Is This The End Of Small Real Estate Investors?

Posted on July 3, 2014 by Maria Rekrut

In Canada, right now, it’s becoming more and more difficult for real estate investors to make money. The reason for this is that it’s becoming more challenging for real estate investors to obtain money from the bank.  Also, the Landlord and Tenant Board’s guidelines are making it increasingly difficult to evict tenants. This will force landlords to sell their properties because of a bad tenant issue, which will incur effect on the serious small residential real estate investors.

 

What I predict for the future is that the small landlord will sell their properties and less people will invest in small properties, therefore, small real estate investors who own duplex, triplex or fourplex will sell their properties. This will force the tenants to move into either a larger apartment building or the tenants themselves will be purchasing a condo or house.

The perpetual apartment renter will end up in buildings owned by commercial real estate investors or will live in government owned buildings. This will produce a larger division between small and large real estate investors.

If we continue this way, the landlord will face more challenges in choosing their tenants. The small investors will be putting their money without making a profit on their properties. Myself as a real estate investor, I sold a number of my properties when I realized because of the new Landlord and Tenant Board guidelines I was less able to control what was going on with my properties. I decided that it was not fair for people who take financial risks to have other people determine how I run my business. So I decided to sell my properties and keep the money in the bank.   At this point, I’m investing in properties that are not regulated by the Landlord and Tenant Board.

I look forward to hearing from other real estate investors who feel the same way as I do and who want to share their war stories.

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Banking In The Real Estate World

Posted on July 3, 2014 by Maria Rekrut

As a real estate investor, I find it difficult to understand why banks make it so complicated for real estate financing, especially when real estate investors have to prove themselves to the bank that they are a good financial risk.   In fact, the bank should be looking for real estate investors who have strong portfolios.  Banks should actively seek good investors to lend their money to, instead of waiting for customers to come to them, they should come to us, the real estate investors.  What the bank should actually do is to come  to the investors proactively, ask what they need in their upcoming project, and lend them more mortgage funds to facilitate their investments.

For instance, I have been with a number of banks and financial institutions for years, some of them even as much as 30 years. I have been putting money in there, why can’t they come to me and say can we lend you more money to make more money.  What I think is that nowadays, the banks should change and do something different for the real estate investor.

The bank should trace the people who are making money for them, partner with them on their projects, figure out how much money they need for their next project. Then the bank should be able to get a mortgage broker involved and do the mathematics to see whether the investors are able to make money or not.  Actually, there are three parties involved, they are the mortgage broker, the banker and the real estate investor.  And they should talk as a unit, the mortgage brokers know the financial situation of their customers who have cooperated with them  for years.

The mortgage broker can prove to the bank that their customers are a good financial risk by reviewing the investors portfolio and  from past  performance.    Therefore, it will become easier for real estate investors to borrow money from banks.  If someone has been losing money and has declared bankruptcy in some cases for more than one time, how can the bank possibly lend them money? On the other hand,  investors who pay their debts on time have proven themselves to be good investors, why wouldn’t the bank want to lend them  more money?   Where is the logic in that?

 

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How To Start A Business With Zero Funds

Posted on July 2, 2014 by Maria Rekrut
Starting a new business  isn’t always easy, but with the right attitude, and not wanting to make a million in the first year, you can comfortably start a new business. In fact you can start  one without spending more than a few dollars. I’ll give you a quick and brief overview to get you started.

 

Six Steps to Starting a Business with Zero Funds
1.    I would run the business from my home or apartment or even a room…whatever, don’t waste your money on office space, meet your clients in a coffee shop.
2.    Take a small  portion of  funds and put it toward a good website,  people have to  find you, if they can’t find you, you can’t make money.  Or learn to build your own website.
3.    Get business cards and don’t spend a lot of money getting them made, you can get 250 cards for free from Vistaprint.
4.    Next I would find a mentor ( at no cost).  Start to network at Business after Five events with various Chambers of Commerce.  Look for Meetup groups in your area that have your customers attending and market, market, and….more  marketing to these folks.
5.    Ask your friends and family if they know anyone who needs you service or product. It’ll take up to 5 years to get your business to a place where you start to make enough money to live off of.
6.    I suggest to all new businesses, that while they build their business they also get a part time job.
You don’t want to  starve while you’re building your business from scratch and you need to pay your bills. You can’t think straight if you don’t have enough money to pay bills, rent and food.
Good Luck, it’s not easy to start from scratch, but it’s exciting!!
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Vacation Home Owners – Don’t Fear Negative Reviews

Posted on July 2, 2014 by Maria Rekrut

I came across a really good article that I want to share with investors thinking of getting into the vacation rental business that I’d like to share with my readers.

