Tag: Real Estate Investment

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Short Term Rentals

What Are Airbnb Guests Dreaming of in 2023 & How can You Benefit?

Checking out Airbnbs for an upcoming trip.
Source: Pexels (cottonbro)

In recent years, short-term rentals (STR) like Airbnb have become a popular choice for travelers. What began as a small start-up has turned into a global phenomenon, with millions of people booking rooms on the platform—especially after the COVID-19 pandemic, where everybody avoided hotels.

But what exactly are people looking for when it comes to their Airbnb accommodations? Just because travelers are back doesn’t mean it’s the same as pre-pandemic times. You need to know what’s trending and if people are after something luxurious or more relaxed and homey experiences.

Knowing that is crucial because it will help you create an Airbnb that guests will want to revisit repeatedly, decreasing your vacancy rate and ensuring that profits keep coming in. So let’s take a look!

6 Trends That’ll Make You the Ultimate Airbnb Host in 2023

Here are six trends to boost your bottom-line profits and increase your occupancy rate. If you’re an Airbnb host or an STR owner, make sure your rental has all the amenities guests are looking for to stand out.

1. Business Travelers Are Back: Make the Space Work-Friendly

Given the COVID-19 pandemic, the business travel industry took a big hit and left it uncertain. Luckily, things are opening up, and business travels are expected to increase this 2023. There’s also anticipation for an increase in business travel spending. This increase means you could receive an influx of professional guests hoping to find comfortable workspaces.

So consider offering amenities that business travelers appreciate, such as multiple plugs and ports for easy charging, fast Wi-Fi, and a spacious desk. You might also want to include a safe where they can store their valuables—anything to make the space feel like a work-home hybrid spot.

2. Travel Is 24/7: Don’t Force Guests to Stick to a Strict Schedule 

People travel around the clock and frequently encounter unexpected situations along the way, so make your check-in time flexible. They can’t control what life may throw at them, so they’ll surely appreciate it if their accommodations can flex along with them.

For instance, suppose a guest’s flight was due to arrive at 9 p.m., but because of aircraft maintenance, they were delayed by two hours. If you listed your Airbnb check-in time as until 10 p.m. with no exceptions, then you’re making everyone’s lives difficult—especially given that 20% of US flights at airports saw delays last year.

So put up a lockbox so that guests can self-check in. Offering options make your listing more appealing to those trying to limit contact with others and increases convenience and safety for all parties.

3. First Impressions Matter: What Will Guests Think?

What will your guests think when they walk through your short-term rental door? Will they notice the badly-lit hallway with peeling paint and crooked frames or the cozy space that feels like a home away from home?

Guests likely won’t spend much time in the entrance area, but this serves as their first impression of your property—don’t miss the chance to wow them right from the start.

Some Airbnb hosts repaint their front door every season, while others opt for more sophisticated features, such as outdoor lights with motion detectors. The goal is to ensure that the “wow factor” is there when the guests arrive, and that the feeling will stay with them throughout their stay.

4. Hotels Aren’t Cool: Turn Your Airbnb Into a Home

People book an Airbnb because they want to feel right at home, as some studies have found. Even when exploring places they’ve never been to before, guests wish for a quiet space to relax. So, to make their stay homey and enjoyable, consider providing these amenities:

  • Toiletries (e.g., shampoo and conditioner)
  • Bath towels and fresh linens
  • Local snacks and drinks (including drinking water)
  • Simple office supplies
  • Don’t forget coffee & tea!

Additionally, you can invest in a Smart TV so they can stream their favorite films and shows, similar to how they probably spend their extra time at home. Moreover, you can go the extra mile and provide a local guidebook to help them explore the area, especially if you get many out-of-town travelers.

5. Minibars Are Useless: Stock the Kitchen with Essentials 

Like most travelers, Airbnb guests will most likely order delivery or grab some take-out for their meals. But one advantage that most short-term rental properties have over hotels is a fully working kitchen, where guests can opt to cook as they do at home.

Of course, they won’t expect your property to have cupboards filled with fresh groceries and a refrigerator stocked with milk and cheese. But there are certain things they hope they won’t have to buy, such as cooking utensils (e.g., pots and pans) and pantry basics (e.g., salt, pepper, sugar, and cooking oil).

Providing a kitchen with all the essentials ensures that your guests have a positive experience in your Airbnb, where they get the comforts of a home beyond that of a hotel room.

6. More Than a Place to Stay: Offer an Experience

You can offer more than a place to stay by offering an experience, too. Add value to your listing and leave your guests with a special memory by sharing a talent or passion of your own. You might decorate with a collection you’ve built over the years or paint the home like your bright, Latin American childhood house.

Integrate activities into your rental house by focusing on one of the 3 categories of Airbnb Experience: culture & history, food, or nature & outdoor. For example, you might focus the vibe of your rental on how to cook like a local, guided hike, or yoga. Whatever activity you choose to focus your style on, ensure its hands-on. Airbnb also has rules for these experiences to be approved, so don’t forget to check them out.

Leaving your guests with a lasting memory (not just that they booked a place to sleep) makes them more likely to recommend and return, which means a chance to earn more cash.

Give Guests Their Dream Airbnb Stay

Airbnb isn’t going anywhere. And with the travel industry starting to return to its pre-pandemic levels, you’ll likely see more and more guests booking your property. Ensure it has everything they’re dreaming of—whether that’s a homey space or world-class amenities—so your rental property investment is always booked. The more you offer, the more they’ll return!

Looking for someone to handle your Airbnb property? Our team of expert property managers are here to help you out. With more than two decades of experience, they’ll take your listing to the next level.

Get in touch with us today to find your perfect partner.

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Landlords

What’s Happening with Rental Amounts in the City of Detroit?

Source: Photo by Andre Taissin on Unsplash

We’ve all seen the headlines—average rent prices are falling for the first time since the latter part of 2020 when COVID was the culprit. For those invested in Detroit rental properties though, the news isn’t as bad as in other parts of the country.

Let’s look at what happened in the Detroit market, for you to stay updated and vigilant in protecting your investments. (TL;DR? Don’t panic! It’s real estate market dynamics.)

