Month: March 2023

Categories
Wholesale Wholesaling

Real Estate Wholesaling Contracts: What Should You Include to Guarantee Success?

Source: Photo by Romain Dancre from Unsplash.

The Wholesaling Contract is the bread and butter of real estate investment, and key clauses can make or break the deal.

Some key clauses in the contract serve as pillars that ensure the document is airtight and that you’re protected against sale issues—without these key phrases, the whole sales cycle could be ruined, and famed returns could be lost.

Whether it’s your first time handling a real estate deal or you’re looking to improve your current system, this article is for you. Here are the key elements real estate investors should include in their wholesale contracts for a successful real estate deal.

What You Should Include in a Wholesaling Real Estate Contract

A Wholesaling Real Estate Contract is a legally binding agreement that sets the terms of the sale between the wholesaler (that’s you, a sort of middle person) and the seller. Having a written understanding between parties helps avoid any disputes and misunderstandings.

There are two critical parts to a wholesaling contract: the assignment contract and the purchase agreement. Here are the roles they play and what you, the wholesaler, should include in each section:

Part 1: Wholesale Real Estate Assignment Contract

The Wholesale Real Estate Assignment Contract is the first part of the Wholesaling Real Estate Contract. It transfers your right to purchase a property to potential buyers. Once you and the seller enter an equitable conversion, you’ll draft an Assignment of Real Estate Purchase and Sale Agreement.

The Assignment of Real Estate Purchase and Sale Agreement is an assignment of ownership from the seller to the home buyer and outlines that the new buyer assumes ownership of the home and absorbs all responsibilities. The agreement should contain a copy of the original purchase and sale agreement you had with the seller and outline all the terms, conditions, contingencies, prices, payment terms, and stipulations involved in the transaction.

When this first part of the agreement is signed, the wholesaler typically gets a portion of the wholesaling profit as a deposit. So, only after closing the deal will you receive the remaining balance.

Part 2: Wholesale Real Estate Purchase Agreement

Now, the second part is the Wholesale Real Estate Purchase Agreement. The document is built of several moving parts, but don’t let that scare you—the Wholesale Real Estate Purchase Agreement’s purpose is housed in the basic information. Here are the crucial clauses you should focus on:

  • Who’s involved? List your name and the seller’s and buyer’s names.
  • What’s the asset? Give a description and address of the real estate being sold and purchased.
  • What’s the deed type? Specify the type of deed that comes with the real estate sale.
  • What’s the condition of the property? List the condition of the premises, including the physical state of the structure, existing damages, and areas that need repairs.
  • What’s the purchase price and financing? Record the agreed-upon price and financing terms, including where the deposits will be held.
  • When’s the closing date? Write the date when the real estate transaction is finalized.
  • What happens when the buyer can’t purchase? Include a financing contingency for the buyer to back out if they aren’t buying in cash and can’t obtain the required financing.
  • What happens when the buyer doesn’t like the property? Include an inspection contingency for the buyer to cancel if they’re not satisfied with the results of a property inspection.
  • What happens when the buyer can’t get title insurance? Include a marketable title option so the deal can be called off if the buyer cannot obtain title insurance.
  • What happens if someone breaches an agreement? Include buyer and seller default clauses that detail what happens if one of them defaults on the sales contract.
  • What happens if the real estate gets damaged before closing? Include a clause for risk of loss and damage to protect the buyer if the property is damaged while under contract.
  • What are the additional charges? Include accounts for utilities, property taxes, and other additional charges required by the state.
  • What property details should be disclosed? Disclose any information that challenges state and local laws or that you otherwise feel could be misunderstood. For example, if the property has lead-based paint, you can make a statement about it in the contract.
  • What are the legalities? Include the standard addenda or legal language at the end of the contract, and mention any additional agreements made after the initial signing.

Clauses and protections help to shield you from liability. Moreover, understanding what each clause means before signing off prepares you for any contingencies that may arise in the deal down the line, helps establish trust among parties, and improves your wholesaling reputation.

Of course, there are plenty of contracts that you can download online. But they aren’t foolproof—not until you’ve got a trusted real estate attorney to double-check them for you. Your contract must guarantee you’ll get what you expect from the deal without stepping on anybody’s toes.

