5 Updates Landlords Shouldn’t Make

Marble countertops, shiny tiled floors, and a brand-new patio: while they might be pretty, upgrades like these won’t help your bottom line. If you plan to invest and maintain a profitable rental property, you’ll need to strike a balance between updating the space and minding your budget.  By creating an appealing setting, you can make more of a profit by increasing the rent – however, if you stray from updates to full-scale renovation, you might end up dealing with a property that costs more than it earns. Here are a few renovations that investors shouldn’t make on a rental property.

1. Adding a Swimming Pool

A pool may seem like an ideal addition to the backyard, but it won’t necessarily increase the value of the home. The feature can also take away space in the backyard for pets or children to play in on the property and make it seem unattractive to families who lack the time or resources to maintain it.

2. Room Addition

According to loans.usnews.com, room additions don’t always pay off due to the high cost of the construction. Projects with a lower price tag – such as appliance updates and repainting – tend to have a better ROI for landlords.

3. DIY Projects

From painting the walls to installing new sinks, DIY projects are cost-effective at a price; while they may seem cheap at the outset, they often look they were performed by someone who had a lack of experience and ultimately turn away would-be tenants. It’s necessary to leave the work to professionals to ensure that your money is an investment that pays off and attracts more tenants in the coming years.

4. High-Maintenance Landscapes

According to Time Magazine, creating a beautiful garden benefits the aesthetics of a home – but it doesn’t justify increasing the rent that you charge. It can also require a significant amount of money for landscaping services to upkeep the property or the tenants may not want to spend their weekends pulling weeds and watering different areas of the yard. Stick to landscaping that is easy to maintain to ensure that you don’t waste your money if you’re renting out the house.

5. Upgrading Everything

Many landlords make the mistake of upgrading everything and assuming that the home needs to have all new features or materials to attract good tenants. Overspending on upgrades can make the house appear too chic and regal for the local area, making it necessary to keep the upgrades to a minimum. Stick to adding new fixtures on the cabinets or new hardwood floors in the living room to make upgrades that are minimal, yet aesthetically effective.

Jason Cohen is a real estate investor and broker working in Pittsburgh, PA who has built his career around turning dilapidated properties into profitable rentals. As a veteran operative in the field, Jason is well-equipped to discuss the do’s and don’ts of property rehabilitation – and here, he points out a few renovations that investors shouldn’t make when they begin to prepare a home for future tenants. 

Originally posted on JasonCohenPittsburgh.net

How to Find a Great Real Estate Agent

Jason Cohen is the founder and president of Jason Cohen Pittsburgh, an informal real estate group which provides constructive advice to professionals considering property investments. Given his near-constant interpersonal work with other professionals in the field, Jason is well-equipped to offer guidance on the process of finding a competent real estate agent. Here, Cohen offers his thoughts.

What separates a great real estate agent from an ineffective one? In a social-media landscape where every realtor’s promotions are glossy and attractive, it can be hard for regular buyers and

sellers to discern whether the agents they research are actually the capable, honest professionals they appear to be online. However, there are some steps that real estate hopefuls can take to ensure a successful professional relationship before officially signing on with an agent. The following tips are brought to you by Jason Cohen, the president and founder of the informal real estate advising group, Jason Cohen Pittsburgh – consider observing them prior to committing to a real estate professional!

Check Qualifications
Every buyer and seller needs to make sure that the agent they hire is equipped to manage their needs. It’s especially important to find a professional affiliated with the National Association of Realtors – you can determine this by checking to see if the agent notes their title with a capital “R.” Those in the NAR pledge to follow a code of ethics, and will be held accountable for any professional wrongdoing in the field. This code protects clients from potentially troublesome action on the part of the agent. Clients should also check to make sure that the agent specializes in handling cases like theirs. For instance, an individual looking to buy a house should search for a realtor with an ABR certification: These professionals are Accredited Buyer’s Representatives, and have completed additional courses for representing buyers in transactions.

