Your success as a Mexico Land lord will require that you are a good Landlord and reduce potential costly mistakes that many first time Land lords can make I have written several posts regarding Mexico real estate rental property, and how to best administer such properties, click here to see my previous articles on Rental Properties.

Based on my experiences, I've compiled a list of mistakes often made by land lords.

• Errors on the lease agreement that cause uncertainty in expectations
• Not enforcing rent collections as defined in the lease agreement. If you allow your Tenant to pay at random, your setting a precedence to continue to allow this type of behavior
• Not knowing the specific laws relating to Tenant-Landlord relationships
• Poor response to Maintenance and Service requests
• Not practicing good customer service
• Not conducting a written, detailed move in inspection with their Tenant
• Not maintaining a professional relationship with their Tenant

In most cases, Landlord and Tenant will have some communication, especially if there is not a Property Managerinvolved. However, it's easy to defy the balance of a Tenant-Landlord relationship if mistakes are not kept to a minimum.

Kami Kemp is both a Texas Realtor and Real Estate Broker in Arizona with Prime Properties. She is a member of the Texas Association of Realtors, the National Association of Realtors and National Association of Residential Property Managers. She began her career in Property Management and Leasing in 1990, has served on various education committees through local associations and has taught many Fair Housing compliance and marketing classes throughout her career. www.TOPmexicorealestate.com 512-879-6546

Many new Landlords with Mexico real estate rentals are unsure what their lease agreement (Contrato de Arrendamiento) really says and if they are truly protected. As with any Mexico legal document, the lease agreement is binding and should be reviewed by all parties carefully.

You will see from my other posts written about rental properties, click here Mexico Real Estate blog, it is important to get correct Mexican legal counsel when working with agreements and contracts Executed leases should be in Spanish with a complimetary English version available.

Key Points on a Mexico Lease Agreement:

• Names of all parties to the lease
• Lease dates
• Rental amount
• Location in which rent is to be paid
• Rent due date
• Late charges
• Security deposit amount
• How maintenance and repairs are to be handled
• Move out notice requirements
• Details about Landlord access to the property
• Utilities and Services
• Condition of the property
• Rules and regulations
• Pets
• Landlord remedies

Although many Mexico Managment Companies use different leases, some are drafted by an Attorney or Notario. Whatever version you or your Property Manager uses, make sure that you have a complete understanding of the document and how it will legally affect you and your Tenant.

Kami Kemp is both a Texas Realtor and Real Estate Broker in Arizona with Prime Properties. She is a member of the Texas Association of Realtors, the National Association of Realtors and National Association of Residential Property Managers. She began her career in Property Management and Leasing in 1990, has served on various education committees through local associations and has taught many Fair Housing compliance and marketing classes throughout her career. www.TOPmexicorealestate.com 512-879-6546

By now you should have determined if you are hiring a Property Manager for your Mexico Real Estate rental. You've interviewed and have chosen a Property Manager that you are confident with. The Mexico Property Manager that you've chosen has sent you the Property Management Agreement (PMA) and you notice a clause that states that you must deposit funds into a Trust Account with the Property Manager and you wonder

what this sum of money is for…

Many Property Management Companies require a specific amount of money deposited into what's referred to as a Trust Account. This amount can be as little as $100 or $1000 and will vary by Management Companies. Most companies I've had experience with require $250-$500.

Mexico Property Management Trust Accounts

Trust accounts can be complicated but the primary details that you should know are:

• Funds are the property of someone other than the Property Manager
• Funds in a trust account cannot be comingled with personal funds of a Property Manager
• Funds in a trust account are used for property repairs, taxes, insurance, utilities, etc.
• Funds in a trust account can earn interest which can sometimes be kept by the Property Manager
• When a Property Manager pays expenses from an Owner's trust account, there must be enough funds in the account to cover the expenses.
• The Property Management Company will/should provide a detailed accounting report outlining how funds have been disbursed.

