The key to getting everyone to follow the rules is to make sure that they are stated at the beginning, in writing and signed off on. A property management company does not have anything to enforce if there is no lease agreement. And same applies to you, the rental property investor.
The lease agreement helps the property management company and tenants understand what is expected of them as outlined below with some tips and insight from Barker Realty.
Key Components of a Lease
There are several things that a property management company needs to include in the lease to ensure it is strong and enforceable.
The name of the landlord and tenant.
The property address
The terms of the rental payments (ie: when is rent to be paid, how much is rent, what’s included in rent, late payment policy, etc)
Lease term: When it starts and when it ends
Information about the security
Whether pets are allowed
Right of Entry: When can the landlord enter?
It is a good idea for a property manager to include a clause about subletting. Some tenants will want to sublet. However, you have to decide whether you will allow this. If you allow subletting, then the new tenant should have to go through the same approval process.
You will also need to let the tenant know how much notice is required to move out of the apartment when the lease expires. The typical length of time is requiring a 60-day notice. Keep in mind that if you do not include this in the clause, then you may lose one month of rent. You will not be able to get a new tenant until the lease expires.
Be careful about copying the template of other leases. This can be convenient, but it is important to note that laws can vary from state to state. That is why you do not want to use a California template if you live in Texas.
If you already have a lease agreement, then it is a good idea to double-check it. It is not too late to make the necessary changes. Make sure that all of the aforementioned items have been addressed properly and it’s never a bad idea to have an attorney review to make sure it’s buttoned up and fair to all parties involved in signing.
Taking the right steps will ensure that your lease protects your tenant, you and the property. Barker Realty has worked over our 30+ years of experience to develop a strong and enforceable lease. Contact us today for more information on our property managers in Raleigh for professional and reliable services.
There are many people who are interested in investing in rental property as it can be a great financial move for a variety of reasons. Not only can investors make money off of monthly cash flow from the collected rent, but there is also financial benefit in the equity appreciation build-up over time. You are essentially having someone else pay your mortgage and insurance on a piece of property that can retain value or appreciate, especially in the Raleigh-Triangle market.
At Barker Realty, our property management company highly recommends conducting research before investing in real estate in your area to make sure it will be a great fit for your business or you personally. Talk with others. Talk with experts. Learn as much as you can about how investing in rental property could be a game changer for you and your portfolio. Here are some tips to help you along the way!
Find a Rental Property
The best rental properties are in areas that are growing rapidly. The biggest predictor of future price appreciation in an area is the growth of the population. In addition, a growing population will have many renters who are willing to live in your property.
With the competitive real estate market, it may be difficult to find a rental property that meets your needs. You should look for a property that will produce positive cash flow every month. You need to plan out your expenses with the property and then look at what the home will rent for. Hiring property managers is part of the rental process. These costs need to be accounted for as well.
Financing
Real estate investors need to understand how to use financing options for their benefit. Financing is the best way to purchase a rental property if you do not have the cash to do so. Some real estate investors borrow too much money and get into financial trouble. Instead of doing this, borrow money in a conservative way. This will help you reduce the overall risk that you have in an investment.
A good property management company can help you find the right loan for you. Many people who work for a property management company have years of experience in the real estate field.
Hiring Help
No one wants to answer calls in the middle of the night from tenants. Hiring property managers is the best way to reduce your stress while owning a property. You need to look at online reviews before making a decision on the company that you want to work with. You should work with a company that has quality customer service and support at all hours.
Rental property can help you get to the next level in your finances. However, be realistic with yourself. It’s not easy and it is not a way to get rich quickly, but it will help you build wealth over time when done the right way. With the strong housing market, now is a great time to look for an investment property in your area.
Contact Barker Realty today for more information about investing in real estate, rental properties, and overall property management services.
If you are interested in investment property management, then there are a number of factors that you will have to consider. The time of the year is one of the many things that a rental property investor takes into account to fine homes for ‘at-price’ or below list. Not to mention, much of the competition is off the market due to half of home purchases take place during the fast paced, over-priced spring and summer months.
However, studies have shown that people who purchase a home in October get a 2.6% fair market value discount. And those people who purchase a home in December and January get a 2% fair market value discount.
Fair market value discounts drop during the spring months. That is why the best time for a rental property investor to purchase property can be during the winter months. There are several other reasons why investors should buy property during the winter and our team helps explain a little more below.
Increased Demand During the Spring and Summer Months
Many people purchase homes during the spring and summer months. People who have families move during the summer months because they do not want their children’s school schedule disrupted. Competition increases when the demand increases. This increases property prices.
Most people are not interested in moving during the winter months. They spend time with their family during the holidays. They also do not have extra money for moving. This is why there is less competition. You will have fewer people to compete with if you buy property during winter.
Desperation
Decreased demand creates a problem with sellers. Many sellers are impatient and do not want to wait until the warmer months. That is why they are willing to decrease their prices. However, you have to be careful. Some sellers will sell property that is in poor condition.
Climate
Climate can change the way that a property looks. A property may look great in the summer, but it can look dull in the winter. Snow can hide the more appealing features of the home and make people less likely to buy, hence why sellers are willing to lower their prices in the winter.
Get in touch with our Apex property managers today for more information or to schedule a meeting with our team!
Some real estate investors, particularly new ones, see hiring property managers or a property management company as an unnecessary expense. But, they can actually be a huge benefit to your income.