 

It’s face and strategy, which puts owners at a disadvantage, but there is a light at the end of the tunnel.  I myself have gotten a few negative reviews about my cottage rental and looking at their comments some of the comments were justified and some were not, the guests comments where from a purely personal perspective, with ideas of black mailing me about getting a refund, as we don’t give refunds, I was told in uncertain terms that their negative review  would hurt my business, which I’m sure it did, but I won’t let myself be bullied and I certainly won’t pay my blackmailers!!

My logic against paying a blackmailer is even if you give a refund, where’s the guarantee that once they get the money they will still put in a bad review!!

According to Roomz at: www.roomz.ca

Here are 3 reasons why we should not fear getting a negative review.

(1) Negative reviews create trust. 70% of guests will believe the reviews when they see good and bad,  30% of guests will suspect fake reviews if they all appear to be all good! (Data provided by Reevoo). Important Note – Potential guests who go out of their way to read your bad reviews, will convert 65% more than the average guest. Nobody will expect your establishment to be perfect for every person. Bad reviews will provide balance.

(2) Negative reviews provide real feedback. They let us know what we are doing right and wrong. If a guest is reporting a problem, we should want to fix it as opposed to pretending it does not exist. Negative reviews will help us to make better business decisions. They will suggest we make dramatic improvements or stop doing it all together.

If guests don’t like the speed of your WiFi, speed it up or stop it. If guests love your master bedroom but hate the television, take it out or get a new 3D plasma!

(3) Negative reviews help your SEO. From Google’s point of view, it doesn’t matter if your reviews are negative or positive. Google sees it as a “sign of life” for your business and it’s generating some interest. They will list you higher in the search results!

And after all being at the top of Google’s search result isn’t such a bad place to be!!

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7 Must Have’s For The Best Vacation Rental Contract

Posted on July 2, 2014 by Maria Rekrut
Or what your best vacation rental contract should include so you stay out of trouble and sleep well at night.

 

Vacation rental contracts are essentially short-term leases drawn up between a property owner and a renter who wishes to use the property for a short period of time, namely the length of their vacation.  According to Bailey Richert,  an eHow Contributor, Rachel states thatyour rental contract serves as a legal agreement between the two parties and therefore must be carefully worded to protect the rights of all individuals involved.
In the fourteen years of owning rentals, I agree with Bailey, that having a proper contract isvery important.  Having the best contract available has been my saving grace and  I didn’t havetoo many sleepless nights worrying if all parties were on the same page.
Here are 7  Must have’s  to include when you’re pulling your contract together:
1.  Download a sample vacation rental agreement to use as a template or reference guide when crafting your own to give you an idea about how to word the agreement properly.  Check your finished agreement against a sample to look for missing sections.
2.  Include the names of every tenant who is going to stay in the property during the rental period. When the agreement is finished, have every tenant who is listed sign the agreement acknowledging he has read and understands the lease. If the property is damaged and the main tenant is unable to be reached, others can be held responsible for costs owed.
3.  Specify the time period of the rental using dates, not a general time frame. Note which day the tenants are permitted to move in and which day they are required to vacate the premises.
4.  Write exactly how much rent is due and by what date. Specify how the rent is to be paid to the property owner, and in what form the rent is due. This may include check, cashier’s check, money order or cash. Specify the financial penalties in the case of late rent, which could include a cost per day or week.
5.  Explain clearly the tenant’s responsibilities for maintaining the property during the duration of her stay. These may include lawn care, garbage pick-up or minor house repairs.
6.  Include a clause stating the purpose of the home as a vacation rental property. Specify that it is not meant to be used as a business property, location of illegal activity or housing for other than the specified tenants.
7.  Ask your attorney to review the lease agreement before you present it to the renter. A lawyer will be able to tell you if a key element of the agreement is missing or if rewording to protect your rights is needed.
Key parts  of the contract should include explanation of fees, time the property will berented and a clear definition of the rates to be paid.  This way by making sure that the rentalcontract has the  above 7 Must have’s you’ll come up with the best vacation rental  agreement thus ensuring that you’ll have the best vacation with no surprizes.05-05-14-rental-contract
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How To Get Your Vacation Rental To Wow Your Guests!!

