The third quarter has come to a close.
Schools are in full swing, the chilly air is setting in, and peak rental season has ended.
The numbers tell the story, so let's break it down:
The third quarter has come to a close.
Schools are in full swing, the chilly air is setting in, and peak rental season has ended.
The numbers tell the story, so let's break it down:
First settled in 1830, Avon, Indiana is a town situated in Hendricks County, west of Indianapolis.
With a current estimated population of 18,343, Avon is the 47th largest city in Indiana.
The median age is 35.3 and the median household income is $85,433.
Caucasians make up 84.01% of the population.
Average rental amount is $1,055 and the median home value is $185,200 according to World Population Review.
According to Niche, it's ranked as one of the best places to live in the entire state.
It's also ranked #11 out of 115 for best suburbs to raise a family.
A staggering 81% of residents own their homes compared to only 19% that rent, also reported by Niche.
Below is some additional information that will hopefully help you determine if Avon is a good place to invest for your goals.
If you've ever hired an Indianapolis Property Management company, or if you're currently in the process of researching some, you've most likely noticed fees for property management differ.
Some differ greatly.
When you're trying to make the numbers work and see positive cash flow, it can be tempting to go with a cheaper option.
We get that.
While from a top-level view we all appear to solve the same problem, we oftentimes solve those problems in very different ways.
And, it's clear, from speaking with some of our Clients, that some companies don't solve those problem at all.
In fact, they create new problems, which is never good.
The old adage, "you get what you pay for," probably rings truer for property management than most other services or products.
So with this topic in mind, we thought we would take some time to discuss various property management fees you may encounter, and why cheaper is not always, and oftentimes, never, better.
As an Indianapolis rental property investor, there will inevitably come a time when you decide to sell one, or all of your properties.
We realize that this is a natural part of the rental investment cycle, and so we have put processes and resources in place to provide the best sales experience possible for our Clients.
As a fully licensed brokerage, we can facilitate the entire home selling process for you.
We know you have a lot of options when it comes to choosing an Agent, but we hope that you'll see the benefit of continuing our partnership from management to selling.
Greenwood, Indiana, the most populated city in the southern region of the Indianapolis Metropolitan area, is the next stop in our "Where to Invest in Indianapolis" series.
This Johnson County city was first inhabited by the Delaware Indians, and later followed by European Americans in 1823.
According to City-Data, the population of Greenwood is 57,375 and the median household income was $56,116 as of 2016.
The demographic breakdown is as follows:
World Population Review estimates the average rental amount to be $903/month and the median home value to be $143,100.
The median age is 35.5 and the ratio of females to males is 52.4% vs. 47.6%.
The cost of living index in Greenwood is 87.6 compared to the national average of 100.
The city is a mixture of blue and white collar workers, with a majority of the jobs being in the sales/administrative category.
By now, unless you don’t live in Indianapolis and don’t pay attention to any news concerning Indianapolis, you’ve read and heard all about IndyGo’s Red Line, which made its debut on Sunday, September 1st, 2019.
These buses follow a fixed, 13.1 mile route consisting of 28 stops that run from 66th St. in Broad Ripple, all the way down south to the University of Indianapolis.
Many of you locals have seen the buses on their routes - “practice” for drivers began around 30 days before the official launch date - and many of you have now ridden the buses as well.
In this week’s blog, I wanted to provide a perspective from someone who has watched the project from the beginning, because I not only work near the Red Line, I also live near the Red Line.
So, commuting to and from work on the Red Line, I thought, could be a real possibility for me.
And that’s the main question I wanted to answer: Could I really take the Red Line to and from work every day?
Located in Madison County, Indiana, Anderson is a suburb of Indianapolis first developed in 1827.
The city has a very interesting history with its early roots in Industrialization.
With the completion of the Indianapolis Bellefontaine Railroad in in 1852, Anderson burst to life.
Numerous industries located here such as natural gas and car manufacturers. These companies aided in a thriving economy until the 1970s when Anderson suffered a mass deindustrialization and companies like GM shut down, laying off nearly 22,000 people.
As of 2017, the population is reported to be at 55,076 and the median household income is $34,693. The median home value is $70,500 while average monthly rent is $724 according to Niche.
76.1% of the population is Caucasian with 13.1% being African-American, 5.3% Hispanic, and several other ethnicities making up a very minute portion of the population.
56% of residents own their homes versus rent.
At T&H Realty Services, we’re all about educating.
If you spend any time on our website, you’ll realize that we work hard to be transparent and open about not only our pricing, but also about our processes and philosophy on running a successful property management company.
And we also don’t shy away from our competition.
In fact, we embrace them.
And when we’re not the right fit for someone, we happily refer prospective Clients to various property managers in Indianapolis.
Below is a list of the top property management companies in the Indianapolis, Indiana area:
I remember the conversation vividly.
We were on a conference call with a Real Estate consultant company a few years ago.
This company’s main business was/is to attract investors to their platform and then help them buy property in Central Indiana, along with a few other markets around the Country.
Many of those Clients then used us to manage the homes.
The President of the company was part of the call, along with all of his lead people.
Who the Company is isn’t important, because you likely haven’t heard of them.
At any rate, we were discussing various topics when he went into full sales mode…
“We preach to our Clients that real estate is the best investment of all.”
OK, I thought, I can get behind that statement.
“Our Clients love cash flow.”
Who doesn’t, I thought.
“And so, we tell our Clients that owning rental real estate is like owning an annuity: you get a set amount of money each month and then you also get the long-term appreciation. It’s the best of both worlds.”
Whoa, whoa, whoa.
Real Estate is like an annuity?
In what world?
Lawrence Township, located in the northeastern corner of Indianapolis, is the 9th and final Marion County Township in our “Where to Invest in Indianapolis” series.
Organized in 1822, Lawrence Township has grown to a population of 125,145 as of 2017 according to the Census Bureau.
Towncharts reports a median age of 35 with a slight majority of the population being female.
According to Census Reporter, the median household income is $48,660 and ethnicity breakdowns are as follows - 53% Caucasian, 34% African-American, 9% Hispanic, 2% Asian, and 3% Other.
Niche reports median home values of $151,400 compared to the national average of $184,700 and a median rent value of $822 compared to the national average of $949. 59% of people in Lawrence Township own their homes versus 41% who rent.
We’re nearing the end of our deep dive into the 9 Marion County Townships in Indianapolis.
The smallest in both geographic size and population, Decatur Township, is located in the southwest corner of the county.
In the 1820s, it was predominantly settled by Quakers from South Carolina.
For its small size and rural feel, Decatur has a pretty big claim to fame. It’s the site of the Indianapolis International Airport.
AmeriPlex, one of the largest industrial parks in the state, is also located there.
As of 2017, the population consisted of 34,297 people with a median age of 32.8 according to the Census Bureau.
86.2% of the population is Caucasian and the median household income is $54,005.
According to Niche, the median home value is $110,900 (compared to the national average of $184,700) and the median monthly rent is $845 (compared to the national average of $949).
Located smack dab in the “center” of Indianapolis, lies Center Township.
Center Township includes Downtown and part of Beech Grove and is the most populated Township in Marion County, with 3,511 people per square mile according to Town Charts.
The boundaries are the South side 38th street, the East side of Belmont Avenue, the West side of Emerson Avenue, and the North side of Troy Avenue.
As of 2016, there were 147,110 people residing here. The median household income is just $27,718 as reported by Best Places.
The median age is 33.8 with a racial makeup of 57.5% Caucasian, 34.8% African-American, and 7.4% comprised of various other ethnicities.
According to Niche, The median home value is $74,600 and the median market rent is $825.
59% of the population rent versus 41% who own their home.
Center Township is very unique in the fact that it covers a broad spectrum. Some of the best real estate in Indiana is located here, but so is some of the worst.
Example: The most expensive single family residence to ever sell in our local MLS system ($4.8M in 2016) is located in Center Township. By contrast, some of the cheapest real estate - we're talking less than $1,000 cheap - has also been sold in Center Township.
As you might have guessed, some of the oldest real estate in Indiana still exists in Center Township. However, several years ago, a building resurgence occurred and continues today, particularly in the outlying neighborhoods outside of the immediate downtown area.
This mass gentrification has made some sections of Center Township very desirable for young people, families and, more recently, retirees who are looking to downsize and crave walkability.
We’re more than halfway through the 9 Marion County Townships!
Located in the west central portion of the county, Wayne Township is next up in our series.
Living in Wayne Township offers residents a suburban feel and most rent their homes.
It's also home to the world renowned Indianapolis Motor Speedway which packs over 600,000 people in every year for the Indy 500!
With a growing population of 143,711, Wayne is one of the more racially diverse townships with 55.4% of the population being Caucasian, 22.8% being African-American, and 16.7% identifying as Hispanic according to Statistical Atlas.
The median age is 32.8 but the majority of people who live here are under the age of 20, with the next largest percentage being individuals in their 20s. A very young crowd overall!
Niche reports median home values of $94,000 compared to the national average of $184,000 and median rents at $800 compared to the national average of $949.