Trust accounting is not difficult and experienced Mexico Property Management Companies know how to handle other people's money with care and consideration. However, it is your responsibility to insure you check your statements carefully and ask questions if you notice anything that you are unsure about.

Kami Kemp is both a Texas Realtor and Real Estate Broker in Arizona with Prime Properties. She is a member of the Texas Association of Realtors, the National Association of Realtors and National Association of Residential Property Managers. She began her career in Property Management and Leasing in 1990, has served on various education committees through local associations and has taught many Fair Housing compliance and marketing classes throughout her career. www.TOPmexicorealestate.com 512-879-6546

It s been my experience that many people, especially those new to Mexico rental investments, believe that property management is easy. The perceived tasks of a property manager is to collect the rent, deposit the rent then wait until the next month to start the process over again. Sounds like little work. Why in the world should you pay for professional Mexico property management services

Regardless if you have one Mexico rental investment or an entire portfolio, property management is a very hands on business. There are many more details in the everydayness of just collecting rent; details that demand a lot of your time and resources

Mexico Property Management Activities

Details will include:

Giving the Mexico Tenant access to the property at move in

Showing the Tenant how each item works in the property

Addressing any maintenance issues they may experience

Pool and lawn maintenance

Tenant move outs

Cleaning the property

Although every Mexico property will have a different list of needs, your Tenant should be viewed as your customer. You need a professional that can cater to your customer and resolve any issues that may arise. After all, the customer ultimately dictates if your Mexico investment property will be profitable or a disaster. A property manager will be the front line person representing you to the customer. Without the customer, you do not have rent revenue and without rent revenue, you are stuck funding the investment yourself.

Questions to Ask a Mexico Property Management Company

When interviewing property management companies, here are a few questions to ask:

What are their fees and when is it paid

How will they handle Tenant issues such as repair requests

What process do they go through to collect rent or what happens if the Tenant does not pay

Will they market the property for rent How

Do they screen the prospective Tenant How

Do they handle all legal contracts between Landlord and Tenant

Do they facilitate any repairs with a contractor Are those contractors licensed in their respective field

What are their hours of operation

What is their accounting method and what reports will they send to you regarding the property

When do they disburse rental funds to you

Who holds the security deposit from the Tenant

What amount of reserve will be required

At what point will they contact you on maintenance or Tenant issues

How often do they inspect the property

Regardless of how many questions you ask, a Mexico Property Manager is your contractor and you must have a comfort level with them. Look for solid credentials, get recommendations and references and make sure they have a good reputation within the community. When searching for a property manager, do your due diligence and pick the one that you feel will be the greatest fit for you and your property.

Kami Kemp is both a Texas Realtor and Real Estate Broker in Arizona with Prime Properties. She is a member of the Texas Association of Realtors, the National Association of Realtors and National Association of Residential Property Managers. She began her career in Property Management and Leasing in 1990, has served on various education committees through local associations and has taught many Fair Housing compliance and marketing classes throughout her career. MEXICO REAL ESTATE 512-879-6546

If you own a Mexico Real Estate Rental, you will need to learn how to administer the security deposits.The security deposit is any advance of money, other than a rental application deposit or an advance payment of rent that is intended primarily to secure performance under a lease of a dwelling that has been entered into by a landlord and a tenant. (Texas property code Sec92.102).

In Mexico, there are no limits on how much you can charge for a security deposit. For long-term rentals, many Mexican Landlords charge an amount equal to one month s rent and this amount is standard practice.

MEXICO SECURITY DEPOSIT

The security deposit is held by the Landlord, sometimes in an interest-bearing account, until the Tenant fulfills the obligations of the lease agreement. Some areas of Mexico require that you pay the Tenant the interest earned on the deposit and some areas do not. However, the security deposit does not belong to the Landlord it belongs to the Tenant. I always recommend that the property manager in Mexico hold onto the security deposit in a trust account so that there is no confusion on disbursement of this deposit when the Tenant vacates.