Wholesale Contract: The Key Elements Unlock Success

By understanding the role of the Wholesale Contract and its key elements, you can protect yourself and ensure a smooth transaction for all parties involved. And, if you’re not sure where to start, we can help.

Join as a member today , and we’ll ensure you receive an invitation to our next meeting to learn more about wholesaling from us directly. And in the meantime, sign up for our newsletter to stay updated on everything happening in the world of real estate investing. See you soon!

Categories
Short Term Rentals

Top 3 Tools to Price Your Short-Term Rental Perfectly, Maximizing Attraction and Profits

A small home made out of dollar bills
Source: Kostiantyn Li on Unsplash

Pricing your rental property perfectly is a complicated dance.

Price it too high, and you’ll reduce the number of bookings dramatically; price it too low, and you’ll leave money on the table and not make enough profits to cover the inevitable expenses.

So what do you do?

The task defeats most humans, but it’s nothing too tricky for technologies to figure out. So read ahead to learn the top three tools to price your short-term rental perfectly, finding that sweet spot price that attracts enough renters without undercutting your profits.

Criteria for Finding the Perfect Tool for Pricing Short-Term Rentals

There are different ways to price your rental, depending on the type of rental property it is. For example, a vacation rental will be priced differently than an urban apartment rental. And within each category, some subcategories will also change the price (i.e., a luxury condo in New York City will go for more than a standard one-bedroom in Tucson).

The perfect tool for pricing your rental should consider all of these factors and give you a competitive estimate based on comparable properties in your area. It should also allow you to adjust the price according to your goals and objectives, whether you’re looking to maximize profit or occupancy.

So, here are four key things to look for in a rental pricing tool:

  • Ease of Use: The best pricing tools are easy to use and don’t require a lot of data input.
  • Accuracy: The tool should be based on real-time data and accurate market trends.
  • Flexibility: You should be able to adjust the price according to your own goals and objectives.
  • Integration Ability: The ideal tool can integrate with other vacation rental software (e.g., channel managers, property management systems, and property listing sites).

We’ve used these criteria to provide you with five of the best pricing tools in the market today.

Top 3 Short Term Rental Pricing Tools

As a property management company, we’ve used nearly all the tools you’ve heard about. Based on our experience, these are the top five pricing tools we’ve found to be easy to use, accurate, flexible, and integrate with other software easily.

1. Airbtics: Get Ahead of the Pricing Competition

Source: Airbtics

Airbtics is a dynamic vacation rental pricing tool that allows users to filter daily prices of similar rentals based on trends. The tool will recommend pricing based on its machine learning algorithm that uses real-time booking data, so all its suggestions are accurate and considers spikes in supply and demand. You can also integrate it with any property management system or tech solutions you’re currently using.

Source: Airbtics

Moreover, Airbtics charges a fixed rate—unusual for pricing tools that usually takes a 1-2% commission from the user. There’s also a 15-day trial period for property managers with at least 5 properties.

2. Beyond Pricing: Optimize Your Pricing Opportunities

Source: Beyond Pricing

Beyond Pricing is an advanced short term rental pricing software that considers changes in demand on a daily basis, all to help you maximize your short-term rental occupancy and revenue. It even rates your properties with a Health Score to ensure that you’re aware of your opportunities for optimization.

Moreover, you’ll see detailed insights with every price recommendation, so you understand the reason for every suggested price. And it’s not just for the current landscape, as Beyond Pricing will provide forecasts and recommendations for pricing your rental next year.

Source: Beyond Pricing

Beyond Pricing comes with a free insights package, but you can take it a bit further with their paid plans. It also offers custom plans for unique portfolios, and can connect to popular property management systems and channel managers.

3. PriceLabs: Customize According to Market Movements

Source: PriceLabs

PriceLabs is a customizable, data-driven pricing tool to boost your revenue. Its price recommendations are based on the market’s supply and demand, seasonalities, short-term rental trends, special events and holidays, and lead time. It’ll pinpoint the dates where demand is high by checking the data of nearby listings, analyze historical data, and evaluate your listing’s performance to give the best pricing possible.

