Tag: Landlord

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Landlords

Marketing a Rental Property: Why & How Landlords Can Brand Their Rentals

: A young designer developing new branding styles
Source: Photo by Faizur Rehman on Unsplash

What do you think of when someone says “electric car”?

I bet you’re thinking of Tesla. And you’re not alone—most people will think the same.

Tesla has established itself as a high-performance energy automaker with a futuristic outlook. Tesla’s branding is so strong the company aptly grabs premium position in every market it’s entered—from solar panels to batteries, the big T is the front-row storyteller.

Wouldn’t it be fantastic if you could use the same strategy for your rental property business?

Good news: You can, and you should. Branding is a powerful marketing tool that enables you to put your business in any position you choose, regardless of whether you want to be known as the “best bang for your buck” apartment unit or the “most exclusive luxury” rental mansion.

Let’s discuss why and how you can brand your rentals to increase your property’s appeal.

Why You Should Brand Your Rental Property

Giving your rental units a brand helps them stand out from the competition, giving you an edge that gets the attention of potential tenants. Unique branding can especially improve your property’s recognition in areas with rentals similar to yours, like if you own one unit in a large apartment building, for example.

Here are three benefits you’ll get from branding your rentals:

  • You’ll attract more tenants. A recognizable brand boosts marketing efforts. Your reputation will spread, tenants will advertise word-of-mouth to their friends, and even when you’ve reached full occupancy, the fact that you’re “fully booked” increases the value of your rental and its demand. You’ll unlikely run out of prospective tenants to keep your vacancy rates low.
  • You’ll attract better tenants. Marketing to the needs of your target demographics proves successful when you attract the very tenants you want. Better tenants maintain the home well and are less likely to move out for trivial reasons, protecting your assets and returns in the process.
  • You’ll be able to charge higher rent and fill vacancies faster. You can potentially charge higher rent if you brand your rental as a premium place. There’s also the concept of perceived value, where tenants pay more for a distinctive experience—even if you didn’t necessarily spend more for the rental property. They’ll be hesitant to leave and likely to justify the higher rent.

The advantages of branding only becomes more apparent if you put yourself in your tenant’s shoes. If you’re choosing from various units to rent, and one of them provides an incomparable experience that’s just your style, wouldn’t you bet all your marbles there? Exactly.

How You Can Brand Your Rental Property

Branding goes beyond creating fancy logos and a unique color scheme for your walls. To brand is to create a compelling story that drives emotion and encourages prospective renters to join the experience.

The key to successful branding is authenticity and trust. Your goal should be to show your potential tenants that your business is valuable to them because they are valuable to you. Caring about your target demographic means showing up for them by offering properties that accommodate their styles.

Here are the best practices for a unique rental branding that’s one of a kind:

  • Communicate a clear message. What do you want your tenant pool to remember about your property? If Tesla is about high-powered and clean electric machines, what’s your rental’s selling point? Make your message memorable, impactful, and novel.
  • Connect with your tenant’s values. What does your tenant pool want out of a rental? What kind of lifestyle are they dreaming of? Prioritize what they prioritize by understanding their perspective. Tesla’s audience prefers luxurious comfort that’s fun. What does your audience care about?
  • Motivate potential renters to act. Branding is marketing, so be clear about what you want your tenant pool to do. Are you looking to fill units quickly? Do you want to make reservations for future openings? Or do you just care that the tenants you fill in are in-tune with your movement to, say, be sustainable or promote mental health, and 100% occupancy isn’t really the goal?
  • Create a sense of belonging. We all crave the feeling of being “home” with like-minded individuals. Create an atmosphere of support and transparency to gain the trust and loyalty of your tenant pool. They’ll see your rental as a safe haven—not just another roof over their heads.
  • Be consistent across all touchpoints. Ensure that your branding bleeds across everything you do and produce—from listing descriptions to how you talk with applicants and take care of your current tenants. Imagine if Tesla suddenly releases a budget-level electric motorcycle for delivery services. That’d be so jarring you’d doubt its entire branding altogether!
  • Stay updated with any changes in the tenant pool. Your target audience’s needs change. Keep a pulse on their demands and behaviors to ensure your branding stays relevant.

The goal is to set yourself apart from competitors to attract the best tenants into your rental business and keep occupancy high. Listening to one “secret sauce” to all successful brands, which you can apply to one or all of the homes in your portfolio.

Good Branding: The Not-So-Secret Ingredient to Business Success

Just because your rental business isn’t as big as the giant Tesla corporation doesn’t mean that good branding won’t work. In fact, branding is what makes a business grow to unprecedented heights.

So, craft a compelling message, connect with your target market’s needs and values, motivate them to do business with you, create a sense of familial belongingness, be consistent with your promise, and stay updated to remain relevant.