When the Tenant vacates, do an inspection of the property. Some landlords prefer to do this inspection with the Tenant and some prefer to do it without the Tenant present. The choice is yours. To avoid potential disputes, make sure that if you are going to deduct any charges for property damages from the Tenant s security deposit, you take pictures of that damage for future record. Do not deduct for normal wear and tear or if the damage were there prior to move in. You can deduct for unpaid rent, late charges, etc.

Send a full itemized report to the Tenant outlining charges and deductions within 30-days of move out.

If you hire a property manager in Mexico, they will handle all aspects of the security deposit for you. If you choose to manage property yourself, familiarize yourself with the Mexico Real Estate laws for the local region so that you know what can and cannot deduct from a security deposit If you want to learn more tips and tricks on how to rent your Mexico Property feel free to visit more of my articles click here or just call me.

Kami Kemp is both a Texas Realtor and Real Estate Broker in Arizona with Prime Properties. She is a member of the Texas Association of Realtors, the National Association of Realtors and National Association of Residential Property Managers. She began her career in Property Management and Leasing in 1990, has served on various education committees through local associations and has taught many Fair Housing compliance and marketing classes throughout her career. 512-879-6546 www.TOPmexicorealestate.com

“Where TOP real estate experts from ALL regions of Mexico come together to share their Tips & Knowledge to help you buy safely !”

Fair housing may or may not be a term that you ve heard before, and probably even less so in Mexico. Unless you ve been exposed to real estate then you probably never thought twice about what this term truly meant and chances are, it has not affected you I have been writing about several “Mexico Real Estate Rental” themes including (Pets and Rentals) and (How to Land a Good Tenant), so I thought this would be a good subject to include.

As a Landlord, your must educate yourself with the fair housing laws as there are severe penalties associated with violating these laws in the US In Mexico, this is less regulated, however, as a Landlord in a foreign country, it is recommended that you adopt these fair rental practices too.

I m not going to give you a lesson in Fair Housing but will only outline the basic protected classes of people. When deciding on whom you will rent your Mexico property to, NEVER, EVER, make a decision based upon the following:

Race

Color

National Origin

Religion

Sex

Familial Status (including children under the age of 18 and pregnant women)

Handicap

There are many, many variables to the Fair Housing Laws. I encourage each of you to familiarize yourselves with these laws and make it a practice, regardless of which country your rental property is located in, to treat everyone the same and do not discriminate against the below protected classes. This is Federal Law in the US and good ethics in Mexico.

For more information on the Fair Housing Act, click on the link below.

http://www.hud.gov/offices/fheo/FHLaws/yourrights.cfm

Kami Kemp is both a Texas Realtor and Real Estate Broker in Arizona with Prime Properties. She is a member of the Texas Association of Realtors, the National Association of Realtors and National Association of Residential Property Managers. She began her career in Property Management and Leasing in 1990, has served on various education committees through local associations and has taught many Fair Housing compliance and marketing classes throughout her career. www.TOPmexicorealestate.com 512-879-6546

Allowing pets is just common sense as over 70% of all US households own a pet. Although I have not seen statistics on Mexico s pet population and the relation to the Mexico real estate rental Market, I suspect it is close to the same numbers as in the US. This poses a question that I often ask a Mexico real estate owner when they indicate to me that they would like their property advertised as NO PETS ALLOWED. My question is,Why would you want to eliminate 70% of your potential Tenant base just because you yourself do not like, want, or are opposed to pets

MEXICO REAL ESTATE RENTAL STRATEGIES

By adopting an effective pet policy, you will attract a larger number of potential Tenants, increase the average length of occupancy, and foster goodwill. This does not mean that you must accept all pets but at least consider pets on a case by case basis.