PriceLabs’ customization features include setting dynamic minimum stays, enabling occupancy-based pricing adjustments, and more. Plus, the tool can easily connect to more than 30 property management systems and channel managers.

Source: PriceLabs

Its pricing structure works as you scale your business, which is perfect for growing portfolios. There’s also a 30-day free trial before a contract that you can cancel anytime, and it charges a flat monthly fee.

Price Your Short-Term Rental for Maximum Occupancy and Revenue

All three of the dynamic pricing solutions above are excellent choices for optimizing your short-term rental prices. They use different methods for price recommendations, but they’re all accurate to your market. And, most importantly, they integrate well with other software solutions you’re currently using.

Of course, the alternative to using technology is to hire an expert property management company that knows the local market inside out. If you’re investing in the Metro Detroit area, give us a call! We have the experience and knowledge to manage your rentals for maximum occupancy and revenue.

Sign up as a REIA member, subscribe to our newsletter, and join our upcoming meeting to get insider knowledge on real estate investing. This is your opportunity to network and become a better short-term rental landlord and investor as fast as possible.

Categories
Landlords

Go Beyond Airbnb: Where Should You List Your Short-Term Rental?

A magnificent cabin nested in the forest
Source: Photo by Madhur Shrimal on Unsplash

Landlords of short-term rentals shouldn’t stop listing on Airbnb. While the platform is the most popular website for finding hotel alternatives, you should also consider other platforms that can increase exposure, generate more bookings, and gain consistent rent income.

So, here’s a list of Airbnb alternatives you should consider listing your short-term rental on.

1. VRBO: The Reach Multiplier

Listing your short-term rental on VRBO (Vacation Rentals by Owner) means that your property is listed on the platform’s affiliated sites: Expedia, Trivago, and KAYAK for increased reach.

Moreover, VRBO isn’t limited to one property type. Feel free to list your cottages, cabins, bungalows, townhouses, lodges, farmhouses, villas—even yachts, castles, and mills on VRBO. The exposure and possibilities you’ll get on VRBO are endless.

2. Booking.com: The One-Stop Shop

Booking.com is another platform that serves more than 1.5 million guests per day in over 43 languages. There are already millions of homes and apartments listed on this platform. Plus, landlords have complete control over their house rules, adding booking prerequisites, and reporting guest misconduct.

It says it’s “serious about your success” and has the safety features to prove its commitment. In addition, Booking.com is a one-stop shop where guests can also book flights and car rentals—so you wouldn’t want to miss the chance to leverage convenience.

3. Plum Guide: The Luxury Platform

Is your property a charming home for bougie guests? Then list it in Plum Guide, where only the most remarkable homes are shown. They are the benchmark for quality rental stays, focusing on providing guests with the finest luxury properties in the market.

Guests have even said that they prefer this platform over Airbnb because Plum Guide’s property photos match the actual accommodation, the reviews are accurate and not glorified, and there was excellent customer service and communication with the host.

However, note that Plum Guide vets and grades properties before allowing them to be listed. This is how it ensures quality over quantity and means that you’ll have less competition on the platform.

4. Agoda Homes: The Asian Market

List your property on Agoda Homes where you can earn extra income by having access to millions of quality travelers daily. There’s also zero commission and plenty of hosting tools to manage your property via desktop and mobile—so you can manage your homes on the road. Plus, Agoda Homes focuses on the Asian market, which means you can expand your reach to other countries.

Agoda Homes’ dashboard for short-term rental hosts is also uniquely designed for easy decision-making and task prioritization, so you’ll have everything you need to increase your bookings.

Expanded Reach + Increased Bookings = Multiplied Profits

Of course, there are other platforms, like Homestay, Sonder, and Blueground, that we didn’t mention in the list. But the point is to make you realize that you shouldn’t stop by only listening on Airbnb when there are many alternatives out there that can give you additional benefits.

Remember that the more you expand your reach, the more bookings you’ll generate—resulting in higher, more consistent profits from your real estate investments.

