Questions To Ask When Interviewing a Potential Property Manager

Rental properties come with lots of responsibilities and it can be hard for you to handle everything especially if you have other things that you need to take care of such as running a business. Fortunately, you can be a hands-off kind of property owner, landlord or investor when you hire a property manager. Today there are professional property managers that you can fully trust in handling the property responsibilities as far as managing and leasing the property is concerned.However, you should select the best and trustable manager to have peace of mind. To do this you can conduct an interview consisting of all relevant questions that make it easier for you to gauge the potential and suitability of the property manager.What advertising strategies do you use? You want to have a property manager that is aggressive enough to make sure that your property does not remain vacant for long periods. A manager that uses extensive marketing strategies targeting both local and international markets can be an excellent manager for your property. Find out exactly what marketing channels they will use and skills they have around them.How do you structure your rates? Most property managers charge for property maintenance and watch on a monthly basis and the fees can range depending on the size of the property and the services you want to enjoy from the manager. Choose a manager that offers more for less but still strives for quality service delivery.What are your agreement termination terms? It is very normal to start a working relationship with a property manager only to realize that they are not what you expected. It makes it very important to find out beforehand what the contract terms are as far as termination goes so you can select a manager that gives you an easier time terminating the agreement. Ask about any penalties that could be attracted by a termination.How do you conduct tenant applications? You might be desperate to have your property occupied but you also want it to be occupied by the best tenants possible. Find out what process the property manager puts in place to make sure that only the best tenants are given a chance to occupy the property. A vetting process that includes running of credit reports and checking of criminal records, current and past employment as well as proof of income can prove rewarding for you. You can at least have confidence in people renting your property.How will you handle maintenance and repairs? To retain tenants you must have a property manager that acts swiftly in solving any issues that arise on the property. Find out whether the manager has maintenance crew or a handyman at hand and how they bill such services. Also find out what repairs the manager will be responsible for and how inspections will be done to make sure that tenants are responsible for damages they cause on the property during their tenancy.

Property Investing – The Art Of The Deal

How times have changed from the initial days of buy to let. The market has matured, investors have come and gone, and in particular, the way in which people invest has changed dramatically.Only a few years ago, then focus seemed to be on “The art of the deal”. You know, a decent return on investment, or a good yield. Things seem to have changed now to “how much is it, and do I need a deposit”, and there are a flurry of deals available out there.The “No money down deal” is now the holy grail for many property investors, as opposed to the old fashioned way of making sure that the rent covers the mortgage each and every month. I know I sound a bit old fashioned, but at 34, I wouldn’t say so. Just an investor with experience, who has seen enough investors buy below their “perceived” market value, only to either lose the property, or sell it at a loss later on, simply because they thought it was a short cut to success (There isn’t one by the way, despite what many property clubs may infer, at least not in my experience).Originally, The Art of The Deal I refer to was about the rental income, less the mortgage costs and any other fees, and whatever was left should have been profit at the end of each month.The profit was then multiplied by 12 (as in the months of the year), and divided by my initial investment. This is your Return on Investment (ROI). This was the way in which you could compare one property deal, against another deal especially at different rental values.For example, is a property purchased at £150k with a rent of £650, as good as a deal at £95k and a rental value of £425. Do you know the answer ? Well you need to know what the service charge is on each one, then add in the property management charges. Then you can do your comparison. Usually, it’s the lower price properties that give a better return on investment. An added bonus of a lower priced property is also the fact that you don’t need to pay stamp duty.As well as having a better return on investment, having two smaller properties rather than one big property helps with void periods. If one of your two smaller properties are empty, then its only a 50% void. But having the one large property empty means 100% void.In fact, when you’re first starting out in property investing, there’s a line of thought that suggests you should only buy properties under the £120k mark in order to avoid stamp duty, and to spread the risk across multiple properties, which takes advantage of a better Return, less risk in terms of voids, less up front costs (although you will have two mortgage fees, and two sets of solicitors fees).I think buying a property at £220k as your first property is potentially “property investing suicide” and you need to cut your teeth on something a little bit less risky, without all the massive upfront costs that come with such a high priced property (and potential mortgage commitments)But the main reason why I think that the Art of The Deal has changed, is that these days its not about doing the maths on the deal, its about the discount you get from the developer so that you don’t need to put down a deposit.While this seems like a good idea, in practice it can mean a lot of similar properties completing at the same time, all with lower rental valuations, and a potential loss of anywhere upto £250 per month. Incidentally, it is usual for rental valuations to be low on new developments, due to normal supply and demand, but not when you have already paid over the odds for a property just to get a no money down deal.That said, not all no money down, off-plan investments, are the bad deals. Some of them do stack up, but you need to do your research. For example, why buy a city centre brand new off-plan property, with no previous history of rentals, when you can buy a 2 bed back to back (or two of them) and know that the property has been there 100 years, its already got history of being rented in the local area.Of course you could say that you have guarantees for the first few years that the white goods (fridges, dishwashers, etc). But that sometimes isn’t the case (as my tenants in one of my Brand new Manchester properties discovered when they were left without a shower for 6 weeks).But do you do the maths? Do you know whether it’s a good deal or not.And that’s why I think that The Art of The Deal has changed.Let me quote an example. I spoke with an investor recently who had purchased a property off plan from a property sourcing company. The property was valued at £140,000 by the RICS approved valuer. The property however was purchased for £150,000, less a 15% discount, and the landlord didn’t have the funds available to fund the rest of the property, so he was going to lose the £3,000 deposit he had paid to reserve it.The property itself didn’t stack up either, as it’s a one bed and the rental value on this is £550 per month. The problem here is that the property just doesn’t stack up, the rent wont cover the mortgage, and it seems to be all about getting a discount on the purchase price. “But you make money when you buy property” said the landlord.Im afraid that’s too much Rich Dad, Poor Dad, the book that launched a thousand investors, which does quite rightly state that you make money when you buy.But the context is incorrect. What Robert Kiyosaki meant was that you negotiate well in order to secure a discount, not that you purchase an already inflated property at a discount just so that you don’t have to put any deposit in.It is by the way, still possible to buy a discounted property, and still make a decent return, but if you don’t know how to find out whether the property is a good purchase compared to another property, then you’re going to make mistakes and this may cost you dearly.The bottom line on this is, is simply that if you can work out how to value one property against another, then you can do a direct comparison and make sure that you reduce the chances of buying a property that may be too expensive, or not cover its costs.

