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In lieu of the warm weather, our team here at MONUMENT wanted to remind new property owners to expect the expected. Yes, the expected. For some, warm weather means backyard BBQ’s, increased visitors and pulling out the pool! This also means potential hazards, increased water bills and a potential headache. The good news is that it doesn’t have to be. Here are a few tips to stay ahead of the game and ensure that both you and your tenants have a great summer!

STAY AHEAD OF LAWN CARE: Whether your property is filled or vacant city of Cleveland isn’t playing anymore. Changes have been made to the grass cut law. Even though you added lawn care to your tenant’s lease, that doesn’t mean you’re off the hook. Per the City, the property owner is still responsible for any fines and they will send the bill to you, NOT the tenant. Be proactive! Research lawn care companies and approach them about setting up a lawn maintenance program to help your tenants out.

WATCH THE WATER BILL(S): Of course, you know the importance of paying bills on time, but PLEASE pay the water AND sewer bills on time! Not only are you avoiding extra fees, but you’re also able to be proactive about monitoring each properties usage. Inflatable pools, car washing and extra loads of laundry are all summer time trends.  Check each properties usage online every 30-90 days to avoid surprise bills.

DID WE MENTION GRILLING? Who doesn’t like to throw a few steaks on the grill on a hot day? Anticipate some outdoor grilling attempts at both apartments and single-family homes.  If you own an apartment complex, you definitely need to have strict rules and scheduled reminders to use everyone is aware of your expectations both in advance and consistently throughout the summer. Check with the U.S. Department of Housing for any fair housing rules related to this matter. Send friendly reminder emails as early as spring hits to restate rules, applicable fines, and to have on file as documentation for the insurance company in case something happens.

For additional maintenance items to keep your eye on this summer, check out AAAOA’s Summer Checklist for Landlords or call Monument Real Estate Services for any of your property management needs!

 

 

 

Help! I Just Purchased a Home with Tenants Still Inside

If you’ve recently purchased on home from an individual owner, or are off-boarding from one property management Company to another…chances are, something WILL go wrong. “Believe half of what you see and none of what you hear” from the current owner or property manager. Not because they’re dishonest (because we hope they’re not), but because you to go into this situation both flexible and objective as possible. Your goal is to make this transition as smooth as possible. Every so often Monument will give you some experience-based advice, and this is one of those times. No fancy citations, just raw, experiential tips from our ten years of experience in the field. The goal is to help you avoid some avoidable mistakes. With that being said, here are a few pieces of advice to consider.

Over Communicate: There’s a high difference between nagging and making sure that all parties are well informed with regards to your expectations. We recommend making sure both the old and new property managers are in contact with one another. This tactic is helpful in ensuring that the former property manager is communicating what’s happening to the existing renter. Make sure they’ve informed the tenant of the sale, provided applicable contact information, and provided important dates to remember. The last thing anyone needs is for the renter to feel swindled. Most importantly, make sure they know that their rent/lease will not change.

Set Aside a Budget: Be prepared for your tenant(s) to tell you all about the maintenance issues that they now have or reported to the last owner. Don’t be afraid to explain that all work orders will be addressed, but in a reasonable AND attainable timeline. Whether you’re delivering information directly to the tenant or through your property manager, stick to your word and set this these clear expectations with tenant in advance. You’ll need to follow through later and referring back to that notice will prove helpful as you establish that professional relationship.

Lucky for you, any previous walkthroughs or city inspections should have revealed any significant issues in within the unit. Setting aside that budget and prioritizing the most crucial repairs will help foster a relationship with the tenant and support a smooth transition.

Bonus Tip: Investors often hold 10% in escrow after the closing, and the former owner won’t get the remaining funds until the existing tenant signs an executed lease. This is known to force the buyer (you) and the seller to work together.

Don’t worry, you’ve got this! In case you have any questions or need additional support we’re here to help. Visit www.monumentmgt.com to learn more about our property management services. #theinvestorsbroker

 

To Sale or Not to Sale? A Simple Checklist to Determine When it’s Time to Liquidate Your Rental Property

So you’ve purchased an investment property, and it isn’t going as hot as you had imagined. No matter the reason we know the temptation to jump ship can be immense, but hold tight. Just like any major decision in your life you should be weighing the pros and cons – things may not be as bad as they appear. Try asking yourself these questions:

How long have you owned the property? A rule of thumb we live by is keeping a property for at least 12 months. You’ll get an accurate idea of just how well, or poorly the unit is doing within this time frame; so don’t get caught up in the first three months of performance. Instead, monitor things like maintenance orders, slow pays, evictions, tenant complaints etc. The more data you collect, the more informed your decision will be.