Nationwide Rents Decline in Major US Cities

As the graph below shows, the August national average rent price, according to Redfin, was up 11% year-over-year from 2021. If you compare it to past trends, this figure is the smallest recent annual increase we’ve seen—down from a 19% gain in March 2022.

Even if we were to look at the month-on-month growth, the median rent only moved slightly by 0.4%, which is the slowest growth since late 2021 and a drop from the 1.6% increase last year.

Source: Redfin

“Rent growth will likely slow further as the Federal Reserve continues to raise interest rates. Higher interest rates impact the rental market because they put a damper on spending power in the economy as a whole, including renters’ budgets,” Taylor Marr, Redfin’s Deputy Chief Economist, said.

Rent Trends in the Detroit Housing Market

We can’t confirm if the data below only covers the City of Detroit or the entire Metro Detroit area, but we see that the market is included in the top rent price drops nationwide in August 2022:

Source: Apartments.com

Moreover, executive director of Detroit Future City, Anika Goss, shared, “During the pandemic… people living in the bottom quadrant of the income scale were not being supported. If rent softens and people are back to work in 2022, we might see an evening out… in a year or two years.”

Should Detroit investors lower their rent to attract and retain tenants? Fewer people are purchasing homes but they still need a roof over their heads, so they rent. But it seems like Detroiters in the lower demographics are struggling to pay rent, even with the supposed decline in rent average.

Then again, the data above might only reflect rent decline in the City of Detroit—excluding the rest of Metro Detroit which includes far more affluent areas like Oakland County. As we know, these areas aren’t as affected by economic downturns compared to lower income zones.

In fact, based on our observations as a property management company in Metro Detroit, rent averages have flatlined (not declined). The reason why reports show dropping rent averages in the City of Detroit is likely due to an increase in vacant properties instead.

Looking at recent statistics and trends, the city is actually doing pretty well:

  • The city still has exceptionally low home prices with a median sales price of $100,000—a growth of 38% from late 2021 to 2022. In terms of rent, it’s also the fastest-growing city in the metropolitan area, where rent averages are said to have increased by 32% from 2021 to 2022.
  • The average rent for a one-bedroom apartment in the city is $1,000, which is a 4% decrease compared to a year before (February 2022). For a three-bedroom though—which is more popular in the housing market—the median rent is $1,200, which is a positive 9% year-over-year change.
  • Plus, looking at Zillow data, the City of Detroit saw an  increase in average rent, where investors are charging $20 higher rent than last year:
Source: Zillow

The data above is good news for Metro Detroit investors. And if you do have tenants struggling to keep up with rent payments, we suggest that you reevaluate by asking the following questions:

  • Are you charging above neighborhood rent averages?
  • Are your tenants struggling with rent payments?
  • Are they paying on time and in full?

If you screened your tenants well, they might not have financial problems. But if the economy’s downturn caused them to lose their jobs that affected their income, you might need to help them out.

“Gas prices are coming back down, but rents are going up 10, 12, 15%. And rent can end up taking 40% of these households’ income,” Bank of America CEO Brian Moynihan said.

Ultimately, your cash flow depends largely on your tenant’s ability to pay rent. As much as you want to generate top dollar from your rental properties, you won’t get any returns if the renters themselves can’t afford your home in the first place.

Finding the Sweet Spot for Rent Prices in the City of Detroit

The City of Detroit (and certain areas of Metro Detroit) remains to be a landlord’s market, with rent prices increasing despite the economic downturn. It presents an opportunity for investors willing to lower their rents to attract more tenants than ever before, although doing so requires careful financial evaluation.

Screen your tenants carefully and keep an eye on the economy, and your rental properties will remain profitable even with all the market shifts happening. Your goal is to secure capable tenants while generating a healthy return on investment—find that sweet spot for a win-win solution.

Do you want more tips and guidance on navigating the Detroit market?

Sign up as a member, subscribe to our newsletter, and join us in our upcoming meetings. Let’s share information and expert tips to ensure that our investments adjust and adapt to the market.

Categories
Landlords

Pros and Cons: Should You Rent to Section 8 Tenants?

Source: Photo by Jem Sahagun on Unsplash

Section 8 tenants are individuals the government has approved for housing assistance. This program is for low-income families, the elderly, and the disabled to afford safe and clean housing. To be eligible for Section 8 assistance, a family must meet specific guidelines that show they require financial help.

Now, of course, there are pros and cons to renting to Section 8 tenants.

Some landlords may hesitate to do so because of the extra work and paperwork or because they have heard stories about problematic tenants. However, there are still benefits to renting to Section 8 tenants, as you’ll realize below.

We’ve listed all the pros and cons to help you make a good decision.

Pros of Renting to Section 8 Tenants

While most information online (especially in forums) list difficult situations with renting out to Section 8 tenants, there are advantages to accepting them that may change your mind. Here are 4 of them to consider if you’re a landlord:

1. Generate Stable Cash Flow

When tenants have Section 8, the government agency pays their rent directly to the landlord or property owner. This means you’re more likely to get paid on time and in full. In addition, the government will still cover the cost if the tenant does not pay their portion of the rent (usually 30%).

2. Increased Tenant Options

When you open your units up to Section 8 tenants, you may have a larger pool of potential renters. This can be beneficial if you live in an area with a tight housing market or if you’re having trouble finding suitable tenants in the area.

3. Opportunity to Help the Needy

By renting to a Section 8 tenant, you’re getting a good deal and helping someone in need.

Families who receive assistance through this program often have low incomes and would otherwise struggle to find affordable and safe housing. As a landlord or property owner, you can make a difference in their lives by providing them with a place to call home.

Cons of Renting to Section 8 Tenants

Of course, there are also some disadvantages to renting to Section 8 tenants—as with any type of rental agreement. Still some concerns are unique to this type of tenant. Here are 3 of them that you’ll need to consider before taking the leap:

1. More Paperwork and Regulations

Renting to Section 8 tenants requires more paperwork and regulation compliance. For example, you’ll need to keep detailed records of your unit and ensure that it meets all the housing standards set by the government. In addition, you may have to deal with inspections regularly.

