Making More Money

Marketing “Dead” Building Space

by Gary Zaremba
You need more money. The rent roll doesn’t cut it and the banks won’t return your phone calls. Before the ulcers set in, there might be some ways to squeeze more juice from the lemon.
Billboards: Let’s start at the top. If your building is near a major thoroughfare, you roof is a source of valuable income for very low maintenance. By placing a sign atop your structure, you can generate a monthly rental without doing a thing. A sign company changes the advertising which you can market yourself or sub out to an agency.
Down at street level you might be able to place more signage that advertises local businesses. These signs are much smaller in nature and usually would be placed for longer periods of time.

With both these ideas, you must consult local zoning codes to make sure you can place these signs.
Storage Lockers: Take a good look around your basement and the lightbulb might go off in your head signaling dollar signs. By turning dead rooms into paid storage space you can again invent money from nothing. For instance, placing private storage lockers in newly painted, well lit rooms will let your tenants keep more things without renting at outside facilities. Not only will this generate immediate income, it will also add another amenity to your building.
Laundry Rooms: Everyone in your building at some time will be down in the laundry room. This audience is captive and bored with time to kill. You can exploit this by setting up a locked display board and charging local merchants for putting in their ads. Tenants with items to sell or meetings to announce can also use this vehicle to reach their neighbors.
Roof Decks: Outside space! That’s all your hear from landlocked New Yorkers. If you can turn your roof into a patio area, a whole new area of revenue will open up. You can either subdivide the space and rent it out individually or make it a common area and adjust the rents accordingly. Here again, you’ve not only created more income, but you’ve added an amenity which will make your building more attractive to potential tenants.
Air Rights: Look up. It’s a bird, it’s a plane, it’s money raining down into your lap. The space above your building might not mean anything to you, but to a developer, it may mean big bucks. Here, it’s a good idea to consult your attorney to find out exactly what air rights you do have and what is the best way to sell or lease them.
Back Office Space: Sometimes all a business needs is space for a desk and a phone. A small storage closet or some dead space in a larger room could be converted into a commercial area for a small businessperson. As with some other ideas, this will have some upstart charges, but they will quickly recouped through you new rental income.
Yard Space: The back alleys or rear yards are sitting idle just waiting for the right idea to spring them to life. Many businesses need storage areas for machinery and equipment they don’t use everyday. If you have access which will not interfere with your other tenants and the hours that these areas are in use are limited, then you might have a workable solution.
Lobbies: Since essentially everyone who enters your building comes through the lobby, a display board similar to the one in your laundry room will generate income without costing you anything. It can be bright and cheerful and blend into your existing decor.
Consult Your Professionals: Your team of dedicated advisers will help you discover which ideas work for you. Your Engineer and Architect will help find out what is technically feasible, while your Attorney can help explain which ideas are legal for your building. Your Building Manager can help market and sell these new spaces to tenants.
In these slim times, it takes new thinking to just stay in place. Anything which can make you money without causing you headaches is worth a closer look.
COPYRIGHT 2010 Gary Zaremba

Do you have vacancies? Consider Specializing

Is Specialized Housing For You?

by Michael Monteiro

Particularly if you own a property in an urban area or near a university or center of business, many specialized tenant markets are just waiting to be captured.

Specialized property management may be just the solution you’ve been looking for to decrease vacancies and guarantee steady rental income.

When considering just a few of your options below, be sure that you take your property, location, property management style, and goals into consideration.
Section 8 and low-income housing
Essentially, the Section 8 program provides low-income individuals with government-assisted rent. Generally, tenants pay approximately 30 percent of a unit’s rent and the government pays the remaining balance directly to the tenant’s landlord.

In such a scenario, the Department of Housing & Urban Development (HUD) will determine the unit’s fair market rate (FMR) and the landlord is not allowed to charge the tenant anything over this amount. While it is up to you to choose whether or not to participate in Section 8, keep the following points in mind:
You will be subject to property inspection to ensure you meet HUD’s Housing Quality Standards.
You will not be able to charge a Section 8 tenant more than FMR.
Regardless of your state’s laws, you cannot evict a Section 8 tenant without judicial action for eviction.
While there may be some similarities, low-income housing is not the same as Section 8. Rather than receiving rental income from the government, property owners who run low-income properties are eligible for the Low-Income Housing Tax Credit (LIHTC).

