Is Owning Rental Property the Right Choice for Me?

owning rental property

Owning rental property is rewarding and builds your wealth. In 2016, 65% of Americans under 35 years of age were renting an apartment or home. That number is expected to grow over the coming years.

But it’s not for the faint of heart.

Before you start purchasing random properties to flip and rent, there are a few things to know about this industry. Owning rental property requires a little elbow grease, commitment, and knowledge.

Here’s what you need to know to decide if it’s the right choice for you!

Owning Rental Property is a Good Investment

The up-front costs of purchasing a house or building may sound expensive. However, many rental property owners borrow money and can use their property as leverage. You spend less money up-front buying a rental property than you do when buying stocks, for instance.

Owning rental property allows you to directly manage your investment. You’re the one who inspects properties, decides rent costs, and personally manage your property. There’s no middle-man, board, or managers micromanaging your investment.

Be Ready for a Little Manual Labor

Finding and purchasing rental property is only part of the rental property journey. You can buy a property and rent it “as is” but you’re less likely to attract good tenants and make a profit.

Owning a rental property means you’ll have to put a little blood, sweat, and tears into your rental for the best return on investment. After inspection, you’ll need to clean up the building, both inside and out.

A few things to fix up and replace are appliances, windows, carpet/floors, wall paint, and cleaning. Your rental property must be up to code regarding fire and building safety. Presentation and safety are crucial when advertising your property.

You can do many minor renovations yourself to save money or hire a contractor to assist you with more invasive renovations.

Owning Rental Property is More Stable than You Think

Everyone needs someplace to live. Even in the toughest of economic times, you’re sure to find tenants and continue making a profit on your rental property.

Watch the rental and housing market in your area. Keep rent within reason and plan for long-term gains rather than making a quick profit right away.

Calculate your rental property ROI by factoring in monthly rental income, mortgage, change in property value, taxes, insurance, and other potential costs. This may seem like a lot at first, but over a short period, you’ll start seeing a profit.

Let’s Get Renting

While owning rental property doesn’t make you wealthy right away, it’s a great long-term investment. If you prefer managing your investments directly and don’t mind a little hands-on labor, owning rental property is the right choice for you.

Have questions or want to get started today?

Let us know! Our agents are ready to help you make your rental dream a reality.

Picture Perfect: 5 Home Staging Tips to Bring in New Renters

home staging

Home sweet home is a rental for more U.S. residents than ever before!

It’s never been a better time to become a property manager.

If you’re trying to rent your property, home staging is the perfect way to showcase the space.

Help potential renters fall in love with your property. Here are 5 home staging tips you need to know about!

1. Inspire them to Dream

When you stage a rental, you’re doing much more than just making it look pretty. You are helping the potential tenant imagine themselves living there. This gives them an emotional response. They should feel at home the moment they step foot inside.

It might take a little extra research to know exactly what type of home staging will work. A great real estate agent can help you too!

2. Match their Style

When you’re decorating a space, step into their shoes and see the home from your renter’s perspective.

Create a space that matches their style. If the space feels like someone else’s decor, then they’re not likely to want to live there. Aim for a simple approach without too many bold colors. This will appeal to a variety of people.

You should also learn about your demographic and the area. What age group will be renting out your space? What is their financial bracket? These can also determine what direction your accents and furnishings will go in.

3. Meet their Needs 

This goes along with understanding your demographic, but with a more practical approach.

If you are selling to a couple who is looking to start a family, you can stage one room as a nursery. Or if the space is better suited for a group of friends, you can stage a room that would be perfect for entertaining.

The idea is that you want to give ideas to the potential renters as to how the space can be used. It is difficult for people to visually see the size of a room without furniture in it. So by filling the space with strategically placed furniture, you are actually making it look bigger.

4. Try Virtual Home Staging 

If you don’t have the budget or the time to stage your rental, then virtually home staging your rental is the way to go.

First, have professional photos taken of the space while it is empty. You can then use these photos to try out different staging techniques. For example, you can test the photos online with different setups in the rooms. 

Virtual staging can allow you the flexibility to suit a variety of preferences because you can quickly re-stage a bedroom as a home office. It also saves you the time and hassle of physically moving furniture in and out.

5. Curb Appeal is a Must

First impressions are everything, so you don’t make the outside of your rental home an afterthought.

