Duplex Chick

How To Make Your Duplex A Dream Getaway- And Get Paid For It 05.22.13

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Do you ever hear about something so often in such a short period of time that before long, you’re pretty sure the universe is trying to tell you something?

That’s the case for me, as a number of clients have recently shared stories of renting their investment properties to non-traditional tenants.

What’s so unusual about their tenants?

They typically don’t stay very long.

While it may be difficult to imagine anybody ever thinking of your duplex as a vacation getaway like a cabin in the Smokies, thanks to web sites like Flipkey.com, Homeaway.com and vrbo.com, it’s now possible. And investors are receiving rents for their furnished properties roughly twice the market average for a traditional tenant.

These tenants range from people looking for a weekend getaway to those who are here for several months on a work assignment.

In exchange for an annual advertising fee (usually starting around $300), these websites allow you to feature a dozen or more photos of your property, describe its amenities, the amount of nightly, weekly or monthly rent, as well as offer a calendar of availability.

To reserve the property, the prospective tenant contacts the owner directly, who may accept payment via credit cards or Paypal. Fees may not only include rent, but a security deposit and cleaning charge has well.

Owners having success with this new way of maximizing cash flow tell me a number of things are critical to ensure success. A property must be:

• Clean
• Freshly painted
• Well staged with quality furnishings and linens.
• Well photographed. Just like listing a duplex for sale, photos must jump out at online viewers, who are making their decision to stay at the property almost entirely on what they see on the Internet.
• Well reviewed. While properties new to this program may not yet have reviews, pleasant stays make for better reviews, which ultimately makes the property more appealing to future visitors.

While this appears to be a great way of maximizing return on your investment, it’s important to note owning extended stay rentals does have some down sides. For example, if you’re in a seasonal climate where it snows, bookings may be sparse over the cold winter months. Also, due to the more transient nature of the tenants, you will be faced with cleaning, as well as washing sheets and towels after every guest departs.

Finally, while this may, on the surface, look more like a hotel than a traditional rental property, many cities (including Minneapolis) nonetheless require the property owner to have a valid rental license.

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If Every Minneapolis Duplex Seller Took The Summer Off… 05.21.13

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If Minneapolis and St Paul residents decided to take the summer off from selling duplexes and houses, by the time school started, Realtors would have nothing left to sell.

That’s right, overall inventory is down 36 percent in the month of April, leaving us with just a 3.2 month supply of inventory.

With so little supply, it is unquestionably a seller’s market.

In fact, 21 Minneapolis and St Paul duplex sellers received and accepted offers the week ending May 11. Of these, a whopping 76 percent were traditional sellers who will pocket money from the sale of their property. With an average final list price of $193,885, many of them should see healthy checks at closing.

Last year during the same week, there were 30 duplex sellers who accepted purchase agreements on their investment properties. Of these, 53.3 percent had equity. As always, when banks have a higher market share, prices tend to be less. This was true last May, with an average sold price for those listings of $167.063.

The good news is new listing inventory was up over last year; albeit ever so slightly. There were 34 new listings for the week. Of these, 76 percent were brought to the market by traditional sellers. There were 33 new duplex sellers during the same week in 2012. Just 66.7 percent of whom were owners with equity in their property.

Single family homes saw new listings increase 25.1 percent, pending sales up 16.2 percent, and overall inventory down 27.5 percent.

While it’s tempting to take the summer off, it looks like it will pay for those who chose to stay and sell.

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Do Duplex Owners Need Granite? 05.13.13

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One of the most common impulses of any first time duplex investors is the desire to over improve their property.

What do I mean? After all, don’t most tenants want to live in a great place, and aren’t they willing to pay more for it?

To an extent, yes.

But would you pay $100 a month more to live someplace simply because it has granite counter tops?

Depends, doesn’t it?

Perhaps if your duplex is in a highly affluent neighborhood where people expect amenities like granite, you might.

For most duplex owners, however, this isn’t the case.

The most important question for any duplex owner eyeing improvements to ask herself is, “How much more rent will this generate?”

For example, if you believe adding a dishwasher will generate $25 more a month in income, it might be worth putting one in.

However, if you can’t objectively predict the return, it might be an improvement for your own home, rather than a rental unit.

Fresh paint, clean carpet and/or floors are givens.

But granite’s a luxury few landlords can afford.

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