Posted on July 2, 2014 by Maria Rekrut

Getting your vacation rental ready for the high season can be a very daunting and time consuming part of your vacation rental business. I’ve found that my low season is the best time to tackle larger projects such as painting, revamping and moving around furniture and updating bathrooms and kitchens.

 

In my off season I’ve also invited an interior designer to choose both wall colours and fabrics and bedding to give my vacation rental a more “boutique hotel” look.

On top of these renovations and updates done on the inside of your vacation rental there is a most often overlooked and forgotten part of most updates which is updating both your front and back yards. Remember to landscape and create “curb appeal”

Myself I’ve preferred perennial plants over annual plants when redoing my garden. Annuals will give you consistent flowers all summer long but in the fall and winter they’ll will die off and you’ll have to purchase more plants the following year.

On the other hand if you have perennials, your garden will ebb and flow with the season. Perennials will give your garden an ever changing collage of colours and plants. I find that my perennial garden requires less care and watering than the annual garden. Also the nice thing is that your perennials will flower and bloom year after year with very little care.

I’ve come across an additional list of vacation rental updates shared by Ezine Article contributing writer Vincent Orlando “Getting your Vacation Rental Ready for the High Season ” to take care of both during high and low season.

I’m sharing Vincent’s partial list below:

1. Perform construction and updates to make the house a better rental

• Upgrade appliances, if needed.
• Add new amenities.
• Deep clean the entire home including windows and carpeting.
• Paint the ceilings and walls with fresh paint in neutral colors.

2. Furnish the rental appropriately

Decorate the home using a theme and color scheme as a guide.

• Landscape and create “curb appeal”
• Perform a security and safety evaluation.

3. Rental Turnover & Day-to-Day Maintenance

Interview and hire cleaning staff.

• Interview and hire maintenance people.
• Establish a backup plan for cleaning and maintenance emergencies.

4. Marketing & Advertising

Stage and take professional-quality pictures of the rental, inside and out.

• Consider building your own vacation rental website.

5. Create marketing text

List on vacation rental sites.

• Research other online marketing methods.
• Advertise the property offline to reach your targeted market.

6. Financial Planning

Plan a budget for expenses.

• Research applicable taxes in your area
• Find, learn and use a basic accounting program.

7. Guest Services

Stock the home with necessities; like toiletries, paper goods, and cleaning supplies.

• Create welcome packet.
• Make a “Guest Information Binder” of local attractions, menus, maps and information.
• Create an emergency contact sheet.

As you can see there’s a lot of work and preparation in getting your vacation rental ready for the high season. You may not get everything done before your high season hits but at least you get a head start and can continue with the less important updates during the high season. Let’s face it our end result and the reason we as vacation owners work so hard, is so that our customers get the WOW factor when they come to our rentals.05-19-14-vacation-rental

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The Good, The Bad And The Ugly Truth About Accepting Credit Card Payments For Vacation Rentals

Posted on June 10, 2014 by Maria Rekrut

06-09-14-credit-card-vacation-houseThe whole truth about accepting credit card payments for your vacation rental.

All vacation home owners who are renting out their vacation homes will have to deal with this question.  Should I accept guest payments via credit cards?  Myself having been in the vacation rental business for 14 years have had to make a decision about this.  Before I go into detail about how I’ve dealt with this payment issue, I’d like to share valuable information that I came across from Rick Smith.

Rick Smith, President of SmallBizAssist:  http://www.smallbizassist.ca/decided after his own struggles with credit companies, to read and study the small print and offer advice to business and the general public of how to make the most of your credit cards and how to stay out of debt.

According to Rick here are 5 Questions to ask your credit card company and for you to consider in order to protect yourself:

1. Calculate your bottom line fees after subtracting debit/Interac fees (IDP and IDP Network Fees). If the total bottom line cost is more than 2.1% of your credit card sales you may be paying too much (percentage depends on volume, with who, how, when and where your do transactions)

2. Do you have 2 statements one for debit/Interac and one for credit card transactions? This is not necessary and you are probably paying unnecessary fees.

3. Do you have more than one account? Some Processors and ISOs will sign businesses up to more than one account when it is not necessary. When it is necessary they should be linked and you should get only one statement more than one usually means extra fees.

