Archive for the ‘Property Info’ Category

By Michael C. Zari

You may have read that the Palace Casino is undergoing some major renovations.  When I say major, I am not only talking about the $53 Million that is being spent on the new project and upgrades.  I am also talking about a new title that the casino will hold.  As of June 14th, 2011 the Palace will get the title Smoke Free Casino!

That is right! When the casino opens up again on the 14th of this month, the casino will be completely smoke free:  No smoking on the casino floor, in restaurants, and in all of Palace hotel rooms.  This is a breath of fresh air (sorry - I could not help myself) for a lot of would-be casino guests who have been turned off by the smoke-filled casino floors in the past.

The Palace said that a recent survey showed that an overwhelming 80% of visitors/guests to the casino were non-smokers and that the move to go smoke free will be very beneficial for all.  The General Manager for the casino said “this decision will allow us to maintain our fresh air quality, creating a healthier, cleaner and more enjoyable environment.”

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By Michael C. Zari

INTRODUCTION

One of the most often overlooked parts of real estate investing (especially when investing in the Gulf Opportunity Zone, a.k.a. GO Zone), is putting your new investment property into service.  In other words, get a tenant in there as soon as possible and start getting the benefits of the rental income.

In addition to the cash flow side of things, “putting the property in service” is an important part of getting your GO Zone benefits (up to 50% Bonus Depreciation on the property).  Hopefully, you have given the topic much thought before you purchased. 

MANAGEMENT OPTIONS

The good thing is that you have many options available to you from the GO Zone property rental side:

1.  You can manage the property completely yourself;
2.  You can get assistance leasing up the property and then manage yourself;
3.  You can have someone lease the property up and also manage the property for you; and
4.  Plus other options and combinations (including getting a rent-to-own or Lease Option tenant in your property).

There is another option that is available to you IF you can find the perfect opportunity. 

5.  Find the perfect situation where you not only have a desirable property, but can also get a lease back direct with the builder on your property.

We will go into some details on the last option in a bit, but let me first go over some basics first. 

BASICS OF RENTING YOUR GO ZONE PROPERTY

There are 2 separate parts of renting out your GO Zone property; leasing and property management.  While these are related to one another and can be performed by the same individual, knowing what is involved for each will help you make the decision on which path to proceed down. 

Property Leasing.
This step should be performed as soon as possible after closing on your property.  Some people/groups even get started on this right before closing (as long as they note such in all their ads and marketing).  This involves advertising and marketing your property to potential renters, showing the property as necessary, taking rental applications, performing your due diligence on the renter (anywhere from calling references to full background and credit checks). 

In addition, you have the task of getting the lease agreement in place, and getting a property condition report signed by both parties as to what the property condition was like before the tenant moves in.  This can save a lot of headaches down the road when (not if) the tenant does move out.

If done effectively and correctly the first time, you will enjoy rental income soon after closing.  Rent-up times (the time it takes to get a renter in place) greatly depends on the property, location, rental rates, and the effectiveness and experience of the person performing these tasks.

Property Management.
Ok, so now that you have a tenant in place and received that initial deposit and the first month’s rent, now the real work begins.

Management of your property involves collecting your monthly rent, making sure that your tenant is adhering to the terms of the lease, answering any questions from your tenant, getting funds to the property owner (if managed by someone other than the owner), fielding requests for repairs, arranging for repairs, evicting the tenant (if necessary), and arrange for the clean up of the property prior to getting a new tenant in place.

SUMMARY
As you can see, there is a lot involved with marketing your property for rent, getting a tenant into your property, and keeping that tenant as long as possible so that you can continue getting the desired cash flow for the property.

As mentioned above, there is another option to this process and that would be to get a property where the GO Zone Builder is offering a leaseback.

A WORD OF CAUTION:  The property has to make sense even before considering the leaseback offer.  In short, single family homes with a 12-month leaseback should be considered.  Personally, I would stay away from, as an example, a condo or multi-family (i.e. duplexes) with a multi-year leaseback.  Why?  Exit strategy for multi-family is hard (especially in the GO Zone) and condos without the leaseback (and any other short term rental property) are VERY hard to rent out given the competition in the GO Zone.

For more details on GO Zone leaseback opportunities,

visit: http://www.gozoneonline.com/leaseback.html

In the next part of this article, we will go over some additional options for leasing up your GO Zone Property.  This includes the range of possibilities from doing it all yourself, to getting help with different portions of the work, to turning it over to someone else.  Plus advantages and disadvantages of these options.  Until then……

 

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For late 2008 and early 2009, the GoZoneOnline.com team is working in two subdivisions in the Biloxi & Gulfport area.  Both are excellent locations with top quality homes getting built.

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One of the subsivisions is in a more urban setting in the northern part of Gulfport.  In the same subdivision, we have also seen a flurry of recent non-investor sales because of a new first time home buyer program being offered by the city of Gulfport.

The second location is about 3 miles north.  This subdivision is also very well done, all from the same builder, with almost all residential home owners at this point.   To some, this subdivision may feel a little more rural but in reality, it is just a few miles from the heart of the commercial growth in Gulfport.  In addition, we have had a recent flurry of activity with rentals in these type locations along with quality, brick homes.

If you want to be contacted about our properties, make sure you sign up above.

Because of overwhelming demand, our Ocean Springs property sold out quickly (in a matter of hours, actually).  For those of you not familiar with how we operate, we suggest you visit this description.

The good news is that we are continuing to work with this builder in other locations throughout the Biloxi and Gulfport area!  This way, we can accommodate many of your requests throughout 2009.

We do caution however that when a property or project does becomes available on GoZoneOnLine.com, it does not stay around for long.  So, if you see something you like for your GO Zone portfolio, you may want to jump on it.