Zona Properties, Inc. | P.O. Box 17937, Rochester, NY, 14617
Email: dick.zona@zonaproperties.com | Phone: (585) 506-9430

Single Family investing vs. doubles & larger buildings

Posted on: February 19th, 2015 by zonaprop

Single family investing vs. doubles & larger buildings

This is a question that comes up many times in conversations with investors. Which vehicle you choose depends a lot on what your goals are in investing in real estate. Are you looking for cash flow? Appreciation? A combination of both? Tax write offs? My observations come mainly from common sense than management experience. Just to outline some factors:

Single Family:

Pro:
– Single family is more desirable to renters in most cases
– Price of homes in the city of Rochester can be as low as $10,000
– Tenants usually pick up the total costs related to utilities, lawn care and snow removal
– On resale you not only have other investors to sell to but also owner-occupants
– Management could possibly be handled by the owner without a professional
Con:
– When you have a vacancy you have 0 income to make repairs etc.
– Resale in lower income or less desirable areas is much slower as owner-occupant buyers who want to live in those areas are usually less qualified for financing

Multi-family (2-8 unit)

Pro:
– When you have one vacancy there is still income to cover monthly costs
– Cost/unit is lower than single family on purchase
– Gross Potential Income (GPI) is higher than single family properties bringing in more money to cover costs and for cash flow profit

Con:
– Larger buildings are usually less desirables to some tenants (especially families with children)
– The cost of exterior upkeep is usually borne by the owner and not the tenants
– The cost of water is usually borne by the owner
– Parking is sometimes limited causing a problem for tenants with cars
– Resale will be likely limited to an investor instead of owner-occupant

Larger buildings (10-50 units)

Pro:
– Many units, thus increasing monthly income
– Cost/unit is lower on purchase
– Smaller units cater to mainly single people or couples (see below)
– Resale will be only to investors

Cons:
– Smaller units cater to mainly single people or couples (see above)
– Resale will be only to investors
– Management will usually require a professional
– All costs are the responsibility of the owner usually including the costs of heat and electric
– There is usually at least always at least one vacancy
– In most cases the cost of an on-site superintendent is recommended

Who’s responsible to remove snow from the sidewalk?

Posted on: February 16th, 2015 by zonaprop

This question came up in a column sent to Anne Peterson, a local Real Estate writer for the Rochester Democrat & Chronicle. It seems appropriate to address this now that we have 15-20″ of snow here in Rochester and the temperature with wind chill is -25 degrees. The simple basic answer is ‘the landlord’. The question posed, and my insight, applies to small properties. Single family, 2-4 family etc. not large complexes where the landlord uses plows and staff to keep the sidewalks and parking lots clear. In all of our single family properties we require the tenant to treat the exterior maintenance as if they owned the property. That means not only snow removal but grass cutting and gardening is their responsibility and this written in their lease. For 2-4 family properties we also have this written in their lease(snow removal) but we do provide salt for the porch steps. But, if push comes to shove our local government states, requires, insists (whatever term you wish to use) that the landlord is ultimately responsible. Since the landlord owns the property he is the only one that the government can fine and try to force to comply.

Who am I and what do I know???

Posted on: February 16th, 2015 by zonaprop

It’s probably the first thing I should write about so that anyone reading my thoughts, ramblings (I’ll try not to write only ramblings) and advice, might see some value in the pursuit of information on real estate management. The information that I will try to express comes from my experiences and education and common sense. My readers may not always agree with my thoughts and comments and that is fine, but so everyone understands that my opinions come from years of experience, and even though I will reference the Rochester New York area where I live and work, the advice and comments will be applicable to almost any real estate management situation. Since this is a blog relating to my personal experience it not meant to be legal advice (I am not an attorney) nor is meant to instruct the reader in what or what not to do. Everyone reading this can make his/her own decisions and is responsible for them.

I started as a child (whoops too far back), actually I began learning property management in the 1980’s. My wife and I purchased several 2 – 5 unit buildings for investment. I had a real estate license and knew a little about managing rental units. Over the next several years I took courses and received the CAM designation (Certified Apartment Manager) from the National Apartment Association, the ARM (Accredited Residential Manager) designation from the Institute of Real Estate Management and my brokers license in New York. I also made every mistake in the book dealing with tenants and buildings to which I attribute the major part of my educational experience. In 1993 I founded Zona Properties, Inc. Real Estate Management in Rochester New York. We specialize in managing single family homes and 2-50 unit properties. At the present time we are managing over 200 buildings and more than 750 units totaling more than 550,000 sq’.

I will try to cover many subjects near and dear to my heart and try to keep up with questions and inquiries. My plan at the present time is as follows: (not necessarily in this order)

Rochester investing – home values and problems
Dealing with drugs and other illegal activity
Single family investing vs. doubles & larger buildings
Working out rental payment plans & deals
Offering rental incentives
Dealing with Social Services and other agencies
Lead paint issues

If anyone has other issues that I might be able to cover please email me at dick.zona@zonaproperties.com.