Review Agent Records

Clients should also direct their research towards answering a few basic questions: How long has the agent been in business? Are their current listings similar to yours? Does the agent have any marks on their record? While the first two can be answered through an online search or direct conversation with the agent, the last question should be directed towards the applicable state regulatory body, which will have a record of any concerns or complaints.

Reach Out to Previous Clients

Don’t be afraid to ask a potential agent for a list of former clients! Reaching out to previous home buyers and/or sellers will help you better understand the agent’s skill set, capabilities, and professionalism. Make sure to ask for details; how long was the client’s home on the market? How much did it sell for? Was the agent friendly and helpful, or were they professionally challenging? All of these questions will help you come to a decision when choosing a professional to represent your real estate interests.

For more helpful advice and intriguing articles, please visit Jason Cohen Pittsburgh’s blog at JasonCohenPittsburgh.org.

Handy Tips for First-Time Landlords

Jason Cohen has been an active investor within the Pittsburgh real estate community for nearly a decade. While he began his industry efforts by purchasing and renovating cheap residential buildings in high-potential neighborhoods, he has since expanded his investments to large-scale commercial and residential properties in vibrant neighborhoods. Here, Jason Cohen provides a few tips to new landlords.  

You’ve finally done it. You’ve purchased the building, touched up the paint, laid the carpet, and put your first investment property up for rent. But as the inquiries come in, you realize that the easy part is over – now, you have to deal effectively with your tenants. Jason Cohen Pittsburgh is an advising group operating in the city; as such, its veteran members have heard their fair share of first-time rental horror stories. It’s common for a first-time investor to be so caught up in the buy and the renovation process that they find themselves at a loss when they need to communicate professionally with the people living in their units. Unfortunately for landlords, the work doesn’t end when the contractors leave. Below, Jason Cohen, head of Jason Cohen Pittsburgh lists a few tips for aspiring landlords to take note of before opening their doors to tenants.

Be Assertive

Everyone has an off month now and again. Sometimes, a tenant can’t make a payment on the day it comes due – and in some cases, that’s okay. Landlords should be empathetic and understanding if a tenant faces tragedy or finds himself in a temporary financial crunch, so long as the tenant communicates the situation. If, however, the tenant chooses to go dark and refuse to pay the agreed-upon rental sum, landlords need to act assertively. You need the rent they owe you to keep up the building and make a profit. Being overly understanding to an elusive or underpaying tenant will only result in your missing needed funds. Be assertive! Don’t be afraid of pursuing a delinquent tenant for the money they owe you.

Check Credit and References

Never rent to someone who doesn’t have a job or has a credit score of under 600. Those without the means to pay rent or a history of regular repayment will inevitably leave you waiting for payments that may never come. Screen your potential tenants closely to ensure that they will be responsible, reliable occupants who will care for your unit and pay on time.

Make Smart Renovations

Don’t install marble countertops if your unit is in a low-income neighborhood. In all likelihood, those that inquire about your unit will be looking to pay a rent in line with those offered in nearby homes; if you try to cover a fancy renovation by asking a significantly higher rent, your prospective tenants will walk. Be smart, and don’t risk renovations that offer little return!

Be Organized

Organization is key to any successful business venture. After all, how will you know you made a profit if you have no documentation of the fact? Ensure your success by keeping organized and detailed records!

For more tips, advice, and real estate content, please visit Jason’s site at JasonCohenPittsburgh.org.

The Value of Research: A Pittsburgh Case Study

Jason Cohen was only two years out of college when he bought his first property in Pittsburgh. It wasn't a luxurious place by any means, but it was what he could afford with the means left to him after student loans. He sunk what resources he had into performing the most necessary repairs and managed to breathe new life into the struggling building. Its value soared; newly determined after his success, Cohen set his eyes on the next project and invested his profits. After ten years of hard work, Jason owns commercial and residential properties throughout Pittsburgh. He began with limited means, but Jason now has the resources and experience to run multi-million dollar community projects.

His secret?  Research.

