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Tampa, Florida Rental Market Forecast for 2014

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Tampa, Florida Rental Market Forecast for 2014

Today’s blog topic is the rental forecast for 2014. I’d like to share my thoughts on what the Tampa rental market will look like in this coming year.

In 2013, we had a banner year for rental property investors in Florida.

Almost 70 percent of all real estate purchased in this state was purchased with cash. That is a remarkable statistic. In the last year, we have also seen institutional and private investors really go on a spending spree in our state. They have snapped up all the property they can, and they are turning those properties into rental homes. Residential values went up 15 percent in 2013. That leaves us with some good news and some bad news for our market in 2014.

Rising Interest Rates

Let’s get the bad news out of the way first. The rising interest rates are something to be careful of. The banks are going to let those rates begin creeping back up as the real estate and mortgage markets continue to stabilize and grow. In Florida and Tampa, we will also see rising insurance rates and property taxes. As the value of these properties go up, the taxes associated with them will also begin to rise. There will also be more competition for renters. Institutional investors are becoming landlords and there are a lot more rental properties on the market. In addition to that, building has really taken off. There are new apartment complexes going up all over Tampa, so tenants really have a lot of options when choosing a place to live.

There is some good news. The population in Tampa bay continues to grow. There is a steady pool of renters who are here now and who are relocating to the area. The Florida economy is in full recovery, and important sectors such as construction are bouncing back. This means more jobs, more stable incomes and a higher quality of tenants. Finally, the National Association of Realtors projects that real estate prices will increase 10 percent in Tampa in 2014.

Income investors are going to feel squeezed. The rising prices of taxes and insurance cannot be offset because you can’t raise rent too much when there is so much competition out there. Still, great cash flow investment properties are available, and a good property manager can help you find them. Be careful with those rising interest rates. Consider taking a smaller mortgage to get the cash flow you need.

Contact us or give us a call if we can answer any questions at (813) 875-7474.

The post Tampa, Florida Rental Market Forecast for 2014 appeared first on Hoffman Realty.


Get Positive Cash Flow from your Tampa Investment Property in 2014? Part 1 – Operational Things You Can Do

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Positive Cash Flow from your Tampa Investment Property

Our topic for the next few blogs will be maximizing real estate investment property cash flow in Florida. This is part one of three parts, where we will discuss the things you can do operationally. In Part two, we will talk about financial moves you can make and in our third part, we’ll discuss which improvements are most helpful to landlords.

If you are a real estate investor in Florida, you may have noticed that your cash flow is getting squeezed. On the one side, you have taxes and insurance increasing and on the other side, real incomes have not been going up at all for your renters in the state, so it’s hard for you to increase the rent in an effort to offset these additional expenses. Plus, there are a lot of new institutional investors who have come to town and are offering their properties for rentals. New apartment complexes are being built throughout Florida and in the Tampa Bay area, which means there is a lot of competition for renters. The market can feel stagnant for real estate investors right now. There is also a new federal tax on investment income that impacts landlords, so let’s discuss what you can do operationally.

The most important thing to do is to minimize your vacancies.

It’s extremely helpful to price the property right, advertise it properly and get a good renter into the home. Next, if you have good tenants in your property, do whatever you can to keep them. Treat your renters right, which means with respect and responsiveness. The number one reason tenants leave is because they wait too long for maintenance issues to be addressed. Pay attention to their concerns and you’ll avoid losing good tenants and finding yourself with a vacant home.

Finally, control the cost of your repairs.

If you are always making expensive maintenance calls to the rental home, the expense can get out of control. At Hoffman Realty, we have a tiered approach for maintenance. When tenants report a maintenance issue, they talk to a property manager first. The property manager tries to troubleshoot the problem over the phone. They’ll ask if a filter needs to be changed or if a breaker might have been tripped. If the phone call doesn’t resolve the issue, we move onto the next tier, which is to have a handyman look at the problem. This is an effective cost saver because it’s much cheaper to have your handyman change a wax ring on the toilet for $45 than it is to have a licensed plumber do the job for $145. If the problem is more complex, we’ll call the specialized vendor for help, which is our third maintenance tier.

We also ask all our vendors to report the cause of the problem. This protects our property owners because if the air conditioner doesn’t work because a filter was clogged or a toilet is backed up because someone flushed baby wipes, we bill the charge back to the tenant and it’s not a landlord expense.

