Tag: #rentalmarket

How to Rent Your House, Part 2

Posted on | by Allison Zuck

Here’s the second part about how to rent your home! With this list, you should have a good start on thinking about renting your property!

Charging Rent

This actually simpler than you may think. You don’t have to think about a price yourself; check the market instead! You want to compare to places around that are similar. You can look on places like Zillow, or call other landlords in your area. If you have a property manager, they are also a good source to check on this. Don’t forget your security deposit, which should go into a bank account untouched. Check your local laws, but typically it’s a month’s worth of rent!

Rental Application

You’ll want information such as the employers, social security number, past addresses, phone numbers, and all other identifying information. Don’t forget to charge a rental application fee. This should cover the background check that you should always do. Decide what you’ll be comfortable with after the background check. It’ll show information of felonies, bankruptcies, or other history that could be of interest to you. Decide who you are comfortable with allowing to rent your property!

Release of Information

Require a release of information signature. You should check up on all your potential tenant’s claims, but the most important is their source of income. You want to know their job stability and earnings. Then, check on previous landlords. Ask about what rent they paid, if they got the security deposit back, and if the landlord would rent to these tenants again. These sources of information will give you a great idea of what this tenant will be like.

Choosing Your Tenant

Make sure to process your tenants in the order they come in. That way you will not get complaints about discrimination. If you deny a tenant, provide written documentation for the reason you turned them down. When you choose your tenant, you can verbally let them know.

Rental Lease Agreement

Usually these lease agreements are for a year long. They should include information such as the tenants names, the lease agreement, how much rent is, how much the security deposit is, what rules there are, and other things like this. When the tenant is ready to sign the agreement, walk them through it. Verbally repeat these things so you are sure the tenant knows their responsibilities.

Property Inspection

Once the lease agreement is signed, walk through the property. Take detailed notes of what condition the property is in, and have the tenant note any issues as well. This is to know what is a preexisting condition, and what damages the tenant may have done to the property.

These are just a few basic steps to renting your property! Make sure that you are well prepared before stepping into the role of a landlord, and it will go just fine!

 

To learn more about this topic, check out the article that inspired our blog: https://www.biggerpockets.com/blog/how-to-rent-your-house

How to Rent Your House, Part 1

Posted on | by Allison Zuck

Renting your house can seem daunting. You want to make sure you get every step right before you get tenants in there. However, renting is a great way to get a steady flow of income. In the next few blogs, we’ll go through the steps to rent your house so that you’ll be fully prepared to do it!

Why You Should Rent

First, you make your home into an asset. Instead of just being there, it’s bringing you money. Hopefully, the rental income will also pay off your mortgage, which saves you money, and then put the additional amount in your pocket. It’s an easy way to dip your toes into investing, and it’s even better if you aren’t sure if you’ll need your house again. After all, if you decide you want to move back into that house, it’s always an option.

Finding Tenants

You want to have a large selection of tenants to choose from. So, don’t just stick a sign in your yard (although that’s a great thing to do anyway). Expand your search online! Put your house on Zillow and Craigslist! For safety though, on Craigslist, don’t put your exact address. Hopefully you’ll have a lot of applicants! And then, you’ll need to narrow them down! Have a list of criteria that each tenant needs to meet, such as a base income, good references, and a good credit score. If they don’t match those specifications, don’t spend time vetting them further.

Also decide if you want to hire a property manager! Our last two blog posts talked about the pros and cons of that, and you can look through those posts to decide what would be best for you! Next week we’ll look through a few more steps of renting out your home!

 

For more information, check out the article that inspired our blog: https://www.biggerpockets.com/blog/how-to-rent-your-house

The Cons of BRRRR

Posted on | by Allison Zuck

Now that we know what BRRRR is and what the pros of doing it are, we can take a quick look at some of the cons. Whenever we talk about cons, it isn’t to deter you from trying something new. Instead, sharing some of the drawbacks of certain types of investments can help you decide what you need to watch out for in trying this new venture! Or, it can encourage you to try a different type of investment; one better suited to your station in life.

