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Fix and Flip Rentals: Pros and Cons of Investing in 'Fixer-Upper' Rental Properties

josh@adeapm.com (Josh Armerding) — Tue, 20 Sep 2022 17:28:44 GMT

In recent years, “fixer-upper” properties, properties purchased and renovated to increase their value, have only gained popularity. Thanks to shows like HGTV’s Fixer Upper and countless social media influencers, renovating homes has become a glamorous and potentially lucrative venture.

Fixer-uppers, unlike move-in ready homes, allow buyers to claim a property for a low sum and to increase the property’s value by restoring neglected parts of the house and adding new features to catch the eye of the prospective buyers and renters. Because they provide renovators with so much creative license, fixer-uppers offer a fun and unique way to diversify one’s income and to meet the ever-expanding demands of the housing market.

Fixer-uppers are particularly attractive to buyers looking to convert a property into a rental unit. The continuous stream of rental dues from tenants offers an enticing incentive to invest in a fixer-upper rental and some assurance that the landlord will eventually turn a profit. Yet, like any other investment or venture, fixer-uppers are not inherently easy to manage or without their drawbacks. Before spending on your fixer-upper, consider these pros and cons of investing in fixer-upper rental properties.

PRO: Lower initial purchase price for the property

Fixer-upper properties have the chief advantage of having lower sale prices than move-in ready homes. On average, fixer-uppers sell for 8% less than market value, presenting an attractive option if you are looking to purchase a property to convert into a rental unit. That being said, these properties need “fixing up” for a reason, whether it be that the home has a cracked foundation or that the kitchen needs a fresh coat of paint. Many people choose to invest in fixer-uppers in order to profit from the margin of cost between the purchase price and the final sale price. Because they are so much more affordable than properties that are in peak condition, fixer-uppers make it easy to increase a home’s value and to potentially make financial gains.

CON: Restorations can be costly

On the downside, renovating fixer-upper properties can be a costly venture, particularly if you hire outside contractors to complete the work. Furthermore, the price of renovation heavily depends on the size and the placement of the home that you are remodeling. The cost of remodeling a two-bedroom house surrounded by houses with low property values will differ drastically from a four-bedroom house in a wealthy neighborhood.

If the cost of purchasing and renovating a home outweighs the price of its final sale value, then the homeowner loses money. On the contrary, if a property owner leases out a fixer-upper, rather than selling it, the property continues to return money upon the initial investment, as opposed to the one-time transaction of a sale. In theory, therefore, fixer-upper landlords have more to gain than an owner selling their remodeled home. If done well, the rental fee has the potential to repay the cost of purchase and renovation, making it easier for the owner to eventually achieve a profit and a stable passive income.

PRO: Easy to customize

Fixer-uppers function as something of a blank slate for property buyers. With so many necessary renovations already under way, it is easy to customize a rental unit to suit the specific needs of the landlord and the tenant. Less expensive than building a unit from scratch, fixer-uppers provide owners with creative license and the opportunity to call the shots throughout each step of the renovation process.

CON: Time consuming

More often than not, fixer-uppers are time consuming projects. Property owners are almost always met with unforeseen repairs, or else must work around the schedules of their construction crews. As a result, renovations can drag on for months or even years, prolonging the landlords’ ability to turn a profit from their property and leading to a sense of dissatisfaction with their investment. Fixer-uppers can require a great deal of an owner's time and money. Ultimately, it is up to the owner to decide whether or not the investment is truly worthwhile.

PRO: Lower taxes…for a while

The worth of a home or property determines the rate of that property’s annual taxes. Therefore, when you purchase a fixer-upper property, your property taxes will reflect the low value of your unrenovated unit. While your taxes will reflect the property’s new value after remodeling is complete, the temporary low rate can equate to quite a sizable savings.

CON : Risks damages from renters

By renting out a finished fixer-upper, a property owner enters into all the risks that accompany typical rental property management. As with all rental properties, landlords with fixer-uppers expose their units to the constant cycle of damages and repairs that naturally follow renters living in the space. As the damages pile up, it can begin to feel like you spent your wealth of time, money and labor to no avail.

Things to Consider Before Purchasing Your Fixer-Upper

Before purchasing your fixer-upper rental property, weigh the costs of your investments in the property with your potential returns. While thoughtfully priced rental dues are sure to pay for a renovated property over time, there can be a great deal of headache for landlords before they start to see the fruits of their labor. Finding a personable and professional property management team to help you market your property, communicate with your tenants and manage maintenance is a sure way to alleviate the hassle.

If you decide to invest in a fixer-upper rental property, relieve some of the stress by turning to a property management team that you can trust. Turn to ADEA.

Dos and Don’ts of Renting to College Students

josh@adeapm.com (Josh Armerding) — Mon, 12 Sep 2022 17:58:30 GMT

For landlords with rental units near college campuses, students make up a significant portion of the potential tenants, a situation that offers its own unique pros and cons. With new students enrolling in college every semester, college students offer landlords a steady stream of renters. Likewise, a close proximity to a college campus allows landlords to set higher prices for rent due to the high demand for housing.

That being said, renting to college students also poses its own set of risks to landlords. As mostly first-time renters, many students lack experience responsibly caring for a property and frequently have no credit score. Furthermore, college students are more likely to have a less stable income than rental candidates that are not in school, as they must manage their job alongside the demands of their curriculum. This is not to mention that college students have a particularly high rate of turnover as renters.

If you feel that renting to college students is right for you after weighing its advantages and disadvantages, consider these dos and don’ts to ensure that you meet your needs and those of your potential college-aged tenants.

DO require a standard-to-rigorous screening process.
A screening process is essential for any landlord to assess risks and ensure quality tenants. While landlords hold the freedom to set different parameters, we recommend creating a list of non-negotiables and accepting tenants that adhere to your requirements. As a minimum, run a criminal background check on applicants and learn about your applicants’ credit history. Since few college students have experience building credit, it is not necessarily a red flag for them to lack a credit score. Instead, look for proof of stable employment and their ability to pay a deposit on the rental unit. You can also require a cosigner, which we will discuss in more depth below.

DON’T leave your renter with questions about the rental unit or the rental process.