Implement an effective Mexico Pet Policy by

Limiting the number of pets per household

Requiring that all pets have up to date vaccinations

Requiring that all pets be kept on a leash while outside

Requiring a pet deposit

Meeting the pet to witness their demeanor

Requiring that all pet owners pick up after their pet

Have a pet addendum to your lease agreement

With a good pet policy in place and a responsible pet owner as a Tenant, allowing pets in your Mexico rental property can be a win/win for all parties.

Kami Kemp is both a Texas Realtor and Real Estate Broker in Arizona with Prime Properties. She is a member of the Texas Association of Realtors, the National Association of Realtors and National Association of Residential Property Managers. She began her career in Property Management and Leasing in 1990, has served on various education committees through local associations and has taught many Fair Housing compliance and marketing classes throughout her career. www.TOPmexicorealestate.com 512-879-6546

We all know that there are no guarantees in life. As much as we look to others for reassurances about many everyday things, no one can guarantee that all outcomes will be favorable and even more so in the Real Estate industry Once we have found an ideal investment property from the Mexico market, It is up to us, as Landlords, to minimize our exposure to risks on our Properties So after a good marketing effort to find tenant prospects, our next question isHow do I know if I m getting a good Tenant in Mexico

The truth is we never know how our Tenant will uphold their obligation of the lease agreement or the word in which they promise to treat our Mexico rental property as if they owned it themselves. There are steps that we should take prior to renting to a Tenant.

Outline your qualifying criteria. This criteria should list exactly what you will look for and what you will automatically decline an application for. Use this criteria for EVERYONE.

MEXICO RENTAL PROPERTY APPLICATION CHECKLIST

1) Have everyone fill out an application in Mexico Did they fill out the form completely

2) Check at least the last two years of residence history, whether they owned their home or they rented from someone else. Look at their payment history, did they write NSF checks for the rent, did they always pay on time or were they often late Did they leave the rental damaged or did they get all of their security deposit back Would the previous Landlord rent to them again

3) Look at the last two years of employment history. How much income do they make It should be at least three times the amount of rent that they will pay. How long have they been at their current employer

4) Pull a credit report, if available. How responsible are they in paying their current and past credit obligations How much debt do they currently owe Is their income enough to cover their debt and the rent payment Does the applicant have a negative credit history If so, ask the applicant to write an explanation letter. Is the explanation reasonable or was the negative credit due to lack of responsibility How long ago

5) Look at their criminal history. I personally decline on felonies but will look at misdemeanors on a case by case basis, unless it s assault. Your tolerance level may be a little different.

6) How many occupants will reside in the property compared to the size of the home A good rule of thumb is two or three people per bedroom.

7) Will they have pets If so, get the details on the pets such as breed, size age, etc.

Obtain their vehicle information.

9) Get references. When asked for references by someone, it always cracks me up because I think,do you really think that I would give someone a bad reference Ask the references this question,If asked to co-sign for the applicant, would you Although your intention with this question is not to get a co-signor, the answer that you get will be a good indication of how responsible the reference thinks that the applicant is.

10) Look at the overall picture of the applicant. Do they have negative credit but outstanding rental history Did they just start a new job but their previous employment reflected stable tenure and they changed because they d make more money or were they laid off Can they get a co-signor for the lease Do they want to move in quickly or do they want you to hold the property vacant for them for 30-days

There are so many indicators down in Mexico that you can look at to help you determine your risk factor with an applicant. However, the majority of applicants that will apply for your Mexico property will have something negative in their credit, rental or employment profile. It will be up to you to examine deeper, to probe into the why s of the negative and to weigh your risks with the applicants. Whatever you do, treat everyone the same, use the same qualifying criteria and ask questions when you need to. Good luck having someone apply for your new Mexico property is very exciting!