The median household income is $38,864, which is one of the lowest that we have discussed thus far.
Organized in the 1820s, Franklin Township is another one of the 9 Marion County townships.
Located in the southeast corner, it was one of the last areas in Marion County to see heavy suburban land development.
Despite efforts to maintain a rural atmosphere, Franklin Township has seen a population explosion in recent years.
As of 2016, the population in Franklin Township was 56,462. According to Niche, the current median household income is $71,706.
With an unemployment rate of 3.5% and projected future job growth of 37.5%, Franklin Township has a fairly strong local economy.
Of the 1,293 homes that were sold on the MLS in Franklin Township in the past year, the median sale price was $180,000. Of the 293 homes that were leased in the last year, the median rental amount was $1,295.
According to Niche, 75% of the population owns their homes versus 25% who rent.
You've recognized the incredible value in rental properties, but how do you find them? Where should you look?
These questions are deceptively simple, only brushing the surface of a subject that's a little more complicated than it first appears.
Yes, you can find a variety of rental properties with a Google search, but finding an attractive property at an affordable price isn't nearly as easy.
You'll need to use all your available resources, taking advantage of many different strategies.
With that in mind, we'll walk you through six ways to find new rental properties for sale.
Moving on down to the south central part of Marion County, we have Perry Township.
Settled in 1822, it was named after Oliver Hazard Perry, a hero from the War of 1812.
According to Census Reporter, the population was 114,519 as of 2017 with a median age of 35.9.
There’s a very even split between males and females, but an overwhelming 77% of the population is Caucasian.
The median household income is $49,693 and 17% of the population lives below the poverty line compared to the entire state which is 13.5%.
Census Reporter also states that 93% of housing units are occupied in Perry Township and 59% of housing units are owner occupied.
According to MLS data, of the 1,579 homes that were sold in the last year, the median sales price was $154,000.
Of the 208 homes that were leased, the median rental amount was $1,195.
Perry Township is also home to the University of Indianapolis.
Moving right along in our series, the third township we will be discussing, is Warren.
One of the nine Marion County Townships, it was named for American physician, Joseph Warren, who played a large role in the Patriot organizations during the American Revolution.
According to the U.S. Census Bureau, the population was at 104,572 as of 2017.
The median age is 35.8, with 58% of the population being female.
The median annual household income is $42,199 according to BestPlaces.
Niche reports a median home value of $104,600 compared to the national average of $184,700 and the median rent at $811, compared to the national average of $949.
Another one of the nine Marion County Townships, is Pike.
Located in the northwestern portion of the county, it lies completely inside of Indianapolis except for a small portion of Clermont.
The township is named for Zebulon Pike, an American general and explorer.
The most notable attraction of Pike Township is hands down Eagle Creek Park. At approximately 1,400 acres, it’s the largest park in Indianapolis, and one of the largest municipal parks in the US.
According to Census Reporter, the current population is at 82,247 with a median household income of $52,917.
The median age is 32.4 with a fairly even male-female ratio and almost half the population falls into the 20-49 year old age range.
There’s also a pretty even split of homeowners to renters with 52% going to the former and an estimated 8% vacancy rate.
With 1,160 homes sold in the last year, the median sale price was $147,000 and the median monthly rental rate was $1,285 according to MLS data.
We work with numerous investors on a weekly basis, many of whom are new to the Indianapolis market, or are new to REI in general.
If you find yourself in one of those categories, you’ve probably asked the question, “Where should I invest in Indianapolis?”
While we’ve touched on this topic in a previous blog, we thought it was time to dive a little deeper.
We’re going to breakdown the Central Indiana market for you, township by township.
We hope this series will offer some insight into what Indianapolis has to offer, and will help you determine the best area to invest in for your goals and strategy.
First up, Washington Township.
Now, our office happens to be located here, so we may be a little biased, but we had to start somewhere!
**Note: This blog was updated - again - on June, 2019, to reflect new changes to the Sheriff Sale.**
This is a topic I’m shocked has taken us so long to blog about.
We’ve been attending the Marion County Sheriff Sale since 2005.
And - wow - do we have stories to tell.
Lot’s of them, which we may decide to do in future blogs.
But, to start, I thought I would use this blog to discuss the basics of the Marion County Sheriff Sale.
Sort of a “Marion County Sheriff Sale for Dummies” blog.
Note: I’m obviously not a lawyer, not an expert on foreclosures, so I’ll provide a VERY basic overview of the process.
If you’ve been investing in real estate for any period of time, or even if you’re just in the research phase, you likely know about property classes.
Just in case you’re brand new to REI and have no clue what I’m talking about, there’s an informal grading system that investors use to classify properties.
Yes, I mean literal grades such as an “A” property or “C” property.
I say it’s informal because everyone has their own variation and subjective opinions about what each grade constitutes.
One investor may think a property is a “B” class while another considers it a “C”.
Some grade on an A-B-C scale while others go all the way down to an “F”.
Some go even more in depth by adding pluses and minuses into the mix.
But with all that aside, at its core, the grading system is universally known and is an important factor to consider because each class represents a different level of risk and return.
As a company who manages mostly A/B properties, we are often asked what those types of properties look like.
So, we thought we would take some time to break down each class, provide some real life examples from right here in Indianapolis, and hopefully be able to help you determine which class of property best fits your investment goals.
For the purposes of this blog, we’re going to use an “A” through “D” scale.
In previous blogs, we’ve discussed how residential Property Management is consolidating and is, generally, getting more professional.
While there remain lots and lots of the classic Ma and Pops out there managing homes, Corporate America has taken a definite interest in our industry.
And, more importantly, Corporate America has entered markets offering a national presence.
It’s hard to tell, exactly, how things will progress from here, but the corporate trend has started.
And if you are an investor who uses a 3rd party property management company, you need to understand what this means to you and your investment.
Because, clearly, you now have a lot of choices when it comes to Property Management in Indianapolis.
When it comes to finding and purchasing rental properties, you want to ensure you have a knowledgeable, experienced partner to help you in your search.
Buying investment properties is a whole other ball game compared to simply purchasing a personal residence.
You have to think about the make-ready work, rent rates, cash flow, appreciation, crime rates, school districts, property taxes, etc, and how it will all fit in with your goals and strategy.
You also have to think about management. Are you going to self-manage or have a third-party handle that for you?
If you’re going to hire a Property Manager anyway, why wouldn’t you take advantage of using their brokerage services as well?
It makes sense on so many levels, and we’re going to discuss a few reasons why:
For the past several years, we’ve been a go-to Company for many investors around the world, all in search of the great real estate deals Indianapolis has to offer.
Indianapolis is, without question, a hot bed for real estate investment.
Everyone wants a piece of the pie, and what makes it even more difficult, is everyone wants the same piece of the pie.
There are hundreds, probably thousands, of investors with the same criteria looking for the same deals that you are.
Not only that, but when you’re dealing with A/B class properties, you also have to compete against a high volume of owner occupants.
So in essence, you have double the competition as other investors who are looking for homes in the C/D classes.
We're all about educating and advising here at T&H Realty Services.
That's why we like to provide resources from every possible channel to help you in your real estate investing ventures.
While we preach that real estate is a long-term play, sometimes it just makes sense to sell.
Selling, like Buying, is a natural part of the investment cycle.
And, in some cases, it can be a smart move.
As a fully licensed brokerage, we’ve helped many of our Clients in the sale of their rental properties and one of the most frequent questions we get asked is, “should I wait until my Tenant vacates or sell it occupied?”
And the answer is, it all depends.
On what, you may ask?
Well, there are several factors that you need to consider when deciding to sell your rental property occupied or vacant.
Outlined below are some pros and cons for each which will hopefully help you decide the best option for you and your property.
It's hard to believe we've already finished up the first quarter of 2019.
While there are no major surprises this time around, there are a few things to take note of.
I'd also like to take a moment to point out that these numbers come straight from the MLS, and obviously not all rental properties are listed there. While this analysis isn't comprehensive, it definitely gives a great overall look at how the market is performing.
Lets take a look at the numbers...
I’m sure you’ve heard the saying, “all good things must come to an end”, and as we wrap up our “Inside T&H” series, that’s exactly what we want to talk about.
While we hope to remain your partner for years and years to come, there will inevitably come a time when we part ways.
Terminating a contract is never something we look forward to, but we understand that it’s a natural part of the investment process.
And when it’s time to end your contract, we want to make sure you are handled with the same care as we provided when you began the relationship with us.
We have identified 3 main reasons why you may want or need to terminate your contract and the process involved in each.
I think we can all agree that education is one of the most powerful tools you can employ in the real estate investing world.
In an industry that's so dynamic, if you're not constantly learning, you won't be successful.
Luckily, in the age of the world wide web, infinite information is available at the click of a button.
The Resource Center our on our website, which is loaded with great information concerning real estate investing and property management, receives a lot of activity, so there’s obviously a thirst for knowledge out there.
And outside the web, there are some tremendous resources to fill your brain. New books are coming out all the time and there are some really good ones out there.
