USA Property Management/Flip step through & Live ATL Properties
I haven't posted for a while but thought that this might help with pointers as I just had another person contact me about another state.
I sent this to my list.... again, at 100k+ SFR, the US market just really is dubious for the Oz investor (commercial is yummier) - at 100k+ the market is US investors putting 20% down and borrowing at 3-5% - the risk is just negated there alone!:
The Good, the Bad and the Ugly
Years ago I wrote that the buy is probably 10% of the experience of being a US investor. The US is an AMAZING investment opportunity, it is entirely doable but it needs watching and after 15 years of doing it I can't emphasize that enough. I am being contacted more and more by people who have friends or acquaintances who have had a bad run in the US market in various states looking for advice/help etc. Most just through being ripped off on purchases or repairs but some by buying in just the wrong, wrong location and any combination of the above including “usual” US property management stories..... Whether to flee or stay is very individual but please remember, S!@#$ happens - just get on top of it! If you are being asked, try giving these basic rules....
1. Have someone one the ground who is separate from your property manager - by on the ground, I mean able to drive to your property and do something practical.
2. If you know someone screwed then this is about my yard stick:
Sell if you can walk away without losing $$. Only Oz investors (6% in a bank looks great) really are likely to want to take the money because the US investors are FINALLY back to being able to borrow at 3-5% on investment properties (I am just starting to refi over here - YIPPPPPPEEEEEeee) and thus US investors are back in force! They put only 20% down - so you are VERY likely to be able to sell out soon enough up to about 150k with ease but you will need to hold until comps match (see next post) - if you bought a 15k house for 60k, you have a long wait for comps to catch up to your purchase price. This is a rising market – if you need to hold on and there is even a chance that you can recoup your $$ within a year then do - if you can hold on without losing $$ for a year to even find out - it is probably worth it. If needs be rent for anything that will at least cover taxes and insurance until then – have a warm body in the place.
Basic Rules of Property Management from Afar
This is not Australia and tenants are not in an economy with 100% employment...in most areas you are seeing a softening of rents and nervous expat investors are the first to ditch yield. So anyone with properties over here needs to be in control way more than they would in Australia – and if the property manager isn’t giving you the right answers, find them out for yourself. Remember property managers here are generally over worked and underpaid. Getting the attention you may want for your property takes involvement.
3 things you need to be on top of: Rent, Repairs and Marketing if the property is vacant...
STAY ON TOP OF THE PROPERTY – once a month – make sure rent was paid. If you have access to your property manager’s system – ie Appfolio etc... Login – if not, ask! YOU make the decision how to proceed. Property managers are not the owners – you are. Yes, take their advice but then go with gut and be firm, make the decision. The greatest expense you can have is a vacancy but at some point you need to just make the call – this is a market that is predominantly owned by foreigners being rented to people who may well be struggling to keep their job..... It is a judgement call with personalities involved – ask your property manager for their gut.
HAVE REPAIR LIMITS in any property management contract and STICK TO THEM. If you have written into your PM contract “no repairs over $200 without prior written authorization by owner in any given month”, then have a penalty clause that gives you recourse if the property manager doesn’t follow this (** Note emergency situations are an exemption – where emergency is defined as imminent danger to life or property occurring within 2 hours). GET PHOTOS. Before and after.
KNOW WHO TO CALL to get comparative quotes – $50 can make a difference in yield... Again – WE LOVE REDBEACON.... www.redbeacon.com – but many states have different variations on the theme...the key with Redbeacon is that at least you get a guarantee.
If your property is vacant – ask for COPIES of the advertisements, the methods they are advertising and weekly (at least) updates on responses.... There is one SURE way to rent a property and that is to reduce rent – REMEMBER – you are losing $200 a week on average for every week your property is vacant but look to market comps and use Trulia/Redfin as your own guides to help YOU decide what to do. You don’t want to start a downward spiral in rents but you do need to do what you must to get the property rented.
I can’t emphasize enough the importance of having someone, anyone on the ground that can be TRUSTED to give a non inflated repair estimate or a once over of a situation....
