Part 2: Marketing
These steps might be a bit simplistic for a larger property owner, but using these tools and implementing this plan has served property owners with as many as 20 units in their portfolio.
If you own several multi-unit buildings with several dozen or more apartments, you’ll probably want to simply hire an apartment finding service to handle your marketing.
Get a Gmail email account
For marketing, you probably don’t want to expose your personal, or your business email address to the public. Also, after you have a tenant, you might simply decide to only give them your Gmail address, but have a system in place that either (a) forwards it to your regular email or (b) you diligently check it.
Get a Postlets account
Go to http://www.postlets.com/. Here you can generate an attractive web page for your rental with a thorough description and photographs. You’ll be given the HTML code you can drop into other websites you choose to advertise on.
Get a Craigslist account
You can easily market your apartments yourself using Craigslist and not have to spend a penny on advertising. Seriously – nothing else.
Go to http://www.chicago.craigslist.org/ and set up an account. Having an account makes it easier to review ads you have already posted, delete them, and update them.
When you’re fielding phone calls, the volume of requests can be overwhelming at times. It’s perfectly acceptable to encourage prospective renters to come to view the property when you intend to hang out for a couple of hours. For example, Friday evening for 1 hour, Saturday morning from 10 to Noon, or a similar schedule for the afternoon or on Sunday. Don’t worry if a prospect complains that they can’t make your showings. You’re simply interested in moving as many people through the apartment as possible in the most convenient period of time.
If you are not going to take pets, feel free to be firm when turning down prospects on the phone. Say “Sorry, no thanks.” Or even better “Sorry. This building doesn’t allow pets.” And if they persist, you can be slightly less friendly while pointing out that your ad clearly indicated No Pets and that you resent having your time wasted.
Guide to articles
A client purchased her first investment condominium this week. Besides helping her identify and purchase her first property, I will be getting her started as a new landlord. Since I have to create a new set of materials on her behalf, I thought I could use them as great series of blog posts.
Phase 1: Identifying your potential investment property.
Get together with your real estate pro. May I suggest ->me<-? You should have a lengthy discussion about kinds of properties, goals and objectives, and finally your finances.
Kinds of properties: Would you like to own a two, three or four flat? Will you live in it? Would you prefer a condominium? Do you want one that you can fix up and sell for a profit? Or one that’s already in good condition? Or do you want to find a larger building with six, a dozen, or even more units?
Goals and objectives: Will you buy and hold? Or buy, fix and flip? Are you betting on appreciation? Or do you need the property to cash flow? Do you need to shelter other income?
Finances: How much money are you putting down? Have you spoken to a bank yet? Do you know what interest rates are on investments? Are you aware of making exchanges? How’s your insurance? What’s your tolerance for risk?
After answering all these questions, you should then begin looking. This step can take a day or many months depending on your unique needs. I have a great checklist of steps to take in order to get comfortable selecting a property and making an offer. It’s several pages – too much to share here. Give a call if you’d like to receive this; it’s part of my investment handbook.
After you identify your desired property, you’ll write a contract on it. You’ll negotiate out your terms and your price, and if you’re successful, you’ll be under contract. But the process isn’t over yet.
Take the time to do your discovery, or due diligence. For a condominium, you’ll be given all the condominium documents. For a multi-unit building, you’ll be given copies of all the leases, reports about expenses and copies of some of the bills.
Another part of your due diligence is to have an inspection.
If this all goes well, you’ll be well on your way to closing on your investment property. Your attorney will handle most of the details and you’ll be given instructions on when and where to go for closing, and how much more money to bring.
Before Phase 1 ends, however, it’s wise to begin implementing Phase 2: Marketing your condominium or apartments for rent. Stay tuned for tomorrow’s installment.
Guide to articles
The Chicago Residential Landlord and Tenant Ordinance (RLTO) requires the City Comptroller to set the rate of interest to be paid on security deposits held by landlords. The rate is calculated annually based on a formula tied to actual market rates.
The new rate of 1.26% applies to all residential rental agreements in which the lease term begins from January 1, 2008 through December 31, 2008. The rate of interest on security deposits is determined by the rate in effect on the date the lease term begins. Owner occupied buildings of six units or less are not required to pay interest on security deposits.
The interest rate to be paid on security deposits for apartments outside Chicago has been set by the State of Illinois at 0.35%.