4. Does your money usually go into your bank account the next day? Some Processors take their time with deposits, with the exception of weekends or bank holidays money should be in your account the next day (subject to a cut off time of day).

5. Do you have more than one deposit per batch and do your fees come off the deposits? This causes extra bank fees and is a nightmare for bookkeepers. Deposits should match your batch report and their fees should come off once a month separately.

6. Have you received a notice of a “change” in the way fees are calculated of similar wording in a statement or separate letter from your Processor. They need to give you the details of any changes and you have 90 days from the date the details are received to cancel without penalty according to the “Code of Conduct for the Credit and Debit Card Industry” in Canada and the USA.

For myself with my vacation rental, I’ve been able to do business never having to process a credit card, I know it’s difficult to believe!! What I do is ask my guests to  send me either an email bank transfer or a personal or business check.  For last minute guests, I ask foreither personal checks or cash.  Of course I ask for their credit card details in order to hold their reservations, I can always go back and charge their credit card, that’s my blanket of security.

Happy Investing,

Maria Rekrut

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10 Marketing Ideas For Vacation Rentals

Posted on June 6, 2014 by Maria Rekrut

1. Fill Your Rental Calendar With Last Minute Travellers
While most people rent vacation homes in advance, some wait until the last minute. You can position yourself to scoop up those travellers by making a few adjustments to your marketing and rental procedures. Then, you will make more money, as you will be able to keep your calendar full throughout the year.

2. Amenities for Golfers
Is your vacation rental located near a golf course? If so, you should make the most out of your location. Include golf amenities in your home so renters will be more likely to stay with you. By including certain amenities, you will be able to keep a full rental calendar.

3. Enhance Your Listing with a Virtual Tour
Vacation rental owners need to have the best listing possible. Part of providing a great listing is including a virtual tour. A virtual tour is a tour that is filmed and then put online so others can view it. There are many benefits to include.

4. Finding the Right Vacation Rental Management Agency
If you are a vacation rental owner that wants to use a management agency, you need to be sure you pick the right one. There are lots of agencies available that are competing for your business. You need to narrow down the prospects by examining each company.

5. Avoid Vacation Rental Bans
Bans prevent vacation rental owners from renting their property to short-term guests. State and local governments, as well as home owners associations, can initiate vacation rental bans.

These bans are devastating to owners. However, they can be avoided. Those who follow a certain set of guidelines will form good relationships with the community, and thus be able to continue renting their property to guests.

6. Insure Your Vacation Rental Property
Your vacation rental property is an investment, and thus it is important to protect it. One of the best ways to protect it is with insurance. There are many different types of insurance for owners to consider before advertising their property to renters.

7. Lower Prices Mean Fewer Customers
The vacation rental industry is booming, and the boom has caused some owners to re evaluate their pricing strategy. They feel they have to lower their prices to remain competitive, when in fact lowering prices can lower their chances of renting the property. When vacation rental owners lower their prices, they fall victim to a variety of problems.

8. Increase Bookings in the Off Season
The off season presents some challenges to vacation rental owners. Business slows down a bit, and owners have to become more creative in order to keep their bookings steady. One of the best ways to make bookings in the off season is to market to couples.

9. Finding an Investment Property
Return on investment and location are important for investors who are buying vacation rentals. Investors want to make money from renters, and they want a property they can spend time at during their own vacations. Because of that, people have to be careful during the property selection process. They must find a home that meets their personal needs, as well as their business needs.

10. The Art of the Headline
The headline is one of the most basic, and yet most important, aspects of creating a vacation rental listing. It is essential for owners and managers to write a headline that is both compelling and informative. In order to do this, they must master some basic copy writing and research skills.

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How To Get Your Vacation Rental To Wow Your Guests!!

Posted on May 29, 2014 by Maria Rekrut

Getting your vacation rental ready for the high season can be a very daunting and time consuming part of your vacation rental business. I’ve found that my low season is the best time to tackle larger projects such as painting, revamping and moving around furniture and updating bathrooms and kitchens.

 

In my off season I’ve also invited an interior designer to choose both wall colours and fabrics and bedding to give my vacation rental a more “boutique hotel” look.

 

On top of these renovations and updates done on the inside of your vacation rental there is a most often overlooked and forgotten part of most updates which is updating both your front and back yards. Remember to landscape and create “curb appeal”

 

Myself I’ve preferred perennial plants over annual plants when redoing my garden. Annuals will give you consistent flowers all summer long but in the fall and winter they’ll will die off and you’ll have to purchase more plants the following year.