Most college students will be first-time renters, and may even be new to living away from their parents or guardians. Accordingly, you can expect them to have plenty of questions about the rental process and what it means to rent and live on your specific property. Be prepared to answer these questions so that your tenants have clear parameters to live by and are more capable of meeting your expectations for their role as your renters. Don’t make assumptions about what your tenant will and will not know about renting. It is always better to provide them with too much information, rather than not enough.

DO ask for a cosigner.

Because college students typically lack prior rental experience, they frequently lack a credit score and experience caring for a rental property. By requiring a cosigner, you add an extra layer of legal protection for you and your property. If your tenant claims inability to make payments, then the responsibility falls onto the cosigner. Just be sure to conduct a thorough credit screening of your tenants’ cosigners!

DON’T hesitate to alert the cosigner if issues arise.

If you decide to rent to college students, don’t hesitate to alert their cosigners if they fail to abide by your expectations agreed upon in your rental agreement. Sometimes the extra pressure put upon the college student from the cosigner is all that a landlord needs to resolve a problem.

DO be honest about all aspects of your rental property.

When marketing your rental property, it might be enticing for you to make your unit sound or appear as friendly to college students as possible. Yet, it is imperative that you remain honest about your expectations for your tenants and about what their experience as renters might look like. For instance, if you are not comfortable with your tenants hosting parties, you must make this expectation clear from the beginning. Transparency is necessary to provide a positive rental experience for you and your tenants.

DO market your property on the internet and through social media.

The internet should be one of your greatest assets in marketing your rental unit to college students. Now, more than ever, technology plays a vital role appealing to tenants. When seeking housing, the internet is the first, and often only, avenue that college students will explore. If you want to market to college students, then you have to be prepared to advertise through channels that they visit and in a manner that they will find appealing, such as real estate sites or through your own social media page.

DON’T be afraid to seek the help of a property management company.

Managing a rental property can be tricky, no matter who you are marketing your property to. While it is certainly possible to market and manage your own unit, understand that seeking a property management company to assist you in your real estate venture is an investment that will eventually turn a profit.

At ADEA, we specialize in a variety of services to help remove your burden as a landlord and to effectively protect your property, whether you are renting to college students, families or anyone in-between. Let us be the help that you need.

A beginner's Guide to HOAs:

josh@adeapm.com (Josh Armerding) — Mon, 01 Aug 2022 19:17:07 GMT

HOA Meaning and How it Gives Back to Your Community

As you prepare to navigate the ins and outs of renting a new home or letting out your current property, you might find yourself overwhelmed by the countless logistics involved with the transition. Every additional fee or contract becomes a headache. Trying to work within a neighborhood’s established homeowners association (HOA) can prove to be a further stressor, particularly for new landlords or tenants.

Here at ADEA, we strive to make property management as hassle-free as possible for landlords and tenants alike, one of our many services being HOA management. But if you are new to working with an HOA, you might be asking yourself, “What is an HOA?” or “Why does my HOA need an external manager?”

We have put together a few frequently asked questions that will hopefully answer some of your own.

What is an HOA?

The acronym “HOA” stands for Homeowners Association and refers to an official group of homeowners and/or tenants in a given jurisdiction. The Association is composed of the people living or owning property in the area and is governed by an elected board of directors.

HOAs operate under the theory that the best people to govern a community are those living in it. Rather than being a restriction on an individual’s freedoms, HOAs are meant to enhance one’s living experience and to protect one’s investment in the property. The goal for any HOA is to ensure that the community works together in favor of the residents’ mutual interest and to help regulate matters such as maintenance and the upkeep of communal amenities, the ultimate goal being to increase property value.

While many HOAs choose to manage themselves, approximately 75% of homeowners associations employ a paid third-party management company, such as ADEA, to help oversee their affairs. Professional guidance from the right property management company helps an HOA to efficiently uphold its ordinances and to relieve stress from the association’s directors.

How do I join? Is there a fee involved?

When you agree to rent or purchase a property in an area with an established HOA, you likewise consent to becoming a member of that association and to paying the fees that accompany it.

Every HOA handles its fees differently. Typically, these small monthly or annual fees go towards the upkeep of shared amenities or to cover maintenance charges. Before agreeing to live in an area with an HOA, be sure to ask whether or not fees will increase in subsequent years and request a detailed list of specific items that the fees will cover.

While no two HOAs are the same, ADEA’s current rental properties include the HOA fee in their rental rates, so that tenants know upfront exactly how much they will be paying to the association. The responsibility to pay the fee, however, ultimately lies upon the owner of the property, not the tenant.

What are the benefits of an HOA?

HOAs offer a wide range of benefits. At its most basic level, well-managed HOAs provide any community with the organization that it needs to thrive. HOAs help tenants and homeowners to agree upon a common set of goals and rules for the property under their care. Commonly, HOAs concern themselves with the aesthetic of their community, as much as anything else. Specifically, an HOA might see that residents keep their lawns well-maintained or contract a company to oversee mowing and landscaping. In doing so, HOAs naturally increase, or at least maintain, the values of the property within their jurisdiction.

Less clearly, HOAs also encourage a sense of pride in one’s community and a feeling of camaraderie between fellow tenants and owners. More than settling simple disputes between neighbors, though HOAs can help do this, homeowners associations foster pride of ownership and draw their members closer together.

What should an HOA look for in a management company?

If looking to hire a third-party company to manage an HOA, associations should look for property management groups experienced with HOA management and with references to reflect the quality of their work. Management companies often step in to improve the communication between owners and tenants, as well as between association directors and members. By stepping in to act as intermediaries, management companies remove the pressure from directors to be on-call 24/7. Thus, the ideal management company will be flexible, dependable and have stellar communication skills.

What sets ADEA apart in its HOA management?

When it comes to HOA management, ADEA offers members the gift of experience and peace of mind. ADEA holds a dedicated team of HOA managers that make it their duty to serve the needs of each HOA’s community. We pride ourselves on timely and clear communication with members and homeowners and take our roles as intermediaries very seriously.

Moreover, our online portal for HOA Members makes it fast and easy to pay dues, submit maintenance requests, establish a clear line of communication with our managers and to gain access to all relevant HOA documents.