2. Limited Options for Termination

If you end up with a troublesome tenant, getting them out of your unit may be difficult. The government has strict rules that protect Section 8 tenants, so you’ll need to have a good reason for wanting to terminate their lease.

The increased complexity of contract termination can be time-consuming and frustrating, especially since it’ll be on top of your already-difficult situation.

3. Possible Lowering of Rent

Contrary to the point earlier, if you live in an area with a lot of Section 8 housing, you may be required to lower your rent to stay competitive. In addition, if the government changes its regulations or funding levels, your rent could decrease as well. This may lead to financial problems down the road.

Find Quality Tenants—Section 8 or Not

There are pros and cons to renting to Section 8 tenants. So weigh all your options carefully before deciding. If you decide to rent to them, be prepared for the extra paperwork and regulations involved. You’ll increase your tenant pool, but you’ll need to know the caveats that come with it.

Do you need help finding good tenants? Join as a REIA member today!

We have regular meetings and newsletter that you can greatly benefit from as a landlord. Don’t miss out on this opportunity to further your investment knowledge and reach your investment goals wisely.

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Landlords

How to Evict a Tenant in Michigan in 2023

Source: Sandra Davidson Real Estate Agents

No matter how well you screen your tenants, you’ll inevitably come across problematic ones who are more trouble than they’re worth. In addition to tenants that stop paying their rent for various reasons, some could be running a liability nightmare or shady business out of your property (putting you at risk of legal consequences), while others may be slobs turning your beloved unit into a garbage dump. You’ll have to evict these problematic tenants before they negatively affect your investments.

But evicting tenants is time-consuming and complicated, requiring you to understand all the regulations involved.

In this article, we provide an overview of the Michigan eviction process to ensure that the ordeal goes smoothly. We also give some information for you to navigate the court system if your tenant contests.

The 5 Steps to Evicting a Tenant in Michigan

There are many reasons why tenants can be evicted from their rental property in Michigan, but here are a few of the most common ones. Having proof of this behavior is not enough to evict them—you should follow specific procedures before they can be legally forced to leave your property.

Here are the steps to evicting your tenant in Michigan:

Step 1: Identify the Grounds for Eviction

As a landlord, you must abide by Michigan’s landlord-tenant laws, which stipulate that tenants may be evicted from a rental property for the following reasons:

  • Failing to pay rent: Tenants who fail to pay their rent on time without giving you any prior notice may be evicted according to Michigan law. Rental payments are immediately considered overdue when they are paid a day past the deadline. A grace period is sometimes provided.
  • Violating the rental lease agreement: Both parties must comply with the signed rental lease agreement for the tenant’s entire stay. While the specific terms vary from landlord to landlord, it usually includes rental property damage.
  • Conducting illegal activity: Under Michigan’s landlord-tenant laws, illegal activities include theft, violence, assault, and involvement in the creation, distribution, or consumption of controlled substances (e.g., drugs and other illegal substances).

If your tenant does one of these things, start the eviction process by serving the tenant with an official written notice. Each reason for eviction has its own rules regarding the length of notice.

Here’s a quick breakdown of each:

Step 2: File the Complaint in the Appropriate Court

After issuing the tenant an eviction notice , the next step is to head to the justice court where the rental property belongs. There, you must file a complaint, which typically costs $45 in Michigan. You might get additional fees of up to $150 though if your case involves overdue payments or damage fees.

An officer of the court will then serve your tenant with the complaint and court summons at least three (3) days before the hearing. They must do so via first-class mail and at least one of these:

  • Giving a copy to the tenant in person
  • Leaving a copy with the tenant’s family member with a request to deliver it to the tenant
  • Posting a copy on the main entrance of the tenant’s rental property

The officer should also have a return receipt confirming that the complaint was sent via first-class mail.

Step 3: Attend the Court Hearing

The eviction hearing takes place within ten (10) days of the summons being issued by the court. However, the court may sometimes decide to hear the case within just five (5) days.

Tenants may object to the eviction by filing a written letter to the court, but it’s not a legal requirement.

If the tenant fails to show up for the hearing, the court will issue a default judgment in your favor. In some cases, the judge can choose to postpone the hearing for seven (7) days, but if they don’t, then they’ll issue a writ of restitution, allowing the eviction process to continue.

This step of the eviction process is usually over within five (5) to ten (10) days, depending on the court’s rules. But if one party files an appeal against the judge’s decision, it will likely take longer.

Step 4: Wait for the Issuance of the Writ of Restitution

If the court decides in your favor, it will issue a writ of restitution, which serves as the tenant’s final notice to vacate the rental property. It also gives the tenants the chance to remove all their belongings before the authorities forcibly remove them and return the unit to you.

The writ of restitution is usually issued ten (10) days after the court serves its judgment, which gives the tenant enough time to file an appeal. However, if they are being evicted for illegal drug activity or health and safety violations, then the writ is issued immediately.

Step 5: Give the Writ of Restitution to Law Enforcement Officials

You have to give law enforcement officials the writ of restitution within seven (7) days of it being issued by the court. However, state law does not specify how quickly you must act, so that’ll be up to your discretion or the number of other evictions already scheduled.

Some areas have introduced guidelines on how quickly the authorities must carry out the writ of restitution, so be sure to familiarize yourself with your local laws.

After receiving the writ of restitution, check with your area’s laws to see if there are local guidelines on how quickly the authorities must carry it out.

Evicting Tenants in Michigan is Complicated, But Doable

Evicting a tenant takes anywhere between two weeks to two months, depending on your circumstances and the reason for eviction. It takes even longer if the tenant decides to appeal the court’s decision. The eviction process may be complicated, but it’s easier with a trained lawyer and property management company.

Get in touch with our team today to help you with everything—from serving official notices to providing writ of restitutions. You’re in good hands with our experienced, expert team.

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Landlords

Minimize the Learning Curve: 4 Expert Tips Beginner Landlords Need to Know

A young man looking professional in his stylish suit
Source: Photo by Austin Distel on Unsplash

Landlording can be a lucrative business, but it also comes with its own challenges. That’s why it’s essential to minimize the learning curve as much as possible and get tips from those who have been in the business for a while. You don’t have to take the trial-and-error approach if you already know the “secrets” and tricks to landlording successfully!