The more you understand the decision making process of your tenant pool, the more you’ll see the opportunities for using branding as a real estate marketing strategy.

Join our upcoming meeting for more investment tips! We are a growing community of like-minded individuals sharing our learnings in the real estate space. Subscribe to our newsletter as well and become a member to become the best property investor you can be.

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Wholesale Wholesaling

Every Wholesaler’s Ultimate Guide to Driving for Dollars

Man driving.
Source: Why Keifrom Unsplash.

You know that boarded-up, overgrown property you drive by every day? Other wholesalers see those, buy them for a low price, and sell it at a higher price point to investors willing to fix the property up. You can do the same—the scouting method called Driving for Dollars.

Scour the streets from behind the wheel of your car, and seek out hidden opportunities in real estate! In this article, we’ll look at why driving for dollars is a good wholesaling strategy, how it works, plus tips on how to make your driving for dollars an organized process.

What is Driving for Dollars?

Real estate wholesalers who drive for dollars comb through neighborhoods looking for distressed or neglected properties from the back of their steering wheel. Once they see a potential property, they’ll cold-contact the owner to see if they’re willing to sell (i.e., a motivated seller). If the owner’s willing to sell, the wholesaler puts them under contract and then finds  an investor to purchase and rehabilitate the property.

The driving for dollars strategy is an excellent, no-brainer way for wholesalers to seek out potential properties and seal more deals. With a watchful eye and a bit of savvy, you could uncover hidden gems and pocket some serious profits by, very simply, driving around.

What Should You Look Out for While Driving Around?

Driving for dollars focuses on distressed homes that present the possibility to be sold under market value. But, what does “distressed” actually mean? Here are the 3 criteria that qualify a property as such:

#1 Physical Damage

Physical house damage represents the most important kind of distress that you’ll look for. While you’re driving around the neighborhood, look for obvious signs that the property is run-down in any way, like:

  • Broken windows
  • Boarded-up doors and windows
  • Damaged driveways
  • Damaged roof
  • Messy garden or yard

Clear signs of distress qualify a property for your list of potential properties to wholesale. Take notes and photos (if appropriate) of these signs so you can look back at them when you need to.

#2 Outdated Design

A house may be outdated if the interior or exterior design isn’t aligned with the current trends. Outdated designs can range from something simple like unpopular wall colors, unmentionable carpet in the kitchen or laundry space, or seriously unsightly popcorn ceilings that have to be removed for health reasons.

For interior designs, you’ll have to ask for permission from the owner to enter the premises. Once you get in, it’s as simple as keeping an eye out for outdated details.

#3 Owner’s Situation

An owner’s financial or other life situation might be a distressing issue that motivates them to sell an inhabited or uninhabited run-down property for below market value. The owner’s situation might not be something you can quickly see on a drive-by, so make note of physical signs of property distress first and use them as clues to learn more about the owner’s situation.

For example, if the house is a rental property, the owner might not live in it and could be too busy to deal with maintenance. They might want to avoid going through the hassle of selling the property and wholesaling could be an easy solution to get rid of it for quick cash.

Want to Make Driving for Dollars a Lot Easier?

Driving for dollars is a great way for beginner wholesalers and experts alike to invest in the market, but it takes time and patience. It can be difficult to keep track of every street you’ve driven on and every house you’ve seen.

Several apps designed to guide and organize driving for dollars are available on the market—the most notable of which is called PropStream.

The PropStream driving for dollars app is designed to make driving for dollars a straightforward process. The app’s features narrow your search according to your preferred filters to save you time on your drive.

PropStream driving for dollars app provides: 

  • Property results up to 50 miles away: Filters for specific property criteria
  • Filtered property information: Narrows your search by lot size, year built, home features
  • Multiple Listing Service (MLS) statuses: Tells whether the property is on or off the market, for how many days it’s been listed or off-market, and if the listing is below the market price
  • Pre-foreclosure or bank-owned: Removes properties listed as pre-foreclosure or owned by a bank, whether you’re interested in that or not

If you want a more flexible drive looking for distressed or vacant homes, another PropStream feature, “just drive,” gives real-time and recordable route directions. You can even tap on properties around you to see the property’s detail and save the listing for future reference.

Overall, PropStream helps you keep your freestyle property searches organized.

Drive for Dollars, Find the Right Property, and Profit

Driving for Dollars is undoubtedly a valuable skill to add to your real estate wholesaling repertoire. Whether you’re looking to make some quick cash or engage in some long-term projects, the effort that goes into driving for dollars can yield great rewards.

If you’re dedicated and have a sharp eye for detail, you’ll properly assess potential properties to wholesale and identify deals that fit your criteria. So get out there, keep that eagle eye on the street, and you’ll land a lucrative deal before you know it.