If you have any questions about managing the operations of your rental home to maximize cash flow, please contact us or give us a call if we can answer any questions at (813) 875-7474.

Can You Get Positive Cash Flow from your Tampa Investment Property Series (2014)

Part 1: Operational things you can do
Part 2: Things you could be doing financially
Part 3: Improvements you can make for better cash flow
 

The post Get Positive Cash Flow from your Tampa Investment Property in 2014? Part 1 – Operational Things You Can Do appeared first on Hoffman Realty.

How to Command Top Dollar for Your Tampa Rental – 5 Cheap Fixes That Make You Money

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Emotions work in attracting potential buyers

tampa-rental-propertyBased on our more than 25 years with renting properties in Tampa, Florida we at Hoffman Realty have learned that if two similar properties meet a renters basic needs (i.e., rent price, size and location) they will always end up choosing one based on their emotions. It is never a logical decision; it is an emotional one which later their brain will justify for them logically.

A perfect example of how emotions work in attracting potential buyers can be found in any model home. As you walk in, you will notice how the builders spent thousands of dollars making that property trigger every possible positive emotion in a buyer. This can even come down to the simple smell of fresh baked cookies floating through the home.

So, as a landlord in the Tampa Bay area what can you do to leverage off this emotional response? Well, you have to elicit a favorable emotional response in your renter and these are the five ways to do that.

5 Ways to elicit a favorable emotional response in your renter

  1. Curb Appeal: Nearly 50 percent of what makes a potential renter decide to rent a home is made by the time they are a few steps inside the front door. It’s all about the curb appeal, so be sure to make the home look good from the outside. If your home is a townhouse or condo, there’s obviously not much you can do. However, if it’s a single family home, make sure flowers are planted along the front of the house and that the yard is cut.
  2. Front Door: People generally make assumptions on the interior of a home based off the condition of the front door. If you have a beat up door, re-paint it. If the wood is rotting, repair it. If you have a rusty lockset, replace it with a new gleaming one. These are all simple fixes that will help impress potential renters.
  3. First Impressions: When the potential renters walk in make sure they have a favorable experience. Don’t make them walk into a cave. Instead, open the blinds and turn on the lights to make the home appear lighter and brighter. First impressions are everything and a poor one will turn away any good qualified tenant.
  4. Cleanliness: It’s so important that you clean the property before potential renters check out the place and/or move-in. Don’t make a tenant second guess or lose that initial emotional response towards the home because you didn’t prepare. Clean it now!
  5. Staging: For about $50 you can do some minimal staging around the home which will elicit a positive emotional response from potential tenants. For example, hang a shower curtain in the bathroom, put towels over the holders, and hang pictures on bare walls.

By implementing these five easy and cheap fixes, not only will you find yourself ahead of 90 percent of the other landlords in the Tampa Bay area, but your property will rent for top dollar as well. Take the initiative and get the most out of your Tampa Bay rental.

Contact us or give us a call if we can answer any questions at (813) 875-7474.

The post How to Command Top Dollar for Your Tampa Rental – 5 Cheap Fixes That Make You Money appeared first on Hoffman Realty.

Investment Property How-To: Long Term or Short Term Rental in Tampa

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short term vs long term lease in Tampa FLLandlord will often approach us because they have a furnished rental property and they will ask if they should rent it out short term or long term. Let me give you some things to think about that might help you make that same decision if you find yourself in a similar situation.

Things to consider with a Long Term vs. Short Term Rental:

Consider the area and need for short term rentals

In order for a short term rental to work, you will need to be in an area where that kind of property is attractive. Usually, these are resort areas such as places on the beach. However, there are some opportunities around in Tampa Bay around MacDill Air Force Base for officers who may be traveling for short assignment periods.

Are you Legal? Make sure you are permitted to do a short term rental where your property is located. There may be restrictions, so check with municipal codes and make sure your HOA or condo association rules and regulations allow short term rentals.

Think about income

On a long term rental, you have lower rents but the property is continually rented. On a short term rental, the rent is often dramatically higher, but there are higher costs to consider as well. A short term property might have higher management fees, maid fees and laundry fees. The property will not be continually rented throughout the year. When you compare the two, the annual income is often about the same with long term rentals maybe coming out just a bit ahead.