We've decided to make it even easier for you by compiling a list of 26 of the most popular and widely-read real estate investing books.
Whether you're just starting out or have been in the game for a while, there's a book in this list for you.
At T&H Realty Services, a key part of our Property Management service is to provide our Owner Clients with the highest degree of protection for their asset.
Clearly, obtaining a proper security deposit from your Tenant is a big part of this.
A security deposit is one of the most important lines of defense for Landlords. A security deposit not only protects the property, but also the Landlord’s finances should anything be damaged during their renter’s lease period.
Let’s dive a little deeper into how we handle this very important issue for our Clients.
Several blogs back we discussed our move-in process.
While you will see some similarities between our move-in and move-out processes, move-outs are obviously a whole different ball game.
Knowing that you’re losing a Tenant as opposed to gaining one puts some added tension on you as the property Owner, and we understand that.
The process of moving a Tenant out and getting the home in rent-ready condition again is relatively involved and our whole staff puts in a lot of time and effort to coordinate everything for you in the most efficient manner possible.
You want to minimize vacancy, and so do we.
If you’re not getting paid, we’re not either.
Let’s take a closer look at our move-out and turnover process so that you can have an overall better understanding of how we handle these big events for our Clients.
In the grand scheme of being a Landlord, there are few things more painful than an eviction.
No Landlord wants them.
But, if you do this long enough, you’ll almost certainly have to evict a Tenant.
At T&H Realty, we evict less than 1% of the Tenants we place.
Unfortunately, in spite of our best efforts and in spite of extreme Tenant screening, evictions are a harsh reality of being a Landlord.
Because, as we all know, life happens: Divorce, job loss, illness ,etc.
Evictions, as you might guess, require significant care from our team, and we are prepared to communicate with you heavily until the situation is resolved.
Rest assured that we're here to expedite the process and get your property re-rented as quickly as possible.
Below is a basic guide to how we handle evictions for our Clients.
Usually, when you think of what a Property Management company does, the first things that likely come to mind are collecting rent, handling maintenance issues, conducting move-ins, and other notable events.
And, clearly, those are are important functions.
But, you may not even realize all of the smaller, in-between tasks that come with the job.
The tasks associated with managing and enforcing the terms of our Lease make up a big part of what we do for you as a rental property owner.
The key, obviously, to managing this minutiae comes down to a strong Lease. To use a cliche... the devil is in the details.
A strong Lease not only sets expectations and standards for the Tenant, but it protects you and your asset.
And even with a strong Lease, you must have the systems and resources in place to enforce it.
So, today, we’re going to discuss a few ways we do this for you.
As we’ve discussed numerous times, vacancy is a cash flow killer.
Not only is it important to rent the property quickly, it’s equally, if not more important, to keep your Tenant in your property.
Renewals are a Landlords best friend.
And as we’ve mentioned in other blogs, renewals are a win-win-win situation, so we do our best to make as many as possible happen.
I say renewals are a win-win-win for the following reasons:
You don’t have to put out any money for turnover costs or suffer any vacancy.
The Tenant doesn’t have to deal with the cost and hassle of moving.
Each member of our staff gets a year end bonus dependent on the amount of renewals we have, so the more the better!
When we say, “We are so much more than just a property management company”, we mean it.
When you become become a Landlord, you are entering into a business.
This is a sentiment that we have echoed time and time again, and will continue to do so.
Having the right mindset from the get-go is vital to running a successful business. To that end, we do our best to ensure all our Clients understand what they are getting into when they become rental property owners.
Another key to running a successful business, is having the proper tools.
We provide these tools in the form of our Owner Portal.
So, your Tenant has been screened, the lease is signed, we’ve conducted the move-in, and you’ve started seeing income in the form of rents.
Things are going according to plan.
That is, until we get a phone call from the Tenant that goes something like this:
“Help! We woke up this morning and there’s water pouring through our ceiling!”
“We just got back from dinner and it's 45 degrees inside our house. We can’t get the furnace to work at all.”
Maintenance issues are some of the biggest concerns for Investors because they are, of course, associated with expenses that translate into lost cash flow.
We get that.
We know that as far as expenses go, maintenance expenses are some of the largest and most frequent you’ll face.
And because of that, many of you want to know exactly how we’re going to handle this very important aspect of your investment.
So, we decided to give you a clear look at how we handle maintenance issues here at T&H Realty Services on a day to day basis.
If you’ve been on BiggerPockets recently, or are involved in REI at any capacity, you’ve more than likely heard about this trending investment term.
It’s known as BRRRR.
When I first saw the term, I wasn't sure what to think.
I'd receive emails with subjects that said, "Check out this BRRRR deal!"
Did it mean a really, really cool deal?
Didn't make sense to me.
After some quick investigation, I learned BRRR was actually an acronym that stands for: Buy, Rehab, Rent, Refinance, Repeat.
Brandon Turner, VP of Growth at BiggerPockets, coined this catchy, new term.
Now, there’s nothing new about this strategy. It’s sort of just a hybrid between “Buy and Hold” and “Fix and Flip”.
In fact, even though we didn’t use the term BRRRR back then, this is exactly how my business partner and I got started back in the early 2000s.
So, what exactly is this method, and why has it become so wildly popular?
Happy New Year, everyone!
It's time to recap last Quarter's rental activity in Central Indiana, as well as examine 2018 in whole.
In short, as we've noted many times in this blog, the rental market remains healthy in Central Indiana.
While we did just experience our first snow storm of the season, this Winter has been extremely mild, which, I'm sure, helped generate more activity than we normally see this time of year.
It’s the grease on the the investor’s skids.
The fuel to the engine.
Without it… well, there’s no reason to own rental property.
And because of that, we take rent collection very seriously here at T&H Realty Services.
Effective rent collection, as we’ve noted in other blogs, starts with effective Tenant screening.
But even highly qualified Tenants can sometimes run into payment issues.
And when that happens, it’s critical that you have the right system in place - a system that helps make paying rent your Tenant’s #1 priority.
If you haven't noticed by now, we're BIG on providing content.
But, not just any plain, old content.
We strive to produce helpful, actionable content that Indianapolis Investors and Landlords can use to help educate themselves and be more successful in the Indy market.
Thanks to you, our readers, we also hit several milestones in 2018, including most blog views in a month!
While we would love to take a look back at all 49 articles we published this year, we know you're busy, so we narrowed it down to the top 10!
“We have an approved application on your home..”
Ah, music to an investor's ears.
Getting the news that your property is about to be occupied is probably the best thing you’ll hear all day.
However, there are a lot of steps to take between approving an applicant, and the physical move-in.
Not to burst your bubble, but there are quite a few things that can go wrong during the time an applicant is approved and the actual move-in.
You just can’t predict the future when you’re dealing with such a wide variety of individuals.
But not to worry.
We have developed a system that helps mitigate potential issues, and our team is a well-oiled machine that works together to provide a smooth process for potential Tenants.
So, once we have an approved application on your home, here’s what happens next.
Out of the many, many tasks a Property Management company completes, Tenant screening is - hands down - one of the MOST important.
The people who end up residing in your property can make or break your investment and Fair Housing is not something you want to find yourself violating.
Finding high quality Tenants is vital and something we take very seriously.
We’ve developed a successful system here at T&H and wanted to share it with you so that you are aware of how we will screen potential Tenants that apply for your property.
So, after your home is made-ready, marketed, and showings occur, the goal is for applications to start arriving right away.
Once we’ve taken over management of your property, gotten all of the necessary paperwork in order, and have it in rent ready condition, it’s time to show it off to the world.
We pride ourselves on having one of the most comprehensive and successful marketing plans in Indianapolis. In fact, we typically rent our homes 2-3 weeks faster than our collective competition.
It’s not by dumb luck that this phenomena occurs. We put a lot of time, effort, and staffing into our marketing efforts to ensure your home is seen by as many qualified Renters as possible.
So, you are all signed up, set up, and you have a vacant property.
Vacancy, as we discuss over and over, is the single biggest drain on an investor’s return.
We’re on the same page with you, and our goal is to get the property in rent-ready shape and on the market as soon as possible.
Let’s spend some time reviewing our processes whenever we take over management of a vacant property.
Now that you are a Client of ours, how we initially proceed is dependent on the occupancy status of the home.
Prior to 2017, almost all the homes we placed under our management were vacant. Occasionally, we picked up occupied homes, but not often.
However, that’s all changed.
Now, a significant portion of homes we take on are occupied… generally from other management companies in Central Indiana.
As a result, we’ve created detailed processes on the proper way to onboard an occupied property.
Bottom line: We’re pretty good at it.
At T&H Realty, we strive to be totally transparent with our Clients and prospective Clients.
One of our core values is “Always Educating and Advising.”
Generally, this starts well before we even speak to potential Clients.
As you may know, our website is LOADED with information… from our detailed pricing breakdown, as well as other informative, insightful content.
In an effort to further facilitate this mission, we have decided to produce a series of blogs detailing the inner workings of our company. You can expect to see topics on everything from how we handle move-ins and security deposits, to how we handle evictions and turnover work.
