As surprising as it may sound, COVID has been a part of our lives for a full year! During Q1 2021, our founder, Elizabeth Reynolds, hosted a series of webinars helping rental owners learn about protecting their assets both in the short and long term.

During these presentations, we explored…

• Real estate market updates and how to manage the effects of COVID-19 on the real estate market
• Tenants’ rights post COVID-19
• Landlords’ options regarding rent collection, possession and evictions
• And which property management options will serve you best now and long term

Whether you were able to join us for these webinars or not, we invite you to send us your questions. Our staff is here to help!

To download the presentation slides, click here.

The post The COVID Impact on the Rental Market –Is it time for Professional Property Management appeared first on Reynolds Realty Advisors.

You might have first heard of ADUs a few years ago when laws passed in January 2017 allowing ADUs on residential lots. Most of these ADUs converted garages into livable units or “Granny Units.” However, in January 2020, this law was amended allowing property owners of multi-family complexes to realize the same benefits!

Under these new amendments, you can add 2 new ADU units to any multi-family property. Additionally, you can add 25% more units, all with no additional parking given your property is located within a half a mile of a local bus stop.

Expansion examples:

• Duplex: Add up to 2 units + 25% (convert the garage to a unit), becoming a 5-unit complex
• 4-plex: Add up to add 2 units + 25% (1 unit), becoming a 7-unit complex
• 20 unit: Add up to add 2 units +25% (5 units), becoming a 27-unit complex
• 100 unit: Add up to add 2 units + 25% (25 units), becoming a 127-unit complex

As you can see, ADUS can greatly expand your property’s capacity and revenue potential!

When does and ADU make financial sense?

To determine the financial viability of adding ADUS, use the 1% rule. (If the rental income that can be generated equals 1% of the build out costs, then this additional make sound financial sense.) Plus, keep in mind that the ADU will add an additional value to the existing property and your investment should realize a 12% ROI. See below for an example value increase per ADU:

• Build Costs:  $300,000.00
• Rent Revenue:  3,000.00 a month (1 % of the build costs)
• Gross ROI:  12%
• Additional Value:  415,000.00

From empty space…

To new, rentable units!

Let’s make it happen!

In order to add your new ADUs, construction must be up to code each step of the way— design, plans, permitting and build out— which is a complex process. The good news is Reynolds Realty Advisors can get you through the process quickly, so you can start generating your additional revenue! We are here to manage all of the steps for you. From finding the right contractor, to overseeing the permitting process and construction, we will make sure your ADUs are the best possible revenue generator for you and your property. And once the units are built, take advantage of our full-service property management to ensure the unit is pre-leased and rents collected timely.

Whether you are a long time client or this is your first time hearing of us, we are happy to talk to you about if an ADU is right for your property! Call us at (866) 613-7772 to learn more.

Be sure to follow us on Facebook, Twitter and LinkedIn!

The post Make More Money in Less Time with Your Current Real Estate Assets! appeared first on Reynolds Realty Advisors.

Tune in for this FREE event: Property Management Tips During the COVID-19 Crisis Thursday, November 5th at 10am.

In this event, you will discover:

• What Steps are Property Management companies taking during Covid19 for their Clients, Tenant and Property Managers?
• What steps are Property Owners taking during Covid19
• Are Owners asking for mortgage and/or tax relief? And are they receiving it?

Click here to register!

The post Property Management Tips During the COVID-19 Crisis appeared first on Reynolds Realty Advisors.

Communication is KEY

While here at RRA, we are fortunate to already have a work from home procedure and setup in place, many teams are going fully remote for the first time. Our best piece of advice for you on working as a remote team is to communicate. Schedule regular check in calls, keep a group task list, create a shared calendar, whatever you need to make sure that your team is all on the same page. And don’t shy away from some social communication as well. If your team is used to all working in the office together, schedule a lunchtime zoom call so everyone can eat their lunch and catch up or schedule some 1:1 coffee chats between supervisors and their departments.

Use Your Time Wisely

In an uncertain world, we must take comfort and find strength in things that we can control. More than likely your schedule has drastically changed. If you find that you have a lighter load than usual, put that time to use! Think over the past few months and all the items you wanted to do “if only you had the time.” Well, whether you want it or not, the time is here, so you might as well take advantage of it. Even if you don’t start any “big” projects, spend the time getting organized, clearing out old files, or updating your website. You might even find some ways to get ahead. Many of us have required and recommended annual trainings. Get a jumpstart on those! Whatever you choose to tackle, be sure to give yourself deadlines or the time may slip away from you.