Insurance considerations:

Florida has a weak insurance market. You might find on a rental property that you can lose hazard coverage if the property is vacant for more than 30 days. With a long term rental, that would probably not apply, but with a short term rental it could be an issue. Check with your insurance agent first.

Your own residence:

If you want to stay part of the year in the rental property, then obviously a short term rental is the only way to go. If you have a long term rental, you will not be able to access the property for your own use because you will have a tenant in place.

I hope these considerations have helped you decide whether your property is best suited for a short term rental or a long term lease. If you have any questions on today’s blog or any issues pertaining to property management, please contact us at Hoffman Realty.

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How to Judge Credit Reports and Scores – 3 Tips Every Tampa Landlord Should Consider

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A credit report can tell you a lot about a potential tenant’s attitude towards paying bills. It’s a lot more than just the credit score. There are three things we recommend you judge when you’re looking at a prospective tenant’s credit report.

Verify Identification

Are the prospective tenants who they say they are? Identify theft is on the rise, so see if you can cross reference their name, address, and date of birth on their government-issued identification against their credit report. You want to see a match and make sure the name matches up to the social security number and the date of birth. The addresses on the credit report should be the same as those listed on the application. These are important identification elements, and a credit report can help you.

Landlord or Utility Debt

A credit report will list delinquent and collection accounts. If any of those are from past landlords, that’s not a good sign. Past behavior is an indicator of future behavior. If there are landlords the tenants have not paid in the past, you could be the next landlord with outstanding debts. Utility debt is also not a good sign. If a person isn’t paying the electric, gas, or water bill, they probably aren’t going to be able to pay the rent, either.

Evaluate the Credit Score

Credit scores are not always a perfect measure, but you should take a close look at them. Bad things can happen to good people. However, in our history, I cannot think of an eviction filing for nonpayment of rent that we’ve had to make against someone with a good credit score. So, know the credit score and use it in your evaluation criteria.

These are the three things you should look for in a credit report and a credit score. If you have any questions about this, please contact us at Hoffman Realty. We look forward to hearing from you.

The post How to Judge Credit Reports and Scores – 3 Tips Every Tampa Landlord Should Consider appeared first on Hoffman Realty.

How to Protect and Maintain Your Tampa Rental Property

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A rental property is like a car. If you don’t properly maintain it, it will probably let you down. If you’re wondering how to protect and maintain your rental property, we recommend the following three things.

Listen to Your Tenant

Your tenants are in your property 24 hours a day and 7 days a week. They will be your best resources for needed maintenance. If the air conditioning stops working, they will tell you. If they notice a damp patch on the roof after a thunderstorm, you want to know about it.

Inspect Your Property and Check the Tenant

Tenants can damage rental property by their actions. They might be walking on the carpet with muddy feet. Tenant damage can also occur due to inaction. This might include not maintaining the yard or neglecting to report maintenance that’s needed. We do an occupied inspection about 90 days after the tenant moves in. This is to see how they are complying with the lease. Usually, everything is fine and we won’t inspect again for 6 months, or 90 days before the end of their lease. However, if we do find issues, we take remedial action and schedule another follow-up inspection to ensure the tenants are back in compliance.

Conduct an Annual Property Review

The annual property review is performed by a licensed home inspector. It goes beyond typical tenant compliance issues. Our inspectors are qualified to inspect and make judgments about the major systems of the property. They will look at the roof, structural issues, and exterior paint. They’ll also look at electric, plumbing, air conditioning, and major appliances. They will report back to us if they find any tenant safety issues that need correcting.

It’s important to protect and maintain your rental property. It’s a valuable asset that can depreciate if you aren’t attentive to its condition. We recommend these three things. If you have any questions about today’s blog, please contact us at Hoffman Realty, and we’d be happy to tell you more.

The post How to Protect and Maintain Your Tampa Rental Property appeared first on Hoffman Realty.

How to Raise Rent on Your Tampa Rental Property – Landlord Advice

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There are two scenarios in which you would raise rent. Those are between tenants and with an existing tenant in place. First, think about why you would raise rent. Being a landlord is a for-profit business, and there are many factors that affect your profitability. One of those factors is the amount of rent you charge. There is usually an optimum rent for every situation. If you can increase rent, you’ll maximize your profit.