Whether you are part of an established HOA or looking to develop a new homeowners association, let us help you meet your needs. Contact us today to learn more!

Considering the Move to Missoula? Things to Know Before Making Missoula Your Home

josh@adeapm.com (Josh Armerding) — Fri, 01 Jul 2022 17:25:46 GMT

If you have considered property in Montana, you have probably heard about Missoula, the state’s second largest city and undoubtedly one of its key landing points. Unique from other cities, Missoula offers the charm of both urban and rural living. While a hub for local artisans and home to the University of Montana, Missoula is also a gateway to the mountains and the breathtaking Montana wilderness, two parts of the city’s identity that flow together seamlessly. Whether you are a native Montanan looking to relocate or an out-of-stater longing to fulfill your dream of living under the Big Sky, Missoula offers a little something for everyone. Here are five things to consider before taking the plunge and finding your dream home in Missoula.

1. There are Endless Opportunities for Recreation

Missoula offers a diverse range of recreational opportunities. In what other city can you enjoy shopping downtown and then take a short stroll to surf the river? (Yes, you heard me. Missoula offers surfing on the Clark Fork River.) The outdoor lifestyle runs in the city’s blood, meaning that Missoula holds no end of outdoor recreation. Visitors and residents alike enjoy spending time in the city’s various parks and green spaces, as well as accessing nearby rivers and hiking trails. You can even find hiking in the heart of the city by hitting the trail and trekking the winding path to the “M,” the great letter on the hillside that proudly declares the city. Interested in something a little more laid back? No worries. Simply spend an evening taking a ceramics course or sipping a locally crafted beer. You’ll find no shortage of ways to rest and relax in this city.

2. Missoula is a College Town

Home to the University of Montana’s main campus, the city appeals to countless college-age adults and young families. With its four affiliated campuses throughout the state, the university serves over 10,000 students, providing a wide range of majors and trade certifications. In Missoula, the institution draws students from all walks of life and creates career opportunities for its community. Missoula is also renowned for its top-ranked public education system, particularly for its high school district, which regularly ranks in the top five educational districts in Montana. This makes the area especially attractive for families with school-age children.

3. The City Welcomes Cyclists

Although Missoula does not provide completely stellar public transportation, the city’s countless bike routes make cycling a breeze. The city boasts of over 22 miles of off-street trails and 40 miles of on-street bike lanes. Missoula even has specialty bridges and underpasses that make it safer and more convenient for cyclists to navigate over the Clark Fork River and through some of the busiest sections of town. Apps like Citymapper and interactive virtual bike maps from the city of Missoula make it even less of a hassle to travel swiftly and safely from point A to point B. That being said, you might want to consider a vehicle with four-wheel drive to explore the natural beauty of some of the surrounding rural areas!

4. The Garden City is also Home to a Vibrant Arts Community

Although most outsiders know Missoula for its green spaces and proximity to Glacier National Park and Yellowstone, the city is also home to a whole host of artisans. From painters to stained glass makers, you can find art in nearly any medium in Missoula. Local artists express the unique blend of culture in Missoula, including artists from all walks of life and cultural backgrounds. The city celebrates this unique community of craftspeople through countless festivals, galleries, storefronts and the beloved First Friday events, when galleries and businesses open their doors to artists and the public for a free art walk. For a more permanent collection, check out the Missoula Art Museum, a contemporary art museum home to over 2,300 objects and the Contemporary American Indian Art Collection.

5. Housing can be scarce

Missoula is not the well-kept secret that it once was. As more and more people make the move to the city, the cost of housing increases while available housing decreases. But don’t let this slow you down! The population increase in Missoula only proves that this city is a diamond in the rough waiting to be explored. For those looking to make Missoula their home, renting or leasing is a highly accessible and rewarding option. Particularly for those new to the state, renting gives the opportunity to explore the area and ensure that Missoula is the perfect fit for you. It also proves to future sellers that you are committed to the area and its way of life, making you stand out among potential buyers.

At ADEA, we pride ourselves on making renting in Missoula as convenient as possible. Let us

help you come one step closer to your dream home.

Missoula Housing Market

Thu, 21 Apr 2022 19:55:59 GMT

With Regulations Curtailed, How Will Missoula Add New Housing?

Missoula’s long-standing housing shortage has become even more severe in recent years. New limits on the city’s ability to add new housing have threatened to worsen the crisis, but city and county officials may have a few cards left to play. What does that mean for Missoula’s housing market in the immediate future?

State Legislature Hampers Affordable-Housing Efforts

In early 2021, Montana placed significant restrictions on the ability of county and municipal governments to create zoning rules intended to promote the development of affordable housing. Among other ramifications of this move is the hampering of Missoula’s efforts to focus housing development in ways that helped solve local problems.

New housing permits were issued in Missoula at a record-setting clip in 2021—1,338 to be precise, up 140% from 2020. But the mere addition of housing stock to a market desperate for new units might not be enough to offset the heightened demand that has increasingly priced working families out of Missoula home ownership. Lot prices alone exceed $100,000 throughout Missoula, a strong indication that new homes and subdivisions will continue to sell at a premium for the foreseeable future.

Zoning Reform: A Partial Solution?

Some city and county officials hold out hope that updates to greater Missoula’s zoning code can help stabilize the housing market. In the 46 years since the last substantial zoning revision, East Missoula has become more urbanized, along with Bonner and parts of the Wye. Missoula County officials expect to release a draft proposal of new zoning regulations on May 5, and every indication is that the new draft will seek to open more land to residential development while also protecting the county’s natural resources.

New zoning rules may not be able to specify the addition of affordable housing to Missoula’s market, but they may be able to address the housing shortage in different ways. For instance, they can encourage the development of larger multifamily residential buildings including apartments and condominiums. Vacancy rates for these properties fell below 1% at the end of 2021, even as the University of Montana, a significant driver of rental demand, saw its latest freshman class grow by nearly 16%.

Finding the Right Place for Vacation Rentals

Short-term rentals have become extraordinarily popular in the Missoula area—more than 300 properties in greater Missoula are listed on Airbnb alone. While new regulations are unlikely to prevent homeowners from letting out their properties from time to time, officials may rein in the licensing of short-term rental properties that do not double as their owners’ permanent residences.

