Financing When Buying a Rental Property

Financing When Buying a Rental Property

Are you considering purchasing your first or maybe even second rental property? In this blog, we’ll discuss extremely useful information shared with us by, Tom Mihalik of Best Interest Mortgage, that can help you tremendously when financing your investment property.

What You Can Expect

For individuals looking to finance a rental property, you’re going to want to ask about investor financing. Mihalik shared with us that they offer both fixed and adjustable rates that can go up to an 80% loan to value, which requires at least a 20% down payment. Although 80% is offered, the rates are much more attractive for investors if they put down 25-30%. Like most major purchases, your credit score is critical for the type of loan you qualify for.

Kim Reed, Owner of Reed Property Management, cleared the air about financing investment condos, “There are rumors circulating about investment condos needing a higher down payment, is that true?” Mihalik responded, “No, it’s standard financing across the board, 20% down is required.”

Rehabilitation Loan

If you’re the owner of an investment property, you might want/need to rehabilitate (rehab) the existing state of the property… This is when to consider a rehab loan. A rehab loan is when you purchase a home at the contracted price, then any addition that you want to do to the home, such as…

  • Remodeling the kitchen
  • Repurposing a room
  • Installing new flooring
  • Adding a pool
  • Putting a new roof on

is added onto the total end loan. As long as you get a licensed contractor bid, then submit that with your purchase offer, a lender will combine the purchase offer plus the projected price of the improvement and will lend off the after fix-up value. For example, if you purchase a home for $200,000, and the projected renovation cost is $50,000. They can then finance 80% of the $250,000 total purchase price. This is a far more convenient option instead of financing $200,000 and coming up with $50,000 out of pocket, or taking out a separate $50,000 loan.

What We Offer

A big thank you to Tom Mihalik of Best Interest Mortgage for a lot of priceless information that many property investors could really benefit from.

If you’re in the process of purchasing a rental property, give Reed Property Management a call! We’ll handle property inspections, rent collection, maintenance requests, background checks, security deposits and much more.

(239) 351-2880

Why As a Tenant, You Should Treat Your Rental Property With Respect

Why As a Tenant, You Should Treat Your Rental Property With Respect

If you’re renting, you might be thinking, “I don’t own the property, why should I go the extra mile to make sure it’s in good shape?” If this is your mindset, we need to change it! Keeping someone else’s investment property in tip-top shape has many benefits for both yourself and the property owner. In this blog, we’ll discuss the importance of showing your rental property a little TLC!

Negotiations

It should go without saying that you should take care of your rental property because it’s the right thing to do… But there are additional benefits to being a caring and attentive tenant. Doing things such as:

  • Paying rent on-time
  • Calling for maintenance when necessary
  • Not hiding pets
  • Moving-in without causing damage
  • Moving-out without causing damage

Can go a long-way with the property owner. If you’re a “model renter” they’re more likely to cut you some slack if you ever need it in an emergency situation.

If you’re negotiating lease terms at the end of your agreement, you’ll be able to fall back on the superb manner in which you treated their property. Your goal as a tenant is to make them want to renew your lease because you treated their property with respect and did the things listed above consistently.

Security Deposit

If you’ve ever rented, you know the security deposit can be a huge chunk of your overall move-in cost. But there’s some comfort in knowing you will get that money back at the end of your lease. But this only stands true if you don’t cause any damage to the property, such as; neglecting something that needed a repair or breaking any of the rules instructed to you by either the property owner or property management company.

Property Owners

When you work with Reed Property Management, we put potential tenants through an extensive background check to ensure your investment property is in good hands.

If you need a property management company to take care of tasks such as rent collection, property inspections, maintenance repairs, etc. give Reed Property Management a call and we’ll be happy to assist you!

(239) 351-2880

Prevent Mold From Growing In Your Home!

Reed Property Management

Southwest Florida is an extremely humid climate with lots of rainfall. Over the years, I’ve witnessed countless renters and homeowners be devastated by mold growth that they didn’t know existed until it was too late… Unfortunately, natural causes aren’t the only reason mold grows. Leaks (water intrusion) can occur and create mold in a number of places in your home, such as:

  • Sinks
  • Washing Machine
  • Refrigerator
  • A/C Unit
  • Dish Washer
  • Toilets
  • Roof Leaks
  • Window Casings

Luckily there is a solution! In this blog, we’ll discuss how you can prevent mold BEFORE it starts forming!

