Tag Archive: avky inc

Rent-Subsidized Tenancies: Pros and Cons

rent-subsidized tenancies

The following article is a guest post by New York City’s real estate expert Alex Vasser on rent-subsidized tenancies.

As discussed in Rent Subsidies Make Tenants Attractive, there are various federal and state government programs that provide rent subsidies to individuals and families whose income is below specific levels. Accepting tenants who receive this type of rental assistance can be a good way for landlords to fill or prevent vacancies, particularly in areas where unemployment is resulting in more rental units than tenants.

Nonetheless, along with the positives there are negatives involved with having a tenant whose rent is subsidized.

Rent-Subsidized Tenancies Provide Guaranteed Payment, Motivated Tenants

These are some of the benefits to landlords in having tenants who receive rental assistance:

Guaranteed payment. In programs such the U.S. Department of Housing and Urban Development’s Section 8 housing voucher program, the amount subsidized by the government agency is mailed directly to the landlord each month. In other words, the landlord is guaranteed payment of all or part- depending on how much of the rent is subsidized- of the monthly rent. The remaining portion is usually in an amount that the tenant can readily afford; therefore, a landlord is usually able to collect the full rent each month.

Motivated tenants. Competition for rental assistance can be tough. In some areas, the government agency that administers the rental assistance program accepts new applications for a limited period each year. As a result, those who qualify for a subsidy tend to do what they must to hold on to it. For a landlord, this means that a tenant with a rent subsidy has reason to fulfill his or her obligations under the lease, including paying the unsubsidized portion of the rent on time.

Competitive rental amounts. HUD sets the fair market rental amounts each year in metropolitan and non-metropolitan counties. If the rental market of a particular area has deteriorated after HUD has sent its rates, a landlord may find that the amount of rent that a rental assistance program is willing to subsidize exceeds what other landlords are accepting.

Inspections, Frozen Rents

These are some of downsides of having tenants who receive rental assistance:

Yearly inspections. The agency that administers the rental assistance program will schedule yearly inspections of the rented premises. The inspections may turn up conditions that the landlord will be obligated to remediate if the rent checks are to continue uninterrupted.

No rent increases. A landlord may not be able to raise the rent for years because the government agency that provides the subsidy may decline to pay an increase, the tenant may not be able or willing to pay it, either, and the landlord may not want to have to find another tenant.

Fluctuating subsidy checks. Because the amount of a subsidy depends on the tenant’s income, the amount of the check that a landlord receives from the government changes from time to time when the tenant’s income changes. This means that the landlord will have to go to the tenant for the difference if the subsidy is reduced.

Instability. In a depressed rental market, tenants may want to change homes, knowing that they can get a bigger place for the same subsidy.

The Bottom Line

Ultimately, landlords must determine their own comfort levels, always in reference to their real estate investment plans. They may ask themselves these types of questions:

  • Do I want guaranteed rental payments each month?
  • Am I willing to rent to low-income families and individuals? If not, why?
  • How likely am I to find other tenants for my rental units?
  • How long am I able to keep a unit vacant while looking for a tenant?
  • Can I take in stride the yearly inspections required by a rental assistance program?
  • Will renting to a tenant whose rent is subsidized help me reach the goals in my real estate investment plan?

Profitability: Making Money In Real Estate Now

profitability

The following is a guest post on profitability in real estate by Phoenix, Arizona’s Avky Inc.

Rehabbing and selling a property in today’s real estate market can be done and it can also be profitable. However, rehabbing real estate and holding it for rental purposes can be a financially and emotionally rewarding experience. It can also become the experience from hell if not done correctly. There are tricks of the trade that will allow you to maximize your profits and minimize your headaches.

So, you have already bought cheap a property. You have already saved on Materials and you hired yourself to complete the project. Very good!! Now let’s look at the steps to create a win/win rental situation between your tenant and yourself. Please remember our goal is to make money in real estate right now!! Also remember that saving money is moving it to the bottom line. So saving money is making money in a sense. Let’s get started.

  1. Profitability: Pictures And Videos

I’m sure you’ve heard that a picture is worth a thousand words. I have a personal saying. A good picture is worth two thousand words and a phone call. What I’m getting at is that you need to take quality exterior and interior pictures of the rental property. Your pictures should ideally be in a common format and size for different uses. A good overall format would be .jpg and the size of 640×480.

The reasons for the pictures are two fold. The first reason is for print and online advertising. The second would be to document the condition of your rental property prior to renting the property. This protects you as well as your tenant. I’d also suggest doing a walk through with a video camera with the time and date stamp activated.

  1. Profitability: Advertising – Free

Advertising is a key part of your real estate business. How is anyone going to know that you have a rental property available, if you don’t tell them through advertising? As you know there are various forms of advertising. I personally like to use free advertising for the obvious reason. It’s free… There are literally hundreds, maybe even thousands of free classifieds ad sites where you can place your real estate rental ads. You can also post your real estate rentals on facebook, twitter, digg, etc… Be creative, use your quality pictures, and write good and informative ads. You will get great results.

