Month: February 2023

Categories
Short Term Rentals

Modern Management: 6 Best Tools for Short-Term Rentals (And How They Can Boost Your Profits)

Source: Photo by National Cancer Institute on Unsplash

There are more than 2 million vacation rental properties up for grabs—and that’s just in the United States alone! You already know that the competition is strong. Plus, you have to constantly deal with:

  • Responding to inquiries from potential guests
  • Updating your property’s availability on multiple platforms
  • Managing the schedules of your cleaning staff
  • Handling check-ins and guest demands

With all these tasks to consider, it’s easy to get overwhelmed—even if you only have one short-term rental property. Luckily, there are a ton of great apps and digital tools to help you automate your most tedious tasks. Not sure where to begin? Read on!

How Will My Short-Term Rental Property Benefit From Apps and Digital Tools?

Generally, people embrace automation when they want to quickly and easily complete tasks. It’s no different in the short-term rental industry, where landlords like you must deal with repetitive chores.

Not only do apps and digital tools clear up your to-do list, but they also allow you to boost your occupancy rates and dominate the competition. Here’s a list of how tools help you manage your short-term rental:

  • Save time: You can automate tasks that are repetitive and time-consuming yet critical to the success of your rental. Apps and digital tools can save you time on listing properties, answering guest inquiries, and managing booking requests.
  • Improve communication with guests: Your guests’ experience in your short-term rental unit is enhanced by messages and reminders that they automatically receive to their phone. Using digital tools to communicate with your guests also helps in avoiding misunderstandings.
  • Increase efficiency: You’re enabled to manage multiple short-term rental units from one central location. Some apps and digital tools even track and analyze data, which allows you to make informed decisions about your business. 
  • Increase revenue: Potential guests receive quicker responses to their general inquiries and booking requests when you automate your messages to them. This can help increase your occupancy rate, which, in turn, boosts your overall revenue.

Clearly, automation allows you to enjoy the benefits of being a short-term rental landlord without having to deal with its associated burdens. But there are so many apps and digital tools out there, that it can be hard to figure out which one is right for your business.

No worries—we have you covered! Here are several tools that we believe will increase your occupancy rates and make your business a huge success. 

6 Best Tools for Short-Term Rentals

From automated reminders to tracking data, there are apps available for every aspect of managing a short-term rental unit. These are our top recommendations:

For Scheduling Cleaners: Breezeway

Managing a cleaning schedule isn’t as easy as you think. To ensure that your guests will always be greeted by a spick-and-span vacation rental, you must have a system in place that allows you to seamlessly coordinate with your turnover service providers.

Enter Breezeway—a platform that features innovative scheduling and quality assurance tools for both cleaning and maintenance staff. It even analyzes how productive staff members are, which allows you to assign the right task to the right person at the right time.

For Synchronizing Your Listings: iGMS

If you want to list your properties across multiple websites, invest in a good channel manager. Aside from increasing your short-term rental unit’s exposure, list synchronization eliminates the risk of accidentally double-booking dates.

iGMS is a challenge manager that allows you to seamlessly list properties on some of the industry’s most popular websites, including Airbnb, Booking.com, and VRBO. It features a world-class dashboard, too, which allows you to easily keep an eye on everything.

For Managing Your Property: Tokeet

Want a fairly hands-off approach to managing your short-term rental properties? Tokeet is your best bet. Its core features include a direct booking website builder, which allows you to easily create your own page for direct reservation management. No more paying hefty commission fees to Airbnb or Booking.com!

Tokeet also offers a dynamic pricing tool called Rate Genie, which automatically updates your rates across multiple channels. It’s powered by data-driven algorithms that determine the best prices for your properties, allowing you to increase your rental revenue by as much as 30%.

For Messaging Guests: Duve

Communicating with guests is a labor-intensive task that takes up a lot of your time. From patiently answering their inquiries to confirming their bookings, you might just find yourself spending hours on your booking platform’s chat function.