But it’s important to bear in mind that these tax credits apply only if you adhere to the rules and regulations that determine who can live in your building and how much they can be charged. Not abiding by the rules that are set forth can result in a whole lot of headaches, not to mention economic loss.

Despite the red tape that can come with low-income housing property management, there is a large pool of renters in need of low-income housing. If your property is in an appropriate situation, low-income property management may be a good solution for you.
Student housing
College students can be a landlord’s best friend or worst enemy. The problems with renting to students are fairly straightforward. Generally speaking, you’re dealing with younger renters (many of whom may be living on their own for the first time).

With this in mind, you may be more likely to experience noise and upkeep issues. Because of the school schedule, you may also find yourself turning apartments over annually or having to deal with sub-lets during the summer months.
But there are some very real positives when it comes to renting to students as well, most of which are financial. If you are living in an area that houses a college or university, chances are you will have a more dense renting population than you would otherwise.

This means that—for at least nine months out of the year—students offer a very real way to keep your vacancy levels low. Also, while students may not inherently have a lot of income (or any at all), when a parent or guardian co-signs the lease, in most cases that monthly check is just as reliable as it would be under any other circumstances.
Sure, you may have to be a bit more hands-on than you would otherwise be when it comes to running student housing. But the bottom line is, they offer a nice steady flow of income.
Corporate housing
More likely than not, managing corporate housing is fairly different from any other kind of property management you’ve done to date. First of all, you’ll be dealing with a company rather than an individual tenant.

In most corporate housing situations, a company will rent out one or more rooms in a property, with the understanding that one or more of their employees or clients will occupy this space over the duration of the rental term.

The way this actually works out may vary from having one stable tenant for a year at a time to having a cast of different tenants in and out on as little as a daily or weekly basis.
The good news here is that signing a lease with a corporate entity allows property managers to feel relatively secure that payment issues will be avoided.

There are not necessarily downsides to this scenario, just things to consider that make this situation different from renting to an individual such as: assuming the responsibility for furnishing the unit; the potential inability to build a relationship with the tenant or screen for undesirable tenant behavior; and, in some cases, the knowledge that you will not necessarily have a tenant occupying the unit at all times to immediately alert you when repair and upkeep issues crop up.
If you are looking for ways to decrease vacancy rates and generate more income, remember: There are always ways to think outside of the box when it comes to property management. Before you undertake one of these (or any other) specialized property management endeavors, just make sure you have carefully thought out the pros and cons and are well versed on any specific tax considerations or rules and regulations that may apply.
Check out the Buildium Blog for more property management resources.