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Landlords

Your Essential Guide for STR Investing—With Video Tutorials!

Photo by Karsten Winegeart

As of 2023, there are more than 4 million Airbnb hosts worldwide and more than 6 million active listings on the website. Airbnb covers over 100,000 cities in the world, where 150 million users have booked over 1 billion stays on the platform.

With how much money the short-term rental (STR) industry is currently making, it’s no wonder that it’s a highly competitive market.

If you plan to enter the STR industry, you need to have a strategy to stand out. STRs are a dime-a-dozen in most tourist traps and high-traffic areas. If you don’t have a well-thought-out plan, you’ll end up with higher vacancy rates and high turnover—resulting in less cash in your pocket.

To help you set up the STR of your dreams, we’ve listed out all the steps you need to take and some extra videos to watch to learn more. Let’s get started! 

Step 1: Manage Your Finances

Before anything, you need to get your finances in order. And unless you’re planning to buy a property out-of-your-pocket, you’re going to need financing.

Ideally, you’re going to want to have a credit score of at least 620 to qualify for a property loan with reasonable terms. With your credit score in order and your loan secured, you can move on to the next step of the process.

For more detailed info, check out this video: Financing For Rental Properties 2020

Step 2: Find Your Location

With your finances secured, you can now start scouting for a location.

Above your property, location is the most important factor that determines success. Establishing an STR in a guaranteed market can reap good rewards. Take, for example, Lansing, Michigan, which is one of the top locations for STRs:

  • Average Property Price: $102,100
  • Average STR monthly income: $2,678 (the average STR host earns $924 monthly)
  • Average Cash-on-Cash Returns: 11% (you want to target between 8-12%)
  • Average Occupancy Rate: 64% (which is above the US average of 44%)

As with any big purchase, you want to have as much information about the area you intend to invest in. You can use tools like Mashvisor to find out these details.

For more detailed information on finding the best places, check out this video: Where to Airbnb  –  How to find the Best Airbnb Cities in 2021

Step 3: Learn the Laws on STRs

Depending on the area of your choice, local laws might have restrictions in place for STRs.

Take Detroit, MI, as an example. Currently, the local government is looking to heighten restrictions on STRs, but the federal government is against the proposition.

Now I know what you’re thinking: What about being unique? You want your STR to stand out of competition to attract more guests, but there are limitations to how “unique” you can be. You can offer cool features like workout equipment or an air fryer in your property, but you can’t go against local regulations, like establishing your STR in residential areas or near airports or highways.

Learn the laws on STRs in your area, and work with them instead of against them.

For reference: Michigan Abolishes Local Laws That Limit Short Term Rentals

Step 4: Buying Your Property

Now that you know the location and you have studied the laws, it’s time to look for your investment property. You can use the MLS to look up properties within your price range and ideal size. You can also look through sites like Zillow or Redfin to scout for properties.

You can also choose to work with wholesalers if you’re willing to go through the process of heavy renovations.

Another option available for you is to rent a property that you can turn into an STR. You’ll work with a landlord that’s willing to sublease their property. After coming to terms with the landlord, you can use their property as an STR.

Check out 7:03 to 8:43 of this video for more info: How To Buy Your First Airbnb Property | Beginner’s Guide

Step 5: Redecorate Your Property

It’s highly unlikely that the property you just bought is great for an STR right out of the box. So, you’re going to need to make some adjustments to attract tenants.

A good tip would be to paint rooms a neutral color. You want to appeal to the biggest audience possible, and to do that, your property has to give off a homey feel. Neutral colors can help achieve this. Another way to accomplish this is by fixing the property lighting. No one enjoys harsh lights, so setting up dimmer switches for lights can be a way to set mood lighting.

These are just some general tips for redecorating your property; feel free to give your personal touch.

Take a look at this video to see how to revamp your STR: Airbnb Hosting: 4 Interior Design Tips to Make Your Airbnb Standout! 🔥(2018)

Step 6: List Your Property on STR Sites

Now it’s time to list your property.

But before you do that, you need to take care of some things first. First‌, you can use Mashvisor again—or similar tools—to run comps on similar STR prices  within a one-mile area. You need to keep your rates within a reasonable margin of your competition.

The next step is to take attractive pictures of your property. For example, use paintings or artwork as background pieces to a listing photo. Also, make sure to thoroughly clean rooms when taking photos. Dust can make or break a tenant’s decision to book.

Lastly, highlight your STR’s amenities. A 2019 survey showed that a deciding factor for bookings is amenity availability; 74% of people are more likely to book your STR if it has Wi-Fi.

Once you have accomplished these 3 things, you can list your STR.

