Rental Property Management 101

Those new to the real estate investment field are typically excited when they close escrow on their first property. However, that feeling can quickly turn sour due to unforeseen changes.

Nevertheless, real estate investing can be a great way to improve long-term wealth.

Below are a few items to consider when preparing for the future as a real estate investor.

MANAGING THE BUDGET

simple kitchen upgrades for rental property investments

Focus on small, simple upgrades for your rental property investment

Spend Your Time, Money Wisely
As the closing date approaches, many first-time investors assemble a list of wanted improvements, but this can be difficult as most first-timers have an unrealistic timeline concerning the completion date. There are always unexpected shortfalls, such as upgrades, renovations and other unforeseen costs. So, it’s important to be cautious when estimating a quick turnaround at a low cost. It rarely works out that way.

Be Prepared to Make an Investment of Sweat Equity
To minimize cost overruns and become better educated, a real estate investor should plan on spending a significant amount of time onsite — from the closing date until the tenant has occupied the property for a short period. Being an investment property owner is a lot of work. The owner must get bids from contractors, wait for deliveries, review work, shop for supplies, advertise the property and review rental applications. It might start out as fun, but in the end it is a lot of work. However, real estate investing is a long-term and wealth-building proposition. That’s why it’s important for an owner to invest his energy and time at the present moment.

Don’t Accept the First Contractor’s Bid
As with other major purchases, it is important to get several competing estimates to ensure a fair price on contracting work has been agreed upon. The more costly the job, the more bids the property owner should get. The bidding process can be long and tedious, but doing research now leads to better and less expensive bids in the end.

Concentrate on Small Upgrades
In most house flipping situations, things like flooring and paint usually require some work. Luckily, these are some of the easiest and most cost-effective upgrades to make. First impressions are everything and potential renters are more likely to keep things looking nice when they see that things are turnkey ready. It costs money to make these upgrades, but it pays off in terms of charging tenants higher rents.

  • Paint: Use neutral, bright colors and paint all the walls the same shade. When touch-ups are necessary — and they generally are — it’s nice to have only one color to consider. When buying paint, choose one that’s easy to clean and buy more than needed, so it’s easy to do touch-ups later on.
  • Flooring: Tile, vinyl, wood laminate and carpet. Tile is great for bathrooms and kitchens due to high moisture levels, and wood laminate is ideal for other rooms for easy cleanup and durability. Carpet isn’t usually advised for rental properties as it is easily stained and every tenant will want new carpet. By shopping around, an investor can find good deals on easy-to-install laminate flooring.

Look for Electrical and Plumbing Issues
A property that’s more than 20 years old should have its electrical outlets and water valves replaced. Get bids from plumbers and electricians before the property is listed. Water lines, valves, dishwasher hoses and drains can pose the biggest threat regarding leaks and floods. Electrical outlets aren’t as big of a risk, but they can end up looking unsightly after years of being painted over. An electrician can quickly change out all of the outlets and switches in a few hours.

Don’t Base Supply-Buying Decisions Solely on Price
When an investor gets bids and review costs at home improvement warehouses, they shouldn’t base purchase decisions solely on the price. Lowball estimates never stick when it’s time to make decisions on what to purchase. If the investor ends up buying the higher-priced item, they can end up going over their budget.

friendly tenants in a rental property

Do your due diligence when seeking tenants

FINDING THE RIGHT TENANT

If rent is any different than other monthly bills, it’s because it is the most expensive monthly bill that someone pays.

Follow Fair Housing Rules
It’s important to know that it is illegal to discriminate against rental applicants based on race, nationality, religion, gender, heritage or disability.

In addition, check to see if other states have their own Fair Housing Rules. These rules are put in place to prevent discrimination and alert landlords when leasing out properties to tenants for other reasons, such as felony convictions, income and employment or tenant history.

Perform Criminal Background Checks
It can be difficult to obtain the full story and, in some states, prevent a landlord from leasing due to a criminal conviction. That being said, it is certainly a good idea to check criminal backgrounds, which are public record and can be requested by email or at a local courthouse. Always be sure to check that an application hasn’t been falsified by verifying the person’s ID.

Look For Financial Responsibility
Also, it is important to have a tenant who shows financial responsibility. Run a credit check to see if a potential tenant appears to have trouble keeping up with car and phone payments. Moreover, it is likely that they will also have trouble paying their rent. Don’t let financial woes affect a real estate investment property. Another way to ensure that tenants will make on-time payments is to check employment history by requiring them to provide two payment receipts and proof of employment for the past six months. It is not ideal to have a tenant living above their means or one that changes jobs too often.