Housing demand in greater Missoula is likely to remain high for the foreseeable future, and the combined effects of state law and local initiatives are likely to favor the development of larger, taller multifamily residences over single-family homes in the years to come. For homeowners, this will likely translate to resiliently high property valuations for single-family units, even as the rental market for apartments and condominiums begins to cool down.

Six reasons to let your home.

Mon, 04 Apr 2022 22:54:29 GMT

Moving From Missoula? Here’s Why Leasing Your Home Might be Wiser Than Selling It.

Missoula is an amazing place to live, and some days it feels like the whole world has caught on. But careers and family can force us to move on. Traditionally, that means putting your house up for sale and looking for another one in your new town, but you might be better off retaining your current home and leasing it to another family. Here are six reasons why.

Avoid paying two mortgages

Even in a property market as healthy as Missoula’s, it can take a while to sell a house. In the meantime, you’ll be paying two mortgages in full, just when you’ve paid for a down payment and points on a new home.

The leasing market, though, is far more nimble. While you’re working out the details of your move, ADEA can list your home, research applicants, and find the right tenant. Sometimes being able to step away from a property cleanly is better than cashing out your equity in a windfall months down the line.

Help others while they help you build equity

Unless you own your home outright, the rents it generates probably won’t put thousands of dollars in your pocket each month. But they can help you build wealth steadily, month to month, by increasing your equity.

In the meantime, Missoula’s property market doesn’t look to be cooling down any time soon, so your home’s actual equity value stands a good chance of increasing far more quickly than your mortgage payments show. While you grow your investment, you’ll be helping another family find its place in an increasingly difficult housing market.

Missoula is the perfect rental market

If you’ve owned your home for a decade or more, you’ve watched its value soar. If you bought within the last five years, you’ve been right in the thick of it while Missoula’s average home value rose by more than 90% and counting. As demanding as those conditions are on buyers, they’re ideal for sellers and even better for owners of investment properties.

A tight housing market drives up prices, as we’ve seen, but it also allows property owners to be selective about who they’ll sign as tenants. In other circumstances, the threat of long-term vacancy might encourage you to bring in tenants with shaky work histories or credit scores. In Missoula, you won’t run that risk.

Be the landlord you want to be

A strong housing market means more than just being picky about your tenants. It gives you the freedom to run your business as you see fit. If you want to squeeze every dollar out of your investment property, Missoula is a fine place to do so. On the other hand, you might prefer to set your rent lower to attract a wider range of applicants. Some landlords mix a bit of altruism into their business strategies, preferring to keep rents a bit below the market’s maximum to sign younger couples, single parents, and other tenants who can use a bit of help. This can be a sound business practice, too: tenants who are grateful for saving $100 or so each month is likelier to renew their leases, and tend to take better care of the property while they live there.

Your ownership style has serious implications for how you use your monthly net proceeds. Setting your rents as high as possible will typically generate a small, steady income stream, and because your property begins to depreciate as soon as you place it into service, you won’t pay taxes on all of the money you take in. Setting your rents lower won’t put much money in your pocket, and you might even have to subsidize the cost of some repairs, but in a typical month you’ll be letting someone else cover your mortgage payments without paying a penny in federal taxes for the privilege.

Save mortgage interest

If you’ve ever thought about owning a rental property, converting your primary residence can be the most cost-efficient way to do so.

Mortgage rates are higher for rental properties purchased as such than they are for primary residences. You can expect to add at least 0.5% to the typical mortgage-lending rate in your area when you buy a house intending to lease it out. When you place your primary residence into service as a rental, your mortgage remains unchanged.

Half a percentage point might not seem like much now, but the value of a low-interest mortgage will only become more pronounced in the coming years. As interest rates begin to rise, existing mortgages will represent increasingly good deals. If you bought a new home or refinanced a mortgage in late 2020 or early 2021, you might already have seen mortgage rates rise more than half a percentage point since you locked in your terms.

We can help

Owning a rental property is a big step, and it involves some risk. That’s where we can help. ADEA Property Management has worked with Missoula landlords since 1983, and we’d love to share the benefits of our experience with you. Whether you’re looking for someone to manage your property while you’re away, or just starting to think about what it would take to own a rental property, we have answers to your questions. Give us a call today at (406) 728-2332 or write to us at rentals@adeapm.com.

Ready to Buy a Home in Montana? Here’s Why You Should Consider Renting First

josh@adeapm.com (Josh Armerding) — Tue, 01 Mar 2022 22:06:36 GMT

Considering a move to Montana? You’re in good company, and lots of it. While the state isn’t exactly crowded, a steady stream of newcomers has kept Montana’s real estate markets popular and competitive.

Any house-hunter knows that patience pays. In a hot housing market like Montana’s, patience isn’t just wise—it’s downright necessary. Still, even new arrivals who have done their homework and waited for the opportunity that seems absolutely perfect can find that life in Montana isn’t quite what they expected.

The truth is that you can only learn so much by studying a place remotely, or even from a few brief visits. That’s why many of the happiest, most satisfied home buyers in Montana don’t buy homes at all in their first year or two—they rent. Here are three good reasons why.

The conveniences aren’t all that convenient

Montana values its wide-open spaces. That’s one of the reasons we love it so much, and one of its biggest attractions for people planning to move here. But those spaces typically mean that most things are a bit farther away than you might be used to. You may live closer to mountains, woods, and streams than ever before, while living farther away from grocery stores, pharmacists, and gas stations.

Many newcomers are surprised by how seriously this affects their daily routines. What you used to accomplish in one trip might take three in Montana. Running a few errands on your way home from work might be a habit you’ll need to leave behind. You won’t be able to fully anticipate the changes you’ll need to make and the assumptions you’ll need to abandon until you’re here, finding new ways to take care of your day-to-day needs.

By the same token, you might find that one neighborhood or town suits your style far more completely than others. Again, you won’t know until you’re here, but just knowing that you’re close to one or two especially important conveniences can help ease your transition and make you feel truly at home in Montana.

