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5 Cost-effective Upgrades to Attract Better Tenants and Reduce Turn Over

As an investment property owner, it can be difficult to determine which upgrades are actually worth making to your property. Upgrades can be expensive, but an updated property is more attractive to prospects and will result in happier tenants that stay longer. Certain upgrades can also increase property value and reduce future maintenance or utility costs.

The goal, of course, is to invest the right amount of money on the right upgrades to increase property value, attract better tenants, and keep tenants for longer periods of time. But as any property owner will tell you, this is a difficult equation to figure out and it can be hard to know for sure if your upgrades will provide an actual return on investment.

As a full service property management company, we advise and guide our clients through the process of upgrading and maintaining their homes, always with an eye toward maximizing their return on investment and keeping their tenants happy. Over the past couple of years, this has become increasingly important in the Greater Boston Area, as there’s been an explosion in the supply of new apartments. This means property owners will need to focus on upgrades if they want to stay competitive within their market.

The Value of Market Research

One of the most important things to understand when upgrading any investment property is that your goal should always be to stay competitive within your local market. If you feel that your property could use some upgrades but it’s still more competitive than any properties nearby, it may not make sense to spend money on additional upgrades.

Alternatively, if your property is outdated compared to other units in the area, it’s almost always going to be worth it to spend some time and money on upgrades. An outdated house will be harder to rent, fetch lower rent prices, and cause tenants to feel neglected. That means more turnover, more headaches, and less return on your investment. In some cases, the upgrades you make can be paid back with just a few months of increased rent prices.

This is why we always do thorough market research before making upgrades to our clients’ properties. This will help us determine which upgrades are (or are not) required. With that in mind, let’s look at some of our favorite upgrades that are quick, cost-effective, and most importantly, will make your tenants feel at home in your property.

1. Curb Appeal

When most property owners think about upgrades, their mind naturally gravitates toward the interior of their home. But external upgrades are just as important and can be cost-effective in terms of keeping current tenants happy and attracting new tenants. Planting flowers, grooming trees, putting on a new coat of exterior paint or power washing walkways can all be done while tenants are living in the unit and for little upfront cost. These small upgrades can greatly improve your property’s curb appeal, attracting better tenants and making your current tenants feel better about the place they live.

More significant upgrades like refinishing balconies, repaving driveways, and installing exterior lighting can be costly but are sometimes worth it in the long run. Again, some simple market research will determine which of these upgrades are most important for your specific property—but no matter what you do, don’t forget about the exterior of your building!

2. Appliances

Appliances are one of our favorite upgrades to make in any property because they are quick, easy, and instantly improve the look, feel and function of any home. Nowadays, tenants expect stainless steel appliances and it tends to be one of the first things they look for when viewing a property. Upgrading old stoves, dishwashers, and refrigerators will make your unit significantly more appealing to prospective tenants. 

While it may seem like a major upfront investment, it has been proven time and time again that new appliances will quickly pay for themselves. Not only will they attract better tenants, but you can charge more in rent and you’ll likely see reduced utility and maintenance costs moving forward.

3. Flooring

Just like stainless steel appliances, most tenants want or expect hardwood flooring. Carpet gives an outdated look and may need to be changed between renters to account for spills and stains—meanwhile, hardwood flooring increases property value, looks great, and requires little maintenance if handled properly.

Laminate and faux wood are great flooring options that look exactly like hardwood without any of the headaches or maintenance, and at a fraction of the cost. This is a common upgrade we recommend for our clients as it is one of the most cost-effective flooring options that will instantly elevate the look of any unit.

4. Countertops & Backsplashes

A decent countertop and backsplash can go a long way in any kitchen. These upgrades are quick and easy to make—you could even do them yourself if you’d like—and cost less than you might think. There are a number of different low-cost countertop options that look and function significantly better than the laminate countertops of decades past without breaking the bank.

Even more expensive countertops like granite can be well worth it as they will last for years to come with little to no maintenance required. Your tenants will spend a lot of time here, so the function and feel of your kitchen should always be a priority when considering which upgrades to make.

5. Paint & Fixtures

Last but not least, we have the easiest upgrades of them all. Putting a fresh coat of paint on the interior of your units can do wonders, and it only takes a few days of work with minimal costs. This is something we try to do between every tenant turnover.

And if you’re going to paint your unit, you may want to also consider upgrading light fixtures, faucets and showerheads at the same time. This is another quick and easy upgrade that can instantly change a room with little upfront investment. Outdated fixtures are a big red flag for prospective tenants, and updating them can have a massive effect on the way a room feels and functions.

We audit every property we take on, providing specific recommendations for our owners around which upgrades they should consider making. Want to see if your property is competitive with your market? Contact us for a free consultation.

