8 Steps To Get Your Property Rented

You never know when you may want, or need, to rent a property. There are many investors who got their start in the business by renting out their primary residence after the mortgage collapse.  There is also a large segment of investors who decide to rent after putting their rehab on the market.  A solid rental property can be a great addition to any portfolio.  That being said there is a lot that goes into it.  You can’t simply put a “for rent” sign on the lawn and wait for checks to roll in.  Like anything else in the real estate world there is a certain process that needs to be followed to ensure results.  Here are eight steps you need to take to get your property rented.

  • Research Local Rental Rules And Guidelines. The first step you should take if you are considering renting is to research the local rental rules and guidelines. There are often specific rules based on the town the property is located in. You don’t want to spend time and money in finding a tenant only to discover that your property is not eligible for rental. There are many quirky rental laws out there for student housing, zoning and the maximum number of tenants that may be allowed in the property. Before you get too far in the process you need to know what you can and cannot do.
  • Look At Market Rents. The rental market is very much contingent on local rental prices. The next step is to look at every rental property on the market within a five mile radius of your property. The closer the property is to yours the more reliable of a comparable it is. Look at important items such as size, room count, square footage, parking and other amenities. It is important to fight the urge in placing a higher rental value on your property based on some upgrades you made. Let the numbers guide you as to what kind of rent you can generate.
  • Understanding Expenses. There are a few hidden expenses that can quickly eat away at potential cash flow. All property owners are aware of the monthly principal, interest, tax and insurance payments. However there are many rental property expenses that can take you by surprise. Water bills, lawn maintenance, snow removal and sewer bills are just a few of them. You also need to figure out how you plan on managing the property. A good property manager will make your life easier but they will also take roughly 10% of the monthly rent received. It can be very disheartening finding out that your rental property is breaking even when you thought you were positive $300 a month. Avoid this mistake by understanding all rental property expenses.
  • Get The Word Out. After you run the numbers and make the commitment to rent you need to spread the word. Gone are the days when a classified ad in the newspaper was your best bet. Today there are many more rental listing sites than ever before. Between social media alone you can quickly reach hundreds of people. You can also utilize Craigslist, Trulia, Postlets and any other rental site you can find. Finding a good rental is often a numbers game. The more people that know about your property the better chance you can quickly find a tenant.
  • Schedule Showings. Just because a prospective renter is interested doesn’t mean they are going to take the property. With every showing you need to always showcase the property in the best possible light. Make sure the property is clean, odor free and ready to rent. You may have to show the property half a dozen times before you find a tenant that ready to act. This is all part of the process. Good tenants rarely just fall on your lap.
  • Tenant Screening. One of the most common mistakes that inexperienced landlords make is renting to the first person that shows interest. Your goal isn’t to find a tenant but find the right tenant. You need to spend some time screening each interested tenant. Give them an application, ask for a credit check and follow up with the references listed. Your tenant is going to live in your house for at least nine months. As easy as a good tenant is a bad one is a nightmare to deal with. Take your time and screen every interested applicant.
  • Lease Review. You can probably find a generic lease online in a matter of minutes. This may be easy and inexpensive but will it protect you if an unexpected issue comes up? You are better off spending some money having an attorney draft your lease. Once you are comfortable with your lease you can present it to your tenant. Sit down at the property and review any items of particular importance to you. If you are adamant about pets or smoking rules now is the time to make it clear.
  • Final Walkthrough. After you and your new tenant have signed the lease and collected the security deposit there is just one more step to go. You should meet your tenant at the property on move in day for the walkthrough. You should be ready to hand over the keys and provide specific information about the property. You should also document the condition with pictures or videos. Doing this now will make things easier for you when the lease is over.

Things will rarely go smoothly over the course of the lease. Take things as they come and be ready for anything.  Use these eight steps as a guide the next time you have a property you want to rent.

