Welcome back to the second half of our two-part series on what to consider when you’re looking for your very first investment property. Buying an extra home is a big decision, and one you want to make carefully. Last time we talked about being financially prepared and choosing a structurally sound home that can be rented quickly after you purchase it. Let’s continue by talking about how to ensure your choice attracts the right sort of renter.
5. Is the Home In a Desirable Neighborhood?
There is a major housing crunch in Australia but that doesn’t mean that just any home will find a renter immediately. Most renters prefer to live in the city but wherever your investment property is, it’s important that the home be in a desirable location. In a nice neighborhood, near a school, or within walking distance of appealing shops and public locations are all great selling points but each neighborhood will have specific considerations to think about.
6. Who Will Want to Live in the Home?
The style and location of the home you choose will influence the kind of tenant you bring in. If you buy a first-floor flat on the quieter edge of a city, you’re more likely to see downsizing aged tenants while a three bedroom house with a yard will be more appealing to parents with children and a trendy loft near a college or shopping center will probably draw a younger crowd. Consider who you will enjoy renting to when choosing your property.
7. Landlord or Property Manager?
One of the biggest questions to ask yourself is whether or not you will be the acting landlord. The answer is almost more of a checklist, though the final decision is always yours to make. If you live near the investment property, are great at performing repairs, and have time to respond to renter problems when they arise, you could have some of fun serving as a landlord for a few years. However, the investment property is far away, you’re not great at repairs, or you don’t have time to deal with renters, hiring a property manager instead often pays for itself in saved fees, regular maintenance, well-managed tenants.
8. What is Your Maintenance Schedule and Costs?
Every home has a maintenance schedule and a number of things that need to be kept up every year in order to keep the home in top condition. Flushing the water heater, inspecting the roof, clearing the gutters, and so on are all officially your responsibility. Make a maintenance calendar with reminders and calculate the approximate costs of each maintenance task or talk to your property manager about their maintenance policies so you know that everything will be taken care of.
9. What is Your Estimated Overhead and Profit Margin?
Now balance the income of a reasonable rent for the property against the costs of the mortgage, regular maintenance, a repairs budget, and possibly a property manager’s salary. This will tell you what your overhead is (all the costs) and your final profit margin, which is what’s left when you subtract all the costs from the rent. If there’s not a lot left, don’t sweat it. You’ll find better quotes and get more efficient over time. Then, when the mortgage is paid off, that entire chunk of costs automatically transfers to profits for a great retirement plan.
10. Are You Prepared for the Responsibility?
Owning an investment property and renting to tenants is, admittedly, a big responsibility. You’re in charge of keeping someone else’s home safe, supportive, and protective. You need to respond if your tenants call for help or repairs and be ready to act immediately if the home somehow becomes unsafe. Not to mention your responsibility to properly maintain your own financial investments. If all of this still sounds wonderful and exciting, then you are in the right mindset to find your first investment property.
For more great tips and tricks on how to be a great investment property owner, contact us today!
Buying investment property is one of the number one ways to build your personal net worth, get into the real estate game, and start a personal business without all the hassle of a store front and customers. Investment property, done well, is a great way to create a little mostly-passive income and connect with other locals who aren’t yet ready to buy their own home. Whether you’re looking to buy your very first rentvesting property to climb the real estate ladder to your dream house or you’re looking to expand your real estate assets to your first investment property, there are a few questions you should ask yourself before closing the deal on an investment property home. Most importantly, you need to understand the financial situation you’re getting into, be prepared for the responsibilities involved in being a landlord, and have a plan for how your investment property will remain financially self-supporting.
1. Are You Prepared for Higher Interest Rates?
Mortgage lenders have their own way of looking at things and weigh every lending decision based on what they see as a combination of risk and potential reward. The private calculations made by cautious lenders have indicated that owner-occupants are less risky than investment property, therefore investment property purchases tend to also come with higher mortgage interest rates. If you’re trying to do your financial calculations early, remember that most of the quoted rates are based on the assumption that you’re buying a residence to live in personally. Talk to lenders individually to get an accurate investment property interest rate before making any plans.