First and foremost, how many of you consistently check “wet areas” (washer, sinks, etc.) of your home for mold? People are generally too busy to worry if their appliances are running without a leak forming. But it’s very important to monitor such things so you aren’t faced with a nightmare situation!

As we know, mold is created by two things, moisture and time. So how do you prevent it? A great solution for this is wired or wireless leak detectors. They are installed in any wet area of your home so they will detect moisture, shut-off the water source, and send you an alert on your smart device so you can immediately resolve the issue.

Additional benefits to leak detectors are:

  • Peace of mind for seasonal residents
  • You don’t need to activate your alarm for it to function
  • If you move, you can transport the devices with you
  • It prevents you from unknowingly living with mold
  • Some Insurers are offering discounts

Even if your home watch company stops by once every week to inspect your property, it might be too late, leaks or floods in your home only take seconds to create an expensive headache that is now your problem.

If you own an investment property, rent an apartment, or own a home, consider purchasing a leak detector. They can preserve your time, money, and your overall health. For a recommendation on where to find top-of-the-line leak detectors, call Reed Property Management and we’ll be happy to assist you!

(239) 351-2880

Mold vs. Mildew

Mold vs Mildew

Being in the property management industry for as long as I have, I’ve truly had the opportunity to see it all… No matter how fantastic, sad, or even downright gross the outcome is. If you’ve ever come across mold (or what you thought was mold), your first instinct was probably to get a professional opinion. Which isn’t a bad decision, but you then realize you could save time and money by doing some research on the topic. In this blog, we’ll discuss the differences between mold and mildew and when you should call a professional versus using bleach to disinfect the area yourself.

What’s the Difference Between Mold and Mildew?

The first and most obvious distinction between mold and mildew is visual appearance. Mildew is typically either white, gray or yellow and has a fluffy or powdered texture. On the other hand, mold is usually green or black and it develops a fuzzy or slimy consistency. While both mold and mildew can grow rapidly in warm, damp locations, they tend to grow on different objects. For example, mildew can be found on moist surfaces with high humidity such as bathrooms or basements. Mold is commonly found on foods such as strawberries, potatoes, cheese, bread, meat and even damp indoor/outdoor spaces that such as sheds, crawl spaces and garages.

Disinfect the Area Yourself or Hire a Professional?

As much as you may want to handle the mold situation yourself, you should leave it to the pros. Mold can create all sorts of health problems such as; respiratory issues, migraines, fatigue, heart complications among many other serious ailments. Mildew is a fungus that you should be able to eradicate with bleach and hefty scrubbing brush. But if you’re uncertain whether you’re dealing with mold or mildew, it is always best to receive professional input.

Living around mold for an extended period of time can be extremely detrimental to your overall well-being. Reed Property Management will thoroughly inspect your potential investment property for any sign of mold and report the severity of the issue to you if necessary.

For any information on how Reed Property Management can help you with a potential investment property, give us a call, and we’ll be happy to assist you every step of the way!

(239) 351-2880

kim@reedpropertymgmt.com

Why Having Regular Inspections of Your Rental Property is So Important

Why Do I Need to Have Regular Inspections of My Rental Property?

If you are a landlord, you may be wondering how often you should be conducting a thorough inspection of your rental property. You may also be wondering whether having regular property inspections are really necessary…

While the answer to the question of whether regular property inspections are really necessary is undoubtedly a resounding, “YES!”, the answer of how often you should have your rental property inspected is bit more tenuous. First and foremost, you have a legal obligation to abide by any/all local laws. Your tenants are entitled to AT LEAST 24 hours’ notice, and the length, purpose and timing of the inspection must be reasonable. And although some law enforcement agencies have advocated for performing property inspections as frequently every four to six weeks, the general consensus is that (in addition to the “Move-In” and “Move-Out” inspections) you should have your rental property inspected every three to six months.

What Are Some of the Reasons to Schedule Regular Property Inspections?