Getting Started In Commercial Real Estate

There is a normal progression most buy and hold investors take.  After getting started with a single family rental they move up to two, three and four unit properties.  Eventually they become more comfortable with the additional units and look to take on bigger projects.  The next step up from multiple units is commercial, apartment and mixed use properties.  While this may sound intimidating managing the additional units is not that big of an adjustment if you have experience.  With additional units comes additional responsibility but also increased income potential.  Some of the wealthiest people in the county have made their wealth through commercial real estate.  This certainly doesn’t happen overnight but the long term potential is there.  If you are interested in getting started in commercial real estate here are four basic items you need to be aware of.

  • Accept Differences. Taking on additional units is very much like running a busy family. With one child you think things are tough but you have time to figure things out. If you have a second child things get more spread out leaving you on constant patrol. If you are daring enough to have a third or fourth child you know that your time is limited but with experience you have a better sense of how to handle things. The same is the case if you have five or more children. The point is that anything new always seems difficult and daunting but you usually find a way to figure things out. The first step in commercial real estate is accepting that while the process is similar there are many distinct differences. Aside from the obvious difference in units there are many different formulas, calculations, expenses and jargon you need to be aware of. Soaking this all in may seem daunting but it gets easier the more you learn about it.
  • Market. Buying real estate on any level is largely about supply and demand. This is just as important if you are exploring commercial real estate. You need to know that the market can support the property. With a single family property your rental pool is much larger than with a commercial property. You need to entice business owners and tenants who find the market appealing enough to commit to the area for three to five years. This means you need to know everything about the market the property is located in. You should have an idea of any changes in local demographics and what new businesses have come and gone. You should look at local property sales and see if homeowners are buying in your area. Something as seemingly unconnected as the strength of the school system impacts homebuyer demand which can influence business sales. An individual commercial piece of land is only as good as the market it is located in. With any commercial sale market knowledge is critical.
  • Numbers. One of the reasons that investors stay away from commercial real estate is the increase in numbers. Figuring out cash flow on a single family property is fairly straightforward. When extra units get thrown in the mix the numbers are more difficult to calculate. In commercial real estate there are a handful of important formulas you should be aware of. Items like net operating income (NOI), cap rates and cash on cash return will give you a much better sense in the strength of a deal. These terms may sound foreign but in reality they are much more basic then they sound. In addition to formulas there are a greater number of expenses you need to know. The property taxes, insurance, management fee and utilities will all be increased based on the exact number of units. If underestimating one of these has an impact on a single family property it is even more magnified on a commercial piece. The best way to understand the numbers is to reach out to a local commercial real estate agent and ask for a template or a pro forma sheet for you to review.
  • Financing. Loan financing for a commercial property has some similarities to a traditional investment loan but also some stark differences. Unless your credit scores are strong (over 680) you will have a tough time getting the ball rolling. From there you also need significant down payment of anywhere between 25 & 30%. Debt to income ratio is important but the lender will also look at the cash flow of the property. There should be leases in place when you buy or strong cash flow potential. Almost all commercial property loan expenses are double or even triple that of a single family purchase and the process can take anywhere from 45 to 60 days. The number of commercial loan outlets is also reduced. Most local lenders only have a reduced number of commercial loan programs and products which can make approval difficult. There is a big difference in getting approved for a single family investment property and a multi-unit commercial building.

Prior to investing in a commercial property you should have an idea of your goals and how you plan on managing the building. Even the most seasoned investors need management help on a twenty unit apartment building.  There is nothing wrong with getting your commercial start on a five unit mixed use property and building from there.  Like anything else you do in real estate you should take your time and know exactly what you are getting into prior to getting too far.

How To Become A Rehabbing Expert With Little To No Experience in Calgary

Do you want to be a rehabber but don’t know how to operate an electric screwdriver? As crazy as it may sound you don’t need to be a handy person to be a rehabber. Sure, it is a help but far from a prerequisite in getting started. There are many rehabbers all over the country who got their start without knowing the first thing about home improvement. They gained their skills and experience from every project they were on until they knew enough to run a project on their own. Conversely, most handy people think they know the process well enough to dive right into the world of rehab. What they find is that it takes more than the handy person knowledge to be successful. Regardless if you can operate a SAWZALL or don’t know how to swing a hammer the rehab side of the business is open to everyone. Here are four things you need to do to be a successful rehabber without tool belt experience.

