Category Archives: Uncategorized

Overland Park Has Lost Their Mind: HELP

The City of Overland Park has lost their minds on their proposed new city licensing of rental properties.  Their new legislation would make property managers responsible, financially, for deferred maintenance of properties under their care.

Now, as an owner you may think this is great.  I can tell you will not have any property manager taking part in that program…at least at their current rates.  Simply put, for all Overland Park rental properties I would have to re-evaluate my management agreements and raise hefty reserves and cost mitigation strategies.  Who ultimately pays? The owner. Then the tenant.

Here is the link to what they are proposing for rental properties;

Here is the snippet of concern in 5.75.060 A5;

The Owner’s Agent shall be jointly and severablly liable with the Owner for;

Are you kidding me? How can a city of any stature make me responsible for a property I do not own? What is going on here? This is still America, right?

To express your thoughts on this go immediately to;

This must be corrected or property management in Overland Park will get much worse or much more expensive.  Either way it doesn’t serve the public interest.




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Seller’s Markets and the Real Estate Investor

I have been blogging about real estate investing in Kansas City since 2006 and during that passage of time I have seen seller’s markets, buyer’s markets and have lived through the Great Recession.  Sometimes these markets have lasted months to years and sometimes it seems that they have oscillated back and forth with the seasons.

But I believe it is safe to say that Kansas City, especially on the Kansas side, has been in a seller’s market for quite some time now (a solid year, at least) and so we need to think about the effect that has on the real estate investor.

  1. Adding inventory to your portfolio is more costly and therefore returns are lower.
  2. You current inventory is worth substantially more than when you purchased it as supply and demand has increased the base price of housing stock.

Should you wait, therefore, to add additional inventory to your rental property portfolio?  Well, when will the economy change?  We know that it will.  History proves that.  But when? And how drastic will the change be?  How long can you stand to have your money in a stock market that is now solidly under-performing?  What alternatives do you have to the stock market and real estate?

Should you sell the inventory you have while prices are still high?  Could be.  Especially on the Kansas side.  But are you looking to 1031 exchange? If so, will you be able to find suitable replacement property that will give you equal or better returns be that here in Kansas City or elsewhere?  Is it time to sell, pay the capital gains and depreciation recapture and move on?

There are no easy answers, as usual.  Your choices must be carefully considered. I can tell you that as a owner of Ad Astra Realty’s KC Property Manager that vacancies on the Kansas side have not begun to rise and on the Missouri side of KC they are only up slightly, say 2-4%.

If you’d like to set up a time to discuss your income property portfolio to see what your options may be, feel free to contact myself or Jimmy Geisler.  We’d love to help.

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When Owners Don’t Make Money

As an investment property owner sometimes you have to hear things that you are not going to like.  And worse?  Things that will cost you money even though, truly, it shouldn’t be your responsibility.  Let me give you an example.

A rental property owner who had been using the services of a competing property management firm here in Kansas City came to me with their story.  Boiled down, the property manager moved in a tenant after screening that the owner believed to be pretty good. After a month the tenant started screaming about not paying rent and wanting out of the lease because they believed that the popcorn ceiling on their 60+ year old house had asbestos.

Asbestos scares people.  I’m not going to tell you it is safe or not safe.  You can look that up.  From my understanding, however, if it is not disturbed it is of no problem.  But if disturbed it can be potentially deadly over the long term.  Feel free to follow this Google search for more research on the subject.

Anywho, the rental property owner was a bit disturbed that his property manager seemed, at least in his eyes, to be working more for the tenant than for him, the owner.  Why?  Because the manager told him it would be better to just get the tenant out as soon as possible and get someone new in to the property.  Let them go (break the lease) and forgive them the 10 days of rent they still owed.

Well, both of those actions will cost the income property owner money, right?  Yes. But, the owner wasn’t collecting any money because the tenant wasn’t paying and apparently had no intention of paying. The owner and manager could have held to the letter of the lease but if they don’t pay now you have to initiate eviction which will cost for a lawyer, court costs, more missed rents and possibly damages.

On the other hand, if you can get them out by the weekend and re-lease the property at no charge you will lose about 45-60 days of rent and, probably, utilities.  In either case, you need that property back as quickly as possible to minimize damages, right?

After you get the tenant out then you may decide to pursue damages.  But, in my opinion, I support the actions of the first property manager.  Get the crazy tenants out.  I mean, who moves in and decides then that popcorn ceilings (which are on the ceilings of literally hundreds of thousands of homes across America) are all the sudden a danger?