We want our current Clients to have a firm understanding of our processes, and prospective Clients to know what we’re all about even before signing with us.
So, let’s start at the beginning… “Becoming our Client.”
In previous blogs, we’ve discussed the various obligations that you have as an Indianapolis Landlord.
On a very basic level, you’re required to provide your Tenants with a safe, clean, and habitable dwelling.
Drilling down into the safety aspect is where smoke detectors come in.
Yes, smoke detectors.
Those circular, plastic gadgets that we stick on our ceilings and don’t give a second thought about until the batteries start to die which causes that annoying, incessant chirping.
At which point, let’s be honest, we usually just end up taking the batteries out until we finally remember to replace them a month later.
In your personal home, you have the luxury of doing what you want (although I strongly recommend that you keep your smoke detectors in good working order as it could save your life). But the fact is, when you’re running a business, which you are when you become a Landlord, you don’t have that luxury.
You have a very distinct set of laws and guidelines that you have to follow.
Smoke detectors may seem like such a small, trivial issue in the grand scheme of rental property ownership.
But I assure you, if it wasn’t important, there wouldn’t be an entire section of Indiana Law dedicated to it.
The Central Rental Market Machine chugged right along during this year's Third Quarter, posting some impressive numbers, particularly in Indianapolis.
Generally, prices are steady, number of rented homes are up and days on market are down.
All of which are good numbers for Landlords.
We’ve discussed Indianapolis evictions at length in past blogs.
There are evictions that benefit you as the Owner, and there are evictions that can benefit Tenants (Constructive Eviction).
There is, however, a third type of eviction.
This is the holy grail of evictions, if you will.
The eviction process that every Landlord dreams about.
The ever elusive, highly coveted….Emergency Eviction.
For those of you who have gone through the unfortunate circumstance of having to evict a Tenant, you know it can be a grind.
It’s not an instant solution.
In fact, it can take weeks, or even months, to go through a typical eviction court process.
In a perfect world, you could dispel lease violating Tenants within days, but unfortunately, that’s not our reality.
So, an Emergency Eviction is the closest we get; and even still, it has some major limitations.
I’m sure many of you can remember, or are at least aware of what the housing market was like around 2008.
Dismal to say the least.
The Case-Schiller home price index reported its largest price drop in history, foreclosures increased seven-fold, and there was a credit crisis that resulted from the bursting of the “housing bubble.”
The 2007-2009 recession was brutal, and it affected a lot of people.
If you were an investor or real estate professional during this time, you’re probably having some PTSD flashbacks.
Luckily, the housing market began to bounce back around 2012, and Warren Buffet was a major reason for that.
He was the spark that lit the fire for what is now single family home investing. He suggested investors should buy up homes while prices were low, and then reap the benefits when the market leveled out.
And that’s just what began to happen.
We can now see the results of that idea. It’s a MUCH different climate today.
In Indianapolis, there’s not even enough inventory to go around because so many people are investing here, and seeing major success.
Let’s go back to 2009 for a second, though.
Investing in your own backyard is an incredible strategy if you are able to find the deals that will help you achieve your investment goals.
If you happen to live in a market that doesn’t have the best returns, however, you need to look out of state. Managing long distance rentals effectively takes a bit of work, but many do it very successfully.
Here are their secrets.
If you are like most investors out there, my guess is you spend a lot of time reviewing MLS listings.
I’ll also guess that you’ve run across some language in an MLS description that includes a phrase, “Tenant’s rights prevail.”
Here’s an example of a description I found on our local MLS system…
"Investor alert! Check out this spacious and updated ranch on Indy’s west side. Home went through a complete remodel 6 months ago, including new roof, HVAC, kitchen and bathroom updates. Home is Tenant occupied. Tenant’s rights prevail.”
Now, as you know, or as you should know, Tenants do have certain rights when living in a property, including...
While owning rental real estate can be a great way to build wealth, it most certainly comes with its fair share of expenses.
Taxes are one of those expenses.
For every dollar you earn, you’ve got to give a few cents - or maybe more than a few cents - back to Uncle Sam.
No one can escape it.
Well, you can try, but that’s called tax evasion - a federal offense - so I wouldn’t recommend it.
Even though the IRS invokes fairly negative feelings by taxpayers, it isn’t all bad. In fact, the IRS offers rental property owners a hefty amount of tax breaks.
You just have to know where to look.
Unfortunately, the IRS isn’t going to provide you with a neatly, bulleted list of deductions and I doubt you’ll want to scan over the 73,000+ pages in the U.S. Tax Code to find them, so I thought I would highlight a few.
Recently, we’ve picked up a lot of properties from other Property Management companies in Indianapolis.
And when I say a lot, I mean a LOT.
This has given us the opportunity to see a wide range of Lease Agreements.
Some are pretty standard and some...well, some have been a little questionable in the legal department.
When we take over management of an occupied property, we must honor the Lease that is currently in place until the end of the term. We’ve been surprised at some of the provisions in these agreements, especially in regards to maintenance.
Some of the provisions explicitly outline that the Tenant is responsible for all maintenance in the rental home.
Yes, all maintenance.
But, in the state of Indiana, this is neither legal nor ethical from a Property Management standpoint.
It’s also just downright lazy.
One of the main reasons property owners hire a PM is to handle maintenance issues. It’s a big part of what we do.
And one of the main reasons people decide to rent, is because they’re not ready to take on the commitment of home-ownership... i.e. maintenance.
So, forcing all of the maintenance onto your Renter is basically just a recipe for disaster.
In the landlording business, there’s nothing quite as exciting as filling a vacant unit. When that 1, 2, or 3 year Lease gets signed, you sigh in relief at the thought of guaranteed revenue coming in for the next 12+ months, right?
That’s probably why it’s equally, if not more disheartening when you find out that your Tenant wants to break their Lease. Suddenly, you don’t have that security and frustration tends to take over.
I think we can all agree, that our first instinct in this situation is to fight back. Raise your hand if you’ve ever said or thought something along the lines of…"I don’t care what the reason is, they signed a contract!"
Unfortunately for us Landlords and Property Managers, Leases aren’t always the end all, be all.
In previous blogs, we’ve discussed several scenarios where Tenants may have the right to legally and freely break their Lease agreement, such as domestic violence disputes or when a Landlord fails to perform certain obligations.
Well, not to be the bearer of more bad news, but there’s yet another scenario that allows your Tenant to get out of a Lease without penalty, and it’s thanks to a little piece of legislation called the Servicemembers Civil Relief Act or the SCRA.
This is a very complex, and important law for you to be aware of. Since it’s Federal, it will affect you wherever you own rental properties in the United States.
Like most property managers in larger cities, we manage a lot of homes in the suburbs.
You know, those idyllic settings several miles from the city center, where young families congregate in mass.
Areas full of chain restaurants, churches and strip malls.
Managing homes in Indianapolis ‘Burbs is great. The homes are usually newer and, because of generally strong school systems, always have a large Tenant base.
One caveat about most suburban areas, however, is the presence of Homeowner Associations (HOAs).
Oftentimes, we think of Lease Agreements as a formalized list of Tenant requirements.
When is rent due?
What are the Tenant’s maintenance responsibilities?
When is the Tenant required to provide a notice to vacate?
Obviously, when a Tenant enters into a Lease Agreement, you expect them to abide by the provisions stated in the Lease.
And if they fail to honor those obligations, you, as a Landlord, have definite rights to seek damages.
But here’s something that I think Landlords sometimes overlook…
When you enter into a Landlord-Tenant relationship, not only does the Tenant have obligations, but you do as well.
Yes, you, as a Landlord, have responsibilities.
Even if those responsibilities aren’t explicitly mentioned in the Lease.
Just as you can evict a Tenant for violating the Lease, you can indirectly and inadvertently “evict” a Tenant by not providing adequate or safe housing.
In real estate law, this is called a Constructive Eviction and it’s much, much worse for Landlords than a regular eviction.
So, let’s dig into this a little bit.
I want to start out by saying that we, as a company, LOVE dogs.
Almost every one of our staff members has at least one furry friend and from a business standpoint, we encourage property Owners to allow pets in their rentals.
In our experience, the pros of having a pet friendly unit far outweigh the cons.
However, ‘pet friendly’ shouldn’t equate to any and all animals welcome.
Unfortunately, there are certain dog breeds that have garnered an unfavorable reputation and, in turn, have become too much of a liability for insurance companies to protect and, therefore, Landlords to accept.
As unfair as it may seem to stereotype entire breeds, insurance companies are supposed to evaluate the risk of an incident happening, and they often feel that the presence of certain dog breeds on a homeowner's property boosts that risk.
Certain dogs simply pose a higher risk of harming someone more than others, so to many, it makes sense to ban those breeds from coverage.
Domestic violence probably isn’t one of the first things that comes to mind when you think of Landlord responsibilities.
It may not even come to mind at all.
But the fact is, that 1 in 3 women and 1 in 4 men in the United States have experienced some form of domestic violence within their lifetime. While these are disturbing statistics, they reveal how critical it is that Landlords and Property Managers understand their local laws, both to help protect Tenants and to avoid unwittingly breaking Landlord-Tenant laws.