  • Know The Process. Instead of being an expert on the technical side of things you should start by knowing the process. You don’t need to know anything about home improvement to master the steps of a rehab. While every rehab has their own unique qualities there are similar several steps with every property. You should have an understanding on the big items to look for that are costly and difficult to deal with. Roofs, issues with the structure, windows and electrical items will have a much bigger impact than simple cosmetics. You don’t need to know how to remedy these problems but you should have an idea of the costs. One way to learn the costs is by simply walking around big box retail stores. This will give you some background on the cost of materials and with a few questions what they may be used for. Cost of labor you will learn the more job sites you are on and the more contractors and project managers you talk to. This knowledge will come in time but knowledge of the process is something you can learn before getting started.
  • Surround Yourself With A Strong Team. If you don’t know what you are doing on a rehab there is a real possibility you can and probably will lose money. Instead of waiting until you master every aspect of the process you can get started by surrounding yourself with a strong team. Start by finding the best contractor you can find. This may not be easy as many contractors only like to work with experienced investors. However, if you reach out to enough you will eventually find one that is a good fit for you and your experience. While you don’t want to blindly give your contractor the keys to a rehab project you should be willing to let them run things the way they see fit. You can certainly get different quotes but let your contractor run the project. In addition to your contractor you should also find a quality project manager, electrician, plumber, drywall expert and painter. Generally speaking, you should try to get at least three quotes on every aspect of the property. This is your rehab but you can make it easy on yourself by having the best possible team around you.
  • Consider A Partner. If the prospect of talking to people in the trades is difficult without knowing the jargon you can consider taking on a business partner. With a business partner you can handle the financial side of the transaction while your partner runs the rehab project. The upside is that you can feel comfortable knowing that your partner will not get run over by a contractor or handy person. The obvious downside is that you will not make as much on every deal as you expect. As you are just getting going this can be a great way to learn the business without the stress of trying to do everything on your own. You can hang around the property in your free time and see how things are done without everyone turning to you with questions or problems. Your partner will be the buffer and deal with any issues that pop up. A partner may limit your upside on every deal but it can be a great way to learn the ropes and break into the business.
  • Defer. In real estate it is always best to know what you don’t know. There are many investors who try to fake like they are an expert only to have it come back to haunt them. There is nothing wrong with saying that you don’t know a particular aspect of the business. With rehabbing if you don’t know what you are doing you will eventually get exposed. You are far better off deferring to the people around you as you develop your education. As we mentioned you should seek out a good team or a business partner until you are comfortable with the process. You will still reap the rewards of the deal, maybe not as much, but in the end it will be worth it for you. There is nothing wrong with deferring to the people around you for your first several rehabs.

Some of the best rehabbers got their start without knowing how to swing a hammer. It may be uncomfortable during your first few deals but eventually you will find your way.

How To Work With Motivated Sellers

With any motivated seller lead the first goal is to get the homeowner to agree to a meeting. The meeting should act as a mini presentation for what you can do and how you plan on doing it without being too over the top.  You never want to hide the fact that you are a real estate investor but there is a certain way of delivering your message.  Every meeting with a motivated seller should be viewed as an opportunity.  They are most likely going to work with someone and that person can be you if you put your best foot forward during your meeting.  Here are five tips to help improve every motivated seller meeting you have.