Is Investment Property Management Right for You

Owning an investment property isn’t for everyone—but if you’re looking to start, here’s some advice.

Investment property management is simple: buy a property, then rent and manage it yourself to create a positive cash flow out of your investment. By doing everything on your own you can cut costs and maximize profits.

But is it really that easy? (Spoiler alert: it’s not.)

If it was that easy, everyone would be doing it! The reality is that investment property management isn’t for everyone. It can be stressful, time-consuming, and risky—but in some cases, it might be a worthwhile endeavor.

Here’s our advice and a few suggestions for anyone looking to get into investment property management. We’ve been in this industry for years, so we like to think we know a thing or two about this stuff. And unfortunately, we’ve seen a lot of people buy investment properties when they could’ve put their money to better use elsewhere.

You need plenty of savings

If you’re thinking about buying an investment property you obviously need to have money saved up for a down payment—but there are a lot of other things people don’t consider. After the down payment, you’ll need to have money available for repairs, upgrades, and renovations. You’ll want some cushion in case your property doesn’t rent quickly or ends up going vacant in the future. To put it bluntly, if you have any concerns about not having enough money saved, you probably don’t have enough.

Until you get to that point, there are likely better ways to use your money—like investing in the stock market or a Real Estate Investment Trust (REIT). An REIT is a company that owns and operates a portfolio of income-producing real estate. Investing in an REIT lets you invest in real estate with far less capital and, in theory, far less risk.

You need to be in a strong market

Real estate market values are constantly changing—there are some areas of the country that are on the up and up, while others are in decline. If you’re buying a house to live in, this is something to take into account but it’s not going to be the deciding factor.

If you’re buying a property as an investment, on the other hand, it is the deciding factor. If the property market value in your area is on the decline, you need to stay far away. You’d be better off relocating to a different area or just investing your money elsewhere. Alternatively, you could buy a property in a different location and have an absentee landlord or property management company look after it for you. Either way, you need to go where the market is strong—and that means either a lot of research or some know-how on your part.

Maintenance is time-consuming and frustrating

Maintenance issues are bound to come up with any property, and if you’re managing an investment property of your own, it’s all on you. On the one hand, you’ll need to be handy enough to fix small issues and savvy enough to find contractors or service companies for anything outside of your realm.

But on the other hand, you have to be ready for the time investment and the inconvenience. If you have a full-time job, will you be able to drop everything and run to your property to fix a water leak? Are you willing to spend time researching how to fix an oven? If someone isn’t paying their rent, will you be able to handle it?

In many cases, dealing with these issues just isn’t worth your time. That is why many people opt to hire a property management company to look after their investment instead of trying to do it all themselves.

The financials can get real complicated, real quick

Creating a passive income stream from your investment property is no small feat. Many newcomers think creating a positive cash flow is as simple as cashing a few rent checks each month. This could not be further from the truth.

In order to successfully manage your investment property, you need to be capable of managing your books, negotiating a good mortgage, and maximizing the value of your investment. If your property is vacant for even a short amount of time, you might actually lose money on your investment. And when tax season comes around, you’ll need to have all your ducks in a row.

If you’re not up for this or you’re not “a numbers person,” you might be in trouble.

If you can handle it, it could be a great opportunity

Although owning and managing a property is tricky, it can be a great way to invest your money. Unlike many other investments, you’re able to directly influence and control your returns—and there is immense value in that. If you invest in the right property, in the right area, at the right time, and manage it correctly…you could see some truly massive returns. But it takes a certain type of person to be able to handle all of the stress and complications that can arise.

All of these pitfalls are why property management companies (like us) exist. If you’re interested in owning an investment property but the idea of managing it scares you—or if we just scared you with this post, in which case, it was for your own good—a property management company can help.

In many cases, hiring a property management company can pay for itself and then some. The job of a property management company is ultimately to make sure your investment brings a solid return—and they do this by cutting costs, maximizing the value of your property, and managing your finances. If you’re interested in buying an investment property or having someone help manage your current investment, get in touch with the Mergo team. We’d be happy to look into your situation to see how we can help.

Why hiring a local Brookline Property Manager matters

As a property owner, you have enough on your plate without having to worry about the day-to-day management of your rental property. But what are your options? You could hire a national property management company, but they may not be familiar with the ins and outs of the local market. Or you could try to manage the property yourself, but unless you have experience in the industry, you’re likely to end up feeling overwhelmed – and your tenants will suffer as a result.

The best solution is to hire a local Brookline property management company like MerGo Property Management. We have the knowledge and experience to take care of all the details of managing your rental property, so you can relax and enjoy the financial benefits of being a landlord without any of the headaches.