Moving Forward
While this is by no means a comprehensive guide to investing in rental property, these tips provide a great starting point. Real estate investors should supplement these tips with their own investigative work, as well as guidance from other, more experienced rental property owners. Other rental property investors can be a good source of advice and they can help new buyers set their expectations to a realistic level. Being a property investor is not easy; it’s more like a marathon rather than a sprint. However, if an investor paces himself and works hard success will come.

Button for financing real estate

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5 Best Real Estate Markets in Florida

If you are searching for the best real estate markets to invest in, you may want to consider Florida. In a recent report on Forbes.com, the online real estate site Trulia ranked the top markets for real estate investing based on the following criteria:

  • High Affordability
  • Strong Job Growth
  • Low Vacancy Rates
  • Number of Home Searches on Trulia
  • A Large Population of People Satisfied with the 2016 Presidential Election Outcome

Five out of the ten real estate markets mentioned in the report are located in the Sunshine State.

1. Jacksonville

Coming in at No.1, this northeast Florida city of 1.3 million residents along the St. Johns River showed an impressive job growth rate of 3.8 percent in 2016, leading to a high ratio of inbound home searches on Trulia versus outbound searches by people wanting to leave. In addition to strong economic stability, the area also benefits from great schools, beautiful weather and close proximity to the Atlantic Ocean.

2. Cape Coral/Fort Myers

It wasn’t only the 80 degree weather that made this city along Florida’s southwest coast rank No. 2 on the list. The area has also had the fourth highest job growth in the nation. Another contributing factor was the sharp drop in vacancy rates over the past year.

3. Daytona Beach/Deltona/Ormond Beach

Due to a low unemployment rate of 6.2 percent and predicted job growth of 36.96 percent over the next ten years, this area of northeast Florida ranked No. 3 on Trulia’s list. The area benefits from some of the best weather in the country.

5. Tampa/St. Petersburg, Florida

Strong job growth with a large number of education related jobs propelled the Tampa market to No. 5 on the list. Of course, much like the other locations, the beautiful beaches and weather didn’t hurt.

10. Bradenton/North Port/Sarasota, Florida

Rounding out the list at No. 10 were these beautiful beach communities along Florida’s southwest coast. Unlike other Florida communities, this area is not a vacation-driven community. “Not only does it deliver on the natural beauty of its beaches and weather, but it also has the critical infrastructure — the arts, great schools, small to medium-size companies, small universities — that is critical to making a great community,” the study said.

Investing in Florida Real Estate

Crowdfunding is a simple way for investors to grow their personal wealth and diversify their portfolios.

RealtyeVest is a real estate crowdfunding company based in Jacksonville. Being in the heart of one of the fastest growing real estate markets in the nation, the company has the advantage of being close to its sponsors and investment opportunities.

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IHT Realty Seeks Crowdfunding for Jacksonville Multifamily Deal

IHT Realty Crowdfunding has rebranded itself as RealtyeVest.

JACKSONVILLE, Fla., March 10, 2017  — IHT Realty Crowdfunding announced on Thursday a new program that will offer investors a guaranteed six-month return regardless of how early the property sells.

This new program comes following the company’s latest investment offering of a duplex property at 3730 Lehigh Street. The investment is being sponsored by Lenger Financial, Inc., which seeks to raise $80,000 in funds for renovations to the Brentwood property.

Lenger Financial is a Jacksonville-based capital management firm that specializes in asset management, investment advisement and financial architecture. The firm’s primary real estate focus areas include single- family, mid-to-small multifamily, manufactured homes and boutique structure ventures.

Built in 1944, the two-story brick building sits on a quarter-acre lot and includes two bedrooms and one bathroom per unit, which equates to about 900-square-feet per apartment. The building is structurally sound and includes a newly installed roof.

Additional upgrades and projected renovations include a new HVAC system with ducting, new flooring, an updated kitchen and new appliances, a new fire escape and entrance stairway, exterior painting, as well as landscaping and fencing.

Lenger Financial is offering a strong debt coverage ratio of 1.28 with an excellent after repair value (ARV) of 74 percent. The sponsor is projecting a gross annual income of $15,590 and a projected net operating income of $10,443.

RealtyeVest is a real estate crowdfunding company that offers investors the opportunity to capitalize on residential, multifamily and on-trend properties across the United States.

Jacksonville is listed No.1 in Trulia’s “10 Hottest Real Estate Markets to Watch in 2017” due to its growing job market. Jacksonville posted a 3.8 percent job growth in 2016, making it one of the top markets for employment in Florida. Trulia noted a heavy influx of citizens contributing to the city’s very high ratio of inbound home searches versus outbound searches from locals wanting to leave. These factors show a trend toward long-term stability in addition to great schools, fantastic weather and a close proximity to the Atlantic Ocean.

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