JUNE 2009... FIRST EDITION OF THE

OWNER'S CORNER ONLINE NEWSLETTER

 Welcome to the first edition of The Owner's Corner. Allow me to take this opportunity to Thank You for your continuing confidence... It has been nearly 29 years since I returned to Kinston and began the process of learning property management. One would think after all these years the "Ole Vernon" had it all "nailed"! Well, I am a firm believer in growth. My favorite adage is "When you're green, you grow.. When you're ripe, you rot!".

It has been and continues to be my personal pleasure to say "thank you".

Please take a moment to check your contact information with my office. I need your Home-Work-Fax-Cell phone numbers. Also, I need an email address for you....Regarding email, this should be an address you check on a regular basis. A few of my Owners are not regular email users or simply never got attuned to the advantages of email. Even if you do not have a computer or home/office internet access, you can still have an email address. Google has "gmail", Yahoo has "yahoo" and MSN has "hotmail". Any of these are FREE services. You can password you email account on someone else's computer.

Here is the link to the UPDATE form (quick and easy!)..

UPDATE NOW

If you acquired your property by Demise, e.g. - got via a Will or passing, and you have not acquired other property, you might ask yourself the question, "What makes a good property investment?". Unfortunately, our banking system was allowed to run amuck for nearly 10-years and "voila", we now have a mess. If you saw this coming (a few of us did, but most did not), you have assets that can be easily converted into real deals on real property. The credit market remains a bit tight for all but the very best customers... I am a strong advocate of utilizing the best investment vehicle. For example, cash in a CD or Money Market is NOT providing a reasonable return. You do not have to risk big to make money, but you do have to think beyond the usual "comfort zone".

The method by which an investor makes the buying decision is quite varied, but a simple (yet effective) approach is called "Cash-On-Cash Return". It works like this:

Cash on Cash Return is probably the most important ratio you need to focus on when evaluating the long-term performance of a property investment. Cash on Cash Return is the property's annual net cash flow divided by your net investment, expressed as a percentage.

EXAMPLE:

If the net cash flow from a property is $10,000, and the cash invested in the property is $100,000, then the Cash on Cash return is calculated to be 10% ($10,000/$100,000).  The net investment in property is the cost of the property less the amount you borrowed.

A way to view this ratio is to compare it to a return of a certificate of deposit.  You deposit money in the bank and the bank pays you an annual return, say 5%.  The 5% is the Cash on Cash ratio. 

Property Management is dynamic in nature. Virtually all situations are subject to change and you have to count on your Property Manager to keep a "storm eye" out [also known as "risk management"] as well as continually improving and streamlining the process of both assisting your needs and working with tenant issues.

Items being examined by Vernon:

On-line Statement Reporting. Would you like to receive your monthly and annual reporting via the internet? There are tons of positives to this idea and work is underway to determine feasibility and all associated issues. IF this can be made to work, I see the following...

* Landlord can forward records to its CPA via email

* Landlord can reply to the email quickly with any question

* Landlord can easily archive statements on computer storage

* US Mail no longer delays reporting (or worse yet, lose your Statement!)

* Both Landlord and its Property Manager go "green"

To reiterate, this is "in the oven" and issues have to be worked out. I cannot give you a time table as to when this service will be available, but I am confident it will happen. In the mean-time, my office works very hard to prepare and collate your statement each month. This is quite a task, but as always, you can count of me to get the job done for you!

Bridging the Gap. We have some folks in the market place that have listed their Property FOR SALE... imagine that! Worse yet, some of these Properties are sitting vacant! (Wish I had THAT kind of money! "LOL"). At any rate, I am in the process of searching out these Owners and looking for deals (to pass along to you) or offer management services to bridge the (slow sales market) gap.

The Swap Shop. What do you think of a forum where you could trade, buy or sell investment Property? This idea is in the very early stages of development. Let me know what you think of this.... FEEDBACK TO VERNON

I am making every opportunity to visit all properties to determine pre-emptive needs, i.e. - exposed exterior wood trim, damaged paint, tree limbs too close to shingle roofs, etc. Frankly, I would prefer there be no repairs (as would you), but that would be a perfect world.

WHAT DO YOU THINK?

WHAT WOULD YOU LIKE TO SEE IN THE NEXT ISSUE? ANY AND ALL COMMENTS WILL BE APPRECIATED!

The ONLY reasons to sell any real property in this economic climate is divorce, bankruptcy, loss of job/income...in other words, tragic circumstances. I pray none of us are faced with any such plight. Now, having said that, it reasonably follows that if it isn't time to sell; then, it's time to buy!! The same philosophy applies to any investment scheme.... Buy low/Sell high. Don't get me wrong, I am not advocating taking advantage of someone else's problems, but if it's gonna "go", then you might as well be the beneficiary (as opposed to a bank or some other investor).

FINISHED LOOKING?  WHERE TO NEXT?

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