That’s a difficult proposition when you’ve already locked yourself into a mortgage in a neighborhood that doesn’t quite fit the bill. Starting out as a renter gives you the time and flexibility to find your feet as a new Montanan.

Montana weather is its own beast

For a good stretch of the year, you’ll be doing all that extra traveling in very interesting weather. Montana’s a big state, and it supports a dizzying range of microclimates. One thing they share: they can be pretty challenging in the winter.

You might not ever have put snow chains on your tires, and you might not be able to pick an engine block heater out of a lineup. Those things are standard equipment in many parts of Montana. Even urban and suburban Montanans find it important to stock up on necessities before a winter storm, and to keep plenty of candles on hand, and fresh batteries for their flashlights.

None of this is meant to worry you—people have found ways to enjoy Montana winters for thousands of years now. But like the sheer distance among things you’ll encounter in Montana, the weather will affect your routine in ways that you’ll need to experience. A year or two spent dealing with the elements—and sharing stories with your neighbors—will give you a much better sense of how to make the most of our ever-changing weather.

You might find that you really enjoy the change of seasons, and that you’d prefer a more remote location. You might find yourself dealing with the elements a bit too far from town. Renting lets you refine your idea of how to make a happy peace with Montana’s weather, and to put yourself in the best possible place. A mortgage means that you tackle the weather on Mother Nature’s terms.

You need time and connections to negotiate a real estate market this hot

Newly arrived Montanans have been dealing with long trips and capricious weather since before there was a Montana. That won’t change any time soon. The real estate sector, though, is constantly evolving. And we’re in the midst of a doozy of a seller’s market.

Prospective homebuyers don’t hold many cards in Montana these days. Buyers from out of state are at an even greater disadvantage when it comes to identifying the best opportunities, making convincing offers, and closing deals on comfortable terms. Establishing yourself as a renter can give you an obvious edge or two and can help in ways you might not have considered.

From a distance, you’ll be able to scour MLS listings. You might even have struck up a relationship with a real estate agent in Montana. But actually, living in a place is your best early-alert system for new home-buying opportunities. You might even hear of properties that are about to hit the market, before any of your friends back home do. When you’re quicker to make offers, some sellers are quicker to say yes.

You might even enjoy an important strategic advantage while sellers weigh competing offers. Each seller is different, but your local presence in Montana—the fact that you’ve committed yourself to building a life here—might just make your offer stand out from ones made by out-of-staters. The right seller might even be inclined to leave a few dollars on the table if it means passing their home along to someone with local roots, even if those roots only started growing a year or two ago.

Montana is different. That’s why we love it. It’s also why you should consider getting your feet wet before buying a home here. Renting your first Montana home is a smart way to make your money and your time work in your favor.

How to Find A Property Manager You Can Trust

Tue, 01 Mar 2022 22:05:25 GMT

The right property manager can save you time, money, frustration, and worry. But how can you be sure that you’ve chosen the right one for you? At ADEA, we’re proud of how well we serve our clients, but we know that you’ll hear the same thing from any property manager you consider. We’d like you to choose us, but we’re even more serious about helping you find a property management company that fits your current needs and future goals.

Let’s look at four things that you can do to cut through the marketing and learn whether a given property manager is ready to deliver the reliability, service, and support you need.

Ask Around

If you know an owner or two of rental properties in your area, you might have spoken with them by now. If not, this is a good time to contact other owners to see who’s managing their properties and what they think of their experiences.

Even if you know a fellow owner or two, you can gain a much clearer understanding of the local property-management landscape by digging in an doing a little research of your own. Take some time to look for rental properties similar to yours, then check your County Assessor’s website to learn who owns them.

With just a few quick questions to people in your situation, you can go a long way toward weeding out property managers who might not work for you. If you need some help identifying rental properties, your city should have records of every property licensed as a rental.

Fees and Terms

Once you’ve shortened your list of potential property managers, sit down with each one of them for a quick informational interview. Some might try to sign you up right away, which is their right, but you shouldn’t be ready to commit at this stage. Instead, take notes on the fees charged by each PM company, the services they cover, and whether those terms are negotiable. Your notes should follow a consistent format to make comparisons easier once you’ve spoken with every property manager on your list.

Be sure to ask for a sample financial statement, just to be sure that it spells things out clearly and comprehensively. If you don’t have a tenant in place, ask how each property manager vets prospective leasers.

This is also a good time to ask a few worst-case questions. How does each property manager handle unpaid rents or unruly tenants? If tenants leave before their leases expire, how does the property manager respond? How are available properties listed, and what is the typical turnaround time from listing to signing?

History and Company Structure

In theory, anyone with a strong sense of responsibility and good people skills can learn what it takes to become a good property manager. In reality, you really do need someone with a bit of experience—or access to someone who does. More often than not, the difference shows up in the way your property manager handles your finances, not the property itself.

Even if you haven’t signed your first tenant, you know that owning a rental property isn’t a matter of just sitting back and watching the money roll in. You’ll have to dip into your reserves during lean months when repairs or late rent payments cut into your net proceeds, and you’ll make up for those months when things get back to normal. The same ups and downs affect your property manager.

Be sure that any property manager you consider has the financial reserves keep things rolling even when tenants fall on hard times (or just flake out), and the experience to insulate you a bit from those bumps in the road. That experience can be secondhand: a younger representative of an established property management company still has a lot of institutional resources to fall back on when things get rough. A highly experienced property manager striking out on their own and operating on a shoestring might be a bigger gamble.

Your Personal Goals

Finally, consider your own personal aims and ownership style. For some property owners, the perfect tenant is willing to pay above market value for a property that includes a lot of extra services like landscaping and snow removal. For others, the perfect tenant is a single parent who’s grateful to pay a bit below market value for a house they personally keep in good shape.

The tradeoffs go beyond monthly proceeds: you might make less each month from that single parent, but you’ll also increase your chances of having an excellent tenant for years and years. This is where your long-term strategy speaks directly to your relationship with your property manager. Don’t be afraid to discuss these matters with any PM company you interview.

In many ways, hiring a property manager is like signing a tenant. You wouldn’t hand the keys off to the first person who showed up at your doorstep with a pen in hand, and you shouldn’t rush into a binding agreement with a property manager, either. With a bit of legwork and some pointed questions, though, you can make sense of the options available to you. Good luck, and we hope to hear from you soon!

