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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.


*Originally posted on JasonCohenPittsburgh.net

Jason Cohen Pittsburgh - Amazon 2

Will Pittsburgh Be Home for Amazon HQ2? Part II

With over $5 billion in potential community investment and 50,000 jobs on the line, every city wants to host Amazon’s second headquarters. Since the company announced its intent to expand in BLAH, over NUMBER of cities have tosses their metaphorical hats into the ring. Over the past few months, the company has parsed through the submissions with all the quiet drama and political silence of a reality dating show. Just recently, Amazon officially released the names on its shortlist. Pittsburgh made the cut, as did Boston, Toronto, Atlanta, and Newark. But with so much drama surrounding the company’s choice, we’re left to wonder: How many names on this overhyped list are actual competitors, and which are just for show? Perhaps more importantly, does Pittsburgh stand a fighting chance? A few months ago, I published a post that assessed the city’s chances as a host – and now, I’ll take a closer look into the details that will either push the city above the rest or force it out of the game.

Many pro-Pittsburgh parties are optimistic about the city’s chances – and have ample reason to be. Pittsburgh is already well-known in corporate circles as a hub for advancement; the city hosts a thriving tech community and well-regarded talent pool. As Jim Rock, the CEO for the Pittsburgh-based robotics company Seegrid comments in an article for TribLIVE, “Pittsburgh has a long-standing reputation for innovation–long before top tech companies such as Apple, Google, Uber and even Amazon itself established a presence in the city.” More than a few high-level Amazon executives even have personal or professional connections to the city. But Pittsburgh’s culture and network isn’t the only draw in the city’s pitch; the area also financially attractive. The cost of commercial state is relatively low – especially when compared to those in its’ rival cities. The average cost per square foot of commercial real estate in Boston, for example, averages $50 per square foot. In Pittsburgh, the cost stands at around $30 per square foot.  

Pittsburgh’s advantages are clear. However, the city does face a number of challenges that may make it less attractive to Amazon’s board, including its comparatively modest workforce. HQ2 stands to make 50,000 jobs once it opens – and while that may sound impressive on paper, the open positions won’t do the community or company any good if there aren’t people to fill them. According to  a 2016 study by Allegheny Conference on Community, increasing retirement rates and an insufficient influx of workers could cause Pittsburgh to lose as many as 80,000 workers by 2025. Mayor Bill Peduto isn’t concerned, though; at a press conference shortly after the shortlist went public, he expressed his belief that Pittsburgh was more than equipped to compete with the other cities on the shortlist and could attract the workers if chosen. Currently, the city has made strides to cultivate talent and STEM interest in schools in an attempt to encourage young workers to pursue careers in tech. This all said, the city’s low workforce will be a factor Amazon will need to keep in mind when making their final selection.

It is worth noting that the so-called “shortlist” is not all that short. Amazon has approached the process with the calculation of a career politician and the dramatic savvy of a reality dating show, thereby fostering a competitive culture which will surely be to their benefit. The company even requested that those in Pittsburgh government sign a nondisclosure agreement and limit their communications to a single representative for greater confidentiality. It is unclear whether officials will comply with their request – but with the importance of the issue, silence seems likely. Pittsburgh stands as a fantastic candidate for HQ2; however, the choice ultimately comes down to Amazon.  With all of the secrecy and drama seen thus far, we can probably expect a few more months of drawn-out competitions and closed doors.

For more of Jason Cohen’s work, please visit JasonCohenPittsburgh.org.

Originally posted on JasonCohenPittsburgh.net

Taking the House: Tips From Jason Cohen on Winning a Real Estate Bidding War

Selling a home is an emotional decision, and sometimes money isn’t the deciding factor in which offer a buyer chooses. Think of it this way – would you prefer to sell to a buyer who offers a few thousand more and wants you to pack up your life in a day, or to his competitor, who offers less, but will give you a few weeks to say your goodbyes? Real estate is predominantly a seller’s market. Jason Cohen has found that in Pittsburgh, Pennsylvania and beyond, it’s become increasingly important for buyers to appeal to both the homeowner’s emotional and financial sensibilities. Prospective buyers need to strategize; they need to make the sellers like them more than their competition.

Be diligent

There are few qualities more off-putting than disorganization. Make a good impression by having your paperwork in order and showing the buyer that you understand the financial implications of the agreement. Prepare documentation that proves that you can afford the cost of closing, and have your mortgage papers, loan documents, and proof of credit ready for the seller’s inspection.

Cut out contingencies

Try not to irritate the seller by adding too many demands to your bid. You may want those cosmetic repairs on the porch finished by the time you move in, but the hassle involved might push the seller towards a lower and less demanding offer. Ask for the inspections and repairs you absolutely need, and no more. Try to be as flexible as possible and make the process less stressful for the seller; they will appreciate your thoughtfulness and think better of your bid.

Enter an escalation clause into your bid

Adding an escalation clause to your offer shows the seller that you intend to seriously participate if the sale comes to a bidding war. Essentially, the clause states that if other buyers drive the price over your initial bid, you will top their offer up to a certain amount. Escalation clauses can help convince sellers that choosing your offer makes financial sense; that said, you need to know your limits. Walk away if the escalation pushes the price beyond what you can afford.

Be sentimental

Appeal to the seller’s emotional side. Include a personal letter with your offer packet that details why purchasing their house matters to you. Build a personal case for why the seller should choose you over other, possibly more lucrative, offers. Money isn’t always the deciding factor in a sell – so be compelling, and convince the seller to like you!

Jason Cohen of Jason Cohen Pittsburgh can provide further guidance on any of the above items. Visit our website at jasoncohenpittsburgh.com for further details.

*Originally posted on 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