2. Do You Have a 20 Percent Downpayment?
While it is possible to get a mortgage with less than a 20% downpayment, it’s not advisable. The more downpayment you have ready, the lower your interest rate can go meaning a lower overall cost and lower monthly payments. If you’re going to do something as big as buy investment property, it’s worth your while to save up the full 20 percent in order to get a more sustainable mortgage.
3. Will the Rent Cover Mortgage and Some?
When choosing a specific home to buy, it’s vital that you calculate mortgage and expenses versus what you can reasonably charge for rent. Rent should be based on a combination of average rent in the neighborhood along with the size and quality of the home. Ideally, the amount you charge for rent will not only cover monthly mortgage payments. For the home to pay for itself, you also need to be able to put aside some extra rent money for regularly scheduled maintenance and the occasional necessary repairs.
4. Can You Rent ‘As Is’?
For your first investment property, do not choose a fixer-upper unless you are an expert home construction professional or know one who will work inexpensively for you. Look for nice quality homes well within your price range that can be rented ‘as is’ or with just a little cleaning. Whatever you do, don’t forget to hire an inspector to thoroughly examine the home and assure you that there are no lurking enormous repair bills in your future. Make sure to check on things like the HVAC and water heater to see if they will need replacing and calculate that into the costs.
Of course, being financially and strategically prepared to handle the house is only the beginning of finding the right investment property. Join us in the second half of this two-part series where we’ll cover how to ensure that the home you choose is appealing to the kind of renters you want. For more information about choosing an investment property and being a great landlord, contact us today!
Every now and then, someone winds up owning a home they have no intention of living in. Maybe it’s your old house and you have since bought something better, perhaps you inherited it from a recently passed loved one, or you might have bought it as a vacation property and just never get the time off you intended. For whatever the reason you have a spare residential property, there’s no need to sell!
If you just did a double-take, we’re not surprised. You’re probably getting advice from every direction to sell, sell, sell but this may not be the best financial choice for you or your family for a number of reasons. Property is an incredibly valuable asset, and not just as something to buy and sell. By simply owning, maintaining, and making good use of your spare home, you could be making a significant amount of nearly passive income each month.
This is Your Investment Property
Investment property is the property you buy in order to make money off of it. The income is usually generated by renting residences to individuals and families. The rent they pay can cover mortgage payments, if any, along with any maintenance and repairs. This not only makes the property completely free to keep in your possession, anything left over is pure profit and passive income for you that comes in every single month. This simple, comfortable landlord mechanic is what draws so many people into quietly buying a collection of homes and building a retirement fund from rental income.
You Can Even Airbnb
In fact, you don’t even have to do things the traditional way, though there are certainly enough professionals and families clamoring for comfortable single-family rental homes. The most popular new trend in investment property is to furnish your property and list it on Airbnb or VRBO as a vacation rental property and book it out nightly to travelers and tourists.
Dodging the Real Estate Hassle of Selling
What may surprise you is that renting is actually a lot easier to do than actually selling the home. Moving property is an incredibly tedious business that requires a lot of dedication from everyone involved. To sell, you’ll need a real estate agent and a lawyer. You’ll need to stage the home, give tours of the home, and haggle over price with every potential buyer who comes by. With renting, the minimum requirements are to have the home cleaned and prepare an appropriate lease.
Landlording Hands-Free with Property Management
While being a landlord does come with some responsibilities like maintenance and repairs and handling emergency situations, there’s also nothing in ‘the rules’ that says you have to do this yourself. If your ideal situation is one that handles itself, simply hire a professional property management service. These pros will ensure that your tenants and the house itself are well taken care of. Most property management services will even handle staging, seeking and screening tenants, security deposit protocols, and cleaning the property between tenants as well as regular maintenance tasks. Great property managers can even add value to a home by improving the property’s quality over time.
Owning an extra residential property is, in fact, an amazing opportunity to start making truly passive income. With a great property management service, you can keep the valuable personal asset at zero cost, give renters a nice home to live in, and collect the monthly profits with absolutely no effort. Why go through the hassle of selling the home for a lump sum when you could guarantee yourself passive income by renting it out instead? For more helpful property management tips, contact us today!
So, you’re planning to move. Maybe you got a new job and the step up means you can move to a bigger home. Or maybe your family is growing and that means you need more room. The opposite may be the case. Your children may be grown now and you want to downsize to something smaller so that it’s less upkeep. Whatever the reasons, it’s always exciting moving to a new home.