I haven't posted for a while but thought that this might help with pointers as I just had another person contact me about another state.
I sent this to my list.... again, at 100k+ SFR, the US market just really is dubious for the Oz investor (commercial is yummier) - at 100k+ the market is US investors putting 20% down and borrowing at 3-5% - the risk is just negated there alone!:
The Good, the Bad and the Ugly
Years ago I wrote that the buy is probably 10% of the experience of being a US investor. The US is an AMAZING investment opportunity, it is entirely doable but it needs watching and after 15 years of doing it I can't emphasize that enough. I am being contacted more and more by people who have friends or acquaintances who have had a bad run in the US market in various states looking for advice/help etc. Most just through being ripped off on purchases or repairs but some by buying in just the wrong, wrong location and any combination of the above including “usual” US property management stories..... Whether to flee or stay is very individual but please remember, S!@#$ happens - just get on top of it! If you are being asked, try giving these basic rules....
1. Have someone one the ground who is separate from your property manager - by on the ground, I mean able to drive to your property and do something practical.
2. If you know someone screwed then this is about my yard stick:
Sell if you can walk away without losing $$. Only Oz investors (6% in a bank looks great) really are likely to want to take the money because the US investors are FINALLY back to being able to borrow at 3-5% on investment properties (I am just starting to refi over here - YIPPPPPPEEEEEeee) and thus US investors are back in force! They put only 20% down - so you are VERY likely to be able to sell out soon enough up to about 150k with ease but you will need to hold until comps match (see next post) - if you bought a 15k house for 60k, you have a long wait for comps to catch up to your purchase price. This is a rising market – if you need to hold on and there is even a chance that you can recoup your $$ within a year then do - if you can hold on without losing $$ for a year to even find out - it is probably worth it. If needs be rent for anything that will at least cover taxes and insurance until then – have a warm body in the place.
Basic Rules of Property Management from Afar
This is not Australia and tenants are not in an economy with 100% employment...in most areas you are seeing a softening of rents and nervous expat investors are the first to ditch yield. So anyone with properties over here needs to be in control way more than they would in Australia – and if the property manager isn’t giving you the right answers, find them out for yourself. Remember property managers here are generally over worked and underpaid. Getting the attention you may want for your property takes involvement.
3 things you need to be on top of: Rent, Repairs and Marketing if the property is vacant...
STAY ON TOP OF THE PROPERTY – once a month – make sure rent was paid. If you have access to your property manager’s system – ie Appfolio etc... Login – if not, ask! YOU make the decision how to proceed. Property managers are not the owners – you are. Yes, take their advice but then go with gut and be firm, make the decision. The greatest expense you can have is a vacancy but at some point you need to just make the call – this is a market that is predominantly owned by foreigners being rented to people who may well be struggling to keep their job..... It is a judgement call with personalities involved – ask your property manager for their gut.
HAVE REPAIR LIMITS in any property management contract and STICK TO THEM. If you have written into your PM contract “no repairs over $200 without prior written authorization by owner in any given month”, then have a penalty clause that gives you recourse if the property manager doesn’t follow this (** Note emergency situations are an exemption – where emergency is defined as imminent danger to life or property occurring within 2 hours). GET PHOTOS. Before and after.
KNOW WHO TO CALL to get comparative quotes – $50 can make a difference in yield... Again – WE LOVE REDBEACON.... www.redbeacon.com – but many states have different variations on the theme...the key with Redbeacon is that at least you get a guarantee.
If your property is vacant – ask for COPIES of the advertisements, the methods they are advertising and weekly (at least) updates on responses.... There is one SURE way to rent a property and that is to reduce rent – REMEMBER – you are losing $200 a week on average for every week your property is vacant but look to market comps and use Trulia/Redfin as your own guides to help YOU decide what to do. You don’t want to start a downward spiral in rents but you do need to do what you must to get the property rented.
I can’t emphasize enough the importance of having someone, anyone on the ground that can be TRUSTED to give a non inflated repair estimate or a once over of a situation....
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