Kami Kemp is both a Texas Realtor and Real Estate Broker in Arizona with Prime Properties. She is a member of the Texas Association of Realtors, the National Association of Realtors and National Association of Residential Property Managers. She began her career in Property Management and Leasing in 1990, has served on various education committees through local associations and has taught many Fair Housing compliance and marketing classes throughout her career. www.TOPmexicorealestate.com 512-879-6546

I just wrote a post on Where you can advertise your Mexico Property to obtain rentals As I stated in this previous post, regardless of what avenue you choose to take, whether one or all, there are a few key elements that you should always consider placing within the advertising (adapted from the National Association of Realtors).

1. Start with a strong opening statement about the Mexico home as 80% of the value of the ad is in the headline.

2. Mention the key one or two benefits that will attract the buyers attention and spark their interest in the first 10 words of the ad.

3. Include the salient facts about your Mexico property, such as the number of bedrooms and bathrooms and the asking price.

4. Include your name, your telephone number, your e-mail address, and your Web site.

5. Use words that appeal to the emotions and senses (e.g., feel, see, enjoy).

6. Avoid abbreviations and real estate jargon that the average consumer won t understand.

7. Be accurate. Prospective buyers in Mexico are bound to feel disappointed or manipulated if the home doesn t match your description.

8. Focus on the Mexico home s strongest selling points, instead of packing your ad with too many details.

9. Close with a statement encouraging the prospect to contact you (e.g.,Call today).

10. Keep a notebook of attractive home descriptions from remodeling magazines and other property ads so you ll have a ready reference for writing your own blurbs.

Once you have adopted this plan of action, your phone should start ringing with prospective Tenant inquiries. However, all advertising efforts are wasted if you do not follow up with those that call or email you for information. Remember time kills all deals so the faster that you can respond to someone, the less likely that they will call on the next ad.

Next week we will examine the risks and benefits of allowing pets in your Mexico rental property.

Kami Kemp is both a Texas Realtor and Real Estate Broker in Arizona with Prime Properties. She is a member of the Texas Association of Realtors, the National Association of Realtors and National Association of Residential Property Managers. She began her career in Property Management and Leasing in 1990, has served on various education committees through local associations and has taught many Fair Housing compliance and marketing classes throughout her career. www.TOPmexicorealestate.com 512-879-6546

Advertising your Mexico rental property is a very important step in working toward your goal of securing a rent-paying Tenant. Before you begin advertising you will need to start with an effective advertising plan.

There are several viable sources in which to announce to the public that you have a Mexico property for rent.

Mexico For Rent Signs

placed at the property with a phone #, email address, a brief description of the property such as number of bedrooms, bathrooms and rent amount. This source works best if you are in a location that a lot of people walk or drive by and is not as effective if you are located in more of a remote area.

Mexico Online Avertising

is typically the best source as most people go online first when searching for anything. There are many great sites to advertise on such as on Cragislist.com, forrentbyowner.com, rentals.com, the local Playa del Carmen classified paper Andale,( http://www.andale.com.mx/andale.cfm publica=home), VRBO.com, beachhouse.com or, ownerdirect.com. There are countless other online resources but my personal favorite is Craigslist.com. More and more people are turning to this website for real estate rentals and it s free! Online advertising also allows you to post pictures and detailed descriptions of your property.

Mexico Real Estate for Rent Flyers

distributed throughout the community, neighborhood, or surrounding area. This is generally a great source of advertising, especially in the small town of Playa del Carmen but it requires a little more work. There are many local restaurants and retail shops that will allow you to post flyers on their bulletin boards. However, in an effort to make the most out of this type of advertising, you want to make sure that you include the address, phone #, email address, rental price and a very descriptive outline of the property. You will also need to check on your posted flyers about once per week to insure that they are still there. This is where it would be advantageous to pay someone to post these for you if you are not always in the area in which the property is located.

Mexico Real Estate Online Forums

There are many local forums online that typically only pertain to a specific area and some have classified sections that you can advertise on. One forum in particular, www.intheroo.com, have members that have a love for Playa del Carmen, are locals to the area or are people that are looking to make their move to the Playa del Carmen area and seeking information. This is a great online source and I highly recommend this site.