You understand that renting out your home is the wisest choice since it gives you a steady stream of income. This offsets your new mortgage – now that’s smart. However, marketing your current home alone is another story. You want to get the best rental amount out of it as possible. The economy is ripe right now. Unemployment is down, consumer confidence is up, surely it’s a good time to get top dollar for rental income. That may be true. However, here are 6 reasons you shouldn’t market your property all on your own but hire a property manager instead.
A property manager has the technological tools to help you rent your property more efficiently. Specialized property management software aids in the speedy rental of your home. In addition, these tools help determine the appropriate price for your rent. That way you don’t undercut yourself. Asking the right amount helps move it fast at the highest rate. Our tools will help determine the best price.
As licensed property managers, we have access to hundreds of rental sites. Our network of rental sites means your home is blasted across multiple sites and seen by more people. We can reach more people with less time and hassle. People from across the country who are relocating to the area will see your home for rent before they would if you try to market the home yourself.
You know the wonderful aspects of your home, all the work you put into it, and the many special touches that make it a great home to rent. A well-written ad highlighting the beauties of your home will gain the attention of viewers. You need not worry about how to word it, property management copywriters have experience in the business of marketing. They will bring out the hidden features of your home you may have overlooked. They know what renters are looking for and what sells.
When it comes time to work a deal, you want top realtors with experience in the field to negotiate the best price for your home. Potential renters tend to take experienced realtors more seriously and are willing to pay what your home is worth. A realtor negotiates the price up whereas when dealing with the homeowner, renters often attempt to get the price down.
You have a busy schedule and marketing a home is a job. You have to meet with people, sometimes with little notice. Most homeowners may not have the extra time to devote to the task. When you put your home in the hands of a property management company, it’s less hassle for you. You can rest easy knowing they are on the job.
When you start a relationship with a property management company, you can continue the relationship and ease the load of renting your home. A management company will take care of the collection, maintenance, and much more. This frees you up to simply sit back and collect the monthly money. It’s a relationship worth developing.
If you are thinking of renting out your home, connect with Property Management Pros. With years of experience, we market your home with ease.
Valentine’s Day is the one day a year that couples celebrate their connection. Dedicating the day to sharing joy and rebuilding connection with your partner in life is a way to celebrate the commitment. Of course, the pressure to make the day memorable adds additional pressure that leads to feeling overwhelmed in planning something amazing. Don’t worry, making Valentine’s Day an amazing adventure that is sure to spark the magic touch is right at your fingertips. Below are some tips to ensure the day shines brightly.
The first stop is JP’s Valentine’s Day dinner and plane ride adventure. Each year, JP’s hosts a Valentine’s BBQ that features dinner, karaoke, and even a plane ride. Cost per couple starts at $179 dollars. They even offer lower rates for couples that just want to join the party atmosphere.
Another adventure to explore is found at the Franklin Park Conservatory and Botanical Garden. The conservatory offers a nature infused adventure to explore and enjoy being a couple. The sights and sounds bring any couple to life with the unexpected. Explore the conservatory and discover the exhibitions, cafe, and hot shop that provides demonstrations by master glass-blowers. In February, the conservatory even offers a hand’s-on cooking demonstration to bring a couple even closer together. Those who cook together, stay together.
German Village is another must see adventure that brings a historic vision to life while strolling hand-in-hand on brick sidewalks. Antique shops, water fountains, and beautiful historic homes will capture your attention. However, German Village also boasts of one of Columbia’s top ten restaurants, Lindsey’s. Enjoy the romantic New York bistro cuisine while sitting among white linen and hardwood floors. Sure to make any Valentine’s Day special.
For those couples looking for an overnight retreat, Ravenwood Castle is a must. Come explore a romantic getaway where every room is a new adventure. At Ravenwood Castle you can stay in King Arthur’s Suite, Rapunzel’s Tower, or even The Duke’s Dungeon. Each room will take your retreat to another level of fun and adventure. They offer an on site dining option; however, many other fine restaurants are also available in the area.