  • Consider Your Approach.  People like working with people they feel comfortable with. Before diving right into the numbers you should take some time and build a rapport. This starts from the minute you drive up to the property. Wearing a three piece suit may work for some meetings but not for homeowner meetings. You want to respect the process and wear something appropriate but nothing too over the top that creates a negative first impression. As you enter the house you should make small talk and not be afraid to ask about the neighborhood or something timely in pop culture. If you have a good sense of humor you should be willing to make a joke as long as it is in good taste. Usually self-deprecating humor works best. Prior to sitting down you should ask to walk around the property further making the homeowner feel as comfortable as possible with you. By the time you sit down the ice should be broken and there should be little or no uncomfortable feelings.
  • Ask Questions. Most of your heavy lifting is done with the initial conversation. When you get to the property the answers should simply confirm what you already know. As you walk the property you should ask questions to get a better sense of their motivation. Find out or reconfirm why they are selling and what prompted their situation. If they say there was a major life event don’t just glaze over this fact. Shift gears and ask what happened and offer any advice you can lend. You want to get your questions answered but you don’t want to sound like you are reading off a script. If the homeowner feels you are insensitive they will surely go find someone else to work with. You can always switch up the pattern you ask questions to find out the information you need. The template you use for sitting down with motivated sellers is just that-a template. You need to have the ability to change gears on the fly all the while still getting the information you need.
  • Listen To Answers. A common mistake that many investors make is rushing through the process without listening to the answers. In almost every circumstance the homeowner will tell you want they want, when they want it and whether or not they are really interested in selling. If you are too busy thinking about the next question you will miss out on some valuable information. Don’t be afraid to let the homeowner go with their answers. This is usually a very difficult time in their lives and they have probably been holding things in for some time. If they want to talk about the process and what led them to this point you should have a compassionate ear. You should also be ready to answer any questions they have. As unfortunate as it is homeowners need to be on alert for scammers. Don’t take it personally if they ask to verify you and your company.
  • Ask About Goals. It is not uncommon for a motivated seller to have unrealistic expectations for the process. They may have heard a story from a friend or family member about how things went for them and want the same on their transaction. Without knowing exactly what the homeowner wants it can be difficult moving forward. Everything starts with the sales price. If you are far apart on value your first goal is to get the seller to see your number. You can do this by calmly pointing out the flaws of the property without being too critical. You should also use comparable sales and current listings to support your argument. This information should be readily available at your meeting but you should only use if needed. Next you need to get an idea of their timeframe. If the seller doesn’t want to close for six months and you want to close in two you need to figure out how to bridge the gap. It is important that you understand the homeowner’s goals and explain what is realistic and what may be impossible to attain.
  • Lean But Don’t Push. You want to know where you stand immediately following the meeting. Depending on how close you are will determine your next course of action. On one hand you always want to push for an answer but on the other if you push too hard you may discourage the seller. The best way to do this is by asking for answers on a predetermined date but make that date far enough away so they have time to think things over.   Always remember what may be just a deal to you is much more important for the seller.

By definition motivated sellers are ready to take action. Use these tips to help convert more meetings into actual deals.

3 Ways to Increase Your Long-Term Property Value

When remodeling a house, you should always consider how your investments will affect your home’s property value. Every upgrade you give your house will increase its property value to a certain degree, but some projects will boost your sticker price more significantly (and permanently) than others. Here are three investments that are sure to add long-lasting value to your real estate investment:

  1. Lay some wood. Hardwood floors might not be as cheap as carpeting, but they’re an investment you’ll be glad you made. Not only are hardwood floors more appealing to buyers than carpeting, they’re more resilient and easier to maintain. A well made wood floor can even outlast your house itself and is sure to add thousands of dollars to your property value.
  2. Stir up a new kitchen. A kitchen is a home’s command center and remodeling the one in your real estate investment will increase your property value dramatically. You don’t need to go big on this project, since modestly upgraded kitchens recoup more of their value than lavishly decked out ones, but you should try to maximize your kitchen’s aesthetic appeal as much as your budget allows. Try installing stainless steel appliances, contemporary faucets and, if you have the space, an island.
  3. Open a door. Believe it or not, new entry doors are the best way to raise your property value for the price. Installing a $1,000 steel door to the outside will boost up your real estate investment’s sticker price by $1,500, so if you’re selling a home this season make sure to upgrade all of your exits.

The best investments to increase your long-term property value are the ones that last the longest themselves. Steel doors, wood floors and new countertops will last for lifetimes after they’re installed and that’s a major selling point for buyers. Pro tip: look for upgrades that come with warranties that can be transferred to the new owner.

4 Ways to Winterize Your Real Estate Investment

The weather outside may not be frightful yet, but it certainly will be soon. Smart real estate investors should take advantage of the mild temperatures to get their homes ready for the snow and ice. Here are four ways to make sure your real estate investment stays cozy and safe all winter long.