Mexico Real Estate Offices

are a great way to advertise your property, especially if you are willing to offer compensation to the Broker for bringing you a Tenant. Be careful with compensation as local, state and federal laws may limit how much you can pay someone, especially if you are not a licensed Broker.

Word of Mouth.

Everyone knows someone that rents a home, apartment, or condo. What better way to advertise than to ask your neighbors to pick their neighbor!

Happy Holidays!

Kami

Kami Kemp is both a Texas Realtor and Real Estate Broker in Arizona with Prime Properties. She is a member of the Texas Association of Realtors, the National Association of Realtors and National Association of Residential Property Managers. She began her career in Property Management and Leasing in 1990, has served on various education committees through local associations and has taught many Fair Housing compliance and marketing classes throughout her career. www.TOPmexicorealestate.com 512-879-6546

There are generally three reasons why a property in Mexico will not rent. We call this the3 P s in Real Estate .

People, Product or Price and Their Affects on Mexico Properties.

Today we will look at how to determine a rental price for your Mexico investment in hopes to eliminate or minimize any potential losses from pricing your property wrong.

Let s say that you ve just closed on your new property in the tropical area of Playa del Carmen or any other Mexico resort city. You re experiencing the excitement of owning here but you are unsure on what to charge potential renters. Rental pricing is one of the single most important aspects of rental investment ownership. If you price too high then you experience unwanted vacancy because no one wants to overpay. If you price too low then you will end up feeling like you, the investor, are getting the short end of the deal. This is why it s important to do your due diligence prior to marketing your Mexico property.

Grab some paper and a pen, hop online to the internet and see what the market says that we should rent our property for.

MEXICO REAL ESTATE FEATURES

Write down exactly what features your property has. At a minimum, you should know the following:

Location

Size in both meters and sq feet

# Of bedrooms and bathrooms

What appliances provided for the Tenant

Pool

Any other amenities that may or even may not be attractive to a renter

Now that you have the basics of your property written down, we will need to do a little research about our competition. Because the Playa del Carmen and the majority of the Mexican regions do not have MLS options, we will seek out other sources for our information.

The first place to start would be to go to your favorite search engine such as Google or Yahoo Find a good web site on rental properties for the city where you own your Mexican property.In our example we will copy and paste this link into your browser: http://www.playacarmenproperty.com/Riviera_Maya_Rentals/page_2143272.html

Here you will be able to look at many properties that are already on the market for rent. You will need to narrow these properties down to only those that are within about a mile radius (further if you are on the west side of the highway or if you are outside of Playa del Carmen s city limits). If you are in a specific neighborhood, it may be beneficial that you start by looking only in that neighborhood. If there is nothing or a very limited number of properties available, then you will need to expand your search. You will also only want to look at those that are truly comparable to yours in age, amenities, and size. A property that was built in 1980 will not be comparable to one built in 2008.

Once you have a list of comparable properties, write down the rent amount for each one.

Let s say that you ve found five properties with rents ranging from $1000 per month to $1500 per month. Our first instinct would be to think that our property would rent on the high side at $1500 per month. Makes sense there s another one out there at that price. WRONG. If your goal is to secure a Tenant quickly with minimal vacancy loss, you do not want to price your property anywhere near the highest on the market as it is typically better to price on the mid to lower side of the spectrum.

If your goal is to get as much rent as possible for your property then it is still better to price on the mid to low range. Confused yet

Look at it this way

People, by nature, are price conscious. When most people do a search for something such as a rental property or a property to purchase, they already know what their budget is and usually will not waste a lot of time searching for properties to rent that they know that they could not afford. If a prospective Tenant is looking to rent and their budget is $1200 per month, they will usually search for properties up to $1250 per month. Let s say your property is priced at $1300 per month but you know that you would take $1200. However, you wanted to test the market to see if you d get any activity by advertising at $1300. You just lost a potential renter because your property did not populate within their search criteria of $1250 maximum per month.