Read on to know the four expert tips for successful real estate investing.

Make It Difficult for Rental Advertising Scammers

Unfortunately, there are a lot of rental property scammers out there—especially on Craigslist. One of the common scams is where other people will steal your real estate listing, use the property information and photos, and replace the contact details with their own numbers and email addresses.

They’ll then:

  1. Attract interested tenants
  2. Say that they’re “currently out of the country” and can’t turn over the keys to them
  3. Have the tenants hire a locksmith to change the locks themselves
  4. Collect rent money and security deposit

Then disappear into thin air. You’ll be left with clueless tenants you didn’t get to screen, and a rental property you can’t rent out without telling the scammed tenants to go.

How can you avoid these scams?

Be proactive and mark your photos with your phone number and contact information. Scammers won’t take the extra time and effort to remove your watermarks; they’ll skip over your listing and look for other opportunities elsewhere.

Another tip is never to publish the actual address of your home. Instead, use the nearest cross streets to give tenants a good indication of where your property is without revealing the address to scammers.

Be Attentive and Creative in Screening Tenants

The ultimate goal of screening tenants is to ensure they are responsible people who’ll pay rent on time, maintain your property well, and abide by all the clauses in your lease agreement. In other words, the best way to avoid bad tenants is by having a good screening process.

Here are our pro tips on how to screen them:

  • Assess their cleanliness: Walk them to their car. Take a peek at how clean or dirty their car is inside. Chances are, if their vehicle is filled with garbage (like this poor vehicle), they’ll treat your rental home the same way, too. Their car is a reflection of what’s to come for your home. Or even do a surprise visit to their current residence – how it looks is how your property will look after they move in.
  • See if they have pets: Don’t ask if they have animals, because they can easily say no to that. Instead, ask how many animals they have—indicating that you already know they have pets and you only want to know how many of them there are. Make it a bit harder for them to lie.

Moreover, don’t believe anybody who says that their animals will “live somewhere else”. All too often, those animals will only live elsewhere for a while before moving into the home.

In other words, make it slightly more difficult for them to hide secrets from you. By checking their car and assuming that they have pets, you’ll get more honest answers out of the applicants, making it easier to decide if you want to accept them as your tenants or not.

Be Cautious in Accepting Upfront Payments Covering Multiple Months

Receiving upfront rent payments may seem great for you. You get to secure the money earlier without having to chase tenants for payments every month. However, take note of the following:

  • Is it legal? State and landlord laws might have a maximum upfront rent payment allowable, while some will require you to pay interest on it. Ensure that you’re familiar with the laws before accepting any upfront rent.
  • Why can the tenant afford it? Did they come upon some money and want to ensure that it goes somewhere necessary before they spend it irresponsibly? If that’s the case, they might not have a stable income or employment to afford the home in the first place.

Of course, there are exceptions to these situations. If you’re renting out to students, for example, the parents might pay upfront rent so their family won’t have to worry about paying monthly rent anymore.

Have a Thorough Lease Agreement

You may be tempted to use online lease agreement templates so you won’t have to create one from scratch. However, barebones templates won’t do much in protecting you or your investment property.

Plus, there are specific state and local landlording laws that you’ll have to consider in your lease, and other rental-specific rules that you’ll want to have (e.g., regarding smoking, pets, or painting the home’s interior). These are things that generic templates won’t guarantee or cover.

Instead, everything you want the tenants to know should be included in the lease agreement, so use online templates only as a guide to creating your own document.

Once your attorney approves the draft, sit down with your tenant and go through the entire thing. Don’t assume that they’ll read the agreement on their own—most of them will skim through it and call it a day. You’ll end up with tenants that will likely forget your rules, creating many problems down the line that could’ve been avoided in the first place.

Ensure that they know and understand your rules by having them put their initials at the start of every paragraph or sign every page of the agreement as confirmation. If anything unfortunate happens in the future, the tenants won’t have any excuse to say that they didn’t know the rental lease guidelines.

Pro Tips for a Successful Real Estate Investment Business

There are many other pro tips that you can learn from experts. Knowing these secrets is the best way to ease yourself into the rental business, become a great landlord for your tenants, maintain your real estate property, and protect your monthly cash flow for investment success.

Become a successful landlord today! Get in touch with me or my team at Logical Property Management.

We’ve been managing properties for more than two decades now, and have more tips and tricks to share for a thriving rental property business.

Categories
Landlords

Top 5 Areas for Short-Term Rental Investments in Michigan 

Source: Airbnb listing

Websites like Airbnb, VRBO, and Homeaway have made it easy for short-term rentals to gain popularity among real estate investors today. In Michigan specifically, you’ll benefit from the growing short-term property market, generate a higher return on investment compared to traditional rental properties, and quickly find new guests thanks to online booking platforms.

Michigan is one of the hottest real estate markets in the nation today. The only thing left is to know which city to purchase your short-term rental in, which we’ve listed below.

We based our list on two key factors: high cash-on-cash returns and rental income. They contribute the most to your short-term rental investment success, which is why we’ve based our list on the two factors.

Disclaimer: All the figures below come from Mashvisor, AirDNA, and Zillow reports.

1. Traverse City, MI

Traverse City is the largest city in Northern Michigan and the largest producer of tart cherries in the nation. In 2012 alone, more than 3.3 million visitor trips were made to this city, resulting in $1.18 billion in direct spending toward its tourism sector.

Guests come here to see the grapevines at Traverse Wine Coast, swim in deep freshwater lakes, and grab a cold one in many craft beer spots. Traverse City is a rustic, charming small city filled with artists, craftsmen, and musicians that contribute to its rich local communities.

Source: Zillow
  • Typical Home Value: $416,822
  • Home Value Increase: 25.4% year-on-year
  • Cash-on-Cash Return: 7.13%
  • Rental Income: $4,572
  • Rental Growth: -16% quarter-on-quarter
  • Capitalization Rate: 7.13%
  • Occupancy Rate: 65.37%
  • Active Rentals: 1,310
  • Rental Channel: 46% Airbnb, 24% Vrbo, 30% listed on both

2. Grand Rapids, MI

Grand Rapids is one of the fastest-growing cities in the nation, attracting travelers interested in art museums, galleries, and competitions. Its tourism industry has also been growing for ten consecutive years from 2009 to 2019, thanks to economic growth and an evolving, diversified community.

