by Lilly Miller | Feb 21, 2020 | CRESTICO
Is Subleasing Worth It?
As a landlord, there is much to manage, and much to think about. Property must be maintained, taxes must be handled, tenants must be evicted, and tenants must be acquired. Many landlords are strategic: they’ll allow one of their tenants to live in the property rent-free provided they help manage the premises. This isn’t feasible if you’re a landlord of a smaller property; it’s something more common to larger rental arrangements. However, the value such a tenant can bring is actually quite considerable. Rent in many parts of the country is around $800 a month—barring places like Los Angeles, where a shack in a basement is well over a thousand dollars for a single renter.
In a thirty-one day month, you’re looking at $25.81 a day. For $25.81 a day, someone who pays their rent by working for you can get a lot done. If they just spent two hours a day changing light bulbs, weeding, taking out trash, or cleaning minor messes, you’re saving money as a landlord. $12.91 an hour isn’t a rate most maintenance people will take; especially if you’re only paying them $800 a month. However, someone who lives for free on the premises provided they do two hours of chores five days a week will be more than happy to do so. You might even get more work out of them, depending. It’s a win-win for everyone. Similarly, as regards subleasing, you can find a win-win—but there are pros and cons. This writing will explore them.
Pros Of Subleasing
If you approach subleasing right, you can be more sure you’ll get rent on time from tenants. Consider the scenario where rent is around $800 a month. At this website, https://www.umovefree.com/City/frisco-apartments-tx/, you can find rental units that start at only $796 a month. Now imagine that’s divided two or three times between people in one unit.
You’re looking at between $265.33 and $398 a month for a $796 single, depending on if the unit is sublet two or three times. That’s pretty darn affordable. At the $265 rate, it’s just a little under $9 a day. At the $398 rate, it’s a little under $13 a day per person. That’s cheaper than lunch. It’s quite affordable. You’ve just got to approve those in a sublet scenario.
Something else that can be done is a slight rent hike. Say your unit was generally $800 a month for a single tenant. Pop that up to $1,000 if there are two living there, and you make an extra $2,400 a year, while the tenant subletting the property gets an even better deal.
Cons Of Subleasing
If you don’t vet those your tenants are dividing up their unit with, there could be some real trouble. Sometimes a tenant starts subletting their unit because they themselves are low on resources. Now you’ve got two people who are broke on your premises, compounding wear and tear while making late payments.
There can also be some legal considerations. What if the person seeking a sublet opportunity is a fugitive from another state? You’ve got to have an apparatus in place which will allow you to vet whoever is on your premises. If you don’t, and that individual is found out, there could be a legal case to be made that you aided and abetted a fugitive.
Certainly this wasn’t your intention or expectation, but the right lawyer can do a number on an honest man. When you’ve got disorganized subletting solutions, you increase such risks substantially—by a factor of two, if you allow subletting across your premises.
Even good tenants who open up their units to those who can be trusted will still increase normal wear-and-tear. Also, sometimes pets show up when you’re not intending them to in such situations. That’s also quite bad for your building’s longevity.
Making The Right Choice
To sublet, or not to sublet? It’s quite a question! The truth is this: provided you put an apparatus in place which vets those who are paying your tenant rent, you should be okay. Just assure you’re not letting any fugitives in, and that those renting from one of your renters aren’t destroying the premises.
If you play your cards right, such options can allow you to make more money from a single unit, and assure that payment maintains regularity over the long-run. If you don’t, you’ll see more wear and tear, as well as the possibility of legal issues. At the end of the day, whether or not these things are a deal-breaker is your call.
by Lilly Miller | Feb 7, 2020 | CRESTICO
Technological, social, and economic challenges of the future will change the way people live, work, and shop. These changes can significantly impact today’s climate, not just in residential, but in the commercial real estate sector as well and its portion of the value chain. The ultimate question is who will profit and who will lose money in the future world of commercial Real Estate.
What can we expect?
The present evolution of technologies towards digitization and automation will cause massive changes within the industry. The job profiles that exist today will change, along with the clients’ demands on how the job is executed. There will be an increase of redundant low-skilled, blue-collar workers while, white-collar jobs will be more driven by data, performed remotely, which will impact the need for office spaces, as well as functional office design and furnishings. These developments promise to reshape the commercial real estate environment.
The future is mobile
With autonomous cars just around the corner, we can expect major changes to the ways cities are built and developed. Property managers will have to evaluate how they use space. The decreased need for parking spaces both on and off the street will free up large areas for development. In some cities, landlords are converting parking space into commercial real estate, taking advantage of the premium location and street-level access. The new space requirements will include re-configured parking solutions for driverless cars and warehouses for automated loading machines.
Tenant health and wellness
As global environmental concerns are gaining momentum, people are more concerned about the impact of commercial spaces on their health and wellness. A global 2016 survey by Deloitte that targeted the Millennial population showed that young professionals consider employee well-being as one of the most important qualities of a workplace. To meet these demands, companies are considering how to improve the health and well-being of their commercial tenants and residents. The overall prediction is that commercial properties that don’t meet the needs of modern tenants won’t see modern tenants. The survey analysis recommends that real estate companies should include tenants in decision-making, so they can better understand design elements that cater to health and wellness.