Here are just a few of the ways we can streamline the process of being a landlord for you:

The Convenience of a Local Property Manager: We’ll take care of everything from finding qualified tenants and collecting rent to handling maintenance issues and dealing with late payments. Basically, if there’s anything that needs to be done, we’ll take care of it – freeing up your time to focus on other things. MerGo Property management currently manages about 50 doors in the Town of Brookline, this gives us a great incite into rental market rates, market cycle, and what kind of upgrades provide the best ROI in a Brookline rental property. You can see some of our Cost-Effective property upgrade recommendations here.

The Knowledge of a Local Property Manager: We know the local market inside and out, so we can help you price your rental property competitively and make sure it’s leased to qualified tenants.

The Support of a Local Property Manager: We’re here to support you every step of the way, whether you’re just getting started as a landlord or you’ve been in the business for years. We’ll answer your questions, offer advice when needed, and be there for you when problems arise.

If you’re ready to stop worrying about the day-to-day management of your rental property, contact us today. We’ll be happy to provide you with a free consultation and customized proposal outlining our services. Contact us today for a free in-person consolation to review your needs and how to optimize your Brookline rental property.

To sell or not to sell? Should you rent your condo instead of selling it?

Should you sell your Brookline condo or rent it out and keep it as an income-producing asset? 

You’ve finally made the decision. It’s time to sell your condo in Brookline. But as you start to look into the process and figure out what it’ll take, you realize that there are other options available to you. You could rent out your condo instead of selling it. And there are a lot of advantages to doing so. So, should you rent out your condo instead of selling it?

There are pros and cons to renting vs selling, but ultimately, the decision comes down to what’s best for your individual situation. MerGo Property Management works with Condo owners all over the Boston metro area, many of them own single condos, and are not professional landlords. They look to MerGo to take care of the process of renting out and managing their property – making their condo a passive income-producing asset.

Let’s take a closer look at both options to help you make the best decision.

The Pros of Renting Your Condo: There are a few reasons why renting out your condo might be a better option than selling it, including:

1. You’ll have a more stable and predictable income stream and continue to build equity while also making a return on the money you have invested.

2. You can write off many things when you are renting your property to a tenant, so there are some significant tax benefits to owning a rental property also.

3. You can still use your condo when you want or need to. If you ever needed to move back to your condo, you could do that. Always nice to have that flexibility.

4. You may be able to get a higher rent than what you would make from the sale of your condo. No telling what the future holds but the Boston Metro area is considered to be a very stable market compared to other national metropolitan areas. This means that even if we go into a recession, real estate values are likely to stay high and should continue to increase in the future.

5. If you have a lower interest rate, it might be better to keep that debt. During inflationary times with rising interest rates, there are many benefits to keeping investments with low annual debt. 

The Cons of Renting Your Condo: Of course, there are also some drawbacks to renting out your Brookline condo that you should consider before making a decision, such as:

1. You’ll be responsible for repairing and maintaining the property.

2. You could end up with problem tenants who don’t take care of your property or pay their rent on time. But hiring MerGo Property Management would ensure you would not need to deal with this =)

3. You may not be able to get the same price for rent as you would if you sold your condo outright. But in the long run, you will likely be able to sell the property for more 10-20 years down the line.

Ultimately, the decision of whether to sell or rent comes down to what makes the most financial sense for you in the long run. If you need to generate income right away, then selling is probably your best bet. But if you’re looking for a more stable stream of income, then renting could be the way to go. Working with MerGo Property Management on the management of your Brookline or Boston Metro area condo will be a great way to increase your income stream and build wealth. Let us handle the leg work so you can have a passive income-producing asset!

If you want to get in contact with someone from our team about how we can help you with the entire process of renting out your condo give us a call! 

Why Hiring a Property Manager for your Brookline Rental Property is a Smart Move as a Landlord

Why Hire a Property Manager for your Brookline MA Rental Property?

As a Brookline landlord, you have enough on your plate without having to worry about the day-to-day operations of your rental property. That’s where a property manager comes in. A property manager’s job is to take care of the hassle-inducing tasks that often come with owning and renting out a property, so you can sit back and enjoy the fruits of your investment.

By taking on the headache-inducing tasks landlords often don’t have time for, property managers make owning Brookline rental property a passive endeavor. From increased rent prices to lower vacancy rates, working with a professional property management company has a host of benefits. For starters, property managers are experts at marketing and can often help you get top dollar for your rental unit. They also have experience dealing with difficult tenants and can handle any issues that may arise quickly and efficiently. And because they’re dealing with these problems on a daily basis, they often have established relationships with vendors who can provide quality services and sometimes cost less than you would pay as a landlord.