Are you losing money? Here’s a legitimate scenario: Every few months a tenant complains about a new maintenance issue. While the complaints are legit, instead of budgeting for repairs you fix the problems with high-end materials, or you hire a contractor to make the repairs. You don’t have to sacrifice quality, but these expenses can add up quickly – so set a budget! For each of our 500 units, Monument sets aside $75/month. If you are losing money in these categories “Save your money for your next home or to spend after downsizing. – Kent ClothierReal EstateWorldwide

How quickly are you evicting tenants? Honestly, this questions ties back into losing money. Court fees, attorney fees, the cost of re-advertising, and the potential time your unit sits vacant…Evictions cost money! When at all possible evaluate if it may be worth the additional effort to negotiate an ONE TIME ONLY payment arrangement for the tenant to stay in the property. Don’t make this a habit, but delay evictions if possible. Make sense? Okay, let’s move down the checklist.

Is your unit priced appropriately? Like all investors, you’re purchasing property expecting a gain…just make sure it’s reasonable. If you didn’t have a chance to research the units surrounding the community, knows the time to do it. Investigate what houses/apartments are renting for on your block and the next couple over. If you’ve purchased a home in a community like Slavic village, don’t expect your unit to fill quickly priced at $800 when most other properties are leasing around $550. It’s coming…but not yet. Pull comps or “comparables” if needed to compare your home’s value to others in the neighborhood.

The point is not to let your emotions get involved in your decision making. If you’ve collected evidence that you’re losing money despite making the minor adjustments we’ve recommended over the course of 12 months then its likely time to liquidate the property. If you see a glimmer of hope, don’t be shy to ask for help. Monument Real Estate Services offers property management options for investors across northeast Ohio. We’re the #investorsbroker. Visit https://www.monumentmgt.com/management-services/  or call 216.916.0486 to discuss your options!

I’m Moving! How to get your security deposit back on time and in full

How many security deposits have you lost in your lifetime? One of our new staff members recalls at least three. Maybe that one time you found a really cozy house you loved enough to decorate; hanging all your family photos and flat screens on the walls of each room. Or back in college when you decided to transfer schools and moved out 15 days before the start of the semester. As renters, our lives can be so fast pace that things just…happen, but it doesn’t have to result in you losing all or a portion of your security deposit. If you’re even considering to move soon, follow these steps offered by Monument Management to make sure your money ends back up in your pocket where it belongs!Monument Real Estate Management icon

Step One: KNOW YOUR STUFF – Thoroughly review your lease to find what timeline the landlord has set for renewing or non-renewing your lease. At least 30-90 days’ notice is common, so know your timeline and plan ahead to avoid hundreds of dollars in avoidable fees.

Step Two: MAKE IT OFFICIAL – Give your landlord/property manager a written letter confirming your decision to move out. What to include in your letter? That you’re requesting your security deposit (in full & within 30 days of you moving out) include your new forwarding address, and even toss in city/state law to back up your request. Send a copy of this letter through the standard mail, and give the landlord a heads up that it’s coming via email if you can. The more proof, the better.

Step Three: FIX YOUR MESS – While you can’t be charged for normal wear and tear, make sure you fix any damages to the property like holes in the walls, changes in paint or wallpaper, broken windows, excessive trash/dirt etc. Once you’re done, take pictures for your records.

Step Four: SEAL THE DEAL – Return your keys and follow-up about your security deposit. Assuming you gave the landlord a forwarding address, the state of Ohio requires that the landlord return the deposit within 30 days. Interest may apply if you have stayed in the unit more than one year, or paid more than 1 months’ rent for your deposit. It’s important to remember that if your landlord decides to keep all or a portion of your deposit, they should offer you an itemized statement to account for every deduction (along with receipts). If it’s not returned to you within 30 days you can file a claim with the court, but let’s hope it never gets to this point.