Make sure you have someone mow the lawn, plant flowers, and trim hedges. The rental should look well cared for and inviting. You might want to hang something like a wreath or welcome sign on the door. 

Do You Have to Stage a Rental?

Ultimately, if you have no trouble renting a property in your area, then you don’t have to worry about home staging a rental property. Can it hurt? Never!

Home staging a space to rent or sell is never a bad thing. It might not be necessary for a rental if you don’t have the budget or time required to stage a space. But if you are having a hard time renting your property, it can make a huge difference!

Want more advice on renting your property? Check out our website for more helpful tips!

First-Time Landlords: How Often Should You Conduct a Rental Inspection?

rental inspection

As a landlord, it’s essential you put the work in to look after your property. Even if your tenant is a perfect angel, it’s always a good idea to check around prevent problems that could arise down the road. 

A presence as a landlord also encourages your tenant to better take care of the property. If you show that you care about the upkeep of the home or apartment, it’s more likely that they will too. 

That being said, keeping up a good relationship with your tenant will depend on communication and cooperation. You don’t want to be bothering your tenant all the time. How often should you conduct a rental inspection? 

Read on and we’ll walk you through what you should consider.

The Importance of an Inspection 

Your property only remains valuable if it is well maintained. If you allow it to fall into disrepair, you’ll be damaging the future value of the property.

An inspection can help you ensure the property is retaining its value when it’s not currently in your day-to-day control. It can help you budget and account for costs. After all, if there is damage to the property, it can be paid for out of your renter’s security deposit. 

Most tenants will expect that some rental inspections will be part of their rental process. Inspections show that you’re responsible and have proper expectations for the home. 

Move-In and Move-Out Inspections 

There are a few moments that are key to have a rental inspection in. Almost all renters will expect there to be a move-in inspection, for example. 

This inspection is done by both yourself and the tenant prior to their official move-in. Together, you will search for any existing issues with the property. Photos of existing damage should be documented. A sense of how the property existed prior to the tenant’s stay should be established. 

This can help prevent things from getting legally ugly later on. 

A move-out inspection will occur on the other side of the process when the tenant leaves. New damage or changes to the property that resulted during the tenants stay will be documented and discussed. 

You’ll want to schedule this walkthrough inspection on the very last day of your tenant’s stay. This way further damage can’t happen after your inspection. 

Routine Rental Inspections

Between the beginning and end of your tenant’s stay, you’ll want to drop in a few times and check on the property. It’s advised that you limit these inspections to once every three or six months. 

To visit more often than that can begin to feel like an invasion of privacy to your tenant. It can begin to cause undue tension between the two of you. But to do inspections less often is also not advisable. 

Once every three to six months allows you to stay on top of maintenance responsibilities and more easily track changes to the home. 

The All-Important Rental Inspection

A rental inspection is one of the key cornerstones to your time as a landlord and property owner. The inspection allows you to maintain the value and care of your property while establishing a working relationship with your tenant. 

Have more questions about working with tenants? Contact us anytime for assistance. 

The More the Merrier! 5 Lucrative Benefits of Investing in Multi-Family Real Estate

multi-family real estate

The research is in. Investing in real estate generates more wealth than any other investment option. Want to build your net worth without wasting valuable time or risking traumatic monetary losses?

If so, multi-family real estate may be the perfect investment option for you. Let’s get into the top benefits.

1. Scalability 

All successful business owners understand the undeniable importance of scalability. While it may seem like a safer bet to invest in a single property, this decision may not be very safe at all.

Think about it. Each individual property needs individual servicing and attention. You need to take care of all the nuances of homeownership like maintenance, landscaping, dealing with evicting tenants, etc.

When you scale up, the per-unit expenses go down. Less maintenance, fewer lawns to mow, and no driving around town to meet with different tenants.

2. Reduce Tenant Risk

A single-family home may be great- when you have tenants. But what happens when the house goes vacant, and the mortgage still needs to be paid?

If, on the other hand, you own a multi-family home, you build a diversification strategy naturally. Multiple tenants are forking over rent payments- this can help you float even if one of the units goes vacant.

3. Less Start-Up Effort

Let’s say you want to buy four houses to rent. Think about all those different closing costs, offer letters, and dealing with various agents and sellers. Think about all the work you need to do before you even own the property.