The main reason that you, as a landlord, would require that your rental property be subject to a quarterly or bi-annual inspection is to protect your investment. Although we would all like to think that a tenant will treat your property with the same level of respect as you would, the sad truth of the matter is that this is very rarely the case. When you have regularly scheduled home inspections it allows you to identify potentially troublesome tenants before it is too late, hopefully giving you the opportunity to take appropriate action and minimize any damage that may be done to your property.

Additionally, by thoroughly inspecting the inside of your property, inspections can help shed some light on your tenants’ behavior. Many times, issues such as hoarding, or trouble with drugs or other illegal activity simply are not visible from the exterior of the property. By having an inspection, you will be able to discover any such issues and take action to correct them before they cause serious damage to your property and/or issues within the neighborhood.

On the flip side, regularly scheduled property inspections also help to encourage open communication between yourself (the landlord) and your tenants, thus helping to ensure that you and your property are also living up to their expectations as well.

Reed Property Management will handle all the aforementioned details so that your real estate investment is working for you and not vice versa. Freeing you up to do what you really want to do, like spending time with your family, enjoying our serene beaches or boating on the beautiful waters of the Gulf.

For more information on how Reed Property Management can help manage your rental property, please don’t hesitate to give us a call!

(239) 351-2880

kim@reedpropertymgmt.com

Why You Need a Local, Reputable Property Management Company for Your Seasonal Rental

Why Do I Need a Local Property Management Company for My Seasonal Rental?

Owning, maintaining and managing all the various aspects of a seasonal rental can be extremely overwhelming. From screening out problem tenants and rent collection, to handling emergency maintenance calls and reducing your overall rental headaches, hiring a reputable and local property management company is a fantastic way to streamline your business and free up your time.

Reed Property Management is a locally-owned and operated family business. Our mother-daughter team firmly believes that the most effective means of working with you (and your family) is to treat you as our neighbors, not just homeowners and tenants. By fostering these relationships, we can help ensure that your seasonal rental never sits unoccupied and that you will have the peace of mind, knowing that we will be there to handle any/all issues that may arise.

With over 30 years of combined experience in the property management industry, the benefits of having your seasonal rental property work with Reed Property Management include:

  • Handling of both tenant applications and renewals
  • Any/all marketing and advertising necessary to fill an available rental property (including optional online advertising on over 50 different sites)
  • Detailed background checks for all applicants (credit, criminal and eviction histories)
  • Move-In inspections
  • Move-out inspections
  • Quarterly or Bi-Quarterly inspections
  • Ongoing rent collection
  • Lease enforcement
  • 24/7 after-hours tenant emergency hotline support
  • Maintenance coordination
  • Online owner portal with full reporting
  • Move-in tenant orientation

Reed Property Management will handle all the aforementioned details so that your real estate investment is working for you and not vice versa. Freeing you up to do what you really want to do, like spending time with your family, enjoying our serene beaches or boating on the beautiful waters of the Gulf.

For more information on how Reed Property Management can help manage your seasonal rental property, please don’t hesitate to give us a call!

(239) 351-2880

kim@reedpropertymgmt.com

What is Renters Insurance and Why Do I Need It? PART II

Renters Insurance

In our last blog post we discussed why you need renters insurance, as well as explained the basics of what is and what is not covered under a standard renters insurance policy. In this blog post we will dive a bit deeper and address some of the more nuanced aspects of a renters insurance policy; specifically, we will touch on the coverage variances of an “All-Risk” versus a “Named Peril” policy and the reimbursement differences between “Actual Cash Value” and “Replacement Cost Value” policies.

What are the Variances in Coverage Between an “All-Risk” and a “Named Peril” Policy?

The differences in coverage between an “all-risk” policy and a “named peril” policy is actually somewhat simple. If you have a renters insurance policy that is “all-risk”, then anything that causes damage (a “peril”, in insurance lingo) to your personal property is covered, unless said “peril” is specifically listed as an “exclusion”. The same principle applies to any peril that makes your apartment uninhabitable and forces you to stay in a hotel and eat-out; as long as the peril that caused your home to become uninhabitable is not specifically excluded within your policy, you will likely be eligible for reimbursement of any such expenses.