 

On the other hand if you have perennials, your garden will ebb and flow with the season. Perennials will give your garden an ever changing collage of colours and plants. I find that my perennial garden requires less care and watering than the annual garden. Also the nice thing is that your perennials will flower and bloom year after year with very little care.

 

I’ve come across an additional list of vacation rental updates shared by Ezine Article contributing writer Vincent Orlando “Getting your Vacation Rental Ready for the High Season ” to take care of both during high and low season.

 

I’m sharing Vincent’s partial list below:

 

1. Perform construction and updates to make the house a better rental

 

• Upgrade appliances, if needed.
• Add new amenities.
• Deep clean the entire home including windows and carpeting.
• Paint the ceilings and walls with fresh paint in neutral colors.

 

2. Furnish the rental appropriately

 

Decorate the home using a theme and color scheme as a guide.

 

• Landscape and create “curb appeal”
• Perform a security and safety evaluation.

 

3. Rental Turnover & Day-to-Day Maintenance

 

Interview and hire cleaning staff.

 

• Interview and hire maintenance people.
• Establish a backup plan for cleaning and maintenance emergencies.

 

4. Marketing & Advertising

 

Stage and take professional-quality pictures of the rental, inside and out.

 

• Consider building your own vacation rental website.

 

5. Create marketing text

 

List on vacation rental sites.

 

• Research other online marketing methods.
• Advertise the property offline to reach your targeted market.

 

6. Financial Planning

 

Plan a budget for expenses.

 

• Research applicable taxes in your area
• Find, learn and use a basic accounting program.

 

7. Guest Services

 

Stock the home with necessities; like toiletries, paper goods, and cleaning supplies.

 

• Create welcome packet.
• Make a “Guest Information Binder” of local attractions, menus, maps and information.
• Create an emergency contact sheet.

 

As you can see there’s a lot of work and preparation in getting your vacation rental ready for the high season. You may not get everything done before your high season hits but at least you get a head start and can continue with the less important updates during the high season. Let’s face it our end result and the reason we as vacation owners work so hard, is so that our customers get the WOW factor when they come to our rentals.

 

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Vacation Rentals Getting The Biggest Bang For Your Bucks

Posted on May 29, 2014 by Maria Rekrut

This is a concept that you have to understand. Doing all the right things can really lead to more bookings at better prices. But I would enter the market at or below the market, and then work my way up the next season. Being booked all year at reasonable prices is better than being half full at higher prices.

 

If you are new to this market or your vacation rental is just being listed for rent and you have no repeat business, we suggest you come into the market on the lower end. That does not mean you are giving your rental away. You have to do some research of your competition.

Let’s  say you have a 4 bedroom cottage. There will be plenty of your neighbors’ listings to view. So finding a unit that is similar online should not be a problem.  You find plenty of comps, they are priced at about  $2700 to $3,500  during the peak season. They seem to be doing pretty well. You can view the online calendars to see how they are booked up. But do not rely on those 100%. Many owners do not keep them up to date.

So this is the first year for your unit. You have a few months till summer and you have no repeat business as this is a new purchase for you. I would price your unit at $2495 for the peak weeks. This will look like a deal to most prospects, you can start taking bookings now and build up a client list.

Pricing your vacation rental is one of the first steps you need to take to be successful. If you are too low, you will be full but lose out on some income. Too high and you could miss out on bookings and have a vacant unit. So what are you to do?

If you are doing the proper amount of advertising, you should have no trouble getting some business. Here are some other things you need to consider to get a competitive advantage on your competition. By using online reservations and online credit card processing you already have an advantage in the vacation rental by owner world.   So you will be able to take bookings faster and easier than the other vacation rentals listed online.

This means you are the path of least resistance. More people will be attracted to book with you since it is easy, fast and convenient. Who wants to wait 7-30 days to mail documents back and forth? They want to book a vacation now!

Add this to a great slide show of your vacation rental, and a google map showing the exact location.   So now you go into your next season with a list of past guest, you email them about the new season and they want to come back to stay with you since it was easy, they loved your rental and you stayed in touch. Now you can raise your prices to at or above the market. Now your rate would be at $2,795 per week in the prime time.

Using all the tools that you need can make a huge difference. If your competition does not put the time in that you do, you will win.

Happy Investing

Maria Rekrut

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