If there's one thing that's music to a landlord's ears it's the news that the market is trending toward rent increases. According to a Marcus and Millichap survey quoted in the Austin Business Journal, rents on 1-4 unit properties are inching up this quarter by 4.2% with another 5% predicted for next quarter. Add this on top of the overall 2010 gain of 5% calculated by the Texas Apartment Association and this is a very, very good time to be real estate investors.

Essentially three factors are contributing to this upward trend, starting with improved unemployment figures and, in general, a better economic outlook, yesterday's plunge on the stock market notwithstanding. It's very tempting and very easy to watch a day like that and to listen to…

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After discussing the need to be proactive landlords lastweek, now I'd like to turn to the topic of qualifying tenants. First, let'stalk about credit scores. This is a topic that's a little more complicatednowadays, and requires greater understanding on our part as landlords.

More previous homeowners are coming into the rentalmarketplace than ever before. These are working folks emerging fromforeclosures and short sales due to the recession. A lot of them have banged upcredit. As long as they have income in place, I don't give as much weight tothe credit score because there are just too many people in this position rightnow.

As long as I know their income is 3 times the amount of therent, I'm willing to overlook a low credit score, but I do factor in…

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Over the next couple of posts, I'd like to consider some aspects of proactive management as well as look at the topic of qualifying tenants. These are basic landlord skills, but we can all get lax and not pay enough attention to what we're doing. When we fall into that trap, we pay in other ways, like unwanted turnovers.

Currently the Austin area has a rental vacancy rate of right at 4%. There's a lot of transition going on, particularly in the downtown university areas. Students are leaving from the spring term or staying on for summer. But, even if you're not renting to a student, this is a good time to highlight a couple of things either you or your management should be doing.

About 90 days out from the expiration of the lease, contact your…

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I ran across this article today. It speaks to what we've been discussing over the past several months. Rental rates are increasing because it's difficult for developers, as well as buyers to take out loans. By the way, Right now Austin has about a 4% vacancy rate.

Click Here to Read the Article

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In talking about green improvements, the subject of rehabbing a property in general came up. The question was basically, "What really adds value and attracts buyers and what's just a waste of time and money?"

Well, first, let's be honest. When it comes time to sell a property, what you've put into it is not going to come back to you as a 1 to 1 ratio. In other words, $20,000 in improvements does not mean $20,000 more at closing.

The ratio goes up and down with the market. In 2007, you could expect to pick up about 70 cents for every dollar you spent on improvements. In 2008, that was down to 67.3 cents. Location is also a factor. If you're out in San Francisco and stick a deck on a property, which is the improvement of choice for that locale, you're…

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The more I've poked around in the question of "green" real estate, the more I realize it's the "in" thing, but the field is far from fully realized. The "green" label is all too often applied indiscriminately and without proof that the property you're buying actually is, in any way, more environmentally friendly than the one across the street.

There are roughly 900 MLS systems in the United States. Fewer than 40 of those have fields where an agent can list a property's green features. Most just use the description and comments field. (Austin is, thankfully, one of the cities with a "green" MLS.) By the same token, appraisers wrestle with putting a value on something like solar panels on the roof because the cost of installation for such items is high…

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Real estate investors are benefiting from the the aging of the Baby Boomer generation just like private homeowners. We're seeing a lot of older properties in gorgeous, established neighborhoods coming up for sale. The Boomers are hitting 65 and looking to downsize. Basically, their thinking is, "Let someone else mow the lawn and tend those beautiful old shade trees."

Now, remember those intriguing figures I shared a couple of weeks ago. Green properties cost 30-60 percent less to operate and appraise for 10-15 percent more. When you can offer a green home, you're appealing to a growing tenant base looking for a long-term commitment. And these folks can easily turn into buyers if that's your ultimate goal for the property.

So, with these factors in…

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Okay folks, in week two of our look at going green, I can tell you one thing. The wording on this stuff can be dense and you need to read carefully. I'm just going to talk about two items off the Database of State Incentives for Renewables & Efficiency (dsireusa.org) because that's all either of us can handle. Both basically involve electricity, which accounts for a huge part of the expense of running a home -- about 70 percent of the cost, in fact, for heating and cooling. You may ask yourself why this matters to you, the investor because you're not the one paying for the utilities. Simple --Long Term Tenant Base.

First, I want to pitch in the idea that adding a little solar can have some long-term benefits, while also potentially adding a selling…

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For the next two or three posts, I'm going to be exploring the advantages to investors of going green. It's a topic of personal interest to me, and frankly one I'm learning about as well. During the week, I made some notes, but when I sat down to write, I realized this was more than a one-post deal.

We all know that we live in a city that is highly environmentally conscious. In fact, some people are drawn to Austin for that very reason. If that's the case, and we can honestly say we've made green modifications and choices with a property, that immediately becomes a selling point.

And, even if the options available to you don't add up to huge savings, green choices on refurbs and maintenance over multiple properties will add up, just like anything…

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This week I'd like to share a video that's a little longer than others I've asked you to watch. It'll take about 6 minutes of your time, and I'm just going to lift the description from YouTube to introduce it to you:

"Texas Exes Austin Professionals' panelists answer questions about local business resources and challenges, the Austin business scene and its relationship to the 'weird' local culture. These UT alumni were panel speakers at the 'Hooked on Austin Business' event that was held at the Etter-Harbin Alumni Center on March 9, 2011. Panelists interviewed in this video include: Colin Pope, Editor, Austin Business Journal; Eve Richter, Emerging Technologies Coordinator for the City of Austin's Economic Growth & Redevelopment Department; John…

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