If a couple is looking forward to stepping away from life for a moment to just enjoy being together, Hideaway Country Inn is the perfect spot. Imagine playing a life-sized game of chess or relaxing in a hammock built for two. They offer romantic packages guaranteed to bring back a spark to your relationship. Many of these packages offer couples massage therapy, romantic meals, roses, and extended check-out hours so you can linger in your retreat. If your goal is to completely infuse a relationship with romance and playful banter, then Hideaway Country Inn is a great choice.
For the wine connoisseur couple, Columbus Ohio offers a wide range of wineries that offer venues for couples to enjoy relaxing together while sharing their passion for wine. You can either find your favorite winery and linger or explore the many options nearby. Some of the wineries even offer dining options.
Now perhaps enjoying an exquisite steak in a fine atmosphere is more appealing to your Valentine’s Day pallet. Columbus offers an excellent range of fine dining to fulfill that need. The Top Steak House, The Claremont, Eddie’s Merlot, and Mitchell’s Steakhouse offer an amazing range of steaks guaranteed to meet the expectations of most steak connoisseurs. However, be sure to make plans because these restaurants are always in high demand.
For the nature enthusiastic couple, the Grange Insurance Audubon Center offers a unique adventure to explore the outdoors. Bring a romantic lunch to share and spend the day looking for birds and walking along trails designed to relax.
Many options are available in Columbus to make your Valentine’s Day memorial and enjoyable. Be creative, think about what you most want to achieve during your special day, then dazzle your significant other with your thoughtfulness in finding a memorable, romantic way to spend the day. For more tips contact us.
Upgrading Your Rental Properties:
Renting can be a tricky business. In today’s market, people have more options than ever of who they rent from and how much they pay each month. When a renter is deciding which property to rent they simply want the best value for their money. They want something clean, modern, and up-to-date, and attractive that suits their lifestyle. While you can’t change the size of the property you are renting or how much yard space is provided, there are many things you can control that will up what you can charge a tenant each month.
5 of those top things that can really help up the price you rent the property for each month:
For more information on how to ensure that you are getting top dollar for your rental property please be sure to contact us.
Buying your first home is often a combination of hard work, financial fortitude, and a certain amount of necessity. You find a place you like within the limitations of what you can save up for and afford to pay for monthly. Buying your second home, on the other hand, is most often an act of financial freedom. Your career has moved forward, your savings deepened, and your ability to financial commit has grown considerably. You can now afford the house of your dreams or even build a new one if you wanted to. The only question is what you’ll do with your old house.
Selling May Not Be the Answer
The vast majority of people assume that they’ll have to sell their first home when buying a second and the idea of getting the lump sum after the sale is pretty exciting. What they’re not thinking of is the hassle of emptying, staging, finding buyers, and negotiating between them and actually seeing the money. Not to mention the legal rigamarole and the capital gains tax which will take a 15% bite out of any appreciated value since the home was purchased.
There is, however, another option that has the potential to completely cover the remaining mortgage, if any, and create a steady passive income for the rest of your life. Once you’ve moved into your new house, you have a rare and valuable opportunity to easily become an investment property owner and landlord.
Owning Investment Property
Investment property is any land or buildings you own that can be used to make a profit rather than serving as your primary residence. While these can be office buildings or even agricultural property, the most common form of investment property is homes. Most people start small, just like you, with an extra home they either inherited or recently grew out of. Rather than selling the home they didn’t plan on living in, the owners decide to rent it out to families who need rental housing.
The best thing about investment property is that it quickly becomes passive income that you don’t have to work for, especially if you factor in a property management service for maintenance, landscaping, and repairs. In most cases, a reasonable rent is enough to cover any remaining mortgage payment, a property manager, and still leave you with a bit of monthly profit that, over time, can really build up. People often use investment property as a retirement plan because once the mortgage is paid, that income will turn into hundreds of dollars in profits every month.
The Vacation Rental Option
Of course, normal housing rental isn’t your only option. In most neighborhoods, if you’re willing to put in a little more time and investment in furnishing and stocking a property with amenities, you can rent it for fantastically more per night and month as a vacation rental home. Platforms like Airbnb and VRBO allow investment property owners to book their furnished properties by the night as an alternative to crowded, impersonal hotels. Your guests get the benefit of a quiet residential neighborhood, privacy, and a full kitchen and you get $60 to $1000 per night depending on the size and luxury of your listing. Many property managers even offer a special service for vacation rental properties.