1)    Tune up your furnace. The last thing you want is for your home’s heating system to break down in the middle of the winter. Call in an HVAC specialist to inspect your furnace and ducts. Stock up on furnace filters, and remove anything around your heater that might catch fire after prolonged exposure to the ambient heat.

2)    Seal interior leaks. Blocking interior leaks is important if you want to keep your home well insulated this season. Try holding a lit candle near your windows, door frames and electrical outlets. If the flame flickers or the smoke moves in unexpected ways, you know you’ve got some caulking to do. Tacky rope also works well as a quick-fix alternative.

3)    Reverse your fan. If you’ve got a ceiling fan in your house, you can switch its direction in order to aid with heat distribution. Rather than pulling all the hot air upwards, the fan will force it downwards throughout the room. It’s a great way to reduce your heating bill, one that not enough homeowners know about.

4)    Clean your gutters. You’re running out of time to scrape that leafy gunk out of your gutters, so grab a pair of gloves and a ladder and get to work. Blockages in your drainage system are bad enough, but if that sludge freezes, it could warp or even break your gutters. Worse, ice dams can cause water to seep under the shingles and into the house. If your property is located in an area where ice has been a problem in recent years, gutter heaters may be a worthwhile investment.

If you haven’t taken these steps to prepare your real estate investment for winter, you should put them at the top of your list. This season won’t be kind to houses, especially empty ones, so it’s important for real estate investors to do everything they can to ensure that their properties stay warm and safe until the spring.

4 Tips To Help Self Manage Your Rental Property

At times managing a rental property can act as a full time job. Even if you have great tenants property issues always pop up from time to time. Most of these are minor in nature but nevertheless still needed to be treated with a sense of urgency.  How well you take care of these will often define your success with the property.

On certain properties there is not be enough cash flow to warrant hiring a property manager. In these situations you are forced to cover their responsibilities. Fortunately with the right attitude and the right team in place this can be easily achieved. Here are four tips to help self-manage your rental property.

  • Handyman On Speed Dial. Regardless of how handy you are it is essential that you have a handyman on speed dial. Anyone that has ever owned a rental property knows that little things pop up from time to time. Between clogged toilets and broken appliances alone you can expect to be at the house a few times a month. Instead of having to drop what you are doing, drive to the house to access the issue, find the parts and repair what’s broken you should have a reliable handy man that you can call. This will save you at least an average of a few hours a week and allow you to focus on other areas of your business. What you never want to do is pay to have work done twice. By using a reliable professional that can handle multiple tasks you can be assured that you are not just putting a band aid on the job but actually fixing it right.
  • 24 Hour Reply Rule. As the owner you should treat your tenants like you would treat a guest at a hotel. You should expect that there will be issues that come up from time to time and work to make them happy. While these issues may not seem like a big deal to you they are critical to your tenants. The house will run without a working washing machine or dishwasher but your tenants will be disappointed. As the owner/property manager you need to make a point to return all calls within 24 hours. The longer your tenants wait the more they begin to doubt you as an owner. Instead of calling you with a small problem they will hide it and let it turn into a bigger one. Instead of taking care of the property like their own they won’t be nearly as enthusiastic. This is especially the case if you have any interested in bringing your tenants back. They can find other properties where the landlords are more active and treat their tenants better. As soon as you get a call from your tenant you need to get on it as soon as possible.
  • Start New Tenant Search Early. One of the biggest mistakes that novice landlords make is not starting their tenant search early enough. A dedicated property manager would strive to have a new tenant lined up weeks before the current lease is over. With everything else going on in your business it can be easy to overlook this part of the process. If you don’t have new tenants coming in nothing else matters. You need to give yourself plenty of time to not only find your next tenant but find the right one. This should start as soon as 90 days until the end of your existing lease. There are more real estate websites than ever before not to mention the growth of social media. You should never have to scramble around a week or two before a vacancy. Give yourself plenty of time to find your next tenant.
  • Move In/Out Rules. If you are going to manage the property yourself you need to have clearly defined move in and out rules. A typical property manager would handle the lease review and final walk through. Without their aid this is one of the areas that can make or break a lease. You need to spend time going over the lease so there are no surprises. Discuss expectations, rules and guidelines. Go through the lease line by line asking if they have any questions or concerns. A few extra minutes before the lease starts will make your life much easier over the next nine months. You should also give yourself plenty of time discussing the end of the lease. Starting two months out you should discuss the end of lease procedure. Explain the condition the property needs to be in and which items need to be where. Make it clear how the walkthrough will occur and when security funds will be returned. The end of the current lease and start of a new one doesn’t have to be filled with stress and anxiety. The better communication you have up front the smoother the transition will be.