If you know that you would accept a particular price point for your rental property, do not advertise it for a higher amount. It s a waste of time. You lose prospective applicants. You incur additional vacancy.

But you say that if you charge more in rent then you make up for the extra time that it took to rent your property Take that philosophy out of your head. Here s what happens:

Let s say that the market dictates that your property should rent for $1200 per month but you advertise it for $1300 per month and you end up waiting an additional 60 days before a Tenant is found at this higher rate. 60 days of vacancy equates to $2600 in lost rent PLUS utilities that you had to pay for. Let s say you were lucky and found a Tenant that was willing to pay $1300 per month for a one year lease. The most that you would recover would be $1200 for the year; leaving you in the negative of $1400 for the year PLUS utilities. That doesn t seem too smart does it

Let s say that you are okay with having that loss for the first year because you will make it up on year two when they renew. Chances are, your Tenant has talked to neighbors and has realized that they are paying too much for rent. You've increased your risks for a vacancy at the end of the year because you charged your Tenant rent that was over market. The cycle then continues

Any successful rental property investor, regardless of the property location, knows that vacancy is hard to financially recover from. It is better to realize a lesser amount of rent, especially to keep you aggressively competitive with the market, than to wait it out for a higher price.

Next week we will talk about how to advertise your property to get the most exposure.

Kami Kemp is both a Texas Realtor and Real Estate Broker in Arizona with Prime Properties. She is a member of the Texas Association of Realtors, the National Association of Realtors and National Association of Residential Property Managers. She began her career in Property Management and Leasing in 1990, has served on various education committees through local associations and has taught many Fair Housing compliance and marketing classes throughout her career. www.TOPmexicorealestate.com 512-879-6546

Calculating your Net Operating Income (NOI) on Mexico Properties

Buying a rental property in Mexico can be very exciting but it can also be overwhelming when we do not know what to expect from our investments. Now that you ve made the decision to purchase a home or condo for rental purposes in Mexico, or you ve already purchased one, we need to have a starting point for our rental income.

Although each of our financial and personal goals are very different and we invest for various reasons, the pathway to your success in becoming a Landlord will require that you know how to calculate your Net Operating Income (NOI). Some of us want a monthly cash flow, while others just want to reach a break-even point. Some of us do not mind subsidizing our investment because we know that our return can be realized in the tax benefits and the appreciation. In order to understand how your Mexico investment property will potentially perform on a monthly or yearly basis, use the following formula:

MEXICO Potential Gross Income (PGI)

Minus - Bad Debt and Vacancy

Equals = Effective Gross Income

Effective Gross Income

Minus - Expenses (include management fees, repairs, leasing fees, etc)

Equals = Net Operating Income (NOI)

Next week we will examine how to determine what our Mexico rental property will rent for.

Kami Kemp is both a Texas Realtor and Real Estate Broker in Arizona with Prime Properties. She is a member of the Texas Association of Realtors, the National Association of Realtors and National Association of Residential Property Managers. She began her career in Property Management and Leasing in 1990, has served on various education committees through local associations and has taught many Fair Housing compliance and marketing classes throughout her career. www.TOPmexicorealestate.com

As with any investment, there are risks to consider but the desired result is to capitalize on many of the great benefits. When buying a Mexico rental property, we must do our due diligence in determining costs, potential income, and how we want the Mexico rental property to work for us.