We recommend watching this video for more tips: How to make an airbnb listing LIKE A PRO (step-by-step tutorial)

Use this Guide to Navigate the Waters of the STR Market

Investing in STRs can be a scary prospect. You’re up against a lot of competition, and it might be challenging to stand out. With no guidance, it can be daunting to invest in the market.

But, with our online syllabus, you don’t need to worry. If you follow our guide, you won’t find yourself lost. We will guide you through every step of investing in an STR.

Do you have any expert advice for STR management? Let us know below!

Categories
Flipping

Netflix & Flip: 5 Best House Flipping Shows to Watch in 2023

Source: Nolan Issac from Unsplash.

House flipping is all the rage right now. We all love them, whether we’re expanding our house-flipping portfolio or watching home renovations for fun. There’s nothing quite like seeing a run-down house turn into a beautiful home.

If you’re looking for some inspiration, here are a few of the best house-flipping shows of all time. You might even pick up a few pro tips that you can use in your house-flipping projects down the road.

#1 – Holmes Family Rescue

Does the name Holmes sound a bit familiar to you? You might have heard about Mike Holmes from Holmes on Homes. Holmes Family Rescue is a new show that now includes Mike’s son and daughter.

A Canadian series that debuted in 2021, it follows dissatisfied homeowners whose properties were ruined by low-quality construction.

Luckily, they’re saved by Mike Holmes, a general contractor, along with his 2 kids, who are home renovation experts, Michael Holmes, Jr. and Sherry Holmes. As a family, they show empathy and commit to their mission, “Make it right.”

If you’re not a big fan of the glamorized version of house flipping, then Holmes Family Rescue is the show for you. This show is a great option if you want to learn more about repairs and renovations.

In each episode, Mike, Michael, and Sherry show the substandard work done on the property and explain in detail how they should have been executed correctly. They also talk with the homeowners, asking them to describe their experience with the original contractor and how it affected the way they live now.

Holmes Family Rescue currently has 1 season and is renewed to have another season and will premier in the spring of this year.

Watch Holmes Family Rescue on HGTV.

#2 – Stay Here

Streaming giant, Netflix, is also riding the house-flipping trend with Stay Here.

In this reality show, you follow along with interior designer Genevieve Gorder and real estate broker Peter Lorimer. In each episode, the duo gives serious TLC to a short-term rental home, transforming it into a moneymaker for its owner.

One of the best things about the show is that it features unique vacation rentals, including a houseboat in Seattle, a firehouse in Washington, and a brownstone in Brooklyn.

Apart from remodeling these, Genevieve and Peter also provide viewers with updates on real estate industry trends, as well as advice about finding success in this line of business.

Currently, there’s only 1 season. Although, fingers crossed because there are rumors that season 2 will be released in August of 2024.

Watch Stay Here on Netflix.

#3 – Home Town

If you’re interested in learning what it takes to remodel historic properties, then Home Town is the house-flipping show for you.

It features Ben and Erin Napier, a husband-and-wife team restoring beautiful Southern homes in Mississippi using up-cycled materials to retain the property’s old rustic charm.

The couple is known for infusing their clients’ characters into the homes they remodel.

For example, one episode featured a local restaurant owner looking to settle into a cozy cottage with her grandmother. They ended up with a custom-built rolling kitchen island and a handmade raised garden bed. Both of which were inspired by their personalities.

If Home Town leaves you wanting more, I have some good news for you. They also have a spinoff called Home Town Kickstart.

Watch Home Town on HGTV and Home Town Kickstart on HGTV.

#4 – Designed to Sell

Want awesome tips and tricks that will help make your properties sell?

Sit back and tune in to Designed to Sell, a show where each 30-minute episode features a home that has sat unsold on the market for a long time. Real estate experts and general contractors are then given $2,000 to renovate the property to the best of their abilities.

Because of this limited budget, this show is perfect for flippers who want creative design ideas while getting the most bang for their buck.

It also highlights the country’s most cutthroat real estate markets—Los Angeles, Chicago, Atlanta, and Washington, D.C. Unfortunately, Designed to Sell ended; although, there’s still a backlog of episodes to enjoy.

Watch Designed to Sell on HGTV.

#5 The Flipping El Moussas

You might know Tarek El Moussa from Flip or Flop. Unfortunately, Tarek and his past partner have broken up and gone their separate ways. Although Flip or Flop is still a must-watch if you haven’t seen it, we’re moving forward to the next reiteration of the popular program.

Tarek is now married to Heather Rae, a famous real estate agent from the Netflix series Selling Sunset. Together, they’re a power couple who are experts in their own fields. They’re unstoppable with Tarek’s experience in flipping homes and Heather’s eye for high-end real estate.

In the first episode, Tarek and Heather take on their first project together. It’s not an easy ride because there are already some issues with the odd floor plan and uneven floors. But, are their combined knowledge and work experiences enough to conquer this issue?