Do you need more help? Get in touch with me today. You can start by joining REIA as a member, so you can attend our upcoming meetings and receive helpful information via our newsletter.

Categories
Wholesale Wholesaling

How and Why You Should Set Up Recurring Rent Payments for Your Tenants

Source: Photo by Mika Baumeister on Unsplash.

Collecting rent can be one of the biggest hassles of owning rental property. Not only do you have to keep track of when rent is due, but you also have to chase down tenants who are late on their payments.

Wouldn’t it be nice if there was an easier way to collect rent? Well, there is.

You can set up recurring rent payments so that your tenants’ rent is automatically deducted from their bank account each month. Not only does this make things more convenient for both you and your tenant, but it can also help ensure that you always get paid on time.

In this blog post, we’ll explain how to set up recurring rent payments and the benefits of doing so. By the end, we hope you’ll see just how easy and helpful an automatic rent payment system can be.

Why Set Up Recurring Rent Payments

As a landlord, having a reliable, predictable source of income is essential. That’s why automating recurring rent payments can be so beneficial. Here are a couple of benefits:

  • On-time payments: Your tenants will have their rent deducted from their bank account automatically each month. This means that you won’t have to worry about chasing them down for late payments or collecting checks in person.
  • Electronic processing: All payments are made electronically and on the same day each month, saving you the hassle of manually entering tenant information into your accounting software. Most systems can handle automatic payments for you with just a few clicks.
  • Incentivize recurring payments to encourage sign-up: Some payment processing providers include a discount function so you can offer incentives to your tenants for signing up for recurring payments. This can be a great way to encourage more people to use the system, making rent collection easier for you.

Protect your cash flow, and you’ll protect your investments—isn’t that the only thing that matters?

How to Set Up Recurring Rent Payments

Setting up recurring rent payments is relatively easy, and it’s worth taking the time to do so. Here are the steps you’ll need to follow:

  1. Choose a payment processing provider: Decide which payment processor you’d like to use. Some popular options include PayPal, Stripe, Square, and Apple Pay. Each company has its own set of fees and features, so take some time to compare them before making your decision.
  2. Set up an account: Create an account and link it to your bank. This will allow payments to be transferred directly into your account on the rent due date.
  3. Collect tenant information: Collect some basic information from your tenants, such as their name, address, bank details, and rent payment amount. Ensure that all information is accurate and updated before proceeding with the setup process.
  4. Set up automatic payments: Set up the automatic payments for each tenant in your system. This typically involves entering their bank details and setting the payment amount and frequency (e.g., monthly).

Once you’ve completed these four steps, you’re good to go. Sit back and wait for the payments to come flowing in. Your well-deserved cash flow is on its way.

Best Tools for Recurring Rent Payments

We recommend the following payment processing providers for their ease of use and excellent security:

  • Avail: This landlord software is owned by Realtor.com and helps you streamline rent collection (even if you don’t work with a property manager). Avail allows upcoming payment scheduling by automatically reminding tenants before the due date. Tenants who split the rent with their roommates can also divide the bill accordingly.
  • Apartments.com: Previously known as Cozy, this tool automates rent collection and monitors all rental payments from one dashboard. You’ll see everything in one glance. The platform also sends reminders to tenants, just like Avail.
  • Buildium: If you have 50 or more properties in your rental portfolio, Buildium is your best bet. The software can set up recurring and one-time payments for tenants to pay online or offline, where the funds are transferred in a few minutes instead of a few days.

There are others, too, like Zillow Rental Manager, Rentec Direct, TurboTenant, PayRent, and ClearNow. Whichever platform you choose, you can rest assured that rent collection will take care of itself.

Automatic Payments, Automatic Cash Flow

Setting up recurring rent payments is an easy way to make collecting rent more convenient for both the landlord and the tenant. Not only does it help ensure that your rental income is always on time, but it can also save you time and money in the long run.

We hope this blog gives you a better understanding of how to set up recurring rent payments and why it’s a good idea to do so.

If you have any questions or need help getting started, join us as a REIA member today[1]  and attend our upcoming meeting[2] ! We also have a newsletter[3] , so you’re never out of the loop.

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