Raising Rent between Tenancies

When your tenants have notified you that they will be vacating at the end of the lease, it is a good time to do a market analysis. Look at what properties similar to yours have recently rented for. The lure of supply and demand is at work here. Most tenants know the market rent, so the amount you charge should not be any higher than what properties like yours have rented for. There’s a danger in overpricing. If you overprice your property, it will stay on the market longer. Just five weeks of vacancy at a property is worth a 10 percent reduction in the annual rent. Don’t overprice it.

Raising Rent on Existing Tenants

When existing tenants have a lease that is coming up for renewal and they’ve been great tenants, you want them to renew. It’s easy to be nervous, because you don’t want a rent increase to cause your tenants to leave. But, you don’t want to leave money on the table. Do your rental market analysis and come up with a fair rent. Generally, if you present the existing tenants with a fair market rent increase and they like the property and the way they have been treated but they don’t like the rent increase, they might be willing to negotiate. This is another opportunity to evaluate what you’ll charge. Most great tenants won’t automatically leave just because there has been a rent increases and they don’t like it. Most of the time, if you explain that this is a fair market rent and you’re increasing it because your costs have increased like taxes and repair costs, tenants will understand.

If you have questions about how to raise rent, please contact us at Hoffman Realty and we’d be happy to tell you more.

The post How to Raise Rent on Your Tampa Rental Property – Landlord Advice appeared first on Hoffman Realty.

Move Up Buyers – Should You Rent or Sell My Tampa Property

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In the last couple of years, about a quarter of all the inquiries to our office have been from move up buyers. A move up buyer is a person who is buying a bigger home or a nicer home, or a home that’s better located. They are trying to decide if they should keep their property as a rental property. We tell them that residential real estate is a fantastic way to build long term wealth. But, before you decide to become a landlord, you need to ask yourself four important questions.

Can You Afford to Buy a Second Home if You Don’t Sell Your Current Home?

Think about whether you need the equity in your current home to be a down payment for your next property. If you’ve got a mortgage on your current property, can you get a second mortgage if you don’t sell your current home?

Do You Have the Necessary Financial Resources?

You’ll need to be in a financial place where you can afford two properties. This is particularly important because you’ll have two mortgages; one on the old home and one on the new property. Even if the rent is enough to cover your mortgage payment, you’ll still need to spend some out of pocket money on that old property. For example, if there are vacancies or routine repairs that are needed, you’ll need to pay for those. There might be major repairs like a new air conditioning system or new interior carpet. You’ll need the financial resources to cover both properties.

Are you Prepared to Be a Landlord?

Even if you hire a good property manager to handle your property and take those 2:00 am maintenance calls, there’s still a lot involved in owning rental property. What if a renter complains and wants things changed in your property that you were more than willing to tolerate when you lived there? Perhaps there’s a shower that has low water pressure or the back door needs to lift slightly to lock. If that type of stuff drives you crazy, don’t be a landlord.

What is Your Timeframe?

Residential real estate is good over the long term to build wealth. It doesn’t work so well for the short term. The very first property I owned and lived in was 32 years ago. When I moved, I kept it as a rental. Over the last 32 years, the price has increased and my renters paid off the mortgage. I have great equity. But, if your timeframe is shorter, like one to three years, it won’t work as well.

These are the four important questions to ask yourself if you’re a move up buyer considering keeping your property as a rental. If you have any questions about this, please contact us at Hoffman Realty.

The post Move Up Buyers – Should You Rent or Sell My Tampa Property appeared first on Hoffman Realty.


Top 5 Laws Every Tampa Landlord Needs to Study

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There are a lot of laws and regulations that apply to landlords, on federal to state to county and even city levels. Today, we’re discussing the top five laws that need your attention. These are all federal laws. They tend to have the most teeth and the biggest penalties if you violate them.

Fair Housing Act

The Fair Housing Act makes it illegal to discriminate against people in certain protected classes. It includes how you advertise your property, select your tenants, and manage your property. I have not yet met a landlord who wants to intentionally discriminate against someone. However, you can unintentionally run afoul of this act if you don’t study it.