This show is so new that it just aired this year. Follow along their journey as they expand their business (and family) together.

Watch The Flipping El Moussas on HGTV.

What Else is on Your Watch List?

House flippers need to stay updated with the real estate market to earn profits and with the current design, and trends to create appealing homes. And there’s no better inspiration than the hit shows we’ve listed above. We’re sure there’s at least one series for you—whether your niche is in historical homes, vacation rentals, or luxury properties.

What other house-flipping shows have you enjoyed? Is there anything on your watch list that we didn’t include here? Let us know in the comments—we’d love to hear from you!

And become a member today to join our upcoming meetings and receive our newsletter. You’ll get insider knowledge and learn from experienced flippers in the industry just by being a part of our group.

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Wholesale Wholesaling

Which Comes First in Wholesaling: Cash Buyer or Property?

Source: Scott Graham from Unsplash.

Wholesaling can be challenging, but you’ll close deal after deal if you have the right approach.

You might be wondering, though, should I prioritize getting cash buyers or finding a property first?

On the one hand, if you have cash buyers first, then you already have potential clients lined up to buy your property.

On the other hand, if you have a property to sell, then you’re left with just finding the right buyer to close the deal.

Is one better than the other? Let’s consider both sides.

What Happens When You Get a Cash Buyer First?

Believe it or not, finding cash buyers in your area is easier than you think, because there are a lot of sources that teach you how to do it.

The plus side of focusing on building your buyer list first is that, when you have a cash buyer first, you now have a guide on what kind of property you are looking for. Ask what your buyer is looking for, their purpose, price range, etc.

After interviewing your client, this will help narrow your search criteria. You know where to look and if you should scout for a commercial space or a residential unit. When you get back to your client to pitch a potential property, you have more chances of closing a deal, since you already know what they want.

Having a buyer first is also an advantage because you can ideally close quickly once you find the right deal. And the quicker you can close deals, the more deals you can do (read: the more money you can earn) each year.

What Happens When You Get Property First?

It’s easy to find buyers if you’ve found a great deal. Nobody declines an excellent real estate investment opportunity, after all. You only have to get the property under contract and you’re free to market or sell it to any of the potential buyers in your list.

That being said, here are few marketplaces and strategies you can pursue to find great properties:

  • Attend REIA Meetings: REIA stands for Real Estate Investors Association, where investors support and help each other via group and individual meetings. These meetings offer information, ideas, and networking within the industry. For example, this blog you’re reading is from REIA of Oakland, where we help anybody who’s interested in investing in Oakland County.
  • Online Paid Ads: There are 5.16 billion and 4.76 billion internet and social media users worldwide, respectively, which means using digital ads opens the door to better reach. Connect with your target audience through paid ads. You can set up ads through social media or Google.
  • Online Marketplaces: Facebook marketplace and eBay are great examples where you can list your property online. Although, you have to make sure that you do your research to ensure that you don’t violate any real estate policies on the platform.

Some people say print ads are still relevant. But we beg to differ. It’s a complete waste of time if you ask us, even if 82% of consumers trust print ads when making purchase decisions—in reality, nobody pays any attention to them, especially for major purchase decisions like real estate.

Newsflash: It Doesn’t Matter Which Comes First

I hate to break it to you, but ultimately, it doesn’t matter which you start with. Because finding good deals and serious buyers are the two biggest challenges of wholesaling real estate in general. Neither one is easy, and both are essential.

It takes time and experience to find good deals on the market. So what you really have to do is build your property portfolio and cash buyer list at the same time. Once you’ve mastered the art of finding good deals and have a broad network of cash-in-hand buyers, the rest will be relatively smooth sailing.

Do you agree that finding a good deal is the real challenge? Or do you think building a buyer list is tougher? Let us know in the comments below. And don’t forget to sign up as a member, so you can attend our upcoming meetings for more tips on real estate investing.

Categories
Landlords

What’s Happening with Rental Amounts in the City of Detroit?

Source: Photo by Andre Taissin on Unsplash

We’ve all seen the headlines—average rent prices are falling for the first time since the latter part of 2020 when COVID was the culprit. For those invested in Detroit rental properties though, the news isn’t as bad as in other parts of the country.

Let’s look at what happened in the Detroit market, for you to stay updated and vigilant in protecting your investments. (TL;DR? Don’t panic! It’s real estate market dynamics.)

Nationwide Rents Decline in Major US Cities

As the graph below shows, the August national average rent price, according to Redfin, was up 11% year-over-year from 2021. If you compare it to past trends, this figure is the smallest recent annual increase we’ve seen—down from a 19% gain in March 2022.