So, if you haven’t guessed already, we’re going to take some time to discuss an Indianapolis Landlord’s obligations in a domestic violence situation.
Updated, fresh from the oven, Indianapolis rental statistics are in for Second Quarter, 2018.
Mostly, things were steady, but a couple of interesting numbers appeared that are worth some discussion.
I’ll take some heat for this blog.
I can already anticipate some eye rolling, some emails, maybe a phone call or two.
Likely a few flames thrown my way in some internet forums.
By and large, my peers won’t like this.
But over the past year or two, a trend has emerged in the residential property management industry that has caused me some concern.
So much of a concern, that I thought it was time to discuss it in an open forum.
As someone who values our industry, wants to protect it, and wants it to succeed, I’m afraid we’re well down a road that needs a better road map.
So, I’m a big boy and I’ll gladly accept any backlash that may occur.
*This review is not paid for or solicited by SimpliSafe or any of its affiliates.*
Break-ins are a real and unfortunate reality of owning rental properties.
They rank right up there with some of the more difficult parts of being a Landlord.
Several years ago, when break-ins occurred in a rental property, options were limited in terms of security systems.
No matter which provider you went with, a long-term contract was almost always a part of the deal and an invasive installation was always required.
So, if the property was vacant, a Landlord had a decision to make… either wait until a new Tenant took possession (and chance another break-in) or bite the bullet and sign-up for a multi-year contract.
Neither option was a good one.
Is condition really important?
If you are an experienced Investor - someone who has rented several homes or a home several times - you already know the answer, right?
Of course condition matters.
And while the answer seems simple, we occasionally have to remind some of our Clients that condition does indeed matter.
It matters, most importantly, to your bottom line.
Gone are the days when Landlords could simply offer a house that didn’t leak, provided heat and, attracted a good Tenant.
Today’s Tenant is demanding and, if you don’t react accordingly, you’ll find yourself with a worn out property.
A worn out EMPTY property.
*Guest Blog Post *
Whether you're buying or renting, the idea of "location, location, location" being essential to a good real estate investment might seem like a cliché, but that doesn't make it any less important.
While there are plenty of factors you'll need to think about when moving to a new house, from how many bedrooms you need, to whether you need a spare bathroom, there are few things more important than where you decide to lay your hat.
With a reliable real estate agent or Property Management Company at your side, you have the world at your feet, and endless opportunities to find a home that suits you perfectly. With that in mind, we're going to cover just a few of the tips you can take with you when you're looking for not just your dream home, but the ultimate community too.
In the rental property industry there are always two sides of the coin - Landlords and Tenants.
In a perfect world, everything would always go smoothly, everyone would get along, and both parties would see eye to eye.
Unfortunately, we live far, far away from that world.
Every state has laws in place to protect both property Owners and Renters and there are certain requirements expected of each. You've heard the saying: "with great power comes great responsibility." Well, as a Landlord, you hold a great deal of power in your hands and so you have a greater burden of expectation.
After being in business for over 10 years, we've made our fair share of mistakes and we've seen the pitfalls that other Landlords have fallen into as well.
The bottom line is, it's on you - not your Tenant, not your lawyer - to ensure you're complying with state, federal, and municipal laws. Ignorance will not hold up in a court of law.
Take a few minutes to read about the most common legal mistakes we've seen Landlords make across the board so that you don't suffer the same fate.
We’ve been inundated with calls over the past several weeks from investors who share a similar story.
The conversation goes something like this.
“I need help. I own a few properties in Indianapolis and I haven’t received rent in (fill in the blank) months. No one is returning my calls. I feel like I’ve been scammed.”
For the most part, these homes are located in some of the worst areas of Indianapolis. I’ve used this illustration in the past to describe it best… picture the worst parts of Indianapolis and then picture the worst homes inside those neighborhoods.
Generally, those are the homes we’re discussing.
And inevitably, as we further discuss things with the investor, we learn that they were using Oceanpointe to manage their homes.
I think I speak for most of us - if not all of us - when I say that taxes can be complicated.
But, unfortunately, as a real estate Investor, taxes are a big part of our life and in order to be successful, we have to stay informed.
We've got property taxes, sales tax, write-offs, state, federal, the list feels never-ending sometimes.
Luckily for us though, we get a ton of perks when it comes to taxes, which most individuals can't claim.
On top of the plethora of items we can write off, there's another tax benefit special to real estate Investors - 1031 Tax Deferred Exchanges.
If you're looking to grow your portfolio and continue building wealth through REI, this could be a very viable option for you. There are some fantastic benefits and a LOT to learn about the process.
*I would just like to disclaim that I am not a tax adviser or financial planning expert and you should consult one before you begin conducting a 1031 exchange.*
A hot topic in the world of Real Estate Investing right now, is whether or not Landlords should accept Section 8.
Or rather, if they have to accept Section 8.
Many municipalities across the country are opting to make “source of income” a protected class.
What does this mean for property Owners?
Basically, it makes your decision for you.
This increasingly popular trend ensures no Tenant is turned away due to being on a housing assistance program. In essence, you’re required to accept Section 8 vouchers.
So far, the state of Indiana has yet to implement this new protected class, but I’m sure it’s only a matter of time.
For now though, if you own rental properties in Indianapolis, you still have a choice.
So, let’s dive a little deeper into the world of Section 8 to:
Today, we thought we would begin a regular - or not so regular - blog series that brings you real-life stories, from a real-life Property Management Company - us - about various situations relevant to the day-to-day life of a Property Manager.
I’m certain, as single family Property Management continues to grow, that someone will produce a reality TV show about our industry.
Because, as you can imagine, or as you may know if you are a Landlord, there can be a lot of drama in the rental business.
Today’s story details an event that happened many years ago.
It was an event that was very painful, taught us some valuable lessons, and made us a much better Company in the long run.
But - wow - was it difficult.
If you’re reading this blog, it’s probably safe to assume that you’re conducting research to determine whether or not you should form an LLC for real estate investing purposes.
The good news is, there’s a fair amount of information out there, the bad news is, there’s no general consensus. Investors are are pretty torn on this issue and both sides of the argument seem to be passionate about why they’re right.
Out of the hundreds of investors that we represent, around 15% of them have formed LLCs to conduct their rental property business. That may not seem like an overwhelming majority, however, I think it’s a big enough number to warrant further discussion.
We certainly can’t tell you one way or the other what you should do, but there are definitely some pros and cons that you should be aware of when using an LLC for REI.
If you Google “Property Management Software”, you will be overwhelmed at the amount of results that come back.
There are literally dozens of different companies out there all vying for your business and it can be daunting trying to scan through reviews and product descriptions to determine what solution will work best for you.
If you have been researching different PM software, you’ve most likely come across Propertyware. It’s by far one of the most popular options on the market right now along with Appfolio, Buildium, and a few other big names.
Our Company uses Propertyware. Today, we thought we would give you an extensive review of the product that we’ve used for more than 10 years.
*This review is not solicited or paid for by Propertyware or any of its affiliates.*
Vacancies present quite a challenge to Real Estate investors.
And in spite of your best efforts, vacancy is inevitable. No matter how good of a Landlord you are, Tenants are eventually going to move. And when they do, it's critical to minimize that vacancy as much as possible.
Tenant turnover is a big expense for many Landlords in the first place. And if you can't get the property re-rented in a reasonable amount of time, lost rents, cleaning costs, maintenance and advertising will compound the Vacancy Effect.
In a previous blog we discussed ways to increase Tenant retention, and today we are going to share some ways you can reduce down time between Tenants.
When you think about rental property expenses, things like maintenance, management fees and mortgages are probably what come to mind.
But there’s one item you may not find when Googling typical costs associated with owning rental real estate.
Now, you can argue that vacancy isn’t an expense per se. It doesn’t show up as a line item on your Profit & Loss statement, but it does have an impact on your income, and is what we’ve called time and time again a “cash flow killer.”
We always advise our Central Indiana Investors to consider vacancy as an associated cost of owning a rental property and to budget accordingly. A general rule of thumb is to expect your property to be vacant for at least one month out of the year or, at a minimum, 8%. Most industry experts will argue that 10% is a better number.
Fortunately, vacancy is currently at a cyclical low nationally, and Indianapolis is set to see a vacancy rate of 6.9%, which is down 70 basis points from 2016 according to homeunion.com.
Even though single family home vacancy rates are on the decline, it’s critical to be prepared for when your property sits vacant longer than you anticipated.
After suffering through its worst quarter in four years, the Central Indiana rental market saw a huge rebound during this year's first quarter.
In spite of a less than stellar January, where frigid temperatures kept a lot of people indoors instead of out looking for rental homes, first quarter numbers were eerily similar to quarter one of 2017.
Fair Housing laws are right up there with property taxes and insurance when it comes to level of excitement for Landlords.
You may feel the Fair Housing Act is fairly straightforward and common sense, and you would never knowingly discriminate anyone from renting your property.
So, why is it such a big deal? Why even spend the time reading a blog about it?