When buying a second home, selling the first is always an option but it may not be your best one. Keeping the home as a rental investment property saves you the hassle of the selling process, provides decades of passive income, creates a retirement plan, and builds your net worth. If you find you love being an investment property owner, you might even find yourself picking up more homes to rent or, if you don’t, the option to sell is always available. For more tips and tricks on managing your residential property, contact us today!
Managing a rental property is a complex task requiring a number of considerations every year to keep the house in top quality without spending too much or intruding on the tenants more than necessary. Even if you regularly check in with the tenants to confirm that everything is working well for them, without actual preventative maintenance steps, disaster can strike that your tenants simply didn’t see coming. To avoid these problems and the costs that all too often come along with them, we have put together three helpful tips on saving money through preventative rental property maintenance.
1) Check for Early Signs of Water Damage
First and foremost, water damage is your biggest enemy. It’s silent, sneaky, and does a lot more than get things soggy. Anything allowed to remain moist too long can begin to grow dangerous mold, soften, rot, and then attract insects who like living in rotting houses. Leaks can happen in your attic, basement, bathrooms, kitchen, and even from the pipes in the walls so it’s important to occasionally inspect the house for early signs of water damage. Your primary checks should be under sinks and around water fixtures but don’t forget to look for pooling water in the ceiling, damp spots on the walls or floor, and signs that the roof might be leaking into the attic. Any signs of leaks should be hunted down and fixed immediately.
While we’re on water damage, also make a careful inspection of the grout and calking in the bathrooms and kitchen. Water splashes around a lot on these rooms and the sealant between the walls and tiles is important to keep the rest of the house safe. If there are any chips or gaps, repair them promptly.
2) Change the Filters Regularly
Anything in your house that runs on filters, from the water heater to the furnace, should have its filters changed regularly based on the advised maintenance schedule. When appliances try to run with a dirty filter, not only is this unsanitary for the tenants, it also forces the machine to work harder for the same results because the clogged filter slows down the flow of air or water. This makes them more likely to break, and new filters are much cheaper than repairs or replacements. Filters usually have their lifespans printed right on the package so it should be easy to determine how frequently you need to change them.
3) Prevent Pests with Biannual Extermination
The final nemesis of any homeowner or property manager is pests. Primarily insects, but sometimes also including birds and rodents, pests invade your home and can cause serious damage to the structure in their effort to dig in and build their own habitat. Bugs birds and mice are all perfectly fine- outside and you can keep them there by spraying long-lasting poison about twice a year. This will keep the termites, wood and, roaches, and mice out of your walls and away from your tenants.
Simply give your tenants plenty of forward warning about your intent to poison, then create a solid exterior perimeter. Spray the entire base of the house along with any doorway thresholds and windowsills to ensure there is no way for bugs to get in. If there is an unfinished basement, you may want to spray this as well.
Maintaining a rental home is a big responsibility but it doesn’t have to be a big expense as well. With the right preventative maintenance steps, you should be able to keep the property in top condition and pleasing to your paying tenants for many years to come. For more ways to save money on your rental property, contact us today.
As a landlord, when you’re renting out your investment properties there are two kinds of tenants. There are those that come and go quickly, staying only one or two short lease durations before moving on, and those who make their home in one of your residences, often seeking longer lease terms. While the first sort often departs too quickly to learn much about them, the personalities and tenant behaviors of your long term rental tenants matters a great deal. Ideally, you want tenants who treat the property with respect, work actively with your property manager on maintenance tasks, and are a joy to their neighbors but how do you make sure that that’s who you’re getting? After all, you don’t want to end up with someone you’ll eventually have to evict for bad behavior.
If you’re looking for a long-term tenant to settle down in one or more of your rental properties, someone who will treat both you and the home with respect, the key is tenant screening. There are ways to tell how well each person or family will behave in a rented property based on their personal and rental histories. Every person you consider for a long-term lease should come up with all positive results when you check their
Running a Background and Credit Check
Before allowing a tenant to sign a long-term lease, it’s important to know exactly what you’re dealing with, including things you know someone would rather not tell you. While a background and credit check may be personal information, they will reveal important insights about someone who could potentially be living in your property for many years in the future. You’re looking for someone with a clean criminal background and a strong credit score. Both will give you a good idea of how your prospective tenant lives their life.