Missoula Montana Housing & Lifestyle

josh@adeapm.com (Josh Armerding) — Wed, 17 Nov 2021 23:21:09 GMT

Missoula: America’s Best Small City Lives Big

We know what makes Missoula special: we’ve been delivering expert property management services to companies, families, and individuals here for nearly 40 years. And we wouldn’t have it any other way. Missoula is home, and every time we return after a little trip, we’re reminded of how lucky we are.

In that spirit, we thought we’d take a step back and look at Missoula from a newcomer’s point of view. What attracts so many people to our little mountain town? And what convinces so many of them to stay?

Before you approach Missoula’s city limits, whether you’re driving or flying, you get a sense of what brings so many people to our neck of the woods. It’s…the woods. And the mountains and valleys. And the rivers and lakes. Missoula is a remarkable hub for nearly any outdoor activity you can name, from hiking and nature watching to whitewater kayaking and a host of double black diamond ski runs.

Missoula’s unique geography gives it a special place even among other cities with strong connections to the outdoors. Five mountain ranges converge here, and the Clark Fork River and its tributaries run through a series of valleys including the one that’s home to Missoula. The result is a huge variety of environments and activities, each one of them easy to reach from the city.

Missoula’s claim to fame may be its status as an outdoor paradise, but there’s plenty to enjoy indoors as well. The city is home to a vibrant arts scene, a constantly evolving music community, and world-class dining.

Some of this has to do with Missoula’s place on the map. In other states, a town of 75,000 might be a suburb. Here, it’s Montana’s second-largest city and a cultural hub. Montanans and out-of-staters alike come to Missoula to hone their talents and to share their visions with the world, and we all benefit.

Many of the artists, chefs, and other creative types who enrich our community initially came here as students. The state’s flagship university, the University of Montana, serves more than 10,000 students. That’s about the right size to complement the rest of town without completely dominating it the way some other universities do. The UM also serves the wider community with cultural events and a renowned teaching hospital.

Missoula’s commitment to education extends to a network of local two-year colleges and to its excellent public school system, which is regularly rated the state’s best.

For all it has grown in recent years and all the variety it supports, Missoula has maintained a remarkable sense of community. We know our neighbors here, and a big part of what makes Missoula special is the mutual support we give and receive from each other.

Like most small towns, we’re a community of doers and makers. When you visit a new restaurant, don’t be surprised to learn where each ingredient in your meal came from…and that they all came from pretty close by. Some of that has to do with our distance from other urban centers. Most of it, though, has to do with a soft-spoken civic pride that you can feel walking down any street in Missoula.

The same things that make Missoula so unique can also make it a bit spendy. While medical care, utilities, and transportation are a bit less expensive than in other parts of the US, the overall cost of living in Missoula is a bit higher. Groceries, for example, have to travel a bit farther to Montana than to most other parts of the country, which increases their cost. The same goes for household goods and other miscellaneous items.

Housing can be expensive, too. Missoula was already attracting attention from far beyond Montana’s borders when the COVID-19 pandemic struck. With more people working remotely than ever before, more are freer to move where they choose, and more of them are choosing Missoula. Geography and the cost of new construction have limited Missoula’s ability to meet a surge in demand with enough housing supply, and home values have climbed as a result.

Renting has emerged as a popular alternative to buying, either as a short-term strategy or as a long-term proposition. Leasing a home frees up the money renters would otherwise have set aside for a down payment and closing costs, and puts a new range of alternatives within reach. It makes sense from the homeowner’s point of view, too: leasing out a house helps owners grow their equity while covering monthly mortgage and maintenance costs.

Since 1983, we’ve served Missoula’s real estate market in good economic times and challenging ones. One thing we’ve learned is that opportunity still presents itself during rough times, and housing booms still call for expertise and caution. Whether you’re looking to rent a new place or to find the perfect renter for your home, we’d love to hear from you .

Hire A Property Manager Or DIY

josh@adeapm.com (Josh Armerding) — Tue, 28 Sep 2021 22:06:10 GMT

Hire A Property Manager Or DIY

When you buy an investment property, the decision to step in and act as the landlord yourself or hire a professional property manager to do the heavy lifting always comes up.

Much like anything else, there are pros and cons to both approaches. On the one hand, you’ll save money, but on the other, you’ll have a slew of new, time-consuming responsibilities.

Use this guide to help you decide if being a hands-on landlord is right for you or if hiring a property manager to take over landlord responsibilities is the better option.

What Does a Property Manager Do?

DIY management means that (you) the property owner is entirely responsible for everything. Renting, cleaning, maintenance, legal matters, the list goes on. Most property managers take on the typical roles of a landlord. If you don’t want your investments to take up hours of your time each month, it’s definitely something to consider.

Property managers can handle both residential and commercial properties, depending on your needs. Your manager will market your rental, find and screen potential tenants, collect rent, keep records of rent activity, resolve tenant complaints, coordinate maintenance & repairs, and handle legal issues. Legal help comes in handy when nonpayment and eviction situations arise. Additionally, most property managers will have local real estate market knowledge and maintenance crews on call for speedy, budget-friendly repairs.

Property managers handle the logistics of your rental for a property management fee, which is typically between 7% and 10% of the monthly rent. The cost of your manager’s fee could also depend on how much you expect your manager to do.

Do I Need a Property Manager?

It doesn’t matter if you have one or ten properties; managing rentals takes time. Whether or not a property manager will benefit you depends on how much time you’re willing to spend handling everything yourself. Additionally, if you’re going the DIY route, prepare to be up for the challenge of handling tenant complaints and requests.

Not sure if passing on the responsibility is right for you? Ask yourself the following questions.

Do I have an upcoming vacancy?
Is self-managing taking up too much of my time?
Are my tenants behind on rent?
Is being a landlord too stressful?

If you answered yes to any of the above, hiring a property manager can help save you stress, time, and energy.

When is The Time to Hire a Property Manager?

Now that you have a better idea of what a property manager does and if you need one, how do you know when’s the best time to hire a manager?