Support Each Other

While the saying “a little compassion goes a long way” has always been true, it is now something we each must take to heart. Each and every one of us is dealing with an uncertain time right now. Offer your clients, your tenants, and your community whatever support you can. If you have valuable advice or resources, now is the time to share it!

And on that note, our team is here for our YOU 100%. If there is a question we can answer for you or a resource we can provide, please do not hesitate to contact us– client or not.

The post We Will Weather This Storm…Together! appeared first on Reynolds Realty Advisors.

Southern California — and the nation as a whole — is experiencing the biggest apartment construction boom in a quarter century.  In the last 34 months alone, new apartments have been springing up from San Clemente to Sylmar, from Murrieta to Marina del Rey.  More than 37,000 new apartments have been built in these regions since the start of 2015, according to data from commercial real estate tracker CoStar show.  Currently, more than 36,000 more are under construction.

The majority of the 2.5M multi-family apartment units are under rent control: with 65% under statewide rent control, 25.1% under local rent control ordinance, and only the balance of 9.9% not under any type of rent control.  Rental rate growth throughout the United States remained strong and constant from 2010 forward, after the recovery from the fall out in 2009.  The average rent increase ranged from 2% to 4.1% nationwide between 2010 through 2019.

With absorption rates high and price indexes remaining very strong, we can expect to see cap rates remaining low throughout Southern California in 2020 and 2021.  Projections indicate we will realize a correction in the real estate marketing within the next couple of years and will continue to see a strong influx of investors within the United States and internationally.

The post The State of the Economy and Its Impact on Multi-family Housing appeared first on Reynolds Realty Advisors.

State of the Market for Office:  Currently there is approximately 250K sqft of office space under construction, down from the all-time high of 2.7M in 2017.  Vacancy rates remain steady at approximately 9.7%, while delivery and absorption remain constant at approximately 8.5%.  The Irvine Spectrum in Orange County has consistently brought online new product year over year since inception, realizing over 3M sqft of office space since 2011.   Tustin, Fountain Valley and Newport beach fall second to the Spectrum individually and cumulatively and have delivered over 3.2M sqft of office space since 2011.  Rental growth for office space nationally averages 1.5% in 2019, down from the high of 8.7% in 2015, with the lowest rental absorption of -13.1% in 2009.

State of the Market for Industrial:  Since 2017, 50K sqft of industrial real estate has been demolished in order to create space for new real estate product within these in fill lots throughout Orange County.  Thus, we have seen a very low delivery of new industrial product coming online.  Vacancy rates remain low, and the vacancies are generally associated with outdated industrial properties.  Demand vs. supply is very strong for the industrial product in the market, which has been maintained.

State of the Market for Retail:  There is approximately 400K sqft of retail space under construction in 2019 within Orange County, down from 1.4M in 2016.  Given the slow-down of product coming online, the net absorption rate is steady just behind the delivery of new product; with vacancy rates remaining at approximately 4% given mostly within the older product.  The malls and entertainment centers are thriving as customers continue to enjoy the experience of shopping, entertainment and gathering.  The strip center tends to be struggling more than malls.  Repurposing brick and mortar is the new trend, as we are seeing online companies such as Amazon leveraging places such as Kohls for returns, bringing shoppers into the stores who in turn realize a discount to shop at that location.  Staples is offering conference room rental spaces, Citibanks are opening coffee shop style banking centers and Starbucks continues to be the location of choice for students to gather and study or socialize and for business meetings across all industries.  Other retailers are offering trying new offerings such as yoga classes and live entertainment.  Re-inventing the retail experience is the trend today.

Investment by Product:  Office space has dominated the market in terms of sales volume in Orange County since 2006, reaching a high in 2015 at $3.5B dollars’ worth of sales.  Currently office space sales transactions are at $2.9B dollars.  Industrial sales volume fell just behind office space realizing $2.4B dollars in sales in 2019, followed by Multi-family at $.9B and retail at $.6B dollars in sales transactions.  Much of these sales transactions are a factor of the product availability within Orange County, driving demand and absorption rates respectively.  Multi-family dominates all product types in terms of price index, reaching 220 in 2019, with Industrial falling just behind Multi-family with a price index of 180 in 2019.  Retail and office space are tied with a price index of 142 in 2019.

Cap Rates by Product Type:  Cap rates remain very strong across all product types within Orange County: with office space realizing an average cap rate of 5.8%, retail cap rates overall are at 5.2%,  industrial cap rates are running out at 4.9% and Multi-family cap rates remain very strong averaging 4.1%. Overall commercial products continue to be a strong investment and are thriving in this market.