  1. Profitability: Tenant Screening

This is a very important step in the process. If you short cut in this step it could potentially cost you a lot of time and money, by having to pay to have a tenant evicted. You should create a tenant screening system for yourself. This system should be performed the same way each and every time. I don’t care if it’s a referral from your best friend. Do your tenant screening process the same all the time. It protects you as the landlord/property owner and the perspective tenant at the same time.

I suggest using a service that will provide you with a perspective tenants background records, public records and prior eviction status. This will give you a snap shot of who your perspective tenant really is. When you do your reference checks, make sure you call the landlord prior to the current landlord.

The reason for this is because the current landlord will say good things about a dead beat tenant that they want out of their property. The landlord prior to the current landlord has nothing to lose by telling the truth.

  1. Profitability: Preparing Your Lease

Congratulations, you’ve found an acceptable tenant for your rental property. It’s time to prepare the lease and riders for your new tenant. As with the tenant screening process this step is very important. If you’re not comfortable preparing your own lease and riders seek legal advise. However, it’s not difficult at all.

The lease is the longest document. There is no need to re-invent the wheel on this one. There are plenty of pre-printed forms at your local office supply store. You can also find them online in PDF form fill formats. Make sure your lease is appropriate for your state and/or city. There may or may not be other riders that need to executed along with the lease. Again, your state and/or city will determine this.

One way to increase your bottom line is to give your tenants performance incentives. When I structure my leases I add an extra say $10.00 to the lease amount. I tell the tenant if they pay their rent on time that they can deduct the $10.00 from the rent.

I know what you’re thinking. Why would I deduct $10.00 from the rent if they pay on time? Why am I rewarding them for what they are supposed to be doing anyway? It’s simple. It works and the rent less the $10.00 is your true rental amount anyway. You get your full rental amount each month and on time.

The tenant feels like they’re getting a discount. It’s a win/win situation for both of you. If you follow these simple steps you will be on your way to making money in real estate right now.

Greek Real Estate: Before Or After January 2016 Increase

greek real estate

The following article is a guest post on Greek real estate from Avky Inc co-founder Aleksandr Vasser, of Phoenix, Arizona.

Today, individuals that are interested in buying real estate in Greece are faced with a dilemma: Whether to purchase a piece of property immediately before the property’s objective value is increased as is expected after January 2016, or further wait with the hope that real estate prices will decrease in the near future?

The objective value of a piece of property in Greece relates to the taxable value that the Greek revenue department assigns to a piece of real estate. The market value is the actual price paid for the real estate. The objective or taxable value is usually equal or less than the market value (at least up to now) and may start from 10% and reach up to sixty percent of the market value. The remaining amount (the market value minus the objective value) is a gift usually to the black economy and is strangely accommodated (at least up to now) by both the revenue service and the ministry of finance.

Greek Real Estate: Purchase or Postpone?

In any part of the world, housing-related purchases are considered high risk purchases not only because of the large sums of money needed, but because of the possibility of cognitive dissonance setting in after the purchase. This is one strong reason that individuals consult with both family members and close friends, and also with reference groups and market experts such as real estate agents.

As far as Greek real estate goes, one current train of thought suggests that it is better to purchase before the year’s end, thus being spared from the incoming increases in the objective value, or taxable value of the piece of real estate in question.

Another train of thought advises buyers to wait with the logic that the increases in objective value will slow the market even more, and the resulting fall of real estate prices will be more than the expected government objective value increases, thus rewarding the patient buyer with a net gain in his or her purchase.

Greek Real Estate: 2015 Real Estate Price Changes

According to the Greek Central Bank, the first half of 2015 has seen Greek real estate prices fall about 6% in the Athens area with a topple of more than 10% in prices of newly built condominium apartments in certain parts of the Athenian basin; areas such as Patisia, Menidi, Sepolia, Kallipoli, Metamorfosi, Nea Makri, Ilion, Neos Kosmos, and Dafni.

Posh areas such as Agia Paraskevi, Brillisia, and Marousi on the other hand, according to Triad Real Estate, have experienced a 5% fall in newly-built condos, and in 20 or 30 year old flats, can reach a discount of 20 to 25%.

Greek Real Estate: Prices Will Eventually Rise

What will happen in the future as far as Greek real estate prices go is very unclear since the situation in the country, although improving, is still quite volatile. There will be ample opportunity for bargains for those that keep their eyes open and consult with qualified professionals and competent brokers, and there will be lost opportunities for those focusing in the wrong direction.

Regardless of which way the real estate market goes, one thing for certain is that prices will at some point pick up, since the amount of available property in Greece is and will always be limited.