Perhaps you only have one rental, and being a DIY landlord isn’t taking up too much of your time. In that case, flying solo might be the best choice for you as long as the ‘landlording’ responsibilities are within your capabilities.

Here are a few scenarios where hiring a property manager can drastically change the way you think about your real estate investment.

Consider hiring a property management company if:

You have multiple properties to rent.
You don’t live within a comfortable driving distance from your rental.
You have another full-time job that requires your attention and concentration.
Hands-on management is not interesting to you.
Property management tasks are making you feel overwhelmed or anxious.
Your time is more valuable than the cost of hiring a property manager.

What Should I Look for in a Property Manager?

Trusting another person with your investment can be challenging. You don’t just want any old property manager. You want someone who is experienced, passionate, and dedicated to your project.

Also, even if you haven’t purchased a property yet, it’s not too early to start looking for a property management company.

Here are some steps and tips to help you find and hire the best property manager for your needs.

1. Look for a property manager with experience with your type of property.

2. Be sure the manager has local real estate knowledge.

3. They should be organized, flexible, and have stellar communication.

4. Ask for references. One of the best ways to learn more about a property manager is to hear from current or previous clients.

5. Find out if the property manager is licensed in your state?

Property Management in Missoula

ADEA Property Management Co. specializes in residential, commercial, industrial, and homeowner property management in the Missoula area. We help property owners in western Montana optimize real estate investments. Utilizing our industry-leading technology and extensive experience, we take care of your rental properties for a totally hands-off experience.

Contact us today to learn more about our property management services or get in touch with one of our team members. We look forward to hearing from you.

7 Rental Property Mistakes to Avoid

josh@adeapm.com (Josh Armerding) — Thu, 09 Sep 2021 17:39:36 GMT

7 Rental Property Mistakes to Avoid

Owning rental homes or residential properties is an excellent way to generate long-term profits. Collecting rent can be a steady income, but not preparing for unexpected situations or circumstances can lead to financial loss.

Whether you're a new or experienced rental property owner, you can learn from other's mistakes to maximize your income and minimize economic damage.

Here are the most common mistakes property owners make and how to avoid them.

Mistake #1: Miscalculating Repair and Maintenance Costs

Your property has to be maintained to keep tenants interested in renting it. Have you budgeted for ongoing maintenance costs like painting, sanitation, household repairs, and carpet cleaning? What about one-time repairs like structural damage or replacing appliances?

Without understanding the costs of labor and materials, property owners can find themselves struggling to keep up with maintenance requests or respond to critical repairs.

Mistake #2: Assuming the Property Will Always be Simple to Rent

Sometimes renting a property is more complicated than it seems. You don't want to risk potential foreclosure and financial ruin because you're struggling to find tenants. Even if you have low turnover rates, every rental property experiences some amount of vacancy time.

Mistake #3: Not Screening Tenants

While we would like to give everyone the benefit of the doubt, some tenants can leave you with vacancies, evictions, and significant damage. To avoid costly damages or lose out on months of rent, always do your due diligence to weed out any bad apples. If you're unsure how to screen tenants, professional management services can help.

Mistake #4: Neglecting Tenants

It's necessary to check in with tenants occasionally. In addition, if a tenant has an issue or a complaint, you want to address it right away. The happier the tenant is, the more chances they'll rent your property for longer.

Mistake #5: Violating House Codes

State laws require rentals to meet standard local housing codes to operate legally. Building and safety codes can be hard to navigate, but failing to keep your property up to par can result in lawsuits and pricey renovations.

To keep residents safe and stay out of the courtroom, work with a property management business that understands your local building ordinances.

Mistake #6: Delaying an Eviction

No one wants to have to evict a tenant, but sometimes it's unavoidable. Begin the eviction proceedings as soon as legally possible.

Mistake #7: Not Enforcing Lease Terms

You have to establish and adhere to lease terms from penalty charges for late rent to rules regarding furry friends in the property.

If you're one to let renters "slide," a property manager will take a calm, professional approach when working with residents and enforcing the lease.

Skip These Mistakes With Property Management in Missoula, MT

Skip these common, costly mistakes with our property management services. At ADEA Property Management, we understand how to minimize expensive blunders to help increase your long-term income.

ADEA Property Management is a full-service property management company. If you're struggling with any of these mistakes, contact us to learn how we can help you get back on track.

5 Signs You Need a Property Manager

josh@adeapm.com (Josh Armerding) — Thu, 09 Sep 2021 17:35:20 GMT

5 Signs You Need a Property Manager

Owning a rental property is a wise investment. Being a property owner definitely has its benefits, but sometimes being a landlord is no simple task. If managing your rental property is starting to feel more like a burden than a lucrative investment, you may want to consider hiring a property management company.

Professional property management companies take over day-to-day responsibilities like rent collection, tenant screening, maintenance, and more while maximizing the income potential of the unit.

If you’re a landlord, here are five telltale signs you need a property manager.

#1. You Don’t Have Enough Free Time

Rental property owners have to be available 24/7 to address any emergencies that may arise. Being a landlord isn’t just stressful. Managing properties t akes up a tremendous amount of time.

The most time-consuming duties include

Handling tenant complaints
Collecting rent
Screening new applicants
Taxes
Sending late fees or eviction notices
Leasing and marketing vacant units

These are just a few of the stress-inducing tasks rental owners have to take care of. If you have other family or work obligations on top of rental responsibilities, your rental home is probably feeling more like a burden every day. Consider hiring a professional property management company to handle the pressure, so you don’t have to.

#2. You Have a High Vacancy Rate

Whether you own a single-family rental home or multiple commercial properties, property managers understand how to successfully market your property and find tenants in your area seeking a place to rent.

A good property management company will help you find long-term renters to fill open spots.

#3. You Live Out of Town

Real estate investing for you might mean purchasing a property far away from where you live. When you work with a reputable and local property management firm, your resident manager can handle emergencies, legal concerns or be your representative when your presence is required.

Avoid the hassle of unwanted road trips or flights without limiting your investment opportunities.

#4. You Spend More Than You Make

If rental management isn’t in your field of expertise, your investment could become another expense. In addition to losing rent on unfilled units, rentals frequently require plenty of upkeep and maintenance.