These are four basic steps you can take to ensure you’ve done your part to receive your security deposit back on time and in full in the city of Cleveland. For more information regarding Ohio’s tenant-landlord law visit https://www.ohiobar.org/forpublic/resources/lawfactspamphlets/pages/lawfactspamphlet-11.aspx and be sure to visit www.monumentmgt.com for more blogs and resources for both renters and investors! Until next time…

Top 3 Priorities for Successful Urban Property Management

No matter the number of units, property management can get stressful. Acquire this role in an urban environment…and you’ve got yourself another set of unique obligations that need a solid strategy.  None the less, property management doesn’t have to be stressful 100% of the time. The best leaders learn to delegate tasks, are confident in hiring people who know more than them, and seek tools help balance their everyday tasks and responsibilities. This has to be you!

Take a second imagine the “rack” or triangle we use to play pool. All three angles are strong and are required to get the desired result. The same goes for your business structure—your management team needs to be strong in three core areas. To support your mission in becoming a more effective, stress-free property manager, here are three operation concepts worth prioritizing while planning for Q1.

  1. Recruit/Hire a STRONG Maintenance Manager, because you NEED one. Typically this department has high turnover and can lead to the most tenant complaints and bad reviews. Start with revising your job description taking into account which skills/requirements are non-negotiable as it relates to the unique needs of your property.  Use your data i.e. past work orders. Property maintenance AND management experience are REQUIRED. There’s nothing worse than hiring someone who knows the work, but can’t manage/train others.
  2. Develop STRICT guidelines for tenant leasing requirements i.e. net income, credit scores, pet policy, late fee etc. These norms should be co-developed with your owner and leasing manager and reevaluated a systematic basis. Once developed, your full team should be should be trained on these policies. The more educated your team is on policies and procedures, the better equipped you are to attract tenants who respect your guidelines and communicate expectations during difficult times to owners and tenants alike. Protect your investment!
  3. Develop clear and consistent collection procedures. To start, be sure all tenant ledgers are up to date. We can’t stress this enough. Once complete, work with your team to develop fair and realistic rent deadline, followed by strict follow-up procedures. Think along the lines of, how will late fees be communicated, how many points of contact are required before ledger is passed to an attorney, secured vs. non-secured payment options post-delinquency, acceptable payment arrangements etc. Collection decisions should rarely if ever be made on a whim.

Cleveland’s Best Kept Secret(s): Investing in CLE’s Top Two Emerging Residential Neighborhoods on the City’s East Side

Yes! We said the EAST SIDE. While most investors are caught in the trend of purchasing properties Downtown or on the west side of the city, we’d like to drop a few hidden gems for those considering to try their hand as a new investor in the Cleveland real-estate market.  Each neighborhood within the city has something great to offer from innovative schools to good eats, but you’ll find that you will get so much more for your money in the long run by exploring properties in these up and coming communities that are primed for growth.

Waterloo Arts & Entertainment District located in the center of the historic Collinwood community. With 15 arts-related businesses and over 6 million of direct investment, no doubt this will be the “Tremont” of Cleveland’s East Side. Collinwood is currently home to 11,500 residents and more businesses to come. Back in 2002, community members envisioned a thriving urban arts community despite dilapidated, boarded-up buildings. That same year, the Waterloo Arts 501 (c) 3 was born, driving their mission to revitalize the community through highly anticipated programming and events. By 2010, the US census reported a median income of $24,995, however, in 2017 the community attracts hundreds of residents, businesses, and patrons varying in economic and cultural backgrounds, driving lower crime rates, prideful community engagement, and more arts and performances from local and A-list celebrities each year. Whether is residential or commercial investing that interests you, Northeast Shores Development Corporation provides resources to help you get your feet wet, including financial incentives. Check it out http://northeastshores.org/invest/finding-properties/

Broadway/Slavic Village one of the city’s oldest neighborhoods located on the southeast side. By 2007, Slavic Village had the highest rate of foreclosed homes in the nation during the housing market collapse. Foreclosure hit as high as 70% in portions of the neighborhood. With 1,200 vacant and distressed homes, the community became labeled “ground zero” for the nation’s housing crisis, according to placenow.org, (Practitioners Leveraging Assets for Community Enhancement). Today, the Cleveland Neighborhood Progress has partnered with Slavic Village Development (SVD), Forest City, and RIK Enterprises to rehab and pipeline homes for sale. What’s in it for you? Homes are acquired at a low cost and rehabbed under SVRP’s supervision ensuring compliance. Price points for the rehab start around $62K and have risen to an average of $72k within 2 years of activity. Another interesting puzzle piece here is the NIB program, also known as the “Neighbors Invest in Broadway” program. NIB began in 2011 by the SVD, support their work in rehabilitating the houses, putting them back on the market, and keeping renovation costs low. NIB is still looking to identify potential buyers and landlords, and home purchases can be made without bank loans. New developments, paired with lower rent, new and innovative schools … Slavic Village is sure to attract new families and new money.