Guests come here to visit the John Ball Zoological Garden, Belknap Hill, Gerald R. Ford Museum, Van Andel Museum Center, Frederik Meijer Gardens & Sculpture Park, and Grand Rapids Art Museum. There are also countless craft beer spots, as craft beer is the leading tourism driver in Grand Rapids since 2013.

Source: Zillow
  • Typical Home Value: $308,077
  • Home Value Increase: 17.6% year-on-year
  • Cash-on-Cash Return: 5.42%
  • Rental Income: $3,029
  • Rental Growth: 4% quarter-on-quarter
  • Capitalization Rate: 5.42%
  • Occupancy Rate: 68.79%
  • Active Rentals: 438
  • Rental Channel: 78% Airbnb, 9% Vrbo, 13% listed on both

3. Lansing, MI

Lansing is Michigan’s capital city that attracts traveling families all year round. The city welcomes around 4.8 million visitors every year which fuels its strong tourism industry.

Here, they can visit the Michigan State Capitol with a cast iron dome, the Michigan History Center that details the state’s past, Potter Park Zoo with more than 160 species of animals, Impression 5 Science Center with interactive exhibits, and the R.E. Olds Transportation Museum for unique and vintage cars.

Source: Zillow
  • Typical Home Value: $142,780
  • Home Value Increase: 14.6% year-on-year
  • Cash-on-Cash Return: 8.66%
  • Rental Income: $2,556
  • Rental Growth: 8% quarter-on-quarter
  • Capitalization Rate: 8.66%
  • Occupancy Rate: 65%
  • Active Rentals: 212
  • Rental Channel: 74% Airbnb, 8% Vrbo, 18% listed on both

4. Dearborn, MI

Dearborn is a historic destination for travelers worldwide. In fact, it is home to Michigan’s leading tourist attraction, The Henry Ford—the nation’s largest indoor-outdoor American history museum and entertainment complex. Henry Ford alone attracts around 1.6 million visitors every year.

Apart from The Henry Ford, guests can also enjoy Greenfield Village, Arab American National Museum, the Henry Ford Estate, the Islamic Center of America, the Automotive Hall of Fame, and more.

Source: Zillow
  • Typical Home Value: $214,291
  • Home Value Increase: 16.4% year-on-year
  • Cash-on-Cash Return: 7.48%
  • Rental Income: $2,469
  • Rental Growth: 19% quarter-on-quarter
  • Capitalization Rate: 7.48%
  • Occupancy Rate: 61%
  • Active Rentals: 63
  • Rental Channel: 64% Airbnb, 22% Vrbo, 14% listed on both

5. Kalamazoo, MI

Kalamazoo is known for being the home of the US Tennis Association Boys 18 & 16 Championships for the past six decades, but it’s also the manufacturing domain of Gibson Guitars, Checker cabs, Kalamazoo Stoves, Kalamazoo Sled, Kalamazoo Corset, and Shakespeare fishing gear.

Guests can immerse themselves in the youthful energy and cultural spots in Kalamazoo, such as the Kalamazoo Institute of Arts, Kalamazoo Valley Museum, Gilmore Car Museum, Air Zoo, Bronson Park, Arcadia Creek Festival Place, and Kalamazoo Nature Center.

Source: Zillow
  • Typical Home Value: $215,027
  • Home Value Increase: 14.4% year-on-year
  • Cash-on-Cash Return: 7.31%
  • Rental Income: $2,759
  • Rental Growth: 8% quarter-on-quarter
  • Capitalization Rate: 7.31%
  • Occupancy Rate: 70%
  • Active Rentals: 151
  • Rental Channel: 78% Airbnb, 9% Vrbo, 13% listed on both

4. Short-Term Rentals, Long-Term Success in Michigan

Take your pick from the list above and start investing in Michigan short-term rentals! All the areas we’ve listed are profitable areas for you to take advantage of local tourism industries.

As long as you conduct property rental investment analysis and create a comprehensive income sheet, you’ll be on your way toward investment success in Michigan.

The list doesn’t end here. We’ve gone ahead and evaluated the rental property opportunities in every Metro Detroit city and neighborhood, too. Head to our Deep Dive series to find more hotspots in Michigan.

Categories
Wholesale Wholesaling

Your Ultimate Checklist for Wholesaling Real Estate

A wholesaler and a homeowner working out the details of the contract
Photo by Scott Graham

It’s no secret: wholesaling can be a lucrative real estate investment method to earn a profit with minimal capital. On average, you can make around 5-10% of a property’s market value if you wholesale an undervalued home—that means you’re looking at a profit of $10,000 to $20,000 with a $200,000 home if you can get it under market value!

However, getting a slice of this pie does not come easy. Contrary to popular belief, real estate wholesaling takes a whole lot of skill, patience, and elbow grease. 

For example, you need to find a property with a motivated seller, then find a buyer for it, coordinate all the paperwork required, complete the deal as soon as possible, and repeat everything again. You also have to simultaneously grow and maintain your buyer’s list so your business doesn’t come to a halt.

In other words, there’s a lot to keep track of when dealing in wholesaling. 

But there is a solution to it: Make a list! Just like most projects in life, it’s easier to streamline the wholesale process if you have a checklist to guide you. That’s why we’ve written this ultimate checklist for wholesaling real estate—perfectly designed to help wholesale investors like you.

The Wholesale Checklist

Having a guide to the step-by-step requirements of a wholesaler can make the entire procedure easy as pie. But we do understand that not all of the things we’ll mention below will apply to you, so we advise that you focus only on the things that are most relevant to you.

Let’s get to the checklist!

A. Select a Market

Have you selected a market? Have you checked the trends of the current market? 

Selecting a prime market can land you a hot deal. You want to find a market where there isn’t too much competition but is still highly coveted. In other words, try to find a balance—buyer markets that are on an upward trend without much competition to deal with. 