Duve allows you to genuinely and smartly manage every single aspect of your guest communications. Send automated messages, provide contactless check-ins, and collect important information before your guests arrive. The single smart platform even offers a customizable welcome app that will enhance their experience and ultimately increase your revenue.

For Turning Your Property Into a Smart Home: Operto

In the short-term rental industry, going above and beyond to provide guests with an excellent stay is key to keeping bookings full. Nowadays, most guests are tech-savvy and work remotely, so giving them a positive experience can be as easy as investing in smart technology.

Operto offers exactly that. It’s an integrated suite of smart home solutions that allows you to streamline your operations and create a contactless guest experience. For instance, Operto implements smart locks and sensors. It can even regulate the property’s thermostat, which saves you big time on energy costs.

For Welcoming Guests: HelloHere

Most—if not all—travelers want to experience new places like true locals. So, if you want to avoid being bombarded with messages about which restaurants to eat at, consider investing in HelloHere, a “digital guestbook” that caters to their every need.

HelloHere offers a destination guide containing every answer to your guest’s inquiries, from fantastic local restaurants to sights that shouldn’t be missed. It also features a live chat function, so you’ll no longer have to worry about guests calling you in the middle of the night!

Automation: A Foolproof Way to Boost Your Business

With countless apps and digital tools available, embracing automation for your short-term rental business is no longer an insurmountable challenge. By investing in these nifty software solutions, you’ll reduce your workload without sacrificing your occupancy rates and revenue!

If you’re a short-term landlord in Oakland, streamline your daily rental tasks and boost your guest interaction today with these top-recommended technologies. We’d love to have you in our community!

Join as a REIA member today to attend our meetings and sign up for our newsletter.

Categories
Flipping

5 Tips to Flip a Really Old House (Challenging but Possible!)

The interior of an old home with aged wooden frames and dry leaves
Source: Mahdi Dastmard on Unsplash

Countless shows have entertained us with the possibility of flipping an old house (over 50 years old) for profit. It used to be simple, too: find a run-down house, fix it up, and sell it for easy money.

However, in today’s market, flipping a house has become much more challenging. Properties are increasingly more expensive to buy and fix up, and more and more wholesalers vie for the same investors.

And everything is exponentially more complicated if you flip an old house—the lower the starting point, the rougher the road is to flipping success.

So how can you flip an ancient house? Here are five critical tips for house flippers to remember.

1. Pick a Home in an Excellent Location

You can change everything about a house except for its location. So pick a home in a good neighborhood, often categorized by its amenities (e.g., near schools, public transportation, etc.).

No matter the potential you see in an old home, never choose one close to the freeway, with a high crime rate, or anything unappealing like that. Nobody wants a pretty property that’s in a terrible location. Instead, purchase a home in a prime location, and you’ll appeal to many potential buyers.

2. Check Your Numbers, and then Check Them Again, & Maybe Again!

How much is the house worth? How can you get it under the market value so you’re making money right off the start? Moreover, how much will it cost to bring it up to a sellable standard?

Knowing your numbers is vital in all real estate investments, but it’s especially crucial to flip an old home.

If you’re not experienced in answering any of the questions we’ve mentioned above, you’ll need to hire these professionals:

  1. Real estate experts to know the estimated property value
  2. Contractors or inspectors to determine the estimated renovation costs (ERC)
  3. Real estate agent or broker to determine the after-repair value (ARV)

These professionals will help you flip an old home, especially given how tricky it is to renovate and know the value of a subpar property; doing things yourself might lead to underestimating or overestimating the cost and value, which could put your entire investment at risk.