We’ll tell you why.
Lawsuits, lawsuits and more lawsuits.
You would probably be shocked to know how many Landlords and Property Managers have been sued over housing discrimination issues due to ignorance of the law and what all it entails.
Violating Fair Housing guidelines isn’t as cut and dry as refusing to rent to someone because of the color of their skin.
There are numerous caveats and subtleties that you should be aware of to avoid an embarrassing and costly lawsuit.
So, in honor of National Fair Housing Month, we thought we would spend some time breaking down the Fair Housing Act so that you don’t make any of these avoidable mistakes.
If you are a rental property Owner at this point in time, you are part of a monumental shift in the market.
Between younger generations preferring renting to buying, along with the lingering ramifications of the housing crash, we’re seeing the strongest stretch of rental growth since the 1980s.
What may be a Renter’s worst nightmare is a Landlord’s dream come true.
Rising demand for units + low inventory = Increased rent rates.
According to CNBC, rents are at the top of the list for fastest rising consumer prices and there’s no sign of this trend slowing down.
If you subscribe to this blog, you know that rents in Indianapolis are definitely on the rise as well.
You may have some reservations about raising your rental prices. You might be worried that raising rents will increase vacancy or scare off good tenants, or maybe you just really hate confrontation. These are legitimate concerns that deserve further discussion.
You have to keep in mind that while your property is someone’s home, it’s also a business and an income generating investment and you need to treat it accordingly.
While you may not be able to raise rent every year for the rest of your investment career, for the time being, we're in an environment that's certainly conducive to increasing rent rates.
We’ve said it before and we’ll say it again: When you buy rental real estate, you’re entering into a small business.
As with all businesses, large or small, customer service should always be a major priority. After all, it’s easier and cheaper to retain customers than it is to find new ones.
As a Landlord, this holds true for you, too.
Maybe even more so than many other industries.
Effective Property Management is a critical component of any successful buy and hold strategy. If your Tenants renew, you save a TON of time, energy and money.
To maximize your investment, you should strive to retain good Tenants and avoid vacancy, which, as we’ve noted before, is a cash flow killer.
Arguably, one of the best ways to keep your Tenants happy is to practice good maintenance processes.
Several months ago, I was speaking with an investor friend of mine, who had just picked up a nice duplex in a solid area of Indianapolis at a foreclosure auction.
“Are you going to keep it?” I asked, knowing that he owned several rental homes already.
“Nope. I’m going to flip it,” he said. “I’m too old to be buying more rentals.”
That hit me hard on a couple of different fronts.
One, he’s basically the same age as me. Too old... whaaatttt?
Two, does he have a point?
Is there an age when buying rental properties no longer makes sense?
After pondering this idea for a while, I’ve come to this conclusion:
There are benefits to buying rental real estate at any age. We represent some very young investors and we represent some investors who have been in the business 50+ years.
Technology has come a long way since we started in the real estate business back in 2000.
Self-Showing services are one of many new technologies that have come to the forefront of the rental property industry in the last few years. These services have changed the game when it comes to showing rentals and we are a real-life example of how they work.
There are a few major self-showing services out there right now, but we use a company called Rently.
Having used Rently for over a year now, we’ve had ample time to see the pros and cons of the service and thought we would share our opinion and experience with it.
This review is not paid for or solicited by Rently.
Security Deposits are extremely important.
Important to you as the Landlord, and important to your Tenant, because it's their money... until it isn't.
In fact, my guess is if you polled Property Management Companies around the country, the majority would say Security Deposits generate the most friction in their businesses.
So, you need to have strong processes around Security Deposits, understand your state and local laws and still be prepared for some battles along the way.
Today, we thought we would discuss best practices concerning Security Deposit and provide some additional insight into how Indiana operates (or fails to operate, in some cases).
It’s no news to you that your rental property is a big investment, and as with all big investments, you have to be extremely careful about who you entrust it to.
If you decide to invest in the stock market, for example, you’re likely going to do your due diligence and conduct a copious amount of research before you commit to investing your hard earned money.
By looking at past and present trends, company information, and other factors, you can get a good grasp of how a stock will perform for you. But remember, there is always going to be some uncertainty and variables outside of your control that may affect the investment as well.
The same goes for owning rental real estate.
You may choose to hire a professional Property Management Company to handle all aspects of your property, including screening all potential Tenants.
But, you might also decide to self-manage. And to perform your due diligence, you need to screen potential Tenants thoroughly. There are various ways you can do this such as background check, credit report, Landlord references, etc.
But before all that, by simply conducting a series of pre-screening questions, almost like an interview, you can get a good feel for the individual before they even see the property.
That, in turn, can save you, and the potential Tenant, a lot of time, trouble and money.
As an owner of rental real estate, there are probably a few things you dread the most. Evictions, maintenance, and...break-ins.
Break-ins can be minor or extensive. They have the potential to leave your property heavily damaged and, if occupied, your Tenants feeling uneasy.
Because of this, you should do everything within your power to prevent one from ever happening.
In Indianapolis, you have a 1 in 20 chance of being a victim of a property crime. With odds like those, you need to be prepared to handle this situation should it ever arise.
There are numerous reasons you may be thinking about becoming a Landlord, or maybe you have already made the decision.
Perhaps you want a way to make some extra income or maybe you are being forced into it due to some extenuating circumstance: house won't sell, need to temporarily relocate, etc. Whatever the reason, you're probably curious about the costs involved with owning rental real estate.
Unfortunately, there is no set expense budget. There's no magic formula to estimate what your yearly costs will be.
The fact is, the Real Estate industry is dynamic. You never know what issues may arise in a 12-month period.The best thing you can do is educate yourself and prepare the best you can to handle whatever gets thrown your way.
Below is not an exhaustive list of possible expenses, but it should give you a pretty good idea of what to expect and plan for.
Nearly every time we speak to new Landlords, the subject of evictions comes up.
It’s a hot button topic.
A topic that creates anxiety.
And an issue that pushes many Landlords into hiring a Property Manager.
For this week’s blog, I thought I would lay out exactly what’s required to file eviction in Central Indiana, along with some helpful tips if you ever have to file.
More often than not, maintenance has a negative connotation in the rental property world.
The goal of all Landlords is to minimize it.
The goal of all Tenants is to ensure it’s done and done right now.
For Landlords, maintenance usually means something is broken, or there’s some other issue that’s going to cost them money.
But that isn’t, and shouldn’t always, be the case.
Most maintenance should be viewed as asset preservation as opposed to fixing and replacing.
Most experienced and successful Landlords understand that the better a property is maintained, the lower the long-term expenses should be, and the higher chances for Tenant satisfaction and longevity.
As many of you know, Central Indiana is a seasonal rental market. The first half of the year is booming, the second half... well, not so much.
And the 4th quarter of every year is always the slowest.
This year was no different.
In fact, you'll have to go back more than four years to find a slower quarter for rental properties.
2017 has been a great year for content. Thanks to you, our readers, our blog has grown more in the last year than we ever thought possible!
We strive to create helpful, actionable, articles that will positively impact Landlords, Investors, and Property Managers alike. Sharing our experiences with you has been very rewarding and we look forward to continuing on into the new year.
As we ring in 2018, we wanted to take a quick look back at our top 10 posts of 2017.
Here at T&H Realty, we highly recommend that rental property Owners allow pets in their homes. It not only puts more money in your pocket, but it opens up your rental property to a larger market. According to a survey conducted by the American Pet Products Association, 68% of U.S. households own a pet.
However, for whatever reasons, you may have decided that you don't want pets in your rental property, and that’s okay too.
So, then the question comes down to, do you have to allow service and emotional support animals in your rental property? The short answer is yes.
These animals and their owners have rights and privileges that you need to be aware of. It’s important to understand Fair Housing laws and how they will affect you.
This blog is only meant to be an informative piece of content and you should consult a real estate attorney before taking any action regarding this issue.
We've been in the Property Management industry since the year 2000, and one of the most frequently asked questions from Landlords across the board is:
"How much will I spend on maintenance?"
As much as we want to provide a quick, one-size fits all answer, it's not that simple.
As you may know, maintenance expenses are dependent on a wide array of variables. There's no magic number we can give you because every property is a little different.
What we can do, however, is help you plan and create a budget for your specific property, and prepare you the right way for whatever maintenance issues may - and will - come your way.
Real Estate Investors like numbers.
Or, at least they should.
And, in our industry, there are plenty of numbers and return models to consider. In fact, we’ve blogged about all the major ones, including:
However, today I thought I would discuss a return model that most people never talk about. I’ll guess that most people have never even heard of it. But, it’s a model that we embraced at the beginning of our real estate careers and I think one that deserves a little more love.
There are no household names in the world of Property Management.
Anyone could rattle off a list of car manufacturers, television brands, or even local real estate companies.
But, Property Management is different.
And that can make finding a quality Property Management company difficult.
If you are like most people, unless you receive a trusted referral, you’ll take to the internet to learn about different Property Management companies, paying special attention to not only fees and services, but also to online reviews.