The post The State of Our Economy: A Decade in Review appeared first on Reynolds Realty Advisors.

The post Property Management End Of Year Checklist appeared first on Reynolds Realty Advisors.

As stated in the article “How Rent Control Laws Hurt Tenants,” by Steven Greenhut, California is about to get a real world lesson in how rent control laws can’t solve a housing crisis alone, |  In this article, Steven articulates several key points regarding this new legislation.  We will likely see a trend in that landlords will no longer maintain the properties to the high standards they did in the past and we will see an increase in deferred maintenance.  Additionally, landlords and builders will exit the market and turn apartments into condos, which will create an even greater shortage of rentable units.  For those that continue to rent to tenants, they will no longer have the luxury of increasing rents to their highest at the right time, but instead will need to increase rents to their maximum yearly, creating more friction between landlords and tenants.

The significant downside is for landlords who have kept their rents under market to retain great tenants, as they it will be more challenging for them to catch up to the market through typical rent increases.  Now, more than ever, is the right time to secure a property management company who will ensure you and your assets remain complaint during these ever changing times.

There is a new group of investors who are buying motels and hotels and turning them into low cost apartment housing.  Additionally, some savvy investors are buying mobile home parks and modular homes for the same purpose, as they realize there is a large pool of government funding to pay the rents to these landlords in support of their tenants who qualify for these state funded programs.  Yes, our tax dollars will go to these great causes until the funds run out.  At which time, these landlords will need to determine what they will do with these properties.

There are many additional ways we can work to help our communities dealing with the rise of homelessness and lack of mental illness support. We need to fund programs dedicated to supporting those in need and help them to transition into a long-term solution and improve their overall situation.   Additionally, employers need to look for new ways of thinking of teams and offices, for example allowing staff to telecommute, so that they can live in affordable housing areas and still be employed by the firms of their choice.

During this information age and with the rise of AI and robotics changing virtually every industry, there are endless possibilities to improve our current situation regarding these key issues.  We need to focus on “Moon-Shot Goals” and fund them, which will give rise to a better future for us all.

Contact us today for a free property management assessment and action plan for your properties!

www.ReynoldsRealtyAdvisors.com

Elizabeth@ReynoldsRealtyAdvisors.com

866-613-7772

The post Rent Control Is Back appeared first on Reynolds Realty Advisors.

1. Keep in Mind the Advantages of a Team Approach: By building a team to support you with your investments, you are able to enjoy the passive income from your portfolio. There are two primary ways to approach team building (1) hiring a property management company and (2) self-managing, in which you manage and hire for all key functions directly.
2. Finding a Good Property Management Company: Your ideal property management company will have experience with the type of properties you own and familiarity with the area(s) in which your properties reside. The property management firm of choice will provide you with a comprehensive team and the oversight of the same including; Real Estate Broker, Real Estate Agents, Office Staff, Regional Property Managers, Onsite Property Managers, Maintenance Management, Contract Managers, HR and payroll management, Controller, Accounts Receivables and Account Payables, CPA/Tax Advisors and IT support for their team.  Additionally, the ideal property management company will have proven systems and processes in place to ensure property optimization and maximizing NOI while ensuring compliance in all areas.
3. Who should be on your Team for self-managing owners? In addition to all of the above applicable functions, owners of real estate portfolios need to have the below team members:
   • Attorney: Contract management, acquisition, and entity structuring support and helping to avoid litigation.
   • Leasing/Marketing Agents: Ensuring the properties remain leased and occupied at all times.
   • Banker/Lenders: Bank account structure, financing and re-financing options and lending support.
   • Escrow/Title Agent: Ensuring clear title and providing critical information upfront regarding the real estate property and transaction. Offering support throughout the real estate transaction and title changes thereafter.
   • Association Memberships: Continued Education to ensure compliance management in all areas including Federal, State, local laws, property policies, ADA, Fair housing as well as employment law compliance.
   • Key Vendor Partners: Maintenance with specialties in all areas in order to maintain the properties.
4. Structuring your Team Members: Team Members can be full-time and/or part time employees and they can be paid on an hourly or salary basis. Team members can also be consultants and paid only for their times, as needed.

Questions/Answers:  Please email us directly at Elizabeth@ReynoldsRealtyAdvisors.com with your questions and we will get back to you promptly.  We are also working on our next Q/A article, where we would like to feature your questions and our responses.

The post Building your Dream Property Management Team appeared first on Reynolds Realty Advisors.