Take for example Burlington, N.C. There’s a total of around 57 thousand brokers in North Carolina—far smaller than states like Florida with 212 thousand. But, the real estate market in Burlington, N.C. is booming right now. In fact, it is the 2nd most lucrative market in the US with listings only lasting an average of 35 days on the market.  

You can only identify potential markets like these if you’re familiar with real estate market trends, so here is a quick jump-off point to get started:

  1. Reference the MLS listings to get an idea of current trends in real estate prices.
  2. Look for how long listings stay on the market. The less time on the market, the faster the turnaround for properties, and the better the situation for you.
  3. Additionally, it’s important to know the median price of properties sold, so you know what you’ll be working with. For instance, in Burlington, it’s $295,000.

Once you’ve chosen your ideal market, you can move on to the next step in the checklist.

B. Build a Buyers List

Have you built your buyer’s list? Have you found any willing buyers in the area? 

You’ll need a robust buyers list for a steady stream of good deals. Your goal is to continuously generate and follow up with the leads in that list so your wholesale investment becomes a growing business.

Here are a few options to build and grow your buyer’s list:

  • Create an online marketing campaign. Use social media and other platforms to get the word out on your name to build a potential buyers list.
  • Use customer relationship management platforms (CRM). Creating accounts on CRM platforms like Hubspot or Zillow can increase your reach to interested buyers.
  • Take note of buyer contact information and criteria. Make a note of the budget of your potential buyers and their contact info. When you find an appealing property, you can reference your list to see if the property coincides with the budget of one of your contacts. 

By having an established and growing buyers list, you can increase the reach of your wholesale business which can lead to more deals and profits.

C. Look for Motivated Sellers

Once you’ve accomplished the first 2 steps, you can now enter the meat of the wholesale process: Finding a motivated seller with a property that coincides with the criteria of your interested buyers. 

Now, in the industry, you’ll notice that distressed properties are popular for real estate wholesaling. There are 2 reasons for this: It’s easier to convince sellers to let go of their unkempt homes, and it’s easier to secure a larger discrepancy versus market price.

But how do you find distressed homes and motivated sellers? You can already do this by increasing your scope, using the same techniques for finding buyers:

  • Use CRM software to find properties. 
  • Use social media to create a marketing campaign for yourself. 
  • Create a dedicated email address and/or phone number to screen incoming leads.

Once you’ve found a motivated seller. You then must hash out your wholesale contract.

D. Create the Wholesale Contract

Having found a motivated seller, you now need to finalize the wholesale contract. When creating the contract, you need to make it clear to the seller that you’re not buying the property. 

You need to establish that you’re only finding an interested buyer for the seller. 

Given that, be sure to establish the terms of what will happen if you fail to find a buyer. For example, you can set up an earnest money clause that will act as a guarantee. This clause will protect you and the seller in the event of failing to find a buyer. You will hand over an earnest money deposit that will act as a contingency that will be returned to you once the wholesale is complete. 

Then, you need to find a buyer for the property.

D. Look for an Interested Buyer

Once the details of the wholesale contract have been decided, you then need to find a willing buyer. Be sure to thoroughly scope out the property to make it easier to find buyers. 

For example, take photos of the property that shows potential buyers exactly what it looks like without having them visit the home. Additionally, take note of important details such as the number of rooms, the size of the property, and the overall condition of the property. 

Once you’ve gathered all the necessary information, you should then do the following:

  • Send the property report to targeted buyers on your buyers’ list. Ensure that you send the property only to the buyers with the perfect criteria—or you lose their trust in the long run.
  • Like insurance, you can get in touch with local wholesalers to market to their own buyers. This expands your coverage, helps you grow your network, and makes it easier for you to sell.

Once you find a willing buyer, you can then move on to the contract turn-over. 

E. Assign the Contract 

With a willing buyer, you can then move on to assigning the contract. Here are the basic steps to remember when assigning a contract to a buyer:

  1. Receive the amount necessary to purchase the property from the buyer.
  2. Collect your earnest money deposit from the seller. 
  3. Turnover the buy and sell contract of the property to the buyer. 
  4. Enter into a new assignment contract with the buyer and collect your wholesale fee.
  5. Contact an escrow company to complete the deal after the arrangements have been made.

Once the buyer has the contract, you can move on to the final step of the wholesale process. 

F. Close the Deal 

The escrow company will now oversee the process of transferring the property to the end-buyer. During this phase, you should keep in touch with the escrow company to get updates on the progress of the sale. 

Once the sale is completed, the escrow company will turn over your assignment fee, and your wholesale will be completed. 

Follow this Checklist to Make Your Wholesale Easy 

Getting into wholesaling unprepared can be a recipe for disaster, and we don’t want that—not when real estate wholesalers already tend to have a bad reputation because of newbies making rookie mistakes!

But with the use of a checklist, you can avoid many of the pitfalls of wholesaling, increase your odds of landing a wholesale deal, feel less stressed with conducting your business and reap continuous profits from the many deals you’re scoring.

Take our list and make it your own! Good luck in your venture and feel free to comment on any other concerns you have in the comments section below.

Categories
Flipping

Top 5 Youtube Channels to Learn About House Flipping

The Youtube Logo on a mobile phone

Getting better at house flipping can be an essential tool for becoming a successful flipper. Gathering info from books and other resources helps expand your knowledge in the flipping game. Plus, learning from experienced flippers can give you a huge leg up against competing flippers. 

But, you don’t have to limit yourself to books. These days, Youtube is a great learning tool. In fact, 7 in 10 Youtube users use the platform to learn. And it goes without saying, that you can gain a wealth of real estate tips from Youtube. 

To help you get an upper hand in the house flipping game, we’ve collected 5 of the best Youtube channels to learn from. 

5 Best House Flipping Youtubers

If you’re tired of reading books on real estate, well then Youtube is a great resource for getting the latest and greatest tricks in the house flipping business. But, you don’t want to just learn from some random Joe Schmo. You want to learn from someone with a wealth of experience. 

That being the case, we’ve sifted through Youtube’s content library to find the best house flipping channels. 