Americans with Disabilities Act

The ADA is written to ensure equal access and enjoyment of rental property by people with disabilities. If a current or potential renter asks for a reasonable modification or accommodation under the ADA, you need to pay attention. A wheelchair-bound renter might need a ramp or lowered counters. The doors might need to be widened. There are some painful penalties if you violate this act.

Fair Credit Reporting Act

The Fair Credit Reporting Act comes into play when you run a background screening on a potential renter. Study the area of the law that applies to adverse action letters. If you deny an application or request different terms like a higher deposit, you want to be compliant with this act.

Federal Trade Commission Red Flag Rule

Study this rule before you run a background check on anyone. The red flag rule is designed to protect people from identity theft.

IRS Regulations

When you own rental property, you need to keep excellent records. Make sure you know what the IRS requires. If you pay vendors more than $600 in a tax year, you’re required to send them a 1099 and complete an informational return on them.

Andrew M. Dougill

These are the top 5 laws every landlord needs to study. If you have questions about this blog, please contact us at Hoffman Realty.

 

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Top 3 Florida Laws Every Tampa Landlord Needs to Study

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This is a follow up to our earlier blog in which we talked about the top 5 laws every landlord needs to study. That particular blog covered federal laws. Today, we’re state-specific, and we’re discussing the top 3 laws every Florida landlord needs to study.

Florida Statute 83

This statute is the Florida Landlord and Tenant Act. In particular, every residential landlord should study Part 2 of this Act. It contains things you need to know to stay in compliance and legally manage your rental property.

Florida Information Protection Act

The Florida Information Protection Act applies to anyone collecting personally identifiable information from others in the course of conducting business. As a landlord, you’re collecting a lot of information from applicants to conduct background checks. So, you do fall under this law. Study it well and understand how you should store and dispose of this personal information and data.

Florida Landlord Local Ordinances

Every county and city in Florida has its own ordinances and regulations that will set rules and standards for rental properties. You need to follow the minimum standards that have been set for you locally. For example, in Tampa, you would need to be familiar with the ordinances put forth by Hillsborough County. Among these ordinances, the part you really want to familiarize yourself with is Section 09-63, which sets the minimum standards for rental properties in the county. Make sure you understand what your city or county expects.

There are a number of other laws that you need to understand to be a successful landlord. These are the three most important laws that every Florida landlord should study. Check out the five national laws as well, if you have not already spent some time with that blog. If you have questions about laws and how to study them and stay compliant, please contact us at Hoffman Realty.

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5 Landlord Tips to Have Better Relationships with your Tampa Tenants

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I recently heard a quote: A rental property with a good tenant is an income producing asset, whereby a rental property without a tenant is a liability because it just sits there losing money. I love this quote because it illustrates the importance of your tenant to your rental property, and why it’s important to have good relationships with your tenants.

Tip 1: Treat Your Tenant with Respect

The first tip is to treat your tenant with respect. The Golden Rule always applies.

Tip 2: Respond to Maintenance

Be very responsive to legitimate maintenance concerns. The number one reason tenants don’t renew their leases when they have the opportunity is because of poor or non-responsive maintenance.

Tip 3: Set Expectations

Set expectations in advance about important things like maintenance and rent payments. If you don’t do this, tenants can become disgruntled if there’s a mismatch of expectations. Maybe your tenant reported the air conditioning went out in the summer. The technician probably got out there the same day to get it fixed. Then, if the dishwasher stops working a few weeks later, the tenant might expect the same instant service, while you might think it’s okay to wait three or four days. Lease signing is a good time to discuss how you handle emergency, urgent, and routine repairs.

Tip 4: Provide Convenience

Make it easy for your tenants to do business with you. Have a portal where they can pay rent online. Don’t make them drive to your office. Let them report maintenance on the portal as well so they can do it outside of normal business hours if necessary. Use electronic signatures for lease renewals. Tenants will find all these things convenient.

Tip 5: Communicate Well

Be a good communicator. Return calls and emails in a timely manner and if something unexpected happens; something breaks and it takes longer than expected to repair, don’t make your tenants guess what’s happening. Let them know what’s going on.

Andrew M. DougillThese are the top five tips to help you have better relationships with your tenants. If you have any questions about this or anything pertaining to Tampa property management, please contact us at Hoffman Realty.

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