With all this retail, office, and residential property up for grabs visit www.livecleveland.org for more research and info regarding Cleveland’s neighborhoods and culture. Visit www.monumentmgt.com/vacanies for a list of our current rental properties! Happy Shopping!!

BREAK UP; NOT HEART BREAK

Break Up, Not a Heart Break

Since our last blog “Too Mature To Speed Date” , had marriage metaphors running through its core, we felt it was prudent that we continued the relationship theme when discussing evictions. Clearly, we don’t become buy and hold investors because we’re looking forward to evicting tenants. But we must understand that there is a good chance you will have to deal with an eviction, and having clear operational standards helps tenants and owners remove a lot of emotion and stress from an eviction -­­­­­ an outcome we’d all like to avoid. We truly believe that when it comes to evictions a “break up does not have to be a heart break”. How do you do that?

Important: Have an eviction process and be consistent!

In all relationships, there should be boundaries and standards that people adhere to, tenants and owners are no exception. Renters should be aware of your eviction process and you should be consistent regardless of heartfelt stories. For example, if a tenant does not reply to our calls, text, and emails to make a payment arrangement then they are given a three-day notice. Furthermore, when tenants are late we require them to commit to a payment date and it must be before the end of the month. If the promised payment is not made by the arranged date we cut-off communication from the tenant and go forward with the eviction process.

Owners must understand that Cleveland has a very tenant friendly court so you must “dot your I’s and cross your T’s”. We once had a case dismissed because of a wrong digit on a three-day notice, so pay attention to detail and be thorough. In addition, if owners have not fixed non-emergency maintenance issues within 30 days then there is a good chance you will lose the case. Finally, keep a record of all interactions and don’t be spiteful and retaliate with acts like shutting off the water. Again, we can’t stress enough how having standard procedures help the owner tenant relationship in the event of a break-up due to eviction.

Tip: Hiring a lawyer that is very familiar with the eviction process is a huge benefit and time saver!

Interesting link: Some Standard Eviction Rules

TOO MATURE TO SPEED DATE

Too Mature to Speed Date
 
The Cleveland real estate market has become too mature to warrant flipping homes or speed dating as the
 most effective way for people to participate in our flourishing investor friendly real estate market. In fact,
the current environment rewards those investors looking for a marriage or to buy and hold properties. We
recently spoke with an investor who was looking to purchase a home for $10K that needed $30K worth of
work and was hoping to sell the home for $50K. If everything went perfectly, this investor could earn
$10K after months of work and would be looking to sale a home to another investor as Cleveland does
not currently have a huge buyers’ market for homes especially in that price range. While investors are
 willing to purchase a turn key property (rent ready) for $40K or more this speed dater (flipper) was not
 aware that it would be a ton of competition in this price range or any investors he could market his
 property to. DO YOUR RESEARCH, especially if you don’t live or are not familiar with an area and
become familiar. Please, talk to a property manager, agent, or realtor that understand your target market.
On the other hand, if this investor decided to buy and hold at $40K he could have purchased a turn key
 property that was ready to start generating revenue almost immediately, instead of having to wait months
for the rehab process to be completed with no end buyer in sight. More importantly, is $5K to $10K worth
of upside worth forgoing the opportunity to earn an estimated $800 to $1200 month ($9,600 to $14,400
 annually) in revenue if you held the property in perpetuity? In our opinion no! While buy and hold
 investors have a longer time horizon before recouping their original investment, those willing to take on
 the buy and hold marriage in the current Cleveland market are taking on less risk than flippers. Less risk
 and more reward is Monumental for novice and experienced investors. After years of following this
model, you can own numerous properties outright and create a net worth well into the millions. Until next
 time.

Our House / Their Home

 

Clearly you need to spend capital to be successful in the real estate investment field. More importantly, this is the art to thriving as an investor and it’s the biggest part of our job. Not understanding that our properties will require constant investment is why some thrive and some don’t. For us “buy and hold” investors we must realize that sometimes we need to spend money to protect our investment and this is the key to obtaining and keeping quality tenants.  Too often we see owners want to cut corners on the cost of rehab or maintenance, but the best advice we’ve ever received on the industry was “fix it right now so you never have to come back”.