Property managers often have good relationships with local maintenance workers, tradespeople, contractors, and vendors. Trust a residential property management company to maintain your property and be on-call for emergencies at a reasonable price.

#5. You Can’t Seem to Find High-Quality Tenants

While vacancies can be costly, unruly, reckless, or dangerous tenants can be even more of a headache. You don’t want to rent your property to just anyone. Property managers can help you select the right people.

In addition, you can trust a property management company to market your property and attract even more top-quality applicants.

Choosing The Best Manager

At ADEA Property Management, we help landlords in Missoula and throughout western Montana handle the ins and outs of owning rental properties. If you’re interested in hiring a local property manager or want to learn more about our property management services, get in touch with us today.

What You Should Know When Hiring a Property Manager

josh@adeapm.com (Josh Armerding) — Thu, 09 Sep 2021 17:29:24 GMT

What You Should Know When Hiring a Property Manager

Your guide to hiring a property management company.

One of the most important decisions you’ll make as a property owner is choosing whether or not you should hire a property manager or handle the ins and outs of the rental business solo. Property management companies make sense when you need more help, live far away from the property, or don’t have the time to dedicate to your investment property.

A great property management firm can become one of your greatest assets. Read on to determine if hiring a property manager is the right move for your real estate investment.

What Does a Property Management Company Actually Do?

Management companies help property owners handle the day-to-day responsibilities of owning a rental residence. For example, managers will deal with tenants directly, collect rent, handle maintenance requests, respond to complaints, and even pursue evictions if needed.

Professional property management also helps save time and money by filling vacancies with top-quality tenants.

When’s the Right Time to Hire a Property Management Company?

If you’re unsure about seeking the help of residential property managers, consider the following. If you can say “yes” to the factors below, a property management company could be the best decision for your investment.

You have another full or part-time job. Being a landlord is more than a 9-5. You have to be on-call for unexpected emergencies, tenant complaints and be ready to encounter all types of situations. If this isn’t your day job, delegating responsibility to a manager will help save you time (and, in some cases, your sanity).

You own multiple rentals. The more real estate you have, the more you’ll benefit from a management company. They will handle the hard stuff like screening tenants, collecting rent, and they can even help reduce repair costs.
You don’t live close to your rental. If you’re tired of having to drive long distances to handle issues with the property, hire a property management company to do it for you.
Management tasks don’t appeal to you. Managing real estate can become overwhelming. If you don’t want to be burdened with finding the right tenants, chasing people for past rent, or locating reliable maintenance crews (the list goes on), you’ll likely benefit from a management company.

How to Find a Reliable Property Management Company

Have you found yourself suddenly inundated with everything that comes along with being a rental property owner? Maybe your business is growing, or you simply don’t have the time, energy, or will to manage everything properly. The good news is you don’t have to.

ADEA Property Management helps real estate owners in Missoula, MT, run residential properties. We work with various types of rental property owners and manage everything from single-family homes to multiplexes.

To learn more about how we can make the most out of your rental, click here to learn what services we offer .

How to Select a Property Management Company

duncan.shea@appfolio.com (Appfolio Websites) — Wed, 01 Sep 2021 23:21:29 GMT

How to Select a Property Management Company

Investment property manager

Whether you have a single-family rental home, commercial or apartment building, your rental property is an asset that needs proactive management to protect it. If you’re considering hiring an investment property manager to help with the day-to-day operations, you want to find a professional, licensed and experienced property management company.

At ADEA Property Management , we’re helping you eliminate the guesswork, especially if you’re a first-time real estate investor. Do you know what qualifications to look out for? What screening process do you use to find a good property manager who will protect your investment? Read on to learn how to tell if an investment property manager is the right fit for you, plus additional questions to ask when you hire a property manager.

Look For an Experienced Company

You want an investment property manager who will tailor their services to meet your needs and expectations. Property management companies can deal with tenant issues, collect rent, and manage various properties. In addition, they should be able to effectively handle the many variables that come with tenants and properties.

Also, a property management company with extensive experience should be on top of current federal, state, and local laws.

Questions to ask:

How will my property manager advertise vacancies?
What’s the average length of time it takes to place a tenant?
Will the property manager help me find good tenants?
Do you also offer homeowner association property management ?

Check Reviews & References

Before you invest in a property management company, look at reviews from previous clients. In most cases, review sites can be a great resource when you’re looking for professional property management company.

Excellent Communication Skills

You’re seeking the help of a management company to find the best investment property manager to handle your rental. You’ll be interacting with the property manager frequently, so communication is essential to effectively managing a rental.

In addition to communicating efficiently, qualified property managers and management companies should have the proper licensing and professional certifications to practice in your state.

Questions to ask:

What certifications does the company have?
Do managers have a broker’s license?

Hire A Company with Local Experience

Finally, go for a property management company with reliable local experience. Why? To market your rental property, a property management company must be in tune with what locals are looking for. Property managers with local knowledge will know the current rental prices, understand different demographics, and have a network of reliable contacts to help manage tenants and maintenance.

The Bottom Line

Hiring an investment property manager can help with daily operations, attaining long-term tenants, maintenance issues, and increase cash flow. But it’s important to do a little initial research to select the company that correlates with your needs. Focusing on the tips mentioned above will help you choose the best company to manage your property.

If you’re a rental property owner in Missoula, MT, contact us today to learn more about how we can help you maintain a rental property.

Make the most of the season by following these simple guidelines

duncan.shea@appfolio.com (Appfolio Websites) — Wed, 01 Sep 2021 22:54:59 GMT

The new season is a great reason to make and keep resolutions. Whether it’s eating right or cleaning out the garage, here are some tips for making and keeping resolutions.

Make a list

Lists are great ways to stay on track. Write down some big things you want to accomplish and some smaller things, too.

Check the list regularly

Don’t forget to check in and see how you’re doing. Just because you don’t achieve the big goals right away doesn’t mean you’re not making progress.

Reward yourself

When you succeed in achieving a goal, be it a big one or a small one, make sure to pat yourself on the back.

Think positively

Positive thinking is a major factor in success. So instead of mulling over things that didn’t go quite right, remind yourself of things that did.