According to Cohen, who facilitates the real estate investment forum Jason Cohen Pittsburgh in his free time, research is the factor that makes or breaks a real estate venture. An enormous amount of pre-planning goes into rehabilitating a property for sale, and the success of the venture hinges on having reasonable profit and cost projections.

More and more investors are flocking to house flipping to make a profit; according to statistics provided by Trulia, a full 6% of homes bought in 2016 had been renovated for sale. However, the field does pose significant risks if investors have little experience. If you intend to break into the real estate industry as Jason Cohen did, please consider the following basic tips for real estate research.

Look into the expense of the house.

Houses cost money. Repairs cost money. As Mindy Jenson, community manager for Bigger Pockets commented for a U.S. News article: "Nobody is going to hand you a house for free, and you can’t go to Home Depot and [get] your supplies for free [...] If you are using credit cards and have no money, you can get into trouble quickly.” Assess whether the house will require expensive repairs, and compare your expense projections to your budget. Sometimes, it’s best to be patient and move on from a house with too many liabilities in search for one that poses less of a risk.

Research the neighborhood.

Find out how much you’ll need to pay to renovate the house for sale, then assess how much you’ll likely get for it based on neighborhood averages. Remember, you can’t tack on an extra $10,000 to the price simply because you owe that much to your lenders. Figure out if you can afford to buy and renovate the home, then act accordingly.

Research lenders.

Financing a house is notoriously expensive. Spend time going over your borrowing options, and choose one that suits your needs. Don’t move forward with the first place you visit; take the time to check out all of your lending options and proceed as seems best.

*Originally posted on JasonCohenPittsburgh.org

Do You Know How to Spot a Shady Contractor?

The first building Jason Cohen bought in Pittsburgh wasn't particularly luxurious - but to Jason, it had potential. He knew that he could refurbish and turn a profit on it if he sank funds into a remodel, but he had neither the time nor skills to complete the repairs it required by himself. Cohen needed a contractor he could trust to do the job well on-schedule, and within the tight budget that he could afford.

However, the hiring process wasn't as simple as finding and signing the cheapest contractor to come along; Jason knew that many homeowners in his position fall into contracting traps when they entrust the remodel of their property to underqualified or shady contractors. Luckily, Cohen found a competent and fair contractor to work with, and that initial project went well. With over a decade of experience under his belt, Cohen continues to hire contractors in

Pittsburgh and elsewhere to improve his properties - and watches for the same red flags that he steered clear of in his early years. Those warning signs are listed below.

Can’t provide proof of permits and insurance

Never work with a contractor who can’t show you their permits, licenses, and insurance papers. Each state has different regulations regarding the licenses contractors should have before beginning work on a project; make sure your applicants meet all of the proper requirements before you hire!

Asks to work without a contract.

If they don’t sign a contract, they don’t get the job. Never trust a contractor who offers to take on the remodel with only an informal verbal agreement; without the proper documentation, they can exit the job at any time and leave you with no money and a half-finished project. For advice on what to put in a contract, check out HomeLogic’s post on Contract Basics.

Offers to work at an unreasonably low rate.

Don’t trust a lowball offer, especially if the contractor asks to be paid upfront or in cash. Some shady operators will lead with a low initial cost, then demand more money from the homeowner later, citing a budgetary miscalculation. Don’t be fooled by contractor scams - go with someone who offers quality work at a reasonable price.

Lacks the proper equipment.

Avoid hacks! Make sure that your applicants have the proper equipment to complete the job at hand. A lack of necessary equipment indicates a lack of experience and skill, and hiring an under-qualified contractor will cost you in time and money. If you’re unsure of a contractor’s competency, reach out to their references! They might provide you with insight into the types of jobs that your applicant has worked before, and whether the contractor is right for your project.   

Acts standoffish or disrespectful

Your remodel is important to you, and any contractor should be aware of its value. Find someone that you can work well with; someone you trust to listen to what you need from the project. Odds are, you’ll be working with this person for weeks or months - so don’t go with someone who brushes away your concerns, skips meetings, or acts rudely!

*Originally posted on JasonCohenPittsburgh.com