Some people have the stupid belief that tenants want to take advantage of owners by making unnecessary maintenance calls and asking for ridiculous request (e.g., changing light bulbs or finishing the attic) and we know from experience that this isn’t true. Tenants just want a comfortable place to stay.  Yes, a few people will take advantage but most of us don’t want people in and out of our house constantly fixing things; and we certainly don’t want the landlord stopping by (especially unannounced). Taking care of and being accountable for our properties (our company policy to respond to maintenance request within 72 hours) shows appreciation for our customers and in turn they will exercise their accountability by paying rent on time. Remember we have already screened them so we know they are capable, but we give renters ammunition when we don’t keep up our end of the bargain.  We are the landlord, so “be too big to act small” (line we heard from Shaq lol). Say to all your tenants, ” it may be my house, but make it your Home”.

We write these lessons from experience, as we have noticed that when we INVESTED our money into making the home look and feel nice, that our tenants stayed long term (a year or more) and made FEWER maintenance calls. In short, the secret to having a long-term quality tenant (besides the usual background screen, income verification, and criminal/credit history……blah blah blah) is taking care of your property.  That’s it!  No birthday cards, Christmas gift bags, no special incentives for paying on time, no intimate, “let me get to know you so we can build a good relationship and you will pay your rent” chats over a beer (we have tried them all!).  No no no – treat it like a business and tenants will respect it like a business. Which leads us to our closing statement, spend the necessary amount of money, make maintenance our number one priority & be consistent .

 

Interesting Link: https://www.american-apartment-owners-association.org/property-management/landlord-quick-tips/6-easy-ways-landlords-end-losing-good-tenants/

 

All Rise! The “Civil” Case of Single vs Multi-Family Homes

Today’s blog proceedings are to decide whether single or multi-family properties should lay claim to your capital for real estate investments.

Single-family properties state your case….

Did you remember housemates don’t always like sharing walls and laundry areas with their neighbors (usually means more turnover and a heated argument that you will have to referee)? Are you aware that tenants in single-family units often fix minor maintenance issues and do things like cut grass themselves (less expenses for owner)? Did you think instead of fixing one toilet you’d have to fix two or more and one leak upstairs could result in a leak and issues for the downstairs tenant? Is it important to you that you’re able to sell your investment property quickly? Single-family homes could be easier to move. The Single-family can resale as an investment property or owner occupancy. Do you live far away from your investment home without a property manager, which makes it harder to handle repairs and tenant turnover? Do you realize that unlike multi-family unit tenants, renters in single-family homes pay all their utilities? Have you heard that land contracts or rent-to-own agreements could be advantageous for single-family owners? The defense for single family homes has no further questions as this time……

 Multi-family properties state your case….

 Have you thought about an empty single family home results in zero revenue but a partially occupied multi-family has the benefit of earning at least some revenue if one tenant moves out? And with that said, are you ok with the added stress of potential break-ins while a single family home sits vacant? Do single-family homes offer as much opportunity for alternative use such as “group homes”? As an exit strategy, did you consider that multi-family homes might be more attractive to buyers/investors because they offer more income? Speaking of more income, did you know that many mulit-family homes can be rehabbed/converted to add even more units that allow you to bring in even more income? Do you live out of state without a property manager that makes it harder to handle repairs and tenant turnover? Have you thought about the difference in cap rates (often comparable in current Cleveland market)? No further questions…..

 The Verdict

 All in, we believe the jury is still out on single-family vs multi-units and it comes down to what type of investor you are and where you are in the process. Said differently, investors should develop their own style and method; however, we don’t suggest new investors purchase a multi-unit home until they get their feet wet with a few single-family homes (biased, yes, but we learned the hard way). To truly master the Real Estate industry, you must be ENGAGED. Know your property. Know your tenants. LEARN THE PROCESS! It is much easier to do this for a first time investor with a single-family investment. Then, the next phase of multi-family investments will run much smoother and bring in that coveted cash flow. Regardless, we think asking these questions help you come to your own verdict.

Link: Single-family homes and high-rises are all the rage. Meanwhile, the vanishing middle bodes ill for the future.

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