for 5 packs.

DriWater in action.

First, I cut a slit down the length of the plastic casing which exposed a portion of the gel to the soil, and then buried the entire product next to the plant, slit down. Cover with soil and mulch and the product is entirely hidden from view. This should provide supplemental watering for roughly 60 days, which will be enough to survive the summer. I’ll provide an update when I’ve gotten a better feel for how they’re working.

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Choosing Landscaping for Rental Properties

17 Jul

This summer we experienced the very essence of sweat equity.

Some of our shrubs were casualties of the 2011 drought, so we set out to replace them with something more attractive but durable.

Similarly affected plants in the neighborhood

Hubby with power tools

The bulk of the old shrubs were extracted with a reciprocating saw.  Removing the roots was quite a feat, but made much easier by the wise advice of Mike’s Backyard Nursery. With only a spade and spud bar, we removed all 5 well-entrenched root balls in about an hour.We turned to the city’s guide to native and adaptive landscape plants for replacement advice; I don’t expect the average tenant to water the plants regularly.  We settled on the Golden Showers Thryallis, an adapted shrub described as “easy to grow; needs room to spread; little maintenance required” that will sprout small yellow flowers in the warmer months.

After planting our wedding ceremony tree this spring, the duplex was a little lop-sided, so we also added a second cedar elm for the other side.  I’m diligently watering the 1st tree until it gets established, so it’s no extra work to water a 2nd tree while I’m there.  I’m pleased to see that several trees have been planted around the neighborhood recently.

Total cost of tree, shrub removal, new shrubs, edging, soil & mulch: $149.23.  Hopefully this is an investment that will pay off for many years, and put us in a better position to get top dollar the next time we have a vacancy.  The next challenge will be keeping these new plantings alive!

Planted thryallis shrubs with new edging and mulch.

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Marketing Rental Vacancies with Inexpensive Door Hangers

13 Jul

cheap door hangerWhen I arrived home this evening, a door hanger was waiting on my door.

On closer inspection, I noticed it was created by hand as an affordable alternative to a printed door hanger. This method is ideal for low-quantity efforts (100 or less). Compared to online services that will print a professional door hanger for  about $.75/hanger, this can be made with materials you might already have around the house.

How to make a cheap door hanger:

  1. Print information on the front and back of a sheet of paper.  The beauty of this method is that you have complete flexibility on the paper weight, size, and color vs. black and white printing.  I believe the brochure on my door was created using legal paper, which provided a wider surface for content. 
  2. Fold the paper in thirds to create a brochure.  If I was using a thicker paper like cardstock, I would probably use a scoring board to make sure the edges were crisp. 
  3. Before stapling the door hanger together, align the rubber band in-between the prongs of the staple.

do it yourself door hanger construction

Easy peasy!  This could be a useful tool for creating some word-of-mouth by announcing a vacancy to the surrounding neighborhood.

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Lease Renewal Letter to Tenants

11 Jul

Below is a short post sharing the letter to our tenants about their upcoming lease renewal.  In this instance, the rent amount did not change.

Update – you might also appreciate these other examples of renewal letters – one emphasizing the market rate of comparable rents and one emphasizing the hassle and costs of moving.

 



Month DD, YYYY

Dear Name and Name,

According to our records, your lease expires Month DD, YYYY. We have enjoyed having you both as tenants, and we would like to extend an invitation to renew your lease for another year.

The rent terms for the new 12-month lease will remain at $x/month.

If the terms are agreeable, please sign and initial the Residential Lease Agreement, Animal Addendum, and Owner’s HOA Restrictions Addendum as indicated. We included a self-addressed stamped envelope so you can return the paperwork to us via mail. When it arrives, we’ll counter sign and mail you back copies of all the documents. If there is something you have concerns about, I’m sure we can work something out – just let us know!

Also included is an optional Inventory and Condition Form. Rest assured, we’re realistic about normal wear-and-tear of a lived in house – this is intended for any significant damages that need repair or replacement so you are protected when you move out.

Sincerely,
Name

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