3. Understand What Needs to be Done—and What Really Doesn’t

A home inspector can help you understand what needs to be fixed in a house before you sell it. Oftentimes, old houses need work in these areas:

  • Outdated outlets and electrical systems
  • Outdated heating systems (HVAC units)
  • Obsolete plumbing systems
  • Foundation issues
  • Deteriorating roof
  • Hazardous building materials
  • Old windows and door frames

These structural issues are called the “bones” of a house because they’re essential parts that make up the structure and safety of the property. You can get away with ignoring other cosmetic details like paint colors or flooring when flipping an old house, but you absolutely cannot ignore the bones. If any of these areas are not up to code or need significant repairs, it will be especially difficult (and expensive) to fix before selling. Contract a professional inspector to confirm the condition of an old home before you buy to stay in the clear.

4. Find Reliable and Honest Contractors for Repairs

Once you’ve bought the house and know what needs to be fixed, it’s time to find a contractor.

A lot of people try to save money by hiring an unlicensed contractor, or by avoiding getting  multiple bids from different contractors. As a result, they often overspend on repairs or end up with a subpar repair job. Cutting corners can cost you thousands of dollars and cause significant delays in selling the property.

Find a good contractor by following referrals from friends, family, or other real estate investors who have flipped homes before. Once you have a few referrals, interview each contractor, get multiple bids, and check their licensing and insurance.

Here are the two categories of contractors you’ll choose between:

  • General contractor: If you choose a general contractor, you’ll only have one point of contact who’s in charge of managing the entire project from start to finish. A general contractor should be someone who is capable of managing every step so you can trust them the entire way.
  • Subcontractors: If you choose to go with subcontractors, you’ll do the overall managing yourself and have a group that includes electrical, plumbing, HVAC, framing, insulation, painting, and flooring professionals. You’ll also need backups to these roles so you’re never left hanging if one subcontractor calls out sick.

A good contractor is honest about the repairs that need to be done, gives you a fair price, and has a good reputation. Don’t be afraid to negotiate with contractors—remember, it’s your money and your investment, so you should feel confident in getting the best value for the repairs.

5. Build More Time than Usual Into Your Timeline

Old homes usually need major modifications and there’s bound to be a surprise or two!

You may need to redo narrow staircases, hallways, and doorways. Moreover, you’ll likely have to take down walls and rearrange the layout to modernize the old home by creating larger living spaces.

You’ll likely touch every part of the house—the electrical, plumbing, framing, and more—and you’ll need to strictly stick to your timeline to cover all the necessary steps. You don’t want to skip, delay, or rush any of those steps, either, (like installing drywall to see immediate improvement) because the structure or “bones” is what truly makes the property valuable.

Essential renovations take time and careful planning; don’t get too excited with the finishing stage.

Instead, plan ahead realistically, stick to your timeline, and schedule when each subcontractor should start their part of the project (if you’re not using a general contractor). You’ll make much better use of your time without sacrificing the quality of the finished property.

House Flips for Huge Profits: Old Homes for New Money

Have cautious optimism when flipping an old home. As long as you understand what you’re getting into before making an offer, lend your due diligence to inspections and contractors, and have a solid plan for repairs, you can make a tidy profit by flipping an old home.

Do you need more help flipping old homes? Sign up as a member, subscribe to our newsletter, and join us in our upcoming meeting! Stay updated with the latest tips and tricks by joining a community of like-minded individuals for your real estate investment journey.

See you in the winner’s circle!

Categories
Landlords

How Should Landlords Handle the Recent Rent Price Decreases?

A woman opening her wallet and realizing there are no bills
Source: Emil Kalibradov on Unsplash

It might have come as a shock to a lot of landlords as market conditions have drastically reversed in the past year, bringing the 20-month streak of increasing rent amounts to a halt. Unfortunately, this drop in rent prices is seen across the nation, affecting many investors’ potential returns.

So, what can you do about it to stay profitable in your real estate investment?

Let’s discuss it below.

How did rent prices decrease significantly?