Rise of smart energy products
With the UN predictions that the world population will reach 9.7 billion in 2050, over 66% will live and work in cities. As a consequence, commercial places will have to become increasingly urbanized with unprecedented integration of smart technologies, drones, autonomous vehicles, and automated services. The modern urban architecture will rely heavily on smart energy products like industrial lighting solutions shown here, as well as on data and technology to make life more comfortable. As a result, the cost of both commercial and residential real estate is expected to rise in those districts.
3D printing
We won’t have to wait long before builders are able to print entire floors with immense time savings. In China and Dubai, there are already low-rise commercial properties being developed with 3D printing, and the builders are reporting construction time reduced by 70% and cost by 80%. With its huge implications for construction, 3D printing is both a threat to traditional warehousing, as less space will be required, but also an opportunity for retailers to respond on-demand.
Event-driven shopping
The rapid increase of online shopping will further reduce demand for retail real estate assets, with more demand for just-in-time logistics. Amazon is already experimenting with drone delivery service, claiming it’s much safer and faster than going through couriers or postal service. This way, logistics centers could be located at the periphery, freeing more space in the city center. Upper-end high street miles will still exist, primarily through the leisure PR function, but smaller retail businesses in decentralized regions will suffer the heaviest blow. To meet the demands of new customers and build interest, shopping malls will need to resort to more event-driven concepts that emphasize on experience rather than shopping.
Fading relevance of real estate brokers
As individual market players in the real estate arena, real estate brokers will become increasingly redundant due to market transparency policies and automated rental negotiations between owners and lessees. Real estate transactions will be based on technologies like blockchain, which eliminates the need for the middle-man. On the other hand, the government won’t miss an opportunity to benefit from new developments through new tax models, such as a tax for automation. Part of this income will be much needed for mitigating social problems due to increased unemployment, which is a result of automated processes. Although the future banks will certainly take advantage of the high degree of debt financing for real estate projects, crowdfunding platforms will take their share as strong competitors to traditional banking.
The word ‘smart’ has changed slightly in meaning over the last decade, as new technologies granted us even more features that help us manage our lives. The increasing automation of running the business will bring profound changes in the commercial real estate sector, that go far beyond smart buildings and shared workspaces.
by Lilly Miller | Jan 6, 2020 | CRESTICO
Every year in the USA, there are millions of existing homes that are bought and sold. These homes come in all shapes and sizes, as well as in various conditions. While some people want a move-in ready home, others might want a fixer upper.
When many people buy a fixer upper home, they are doing it so they can quickly Fix and Flip the home. Fixing and flipping a home is buying it for a cheap price, fixing it up quickly and relatively affordably, and then selling it for a profit.
However, fixing and flipping isn’t the only use for a fixer upper. The costs can add up, a lot of work is involved and the time it can take to sell the home can be plentiful. With that in mind, this article is going to look at a few other ways to put your fixer upper to good use.
As an Airbnb
When people used to visit or stay in a new city, they would almost always stay in a hotel. However, in recent years, that has begun to change. A big reason for this is Airbnb. Airbnb allows anyone to rent out their home by night, similar to how a hotel will rent out a room. This often gives customers more bang for their buck, and allows homeowners to make money without doing a thing.
Sure, you will have to keep the place clean, stock it with items and perform a bit of customer service, but that is a small price to pay for what you can make. You will need to fix up your fixer upper to a point where it is livable, but renting it out nightly through Airbnb is significantly less work than completely renovating it and selling it.
As a Vacation Rental
While this will depend largely on where you live, you could also rent your home out as a vacation rental. For example, millions of people travel to California every single year, and they need a place to stay. If your fixer upper home has a good location, it could be perfect as a vacation rental.
You could rent it out weekly or monthly to interested parties, and potentially make thousands of dollars. You will need to update it and ensure it functions well and looks nice, but think of this as an investment than a cost. Sure, selling a house from ISoldMyHouse.com can be a good idea and can net you a lot of money, but be sure to consider putting the home up as a vacation rental as well. This could allow you to make a good amount of money, without actually having to lose the asset.
As a Standard Rental Property
Another option instead of fixing up and selling your fixer upper is to fix it out and then rent it out. Being a landlord is indeed some work, but can be incredibly fruitful financially. Depending on the size, location and look of the home, it can be rented out to families, couples, university students or anyone.
Oftentimes, you will essentially be able to get your mortgage paid for if you rent out the home. In some cases, you may even be able to charge more in rent than your mortgage if you include utilities or internet. While you will essentially be breaking even for a little, once the mortgage is paid off, the rent you collect will be nothing but pure profit.
In conclusion, there are many different things you can use a fixer upper for, in addition to simply fixing and flipping it.