They absolutely sway opinions.
But they can also be confusing.
And yes, they can also be fake.
Today I thought I would spend some time discussing what to look for when reading various online reviews about Indianapolis Property Management companies.
If you've been an investor for any period of time, you know the importance of choosing the right things.
The right Realtor.
The right property.
The right Property Manager.
The right vendors.
Etc., etc., etc.,
These individuals and companies can make or break your investment experience. It's important to get into business with people who know what they're doing and have your best interest at heart.
Landlord registration is an ordinance that the City of Indianapolis, after much debate, established in 2015. It requires all Landlords and Owners of residential rental properties in Marion County to register with the City of Indianapolis' Department of Code Enforcement (DCE).
I know a lot of people will read the headline of this blog and move right along to something else.
Because, in reality, there’s definitely a segment of investors - particularly new investors - who aren’t in the position to actually pay cash for an investment property… at least an investment property that’s habitable and in a respectable area.
But, for those of you in the position where you could pay all cash for an investment home, I’m sure you’ve debated the idea of paying cash, or using a mortgage - leverage - to help pay for the property.
This is a long-standing debate in the investment world and one that really doesn’t have a magic bullet answer.
At the end of the day, the answer all comes down to your personal needs and wants and what makes the best sense for you as an investor.
So, I thought I would spend some time discussing Pros/Cons of both and also talk about how we’ve used both over the years during our investment ventures.
So, you are in the market for a Property Manager.
My guess is that this decision is important to you.
It’s not one of those decisions that’s similar to purchasing, say, a stapler. While you may have a favorite and trusted place to buy a stapler, most people will generally look at the price, scan whatever features a particular stapler may have and make a quick decision.
If you’ve ever spent more than 1-2 minutes debating the type of stapler to buy, I’m certain you are in the minority.
Now, let’s compare that to searching for a daycare provider for your child.
In most cases, referrals from other parents you know will weigh heavily in your decision. If that’s not an option, you most certainly will read reviews of different daycares, visit the daycare or daycares you find appealing, and only enter into an agreement with a specific daycare provider when they’ve established a very high level of trust with you.
Where you place your child for potentially thousands of hours each year is a big decision and a decision you will only make after carefully reviewing your options.
And my guess is that price won’t be the determining factor. It will be part of the decision, for sure, but not the same way you decide on a stapler.
Investing in rental real estate is an exciting and challenging venture. It takes both strategy and, somtimes, some good fortune to be successful.
When dealing with rental properties, there are three key factors to consider:
All three are equally important and extremely dependent on one another.
So, today, we thought we would spend some time talking about a question we’ve gotten from some of our Owners:
The 3rd Quarter statistics are finalized and the numbers are certainly both interesting and encouraging for Indianapolis Landlords.
In short, rents are on the rise and days on market are low, indicating a strong demand by Central Indiana residents in search of rental properties.
I came across a blog post recently that discussed some tips on choosing the right Property Management Company. It was written in the highly popular Bigger Pockets blog and was directed, of course, toward investors.
There were 8 tips and I whole-heartedly agreed with all but one.
It was point #2...
"2. Do they own any rental properties themselves? For me this can be a deal breaker!"
I get the temptation. You have a rental home and a family member or friend is interested in renting it.
Sounds like a nice idea.
Even sounds noble.
And sometimes it is those things. Sometimes the friend/family member moves in, pays rent, leaves the property in good condition, and your relationship is better because of it.
You’ve helped them out, they've helped you out.
But having been in this industry for as long as I have, I’ve also heard plenty of the horror stories.
It’s a conversation I’ve had multiple times over the years, and it typically starts this way:
A while back, Feedspot voted us #36 on a list of the top 80 Property Management Blogs. We were thrilled and flattered, but more so surprised and excited to see all of the resources out there for landlords and rental property investors.
We pride ourselves on our blog and do our best to provide the highest quality content and to educate anyone who wants to learn.
Although we hold our blog in high regards, we realize that there is a wealth of knowledge and many other outstanding resources for individuals like yourself.
So, we decided to use our expertise to make our own list of Property Management blogs that we think are the most helpful.
So, you’re thinking about transitioning your personal residence to a rental property.
Maybe the proposition excites you: "I REALLY want to be a Landlord."
Or, maybe you enter this discussion from a simple point of desperation: "I can't sell my house and renting is my only option."
Whatever the case, renting out your home comes with a lot of potential benefits, but it’s also a decision you need to make after understanding exactly what it means to be a Landlord.
Consider the following scenario:
You decide to buy a rental home and officially enter the Wonderful World of Landlording.
Five years later, after reviewing all of your financial information, you realize that you essentially broke even - from a cashflow standpoint - on the investment.
Meaning, while the investment didn’t put any additional cash into your pocket at the end of five years, you weren’t required to put any additional cash into the investment either. So, basically, your rents covered your expenses.
Is this a bad thing?
We take a lot of calls from investors who are interested in the Indianapolis real estate market. Inevitably, one of the first questions they ask is:
“Where Should I Invest in Indianapolis?”
The answer is: “It all depends on your investment goals.”
If you are considering renting your home, one of the first questions you might ask is:
“How much rent should I charge for my Indianapolis rental property?”
Pricing is very important. You want to ensure that you don’t price it too high, or the home will sit on the market; and you certainly don’t want to price it too low, and leave money on the table.
Nearly every time I speak to someone new to the Indianapolis market or someone who is a new Landlord, the issue of landscaping comes up.
Most of these Landlords, it seems, don’t understand who is responsible for landscaping.
So today, I thought I would spend some time answering the question:
Sorry I'm a little tardy with this report. To say we've been busy is an understatement. And to say the Central Indiana rental market is hot right now is another understatement.After putting the numbers together, we discovered not one, but two records were set during the quarter.
I get it.
Real estate is filled with lots of exciting stuff, but insurance generally isn’t considered one of them. Insurance ranks right up there with property taxes... just another expense to throw on the pile.
If you are a Landlord, or considering becoming a Landlord, I’ll guess that you’ve at least thought about the idea of Renters Insurance.
But most Landlords in the Indianapolis rental market, in my experience, aren’t overly concerned about Renters Insurance. In fact, I think most Landlords are under the impression that Renters Insurance will only cover the Tenants possessions in case of theft. And as a result, most Landlords don't require Renters Insurance.
Absolutely, and there's 4 major reasons why:
Recently, I’ve taken a lot of phone calls from Indianapolis real estate investors that tell me a similar story. It goes something like this…
“Hello, my name is Joe Investor and I own some rental properties in Indianapolis. I’m just really frustrated with my current Property Manager and I’m exploring my options.”
In response, I generally follow-up with the same question each time…
Indianapolis is a city where many investors have decided to invest because it’s considered a “Cash flow Market.” We’re not a market, like in coastal cities, for example, that sees dramatic increase in property values, but we are considered a stable market that produces cash flow.
A question we receive from time-to-time from our Owners, is “Should I Buy a Home Warranty?”
As you probably know, a home warranty is a service contract that is designed to pay for home repairs. So, you pay a home warranty company an annual premium, which could range from a few hundred dollars a year to well over $1,000 per year, depending on options.
A common question we receive from many new investors to the Central Indiana market is: What type of cash on cash return should I expect in Indianapolis?
As you probably know, cash-on-cash is simply the annual pre-tax cash flow of a property divided by the actual cash invested.
We work with a lot of investors throughout the United States and throughout the world. A question we receive from many new to the Central Indiana market is: What kind of cap rate should I expect in Indianapolis?
As most of you know, the cap rate simply measures the annual net income of a property divided by the purchase price.
A question that we hear all the time from Buyers is, "Should I have a home inspection?" As a licensed Realtor, I always advise clients to have a home inspection. I recommend having a home inspection regardless if this is your first time buying a home or you are buying the property as an investment home. Without an inspection, you would have no clear way of knowing if everything is working properly and is up to code.
There are two main benefits to having a home inspection done.
We take phone calls on a pretty routine basis from people who are considering renting out their home who really don’t understand, at a very basic level, what a Property Management company does.
It’s one of those, “So, how does all this work?” questions.
If you are a new Landlord, I’m certain you’ve asked yourself, “Do I really need to hire a Property Manager?”
Now, as an Owner of a Property Management company, you probably are thinking, “Well, I know what this guy is going to say.” But, my answer might surprise you.
One of the top questions we get from people who have never been a Landlord is, “What if a Tenant Destroys My House?”
It’s a certainly understandable question. Most people, who are new to our industry, have probably only heard the horror stories out there. Yes, Tenants can do a lot of damage to properties, but I can assure you, from our own experience, that it’s not common.
And while there are no guarantees, there are some steps you can take to help ensure your Tenant doesn’t destroy your property.
In this blog, we want to discuss our mark-up fee. A mark-up fee is a small service fee that property management companies add to all bills that are paid on behalf of an Owner.
As you likely know, a management fee is a fee that Property Management companies charge for managing your home.
As you may know, a leasing fee is a fee that Property Management companies charge for leasing your home.
As you probably know, a renewal fee is the fee that Property Management companies charge for renewing a lease.
