As a real estate investor, you already know that a vacant apartment does not make money. Vacancy rate, the percentage of all apartments in your portfolio that are vacant at any time, is generally figured on a year or more of data, based on the number of units that are occupied and vacant monthly. Occupancy rate is the number of occupied units, and is often used because it is seen as more “positive” than vacancy rate.
An example would be having 20 units total, with 15 occupied in January, leaving 5 units vacant in January. When figuring vacant units, you should include units that are vacant and ready for showing / move in, units that are being turned over after a tenant leaves, and units that are not rent-able due to needing repair or renovation. This will give you the most accurate figures available.
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Back in December, I wrote an article on my switch to Skype for my calls made while at my desk, to cut back on the number of cell phone minutes I was burning through each month. After calculating savings, I realized I was saving $631.70 per year by going with a VoIP provider as opposed to Verizon. At the time I was using a headset connected to my desktop. Since then, I’ve gotten a bit more technologically advanced.
I recently came across a product put out by D-Link, which plugs into the USB port on my computer and allows me to make Skype calls from a normal phone! In addition, if I had a regular phone line, I could plug that in as well which would allow me to make and recieve phone calls from either line. The ability to use a regular phone is something that I did miss, but with the addition of the DPH-50U, I have added a lot of versatility to my office. You can use any regular phone with this device. I purchased mine at NewEgg.com, for $19.99 on sale, and there was no shipping cost. In addition, there was a $10 mail in rebate which I took advantage of.
Overall, I would say that the call quality I have had has been very good. I’ve had a couple calls fade out for a second, but the interruptions have been minimal at best.
(This post is part of our “Landlord Basics” series, which seeks to help the new landlord / investor understand some of the basics of tenant relations and property management. Click here to view the entire Landlord Basics archive.)
One of the best parts of being a landlord or real estate investor is collecting the monthly rent check. Deciding what forms of payment you will accept can determine the amount of work you will have to do on the back end. Some payments are more beneficial than others, but ultimately most investors elect to use multiple methods to make the tenant’s life (as well as their own) easier.
Continue reading ‘Landlord Basics: Collecting Rent & Payment Methods’
Cap Rate, short for Capitalization Rate, is a formula used to help determine the value of rental property. Investors will use the cap rate of a property to help determine a good or bad deal, since it is based on market values (recent sales of similar properties) in the area.
Cap Rate is determined by dividing the net operating income (NOI) by the sale price (SP). The result will give you a percentage, which is your cap rate. For instance, a duplex in buffalo bringing in $450 per month per side has a gross operating income of $10,800. After taxes and some minor repairs, it is determined that the NOI is $9,000. The property is listed at $65,000, but having a shrewd real estate agent, the final sale price is $60,000. Using our sample figures, we come to a Cap Rate of 15%.
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