Here are four important reasons to hire a property management company to oversee your rental property:
1. Set the Best Rent for Your Property
You could spend hours, days, or even weeks scrolling the classifieds to try to find comparable properties and the rent they’re getting. But a local real estate management company will have a good handle on the local market and be able to tell you how much to charge to ensure that you not only get quality tenants and low turnover but also get the most income out of your property. Plus, property management companies have access to professional sources such as MLS (multiple listing service).
2. Market, Advertise and Show Your Property
Real estate investors, managing your property alone, can spend hours every week crafting ads, fielding phone calls, text messages and emails about the property, and showing the home to prospective tenants. Unless the rental property is your full-time job, this takes time away from your family, work, and downtime. Property managers do this every day. They have the experience and knowledge to quickly create ads, and it is their full-time job to answer prospective tenant questions and show the home. This frees up your time, and also provides more flexibility to the prospective tenant, as they don’t have to work around your schedule.
3. Manage Vendor Relationships
Plumbers, electricians, appliance repair technicians – at some point, they’re all going to need to come to your rental property to repair or replace something, whether it’s through tenant damage or simple wear and tear. As a real estate investor, you’ll always get the same rate that any other private party would get. A property manager, however, may get a discount because they manage so many properties and can give an extensive amount of work to the vendor. You’ll save money and get high-quality repairs through vetted vendors.
4. Ensure Compliance with Housing Regulations and Property Laws
As a real estate investor, you likely did your research before you started. But the regulations and laws can be exhausting, confusing, constantly changing and hard to read. A property management company will be thoroughly familiar with all the regulations and laws, and they will ensure that you comply with them all.
Give Barker Realty a call today to see how we can help!
Let’s run through an all too common scenario with real estate investors in the past…
You have a rental property worth $200,000, but you would like to sell it and buy a different one worth slightly more. The property will be used in the same manner as its predecessor. Usually, you would incur a tax liability from the net proceeds, leaving you with less capital for your intended investment.
That was until the introduction of the 1031 Tax Deferred Exchange that allows a real estate investor to defer capital gains tax liability, effectively releasing more money to you for investment. A full deferral means that you will invest the entire net proceeds in the exchange property, effectively dictating that the replacement be of equal value or worth more than the original.
Let us explain further…
What Does This Exchange Mean?
Section 1031 of Internal Revenue Service Code allows you as a real estate investor to defer your tax liability when you dispose of one property and invest in another of the same nature. The said property must be the used for trade to generate income.
What Are The Conditions For A 1031 Exchange?
The law states that the exchange property should be like-kind, meaning it should resemble the sale property in nature and character rather than quality. You can spread the net proceeds over one or more exchange properties.
Like-kind property considered in the deferral plan include:
Exchanging an unimproved property for an improved one.
Exchanging a single family rental unit for a multi-family one.
Selling a vacant piece of land to buy a commercial building.
Selling an industrial property to buy rental property in a resort area.
Personal property does not qualify for 1031 unless for productive use in business or trade.
In a full tax deferral, you are expected to invest the entire net proceeds in an exchange property.
Timelines
A real estate investor must adhere to strict deadlines if they are to benefit from this tax deferral plan. You should identify an exchange property within 45 calendar days of closing on of the sale property. After determining the replacement property, you should close the deal within 180 calendar days of closing the previous investment.
Practically, say you sold your property on January 1, 2017. The identification period ends on February 15, 2017, while the exchange period ends on June 30, 2017. If you fail to close the deal within that time limit, you lose your deferral privilege.
We are an experienced Raleigh property management company that would like to see you take advantage of this tax deferral. Talk with Barker Realty today for more information on 1031 Exchanges and managing your rental properties with ease!
Here is the thing. When you decide to buy property, be ready to spend significantly. Further, if you, a Raleigh property investor, have ready cash, you can get the property and cash flow right away. Only that, very few investors can afford such huge sums of money at short notice. Then, if you’ve identified a prime property and are constrained by cash, here are 4 top ways to solve this challenge.
1. Get a Homeowner’s Mortgage
Mention property financing and the traditional mortgage option comes to mind. Well, guess what? It is still as effective today as it was during the Great Depression. It is a go-to for most homebuyers since it spreads the repayments up to 30 years.
Homeowners can maintain large debt through affordable monthly repayments. Still, as local property investors, we advise opting for a mortgage with the shortest repayment period that you can manage. That way, you will be mortgage-free sooner and venture into bigger investments. Other benefits include:
A lower down payment
Lower interest rates for persons with good credit rating
Access to special rates and benefits from the local banks
2. Hard Money Loan
A property investor in Raleigh NC, may use their existing real property to secure their next home purchase. The hard money loan attracts high costs and an LTV ratio. In turn, this strategy comes as a last resort or as a short-term bridge loan.
3. Government Loans
Are you a Raleigh property investor seeking financing for your first home? Consider the government-backed VA or FHA loans. These are homeowner financing subsidized by the government. The Federal Direct Loans protect the lenders from default. Here are their attributes:
Lower interest rates
Up to 3.5% down payment; VA loans have zero down payments
Gifts and concessions permissible to cater for the closing costs
More refinancing options
VA loans have no monthly insurance premiums
These loans are still applicable to your subsequent owner-occupied properties.
4. Private Lending
Apart from the mentioned strategies, local property investors still rely on their family members and friends for private loans. Here, there are flexible loan terms and interest rates. Plus, the borrowers build trust by repaying on time.
Contact Our Raleigh Property Management Company Today!
Are you a property investor in Raleigh NC, seeking appropriate funding for your next purchase? Come and learn about the options you have. Talk to us today.