Keep in mind…

• “Good” is a state of execution that meets one’s customers’ expectations at a given point in time.
• “Great” is the execution of good property management services measured over time
• “Premier” Property Management is excellence in execution, sustained over a long period of time

Question 1:  Is owning Real Estate a good idea?

Answer:  Owning real estate is always a good idea over the long run.  There are so many benefits to owning real estate such as; cash flow, equity growth, leverage, tax benefits, appreciation, pride in ownership, and the ability to will these assets onto the next generation.  Building wealth in real estate can be done, but it is not always easy.  Successful real estate investors become the experts in the territory in which they invest and the type of products they hold within their portfolio.  Further, successful real estate investors know every aspect of property management, whether they manage the properties themselves or hire the right firm to manage it, on their behalf.

Question 2:  What is the benefit of hiring a property management firm vs self-managing?

Answer:  Hiring the right property management firm is key if you want to enjoy your real estate investment, realize passive income, travel and not deal with the plumbing issues in the middle of the night.  As Robert Kiosoki details in his “Rich Dad’s Cashflow Quadrant” book, one can be an Employee, Sole Proprietor, Business Owner or an Investor.  Purchasing your real estate portfolio, which allows you to quit your JOB, is an outstanding step in the right direction.  This will move you into the Business Owner quadrant.  However, property management of your portfolio is a 7/24 job, which does not allow for vacations, family time, days off or sick time.  This will ultimately take its toll on you as the Business Owner/Operator.  The investors we meet are highly energetic, adventurers by nature, love the art of sourcing and closing on a good deal and take great pride of ownership.  By partnering with Reynolds Realty Advisors, our clients are able to focus on what they do best, growing their portfolio, securing new deals and enjoying the benefits of their passive income.   Reynolds Realty Advisors focuses on all the operational aspects of the portfolio for our clients, ensuring we maximize our clients’ NOI and exceed their expectations through employee training/retention, compliance management, strategic marketing, property common area management, maintenance management, tenant management, accounting/cost management, repositioning/ renovation and owner reporting.

Question 3:  How do I find the right property management firm?

Answer 3:  There are several factors to consider when looking for the right property management firm such as:

• Will they help you to source your next property?
• Will they help you to evaluate the deal you’re considering to purchase?
• Can they help determine the capital improvements, costs, and repositioning opportunity of this property?
• Do you have a connection with the management team of the firm? Are they personable?
• Do they have experience managing the type of properties that are in your portfolio?
• Do they have proven best practices in place, ensuring compliance in every aspect of the business?
• Do they have a proven track record for increasing clients’ NOI?
• Do they leverage best in class accounting systems and owner reporting methodology?
• Do they provide “value-add” to your portfolios?

Question 4:  I would like to have more time, but not sure I am ready to let go of my portfolio to be managed by a third-party management company.  How can you work with me?

Answer: Many owners who have been self-managing their portfolio, but would like to turn it over to third party management, have a difficult time letting go.  Premier Property Management services is all about providing “Excellence in Customer Service,” customizing our model to best fit our clients’ needs.  Trust is the foundation to every relationship, to include that between an owner and his/her property management team.  To build trust, we must work together to find the balance that works for our clients.  Some clients like to take time up front to complete a lengthy due diligence process about our firm and then turn over their portfolio, all at one time.  Whereas others, decide quickly that we are their firm of choice, but transition the properties over to us gradually.  We have other clients who like to walk the properties with us in order to receive verbal updates, whereas other prefer to have reports distributed monthly or bi-monthly.  The key to moving forward with the right property management company is to find the company that will work with you.

Question 5:  Cost management is very important to me, how can I stay involved in this area of property management, while having a third party management firm manage my portfolio

Answer 5: Transparency is key and our clients receive just that.  With owner access to the portfolio operating bank accounts, accounting system, budget development and alignment, cost reporting monthly and quarterly, our owners are completely apprised of the income and expenses associated with their portfolios at all times.  We realize that maintenance and repair costs are a big part of what makes the property cash-flow or not.  As such, we pay close attention to that category, tracking spend to budget weekly, ensuring we are within or under budget every month.  Capital improvements, remodeling and renovations is one of our areas of expertise, understanding the highest and best use of the property and where to spend the capital improvement dollars in order to realize big returns is what sets us apart from our competitors.

Call us today for a free Property Management Assessment at (866) 613-7772 #1, or visit us on our website at www.ReynoldsRealtyAdvisors.com.

We look forward to helping you to achieve your personal and financial goals through real estate!

The post Frequently Asked Questions appeared first on Reynolds Realty Advisors.