How to Win in Court

Documentation: A Landlord’s Best Friend in Court
by Nathan Miller

I was reading a property management advertisement the other day from a property management company trying to earn my business and on their information sheet they say “less than 1% of our leases end up in court”. 1%?!!?!? So as many as 1 in 100 leases end up in court. They were bragging about this, so perhaps other property managers are 2 in 100 or more? That tells me that of all the industries I participate in, the property management (landlord) industry by far and away spends more hours in a courtroom than any other that I’m aware of.
Nobody wants to end up in court, it’s a drain on valuable resources; time, money, energy. Then there’s always the worst that can happen and the tenant has a better case and walks away with the prize. Granted, some property managers run bad business and it is good that tenants have a recourse through the court system; however, in many cases property managers are doing their best and are just winding up defending a frivolous claim because the tenant felt they should really live in your house free for a year, plus emotional damage of course for the eviction letter trauma you caused.
This leads me to my next point. Documentation is EVERYTHING. Whether you’re initiating a proceeding and you’re sitting on the right side of the courtroom or a past or current tenant did and you’re on the left side, the best protection you can enter with is full and complete documentation of the event. Some may argue having an attorney at your side is the best protection; however, while attorneys do know the system well, I would certainly say having documentation is your first defense, and an attorney (if one can be afforded) will present that documentation. However, without the documentation the attorney won’t have much ammo to defend the case.
You never know what might end up in court, so it’s best to document everything
Here are some tips I’ve learned through the years:
Ask for it in writing. Unless you can legally and are recording every call and voicemail, a phone call is as good as nothing. Get it in writing whether it’s a complaint from a tenant, an invoice, an issue with a neighbor, whatever it is, get it in writing, scan it, and save it electronically where it can be easily accessible if needed.
Save all your receipts. Great tip not only for documenting repairs, etc, but this also provides solid proof of expenses in the event of a tax audit. I scan my receipts and upload them with the expense transactions to my property management software.
Take pictures. A picture is better than almost anything. If one person says it was this way, and another person says it was a different way, it’s simply word vs word and a court cannot make a decision. However, if one or another brings a picture to backup what they are stating their position all of a sudden is much stronger and can also discredit the others thereby not only proving this point but strengthening the whole case.
Take video. If you have a lot of area to cover, it may take a hundred pictures to cover everything. On the other hand, video handles this situation nicely. If you want to record the condition of a property for instance, walking through with a video is a great way to document the condition of a large area. Ideally use the highest quality video setting on your device so if need-be the video can be paused and details of that area can be seen. Also pan slowly as to be sure not to blur your video. Taking a video to document the condition of a property before a tenant moves in is a very good idea.
Save your documentation, pictures, and videos electronically in a safe place. Paper can be messy, especially if you have file cabinets (or chronologically filed piles as the case may be) which means it can take a very long time to find what your looking for. Scan and save your documentation electronically where it can easily be accessible if the need arises.
There’s a bit of a misconception about how hard it is to electronically store documents. Nowadays it’s very easy. Drop by your local office supply, Costco, Staples, or almost any electronics store and pickup a multi-function printer that includes a sheet feed scanner. They can be purchased for as little as $150. There’s also scanners designed strictly for the purpose of scanning documentation which work very well, do two sided scanning, rarely jam, and cost a bit more. Any of these options work. Also, most scanners include software to automatically save to PDF, which is a universal format that can be opened on any computer.
Now saving it somewhere safe. If you maintain your own IT infostructure, be absolutely sure you are backing everything up. Hard drives die all the timeand people can lose all their valuable data when this happens. Backup your data ideally off-site to a secure storage medium or online backup service. Another very convenient method is if you use a property management software that allows attachments and a file library, simply upload your documentation here for safe keeping and easy access, which is what I have found the most convenient.

is an experienced landlord and real estate investor with superb computer skills who co-created Rentec Direct property management software.

Leaky Roof: Where to find the problem and the solution by Jay Dee

So your roof is looking a little shabby and you are wondering when it's time to replace your roof. There are some places on your roof you can check, they tend to be the weakest points on the roof due to high volume of water or trees covering a section of a roof.

Asphalt shingles are a large blanket covering an area of a lot of moisture. Over the years it is quite common especially with bad ventilation to notice that the shingles curl upwards. Over the years the moisture need to find a way out, when the heat softens the asphalt the shingles actually go against gravity and curl upwards, cedar shake has a tendency to do this as well. over time the curling cause the shingles and shakes to split and crack. It generally takes three in a row to split vertically and trouble will begin.

Chimney and skylights over time have the ability to accumulate debris and moss growth around the base where they meet the roof. generally behind the chimney or skylight enough debris accumulates for the water to dam up and push the flow against gravity up a shingle and into the attic. you could stop this leak by cleaning around the flashing and making sure that water has a clear path towards the eaves trough.

Valleys are the area on a roof where two angled roofs meet and is also a point on the roof that has the most water running along it. Using steel in valleys is a common but new practice with the majority of the roofs have knitted shingles in the valley. Shingles are strong against the elements but are not designed to deal with that kind of flow of water. Valleys are probably the biggest reason roofs leak.