The Circle City.
The Crossroads of America.
By now, you've most likely heard one of these names within the rental property investment community. That's because Indianapolis has been, and continues to be a one of the most desirable residential investment markets in the country.
There are literally hundreds, if not thousands, of investors who own rental Real Estate in Central Indiana. And, they continue to buy at a feverish pace.
If you're considering a real estate investment opportunity, you are considering Indianapolis, you've come to the right place.
Indianapolis rental property management is essential for many reasons, and the ability to effectively market your home is one of the main reasons you would choose to work with a property manager.
Every property management company will tell you how great they are at marketing your home.
It seems like most property managers don’t have a firm grasp on what it really takes, however.
Property taxes are a topic that the average Indianapolis Landlord won't find overly interesting and I totally get that.
But property taxes are important, and if you’re investing in Indianapolis or you plan to invest here, you need to understand our property tax rules.
I can't tell you the number of phone calls we've taken over the past several years from our customers regarding property taxes. And, trust me, they are not fun phone calls.
Me: "Hi Joe Investor. Good to hear from you. How can I help?"
Joe Investor: (very panicked voice) "Jeremy, I just received my tax bill and my property taxes doubled!! What's going on??"
That's followed by a few minutes of Joe discussing how his cash flow is killed, we have to raise rents immediately, being a Landlord is the worst idea ever, etc.
The bottom line is that Joe didn't understand how property taxes work BEFORE buying his investment property. And Joe clearly didn't use us to help buy his home, or Joe would have known exactly what to expect.
So, don't be Joe.
Take a few minutes to understand how our taxes work here in Indiana. They are a little different, and depending on how and what you buy, you may have to adjust your budget and your cash flow expectations to account for taxes.
Recently, I have taken a few phone calls and emails from investors who are a bit disgruntled about their investment properties here in Central Indiana. There are a variety of reasons, but they feel like their investments aren’t performing as well as they anticipated.
If you’re an Indianapolis landlord, and especially if you’re an out of state investor, it makes sense to hire a local property manager you can trust. Today, we’re sharing some of the reasons why it’s so important to work with a good property management company.
If you’re watching this video and reading this blog, you are probably considering the idea of becoming a landlord. Owning Indianapolis rental property can be a rewarding and lucrative experience. There are a couple of things to keep in mind prior to buying your first rental home.
On our blog today, we are explaining why you should work with T&H Realty. Here are five different reasons to do business with us.
Today we are talking about vendors and emergency maintenance.
If you are a do-it-yourselfer, that’s great. You can save yourself a lot of money. You can paint, take care of cleaning ,and maybe do any small repairs that are easy to manage.
That’s assuming you have the time to do it.
If any of you have listened to my previous blogs, you know that I believe tenant screening is the most important function a property manager can perform.
Basically, it’s because past performance is the best indicator of future performance. If you screen someone and they prove to be very highly qualified, they will likely be a great tenant for you as well.
There are 4 main things you should include in your Tenant screening process:
1. Credit check
2. Criminal background check
3. Current and previous Landlord references
4. Consistent written policies
Most late rent payments can be avoided altogether with proper tenant screening.
Any applicants you consider for your rental property should be thoroughly screened. Confirm with current and former landlords that rent was paid on time every month.
If you took a poll of landlords and property managers and asked them what their greatest challenges are, they would tell you that dealing with security deposit issues and wear and tear are the greatest challenges.
There are a couple of questions you should always ask before choosing a property management company in Indianapolis. Generally, the first question we get is – what are your fees? That’s an important question to ask, however there are a couple of things to consider when you are comparing fees.
Many people often ask me about how long it takes to lease an Indianapolis rental property and what needs to be done before it can go on the rental market. There are a few things you can do to ensure you rent your house fast:
Our final installment of “So, You Want to be a Landlord?” focuses on the final stage of a Tenant’s residency, which is managing the turnover (sometimes referred to as “Make Ready”) of a property. This blog brings us full circle and has some similar sentiments as Part 1, which was “Preparing your Property for Leasing – The First Time.”
So, can we blame it on the “Blizzard of 2012?” I doubt it, but the rental market did hit the deep freeze in December.
Generally, property management in Indianapolis is a fairly busy industry during December, or at least it is for us. We find that many people in search of rental properties are anxious to spend the Holidays in a new home, which prompts many people to move just in time for Christmas.
Moving right along, Part 5 of our Blog Series, “So, You Want to be a Landlord?,” focuses on preventative maintenance. Our Property Management Company offers a variety of proactive maintenance measures to head-off many potential issues.
Investing money in preventative maintenance can oftentimes save thousands of dollars down the road.
The 3rd installment of our series, “So, You Want to be a Landlord?” focuses on 'every-day' maintenance.
At this point, your Property Management Company has prepped the home, the “break-in” issues have been addressed following the move-in, and now those inevitable, every-day maintenance issues will arise. You know, the drippy faucet, the leaky drain line, the back-left burner on the kitchen stove that suddenly stops working.
Continuing my blog series, “So, You Want to be a Landlord?”, we’ll move next to the all-important Move-In.
Setting the right tone at the outset is critical to achieving high Tenant satisfaction. By this point, the property should be properly prepped and a basic inspection completed. It’s important that all the plumbing system work properly, all doors latch, etc.
As I begin my Blog series “So, You Want to be a Landlord?”, I thought I would start at, well, the beginning.
Generally, when we begin property management with a new Landlord, the home was, and may currently still be, the Owner’s principal residence. For whatever reason, the Owner cannot or does not want to sell the property and decides to rent it instead.
Beginning next week, I plan to begin a series of Blogs titled “So, You Want to Be a Landlord?”
The purpose of the Blogs will be to better educate property owners about the various aspects and obligations required to be a Landlord. Yes, there are just a few!
I’ve always been a fan of Renter’s Insurance. The benefits are definitely there for both our property Owners and Tenants. However, until now, we’ve only “recommended” that Tenants get insurance. And many do. It’s cheap. It’s easy to obtain and many residents see the numerous benefits.
One of the many hot buttons in property management is the disposition of security deposits. As a 3rd party property management company, we occasionally find ourselves directly in the middle of security deposit battles.
Our Tenants, naturally, want all of their deposit back and our Owners, naturally, want to keep the entire deposit.
Being a Landlord isn't for everyone, especially for those who can't - or don't want to - treat it like a 24/7 business. Below are some reasons that could cause a Landlord to hire a Property Manager. In other words, you know it's time to hire a Property Manger when...
A slow housing market generally creates more demand for Property Management companies. In today's climate, Sellers have seen their equity shrink while Buyers are facing more stringent borrowing requirements.
As a result, more Sellers now lease their homes and more would-be, first-time home buyers are now forced to rent.
Choosing a company to manage the largest asset you own - your home - shouldn't be taken lightly.
All too often, our Company fields phone calls from disgruntled homeowners that are frustrated with their Property Manager. The core cause of the frustration is often traced to a simple lack of experience on the part of the Property Manager.
I get calls often here at T&H Realty Services where it seems prospective tenants don’t understand the difference between a Realtor and a Property Management company. The two are similar but they are also different and offer different services.
At T&H Realty Services, as a property management company in Indianapolis, we are constantly striving to communicate with our tenants in the best way possible. We manage several hundred properties, and we always wish to deliver the same customer service and appropriate form of communication with each and every one of our tenants.
Unfortunately, quite a few of those tenants do not give a thought about how well they communicate with their property manager, or landlord.
It seems like in today’s property management market, I always get people asking if one of our properties is also for sale or "rent to own." It seems like most are going back and forth from either renting a home or buying a home.
If you are going back and forth between renting and buying, here are some of the best tips our Indianapolis property management company has come up with for making the big decision:
Here in Indianapolis at our property management company, I am always getting calls from people who need to move and move fast.
The reasons are usually that the end of their lease snuck up on them, that they have been busy and waited until what seems like the very last second to find a new rental property. What, they ask me, can they do to make the process go quicker?
If you need to speed up the process of finding a property to rent, here are my suggestions:
When you finally decide to rent a home, you’re probably feeling a little anxious. A million thoughts may be swarming inside your head. How in the world, you might think, am I going to find a place with a room I can use for sewing, a back porch, AND close to work?
Trying to find a rental property that is perfect for you can be tedious. Here are the 3 best tips we have for you prospects out there who are looking to rent… and stay sane!
Having been involved with residential Property Management over the past 10+ years, I’ve witnessed my share of rental home scams.
Internet marketing, while wonderful and highly effective, has allowed certain scumbags to take advantage of people in a number of ways. Recently, when I saw one of our properties listed in an obviously fraudulent advertisement, I decided to reach out to the Scammer and pose as an interested party.
While most of the “transaction” went as expected, this particular Scammer did throw me a curve ball.
November 2nd should be a good day for property owners in Indiana. In case you haven’t heard, the Indiana Property Tax Cap Amendment is on the ballot. A simple majority vote will permanently add the tax caps to the Indiana Constitution, capping personal residences at 1%, rental property at 2% and commercial property at 3%.