In recent months, the US real estate market slowed down, where rent decreased by 0.1% across 40 of the most extensive metropolitan areas in August 2022. Renters celebrate financial relief (excellent), but investors clutch desperately to their original investment returns (not ideal).

Here’s a snapshot of the rent price movements across 40 markets, where we see that our home area, the City of Detroit, has dropped 0.5% month-over-month:

Source: Apartments.com

Jay Lybik, CoStar Group’s national director of multifamily analytics, said, “We’re seeing a complete reversal of market conditions in just 12 months, going from demand significantly outstripping available units to new deliveries outpacing lackluster demand.”

Beyond that, places like the City of Detroit are experiencing a labor shortage in the construction and maintenance industry of the City of Detroit. While this news means that it’s harder to build homes (bad news for anybody developing a property), it means that the demand for housing stock is still increasing. And, more importantly, people are competing for a limited number of units (good news for landlords and rental property investors).

If you’re a rental property investor in the City of Detroit, ensure that you stay ahead of the curve and keep your properties in excellent shape to attract and keep tenants. And of course, always keep an eye on the market and prepare to adjust your rents accordingly.

What should landlords do when rent averages decline?

The most important rule in real estate investing is to stay updated with the market’s current status to change your strategy on the fly and avoid significant financial losses. For instance, if you know that there’s an oversupply of rental units in your area and not enough renters to fill those up, opt to lower your rent to attract quality tenants willing to pay for a comfortable space.

But if you think that the rent prices in your area will continue to decline, selling your property might be the best move to make. This tip is especially true if you’re carrying a lot of debt—the last thing you want is to end up upside down on your mortgage.

Of course, there are other strategies that you can do to stay profitable during a rent price decline. Here are 4 tips to maintain financial viability:

#1 – Review your financials and make necessary changes

Go over your finances and see where you can make adjustments. This might mean looking for ways to reduce expenses, like cutting down on maintenance and marketing costs. You should also consider ways to increase your income, such as by finding new tenants or increasing rent for existing ones. If you have vacant units, consider offering discounts or incentives to attract new renters.

#2 – Negotiate with your lenders

This could involve asking for a lower interest rate on your mortgage or a longer repayment period. You might also want to consider refinancing your loan so you can get more favorable terms. This could help you free up some extra cash each month that you can use to cover other expenses.

#3 – Raise rent for existing tenants

If you can, consider raising the current rent amount for your existing tenants. Doing so could help offset any decline in rent prices that you’re experiencing. Of course, you must be careful not to price your tenants out, so raise your rent slowly to keep occupancy up without dragging your returns down.

#4 – Diversify your portfolio

Diversifying your portfolio means investing in other types of property, like commercial or vacation rentals. Doing so could help you mitigate some of the risks that you’re facing with your rental properties and generate additional income to cover your expenses.

Rent Drops Doesn’t Always Mean Cash Flow Decrease

The biggest takeaway from all of these is that landlords should always be updated with the latest market trends so they can change their strategy accordingly. This way, they’ll be able to protect their investment and even grow their portfolio despite a rent drop.

No matter what strategy you use, stay proactive and adapt to the changing market conditions. By doing so, you can minimize the financial impact of a rent price decline and keep your business healthy.

One way to stay updated is by signing up as a REIA member. You can also subscribe to our newsletter and join our upcoming meetings, so you’ll be the first to know any tips or advice we have regarding the real estate market. The market is always changing, so you have to as well.

Categories
Wholesale Wholesaling

Pro Tips on How to Wholesale Real Estate in an Uncertain Market

Source: Usman Yousaf on Unsplash

Every real estate investor knows how volatile the market can be. It’s not as crazy as stocks or crypto, but the real estate investment environment isn’t completely protected against shifts.

For example, the International Monetary Fund recently announced that they’ll be more aggressive on funding now. So, combined with the uncertainty we see in the economy, bond yields increased, directly correlating to a rise in mortgage rates for the real estate market.

But even with things like this, you can still invest in real estate and come out victorious.