Rental History and Landlord References
One of the most important parts of your due diligence is to check out a tenant’s rental history. How responsible has the tenant been in the past and what do their previous landlords have to say about them? Late rent payments, evictions, and filed complaints will all show up in their official rental history, giving you an idea of how they traditionally treat rental properties. You can also call up their previous landlords to ask how they were personally. While glowing recommendations are always a plus, a tenant who left little to no impression at all is also a great sign that they left the property exactly as they found it.
Job History and Income
A persons job history is one of the most revealing details about them. It reveals where they’ve worked and, more importantly, for how long at each location. Someone who changes jobs frequently may also be unstable and might change jobs again soon, indicating that their income may also be unstable. If they do have a stable income, you should also make sure that it is at least three times your asking rent or that they have a qualified co-signer.
Plans for Residence
Your final layer of screening is a simple practicality test. Do they have reasonable intentions for how they plan to live on your property? Make sure that if they have pets, they conform to the pet clause in your lease. If they have family, that there is room for everyone in the home. If they have a job location, that your house is not an impractical distance away. In most cases, tenants will have a perfectly reasonable plan, but it never hurts to check.
If your potential tenant passes every test with flying colors, then they are a great candidate for a long term renter. Chances are that they will be well behaved, responsible, and will help your property manager keep the home in good condition for the duration of their extended stay. For more helpful landlord and property management tips, contact us today!
November marks the beginning of the official Holiday season, a time when families all over the world begin visiting each other for enormous shared meals and celebrations. From Thanksgiving to New Years, people will be traveling anywhere from five to three thousand miles to visit relatives and spend a few days or weeks relaxing on leftover feast sandwiches. While some people will pile into their grandparent’s spare bedroom happily, this is the best possible season for vacation rentals and competition will be fierce as families search sites like Airbnb and VRBO for cozy residential locations where they can stay without all the hassle of a busy hotel. How does your vacation rental property stand up against the local competition?
What the Guests are Looking For
The key to successful holiday vacation rental is to understand your guests and know what they’re looking for. What makes one listing superior to another is often a matter of decor, amenities, and features rather than space or even location. This means that even if your rental property is nicely appointed you could stay booked solid this season with a few simple tips and tricks.
1) Amenities and Forgotten Items
There is a very good reason why hotels leave out soaps, cups, shampoo, and conditioner and sell things like toothbrushes in the gift shop. When packing for a vacation, most people have a dozen different things on their minds and something is always forgotten. The best way to make a vacation rental home appealing is to ensure that even if your guests forgot everything but a change of clothes, they could still stay comfortably for a few days.
2) Professionally Maintained and Cleaned
Of course, no matter how well you arrange your vacation rental, the true mark of quality is how nicely it’s kept between tenants. Many vacation rental property owners hire a vacation rental service including cleaning and property management. A cleaning service means that no matter what you’re up to between guests, someone will always be available to clean the property between guests to the high standards of the hospitality industry. A property manager, on the other hand, can help you take care of the building itself, be on-call to help guests in an emergency, and inspect after a guest leaves to ensure no damage was done during their stay.
3) A Helpfully Stocked Kitchen
One of the reasons people choose vacation rentals over hotel rooms is the convenience of having a kitchen. This allows guests to save money on restaurant bills, store and reheat holiday leftovers, or maintain their normal diet while on vacation. One of the most helpful and appealing things you can do is to ensure that the kitchen is fully stocked with everything they won’t have remembered.
4) Host Book
The host book isn’t anything fancy, but it’s one of the most welcoming features a vacation rental property can have. It’s usually a small binder with a few pages starting with a warmly written welcoming letter from the host. Other information might include a guide on how to set up the wifi and use the TV remote, suggestions for local venues, a fire escape plan, and emergency contact numbers including your property manager for any necessary repairs during their stay.
While holiday decorations are a nice touch, the real magic of vacation rentals lies in recreating all the luxury and convenience of staying at home. You might be surprised how much expert management, amenities, and kitchen supplies make a difference for your guests. And, of course, if you need new staging pictures for your holiday property rejuvenation, talk to your property managers. They’re often experts at staging. For more vacation rental tips and tricks, contact us today!