Now, the cons:

Interest and Appraisal

First, you’ll need to consider money. You will most likely get a short term loan, which will have high interest and could result in an initial negative income. However, if it’s the right property, this should only be a temporary setback. But if you’re already struggling with making ends meet, this may not be the best plan. Additionally, fixing up a house means knowing how much that will cost, so make sure your initial appraisal is close to correct. Unfortunately, in home repair, things pop up all the time that could add to not only the expense of the upgrade, but also the time.

Refinancing and Loans

Banks have a “seasoning” time, where they wait a set amount of months (usually half a year to a year) before refinancing the property. While this is very reasonable, it could cause some problems, depending on how long your short-term loan extends. Therefore, make sure it is at least 18 months long, giving the bank plenty of time to “season” your property. As for the loans, you’ll have to juggle two: the short term one, and the one you take on when the property is refinanced. Make sure to shop around for the right lender and get the best deal on fees.

Property and Tenant

Make sure you are up to doing major renovations yourself. If you don’t like heading up big projects, BRRRR may not be for you. Additionally, don’t get so wrapped up in the project that you don’t select the right client. It’s still important for you to get a right tenant, so continue good practices in vetting the tenant before you approve them.

BRRRR shouldn’t be scary. These past three posts are here to help you realize if it’s right for you, not scare you away! It can be an accessible start to real estate, but make sure you know what you’re getting into!

For more information about BRRRR, check out the article that inspired this blog: https://www.biggerpockets.com/blog/brrrr-pros-and-cons

The Pros of BRRRR

Posted on | by Allison Zuck

Last week we took a quick look at what BRRRR is. This week, we’ll check out some of the best pros for getting involved in BRRRR.

First, you don’t necessarily need a lot of money to do it. If you can get a good short-term financing option, it could really open up the possibilities of you not needing as much hard cash to start your real estate investing.

Second, high return on investment. Once you fix up the property, you have passive income streaming in, that could very well quickly cover any money you spent. Additionally, rehabbed homes can be rented out at a higher rate than homes that are not as redeveloped, giving you an additional return on investment.

Third, you get higher equity. Because you’ve remodeled the home, it’s worth more than what you purchased it for.

Finally, it can be a good way to build your portfolio. If you continue to find great deals, you can continue to build your investments. As long as you know your numbers and what you can afford, you can put yourself in a good position for investing solely with the BRRRR method.

These were a few of the pros of BRRRR. However, it’s not a perfect system. Next week, we’ll discuss some of the drawbacks to investing with the BRRRR method.

 

To learn more about this topic, check out the article that inspired this blog: https://www.biggerpockets.com/blog/brrrr-pros-and-cons

Turnkey Real Estate: The Steps and Tips

Posted on | by Allison Zuck

Last blog post we covered some of the basics of turnkey real estate. This week we’ll cover what you should do to get started investing in turnkey, if you think you are a right fit for it!

Steps

First, look for turnkey properties. You should be able to browse some websites specific to turnkey reality. And while you should narrow down your list of specifics, you will be able to look long distance. You can secure a fantastic property manager for any long distance properties. While researching, make sure you get a clear picture of the property’s financial situation. You don’t want to offer on a property only to realize that it won’t be making you any money. Then, you make an offer. That follows standard procedure, where you negotiate until you and the seller are both happy with the outcome. Finally, you figure out the financing and close on it. It really is as simple as that!

Tips

  • Long distance properties are not a bad idea. You won’t have to be hands on, which makes it a great option! And, if you live in an expensive area, you can search out of state to get a better deal!
  • Make sure you don’t assume the property is good. Research, research, research! You don’t want to think you’ve found a dream option, only to learn that it’s in unlivable conditions a week after you buy it.
  • Similarly, know how long a property has been on the market. This may not change your decision, but it’s good to have that knowledge so that you can make a decision that’s best for you!

Turnkey properties are a great investment, especially if you want minimal hassle in the real estate world. As long as you research what you will be buying, you should have a great property with almost immediate reward.

Don’t forget to check out our earlier blog post about turnkey real estate: https://allcountylegacy.com/2021/09/14/turnkey-real-estate-the-whats-and-hows/

To learn more, check out this article that inspired this blog: https://finance.yahoo.com/news/2021-clear-simple-guide-turnkey-181431989.html