Even if we were to look at the month-on-month growth, the median rent only moved slightly by 0.4%, which is the slowest growth since late 2021 and a drop from the 1.6% increase last year.

Source: Redfin

“Rent growth will likely slow further as the Federal Reserve continues to raise interest rates. Higher interest rates impact the rental market because they put a damper on spending power in the economy as a whole, including renters’ budgets,” Taylor Marr, Redfin’s Deputy Chief Economist, said.

Rent Trends in the Detroit Housing Market

We can’t confirm if the data below only covers the City of Detroit or the entire Metro Detroit area, but we see that the market is included in the top rent price drops nationwide in August 2022:

Source: Apartments.com

Moreover, executive director of Detroit Future City, Anika Goss, shared, “During the pandemic… people living in the bottom quadrant of the income scale were not being supported. If rent softens and people are back to work in 2022, we might see an evening out… in a year or two years.”

Should Detroit investors lower their rent to attract and retain tenants? Fewer people are purchasing homes but they still need a roof over their heads, so they rent. But it seems like Detroiters in the lower demographics are struggling to pay rent, even with the supposed decline in rent average.

Then again, the data above might only reflect rent decline in the City of Detroit—excluding the rest of Metro Detroit which includes far more affluent areas like Oakland County. As we know, these areas aren’t as affected by economic downturns compared to lower income zones.

In fact, based on our observations as a property management company in Metro Detroit, rent averages have flatlined (not declined). The reason why reports show dropping rent averages in the City of Detroit is likely due to an increase in vacant properties instead.

Looking at recent statistics and trends, the city is actually doing pretty well:

  • The city still has exceptionally low home prices with a median sales price of $100,000—a growth of 38% from late 2021 to 2022. In terms of rent, it’s also the fastest-growing city in the metropolitan area, where rent averages are said to have increased by 32% from 2021 to 2022.
  • The average rent for a one-bedroom apartment in the city is $1,000, which is a 4% decrease compared to a year before (February 2022). For a three-bedroom though—which is more popular in the housing market—the median rent is $1,200, which is a positive 9% year-over-year change.
  • Plus, looking at Zillow data, the City of Detroit saw an  increase in average rent, where investors are charging $20 higher rent than last year:
Source: Zillow

The data above is good news for Metro Detroit investors. And if you do have tenants struggling to keep up with rent payments, we suggest that you reevaluate by asking the following questions:

  • Are you charging above neighborhood rent averages?
  • Are your tenants struggling with rent payments?
  • Are they paying on time and in full?

If you screened your tenants well, they might not have financial problems. But if the economy’s downturn caused them to lose their jobs that affected their income, you might need to help them out.

“Gas prices are coming back down, but rents are going up 10, 12, 15%. And rent can end up taking 40% of these households’ income,” Bank of America CEO Brian Moynihan said.

Ultimately, your cash flow depends largely on your tenant’s ability to pay rent. As much as you want to generate top dollar from your rental properties, you won’t get any returns if the renters themselves can’t afford your home in the first place.

Finding the Sweet Spot for Rent Prices in the City of Detroit

The City of Detroit (and certain areas of Metro Detroit) remains to be a landlord’s market, with rent prices increasing despite the economic downturn. It presents an opportunity for investors willing to lower their rents to attract more tenants than ever before, although doing so requires careful financial evaluation.

Screen your tenants carefully and keep an eye on the economy, and your rental properties will remain profitable even with all the market shifts happening. Your goal is to secure capable tenants while generating a healthy return on investment—find that sweet spot for a win-win solution.

Do you want more tips and guidance on navigating the Detroit market?

Sign up as a member, subscribe to our newsletter, and join us in our upcoming meetings. Let’s share information and expert tips to ensure that our investments adjust and adapt to the market.

Categories
Flipping

the Flipping Forecast for Detroit in 2023 and Beyond

A kitchen after a flipper renovation.
Photo by Aaron Huber

During the height of the pandemic, the real estate market took a big hit. Large markets like New York felt a significant decline in pending house sales, with a hefty 58% decrease. And in our case, the City of Detroit took an even more severe hit, losing 74% of pending sales.

However, when stimulus packages started rolling in during the latter half of 2020, housing sales came back with a caveat. For example, list prices spiked 27% due to the revived increase in demand. This is bad news for house flippers, as finding good deals is significantly more challenging.

Still, with the pandemic in the rearview mirror, it’s time to look at how the real estate market is shaping up in 2023. And more importantly, is it a good time to build your home-flipping portfolio this year?

Real Estate Trends for the City of Detroit, MI

To try and curb inflation, the federal reserve is looking to increase interest rates across the board.

Just this February, interest rates are up and are expected to keep rising in 2023. That being said, inflation is still going strong. We’re looking at incremental interest rate increases throughout the year.