Compare that effort to that of owning a multi-family home. With this strategy, you visit one property, collaborate with one owner or seller, and engage in a single closing. That’s less time, money, and overall headaches for you!

4. Excellent Tax Breaks

As it turns out, the government rewards real instate investors with some attractive tax incentives.

For example, a major multi-house unit is going to come with serious deductions like depreciation. The depreciation can take place over two or more decades depending on how the property is classified.

To take advantage of these tax breaks, it’s best to work with a CPA who has ample experience in real estate. A CPA can help you save tens of thousands of dollars on your investment each year.

5. Faster Rent Increases 

Multi-family properties can adjust with current market conditions, which means they change according to inflation and market demands.

Multifamily leases are typically a year. Commercial real estate, on the other hand, often have 5-year leases. This short-term lease means that you can raise the rent more quickly and consistently according to market conditions.

Translation? More money for you! And you’re also keeping your property competitive on the current market. 

Final Thoughts On The Benefits of Multi-Family Real Estate

Multi-family real estate is one of the best options to diversify your assets and grow your wealth quickly!

Want to learn more about renting out property like a true professional? We have you covered. Check out this property management guide today.

Ready to Rock Real Estate? Tips for Property Management Professionals

property management professionals

There are more than 43 million Americans that rent their property. That’s the highest number in the past 50 years. No doubt about it: it’s a great time to be in property management. 

Property management professionals are in a great position thanks to the recent “rental rush”. And this trend doesn’t seem to be going away any time soon. Whether you’re new to this career path or you’re a seasoned professional, we’ve got some tips that’ll help you do a great job.

Property Manager Responsibilities

Job responsibilities of property management professionals depend largely upon if you are a residential or commercial property manager. Residential property managers run a piece of property on behalf of its owner. These can include apartments, homes, condos, and townhouses.

A commercial property manager runs non-residential spaces. These include offices, shopping centers, and retail spaces.

Residential Property Management

Leases on residential properties tend to be shorter than commercial ones. This means that residential property managers do a lot of marketing. They have to show the property to potential renters, set the rates of the rental, and set the lease time and terms. 

Residential property managers also deal with the financial aspect of the rentals. They collect the rent from residents and pay taxes, mortgages, and maintenance for the owner. They also deal with daily upkeep of the property, which can either be hands-on or outsourced.

Commercial Property Management

Marketing is also an important part of the commercial property manager’s job. Negotiating the lease and marketing the property can take longer than a residential property. But as industrial leases last longer and have built-in renewals, it’s a smaller role.

The financial aspects are like residential property management, too. But one major difference is that a commercial property manager is less responsible for daily upkeep. Most commercial tenants take care of maintenance and other upkeep responsibilities. 

Tips for Property Management Professionals

It doesn’t matter if you’ve managed zero properties or one hundred—there’s always room to improve. So no matter what type of property you’re managing, check out these tips to become an amazing property management professional. 

Know the Law

Whether you know the law or not doesn’t change the fact that you’re bound by it. It’s best to know as much about rental laws and real estate laws as possible. Most important are fair housing laws and landlord-tenant laws.

Some important areas to focus on are legal screening processes that don’t allow for discrimination and the use of unlicensed contractors for plumbing and electrical work. And make sure to know your lease! You can find our quick guide on some of the basics of property management law here.

Find Great Tenants

Finding a good tenant that’s here to stay is the best-case scenario. Tenant turnover costs about $1,750 a month. It’s important to properly screen your tenants before selecting them. Don’t rush into filling a vacancy.

Look out for a criminal background or eviction records. If possible, get a reference from the tenant’s previous landlord.

Finally, consider requiring an application fee for a background check. This is often able to deter unsavory individuals from applying in the first place.

Keep a Stellar Team

There are so many property management responsibilities, it would be nearly impossible to do them alone. Know your weaknesses and delegate these tasks out to your staff. 

Try using a tier system. That way, you can focus your energy on dealing with the owner and delicate matters. Meanwhile, your staff can manage inquiries from current and future tenants.

Now You’re Ready to Be the World’s Best Property Manager

Now that you know your responsibilities and have a few tips on your side, you’re ready. If you’re just getting started among the ranks of property management professionals, check out our tips for newbies.

Or maybe you’ve managed your fair share of properties and you’re looking to branch out and invest in your own property. Contact eFind Agent to locate a real estate agent that’ll help you find your own perfect rental property.