When deciding on a Mexico rental investment, stop to ask yourself these questions:

MEXICO RENTAL INVESTMENT PROPERTY CHECKLIST

o What do I want to obtain from this property

o Am I looking for a specific rate of return (ROI) or just looking to break-even

o What are the tax benefits of a rental property

o Will I hold this property long-term and wait for appreciation or try to sell it quickly

o Will this be my retirement home

o Will I rent the property for long-term or short-term use

o How will I prevent myself from getting emotionally attached

o What will the market comparables indicate rents will be

o Will I use a property manager or will I try to manage the property myself

o How do I find the best Property Manager for me and what should I expect from my Property Manager

o Why do I need to place money into a Property Management escrow account

o If renting my property as a vacation rental, how will I furnish it and what should I provide

o How will I find a Tenant and how much will it cost me

o Should I allow pets

o How do I know that I am getting a good Tenant

o Should I require the Tenant to have renter s insurance

o How much should I charge for a security deposit

o Does the Tenant pay the HOA dues or does the Landlord

o What does the lease REALLY say and does it protect me

o Common mistakes Landlords make with their Tenant s.

o What happens when my Tenant s lease expires

o How do I handle lease renewals

o What does preventive maintenance mean

o What happens when the Tenant does not pay rent

o What happens if I my Tenant moves out

o Can I keep my Tenant s security deposit

o What does vacancy really cost me

o What improvements to make to my property and which improvements make the most sense

o As a Landlord, what else should I expect out of my rental property

In an effort to help you to become a successful Landlord, each week we will take an in depth look at many of the above questions and associate them with typical rental property experiences.

Kami Kemp is both a Texas Realtor and Real Estate Broker candidate in Arizona with Prime Properties. She is a member of the Texas Association of Realtors, the National Association of Realtors and National Association of Residential Property Managers. She began her career in Property Management and Leasing in 1990, has served on various education committees through local associations and has taught many Fair Housing compliance and marketing classes throughout her career. www.TOPmexicorealestate.com

What factors to consider before choosing a long-term rental property location

Most of us have heard throughout our lifetime that the one way to financial security is through real estate. Typically, we invest in real estate because it equates to low risk with a nice return on our money. Many of us believe that the way to financial freedom is to buy real estate, whether you purchase one property or multiple properties, with the sole intention to flip or sell quickly, at an increased price.

We've all seen the shows on cable that promote how easy it is to buy fixer uppers, do a little work to them then put the property on the market for sale and instantly have a huge profit. This way of investing is not a realistic option for most of us, as we'd have to dedicate ourselves to seeking out properties on a fulltime basis then doing our due diligence to assess if the property can potentially be profitable. We all want to believe that we can overcome these challenges but unless we are a seasoned real estate investor for these types of opportunities, the obstacles can sometimes far outweigh the benefitsThis is one of the multitude of reasons why I am an advocate of investing in real estate with the anticipation of being a long-term holder of the property for at least five to 10 years

The concept of investing in rental property affords us the ability to purchase at or just slightly below market value but continues to allow us make a good return on our money. So the question arises, how do you know where to buy a rental property for investment purposes

We should consider many factors before choosing a location to invest in rental property. We must look at the future job growth and how many people will be coming to the area to fill those jobs What is the social economic demographic of the population What is the economic stability of the area Is the current market saturated with long-term rentals or is there a demand for more

Let's take Playa del Carmen as an example. Although the economic structure of Playa del Carmen is very diverse, the common denominator of tourism is the actual driving force that dictates this economy. With the increased tourism year after year, the demand for workers on all ends of the economic spectrum has also increased. The population of the Riviera Maya is, on a conservative level, slated to double within the next several years.

There are so many contributing factors as to why Playa del Carmen is the ideal location for investment of long-term rental properties. The number one reason is this influx in population. People are moving to Playa because of the growing number of opportunities and the realization that they can sustain wages that will allow them to live their desired lifestyle. However, many just seek to lead a simpler way of life.

As tourism continues to increase, the demand for long-term rentals also increase. We are have begun to witness a need for long-term housing for those that begin to call the Riviera Maya home, whether they are Mexican Nationals or Expats alike. We, as real estate investors, need to go where the demand is. That demand is in Playa del Carmen.

Kami Kemp

www.TOPmexicorealestate.com

(512) 879-6546