This results in a more challenging time for house flippers to get financing for their flipping project. To give you an idea of how the real estate market looks in the city, here are some trends we’ve observed:

  • Days on the Market: On average, properties stayed on the market for 36 days as of November 2022. It’s an improvement from the earlier half of last year’s average of 44 days on the market. Flippers might have an easier time selling their flips because buyers are more willing to buy.
  • Average Home Price: Compared to June 2021, home prices increased by 38.3%, from $72,500 to $100,205. The increase means house flippers like you might see lower returns on investment because buying a house requires more capital.
  • Average Sale Price: The average sale price of a Detroit property is identical to its average home price and set a new record by surpassing the $100,000 at $100,250—an increase of 38.3%. This isn’t necessarily bad news, as you might earn a bigger profit when you sell your flip.
  • Number of Listings: The number of listings increased from 2021 to 2022 by 38.9%, going from $1,983 to $1,428. This figure means that you’re off to a good start, as there are more houses on the market that you can list as options.
  • Total Sales (Unit): The total sales took a hit in 2022, by -10.1%, from $424 to $383. Your flipping projects might fall through because fewer people are buying, so you need to prepare a good exit strategy , just in case.
  • List Price: In January of this year, the year-over-year home prices were at an increase of 6.7%, and the average listing home price was $80,000.

Despite the climbing interest rates, the Detroit real estate market continues to climb in price, and the economic outlook in the City of Detroit is shaping up to be moderately positive this 2023.

Of course, we’ll have to wait and see if the interest rate hike will affect the situation, but it seems like 2023 is still a great year for you to potentially expand and earn from your flipping projects—as long as they make sense for your budget and risk appetite.

Flippers should Approach the City of Detroit Market with Cautious Optimism in 2023

Despite society moving on from the issues we faced during the pandemic, real estate prices continue to skyrocket. Sure, there’s pressure for the federal reserve to implement schemes to ease inflation, but various other factors also affect the housing market.

Regardless of what happens, the City of Detroit is still one of the most affordable areas, with its median sale price of $100,205, which is around 4x lower than the US median sale price of $405,900.

You’ll continue to find hidden gems in the famed Detroit real estate market to continue building your portfolio. Just be careful and get into projects that are guaranteed success, which you can do by joining as a REIA member, signing up for our newsletter, and meeting other investors in our upcoming meeting.

Leave a comment below if you have any other thoughts about the forecast for 2023!

Categories
Landlords

Go Beyond Airbnb: Where Should You List Your Short-Term Rental?

A magnificent cabin nested in the forest
Source: Photo by Madhur Shrimal on Unsplash

Landlords of short-term rentals shouldn’t stop listing on Airbnb. While the platform is the most popular website for finding hotel alternatives, you should also consider other platforms that can increase exposure, generate more bookings, and gain consistent rent income.

So, here’s a list of Airbnb alternatives you should consider listing your short-term rental on.

1. VRBO: The Reach Multiplier

Listing your short-term rental on VRBO (Vacation Rentals by Owner) means that your property is listed on the platform’s affiliated sites: Expedia, Trivago, and KAYAK for increased reach.

Moreover, VRBO isn’t limited to one property type. Feel free to list your cottages, cabins, bungalows, townhouses, lodges, farmhouses, villas—even yachts, castles, and mills on VRBO. The exposure and possibilities you’ll get on VRBO are endless.

2. Booking.com: The One-Stop Shop

Booking.com is another platform that serves more than 1.5 million guests per day in over 43 languages. There are already millions of homes and apartments listed on this platform. Plus, landlords have complete control over their house rules, adding booking prerequisites, and reporting guest misconduct.

It says it’s “serious about your success” and has the safety features to prove its commitment. In addition, Booking.com is a one-stop shop where guests can also book flights and car rentals—so you wouldn’t want to miss the chance to leverage convenience.

3. Plum Guide: The Luxury Platform

Is your property a charming home for bougie guests? Then list it in Plum Guide, where only the most remarkable homes are shown. They are the benchmark for quality rental stays, focusing on providing guests with the finest luxury properties in the market.

Guests have even said that they prefer this platform over Airbnb because Plum Guide’s property photos match the actual accommodation, the reviews are accurate and not glorified, and there was excellent customer service and communication with the host.

However, note that Plum Guide vets and grades properties before allowing them to be listed. This is how it ensures quality over quantity and means that you’ll have less competition on the platform.

4. Agoda Homes: The Asian Market

List your property on Agoda Homes where you can earn extra income by having access to millions of quality travelers daily. There’s also zero commission and plenty of hosting tools to manage your property via desktop and mobile—so you can manage your homes on the road. Plus, Agoda Homes focuses on the Asian market, which means you can expand your reach to other countries.