How? Well, try wholesaling properties.

Real estate wholesaling is finding a deeply discounted property and then selling it to another investor, usually for a quick profit. And since you’re not the one who’ll fix it up or hold on to it for the long term, you don’t need to worry about market conditions as much.

Of course, wholesaling has its challenges in an uncertain market. But knowledgeable wholesale real estate investors deviate them easily—simply as they know how to play the game. Read on to know!

1. Increase Your Lead Conversion Rate

Finding motivated sellers is key to a real estate wholesaling business. You must constantly find people who need to sell their properties fast (usually because they’re facing foreclosure or divorce), as they present an opportunity for you to swoop in and make an offer.

In an uncertain market, looking for motivated sellers should be easy, as more people want to sell their homes quickly to free up cash. You can find them by networking with real estate professionals, driving around neighborhoods with distressed properties, and more.

But it’s not just about finding motivated sellers; it’s also about increasing your conversion rate:

Number of deals closed / Total number of motivated sellers = Conversion rate

The higher your conversion rate, the better you can weather any uncertain market storms. You already spend so much time and money on marketing and generating leads; you’ll do yourself a favor by optimizing your closing process to convert more leads into closed deals.

Continue to find motivated sellers, and improve your chances of closing deals with them.

2. Get Your Financing in Order

If you’re going to wholesale real estate, you need to have your financing in order before you start looking for properties. Getting your ducks in a line is important because, most of the time, the properties you’ll find will require some form of creative financing, like using:

  • Hard money loans: Loans based on property’s value instead of the borrower’s creditworthiness
  • Private money loans: Loans from private investors if you can’t qualify for traditional financing
  • Partner with another investor: Pooling resources together with a partner to finance a property

If you don’t have your financing set up beforehand, it’ll be hard to take advantage of these opportunities when they come up, especially when dealing with uncertain market conditions simultaneously.

For example, if the market crashes and you’re trying to get a loan from a bank, they’ll be much more hesitant to give you the money. Whereas if you have a hard money lender lined up, they’ll be much more willing to finance your deal.

3. Know Your Numbers

In an uncertain market where things can change rapidly, you need to be extra conscious of unnecessary business costs harming your cash flow. Are you spending too much on lead generation? Can you do without the tech subscriptions? Have an honest conversation on how you can keep expenses down to protect your cash flow in an unstable market.

Moreover, know your numbers well enough to make quick and sure deals without costing you dearly. Things like being clear on your maximum offer price, estimated repairs, and expected profit margin all play into the success of your wholesaling investment opportunities.

Say the market crashes and property values drop significantly—you’ll find yourself in a situation where the property is worth less than what you paid, depleting your chances of any profit margin. Only by knowing your numbers well can you adjust accordingly and still come out ahead.

4. Have a Plan B

Having a plan B when wholesaling real estate is always a good idea. And in an uncertain market, that truth is all the more true, where things might change quicker than you expect. There’s always the possibility that something could go wrong, whether it’s the deal falling through, the market taking a turn for the worse, property values dropping significantly, or all of the above.

So, what should your Plan B be? Well, that depends on your situation.

But some things you might want to consider include: having another property lined up to sell, having extra cash on hand in case of emergency, being able to lower your prices to sell, or partnering with another investor to share the risk. The bottom line is to be prepared for the worst, while expecting the best.

Being Certainly Profitable in Wholesale Real Estate Investing

By following the tips we’ve outlined in this article, you can ensure that your business is as resilient as possible to market fluctuations. So whether you’re a seasoned investor or just starting, remember to increase your lead conversion rate, get your finances in order, know your numbers, and have a plan B.

With these strategies, you’ll weather any storm and continue making money by wholesaling.

Do you need more help? Then, get a membership, subscribe to our newsletter, and join our upcoming meeting! We’ll discuss key industry trends and expert tips—you wouldn’t want to miss out.

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