Yes, I know it’s inconvenient and probably costly.  But this is property management.  This is what happens when you own income property.  This is why owning investment houses isn’t for everyone.  This highlights that literally every transaction with a tenant is different than the last.


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A Real Estate Obituary

As I start writing I have to say I’m really not sure where I am going with this.  I’ve had a tough 24 hours.  One of my children is having a tough time.  But I can get help there though hard choices have to be made.  And then I receive a phone call yesterday letting me know that one of my “competitors” took his own life last week.

I don’t know why, though there is rampant speculation.  At this point it really doesn’t matter to me.  This gentleman was a good guy.  Though we disagreed as to how extended a person should get while real estate investing we both were honestly trying to help people while making a living for our families.

We’ve spoken on panels together.  We have mutual acquaintances.  We’ve shared a war story or two over the years.

A sinking feeling that I cannot shake says that because he was more and more in to the hard money loaning business that somehow that doubled down on him.  I cannot shake the feeling that real estate investing lead to the overwhelming pressure he must have been feeling.

The public thinks real estate is easy.  They think big cars, free time and see a hefty commission taken out of their proceeds.

They don’t see the rejection. The endless rejection.  They don’t see the weeks and months of no income.  They don’t see the stressed families because mom or dad cannot make it to a basketball game or theatrical performance or concert because some buyer decides that RIGHT NOW is the time they have to see a house.

Listen, we all have pressures in life.  We all make financial decisions we later regret.  We all have times where we want to throw up our hands and say enough.  However, enough means different things to different people, sadly.

My heart breaks for his wife and is saddened for his staff.  The repercussions will roll on and on, even to the creditors that must have been pressing harder and harder. Surely, this wouldn’t be the outcome they had imagined.

Resolve.  As a person of influence in the real estate business here in Kansas City, I resolve this day to take more time to connect, really connect with other agents.  I resolve to help each agent I come in contact to understand how to succeed in this business and to not let it swallow them up.  I resolve to recognize pain when I see it and to say something, to do something.

I wish this man’s soul well.  Some say suicide is an unpardonable sin.  But I just don’t know. What if there is depression or something else?  In any case, it is between him and God.  And I do pray, right now, that be resolved in a loving way.  Good bye.  You will be missed.


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KC Property Manager

KC Property Manager operates throughout the entire Kansas City area and as such has a broad perspective on a whole host of issues including;

  • Rent prices
  • Current vacancy trends
  • Transitioning neighborhoods

You might have expected that first part.  But with our jobs as property managers we also see everyday Americans in everyday situations.  We have funny stories.  Heartbreaking stories. Stories of victory and of tragedy.

What I am trying to say is that in some ways a property manager is more than qualified to actually be a policy maker in Washington.  We work with white collar and blue, high incomes and low and people of most religious and ethnic backgrounds. In short, we kinda see it all.

So the next time you are talking to us or any Kansas City property manager stop and think about their perspective, not just yours.  I’m going to guess that their perspective has a bit more data to pull from.

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1099s and Your Property Manager

Here are a few things to think about if you are an investment property owner using a property manager to manage your rental portfolio.

  • Will you be issued a 1099?
  • Who issues the 1099 for maintenance performed?
  • How will you receive your annual reports?
  • Is your tax person permitted to contact the property manager?

These are just a few things to think about.  Every year we get asked how the maintenance men (or women) 1099s are handled.  Over here at Ad Astra RealtyKC Property Manager we issue 1099s to for the maintenance performed.

Just a reminder that the end of the year is coming and you need to know how your money will be accounted for.

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The Power of Passive Income

As I get older I begin to appreciate more and more the power of passive income.  How awesome is it to figure out a way that you continue to earn based on earlier investments or efforts?

Of course at this website you would expect me to talk about passive income as it relates to residential investment property.  And you’d be right.  But in this article I’m not going to bore you with breakdowns of cash flow. You can find that elsewhere in the website.

But I am going to ask you to stop, just for a minute, and imagine your life with more passive income.  What would your retirement be like? How much earlier could you retire?  What would you do with your retirement?

Passive income is allowing me to ride my bicycle more. It’s allowing me to see Mexico more.  It’s allowing me more peace of mind.  And how much is that worth?

Income property isn’t the only form of passive income out there.  But I FIRMLY BELIEVE that each investment portfolio should have at least a measure of rental properties.

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