Agoda Homes’ dashboard for short-term rental hosts is also uniquely designed for easy decision-making and task prioritization, so you’ll have everything you need to increase your bookings.

Expanded Reach + Increased Bookings = Multiplied Profits

Of course, there are other platforms, like Homestay, Sonder, and Blueground, that we didn’t mention in the list. But the point is to make you realize that you shouldn’t stop by only listening on Airbnb when there are many alternatives out there that can give you additional benefits.

Remember that the more you expand your reach, the more bookings you’ll generate—resulting in higher, more consistent profits from your real estate investments.

Do you need more help? Get in touch with me today. You can start by joining REIA as a member, so you can attend our upcoming meetings and receive helpful information via our newsletter.

Categories
Wholesale Wholesaling

How and Why You Should Set Up Recurring Rent Payments for Your Tenants

Source: Photo by Mika Baumeister on Unsplash.

Collecting rent can be one of the biggest hassles of owning rental property. Not only do you have to keep track of when rent is due, but you also have to chase down tenants who are late on their payments.

Wouldn’t it be nice if there was an easier way to collect rent? Well, there is.

You can set up recurring rent payments so that your tenants’ rent is automatically deducted from their bank account each month. Not only does this make things more convenient for both you and your tenant, but it can also help ensure that you always get paid on time.

In this blog post, we’ll explain how to set up recurring rent payments and the benefits of doing so. By the end, we hope you’ll see just how easy and helpful an automatic rent payment system can be.

Why Set Up Recurring Rent Payments

As a landlord, having a reliable, predictable source of income is essential. That’s why automating recurring rent payments can be so beneficial. Here are a couple of benefits:

  • On-time payments: Your tenants will have their rent deducted from their bank account automatically each month. This means that you won’t have to worry about chasing them down for late payments or collecting checks in person.
  • Electronic processing: All payments are made electronically and on the same day each month, saving you the hassle of manually entering tenant information into your accounting software. Most systems can handle automatic payments for you with just a few clicks.
  • Incentivize recurring payments to encourage sign-up: Some payment processing providers include a discount function so you can offer incentives to your tenants for signing up for recurring payments. This can be a great way to encourage more people to use the system, making rent collection easier for you.

Protect your cash flow, and you’ll protect your investments—isn’t that the only thing that matters?

How to Set Up Recurring Rent Payments

Setting up recurring rent payments is relatively easy, and it’s worth taking the time to do so. Here are the steps you’ll need to follow:

  1. Choose a payment processing provider: Decide which payment processor you’d like to use. Some popular options include PayPal, Stripe, Square, and Apple Pay. Each company has its own set of fees and features, so take some time to compare them before making your decision.
  2. Set up an account: Create an account and link it to your bank. This will allow payments to be transferred directly into your account on the rent due date.
  3. Collect tenant information: Collect some basic information from your tenants, such as their name, address, bank details, and rent payment amount. Ensure that all information is accurate and updated before proceeding with the setup process.
  4. Set up automatic payments: Set up the automatic payments for each tenant in your system. This typically involves entering their bank details and setting the payment amount and frequency (e.g., monthly).

Once you’ve completed these four steps, you’re good to go. Sit back and wait for the payments to come flowing in. Your well-deserved cash flow is on its way.

Best Tools for Recurring Rent Payments

We recommend the following payment processing providers for their ease of use and excellent security:

  • Avail: This landlord software is owned by Realtor.com and helps you streamline rent collection (even if you don’t work with a property manager). Avail allows upcoming payment scheduling by automatically reminding tenants before the due date. Tenants who split the rent with their roommates can also divide the bill accordingly.
  • Apartments.com: Previously known as Cozy, this tool automates rent collection and monitors all rental payments from one dashboard. You’ll see everything in one glance. The platform also sends reminders to tenants, just like Avail.
  • Buildium: If you have 50 or more properties in your rental portfolio, Buildium is your best bet. The software can set up recurring and one-time payments for tenants to pay online or offline, where the funds are transferred in a few minutes instead of a few days.

There are others, too, like Zillow Rental Manager, Rentec Direct, TurboTenant, PayRent, and ClearNow. Whichever platform you choose, you can rest assured that rent collection will take care of itself.

Automatic Payments, Automatic Cash Flow

Setting up recurring rent payments is an easy way to make collecting rent more convenient for both the landlord and the tenant. Not only does it help ensure that your rental income is always on time, but it can also save you time and money in the long run.

We hope this blog gives you a better understanding of how to set up recurring rent payments and why it’s a good idea to do so.

If you have any questions or need help getting started, join us as a REIA member today[1]  and attend our upcoming meeting[2] ! We also have a newsletter[3] , so you’re never out of the loop.

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.

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