A property manager can help you keep vacancy rates low by making sure your units are always in top condition and by actively marketing your rentals to potential tenants. They can also help you, screen tenants, thoroughly to ensure you’re renting to responsible, long-term occupants who will take good care of your property. At MerGo Property Management we have an in-house leasing agent who knows the rental market very well. Choosing to work with a professional property management company is one of the smartest decisions Brookline landlords can make. With their expertise and experience, they can take care of all the day-to-day tasks associated with owning rental property and help you maximize your return on investment.

If you’re a Brookline landlord and are looking for a property management company to partner with, we would love to chat with you about how we can help you reach your goals. Contact us today to learn more about how we help landlords turn their rental properties into passive investments.

Our Process: How We Find Great Tenant & Fill Vacancies

As an investment property owner, finding great tenants and filling vacancies is one of your top priorities. A vacant property will cause a huge dent in your investment while an unqualified or unsuitable tenant can cause damage, headache, and financial loss far into the future.

This stuff can truly make or break your investment, and that’s why you need to take it seriously. We’ve seen what can happen when property owners take the laissez-faire approach—they trust their gut, assume everything will work out, and go with the first person they feel comfortable with.

In this day and age, that just doesn’t cut it. That’s why we take our tenant vetting process extremely seriously and we work hard to ensure there are zero vacancies in the properties we manage.

At Mergo, we use a four-step process to ensure that all of our properties are consistently filled with great tenants. There are a lot of intricacies involved in this process, but here’s the high-level.

Step 1: Marketing

The first step in finding tenants for any property is getting the word out. There are many ways to do this—but in order to cast the widest net and get the highest number of qualified applicants, you need to be focusing primarily on online sources.

That’s why we list our properties on all major real estate and rental sites. That includes MLS (“Multiple Listing Service”—a network for real estate brokers), Zillow, Craigslist, Hotpads, and many more.

One common mistake we see new property owners make is listing on one site only. They assume that there are enough people on one site to fill their vacancy—and while that might be true, the problem is that you’re not actually seeing the full breadth of applicants that are available to you. That means you could potentially be missing out on the perfect tenant, and in some cases, the property may go vacant for longer than expected as you try to find more applicants on that particular website.

By focusing on multiple sites, we’re able to quickly gather huge numbers of interested parties to ensure we not only find a tenant quickly, but find the perfect tenant quickly. We aggregate all of the applicants across all of the websites so we can quickly sort through them and move on to the next step.

Step 2: Showing

We employ a full-time rental agent, Gretchen Devine, who has years of experience doing rentals and has facilitated over 300 apartment rentals in the Boston area. It is important to use a rental property agent who knows the property and works closely with owners and property managers because they are the first point of contact for a prospective tenant.

Gretchen schedules showings, open houses, and finds applicants who are ready to move on to the next step—vetting.

Step 3: Vetting

Once we find an interested tenant, we move them right into our vetting process. That means we have them fill out an application and submit income verification, a photo ID, and past landlord references. We then check their background and credit within our own system and contact their references with a specific set of questions to gauge their response.

Once that’s all done, we summarize our findings into one simple package and send it over to the property owner. We do all the legwork and send only the best applicants to our owners so they can choose who they’d like to accept.

Step 4: Renewal

In order to keep properties filled and turnovers smooth, it’s important to reach out to tenants well before their lease is up to determine if they will be moving or staying. You also need to make sure your turnovers are happening on the dates that people are looking.

We aim to start all of our lease cycles on June 1st or September 1st, as those are the two predominant rental cycles in the Greater Boston Metro Area. But in the case that we take over a new property with a different lease cycle, we always make sure to switch it to June or September within the first year. We do this when we reach out with our lease renewal notice.

We send our lease renewal notices in February, which ask tenants if they want to stay in their current home or leave. At this time, we also inform them of any rent increases that may occur if they do stay, and give them 30 days to respond to the letter so that we get all responses back quickly. It’s important to get apartments on the market as soon as possible—some neighborhoods rent as far as nine months in advance! Mission Hill, for example, rents most of its apartments in January for a move-in date of September that year. 

If they don’t want to stay, we put it on the market immediately. Another common mistake we see people make is that they wait a few months to put it on the market because they don’t want to do it too far in advance. But then they end up having to scramble at the last minute or the property goes vacant because things took longer than expected and deals fell through. 

We work to fill all of our properties one to six months before they actually turn over, because we don’t want to be scrambling at the last minute or, at the worst, dealing with a vacancy for any period of time.

This 4-step process ensures that all of our owners are generating consistent, stable revenue by avoiding vacancies and bad tenants. You’re more than welcome to implement this method on your own. Or, if you’d like to see how we can put it into practice for you, just get in touch for your free proposal.