On the flip-side, “named-peril” renters insurance policies will only cover property loss or expense reimbursement of perils that are specifically named (in clear and concise writing) in your policy. Additionally, with a named-peril policy, the responsibility to prove that said loss and/or expense was, indeed, caused by one of the policy’s named perils falls onto you, the policy-holder.

What Exactly is a “Peril”?

Perils are the incidents that are covered by your renters insurance policy. As discussed above, depending on the type of policy you purchase certain perils may or may not be covered. Of course, as with any insurance policy, the best practice to ensure that you have the protection you and your family need is to very carefully read through your policy in its entirety. That being said, most renters insurance policies will typically cover damage that is the result of the following perils (unless explicitly stated otherwise):

  • Weather-Related Incidents: Hail, windstorms, lighting and water-damage NOT caused by floods
    (Remember, earthquakes and water-damage resulting from flooding require additional coverages, also know “riders”)
  • Fire and Smoke Damage
  • Electrical Surges
  • Explosions
  • Theft and/or Vandalism
  • Falling Objects

Obviously, as we discussed in “What is Renters Insurance and Why Do I Need It? PART I”, if any of the perils listed above occurred as a result of (or could have been prevented were it not for) your own negligent actions, then any/all coverage would be null and void.

What are the Reimbursement Differences Between “Actual Cash Value” and “Replacement Cost Value” Policies?

When purchasing a renters insurance policy, it is important to understand the difference between an “Actual Cash Value” and a “Replacement Cost Value” policy.

An actual cash value policy covers the actual cash value of your property; however, it is imperative that you understand that the “actual cash value” is NOT what you originally paid for the property in question. Instead, actual cash value refers to whatever the underwriting insurance company deems to be an accurate appraisal of the actual cash value of said item, today, accounting for depreciation, inflation, etc.

Alternatively, a policy that specifies “replacement cost value” coverage means that the insurer is responsible to cover whatever the costs associated with replacing (or even repairing to its original condition) the damaged item. Simply put, with a replacement cost value policy you needn’t worry about an item’s depreciation in value, whereas with an actual cash value policy you absolutely do.

What is Renters Insurance and Why Do I Need It? PART I

What is renters insurance and why do I need it?

What Does Renters Insurance Cover?

If auto insurance covers your vehicle, homeowners insurance covers your home and life insurance (essentially) covers your life, then it would stand to reason that renters insurance would cover the home or apartment you are renting…

NO! This is a very common misconception, renters insurance does not cover the home or apartment you are renting. The physical structure itself is covered by your landlord’s insurance policy, a policy that specifically excludes YOU (the tenant), your property and any injuries or accidents that you could be found liable for in a lawsuit from any sort of protection.

Renters insurance covers the personal property INSIDE your rental, as well as various personal liabilities. For example, if a broken pipe causes destruction to your home furnishings or a thief breaks in and steals your new flat screen TV, you can file a claim with your policy provider and be reimbursed for the damaged or stolen property.

Additionally, many renters insurance policies also cover property losses that result from a fire or smoke damage, windstorms, lightning, vandalism, water damage NOT caused by floods (protection from flood damage requires a separate Flood Insurance policy) and Additional Living Expenses (ALE) in the event that you are forced to pay for a hotel while your home is undergoing repairs.

What Kind of “Personal Liabilities” Are Covered by Renters Insurance?

The other big advantage to purchasing a renters insurance policy is that it helps protect you, and your family, from the complete and utter financial ruin that could occur as the result of a lawsuit in which you are found to be personally liable for damages.

For instance, let’s say that someone had an injury or accident at your apartment, or that your dog got a little too rambunctious with his “guard duties” and gave the mail carrier a less than friendly welcome that resulted in injury, most policies would pay for medical bills or legal expenses if there was a lawsuit, provided that you disclosed Fluffy’s existence to your policy holder and that the injury or accident in question was not due to your own personal negligence (more on that a bit later).

Your renters insurance policy can also cover damage that you accidentally caused to another person’s property; like if you’re visiting a friend or neighbor’s unit and unintentionally knock over their Fabergé egg collection, your renters insurance may help foot the bill.

What Does Renters Insurance NOT Cover?