In a perfect world you could just hire a property manager and let them deal with the headaches. Not all rentals have this luxury. There are plenty of good landlords who self-manage their rentals.  The key is that they acknowledge that they are constantly on call.  Having this mindset allows them to deal with whatever comes their way.

Flipping Houses in Calgary : Must-Haves for the Modern Kitchen

These days a kitchen isn’t just the place where food is made – it’s the command center of the entire house. If you’re in the business of rehabbing properties, you need to make sure that your kitchen is in good shape before listing your real estate investment on the market. Here are a few things every marketable kitchen includes:

  • An Island. Islands and standalone counters have become the norm in contemporary kitchens, and if your real estate investment has the floor space, there’s no excuse for not installing one. While many islands are built directly into the kitchen floor, if you’ve already installed your flooring you can find a wide variety of “aftermarket” islands – with feet attached – at your local home supply retailer.
  • A Stunning Sink. The kitchen sink isn’t the boring old function-over-form installation it used to be. If you’ve been flipping houses for a while then you’re well aware that lavish and curvaceous faucets are a major selling point with buyers. Even the most affordable designer faucets will add significant property value to your real estate investment, so you should make sure to pick one up.
  • Eco-Friendly Appliances. If you’re remodeling your kitchen, you can increase your property value by thousands if you’re willing to go green. Energy-efficient dishwashers, magnetic-induction cooking ranges and tiles made from recycled glass or vinyl are a great way to appeal to the environmentalist in everyone, and they’re guaranteed to be a hit with buyers.
  • Steel. Lots of Steel. In the past, stainless steel appliances were a commodity to be found mainly in ultramodern houses. But as more and more consumers began to associate a steel finish with quality, brushed-metal appliances steadily gained popularity. Now they can be found in every type of home, from Spanish revivals to Bauhaus bungalows. Needless to say, if you’re replacing your stove or refrigerator then you should spring for stainless steel models. After all, you’re guaranteed to make back the difference when it comes time to close the sale.

When it comes to remodeling the kitchen in your real estate investment, the progressive approach is best. No matter the style and theme of your house, buyers will be looking for modern aesthetics and convenience in the kitchen, so make sure to incorporate eco-friendly technology, an artfully designed sink and as much stainless steel as you can find.

What Makes A Quality Rental Property?

There is a lot that goes into finding the right rental property. Many novice investors think they can turn any property in a cash flowing rental property. The reality is that there are a handful of important features that influence just how strong the property will be. It is not enough to make some minor improvements, stick a “for rent” sign in the front yard and wait for tenants to flock to the property. If the market is poor or the demographics are weak any improvements you make could be for naught. On the flip side, if you find the right property in the right area you can earn monthly cash flow and long term wealth for as long as you own the property. Here are four important qualities of any successful rental property.