  1. Lex Levinrad 

Joining the platform in 2008, Lex Levinrad is a veteran of the Youtube landscape. Not only that, but he’s also a veteran of the flipping game. According to Lex, he’s flipped over 1000 houses throughout his flipping career. Currently, he has 17 thousand subscribers and has a total of over 2 million channel views. 

The Lex Levinrad channel will help fill gaps in your flipping know-how. For instance, his video on flipping a fire damaged property. In it, he gives tips about the pitfalls of buying a fire-damaged house and what repairs to focus on. 

With the Lex Levinrad channel, there’s always something new to learn about flipping houses.

  1. HouseBarons 

The HouseBarons channel is run by brothers Dave and Rich. They’re quite successful as Youtube creators considering their channel has garnered over 13 million views in its 10-year lifespan. Add to that, the HouseBarons gathered a healthy following of over 38 thousand subscribers. 

On the HouseBarons channel, you’ll get find a large vault of very specific tips and tricks. Take, for instance, their tutorial on fixing a faulty door. After all, creaking doors that open by themselves might be something you don’t want to show potential buyers during a property tour. 

All in all, the HouseBarons Youtube channel can be a great wellspring of knowledge. 

  1. Real Estate Investing Tips for Beginners

If you’re just beginning your journey in the house flipping business, the Real Estate Investing Tips for Beginners Youtube channels can be a great instructor. The channel has over 720 videos that cover a wide variety of topics for investing in real estate. It has just a bit over 50 thousand subscribers and uploads regularly. 

The channel has a series of videos dedicated to house flipping. There’s even a guide for how to start flipping with just $10 if you’re on a tight budget. From house flipping to wholesaling, you can learn a ton of real estate tips from this channel. 

  1. The Friendly Flipper

Learning from experienced flippers is a valuable experience that can’t be replaced. But some experts forget how to talk to beginners and can drown you in jargon. Thankfully, The Friendly Flipper channel makes this easy. With over 130 videos dedicated to house flipping, you’ll learn a ton and it’s all easy to digest content. 

The Friendly Flipper host a range of videos from interviews with fellow flippers to flipping progress vlogs. For instance, in his latest series of videos, you can follow the entire progress of a flip over the course of just 7 days.

When you subscribe to The Friendly Flipper, you’ll get a great guideline for flipping houses.

  1. BiggerPockets

Finally, BiggerPockets is one of the biggest channels on this list. In fact, it has nearly 900 thousand subscribers to date. And with over 2.3 thousand uploads, you’ll have a lot of content to digest. 

On the BiggerPockets Youtube channel, you’ll get the full breadth of what it takes to be successful in the real estate business. While the channel covers the entirety of the real estate market, it isn’t lacking when it comes to house flipping. For example, one of their most successful videos is a series that goes through the house flipping process from start to finish.

Between securing funding to looking for the right property, you can learn a lot from BiggerPockets. 

Expand Your House Flipping Knowledge with Youtube

There are a lot of avenues to explore when it comes to learning about house flipping. From reading a book to listening to experienced flippers recount their journey, you can pick up tips from almost anywhere. With this list, you can easily turn on a video to learn a little more every day.

Follow these 5 channels, and you’ll gain enough flipping knowledge to gain an edge over other flippers.  

Categories
Wholesaling

Paperwork Made Easy: The Important Details Every Real Estate Wholesaler Should Look For

The buyer, seller, and wholesaler hashing out a contract.
Photo by Pexels

When conducting wholesale deals, contract negotiations become an everyday occurrence in your life. This means that if you aren’t knowledgeable about the requirements and details of wholesale contracts—you can end up losing a deal.

You have to be exceptionally familiar with contracts to be a successful wholesaler, which is why we’re writing this article to dive deep into the key paperwork you’ll need. Nail these on the head, and you can navigate through the world of real estate wholesaling with ease.

What is A Buy and Sell Contract? 

Otherwise known as a purchase agreement, this is the contract you enter with the seller of the property. It acts as a legally binding agreement and outlines the terms of the offer between a buyer and seller in real estate transactions. 

Your job as the wholesaler is to act as a middleman and find a willing investor to buy the property. That means to need to know how this is the contract permits them to purchase the home. Once you find a buyer, this contract transfers from you—the wholesaler—to the buyer. 

The content of the buy and sell contract should have the following: 

  • The date of the agreement 
  • The name of the seller/individuals listed on the property’s title
  • The buyer’s name
  • Property address 
  • The earnest money deposit. 
  • The total purchase price of the property
  • Financing 
  • Closing date and transfer of title 
  • Escrow and closing fees 
    • The buyer can be assigned to pay the fees
    • Or it can be the seller 
    • Or they can pay equally 
    • Or they can pay their respective escrow and closing fees
  • Signatures of you and the sellers
  • Date of signature

This list isn’t exhaustive, but these are the most relevant things you should pay attention to in buy and sell contracts. As long as you have these covered, you should be good to go.

Note that your buyer will also thoroughly examine the agreement before getting into the deal with you. As such, it’s best that you know your way around these contracts well enough to answer their questions and successfully close the sale.

What Is A Seller’s Disclosure? 

The State of Michigan requires a seller to complete and sign this disclosure to accompany any and all purchase transactions. It’s meant to protect a buyer from seller misrepresentation about the condition of a residential property.

Since most sellers aren’t aware of this form, you’ll want to keep a copy with your buy-sell contracts. Do NOT ever complete the form though, for a seller—legally they must complete it.

The next one to know is an assignment agreement. 

What is An Assignment Agreement? 

An assignment agreement is a real estate contract that transfers your rights and responsibilities listed in the purchase agreement to your investor—the new buyer. Often, this can also be referred to as an “Assignment of Real Estate Purchase and Sale” agreement.

After signing this contract, the buyer will take over the purchase agreement, and you’ll be awarded an assignment fee. Only you and the buyer will receive copies of an assignment agreement since the seller is not involved in completing an assignment contract.

An assignment contract needs to contain the following: 

  • The agreed-upon assignment fee
  • The assignor’s name 
  • The assignee’s name
  • The date of agreement on the purchase contract
  • The names on the purchase agreement
  • Location of the property 
  • Closing date 
  • Assignee to pay the security deposit in escrow 
  • Signatures of you and the buyer 
  • Date of signature

Once the assignment contract has been signed and fulfilled, the investor will then take over the purchase agreement. After that, the buyer closes on the property and you’ll be awarded your assignment fee.