As mentioned earlier, water damage from flooding is specifically excluded from standard renters insurance policies and requires a separate Flood Insurance policy to be protected. As a general rule, major natural disasters such as earthquakes or (and this is especially important to be aware of here in Southwest Florida) hurricanes are not covered by a standard renters insurance policy. You can, however, opt to purchase extra coverage for natural disasters either as a ‘rider’ on your existing policy or as a sperate policy. Your vehicle is also excluded, since it is (or, at least it certainly should be) covered by your auto insurance.

Also, it is essential that you understand there is a very important distinction in the insurance world between actions that are deemed to be “unintentional” or “accidental” and “intentional” or “negligent”. Any damage or injury resulting from your actions are absolutely, 100% NOT covered if you caused said damage or injury either intentionally or out of negligence.

Negligence is legally defined as a, “failure to use reasonable care, resulting in damage or injury…and may consist of either an act, or an omission to act when there is a duty to do so”. Simply put, if you leave the stove burner on and burn down your apartment building (or even just damage your own unit) your renters insurance policy will NOT protect you because the damage resulted from your own “failure to use reasonable care” when operating the stove, which is by definition a negligent action.

Additionally, insect or vermin infestations are excluded from standard renter insurance policies, as they are considered to be a “Standard Home Maintenance Issue”. What that means is it is your responsibility to act quickly and appropriately to eliminate and, furthermore, prevent, any incidences of critters infesting your living space.

Obviously, there are A LOT of variables when it comes to what may or may not be covered under a particular renters insurance policy…and we’ve only just begun to scratch the surface!

Stay tuned for our next blog, “What is Renters Insurance and Why Do I Need It? PART II” where we will discuss some of the more nuanced aspects of renters insurance. Including the coverage variances of an “All-Risk” versus a “Named Peril” policy and the reimbursement differences between “Actual Cash Value” and “Replacement Cost Value” policies.

Why Your COA/HOA Needs a Reputable, Local Property Management Company

HOA COA Rental Management

When a member of your condominium owner’s association or homeowner’s association decides to rent out their property, it is vital that the tenant(s) that are leasing said property are properly vetted and fully understand their individual responsibilities (as defined in the community charter), as well as the penalties associated with non-compliance.

Many community associations have specific rules and guidelines governing everything from property upkeep and expected behavior in common areas to restrictions on overnight and/or guest parking. As such, it is not just advisable but, indeed, necessary to include a clause about adhering to these rules within a lease. If a tenant does violate said guidelines it is very important to have a thorough description of the procedural process that will occur (and whom will be held accountable/responsible for any fines incurred), clearly detailed in writing. This both minimizes the liability of the homeowner and empowers the governing body of the association to enforce its charter’s rules and regulations.

In addition to pre-screening applicants and ensuring compliance with association guidelines, there are a number of other financial and logistical benefits to utilizing a property management company within your community association. First, and foremost, because most COAs and HOAs are governed by a board that is made up of volunteers from the community, a property management company can offer valuable insight into the various legal aspects of charter enforcement. Property management companies also have the resources to help with the logistics involved with managing daily operations of the association, the collection of COA/HOA dues and conflict resolution.

With over 30 years of combined experience in the property management industry, the benefits of having your condominium owner’s or homeowner’s association work with Reed Property Management include:

  • Handling of both tenant applications and renewals for your COA or HOA
  • Any/all marketing and advertising necessary to fill an available rental property (including optional online advertising on over 50 different sites)
  • Detailed background checks for all applicants (credit, criminal and eviction histories)
  • Move-In inspections
  • Move-out inspections
  • Ongoing rent/association dues collection
  • Lease and COA/HOA charter enforcement
  • 24/7 after-hours tenant emergency hotline support
  • Maintenance coordination
  • Online owner portal with full reporting
  • Move-in tenant orientation

For more information on how Reed Property Management can help manage your COA/HOA-governed rental property, please contact us!

(239) 351-2880

kim@reedpropertymgmt.com

Welcome to Reed Property Management Services

Reed and Mom

Having personally been a tenant in New York City and New Jersey, a homeowner in both Virginia and Florida and with over 25 years of professional property management experience under my belt, I bring a unique perspective and different approach to the business of property management.

Growing up in a working-class family, where both my grandmother and mother were very strong-willed, successful businesswomen, my sisters and I learned from a very early age the importance of having an exceptional work ethic. Additionally, the intrinsic value of “working our way up” in our respective fields, thereby learning all aspects of the business, was instilled into us with great enthusiasm.

