A Prefabricated/Modular Home
What’s a prefabricated home you may be asking yourself? Well, it’s a mobile home that’s not “mobile” anymore. It appears that the mobile home has transformed into a more luxurious home known as a prefabricated home, also referred to as modular homes.
Traditionally, we know that non-mobile homes increase in value over time and mobile homes would generally decrease in value. However, over the past several years as we’ve watched the housing market take a turn, we’ve experienced many changes, from foreclosures to declined property values. Now, today it seems as though the tables have turned, traditional homes are now declining in value and prefabricated homes are on the rise.
So, what’s drawing real estate investors to these prefabricated homes and why are they becoming the new real estate investment trend?
Here are a few reasons why:
• In the late 1970’s the Federal Government implemented a safety standard that extended a prefabricated home’s life to meet the maximum loan life of 25 years.
• Prefabricated homes require less land and many investors and/or those seeking their first home are becoming more attracted to this alternative.
• Prefabricated homes are built much stronger than traditional homes because they are built at one location and then transported to the new location. These homes have to withstand that transport.
oFor example, a traditional home structure is built using 2” by 4” pieces of lumber for walls, but a prefabricated home needs 2” by 6” for additional strength.
• Since prefabricated homes are cheaper to own, first-time home buyers are able to own their dream home on a limited budget.
• Prefabricated homes give the buyer more options when choosing a design.
• Prefabricated homes appreciate in the same way traditional homes do allowing equity to grow.
• Prefabricated homes offer “green” ideas. Many people are going green and a prefabricated home is extremely attractive because they can be placed at an angle that can allow an extreme amount of natural sunlight.
• These homes may be built faster, allowing families to move in sooner than traditional homes.
• Many modular homes are very energy-efficient, which helps reduce your heating and cooling costs.
These are just some of the reasons that real estate investors and first-time home buyers are turning to prefabricated homes. There are several more reasons that this new trend is taking more of a notice when it comes to real estate investing and I’m sure we will hear or read more about it soon.
If you already own a few prefabricated homes and need to manage them better, check out Point2 Property Manager.com, an online property management software solution that can help you to manage your rental property better.
Tags: property, real estate, real estate investment, real estate trend
I am sure with today’s economy many people think that it is more difficult to get a tenant to renew their lease. Well this does not seem to be the case for those firms focusing on retention. According to SatisFacts Research in a recent blog posting on a retention survey comparing 2009 to 2008, there is good news for property managers who focus on retention and taking care of tenants. The survey highlights two questions, very likely to renew (1% increase over 2008) and not likely to renew (1.6% decrease over 2008).
However, the real interesting part of the article was the calculation of the cost of a move-out. According to SatisFacts, the cost is $4,500 (due to increased concessions and vacancy loss days). Their top performing clients were able to beat the 2008 index by 7 points. If you do the math, even a small to medium sized portfolio can be greatly impacted by reducing move-outs. For instance, if you have a portfolio of 200 apartment units or single family homes and reduce turnover by 7%, that would equate to 14 * $4,500 which gives a savings of $63,000 per year.
My blog, Does Good Property Management Matter, pointed out that by using low cost technology, a property manager can improve relationships with tenants, thus making them less likely to move-out due to frustration with the property. It seems to me only logical to explore ways to have higher retention, particularly if the cost is reasonable.
There is no escaping the fact that the internet is the easiest and lowest cost way to stay in communication with your tenants. By using a property management website to acquire the tenant and then using a resident portal to communicate with the tenant, you have leveraged the life-cycle costs of getting and keeping tenants. Resident portals allow a tenant to submit property maintenance requests, check out property events, pay rent online, and more.
To investigate web based portals and determine the best approach to use for your operations, refer to my blog, Picking a Property Management Software Solution, or watch a brief overview of DIY’s property management websites.
So is focusing on retention important? Only if you want to improve your NOI.
Rob Crichlow
DIY Real Estate Solutions
Tags: residential-property-managers, tenant-retention
Keeping a property looking good and the tenants happy is hard work for property managers. And now with the internet, it has never been more important to focus on keeping good relationships with your residents. A recent blog on Rent Bits indicates that people are beginning to use reviews as a way to choose an apartment or a single family home. Though the blog refers to the predicted purchase of Yelp, a very popular review site, by Google, Yelp has since passed on the deal. Google had already begun to expand its review concept with Google Place Pages, where people can review companies and places. Instead of just getting limited information on a map, Google now provides an entire page dedicated to information about the company or place. I tested this by typing in several apartment properties into my Google search bar. I was able to quickly get reviews by current and previous tenants. The blog suggests that reviews on the internet will change the apartment industry. I agree with this. Whenever I buy a product on the web, I read the reviews to make sure it will fit my needs.
Providing ways for your tenants to communicate with you and you with them is a way of determining how they are doing. Many property management companies are starting to use online resident portals to accomplish this, letting the tenants schedule the use of common areas, pay their rent online, report maintenance requests, and check the status of existing service requests. A good online rental property management software program should support this feature as part of the system.
Over communicating with your tenants on what is going on with the property and seeking feedback is the real key to keeping a pulse on what is going on. It is better to learn how a tenant feels when you can do something about it than waiting for them to post a negative review online. In his book, ‘What Would Google Do?’, Jeff Jarvis says that a company must allow easy two way communication if they want to be successful today. The web allows information about a company to travel at the speed of light, so focusing on communication with your tenants will make sure that information is positive.
So how do you make sure your hard work is paying off? Communicate.
Rob Crichlow
DIY Real Estate Solutions
Tags: property-management