Investing In Spanish Property

More and more individuals consider investing in properties in Spain. Considering the rise and fall in Spanish property prices, a lot more foreigners have become interested in making an investment. But even though you can find cheap yet extraordinary Spanish properties, it is not that easy to take on the many challenges of property buying. There are certain things that you need to consider to ensure a smooth, safe and successful purchase. You have to understand the pros and cons to avoid any issues.So what are the tips and crucial factors that you have to keep in mind to be successful in investing in the Spanish property market?The right location.Look into different locations until you can find a property in a particular region that fits your requirements. Take note that climate varies throughout Spain, and so you cannot expect to enjoy sunshine all year round in some parts of the country. If climate is a big issue for you, research of the local climate in the region where you want to purchase a property. You should also think about the cultural differences or the customs and traditions of the region. The cost of living must also be assessed. More importantly, see if the property is well-situated. Your convenience must be considered.The accessibility of the property.Analyse the distance between your desired property and the commercial area. How long does it take to go to the hospital or clinic, schools and stores? Will you have any difficulties with public transportation? Think about where you want your property to be located. Compare the features of inland properties to those located near the coastline. The more accessible your property is, the more chances you have of reselling it or making money out of it as a rental. Explore different options. Be practical.The property’s return on investment, and the location’s potential growth.Look for a Spanish property that has the potential to generate substantial income or one that can be resold at a rewarding price. If you are going to buy a property for investment purposes, you need to make sure that it can potentially yield a considerable return on investment. Make an estimate or calculate the possible income while taking into account the deductions or expenses that you have to deal with in the future. Moreover, learn about the growth prospect (i.e. future developments) of the region. It’s wise to invest in Spanish properties near or within the commercial areas. Research well.The most appropriate financing option.Assess your personal circumstances, and see if you have enough financial resources before making any investment; particularly when it comes to buying a property in Spain. Fortunately, you don’t have to spend a fortune to be able to purchase a really functional and well-situated Spanish property. You can actually find astonishing Spanish houses at a budget-friendly rate. Just figure out how you should finance your investment. Are you going to spend some cash? Perhaps it’s better to secure a mortgage.The property’s legality.Do not make any payment unless your solicitor can verify all legal documents completely. If possible, get all documents in English so that you can be assured that you have read and understood everything. Always check the paperwork, especially when considering buying repossessed or distressed properties. If necessary have a property survey carried out toconfirm the legality of the property boundaries etc. Find out whether you have to deal with some documents that need to be rectified. Have the seller sort it out before closing the deal. Remember, some properties for sale in Spain are not really what they seem to be. Be very cautious and meticulous and always enlist the services of a Spanish property lawyer.The type of ownership.Check out at the local land registry to ascertain the ownership of the property that you intend to buy. Try to get hold of some documents that will confirm the ownership so that you don’t find yourself dealing with any issues in the future. Apparently, some properties have multiple owners. Avoid this type of ownership if you don’t want an arduous and complicated buying process. Look for a Spanish property from a single owner. Check and confirm all the documents. Wait for the verification of your solicitor.The title deed’s accuracy.See to it that you understand the title deed. Your solicitor should be able to provide you with a translation, particularly during the signing of the contract. Have all the details checked and verified. Make sure that the terms and conditions are clear enough, and that everything you specified has been included. The title deed should clearly state the dimensions and features of the property along with the boundaries and accepted sale price. The date of signing the contract must also be visible and accurate.Be well-informed if you do not want to put your investment at risk. Prepare to take on the many challenges and responsibilities of buying a Spanish property. Be diligent, systematic and patient; particularly if this is your first time investing in the Spanish property market. Seek for the services of an experienced real estate agent and solicitor. It’s extremely beneficial to work with someone more knowledgeable and experienced. Remember, never make a purchase out of whim. Always proceed with caution.