Building on this foundation of hard work and meritocracy, I began my career as an Assistant Property Manager with AIMCO in 1990 and quickly worked my way up to Head Property Manager. It was during my time at AIMCO that my passion for property management really began to flourish.

The ardor and dedication with which I approached my profession did not go unnoticed; in 1998 we had the honor of being rated “AIMCO’s #1 Property” (beating out nearly 800 other properties across the United States). I endeavored to be at the top of my profession and proceeded to improve my professional credentials via continuing education courses and annual Fair Housing training programs.

I eventually decided to move on from AIMCO and took on a Regional Property Manager position with NIUSA Petersburg, VA. During my time with NIUSA I was responsible for a rather robust portfolio that included 6 separate properties (spread across the states of Indiana and Ohio), scheduled and facilitated staff training event, conducted monthly inspections of each property within my portfolio and over a $2+ million renovation project.

By 2005 I was ready to take my career in property management to the next level and decisively embarked on an exciting, new journey in my professional life. I took the requisite courses, passed the state exams and was proud to become a Licensed Realtor in the State of Florida. I was subsequently brought on as a Realtor and Property Manager for Synergy and Gulf Coast Management Group in Naples, Florida I was promptly named Property Manager for Carrington Property Services with a portfolio consisting of 60+ units in Collier and Lee County. Simultaneously, I was responsible for the day-to-day management of approximately 120-130 residential rentals including, but not limited to, evictions, leasing, advertising, tenant disputes, repair coordination, accounting, funds disbursement, insurance claims and inspections. During my time with Synergy and Gulf Coast Management Group I was consistently rated “#1 in Customer Service” by our clients.

In 2008 I had the opportunity to take the state Real Estate Broker Exam. Upon successfully completing the exam and obtaining my Broker’s License, I was promoted to the dual positions of “Director of Operations” and “Licensed Broker” at the newly-formed Gulf Coast Management Group of Naples, Florida. Having been instrumental in its very inception, I was quickly immersed into essentially every aspect of Gulf Coast Management Group’s business and became responsible for ensuring quality control via human resource education, as well as the hiring, training and evaluation of employees. I also continued to play a vital role in overseeing the operational “big picture” regarding marketing, management and supervision of Gulf Coast Management Group’s existing portfolio, while simultaneously identifying and assisting in the evaluation of new investment opportunities.

The fruits of my labors at Gulf Coast Management Group soon began to speak for themselves in the form of a rapidly expanding portfolio with residential properties all across Southwest Florida. Before long, I (personally) was managing the leasing, advertising, rent collection, insurance claims, inspections, vendor relationships and maintenance issues for 250+ units in Lee and Collier Counties while consistently receiving positive feedback from the property owners that I served!

On a personal note, I’d like to mention that we are a locally-owned and operated family business. Our mother-daughter team firmly believes that the most effective means of working with you (and your family) is to treat you as our neighbors, not just homeowners and tenants; and as our neighbors, we’d love for you to get to know us!

For as long as I can remember, my mother has been extremely active as a volunteer within various church and community groups. Despite the fact that she continually worked full and/or part time, while also attending school and raising her family, she ALWAYS made the act of selfless service to others a priority. She spearheaded a number of charitable programs over the years, aimed at serving various underprivileged and marginalized groups within our community. Even now as a senior, she continues to embody the same resolute spirit of interminable generosity; as recently evidenced by a leg fracture sustained while canvassing the neighborhood, collecting canned goods for our church’s food drive. She continues to stress the importance of civic duty and responsibility to this very day, and we endeavor to incorporate this fundamental value into our business vis-a-vis charitable contributions and acts of community service.

We are regularly contributing members of The Veterans of Foreign Wars of the United States Foundation and proudly support our country’s veterans, as well as all the brave men and women who serve in our military, sacrificing of themselves to protect our freedoms.

Happy Fall!

– Kim Reed

 

P.S.

Check back often as we will continue to provide updated and relevant information for both homeowners and tenants. In the near future we will also be taking a look at the history of Naples (and surrounding areas), as well as highlighting various restaurants and other local points of interest.