Wholesaling Contracts Made Easy 

There’s a lot of paperwork that comes with wholesaling in the real estate business. If you get in over your head and gloss over every other contract you get into, you can end up losing your wholesale deals—or worse—alienating your potential buyers. 

If you ask us, it’s just not a risk worth taking if you want to grow your wholesaling business.

With our help, you’ll have a good idea of how the contracts you’ll be dealing with regularly are done. If you need more help with wholesaling paperwork, feel free to reach out to us!

Have any questions about wholesaling contracts? Let us know in the comments below!

Categories
Wholesaling

Top 6 Ways to Increase Real Estate Wholesaling Leads and Grow Your Buyers List

Consistent lead generation is paramount to your success in the real estate wholesaling business. Finding a seller begins the wholesale process while finding a buyer closes the deal. 

However, generating valuable leads does not come easy. 

Even when you already have a long list of leads, you’ll still have to trim it down to the quality ones. After all, you don’t want to have just any leads—you want to garner high-quality leads to close more deals. And this can only be achieved by mastering the methods for consistent lead generation.

In this article, we’re going to tackle some real estate lead generation ideas so you can keep growing your buyer’ list. By having consistent growth in your buyers’ list, you can be confident that you’ll keep closing wholesale deals—and keep your income stream flowing. 

6 Ways to Generate More Leads

Generating leads in wholesale real estate requires diligence. That said, even a wholesaler’s time and effort are an investment. To ensure that your work pays off, you’ll have to work smart—not hard. 

For example, if your current method isn’t giving you the desired results, you need to try different lead generation strategies. Remember what Albert Einstein said, “Insanity is doing the same thing over and over and expecting different results.” 

And you don’t want to fall into that frustrating trap.

So, consider using these wholesale lead generation strategies to fill up your list, so you can spend time closing more deals.

1. Multiple Listing Service (MLS)

The Multiple Listing Service is an exclusive online database for licensed real estate agents, featuring properties available and sold on the market. What’s great about this is that it can automatically send leads to your inbox, among many other perks. More importantly, this real estate lead generation strategy is completely free—as long as you find access to it. 

Another benefit of this is that it can also connect you to other real estate investors in the market. As you grow your buyer’s list, you can also grow your business network.

Still, using MLS requires some dedication to be effective. Since a lot of agents use this strategy, posts can easily get lost among thousands. You’ll also need to go through many real estate leads until you find quality ones. 

So, yes, MLS comes with a few challenges. But, it’s comprehensive, affordable, and convenient—making it a terrific real estate lead generation method. 

2. Leverage Networking

Connecting with other real estate investors and helping each other out can keep you consistently closing deals. Now, some wholesalers are looking for sellers while others are looking for buyers. But by pooling together your resources, you can establish a mutually beneficial relationship. 

Nevertheless, this setup requires you to split profits. You’ll earn a bit less, which means you need more leads to compensate. This strategy is still great for growing your buyers’ list, as well as your network, so the pros outweigh the cons.

Apart from the real estate community, you can also look at your personal network. You never know which one of your friends or family members is looking to invest in. A quick post on social media sites or asking around might seal you some great—unexpected—deals. 

In other words, think out of the box and use your current network to generate wholesaling leads.

3. Cold Calling

This method is a popular one, as it kills two birds with one stone. By cold calling, you use your existing leads to generate new ones. 

The idea behind this is that people with similar interests usually gather together. Similar to how there is a network of wholesalers, there is also a network of buyers. So, take advantage of your current connections to see if they know others who are interested in your deals, even if they aren’t interested themselves.

Once you’ve identified some prospects, give them a quick call. Then, keep all of these individuals in mind and remember to follow up whenever you have something to offer. You can then continuously assess which ones are willing to make a deal, giving you very high-quality leads more willing to make a deal with you.

4. Drive for Dollars

Driving for dollars is a tried and tested strategy for real estate lead generation. There are many leads out there in the world—and sometimes all it takes is a quick drive around town to spot the right signs, literally. Yes, your car’s mileage will increase, but so will your buyer’s list.

Many real estate investors are also renters. In other words, you might find a house with “for rent” signs and contact details. 

Once you see these potential clients, give them a call to ask if they’re investors looking for properties. Investors are always looking for the next opportunity, so you might just get lucky and land on a willing prospect. And even if the person is an agent, that still works, because they might be looking for properties on the market as well.

5. Real Estate Agents

If there’s anyone that’s knowledgeable about the local real estate market, it’s the real estate agents. 

If you’re considering doing future investments in a certain area, a real estate agent can help you start. Real estate agents can be very helpful in building your buyers list and growing your own network. When you’re investing in a new area, they can help you close your first few deals by linking you to local sellers, investors, and properties in the local market.

Once you gain a grasp of the local market, you can start doing deals on your own. Alternatively, if you establish a good business relationship, you can even consider becoming long-term business partners. Real estate agents won’t only help you grow your buyers’ list, but they can help you land consistent deals.

6. Bandit Signs

Bandit signs are poster-sized signs with a short, direct message and contact details. You usually see a dozen of these signs near a property, often in high-traffic areas like local markets, shopping malls, and busy streets. It’s a common practice in real estate since it’s an effective form of real estate marketing. 

After all, leads can come from all sorts of places. And this method is a great way for you to cover multiple areas and expand your reach. Also, it’s usually quite affordable to put up bandit signs making this a more cost-effective way to strategically grow a buyer’s list.

Conclusion

Real estate wholesaling takes time, effort, and commitment. As a wholesaler, you have to strategize, think ahead, and be ready to face challenges head-on. Yes, generating wholesale leads does take a lot of work. But if you do it right, all that hard work pays off. The more leads you generate, the higher your chances of closing deals. 

With these strategies at your disposal, you’re now ready to generate consistent leads to propel your real estate wholesaling journey to the next level.

Got tips of your own or stories to share? Let us know in the comments below!

Image courtesy of RODNAE Productions

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