  • The Surrounding Area. Simply saying the market needs to be strong is not enough have success. Start by examining the immediate area surrounding the property. With rental properties you need to think like a tenant. You can get a great deal on the purchase price but if tenants don’t find the area appealing you may not be able to rent for as much as you think. It is always better to pay more for a property in a better location than the other way around. By doing this not only can you maximize cash flow but you will also find better tenants that tend to stay in the property longer. This reduces vacancies which allows you to not have to deal with constant tenant turnover. If you don’t find the immediate area appealing the odds are your tenants won’t either.
  • Local Demographics. There is plenty to consider when evaluating local demographics. It is no secret that there are more renters today than ever before. If your property is in a town with sagging demographics they will surely look elsewhere. Start by looking at the overall strength of the town’s economy. The best way to do this is by looking at the job market. National unemployment rates have improved but it is important to look at this number on the local level. If a large job source has just left the area you can bet that renter demand will eventually be reduced. Another good indicator of demand is the local school system. Renters and buyers want to live in towns that offer the best schools for their children. If the school system is poor or there are rumors of a school closing you may want to look elsewhere. The final major demographic are the crime numbers in the area. Everyone wants to live in a property where they feel safe. If crime has been on the rise and in the news they may automatically eliminate the town. If you are having trouble finding information on demographics ask your real estate agent or go directly to the town hall website.
  • Taxes, Misc. Expenses. There is more to calculating cash flow than simply subtracting your mortgage payment by the rent received. Inside of your mortgage payment you need to factor in the property taxes and insurance. While these are typically consistent annually they can change at any time. In areas with increased foreclosures you can have an unexpected hike in the property tax payment. It is not uncommon to see an increase of several thousand dollars if the town’s financials are poor. You also need to look at any non-mortgage payments as well. If the property is in a market impacted by winter weather, you need to add snow removal to your budget. This could easily add a hundred dollars or more in the winter months. The same is the case with properties located in predominately sunny areas. With these properties you need to factor in lawn maintenance and exterior upgrades. Wherever the property is located it is critical that you know all the monthly expenses you must endure and which you can pass along to your tenants. These numbers hold the key to your cash flow.
  • Competition. As you evaluate a rental property purchase you need to keep an eye on the competition. Just as if you were selling tenants will compare your rental with every other rental property in the area. You cannot expect minimal improvements to give you a 20% bump compared to the rest of the market. There are a handful of rental websites where you can look at the competition. Look at how long the properties have been listed for and the volume of listings. If the area has pages full of supply it can be an indicator that demand is poor and you may have a tough time finding tenants. If there is limited supply it can be a sign that rentals are flying off the market. Reach out to the landlords listed and ask if they can give you any insight on the market. In most cases, they will be willing to share whatever they know.

It is important not to evaluate a prospective property on how it looks now but rather the potential. Often times knocking down a wall or adding an extra half bathroom can greatly enhance the value. If you look at where you can add value it will change the cash flow of the property. A rental property purchase is more than buying and waiting for tenants. Look at these four areas to help you find the perfect rental property.

 

4 Ways to Raise Your Property Value for Free

If you’re selling your home on a tight budget, there’s no need to break the bank to raise your property value. There are a handful of projects you can do for free, all of which will go a long way towards hooking a buyer. Here are a few of them:

1)    Touch Up The Paint. You don’t need to repaint your walls before selling a home, but you should touch up any smudges that won’t wipe off. Chances are good that you’ve got some leftover paint in your cellar or shed from the last time the walls were painted, so stir it up and lay it on where needed. It will take some time for the new paint to darken and match, so make sure you do this at least a week before showing the house.

2)    Fill Wasted Space. If there’s a room in your house that’s not really doing much, it’s time to give it some purpose. Add a desk and a computer, then tell people it’s an office. Or maybe you’d prefer to clean out the clutter and turn it into a guest bedroom. You want buyers to see how versatile your square footage is, so make sure none of your space is wasted.

3)    Mow the Neighbor’s Lawn. When buying a home, people want to know that the neighborhood they’re moving into is a pleasant one. If you’ve got neighbors that have fallen behind on their yard work, offer to mow their lawn or rake their leaves. If their houses look valuable, yours will too.

4)    Warm the Hearth. Nothing says “cozy” quite like a crackling fire, so put your fireplace to good use when showing your house. A warm hearth kick-starts the nesting instinct, and it’ll increase the perceived value of your home.

These are only a few ways you can quickly and easily raise the property value of your home. Remember, selling a home is more about care than flair, so as long as your real estate investment is well-kept, there’s no need to break the bank with remodeling projects.